It's All About The Pips...

[danarm]

Hi all

Looked a nice days trading. This volatility in the market place is great for us.

Shame i missed today but had a few things to do.

Have a great weekend.

D

 

[danarm]

What can I say these moves this week have been so scary its not even funny. For those of you who are not aware, the Fed are buying everyone's CP, they are also attempting to set up a "bad bank" that will buy all the banks whale excrement removing it from their balance sheet and thus freeing up room for them to lend again. Sounds good in theory and from what I understand worked during the S&L crisis of the 80's ( I was doing trigonometry and chasing my sisters mates at the time so I cant vouch for that). At what price do the banks get this whale ****e off their balance sheets and to what cost to the US tax payer? So aside from all the stuff I mentioned yesterday, they are buying toxic waste, buying cp and by the way you are no longer allowed to short equities either. Call me old fashioned but is this a free market economy a capitalist country or is it communism? At the same time the Chinese are buying their own stocks as are the Russians. I am no rocket scientist but are we not repeating mistakes that previous generations made thus making it more costly in the future and leaving a longer deeper recession a possibility. I'll repeat what I said earlier this week I am embarrassed to be a part of this mess as normal people, farmers, nurses & teachers have to foot the bill for the mess the banks have got themselves into, is that fair or right? Does the US still deserve a triple A rating? One more thing, these moves these past few days have been historically volatile, I can talk from experience that very small positions with 200bp moves can be extremely costly or profitable and are not going to encourage any position taking in the near future. How many more hedge funds will implode on the back of this weeks volatility specifically the squeeze of the last 24 hours?

Clearly this is another weekend that is going to be key, will Hank get his grand plan through congress and for how long will this hold the stock market up? My view has not changed, the knock on effect on the real economy is going to be painful, asset prices specifically property will continue to depreciate and government intervention will delay the recovery (case study Japan late 80s early 90s). Its been a long tiring week for all, enjoy the Ryder cup may the best team win, lots more fun and games next week!

The City Trader

 

[sinimini]

It is not a free market when banks are told to lend to high risk people just so they can own their own home.

 

[Rollingstone]

Hi D

In a week that would send many a seasoned pro-trader into a state of confusion and leave the novices hiding under their duvets, you have reaped in over 1,000 pips.

As a novice trader, 6 months ago I would have been totally bewildered by the pace of events unfolding across the markets. However, looking back at my charts this week I have been able to see many clear entries using your strategy that I would have felt confident entering (unfortunately I have not been around this week to trade).

I find your strategy so versatile and robust that it translates across all the time-frames and I am beginning to find a trading style I feel totally comfortable with. I too use the 60m chart for the trend and pick between the 5m (on crude and gold) and 15m (forex and indices) to see entries.

I now have the confidence and patience to wait for the trades to set up how I like them, rather then just jump into trades that aren't there, knowing that the best opportunities present themselves with clarity using this strategy.

Thanks for sharing your knowledge so freely.

 

[gamma]

I now have the confidence and patience to wait for the trades to set up how I like them, rather then just jump into trades that aren't there, knowing that the best opportunities present themselves with clarity using this strategy.

That statement says it all

 

[JTrader]

Hi Danarm

would you say that your strategic approach setup keeps you out of the market when price is congested, & aims to get you in when a breakout occurs? be it a bounce off S/R and CCI takes over/breaks out?
If you were describing your approach, what does it do in terms of price action? what are its strengths & weaknesses?

Also, i noticed you were using 40-60 pip SL's on cable.

How many ticks/mini-pips SL's do gold & crude tend to require in comparison?

What is interesting is you are an experienced bank?/city trader using a very simple indicator based method. whereas a lot of experienced guys here, deplore indicators....Any comments?

Cheers.

 

[JTrader]

Also danarm,

i notice you use heiken ashi over your candles. is this just to take away reasons for doubt that individual candles information may give you type of thing?

Does heiken ashi require settings, if so what R yours?

Cheers.

