Making Money Trading

[omni]

Hey TD,
Things with me are ok. I have been hitting the sugar a fair bit. From taking the pin way back at 320, it eventually got to 360 before retracing hard. I cut at 354ish and took it long again within 24hrs on the bounce off 340. It again hit the 360 where i took the short to only again bounce off 340...... and so on........ get the picture here!? Anyway, last position on sugar was another long at 340 on the 6th of feb and it has finally broken the 360, so i am lumping in again here, it trades pretty nicely.

Had a few nice rides off the top of euro (14900) and off the bottom of gbp (19400). They are all trading well at the moment - giving some nice setups. And oil is another favourite. I got on the sell off and then reversed it a week or so ago @ 89 and am currently riding the up. I have stayed away from indices - way tooo much vol for me. Had a couple of bad rides on soya and corn but offset them reasonably with the silver and gold retrace and bounce.

In terms of setups on the horizon. I am going to follow oil as i see a nice big range for us to get involved in. Cable and eurusd are looking good too, nice patterns here for now. And with regards to yen - i am watching gbp/eur/usd yen as they are all at interesting levels.

I have really missed a few things tho which i am kicking myself over - corn / soya / platinum & coffee.......... what a mug. It is just hard keeping eyes on EVERYTHING. Really need an assistant!! Haha.

What has your blotter looked like?

 

[TraderGreg]

Hey you all. Much respect to Trader_Dante for all this good work. I have been reading this thread for just a few days now and I must say that I am getting an enlightenment on this business of trading especially when it boils down to reading and reacting to charts. This method of trading would seem to work in all markets that charts are used to track prices (candlesticks). This is exceptional. I think that this method would work very well with the Elliott Wave Theory. This theory suggest that there is a predictable rationality to wave length and positioning. Thus its a theory popularly used by trend hunters or similar (I think it is called trend channeling). More on theory at: Elliott Wave Theory

My point here is that: if it is that price move in predictable patterns as touted by this theory, it should be helpful with this trading system in telling us how long a wave will be and at what point on a wave pattern we are. This I think would help with confluence and entry and exit!

Since I am relatively new to TD's pin bar trading method and to trading overall, I have not gotten around to testing it with the wave theory as yet but on a point of observation though I would think that E-wave pattern sensing could have some use here.

Trader-Dante, if you are familiar with E-wave theory, you may see the point I am trying to make here?

Candlesticks hooray!!

 

[rathcoole_exile]

Hey you all. Much respect to Trader_Dante for all this good work. I have been reading this thread for just a few days now and I must say that I am getting an enlightenment on this business of trading especially when it boils down to reading and reacting to charts. This method of trading would seem to work in all markets that charts are used to track prices (candlesticks). This is exceptional. I think that this method would work very well with the Elliott Wave Theory. This theory suggest that there is a predictable rationality to wave length and positioning. Thus its a theory popularly used by trend hunters or similar (I think it is called trend channeling). More on theory at: Elliott Wave Theory

My point here is that: if it is that price move in predictable patterns as touted by this theory, it should be helpful with this trading system in telling us how long a wave will be and at what point on a wave pattern we are. This I think would help with confluence and entry and exit!

Since I am relatively new to TD's pin bar trading method and to trading overall, I have not gotten around to testing it with the wave theory as yet but on a point of observation though I would think that E-wave pattern sensing could have some use here.

Trader-Dante, if you are familiar with E-wave theory, you may see the point I am trying to make here?

Candlesticks hooray!!

mate, EW is pants, there is no such thing as predictable patterns.
All you can do, as a trader, is to position yourself to take advantage of price action as it unfolds.
You'll always be able to fit EW to your chart AFTER the event, but it won't be much use to you when you're crying 'cos a trade hasn't gone where you/EW "predicted".
I suggest you concentrate on Trader Dante's methodology, humble yourself and don't try to "improve" something that is already working as well as can be expected given the nature of the manic-depressive bi-polar beast we're working with (aka the "Market")

If you are serious about your trading, then wise up and concentrate on what T_D is telling you. it's a sure sign of a newer trader always wanting relentlessly to tweak and fiddle.

