free seminar...london / sat 29 jan 2011

[DashRiprock]

I have a soft daily target of a 20pip gain, that I don't get hung up on (ie if the set-ups aren't there they are not there, although this is very rare.) That soft daily target is an aggregate of my hard weekly target and I look to trade 40 x 5day weeks / year.
...

Since trading the' Full Set-Ups, ' my biggest drawdown has been less than 2%.

G/L

hi BBmac

what is the difference between soft and hard targets? so 20 per day is soft because its average of 100 hard per week

also can you say what your typical % risk on any one trade? less than 2% drawdown is best i have ever heard!

 

[trendie]

hi bbmac,

great doc.
as you trade the fairly small TFs, you are susceptible to relatively large moves during news events.

I don't think your doc covers your approach to news events in the context of intra-day trading.

do you have rules for trading/avoiding potentially volatile news?

 

[counter_violent]

Just a good example of what I was talking about and didn't get chance to show as I was aware we had already lost one and another had fallen asleep ! Lol.

G/L

Were the others paying attention? Never follow what the crowd does :smart:

 

[bbmac]

hi BBmac

what is the difference between soft and hard targets? so 20 per day is soft because its average of 100 hard per week

also can you say what your typical % risk on any one trade?

Yeh exactly, a soft target is just 1/5 of my hard weekly target, but I don't get hung up on the soft daily target because if there are no hi-prob 'full set-ups' developing during my session, it would be silly chase a 'soft' target for the hell of it. Better to leave it until next day and the day after etc when some may and almost certainly will develop..

My risk/trade is anywhere between 0.8% - 2% depending on the confidence in the Full set-up and the size of stop required. Typically I would say 1.4% is my typical risk. Even given the strike rate, I am comfortable at this risk level. Even If I suffer a consecutive losing run of 3 trades which is statistically improbable but not impossible at my strike rate, it doesn't leave me with a 'mountain to climb' and so the loss won't destabilise my ability to carry on acting on the Trading Edge ,for the reasons discussed in the document.

You have to trade your trading edge at a risk level knowing what the probabilities are of a consecutive losing run and it's likely typical - max size and resultant drawdown. Then you have to be comfortable knowing that could happen, and if it does that such a drwadown won't detsabilise your ability to keep on acting on your trading edge to recover the drawdown and beyond.

Drawdowns can be destabilising no matter how experienced you are. As I say in the document they can cause you to loose confidence in your ability to even act as the trading edge sets-up again after a run of losses, and if you do act and enter the market -without decreasing risk, and then to manage the reulting trades properly in the way the trading edge is supposed to be managed (ie let winners run despite the fear of adding to the losses.) They can also cause you to loose confidence in the trading edge itself leading to such a derease in risk or it's abandonment mid way thropugh a typical sample. This is particularly the case if you don't know enough about it, as discussed in the document attached to this thread.


G/L

 

[bbmac]

hi bbmac,

great doc.
as you trade the fairly small TFs, you are susceptible to relatively large moves during news events.

I don't think your doc covers your approach to news events in the context of intra-day trading.

do you have rules for trading/avoiding potentially volatile news?

It's extremely rare I am in a position heading into data that has historically been proven to move the market violently. If I am, my stop is at least at b/e, but I really don't remember the last time this happened.

My approach to the immediate knee-jerk reaction to any data that does move the market violently is to ' go where the money goes.' Typically I will look to get involved on any 'momentum set-ups that may develop in the immediate aftermath of data, or failing those developing, and again depending on the market reaction and set-ups that may or may not develop, the ' Buy the first Low,- Sell the first pullback ' -or- conversely ' Sell the first Hi, -buy the first pullback ' can sometimes play out well...as for whether to try and ride any data inspired resultant move past the immediate knee-jerk reaction, well, as you know, that depends on that initial knee-jerk reaction and the actual data numbers etc themselves and their impact on the market and it's price action. Ie as a simplistic example if NFP was +50k last time with a forecast of +75k, and +300k is printed with a drop in the un-emp rate and positive revision to that +50k previous month, then where ever the money is going, I will seek to follow.

If there is/are no set-up (s) on the t/f's of interest to me I simply stand aside.

G/L

 

[DashRiprock]

Yeh exactly, a soft target is just 1/5 of my hard weekly target, but I don't get hung up on the soft daily target because if there are no hi-prob 'full set-ups' developing during my session, it would be silly chase a 'soft' target for the hell of it. Better to leave it until next day and the day after etc when some may and almost certainly will develop..

