Making Money Trading

[bertie123]

Word doc

TD,

Have just spent last 10 days working through this thread and would like to commend you on your excellent insights. your time and effort is much appreciated by many of us would be traders. Your pin method appears to be a good system but I am sure you would agree that discipline and patience are the cornerstone of successful trading.

You mention a feeling of loneliness when trying to trade from home, something I am experiencing myself. Would just like to ask how you overcame this? I feel it is a barrier to individuals trading at home.

Also has anyone summarised this thread in a word document?

Once again many thanks and best wishes in your pro trading.

 

[barjon]

...........PS: How do I get these smilies in my text, when I click on them, only punctuation marks appear?..........

rider,

that's ok - when you click on submit and the post comes up they'll be smiling in all their glory :cheesy:

jon

 

[rider5]

Wow, struggling with something so simple. And I want to be a trader...

Thanks jon

 

[trader_dante]

You mention a feeling of loneliness when trying to trade from home, something I am experiencing myself. Would just like to ask how you overcame this? I feel it is a barrier to individuals trading at home.

Hi bertie,

For me personally, the key was to force myself on the outside world at some point during the day. Usually I would go out and get a coffee and something to eat in the morning - even if I brought it right back to my flat it still felt good to see and interact with someone, however briefly. Then I knew a group of traders I met here on T2W that were on Skype during the day. It was really good to log on in the morning and know that there were others sitting at desks on their own just like me and since our perspectives in terms of TFs were very different (they were very short term) their opinions didn't affect me. Still, I did find it hard particularly since I lived on my own andmost of the time didn't even see anyone in the evening. In the end I got myself a flatmate lol

 

[bertie123]

TD,

Thanks for your prompt reply - had not thought of skype so may look into that. Would justlike to ask for your opinion on how you honed your discipline skills - I find that I am taking trades I know are not high prob trades but I can't seem to stop myself.

Any advice would be greatly appreciated.

Good trading to all.

 

[trader_dante]

TD,

Thanks for your prompt reply - had not thought of skype so may look into that. Would justlike to ask for your opinion on how you honed your discipline skills - I find that I am taking trades I know are not high prob trades but I can't seem to stop myself.

Any advice would be greatly appreciated.

Good trading to all.

Hi bertie,

For a long while, I too was taking positions that I knew were not high probability setups. In the end I realised that I simply was not going to make money consistently unless I waited for only the best setups.

It took me close to seven years to realise that you either trade to trade or you trade to make money.

If you choose the former, you will likely never be bored. You will always be in the thick of the action. Whether you are on the right or wrong side of the momentum will matter less than whether you are a PART of it. Somedays you will have significant wins. Other days you will have significant losses. You will most likely experience a rollercoaster of emotions in the process. Over the long run you will probably lose money.

If you choose to trade as a business - in short to make money from it, you will most likely find yourself bored stiff day in day out. 90% of your time will be spent watching the market move and not being a part of it. Watching and waiting and doing nothing but preparing. When you do strike you will need even more patience to resist taking profit too early and many times you will find your waiting was for nothing and you either make nothing or worse, suffer a loss. There will no more joy from winning or pain from losing. Each trade will just be another position. A step forwards or a step backwards from where you eventually want to be.

Each trader has to choose their path.

 

[trader_dante]

I posted a very simlar post to this one a while back on the Forex Pin Bars Thread.

It is a follow on from what I have said above.

I found it odd, as did Vince, that when this strategy is so reliable and I have been making such good money from it that there are such a mixed bag of results over on that thread with just as many wins being met by losses from what I've seen.

When I first heard about pin bars over on J16 I thought it was the key to riches. I just scanned charts for pin bars and when I found them I did a quick bit of TA and took them. The problem with doing things this way round is that the pin bar is a DIRECT SIGNAL to enter so once you've seen it you start thinking you should get in the market and if you're not careful you fit the market to the signal.

In the beginning I would see a pin bar and find myself saying: "right I'll draw a fib from the previous swing high...hmm the pin bar comes near to the 38...not bad...fib from next swing high...hmmm nothing there...but this is a bullish pin bar so I must be overlooking something...ahhh now if I fib from a high...well thats not a actual high but actually if I fib from there anyway it hits the 50. Now let's look for support/resistance pivots. Hmm there aren't any key ones...mind you, if you take those previous lows then that does kind of form..."

You get the point.

Overall I lost money trading this way only at a slightly slower rate than previously.

I felt disillusioned. You start to doubt that anyone is making money at all. How can these people be posting charts with these perfect entries when I have tried the strategy myself and can't make any money with any consistency?

Then I realised that you have to do your TA first. You have to mark just the areas on the chart where the price has HIGH PROBABILITY of turning and you have to wait for the market to get there and then see if it tips its hand through the price action and shows you that it is turning.