Even a cynical like me, (and T_D and I have had our differences in the past) I'm happy to acknowledge that his work is probably some of the most important reading freely available for new traders.

But thanks for your interest and enthusiasm. Just channel it the right way....

R_E

 

[Splitlink]

Hi R_E,

You are absolutely right! There is no way that patterns can be predicted. The trader has to watch them unwind. If you trade them before the completion then you may have cause to slap yourself on the back and swear by them. That is called, by conservative traders, "aggressive trading" and a winner is enthusiastically congratulated by everyone but, IMO, that trader is building a method on sand.

Split

 

[rathcoole_exile]

his work is probably some of the most important reading freely available for new traders.

and then absorbing everything dbphoenix writes, particularly his own threads, wouldn't be a bad move on your part.

good luck, hope it helps

 

[bansir]

Just for interest, Eur-Gbp triangle break-out on the daily.
If it does go we may get some sort of pin-bar reaction to trade off.
All very speculative of course.

Cheers,
Neil

 

[trader_dante]

Just for interest, Eur-Gbp triangle break-out on the daily.
If it does go we may get some sort of pin-bar reaction to trade off.
All very speculative of course.

Cheers,
Neil

OK, OWN UP!
HOW DOES EVERYONE SEEM TO KNOW EXACTLY WHAT POSITIONS I AM IN?

 

[TraderGreg]

Hello all (TD),
I took this circled pin bar today (see chart bellow) on the GBP/USD one hour time frame. I placed my stop at 1.9636 i.e. above the pin bar when it formed and placed my sell order at 1.9620. The reason I entered the trade is this:
There was confluence of S/R bar , 38.2% fib. and pin bar (though pin bar was slightly above both fib. and pivot).
How I Managed the trade:
I moved my stop down to even when first white hour bar was closed out.
Then I moved my stop down thereafter every 30 pips clear of the market action.
I was stopped out at 1.9530. I cleared a +90 pips profit.

According to the style of trading outlined in this thread, I would think I did a pretty good imitation here. I would like comments. Also, How how would you rate my chart setup overall? My first trade using this method!!

 

[Reas]

OK, OWN UP!
HOW DOES EVERYONE SEEM TO KNOW EXACTLY WHAT POSITIONS I AM IN?

Because you taught us well master Dante
I'm in this one too, it is going to be the best trade i ever made, in turms of profit.

 

[Reas]

Hello all (TD),
I took this circled pin bar today (see chart bellow) on the GBP/USD one hour time frame. I placed my stop at 1.9636 i.e. above the pin bar when it formed and placed my sell order at 1.9620. The reason I entered the trade is this:
There was confluence of S/R bar , 38.2% fib. and pin bar (though pin bar was slightly above both fib. and pivot).
How I Managed the trade:
I moved my stop down to even when first white hour bar was closed out.
Then I moved my stop down thereafter every 30 pips clear of the market action.
I was stopped out at 1.9530. I cleared a +90 pips profit.

According to the style of trading outlined in this thread, I would think I did a pretty good imitation here. I would like comments. Also, How how would you rate my chart setup overall? My first trade using this method!!

Hi TraderGreg,

Very nice trade, you have mentioned the right reasons to enter, although i probably wouldn't have taken it if i saw it the way you did.
Reason is because it was above the S/R pivot and also above Fib on your chart
There is a big chance of it to bounce back from S/R and so the R:R on this trade wouldn't be good.
I don't have my own chart here, maybe my pivots are at diferent levels, i'll look it up later.


Edit: Looked up my chart Greg, in my chart the pivot was above the pin, so maybe i would have entered too.
About chart setup: if you mean the way youre chart looks, well i would get rid off those grid lines, they are confusing.
I have added my template, maybe you like it

 

[trader_dante]

Patience

It is my belief that UNLESS the market gives you a reason to move a stop to breakeven, it is more profitable in the long run to let a trade run its course.