My risk/trade is anywhere between 0.8% - 2% depending on the confidence in the Full set-up and the size of stop required. Typically I would say 1.4% is my typical risk. Even given the strike rate, I am comfortable at this risk level. Even If I suffer a consecutive losing run of 3 trades which is statistically improbable but not impossible at my strike rate, it doesn't leave me with a 'mountain to climb' and so the loss won't destabilise my ability to carry on acting on the Trading Edge ,for the reasons discussed in the document.

You have to trade your trading edge at a risk level knowing what the probabilities are of a consecutive losing run and it's likely typical - max size and resultant drawdown. Then you have to be comfortable knowing that could happen, and if it does that such a drwadown won't detsabilise your ability to keep on acting on your trading edge to recover the drawdown and beyond.

Drawdowns can be destabilising no matter how experienced you are. As I say in the document they can cause you to loose confidence in your ability to even act as the trading edge sets-up again after a run of losses, and if you do act and enter the market -without decreasing risk, and then to manage the reulting trades properly in the way the trading edge is supposed to be managed (ie let winners run despite the fear of adding to the losses.) They can also cause you to loose confidence in the trading edge itself leading to such a derease in risk or it's abandonment mid way thropugh a typical sample. This is particularly the case if you don't know enough about it, as discussed in the document attached to this thread.


G/L

:-0

so you have never had a string of 3 losses? over how long have you been trading with this system? what about the size of your typical winning trade? your hit rate must be like a sniper!

 

[Black Swan]

'

It takes many hours at a the screens (1000's) to develop a reliable Trading Edge and although this presentation doc doesn't reveal my own it does suggest what is requred and details some technical factors I use and that others may find useful in doing so/enhancing their own.
G/L

This.

 

[leerees]

Hi BBMac and co, many thanks for uploading the presentation, I will be reading it over the next few days.

Have you heard of the THV system? I've been using the trix indicator that comes with it combined with the meta trader fractals and have been taking trades off pivots, emas plus support / resistence, it's pretty basic stuff but profitable enough for now (between 15 - 25 pips a day).

As a beginner it's very exciting to get hold of your presentation to see how you trade so again many thanks for sharing!!

 

[bbmac]

:-0

so you have never had a string of 3 losses? over how long have you been trading with this system? what about the size of your typical winning trade? your hit rate must be like a sniper!

I am sure I have had 3 losers in a row in the dim and distant but certainly not for a very long time...(years) When you look at the confluence Iof tech factors I use to enter a trade, and that makes up my trading edge, it would be more surprising if there had been more. If I stick to the rules and wait for the 'full set-ups' to develop I can maintain a very high strike rate.

G/L

 

[bbmac]

Hi BBMac and co, many thanks for uploading the presentation, I will be reading it over the next few days.

Have you heard of the THV system? I've been using the trix indicator that comes with it combined with the meta trader fractals and have been taking trades off pivots, emas plus support / resistence, it's pretty basic stuff but profitable enough for now (between 15 - 25 pips a day).

As a beginner it's very exciting to get hold of your presentation to see how you trade so again many thanks for sharing!!

I haven't come across the THV system to which you refer. G/L with though and your trading.

G/L

 

[bbmac]

hi bbmac,

......I don't think your doc covers your approach to news events in the context of intra-day trading.

do you have rules for trading/avoiding potentially volatile news?

Hi Trendie

per my reply in post # 125 to your post above, a great example this morning in candle...big bullish thrust b/o of the previous LH and the then daily hi/current trend hi just before the data came out at 0930am...see pic below (did data leak out before official release ?)

I came out ahead of the data and then sold the first Hi at the 2nd 1min Set-up shown below (regular bearish divergence)...as price entered a previous 4hr/daily swinng hi zone co-existant with minor factors of Weekly R2 pivot and the 138.2% fib extension of yesterday's daily candle. There had been a breech of the 261.8% res channel on the 1min which contains 99% of price action as a further tech confluence in the 'Full set-up.'

I bought the first pullback on the 1min hidden div based set-and stop is now @ b/e so will see what happens. ..tepted to take the profit here !..yeh just have Lol

G/L

Edit: 1022am Glad I took profit as would have been stopped at B/e on that 1min hidden div set-up

 

[MagicJohnson10]

Hi BBmac

great stuff ... brilliant in fact... :clap:

in the doc you refer to the 100 and 200 smas as trend indicators

i am wondering whether or not they coexist with the macd trend dots
that your former work contained or does the 100 annd 200 smas
superseed the macd trend dots indicator?

 

[bbmac]

Hi BBmac

great stuff ... brilliant in fact... :clap:

in the doc you refer to the 100 and 200 smas as trend indicators

i am wondering whether or not they coexist with the macd trend dots
that your former work contained or does the 100 annd 200 smas
superseed the macd trend dots indicator?