When it gets to these levels and it hits them and it bounces and it forms a pin bar you get CONFIDENCE because the market has CONFIRMED your TA.

Sometimes you have levels on your charts for weeks before the market reaches them and this is why trading is a waiting game. If you are in the game for action you are not going to be around for the long term unless you have something very very special and most of us don't.

Most of us are not the Picassos of the Art world or the Mozarts of the music world. We are just normal people trying to make a living and if you want to do that then you have to tip the odds in your favour.

When I finally got serious about this business I took only the best setups. ONLY THE BEST. I wanted to see perfect looking pin bars. And I wanted to see them at perfect looking S/R pivots. The kind of S/R pivots that you can spot a mile away. Then I wanted to see a few levels of fib confluence. I wanted everything to be in my favour and if it wasn't I simply didn't trade.

When I started doing this, I never looked back.

I passed up so many bars - even ones that were good pins with good supporting factors. I passed them up perhaps because the nose didn't stop AT my pivot but went through it or stalled above it.

When I traded like this my win/loss ratio over hundreds of trades was almost 90%. That is to say, I lost 1 in 10 trades.

Later on, I'll admit I got a bit carried away with the number of wins I was having and the money I was starting to make. I started taking them perhaps if they just had a pivot rather than a pivot and a fib. You've seen a few taken on here. Basically I started concentrating on the pin bar ITSELF rather than where it occured. And what happened? My win/loss fell to the high 60's. Still good but far off where it could be.

Now let me say one thing: win/loss ratio is not that important. You can make money if you are right only 10% of the time if you can run your profits and cut your losses short very quickly. However this is very hard to do so it will certainly help you if you can put the percentage of winning trades in your favour. This is true from an emotional perspective too. Even if you make money overall it is hard emotionally to lose a large majority of the time.

So do your TA first and when you do you will start realising that setups like inside bars and other bar patterns work just as well as pin bars. All these PA setups are just the market tipping its hand that it is about to move but they are just the icing on the cake. You have to have the cake first.

 

[trader_dante]

Cable and Wireless

Here is what I mean by the point at which you should wait to take action.

I've never traded this share before until recently - infact my general rule is I never trade shares BUT a chart is a chart and this one is a beauty.

I've had 7 winning trades in this share back to back on the hourly chart.

Look at the area that is circled. That is the area at which I first started to notice this share.

The market rolled over late last year, it made a good pin bar in January and then started a nice rally. That rally took us back up into a major S/R pivot combined with the 61 fib from the highs. At this point the market consolidated. I started taking short positions on signs of the price rejecting new highs. It had a few days to make up its mind and then down it went.

 

[rider5]

Hi TD,

Do you always manage to buy exactly one pip above the pin bar? Say, for instance, if the current price was to close to put in an order and you want to buy at market, but price rises to fast past your entry target. How many pips above that would be viewed as chasing the market?

Any advice appreciated
Thanks

 

[VinceStanzione]

Here is what I mean by the point at which you should wait to take action.

I've never traded this share before until recently - infact my general rule is I never trade shares BUT a chart is a chart and this one is a beauty.

I've had 7 winning trades in this share back to back on the hourly chart.

Look at the area that is circled. That is the area at which I first started to notice this share.

The market rolled over late last year, it made a good pin bar in January and then started a nice rally. That rally took us back up into a major S/R pivot combined with the 61 fib from the highs. At this point the market consolidated. I started taking short positions on signs of the price rejecting new highs. It had a few days to make up its mind and then down it went.

Outstanding TA, patience & set-up.

The key thing here would be placing the initial stop & subsequent early "lock-in" stops at
a distance sufficent from the outer price whipsaws to still stay in the trade.

However, this is an unrivalled example of the power possessed by the tools being highlighted throughout this thread.

 

[Upcomingstockmaster]

Where can I read about this pin bar thing?

 

[VinceStanzione]

Where can I read about this pin bar thing?

Go back to the start of this thread & read it to the finish.

Then, go back to the start & read it again...and again....

Not trying to be smart, but there's about 170 pages of analysis, tips & hints relating to pin-bar trading on this thread...

Cheers,
VS

 

[trader_dante]

Where can I read about this pin bar thing?

Page 1.

But when you say "pin bar thing" you make it sound as if they are some kind of setup that is the key to making your fortune.

It is true, this thread focuses on pin bars but it is important to know something:

A pin bar is just a candlestick that indicates prices went one way and then reversed.

Nothing more and nothing less.

And if you consider that markets move up and down all day then a pin bar in and of itself really means absolutely nothing at all.

This is even more apparent when you look at the same market on different TFs and see that what is a pin bar on one is a completely different setup on another.

The key point is this: The reliability of pin bars only increases when they occur at levels of good support or resistance.