 

[danarm]

Hi D

In a week that would send many a seasoned pro-trader into a state of confusion and leave the novices hiding under their duvets, you have reaped in over 1,000 pips.

As a novice trader, 6 months ago I would have been totally bewildered by the pace of events unfolding across the markets. However, looking back at my charts this week I have been able to see many clear entries using your strategy that I would have felt confident entering (unfortunately I have not been around this week to trade).

I find your strategy so versatile and robust that it translates across all the time-frames and I am beginning to find a trading style I feel totally comfortable with. I too use the 60m chart for the trend and pick between the 5m (on crude and gold) and 15m (forex and indices) to see entries.

I now have the confidence and patience to wait for the trades to set up how I like them, rather then just jump into trades that aren't there, knowing that the best opportunities present themselves with clarity using this strategy.

Thanks for sharing your knowledge so freely.

Glad i can help a little...

Trust u enjoyed the weekend.

D

 

[danarm]

Hi Danarm

would you say that your strategic approach setup keeps you out of the market when price is congested, & aims to get you in when a breakout occurs? be it a bounce off S/R and CCI takes over/breaks out?
If you were describing your approach, what does it do in terms of price action? what are its strengths & weaknesses?

Also, i noticed you were using 40-60 pip SL's on cable.

How many ticks/mini-pips SL's do gold & crude tend to require in comparison?

What is interesting is you are an experienced bank?/city trader using a very simple indicator based method. whereas a lot of experienced guys here, deplore indicators....Any comments?

Cheers.

Morning

Like any strategy, it is never perfect and yes it will take you into trades when you shouldn't get in and likewise can keep u out when you could have made a few pips. Thats trading as we know it unfortunately. Everyday is different and with experience you get a feel for a market and are more aware of momentum and volatility in the market place at a particular time.

The longer term CCI will give me a great insight into where the trend is heading and generally i will try and trade with that. However there are exceptions to every rule in trading, depending on S&R levels, momentum, correlation, trajectory of ma's, figure's, time of day etc etc and that can only come with experience.

Yes price action is very important in trading. For example novice's will trade a 123 setup, with no momentum and cant understand why it hasn't bounced. Thats why it is important to get a feel for what the other markets are doing eg CRUDE and GOLD.

I rarely have a 40-60 pips stop loss on my shorter term book but again this depends on how much i like a particular trade and where the S&R levels are. I don't believe in having a standard 20pt or 30 pt stop on all trades, as every trade is different and i make a judgement call there and then. What do i expect from the trade? Is it with the 4HR trend? What is the rest of the market doing? How is volatility for that day? Am i going to hedge myself in? I am sorry for not being black and white but thats how i see it and have done for years. Successful trading comes with experience and the more you learn and put into practice the better you become.

Gold and Crude are different beasts and i love the Crude movement in the london open. Less volatile but when its found direction you can def pick up a few pips...Again stop losses vary here depending on the ma's and where i get in and what expectation i had for that particular move. Crude is his own man at the moment and is running the show so you do need to very vigilant with stops. For the longer term charts, the higher the stop losses, so if i worked purely off my 60min and 4Hrly chart, i might decide to have a 100 pt stop for example. If i was working off my 5min, with a tight bounce off my 20ma, i might only need a 25 pt stop.


Lastly you asked why i use a very simple indicator based method. Quite simply for me it works and i make a good amount of pips from it. Its simple, easy to understand and makes me money.

Ok well hope that explains a little...We r all different and as long as we all make pips nothing else matters.

Keep it simple

D

 

[danarm]

Hi all

I am knackered today...Couldn't sleep last night so got up and studied longer term charts.

Won't be in on monday as i have a meeting for most of the day.

Will hopefully get online at some stage.

Please keep blogging and keeping this thread going.

Have fun.

D

 

[Rollingstone]

The Serpent's Tooth

Hi All

I read this over the weekend and thought it might be of interest to some of you. It's about the cycle of success and failure which is relevant to the process of learning to trade.

