Cash FX

[JER08]

time to take profit on euro/cable shorts? The coming pullback could be quite strong....

 

[montmorencyt2w]

If you don't mind my asking Tom, what do you like about Oanda?

 

[trader_dante]

Ah, then from the recent swing low from the blue box would act as resistance in the next rally testing but failing at which point you would have pyramided short.

That's one way of doing things.

My entries in the trades above were actually earlier than this though.

What I try to do is pinpoint the exact point at which the tone of the market has changed or will change or is changing and get in either at that point or preferably before it.

If you only see this point with hindsight (as happened to me in the Euro) then once that point has been given, you need to get on board. What you don't want to do is get emotional, sell one extreme and then puke your position at the other which often happens when new traders try to get on board momentum.

In this case you wanted to wait for the rally and short it into an area of overhead supply.

You want to try and get the best entry into a trade that you can get. Always note your maximum drawdown on trades (especially the winners). Over time this should get lower and lower on average as you get better at calling the turning point.

For me it is a very important point to mention that to make money trading with the trend you need to learn to trade against it first.

 

[trader_dante]

If you don't mind my asking Tom, what do you like about Oanda?

They can handle some of the size I am doing without requoting.

 

[barryb]

They can handle some of the size I am doing without requoting.

If Oanda can only handle some of your size, i'd suggest you set up your own brokers and clearers to save on costs, like Refco/Marex did.

 

[trader_dante]

If Oanda can only handle some of your size, i'd suggest you set up your own brokers and clearers to save on costs, like Refco/Marex did.

haha!

 

[trader_dante]

I just closed my Euro/Usd short at 1.3845. (chart 1)

Profit: +553 pips
Maximum drawdown on the trade: -14 pips
Risk-Reward: 1:39.5

If you guys over on FF are reading this, I duly appreciate that I should have added and not doing so has made this a wasted opportunity that could have a huge opportunity cost impact on my performance.

I take the blame and have no excuse.

I will try not to make that mistake with the Gbp/Usd in which I am still short from 1.6140 (chart 2):

Maximum drawdown on the trade: -38 pips
Current position: +300 pips

Note: When I screen grab my Oanda charts the images are coming out very small and as a result virtually unusable. I think this might be because I am screen grabbing across a three monitor display, so when I crop the image and pull up a new canvas, the size of it is huge compared to the image...this is a new problem and strange since it worked fine before...whatever...I'll use FxPro charts and if anyone wants I can post a statement since you can't see the arrows anymore

 

[montmorencyt2w]

Great stuff on EUR/USD, but why stop there?
It's going all the way to 1.32 ...

 

[Yuppie]

Note: When I screen grab my Oanda charts the images are coming out very small and as a result virtually unusable. I think this might be because I am screen grabbing across a three monitor display, so when I crop the image and pull up a new canvas, the size comes out huge...this is a new problem and strange since it worked fine before...whatever...I'll use FxPro charts and if anyone wants I can post a statement since you can't see the arrows anymore

Have you tried using a capture program? There are a few good ones out there. Free as well. I use Faststone (although don't think it's free).

Magnus

 

[Hotch]

I just closed my Euro/Usd short at 1.3845. (chart 1)

Profit: +553 pips
Maximum drawdown on the trade: -14 pips
Risk-Reward: 1:39.5
...

Where was your stop?

 

[peace]

I just closed my Euro/Usd short at 1.3845. (chart 1)

Profit: +553 pips
Maximum drawdown on the trade: -14 pips
Risk-Reward: 1:39.5

If you guys over on FF are reading this, I duly appreciate that this was a wasted opportunity that could have a huge opportunity cost impact on my performance.

I should have added. I have no excuse.

