Making Money Trading

[lurkerlurker]

That's TA all over, though. The importance is consistency in the way you do it. Pins keep you from overtrading, but so do other systems and there are many excellent trades that are not taken because the signal that one is waiting for was not given.

This is very true. I think it is better to have multiple setups. However, I do not think that any new traders should try adding a second setup until they are entirely comfortable, consistent, and profitable with the first.

I trade pin bars exclusively (I also trade the news a few times a year, but that isn't relevant here). I don't use indicators, I don't use other price action setups, inside bars, DBLHC/DBHLC, volume analysis, order book, T&S, fundamentals etc. I have a trading plan which I need to follow until the middle of February. That will mark 3 months of consistency (I hope - I stepped off the path for the first time during this 3 month challenge on Friday).

If I am consistently profitable come mid February with the pin bars, I may look at increasing my account size. However, I will still be trading only pin bars. A few months after that, I will start paper trading a second setup alongside the pin bars. After I am consistent with the pin bars, I will learn some more about price action to give me criteria for a second setup. I should also have improved my pin bar exits.

I notice that TD trades quite a few setups. He has taught us about inside bars for continuation, congestion zones / breakouts, and DBLHC/DBHLC setups. My goal is to have quite a few profitable setups I can trade. In a few years, I should be comfortable trading decent size with multiple setups - this way I should capture more of the profitable moves which wouldn't have been triggered with just pin bars.

However, the important thing is to perfect one edge at a time. I'm taking next week off, which wasn't in the original plan. I will have less experience of the markets because of it, and I'll have to finish my 3 month consistency challenge a week later than expected. However, if I can get to February without having any more days like Friday, and taking better and more controlled exits I will be doing very well indeed.

 

[shortorlong]

Yes, I think we should. Pin bars come up here, but the purpose of this thread is for TD to teach us all about trading, and posting too many live pin bar calls pollutes that. It is important for TD to post the setups he takes, but what we do is less relevant to the thread.

I've started a thread where we can post live pin bar calls. I'll be adding my website to that soon too!

great stuff Lurker. I hope you don't mind the odd index pin being posted for consideration. not to mention pork bellies' pins ( I don't trade them I just like telling people when they ask what I do- - "oh yeah there's money in pork bellies") .. really there is no reason to limit the thread to any instrument group.

 

[shortorlong]

I am looking to go long on EUR/JPY.

This is not a recommendation to trade.

How will I enter this trade?

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

My stop would be one tick beneath the low of the pin.

Why I am taking this trade?

Chart 1: Daily TF shows that price has hit a significant support/resistance pivot and round number.

Chart 2 Close up of the daily TF shows a pin bar formation.

How will I manage the trade?

Chart 3 shows the significant s/r pivots that lie overhead. These may cause price to stall or reverse and as a result, if the price were to approach them I would watch it very carefully and adjust stops based on the price action that occurs.

This chart also shows a lower pivot that the price is currently sitting on. This is at 161.23. Since there is a lot of risk on this trade (199 pips) and this is a significant pivot, I aim to move my stop up quickly on this trade to the approximate area of the left eye which is beneath the pivot.

Chart 4 shows the potential fib levels that occur on the way up. Note again that price may stall or reverse at these. This is going to be tricky to judge as the zone I have drawn a square round is going to be choppy from the look of the previous price action in it. Stop adjustment will be based on price action.

The 61 level has confluence with the first major s/r pivot at 164.04. This is going to be an important area.

++++++++++++++++++++++++++++++++++++++++++
At the time of writing this, the market still has just under two hours to trade. If the price "closes" below the low of the left eye at 1.6097, then the trade for me, is invalidated.

Please note that as the market still has longer to trade, the order will NOT be placed until shortly before midnight UK time.

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

Always have a plan.

I don't think anyone has had reason to trade this yet, it has not reached TD's buy price one point over the pin, and it has not reached Rathcool's sell price (one point below the pin)

Is this pin bar void now or is it still in play?

(I have had a nibble of the price action here but I was not following any rules)

 

[Phil Mibbutz]

Hi Phil,

No sure that I understand what you mean, there. As I see it the pin is the highest point of a trend, with a short body inside the previous bar. I think that it must be used with other criteria--a bounce off something that you already follow. It is true that they disappear, frequently, from one time frame to another and it is possible to find that there is no signal given, but the price bounces just the same, leaving you cursing for not taking the trade.

That's TA all over, though. The importance is consistency in the way you do it. Pins keep you from overtrading, but so do other systems and there are many excellent trades that are not taken because the signal that one is waiting for was not given.

