Currency trading (December 4th > 8th)

[ashoksagar]

Stopped out there at b/e+1, so will just sit on my hands for a while.

 

[Offshore Trader]

It would be interesting to know the failure rate in strongly trending markets and also gains made when against the trend but obviously the really strong trend we have now is relatively rare. I would be surprised if we didn't have a 200 point down day at some point.

 

[jacinto]

The breakout i trade doesn't take trend into consideration, the testing didn't either. Most would argue that filtering on trend is a good idea. For a big ben style breakout strat, which timeframe of trend filter do you think would be best?

at the very least, i would use 4hr charts. the daily says everything. yes, there can be retracements, and a breakout south can be one. in that case, i prefer to see fibs, the trendline itself, and swing lows-highs whatever may be. that gives an idea if the breakout counter trend can get to a reasonable target or not. (the break from the asian range has a target of its own, and its the size of pattern add to breakout)

on the other hand, if breakout is accompanied by reversal pattern and breaking the trendline, then the better it should work.

just my 2 cents. but as OT mentions, it really comes down to your strategy.

 

[jacinto]

. I would be surprised if we didn't have a 200 point down day at some point.

i wouldnt be surprised either.

however, look at friday and monday last week. move down from high of around 100 pips (on no reversal patterns), then move up. seems like the retracements are happening intraday (giving the potential 200 pip down day you mention on an intraday basis, and giving the trend a breather). this is just an opinion, and most likely could be 100% wrong.

 

[Offshore Trader]

Jacinto

Mutual appreciation society here. All of your comments are very valid and would definitely enhance my work. Unfortunately, I am a trader who lacks discipline, gets way to wrapped up with emotion and therefore "sees" things in the market that aren't really there. For the really good trader, an adaption of a simple breakout method would be good but the adaptions I have made to mine are all based on fact, rather than interpretation (unfortunately trend lines are interpretation to a certain extent).

I hope that over time, my trading will improve to include more of the things you mention

 

[jacinto]

Jacinto

Mutual appreciation society here. All of your comments are very valid and would definitely enhance my work. Unfortunately, I am a trader who lacks discipline, gets way to wrapped up with emotion and therefore "sees" things in the market that aren't really there. For the really good trader, an adaption of a simple breakout method would be good but the adaptions I have made to mine are all based on fact, rather than interpretation (unfortunately trend lines are interpretation to a certain extent).

I hope that over time, my trading will improve to include more of the things you mention

no worries mate. think we are on the same boat , and is a question of approaches, which can add value to ones own method or not.

i guess that what counts is the pips you make. i do suffer from the same thing as you (emotions and discipline).

also, i wouldnt change my method unless fact and fact only made me change it, so we definitely agree on that. :cheesy:

 

[a_gnome]

If I can add my 2p's worth to the debate, you need to test your strategy to see if it performs "better" with a trend filter or not. You also need to decide what "better" means - it won't always mean more pips but might mean more pips for a given amount of drawdown or volatility in your equity curve, depending on what is important to you. Once you have decided then you need to stick to what your system is. I would also suggest that the current market conditions are highly unusual and I would not change my system on the basis of what is going on at present.

For those who are interested, since I'm trading a VEBO variant I too entered short this morning which I don't particularly fancy but I am currently still in. As I keep telling myself if I'm trading a system then all I need to do is to follow the rules.

Good trading to all...

 

[Offshore Trader]

Exactly my thoughts a_g.

Great post

 

[jacinto]

a-g

never intended to start a debate, or suggest that people used a trend filter for their method. only asked baruch a question on his breakout strat.

i agree with your points though.
jacinto

 

[ChowClown]

Short vebo 9735 (again, -20 from this morning's vebo short). Also short 9759 from another setup with indicator/PA based exits.

 

[ChowClown]

Short vebo 9735 (again, -20 from this morning's vebo short). Also short 9759 from another setup with indicator/PA based exits.

...stopped out vebo. No more vebo trades today.

 

[JER08]

Looks like lots of BO traders on this thread, feeling just a bit lonely here......

 

[Baruch]

I think it's dangerous to change your strategy based on one trade going wrong. In strongly trending markets you do get some deep retracements which BB is ideally positioned to take advantage of. If you analyse it carefully and over a period of time a change in strategy is justified, then that is fine but BB and other breakout methods work because they only look at the price action on the day in question.

My opinion only but I don't regret going short this morning and would do so tomorrow given the same set up.

The trade did not go wrong - I could have taken 30 pips, if I wanted. And even if I had a loss, I would't care, because losses are a part of this game. But I don't like the idea to trade against the trend, if there's not a very good reason to do so. It's not a sound strategy. And trying to pick tops (or bottoms) are a very bad idea.

 

[Offshore Trader]

Disappointing day today which continues a poor run for my breakout method. Last week was the first losing week in absolutely ages and I hope to see some good days with sharp breakouts in the European session. Last week would have been great except that most of the breaks came very early in the day. Well done to anyone who has a decent profit today

 

[ChowClown]

hi Baruch, out of interest what do you use as your intraday proxy for trend, when trading BB?

 

[Baruch]

hi Baruch, out of interest what do you use as your intraday proxy for trend, when trading BB?

I talk about the major trend.

 

[Baruch]

at the very least, i would use 4hr charts. the daily says everything. yes, there can be retracements, and a breakout south can be one. in that case, i prefer to see fibs, the trendline itself, and swing lows-highs whatever may be. that gives an idea if the breakout counter trend can get to a reasonable target or not. (the break from the asian range has a target of its own, and its the size of pattern add to breakout)

on the other hand, if breakout is accompanied by reversal pattern and breaking the trendline, then the better it should work.

just my 2 cents. but as OT mentions, it really comes down to your strategy.

Yes, everything looks very easy and clear on a daily or at least 4 hr chart. But can you trade only with those long-term charts? If yes, you must use a very big stop?

 

[ChowClown]

I talk about the major trend.

...but you were counter major trend on this morning's BB...weren't you?

 

[jacinto]

Yes, everything looks very easy and clear on a daily or at least 4 hr chart. But can you trade only with those long-term charts? If yes, you must use a very big stop?

nope, stops are as tight as yours or tighter. entry is refined with 60 min, and 15 min charts.

example is friday. main trend is up, but trend bias for day is down (it did move down 100 pips in the morning, with a clear trend bias south for the day.). look at the hourly spinning top at 11 am i think. break of spinning top triggers a 123 on the 15 minute chart for the long (see chart) and a break of the main trend for the day (intraday at least). so signals continuation of main move up. target of pattern is 50 pips, but it really becomes the continuation of another pattern on the 4 hr chart that had as target 8820 (which was surpassed).

trade was: long 9670 on pullback of break of 85 i think, stop at 50.

dont know if that answers your question.

edit: attached is chart for 4hr pattern....a 123 for a continuation of the long (or a sloppy bull flag). the fib expansions show the pattern.

 

[Baruch]

...but you were counter major trend on this morning's BB...weren't you?

Yes. :cheesy: