Trading Naked - Part 2

Hi Rob,

Hope you get better soon, can't be fun trading with swine flu...

I like everything you have said about R:R, but, they say being critical helps so here goes. :) Even though I agree with you on this, I can only see one problem, the fact when a trade goes against you are looking to exit quickly, but won't that mean you will end up closing potential winners too early and too much? You could end up with three -10 losses and then only one +20 win.

Haven't you been taking profits at pre predetermined levels anyway, or have you only been letting them run?

Edit: I've been trading 4H recently, and when I enter I go down to the 1H and watch. I see trends changing (HrHs in a short trade!!), price shooting in the opposite direction, etc but if I ignore that and just keep watching the 4H, as long as thats in my direction it seems to end in a profit. It's so hard though!!

HI Owain,

Well swine flu might be slightly over-exagerating how I feel but not too great so not trading today! It's very interesting what you say about cutting winners too soon. The fact is, that sometimes I may cut a winner but that's not a major drama as there will be plenty more. What I can't afford is to let the losers run. Put another way, however, in my limited experience the winners tend to just win. One sits there, with a level drawn and, bam, the level gets busted and price is shooting up or tanking down, and the profits come with that. The trades where price pokes its nose through a level and then take time to get going tend not to always produce as good results and, quite often, lead to reversals and losers.

All the best

Rob
 
Hi Rob,

Get well soon so we can see some of your great trades again. :)

Since you are a day trader, what you are saying comes from a day trading prespective! When swing trading I've noticed that when price breaks a level it does shoot off, probably as all the day traders enter but then it seems to slowly trail down to the entry point, scaring me away! But then the other swing traders come in a finally push price in the original direction. I wonder what is actually happening though, some people reckon the big players are purposely trying to shake people out?

Phantom of the Pits said the same as you probably remember, the one limiting thing about day trading is the fact you must take time into consideration.
 
Hah, I knew something like that would come from you! :D

You're right though, it doesn't really matter but perhaps with knowlegde of why they are doing it I could react better, but then again I can just watch price and learn.

Here is an example, if you get chance look at 4H EUR/JPY and AUD/USD. I've just been trigged long on both, you'll know where I've entered! Check the longer TF and see how it's shot off, but now its coming back abit... I won't be shaken out!
 
KJ,

Regarding your post on having a target of 20, this seems to go against your earlier wisdom of adding to winners and having the bid trends be the pay day as you stack up. Have you now changed your view and started leaning towards 1 trade at a time and a fixed target??
 
KJ,

Regarding your post on having a target of 20, this seems to go against your earlier wisdom of adding to winners and having the bid trends be the pay day as you stack up. Have you now changed your view and started leaning towards 1 trade at a time and a fixed target??

Hi Vinnie,

Apologies for any confusion. I was using 20/20 as an example. What I do in reality is a little different as I run multiple positions to catch the runners, as well as adding etc. It was more to demonstrate that a fixed TP with a risk / reward of 1:1 can still be profitable if one focuses on hard stops and reducing the actual size of one's losses by never allowing this hard to stop to actually be hit.

Hope that clarifies it better. As Elitejets has incorrectly surmised, I have manflu, so may not have explained terribly well what I meant.

All the best

Rob
 
Cable today - Part 1

As I'm not feeling too well today I thought I'd have a go at looking at some price action chronologically as it might be interesting. I find this a useful exercise in training myself to 'read' what's going on and come up with trading plans in real time.

Anyway, here goes....

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The bandwagon theory: A glimpse at how the market really works :)

"Edit: I've been trading 4H recently, and when I enter I go down to the 1H and watch. I see trends changing (HrHs in a short trade!!), price shooting in the opposite direction, etc but if I ignore that and just keep watching the 4H, as long as thats in my direction it seems to end in a profit. It's so hard though!! "

Hi Owain

longer timeframe analysis stuff :)


THE BANDWAGON THEORY: A GLIMPSE AT HOW THE MARKET REALLY WORKS

Imagine a bandwagon that is rolling forward at a quickened pace. Music that is very pleasing to the ear is being played from speakers on each side of this bandwagon, and a few people currently on the back of the wagon are partying, having the time of their lives. The music, loud and clear, starts to attract many other onlookers that happen to be idly standing on the sidelines. These onlookers, unable to resist the sweet sounds being played, run to join the party that seems to be going on. Progressively,more and more onlookers jump on the back of this bandwagon, and those few who were initially enjoying the first phase of the party begin to leave. As the crowd of new party animals on this bandwagon grows larger, the bandwagon finds it harder and harder to move forward at the same pace. It slows, enabling more and more late onlookers, witnessing
the great fun, the chance to jump on. The crowd grows even larger. Larger and larger this crowd grows, until the bandwagon, heavily laden with the bodies of drunken party animals, can no longer move forward.

It finally comes to a complete stop. Now that the bandwagon is at a complete standstill, more people jump on. And why not? At this point, joining the fun is easy. Absolutely no work is required, for individuals wanting to join the crowd no longer have to run to jump on board. But the nature of the bandwagon is to move forward. Its motionless state is unnatural, and therefore cannot last.

It tries to move forward again, but can’t.