Death Valley and the Serpent's Tooth

As a youngster do you remember learning a particular skill or ability - one such as learning to swim or ride a bike? Do you remember the pain and frustration that you went through as you struggled to master the basics and then the seemingly endless effort that you had to make to perfect your art? Tough wasn't it? Do you also remember the times when you wanted to give up? The times when the effort seemed pointless and everything that you did went wrong?

However, finally and after a lot of perseverance and self-discipline quite suddenly everything that you learnt fell into place. You reached a point when you no longer constantly fell off your bike or when you finally managed to complete a whole length of the swimming pool. That single glorious day was when all of the hard work and effort suddenly seemed to be worthwhile, when the struggle of the early stages were forgotten and you sailed into a blissful land in which all of your actions were effortless and successful.


The Serpent's Tooth Cycle

If you examine each of the various skills that you have learnt throughout life you will discover that the same basic pattern of growth/decay/growth is woven into the development of each one. This cycle is a well accepted theory and can been seen in the growth patterns of many businesses, during the development of any skill, through the life cycle of plants and is observable in every key element to human experience.

Stage 1 - The Rise
At first you start off your chosen task with great enthusiasm. This energy quickly propels you into making rapid progress. Sometimes referred to as beginners luck, in this part of the cycle everything that you do is a success and you learn at a faster pace than at any other time.

Stage 2 - The Peak
However this rapid rise in growth does not continue onwards forever and you reach a zenith in performance. Most of us are only aware of their highest state of achievement after it has been reached.

Stage 3 - The Turn
Then suddenly just as you think you know it all along comes a disaster. You fall from your bike, you fail your exam, you have a run of losing trades etc. Something happens to suddenly bring to your attention the fact that you do not know it all. No matter what you try to do all you experience is continued frustration, failure and defeat.

Stage 4 - The Fall
The rate of decline then appears to accelerate and your enthusiasm for the chosen task falls to its lowest point. It is at this stage that 99% of people give up. However this decline in fortune does have its limit. Suddenly things change and you start to feel a little more positive about things.

Stage 5 - The Growth Gradient
From the turn you slowly begin to piece things back together again. Bit by bit you develop a new aptitude for your chosen task. This then continues unabated until you finally begin to realise that you are starting to surpass your earlier achievement level.

 

[JTrader]

Hi danarm

i definately agree with your point about quality hours v's long hours, and the non-correlation between net pip count at the end of the day/week. Trading at the right times of day is key to this.
I will hopefully reduce my screen time by half soon, as i hope the pip count obtained in a 3-4 hour stint will be enough.

 

[danarm]

Hi danarm

i definately agree with your point about quality hours v's long hours, and the non-correlation between net pip count at the end of the day/week. Trading at the right times of day is key to this.
I will hopefully reduce my screen time by half soon, as i hope the pip count obtained in a 3-4 hour stint will be enough.

Morning JTrader

Trust u had a good weekend.

Let me know how u get on today as i have to run out now. Should be back late avo.

Have fun.

D

 

[Stuart14]

Morning. I took a long position light crude this morning. Doing O.K so far. I normally work with pure price action, but i like the way these indicators show the longer term trend on the shorter timeframe.

I've added the ADX to mine as well, just so I can easily see the trend and conviction of the trend.

Good Luck today

 

[Stuart14]

Out for 60pips profit. At one point I was 250 pips up. Now how do you decide when to take profits? I like to try to catch the greater trend, but equally want to make money and not hold on to trades when the completely reverse....

 

[danarm]

Out for 60pips profit. At one point I was 250 pips up. Now how do you decide when to take profits? I like to try to catch the greater trend, but equally want to make money and not hold on to trades when the completely reverse....

Stuart...I have to say excellent work but to be 250 pips up and not bank at least 50% is worrying. What is your weekly target? Surely that would have been a good start for the week...

Anyhow 60 pips is 60 pips and overall excellent work for taking the trade. We can work on when to close a position during the week.

Have u got a written business plan? How many pips are u after per week/month?

Well done...