By doing this you will sometimes see a winner turn into a loser.

Some people can't stand that happening. Some people even have it as their number 1 rule: never let a winner turn into a loser.

It is my opinion that you have to give a trade a chance to work.

Let's illustrate this with a chart.

This is Aussie/Dollar.

Check this pin bar out. We will presume that it's a good one to take. (it is certainly perfect looking in terms of the pin bar itself and shows rejection of the previous top)

If you took this trade you had to watch your position go from +81 at one point in the day to close at +2. It may even have gone against you after being up that much - I don't have intraday data back that far. (see chart)

Now MOST traders will put a stop at least at breakeven when the market is +81. Why? To put it simply: because it's +81!

Yet if you did that in this case, you would have lost out on a HUGE move!

If you want to TRY and capture the bigger moves, look for the market to react to what I have called potential "problem areas". These are defined by S/R pivots, fib levels etc. In this case the potential problem area was lower down and a trader that waited for it to be tested rather than bailing out early because of profit would have profited handsomely.

REMEMBER: The market will often tip its hand by its reaction to these levels. This can help you with your exit.

 

[Reas]

Hey T_D,

I got another example.
I entered on the break of the pin, see red arrow on the chart.
It came into profit a little but then reversed all the way back to the bottom of the pin.
It happens very often that the price first reverses a bit before it goes in the anticipated direction.
I try to keep my stop below the pin untill i see something that looks like a new higher/lower low/high.

 

[Cavalry Trader]

Hey T_D,

I got another example.
I entered on the break of the pin, see red arrow on the chart.
It came into profit a little but then reversed all the way back to the bottom of the pin.
It happens very often that the price first reverses a bit before it goes in the anticipated direction.
I try to keep my stop below the pin untill i see something that looks like a new higher/lower low/high.

I would question whether this is a good pin bar as defined by TD as

a) the price does not swing into it
b) the body of the bar is not inside the previous bar

However, would have been pleased to get in on the overall move!!:clap:

Maybe TD could give us his wisdom on this

CT

 

[trader_dante]

I would question whether this is a good pin bar as defined by TD as

a) the price does not swing into it
b) the body of the bar is not inside the previous bar

However, would have been pleased to get in on the overall move!!:clap:

Maybe TD could give us his wisdom on this

CT

I can't see many bars before the pin bar but I would agree with CT the setup is not perfect.

Having said that, you will find time and time again that less than perfect pin bars will sometimes lead to large moves.

The reason for this is that a pin bar is NOT an infallible signal that the market is about to turn. All it simply shows is that a temporary reversal has occured.

If is an hourly pin then the reversal occured in the space of an hour. If it is a daily pin then the reversal occured over the course of a day and so on.

When you look at it like this you will see why it is so important to be looking for REASONS (S/R, Fibs, EMAs - perhaps even indicators if that is your preference ) that the reversal is going to be sustained in the bars to follow.

It is not enough to simply say - there is a pin bar on the 1hr so the market should move. If you followed this logic you may as well just get on board any retracement after any sustained move you see on any TF.

I try to give pin bars specific "rules" which is why I point out the guidelines for picking them (long nose, small body etc). The reason I do this is because

a) It prevents you second guessing yourself if you follow a clear set of rules
b) The elements represent a sound psychology as follows:

i) The reason we want to see a long nose is because we want to see an indication that the reversal is a significant one and not a minor bounce

ii) The reason we want to see a small body near the extreme of the range is because we want to see that the market opened and then moved firmly in one direction after which it turned, came all the way back and closed near to where it opened which also happens to be near the EXTREMES of the day.

And so on and so forth.

This brings us to the reason why some pin bars that look perfect don't work and some that look awful (according to my criteria) do work.

