Making Money Trading

[1Pipped]

Lurker you may already know, oanda pays interest on your deposit, but in case you didnt you do now!
Good work on your target by the way.

 

[lurkerlurker]

Lurker you may already know, oanda pays interest on your deposit, but in case you didnt you do now!
Good work on your target by the way.

That is excellent. Never knew that. I know CMC pays interest on deposits above a "qualifying amount", but something tells me that is £20k or so.

How much do you need in Oanda, can you get a GBP account, and if so how much do they pay on balances of a few £k?

 

[trader_dante]

That is excellent. Never knew that. I know CMC pays interest on deposits above a "qualifying amount", but something tells me that is £20k or so.

How much do you need in Oanda, can you get a GBP account, and if so how much do they pay on balances of a few £k?

I believe you can only get US or Euro accounts with them. There is no minimum intial deposit required and they make continuous interest rate payments second by second.

Here are some useful links:

OANDA FXTrade - Open A Forex Trading Account

OANDA FXTrade - Comparing the Spreads of Different Forex Brokers

OANDA FXTrade - Interest Rate Calculation

P.S I don't use Oanda to trade and am not affiliated with them.

 

[lurkerlurker]

I believe you can only get US or Euro accounts with them. There is no minimum intial deposit required and they make continuous interest rate payments second by second.

Here are some useful links:

OANDA FXTrade - Open A Forex Trading Account

OANDA FXTrade - Comparing the Spreads of Different Forex Brokers

OANDA FXTrade - Interest Rate Calculation

P.S I don't use Oanda to trade and am not affiliated with them.

Ahh - I thought the second by second interest was for being in a position, not for the free cash in the account.

I don't fancy the currency risk involved in using EUR or USD. This is one of the reasons I spreadbet. I suppose I could hedge the exposure and pay transaction costs, but managing that would be a bit difficult with a fluctuating account size.....

GBP interest is higher than EUR or USD. Also, are they a bucket shop broker or an ECN broker? (sorry for being a little offtopic)

 

[1Pipped]

You can have a GBP account, my account is GBP and it does make it a bit confusing at first when working out how many EURJPY to trade (you can trade 1 single euro ) Ive done a spreadsheet to sort that out for me, Ill post it later if interested as it is on my laptop.

About bucket shop / ECN they are essentialy a bucket shop, but a completely automated one.

Also sorry for off topic.

 

[trader_dante]

Trade setup *London Sugar*

I am looking to go short on March London Sugar.

This is not a recommendation to trade.

How will I enter this trade?

I will enter on a break of the low of the daily pin.

My stop would be one tick above the high of the left eye.

Why I am taking this trade?

Chart 1: Daily TF shows a pin bar at a swing high. Note how the body is NOT near the top of the preceeding bar. This is an example of where a traders discretion comes in, in deciding whether to take it.

How will I manage the trade?

The stop is placed above the left eye because the first problem area is likely to be the 320 level which marks an area of previous resistance and is currently where the 10ema is.

To place a stop above the pin would mean that the R:R would not be favourable.

++++++++++++++++++++++++++++++++++++++++++
I think it would be advisable to add that I have made two previous position trades in this Sugar contract in the last six months and BOTH resulted in losses.

I remember Lurker looking at my account history in the early days and saying "Good stuff but don't touch the sugar again..."

LOL

+++++++++++++++++++++++++++++++++++++++++

Always have a plan.

 

[Newk]

TD,
As you consider a stop above the pin too high (70-80 pips), what are your targets on this trade?

Thanks,
Newk

P.S. Keep up the good work, follow this thread daily!

 

[trader_dante]

TD,
As you consider a stop above the pin too high (70-80 pips), what are your targets on this trade?

Thanks,
Newk

P.S. Keep up the good work, follow this thread daily!

Hi Newk,

It's not that the stop is too high but that it gives an unfavourable R:R in relation to the first problem area.

I don't like to talk in terms of targets because most traders associate TARGETS with EXITS.

I prefer to think of PROBLEM AREAS. They are problem areas because they are areas that the price may stall or reverse at.

I do not blindly exit once they are reached but I watch the price closely for signs that it may turn against me.

On my chart, the entry is at 325.4 bid.

The first problem area is at 319.8 bid which is 320.8 offered.

The distance between the entry and the first problem area is therefore 46 ticks.

Now a stop above the pin would be a risk of 91 ticks. This gives us a reward to risk of 0.5:1 which is not good.