Split

What I meant was that the formation of a pin bar would seem to depend on when the candlesticks start. F'rinstance, if say you have a 5 min chart beginning at 10am, it will look different from a 5 min chart starting at 10:02.30, or indeed any other moment not 5 min, even though it's still using the same time frame.
Possibly related to the same thing, I find the charts supplied by SB cos (which mostly come fromt he same source) are fairly useless in candlestick mode.

 

[Splitlink]

What I meant was that the formation of a pin bar would seem to depend on when the candlesticks start. F'rinstance, if say you have a 5 min chart beginning at 10am, it will look different from a 5 min chart starting at 10:02.30, or indeed any other moment not 5 min, even though it's still using the same time frame.
Possibly related to the same thing, I find the charts supplied by SB cos (which mostly come fromt he same source) are fairly useless in candlestick mode.

TD uses a 1 hour chart, minimum, and I have had a look at the lower time frames but the lower they go, the more pins stick out so I decided to try for the 1 hour, too. The better quality pins seem to be the ones on a higher time frame.

 

[lurkerlurker]

great stuff Lurker. I hope you don't mind the odd index pin being posted for consideration. not to mention pork bellies' pins ( I don't trade them I just like telling people when they ask what I do- - "oh yeah there's money in pork bellies") .. really there is no reason to limit the thread to any instrument group.

I don't touch pork bellies- I know nothing about them, the underlying is illiquid, and the SB firms would make me a price wide enough to sail the fleet through. I'm happy enough telling people "oh yeah, there's money in foreign exchange".

I don't mind the odd index pin being posted actually. I lost 10% of my account on a failed Crude pin on Friday and only ended the day / week up thanks to an index trade!

 

[black bear]

extract from T2W trading plan

"To assess the probability of success of a trading strategy we must start by defining the trade setup. This needs to be extremely precise, unambiguous and crystal clear. This is vital in order to spot the setup in real time, trading with real money. Once the setup is defined, it can then be back and forward tested to see if the probability of its success outweighs the probability of its failure."

Hi TD

I have put in this post as a reality check nothing more, the thread in my opinion is very good and teaches a lot of very good stuff etc to new traders and some older ones.

Thanks TD.

There are still to many grey areas IMO, some of them caused by posts and questions etc along the way, that is to be expected.

Everyone likes to have a say or look at things perhaps from other positions etc no harm there.

Split gave me a good link, I no you posted it before but no harm again on a thread this long

Pin bars introduction

Timsk posted T2W plan template on another thread,

Thanks Tim, I for one think its better than mine so will be or am re-attending to my own more complete plan.

I think this belongs here to at this stage of the thread to.

I would just advise all interested in method outlined by TD to do their own research, their own back or forward testing etc to make the method their own.

Again thanks TD and good luck in your new job

Andy

 

[trader_dante]

I don't think anyone has had reason to trade this yet, it has not reached TD's buy price one point over the pin, and it has not reached Rathcool's sell price (one point below the pin)

Is this pin bar void now or is it still in play?

Hi shortorlong,

Friday's bar is an inside bar and the s/r pivot that the pin bounced off has held so I still have my order in.

 

[lurkerlurker]

Hi shortorlong,

Friday's bar is an inside bar and the s/r pivot that the pin bounced off has held so I still have my order in.

I'd dearly love to put an order in at 1U and see what happens. As it is on a daily bar I wouldn't need to screen watch during the day, and a small size shouldn't cause me to become emotionally involved as it would be impossible for my to "win back" my losing trades from Friday at such a small size, and the loss from this trade if it fails wouldn't be terribly large. It would also give me a bit of practice playing the larger timeframes.

On the other hand, I said I would take the week off. Thoughts?

 

[trader_dante]

I'd dearly love to put an order in at 1U and see what happens. As it is on a daily bar I wouldn't need to screen watch during the day, and a small size shouldn't cause me to become emotionally involved as it would be impossible for my to "win back" my losing trades from Friday at such a small size, and the loss from this trade if it fails wouldn't be terribly large. It would also give me a bit of practice playing the larger timeframes.

On the other hand, I said I would take the week off. Thoughts?

Work on your discipline first and foremost.

Take the week off.

What will happen if you ignore your earlier decision to take time off, break your discipline, place the order and the trade fails and loses you money?

You will have ANGER at yourself to add to your negative emotions.