REMEMBER: The market doesn't have to follow any rules. A change of trend after a move doesn't have to nicely fit the criteria I/we give it. It doesn't have to have a huge move down and then close near the top of the range. It may have a large move down and then close only just above half way up the bar. The move might come the next day or the next hour.

Just something to think about.

 

[Reas]

I would question whether this is a good pin bar as defined by TD as

a) the price does not swing into it
b) the body of the bar is not inside the previous bar

However, would have been pleased to get in on the overall move!!:clap:

Maybe TD could give us his wisdom on this

CT

Hi C T,

You are absolutly right, i wrote the following in a PM to someone who asked me about this pin.

"It was not according the rules teached by TD.
I saw the price consolidating for some time, forming a resistance level at around 0.7414
Then i saw this pin piercing trough this resistance showing that price was rejected firmly below it.
On the next bar i then entered at 0.7419 knowing that the risk was limited to 16 pips.
It was a bit off a gamble i admit, and also a bit stupid because usualy those gambles only cost me money."

Reas

 

[trader_dante]

Some trade ideas

Keep your charts simple. Look for S/R levels and simple patterns and watch for the price to react to them. This is all you need to do to make money. A lot of people out there make trading too complicated.

Of all the traders that I work with only one of them uses indicators. The rest are using candlestick charts with simple TA.

With the idea of keeping things simple, here are some markets I am currently watching:

Chart 1: Gold (Daily TF)

Chart 2: GBP/CHF (Daily TF)

Chart 3: Dax (1hr TF)

Chart 4: Dax (Daily TF to show 38 fib and previous major swing high coinciding with the top of the hourly range in previous chart)

Chart 5: Crude Oil (Daily TF)

 

[omni]

Hi Td,
Just a quick question for you.
What is the maximum number of trades you will allow yourself to be in at any one time?
I am beginning to find that 4 is about my maximum (on a daily or 1hrly tf). I struggle to manage / watch / add to the position when I have greater than this number of active trades (i have an intensive full time job) I also find that if I am in more than this, I am basically in the same market, just a varying permutation..... hence if you are in eurjpy, there is no real point to start a trade in gbpjpy. (Unless you have already got this trade embedded and you want to add, altho not directly, by taking the gbpjpy trade in addition).

Would you agree that 4 is about the max you are in?

And do you have to calculate VaR with work? It tells me a lot about the implications of adding a trade - whether i am actually adding to my risk or in some cases, decreasing my risk!

Thanks

 

[eltrot1979]

Keep your charts simple. Look for S/R levels and simple patterns and watch for the price to react to them. This is all you need to do to make money. A lot of people out there make trading too complicated.

Of all the traders that I work with only one of them uses indicators. The rest are using candlestick charts with simple TA.

With the idea of keeping things simple, here are some markets I am currently watching:

Chart 1: Gold (Daily TF)

Chart 2: GBP/CHF (Daily TF)

Chart 3: Dax (1hr TF)

Chart 4: Dax (Daily TF to show 38 fib and previous major swing high coinciding with the top of the hourly range in previous chart)

Chart 5: Crude Oil (Daily TF)

Would you be exclusively looking at pin bars to enter the above markets at the S/R levels, or would you consider some other criteria if S/R was reached but a pin bar did not form?

 

[pelzar]

Dante, youre only watching five markets?? Funny because im sitting next to you and I can see 5 screens and your laptop. 'Now I aint to good with number but me can count at least 16 charts'

 

[trader_dante]

Hi Td,
Just a quick question for you.
What is the maximum number of trades you will allow yourself to be in at any one time?

Hi omni,

I don't have a strict limit on the number of trades I would allow myself to be in at the same time, however I think you're right and that 4 would be about my maximum for the reasons you state.

And do you have to calculate VaR with work? It tells me a lot about the implications of adding a trade - whether i am actually adding to my risk or in some cases, decreasing my risk!

WE don't calculate VaR here. Perhaps the risk managers do...