I will try not to make that mistake with the Gbp/Usd in which I am still short from 1.6140 (chart 2):

Maximum drawdown on the trade: -38 pips
Current position: +300 pips

Note: When I screen grab my Oanda charts the images are coming out very small and as a result virtually unusable. I think this might be because I am screen grabbing across a three monitor display, so when I crop the image and pull up a new canvas, the size comes out huge...this is a new problem and strange since it worked fine before...whatever...I'll use FxPro charts and if anyone wants I can post a statement since you can't see the arrows anymore

Hi TD

easy capture works well and it's free: http://www.easy-capture.com/

Peace

 

[trader_dante]

Where was your stop?

Stops are for buses!

 

[trader_dante]

Great stuff on EUR/USD, but why stop there?
It's going all the way to 1.32 ...

It is?!!

 

[Hotch]

I just closed my Euro/Usd short at 1.3845. (chart 1)

Profit: +553 pips
Stop: ∞
Risk: ∞ - 13845 = ∞
Risk-Reward: 1:0

fixed.

 

[trader_dante]

fixed.

Since your real risk can never be truly known unless your position is closed for a loss, I consider this a largely unimportant ratio.

I prefer to use one that measures your maximum drawdown whilst in a trade against your final profit.

While this doesn't tell you what one was truly prepared to risk, it does tell you how much heat one took before their profit was realised and therefore is an indication of precise your entry into the trade was.

Of course the much more reliable figure to look at is the win ratio (average winner/average loser) of your trades. This combined with your win/loss ratio (number of wins/number of losses) can give you your expectancy over time.

 

[Shakone]

I don't really understand your point about moving stops to break even. If you know where it will likely run into trouble, and it starts reversing there, then you better not be taking a loss. If you mean simply that, break even is an arbitrary point, and I might move my stop to ahead of break even, then fine.

I think it is nonsense to say that a trader moving his stop up to break even or better is going to lose in the long run because he is playing the P/L. No offence, just my two cents.

 

[montmorencyt2w]

It is?!!

Or at least ~1.34


....

I didn't say today mind you ...

 

[montmorencyt2w]

I don't know as much about stops as Tom no doubt does, but I do sometimes feel there is undue reverence paid to them.

"Never move your stop" - hm... So you can guarantee to get that right first time, every time?


Maybe ultra-experienced gurus can.


As for moving to break even, if you are that worried about not losing your profit, maybe better opening up a new position, and take the old profit (at the optimum moment of course).

 

[trader_dante]

I don't really understand your point about moving stops to break even. If you know where it will likely run into trouble, and it starts reversing there, then you better not be taking a loss.

Most of the people I've dealt with have no idea where the market is going to run into trouble but they move their stop to breakeven simply because they are in profit.

Here's a text I got today from someone I've been mentoring:

"Was short dow from 247, put stop at 246 when it had dropped to 220, it then went back to 246 on the button to take me out before plunging to 100, makes you want to thro the towel in!!!"

Here is my response:

"It sounds like you made the notorious breakeven +1 mistake...that's cost me many thousands of pounds in my time...your personal breakeven point means nothing to the market so you can't expect the market not to hit it when it jumps around. It has to be in a technical spot"

Moving your stop to an arbitrary point just for the sake of protecting profit is in my opinion foolish. Those that trade their P&L usually don't make money...but each to their own...

 

[FXTrend240]

Most of the people I've dealt with have no idea where the market is going to run into trouble but they move their stop to breakeven simply because they are in profit.

Here's a text I got today from someone I've been mentoring:

"Was short dow from 247, put stop at 246 when it had dropped to 220, it then went back to 246 on the button to take me out before plunging to 100, makes you want to thro the towel in!!!"

Here is my response:

"It sounds like you made the notorious breakeven +1 mistake...that's cost me many thousands of pounds in my time...your personal breakeven point means nothing to the market so you can't expect the market not to hit it when it jumps around. It has to be in a technical spot"

Moving your stop to an arbitrary point just for the sake of protecting profit is in my opinion foolish. Those that trade their P&L usually don't make money...but each to their own...

you could also just cover half without moving your stop to breakeven. Personally using ATR is best