 

[shortorlong]

Hi shortorlong,

Friday's bar is an inside bar and the s/r pivot that the pin bounced off has held so I still have my order in.

Thanks for the update TD,
looking forward to seeing how it works out.
That's the great thing about daily pins .. plenty of time to think the trade through, not at all like my usual .. one minute bar trading frenzy :cheesy:

 

[omni]

Anyone got a view on gold?
Buy in levels?
Stops?

 

[laptop1]

Anyone got a view on gold?
Buy in levels?
Stops?

Never to high to buy, if holding on to it. Target 1,000, then long term, 2,000

I like silver. I have mentioned it, when it was trading at 14,00.

I've been in and out of Gold since 620,00 and Crude since the 50s,

Also one should buy wheat long term.

However, if you don't want to be fully position in Gold. and lets say you max size is 10 lots, buy it here and scale in on pull backs until you archive you full position size and an average lower price. If you dont get pull back at least you have some money in gold even if you not fully position. This is how I look at the markets when trading long term, but everyone is different. Good luck

 

[TimeLine]

Hi T_D,

Thanks for the wonderful thread, you teach a very complete and logical method.

I got a question about the timeframe. You said if a trade is based on a timeframe, trader should not exit it because of some lower timeframe actions. I saw your examples, most of them based on 1H timeframe, you exit method is based on the Daily( r/s level ) and H1(MAs) timeframe, I can understand that. Do you hold midterm positions? I mean the entry & exits totally based on daily chart, no 1H chart involved.

Thanks

 

[trader_dante]

Hi T_D,

Thanks for the wonderful thread, you teach a very complete and logical method.

I got a question about the timeframe. You said if a trade is based on a timeframe, trader should not exit it because of some lower timeframe actions. I saw your examples, most of them based on 1H timeframe, you exit method is based on the Daily( r/s level ) and H1(MAs) timeframe, I can understand that. Do you hold midterm positions? I mean the entry & exits totally based on daily chart, no 1H chart involved.

Thanks

Hi TimeLine,

Yes, I do enter and exit trades based only on the daily chart. It's just that the setups don't come along very frequently.

Tom

 

[TimeLine]

Hi TimeLine,

Yes, I do enter and exit trades based only on the daily chart. It's just that the setups don't come along very frequently.

Tom

Hi Tom,

Thanks for your replay, The three MAs setup is very interesting, have you thought about using them as a entering method, combine with price action. Maybe we can got more signals.

Qiu

 

[trader_dante]

Hi Tom,

Thanks for your replay, The three MAs setup is very interesting, have you thought about using them as a entering method, combine with price action. Maybe we can got more signals.

Qiu

Hello Qiu,

From time to time I have used them as an entering method very successfully. I find them to be a very effective way to judge the rhythm of the market.

If you are interested in that route, you should read this thread: 5Min Intraday System which uses them on the 5m TF on Cable and Eur/Usd.

Phillip Nel also has a 4hr strategy which I have heard is very, very successful. You will find the link within that thread I believe. He does a lot of work on market rhythm and it is exceptional.

Tom

 

[TimeLine]

Hello Qiu,

From time to time I have used them as an entering method very successfully. I find them to be a very effective way to judge the rhythm of the market.

If you are interested in that route, you should read this thread: 5Min Intraday System which uses them on the 5m TF on Cable and Eur/Usd.

Phillip Nel also has a 4hr strategy which I have heard is very, very successful. You will find the link within that thread I believe. He does a lot of work on market rhythm and it is exceptional.

Tom

Yes, I tried Phillip Nel's 4hr strategy a while ago, but I found it is too hard for me, the strategy need a lot of experience and feeling about the market, I just do not have that.

As for 5min strategy, you know, low timeframe always scare me to death, so I did not even think about reading that thread before, but it looks fine on 1H chart, so I will read that thread.

 

[Splitlink]

Hi DT

It seems to me that FT did a "double" during the first hour. I was expecting a "sell" situation but it could have been a buy, too. I decided to leave it to see how the next hour developed. Now I have a new high and, perhaps, a new pin.

What do you make of that bar? First hour on a Monday morning---leave it?

Split

 

[trader_dante]

Hi DT

It seems to me that FT did a "double" during the first hour. I was expecting a "sell" situation but it could have been a buy, too. I decided to leave it to see how the next hour developed. Now I have a new high and, perhaps, a new pin.

What do you make of that bar? First hour on a Monday morning---leave it?

Split

I see a wide ranging bar with a bearish close. I certainly wouldn't have been thinking of going long...