The crowd, piled on back, is much too large. It must free itself of the heavy burden. And it does. It quickly shifts into reverse, and jolts backward, knocking a few of the party animals off the back. The music stops. Puzzled faces from the crowd begin to emerge. Before anyone figures out what’s going on, another backward jerk takes place, only this one is more violent. Another large group of people gets thrown off the back. Now, reality sets in. The fun has turned into a nightmare of epic proportions, and panic begins to run rampant. Some decide to jump to their deaths. Another thrust backwards sends an even larger group of drunken, off balance people, hurling to the muddy ground. It doesn’t stop. The jolts backward continue, each successive one more violent than the last. At this point, only a few die-hard wagon dwellers are holding on, their very lives hanging in the balance by a very thin thread. Failing to be completely free, the bandwagon angrily puts the pedal to the metal, and this final thrust backward is so vicious that its front wheels lift high off the
ground, momentarily suspending the wagon in a perpendicular position. The last of the hangers-on crash to the ground, broken and maimed to no end. At this point, a new group of onlookers emerge from the nearby woods. They are clean and serene. Each movement they make is deliberate and powerfully energetic, for they did not take part in the tragedy that just transpired.

Or did they?

A few of the dejected souls lying on the ground take a closer look, a look that reveals something very interesting. This seemingly new group is not new at all. It is the same group that was seen quietly exiting the party before it came to its violent end. An even closer examination by a few more beaten-down onlookers reveals something even more stunning. This group not only exited the party early, they were the originators of it!

“My God,” someone exclaims.

Paralyzed, and unable to move freely, all these dejected souls can do is watch, as the masters of the game go to work, again. No sooner does the bandwagon’s wheels hit the ground than this professional platoon bolts for the wagon. In a flash they are on board. Easy. The bandwagon, now free of the larger crowd, can move forward freely and gracefully, comfortably carrying the more astute group with it. Its pace quickens, and before long a smooth elegant stride is in place. After a few miles of uninterrupted movement, someone from this masterful group flips on a switch, and suddenly the loud sounds of entertaining music start again.

Someone yells, “OK everyone. Here they come. Let’s do it again.”

Within moments, those who were the former victims of the backward crash become interested again. The music almost calling them from the grave.

And once more, the never-ending cycle repeats.
 

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Cable today - Part 4

Well she's gone into serious hibernation mode now, probably pre US data. I'm always wary of getting suckered into fakes at times like this.

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N.B. I have support from 29th October at 6336 (not shown on chart) which would concern me if I get triggered short
 
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Cable today - Part 5

Having hooked the fish it's now just a case of playing it. It may work, it may not......

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Cable today - Part 6

Final bit on M1 and now back up to M5 to hopefully manage a decent run down. As I write price is acting very slowly which reinforces my resolve to have got my stop to b/e as quick as possible. I'd rather miss the run than lose capital...

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Hope that's been of interest anyway.

All the best

Rob

Edit at 1436: Stopped out of short but would now be looking to either re-enter short below low or go long on SbR level of 6351
 
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And finally.....

Edit at 1436: Stopped out of short but would now be looking to either re-enter short below low or go long on SbR level of 6351

And finally, to round things off, price double bottomed and then started to move up into the US data, followed by lift off. Currently consolidating to offer up a chance to load up etc.....

and finally....gif

Hopefully Tenbob would agree with me that the double bottom and slow move up pre-data would have offered the opportunity to be first on the bandwagon.....
 
"Hopefully Tenbob would agree with me that the double bottom and slow move up pre-data would have offered the opportunity to be first on the bandwagon..... "

Hi Rob

only a 5 piece band :)

the slow decline before the news was of more interest imvho


a little pop in M5 is ......... a little pop and could be anything prior to News !

you enter at 14:58 or 59 ? ......... or you enter the live bar at 1500 ?

Andy

Good question Andy re the timing. TBH, I don't like news BUT, when I used to trade cable M15, I got used to (every now and again) seeing early warning signals. If I were trading live today, I think I would have had that buy order in place and then would have kept a close eye on price in the 15-20 minutes prior to the data release. The move up was fairly gradual which would have given me confidence - what used to scare me was when prices would start jumping all over the place 2 minutes from the release!! One thing I never do now is pull the trigger manually. 1) Because the magazine might be full of blanks and 2) Because I'm not brave enough to do it!!
 
thanks for answer Rob

see you liked the long term analysis post Rob so another for your collection ~

The Stock Exchange Explained

"Once upon a time in a village, a man appeared and announced to the
villagers that he would buy monkeys for $10 each.

The villagers seeing that there were many monkeys around, went out to the
forest and started catching them. The man bought thousands at $10 and
as supply started to diminish, the villagers stopped their effort.

He further announced that he would now buy at $20. This renewed the efforts
of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to
their farms.

The offer increased to $25 each and the supply of monkeys became so little
that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50!
However, since he had to go to the city on some business, his assistant
would now buy on behalf of him.

In the absence of the man, the assistant told the villagers.

"Look at all these monkeys in the big cage that the man has collected.
I will sell them to you at $35 and when the man returns from the city,
you can sell them to him for $50 each."

The villagers rounded up with all their savings and bought all the monkeys.
Then they never saw the man or his assistant, only monkeys everywhere!

Now you have a better understanding of how the stock market works."
 

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Found a "Rumpledone" indicator to use at the start of hourly bars (The Buy Zone) over on Kreslick.com.
Would it be useful to the 5 minute trader one wonders?
Bugger - I cannot post an attachment - is the site down - I get a white blank square imposed on top of the attachment box !!!:confused:
 
Currently trying to move house (still) so have abandoned full time trading for the moment. In the interim I've taken advantage of FXCM's free $25 offer and am having a go at seeing if I can build it up a bit.

Balance currently standing at $34.60 after the nice little run up this morning.

Edit: Hardly very nice - in fact proably one of the toughest moves I've seen - chop chop the whole way lol!!

gbpusd - 091104 m5 a.gif

Currently stopped out of long with brackets above and below the current levels....
 
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