That is the single most important point of this thread: how to identify the high probability pivots on a chart.

Once you can do this, then you can use the price action to let you know if the market is going to agree with your personal sentiment.

That price action setup may be a pin bar or an inside bar. It may be a bullish bar, a bearish bar, a bullish outside bar, a bearish outside bar or a double bar high/low with a higher/lower close.

Look at J16 for these and more.

 

[TheTick]

Go back to the start of this thread & read it to the finish.

Then, go back to the start & read it again...and again....

Not trying to be smart, but there's about 170 pages of analysis, tips & hints relating to pin-bar trading on this thread...

Cheers,
VS

Excellent advice. And if you want some more info, try the James16 thread on ForexFactory:-

james16 Chart Thread

It covers pin bars and a whole host of other Price Action set-ups and is more than enough to get you going.

 

[grimweasel]

T-D
Thanks for more interesting thoughts!
I have read your post about looking for pin bars and I found that was exactly what I was doing. I was scanning the charts and trying to 'fit' the pin bars to the S/R or Fibs. I will now re-appraise and ensure I set the S/R etc first!

I find that I like using MT4 for charting as it's easier to use than IT FInance but the TF's are a pain to use. I'd like to see a yearly chart and set major S/R off that.
I use NF for the MT4 and then trade with IG. I spoke with IG the other day and they recommended using the ProCharts under tools/charts rather than the advanced charts on the trade/price bar, as they were more accurate. They don't save your data though, so you have to re set the S/R and Fibs each time you log on!

Is there a provider of a MT4 that covers a wider range of markets? It's a real pity that IG or other SB providers don't provide an MT4 feed that we could use instead of their charting package.

I need to trim down the markets that I watch too. Which are the best forex pairs to monitor that don't follow each other? It seems that most euro pairs trade alike bar usd/euro etc. What are the key markets that I should trade.
I notice that you need the volume on the shares to make a good deal so I'm scanning FTSE100 shares as well for pin set-ups.

I have also developed a hybrid system of my own that seems to work on looking back on the charts. What I need is the confidence to use the set ups it provides so I can trade it for real. Is there an easy way to back test or do I need to be a code wizard?

I had a bad day today as I made the error of trying to trade news. A mate in the city told me that £ rates were going to be chopped today so I took some early set-ups for the cut....and his info was wrong!
When I scanned the charts there was no good reason for me to enter, yet I still did thinking I could outsmart the market. Silly Boy! Lesson learnt. If the chart does not conform to the plan...NO TRADE!!
Trade the plan and plan the trade. News trading is not for me!

TD, if I could send you some charts of the new set-up I have been using would you give your opinion, as it would really help me gain an understanding of my knowledge etc?
Thanks again,
Grim

 

[trader_dante]

Do you always manage to buy exactly one pip above the pin bar? Say, for instance, if the current price was to close to put in an order and you want to buy at market, but price rises to fast past your entry target. How many pips above that would be viewed as chasing the market?

Any advice appreciated

I always put an order in to get in one pip above/below the bar and as far as I have remembered have always been filled from these orders at the price I wanted.

If the pin bar closes right at the top of the range and then starts moving up quickly then I sometimes have to enter at market. From time to time I miss these entries because of the time taken to calculate the number of pips risk and work out my position size. If I do so, I pass on the trade.

I personally wouldn't take a trade if it went 1 pip past my intended entry price. That may sound ludicrous to some - buying a few pips past is not chasing the market - not on 1hr TF and up BUT I do this to enforce my discipline. Sometimes you have to have rules a little OTT if you're the kind of person that is given an inch and takes a yard

 

[trader_dante]

Hi Grim,

I'd like to see a yearly chart and set major S/R off that.

Not sure a yearly chart is necessary...I glance at monthly and then do weekly, daily and hourly methodically.

I use NF for the MT4 and then trade with IG. I spoke with IG the other day and they recommended using the ProCharts under tools/charts rather than the advanced charts on the trade/price bar, as they were more accurate. They don't save your data though, so you have to re set the S/R and Fibs each time you log on!.

Sounds like a bit of a pain...

Is there a provider of a MT4 that covers a wider range of markets? It's a real pity that IG or other SB providers don't provide an MT4 feed that we could use instead of their charting package.

NF do the most markets of the providers that I have found...

I need to trim down the markets that I watch too. Which are the best forex pairs to monitor that don't follow each other?

Why don't you try concentrating on a few? Right now I am just looking at EUR/USD, GBP/USD and USD/JPY.

What are the key markets that I should trade.

What markets to trade is a very personal question. They all have different characteristics and some might suit you more than others.

Also, many of the markets are correlated in their price action. For example if you see a bullish pin bar on the FTSE you will often (although by no means always) see a bearish pin bar on the Bund because bonds and equities have a loosely inverse correlation. And you must remember that if you took both pins then you would really be doubling your risk...