D

 

[danarm]

After last weeks madness today was almost enjoyably peaceful. Spreads were quite frankly all over the place as was flow although unlike Friday, flow was more balanced today with retail accounts definitely gaining confidence from Friday's rally and continue to be a better buyer of decent named corporates. At least there was a little more clarityon Hank's 1 trillion dollar bail out plan and with that are lots ofquestions? We hear that these illiquid assets as the Fed calls it or whale ****e as I call it, will be transferred at a price derived as aresult of a reverse auction. So what happens if that price issignificantly lower than most peoples marks and therefore causing a hugep&l hit that will mean another capital injection is required? If thebid is too low will the banks tell the Fed to kindly go forth androtate? Ignoring all that, lets assume they all sell their toxic waste at marks and it still doesn't fix the mess, how many more trillion do you want to throw at it, and at what cost to the tax payer and thedollar? I still don't see how this "bad bank" is going to help the manin the street and I still fear the impact on the real economy although Ido understand that bank lending remains the key to our recovery. Thefact is Hank's grand plan is by no means a no brainer and 700 billiond ollars is quite a lot of cash to gamble with especially when you don't have the cash to hand. If it gets chucked out by congress (I know unlikely) who knows what's going to happen next! As for EM there are clearly some bargains to be had if you have faith in Hank and friends. Take your pick whether it be MTS, Vip at +750r,VTB at+700, or Halyk at +900. These names have been everyone's darling these past few years and I see little default risk in any of them and yet I don't see a huge queue of buyers lining up to load up at these generous looking spread levels. What I am trying to say for the bulls out thereis that there are some opportunities to be had, timing is everything and I would be surprised if we have seen the wide prints. Expect activityand volatility to pick up through the week and congratulations to the US on a well deserved victory in the Ryder cup!

(A day in the life of a city trader)

 

[gamma]

Stuart...I have to say excellent work but to be 250 pips up and not bank at least 50% is worrying. What is your weekly target? Surely that would have been a good start for the week...

Anyhow 60 pips is 60 pips and overall excellent work for taking the trade. We can work on when to close a position during the week.

Have u got a written business plan? How many pips are u after per week/month?

Well done...

D

A business Plan!
Aiming for a certain number of pips each day/week/month!
Two statements that should be in the arsenal of every trader.

 

[Stuart14]

A business Plan!
Aiming for a certain number of pips each day/week/month!
Two statements that should be in the arsenal of every trader.

O.K clearly I am still working on this.

I need to be able to clear £6000 per month to be comfortable enough to leave my current role. With £100k as a trading account I would hope to be able to do it.

Now how many pips per month/ week etc. I guess it would all depend on how much each pip is worth. I doubt i'll ever do it on a £1 per pip basis but would hope to be able to do it at £5 per pip.

At the moment I am just trying to get my trading to a consistent level, but you are right, I need a plan.

If I said 100 pips per day profit I clearly should be kicking myself for not taking twice that amount earlier!

There you go, lesson for today learnt!!

I definitely need help on exits!!!!!

 

[gamma]

O.K clearly I am still working on this.

I need to be able to clear £6000 per month to be comfortable enough to leave my current role. With £100k as a trading account I would hope to be able to do it.

Now how many pips per month/ week etc. I guess it would all depend on how much each pip is worth. I doubt i'll ever do it on a £1 per pip basis but would hope to be able to do it at £5 per pip.

At the moment I am just trying to get my trading to a consistent level, but you are right, I need a plan.

If I said 100 pips per day profit I clearly should be kicking myself for not taking twice that amount earlier!





There you go, lesson for today learnt!!

I definitely need help on exits!!!!!

Hi Stuart,
I am not aware of your experience so please don't take offenseive of its all old hat.
I trade Newtron bombs system almost every morning, and and use a stop loss that I am comfortable with, if my position goes in profit ,I start to move my stop loss up and then convert it to a take profit. if there is news about, that might effect my trade I run a tight t/p I, generally find this is an excellent exit strategy.