The 'macd dots' to which you refer are a custom indicator built for MT4 that shows where the macd signal line is in relation to it's zero axis, ie whether it is crossed up or down and which way it is pointing, this on the next higher and one higher above that t/f's...So for eg on a 1min t/f it would show the 5min and 30min, I don't use it anymore as I tend to view this manually now..ie for a 1min re-entry after a pullback into a a 5min opa uptrend for eg the 5min macd signal line should be crossed aboev it's zero axis (it may not be pointing up as may/probably will have been dragged down by the pullback,( ilst the 3omin + should be at least pointing up at the time of the 1min re-entry set-up.

The 100 and 200sma 's are simply to ascertain whether a 'general trend' exists if a 'classic trend' does not exist...the macd dots are really a filter for a re-entry set-up after a pullback.

G/L

 

[MagicJohnson10]

thank you kind sir!

 

[DionysusToast]

BBMac - with the high hit rates you mention - why do you only risk .8->2% per trade?

You mentioned a run of over 90 winners and that 3 losers in a row hasn't happened for years.

Whats your typical R:R ?

 

[meanreversion]

To date this remains my biggest drawdown in any a/c I have traded. Since trading the' Full Set-Ups, ' my biggest drawdown has been less than 2%.

G/L

How long have you been trading 'Full Set-Ups' .. if you're typically risking 1.4% per trade and your biggest drawdown is below 2%, this implies you've never had two losing trades in a row? Or is the drawdown based on day end, such that you COULD have two/three losing trades in a row but will have made that up by day end?

 

[DashRiprock]

and how are you measuriong drawdown?

biggest run of losing trades or biggest drop in equity from highs?

 

[bbmac]

BBMac - with the high hit rates you mention - why do you only risk .8->2% per trade?

You mentioned a run of over 90 winners and that 3 losers in a row hasn't happened for years.

Whats your typical R:R ?

Hey DT,

The rationale behind my answer to your question is in part mentioned in post # 124 which was a response to another question. I will expand on that rationale here in specific response to your question.

I mentioned in response to another question that my largest drawdown in an a/c had been 8% and in a sense my onward development since that experience has probably to a large extent been a response and reaction to it.

I stick at the risk/trade I am comfortable at. Even at this high strike rate, over a 50 trade period there is still a 5% chance that I could get 3 consecutive losing trades over a 50 trade sample. So, If for eg I was trading @ 5% trade risk this would put me in a 15% drawdown and as I mention in the presentation I am not good with drawdowns, if that previous experience is anything to go by.

Now, being objective that was some years ago and both I and the Trading Edge I trade have 'developed' since then, so I would probably be better able to do deal with it without it destablising me. But first and foremost we are in the business of minimising and then managing risk, so in order to minimise the risk of being drawdown to an extent I haven't ever experienced, and possibly deing detsabilised by it, I keep my risk/trade to an amount that in the event of a consecutive losing run of 3 trades would still be less than the most I have experienced. In this way I am very much minimising the risk of this ever happening.

Big drawdowns have never been a feature of my trading so I have not developed the necessary psychological tools that others whose trading edges may experience it from time to time may have.Indeed I mention in the presentation doc that one of the objectives in developing this Trading Edge was to achieve lo drawdown.

In trading we have to minimise the risks involved and that may come to pass as a contingency against the risk of it affecting our future performance.

In answer to your 2nd question re R:R, the typical R:R I achieve with it is 1:1.

G/L

 

[bbmac]

How long have you been trading 'Full Set-Ups' .. if you're typically risking 1.4% per trade and your biggest drawdown is below 2%, this implies you've never had two losing trades in a row? Or is the drawdown based on day end, such that you COULD have two/three losing trades in a row but will have made that up by day end?

Since I started trading the 'Full Set-Ups' [ie since I added in the repeating fractal geometric price patterns and finalised the repeating highest-probability combinations of potential supp/res factors,] I have not had 2 x consecutive losing trades. To qualify this though, If I have a losing trade I will then only trade a 'perfect' Full-Set-Up at what I call an A+ or A- repeating combo of Support/Resistance factors so that it minimises the chances of a 2nd and/or 3rd consecuitive losing trade. This involves even more patience and discipline.

(NB: These highest-probability repeating combinations of potential support/resistance factors are rated as A+, A-, B+ and B, everything else being B- and rejected. It is obviously the A+ and A- which are highest in probability of a successful outcome should the 'right' Full Set-Up develop there.

G/L

 

[bbmac]

and how are you measuriong drawdown?

biggest run of losing trades or biggest drop in equity from highs?

I class drawdown as the a/c hi to a/c lo before recovery to a new a/c hi.

G/L