As a professional I am now concentrating on the three major FX pairs noted above. When I was trading part time I was looking at around 80 markets.

You must do what you feel comfortable with BUT I would say that if you want to be monitoring the KEY markets, they are:

The 6 forex majors: EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/CAD and AUD/USD

Indices: S&P 500, FTSE, DAX, Dow Jones

Bonds: Gilt, Bund, US T-Bond

Commodities: Oil, Gold, Wheat

I have also developed a hybrid system of my own that seems to work on looking back on the charts. What I need is the confidence to use the set ups it provides so I can trade it for real. Is there an easy way to back test or do I need to be a code wizard?

I always did my backtesting manually...pressing F12 in MT4 takes you forward one bar at a time...

I had a bad day today as I made the error of trying to trade news. A mate in the city told me that £ rates were going to be chopped today so I took some early set-ups for the cut....and his info was wrong!
When I scanned the charts there was no good reason for me to enter, yet I still did thinking I could outsmart the market. Silly Boy! Lesson learnt. If the chart does not conform to the plan...NO TRADE!!
Trade the plan and plan the trade. News trading is not for me!

I did the same thing yesterday. I went short the Euro when Trichet was asked about the currency. He said that a high Euro was bad for the US and the market started coming off. I went short at 04 and suddenly the bids just disappeared. Next thing I know we are trading at 24. 20 ticks. Not a huge problem. Although it was a 5 lot so it cost me £625. LOL

TD, if I could send you some charts of the new set-up I have been using would you give your opinion, as it would really help me gain an understanding of my knowledge etc?

Sure. PM me for my email address or post them here. Whichever you prefer.

 

[bansir]

Hi Folks,
Just for interest...
EUR/GBP daily looks fascinating at the moment from a TA and price action point of view.
There are decent trend line / MA supports as well as Fib and pivot regions to work off following the triangle breakout.

All we need is the PIN; without it or something just as good I suppose we just lie low?
If we get a break of the last (long body-black) candle's open then I may start to see an argument for going long with a stop somewhere underneath it's low.
The rewards could be there based on the length of the run up to the triangle.

The whole thing could also just as easily turn into a sideways channel. Have to wait and see.

 

[black bear]

IG tools charts

T-D
Thanks for more interesting thoughts!
I have read your post about looking for pin bars and I found that was exactly what I was doing. I was scanning the charts and trying to 'fit' the pin bars to the S/R or Fibs. I will now re-appraise and ensure I set the S/R etc first!

I find that I like using MT4 for charting as it's easier to use than IT FInance but the TF's are a pain to use. I'd like to see a yearly chart and set major S/R off that.
I use NF for the MT4 and then trade with IG. I spoke with IG the other day and they recommended using the ProCharts under tools/charts rather than the advanced charts on the trade/price bar, as they were more accurate. They don't save your data though, so you have to re set the S/R and Fibs each time you log on!

Is there a provider of a MT4 that covers a wider range of markets? It's a real pity that IG or other SB providers don't provide an MT4 feed that we could use instead of their charting package.

I need to trim down the markets that I watch too. Which are the best forex pairs to monitor that don't follow each other? It seems that most euro pairs trade alike bar usd/euro etc. What are the key markets that I should trade.
I notice that you need the volume on the shares to make a good deal so I'm scanning FTSE100 shares as well for pin set-ups.

I have also developed a hybrid system of my own that seems to work on looking back on the charts. What I need is the confidence to use the set ups it provides so I can trade it for real. Is there an easy way to back test or do I need to be a code wizard?

I had a bad day today as I made the error of trying to trade news. A mate in the city told me that £ rates were going to be chopped today so I took some early set-ups for the cut....and his info was wrong!
When I scanned the charts there was no good reason for me to enter, yet I still did thinking I could outsmart the market. Silly Boy! Lesson learnt. If the chart does not conform to the plan...NO TRADE!!
Trade the plan and plan the trade. News trading is not for me!

TD, if I could send you some charts of the new set-up I have been using would you give your opinion, as it would really help me gain an understanding of my knowledge etc?
Thanks again,
Grim

Hi grimweasel

mine save ok (Tools Charts) like you just usually use advanced because they are right in front of you. Have saved good heat map of ftse 100 and some others to for ref, good tool imho for free

I only had passing interest in this thread when it started because of the lets make money theme :whistling

but......................refer to pages 5-25 and if its your timeframe and your prepared to put some work in and demo it

came back to some old charts after a month or two

S&R lines I marked on some random pairs (don"t trade pairs)with fibbby"s when this thread started were still on them and.............

:-0

good thread TD

 

[trader_dante]

Usd/Jpy

This market has reached a key S/R pivot.

It is now at a very important point from a technical perspective.