If we put a stop above the left eye, the risk becomes 44 ticks which improves the R:R to just over 1:1. This is better although many traders wouldn't even play for that.

I don't normally like to place stops above or below the eyes. I like to put them above or below the pins themselves as this is, in my opinion, the only place you are truly wrong when you trade the setup. As explained before, the strategy is very discretionary and if you look at an hourly chart for this market you will see it fell very sharply into the close. As a result I am looking for momentum to the downside and consider a break above the left eye to seriously negate this thinking.

 

[trader_dante]

Tips and Tricks *Part 11*

I have already talked about how I largely ignore the news when I trade so now I want to talk briefly about the one other thing that many traders love to look at, that I ignore: indicators

It is not for me to say that indicators are beneficial to a trader or not. I know many good traders that use them, I know many that do not.

All I can say is that I don't.

However, sometimes, I will put a 14 period RSI onto my chart to see if there is any DIVERGENCE. This is the only time I use an indicator and I usually only do so when I am thinking of taking a trade that has no other supporting factors. That is to say, a pin bar that is at an extreme high or low after the end of a sustained bull or bear move.

What is divergence?

Divergence describes the phenomenon of momentum moving in the opposite direction to price.

A classic divergence signal is where a HIGHER PRICE is accompanied by a LOWER OSCILLATOR HIGH, or a LOWER PRICE accompanied by a HIGHER OSCILLATOR HIGH.

The idea is that the market has posted a new high or low but momentum is failing to confirm that price move with a new high or low of its own.

This can be viewed as a sign of trend vulnerability.

The key word in the sentence above is VULNERABILITY.

In the context, a vulnerability means that a trend could be SUSCEPTIBLE to WEAKNESS, it does NOT mean that a trend is going to sharply reverse.

A trader should have this first and foremost in their mind.

Combining divergence with price action

When I see a pin bar at a swing high or low and divergence is present it gives me added confidence. The divergence shows me that momentum is weakening, the pin bar shows me the reversal has begun.

Chart 1 shows classic divergence on the London Sugar setup that I posted above.

Chart 2 is another example of divergence on a daily stock chart for McDonalds (MCD). Note how the price declines steadily while the RSI goes sideways with a very, very minor upside bias. When the final swing low happens, there is a clear divergence.

Chart 3 is an example of why I like to keep an open mind as to where prices can go. This particular pin and divergence combination in MCD (marked by the arrow) caught the exact low of the market.

 

[trader_dante]

Tips and Tricks *Part 12*

This is the final part of this installment and I want to end it by repeating something I posted earlier in this thread:

For many people in life there is a difference between what you want to do and what you are good at doing.

I firmly believe this applies to all aspects of life.

It certainly has to me.

Find out what you are good at and use it to your advantage.

 

[trader_dante]

Ever wondered why Gisele is a Supermodel and you're a trader?

 

[0007]

For many people in life there is a difference between what you want to do and what you are good at doing.

Find out what you are good at and use it to your advantage.

That is such good advice!

 

[lurkerlurker]

Ever wondered why Gisele is a Supermodel and you're a trader?

I remember that. It was very funny. The dollar as a toy currency.

I am looking to go short on March London Sugar.

I think it would be advisable to add that I have made two previous position trades in this Sugar contract in the last six months and BOTH resulted in losses.

I remember Lurker looking at my account history in the early days and saying "Good stuff but don't touch the sugar again...".

Yes, I remember. Could you take this trade at the smaller of either half your usual risk % or the smallest possible contract size you can trade?

 

[trader_dante]

Yes, I remember. Could you take this trade at the smaller of either half your usual risk % or the smallest possible contract size you can trade?

What are you, my risk management advisor?

 

[shadowninja]

Find out what you are good at and use it to your advantage.

If I did this, I wouldn't get out of bed.

 

[trader_dante]

If I did this, I wouldn't get out of bed.

LOL

 

[lurkerlurker]

If I did this, I wouldn't get out of bed.

Now you just need to find someone to pay you for being good in bed.

If that were a job, I wonder what we'd call it?

I suppose being a gigolo would be an alternative to trading...

 

[trader_dante]

Now you just need to find someone to pay you for being good in bed.

If that were a job, I wonder what we'd call it?

I suppose being a gigolo would be an alternative to trading...

That's the title of my next thread: Making Money as a Gigolo

 

[shadowninja]

Hm.

 

[smbtnt]

Hi guys,

Nice pin on gold daily, ticks all the boxes.

FYIO.