Focus or Money Management?

Sigma-D

Established member
648 62
I once did a study of a clear down trend move over a period of a few weeks on USD CAD
It was simply counting up and down candles on all time frames from 1m through to 1 day.
The findings were interesting to say the least. On all time frame counts up to 1 day, up v down candles were roughly equal in number. It was only when we got to 1 day count that the percentage started to bias in the direction of trend. Roughly 53% down v 47% up.

Are you saying the trend on the daily has a higher probability of carrying any trade in a lower timeframe? Please tell me that's all there is to it. I'm ready to believe anyone, anything.
 

counter_violent

Legendary member
11,281 3,005
Are you saying the trend on the daily has a higher probability of carrying any trade in a lower timeframe? Please tell me that's all there is to it. I'm ready to believe anyone, anything.

I'm saying that even with a visible strong trend...there is sufficient noise in the market to take you out more than 50% of the time and on all time frames sub 1 day.

So if you must be an entry, target and stop trader, then a top down analysis (month,week,day) is the Only way to go. That's the edge...longer time frame and lots of patience !
 
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Sigma-D

Established member
648 62
I'm saying that even with a visible strong trend...there is sufficient noise in the market to take you out more than 50% of the time and on all time frames sub 1 day.

So if you must be an entry, target and stop trader, then a top down analysis (month,week,day) is the Only way to go. That's the edge...longer time frame and lots of patience !
I looked at the longer tfs when I ran out of humour with the 15 min some time back. The charts looked rather similar. None of this fractals bollox, just the same spikes, reversals, whipsaws etc.

I'll give it another go as I have nothing to lose.

Thanks for the suggestion.
 

counter_violent

Legendary member
11,281 3,005
I looked at the longer tfs when I ran out of humour with the 15 min some time back. The charts looked rather similar. None of this fractals bollox, just the same spikes, reversals, whipsaws etc.

I'll give it another go as I have nothing to lose.

Thanks for the suggestion.

Also, you really do need to think about the first obstacle to overcome, which is spread cost.

How many trades might you do in a typical year? For me it could easily be 10 a day. Which equates to 2,500 a year. So lets assume a 2 spread x stake, even at a quid that's 5k large. A lot of traders would be very happy to make 5 large as opposed to losing 15!
 
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Sigma-D

Established member
648 62
Also, you really do need to think about the first obstacle to overcome, which is spread cost.

How many trades might you do in a typical year? For me it could easily be 10 a day. Which equates to 2,500 a year. So lets assume a 2 spread x stake, even at a quid that's 5k large. A lot of traders would be very happy to make 5 large as opposed to losing 15!

Spread is operational cost. No way round it.

Seriously, if I could make 1/10th of what my broker makes on each of my trades as a profit, I'd sign my soul away.
 

Sigma-D

Established member
648 62
I'm only half laughing as I type this, but if I took a profit at double spread on every trade I've ever taken, I'd actually be in decent profit right now.

It's hanging on for the home runs that dip you back into the red.
 

counter_violent

Legendary member
11,281 3,005
Agree it is very labour intensive and not for everyone.

But surely if do this type of work over a long period.
You are better than a coin toss.

Yes exactly, because you can take a single trade and it works and you close, job done.

You can take another and it isn't working, so you bias in a related instrument and it works out and you close both for a net profit, job done.

Take another trade, it works out, close the trade, job done.

Take another trade, it isn't working, you bias the related instrument, direction changes again, you re-bias original direction, yada yada yada. You can take single position profit when you think the bias is going to change again, hence, not always a need to keep adding possies, either side can be reduced as well. It's just a way of keeping on managing until the cluster of trades end up net profit.
 
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counter_violent

Legendary member
11,281 3,005
I'm only half laughing as I type this, but if I took a profit at double spread on every trade I've ever taken, I'd actually be in decent profit right now.

It's hanging on for the home runs that dip you back into the red.

Yeah I hear ya :LOL: So i'll laugh with you, not at you :)
 

Sigma-D

Established member
648 62
Yes exactly, because you can take a single trade and it works and you close, job done.

You can take another and it isn't working, so you bias in a related instrument and it works out and you close both for a net profit, job done.

Take another trade, it works out, close the trade, job done.

Take another trade, it isn't working, you bias the related instrument, direction changes again, you re-bias original direction, yada yada yada. You can take single position profit when you think the bias is going to change again, hence, not always a need to keep adding posies, either side can be reduced as well. It's just a way of keeping on managing until the cluster of trades end up net profit.
A bit of me says this is, to use your words, yada yada yada...And another bit says this is probably exactly where it really is.

Almost random entry, trade while good; exit when bad. If bad, reverse entry,. Trade while good; ext when bad, reverse entry...ad profitarum
 

counter_violent

Legendary member
11,281 3,005
A bit of me says this is, to use your words, yada yada yada...And another bit says this is probably exactly where it really is.

Almost random entry, trade while good; exit when bad. If bad, reverse entry,. Trade while good; ext when bad, reverse entry...ad profitarum

Might sound a bit odd....but I don't exit the bad ones until I've made more on the good ones.
 

Sigma-D

Established member
648 62
Might sound a bit odd....but I don't exit the bad ones until I've made more on the good ones.
This is so sh!t. No offence, but that;exactly what I ended up doing (accidentally) this week.

I ended up quite unintentionally with a synthetic long audchf. The long audusd took off nicely, the long usdchf was suffering. When the audusd got into double digits profit, I took it an profit and left eh languishing usdchf on. WQhen it hit a +1, I took it.

Trade of the week for me.

Really. Is it it that basic?
 

counter_violent

Legendary member
11,281 3,005
This is so sh!t. No offence, but that;exactly what I ended up doing (accidentally) this week.

I ended up quite unintentionally with a synthetic long audchf. The long audusd took off nicely, the long usdchf was suffering. When the audusd got into double digits profit, I took it an profit and left eh languishing usdchf on. WQhen it hit a +1, I took it.

Trade of the week for me.

Really. Is it it that basic?

It's far from basic...what you did was manage to a successful outcome overall.

Most traders can't even think in one direction with one trade...let alone two directions with multiple trades. They never get beyond entry, target and stop before they give up on the whole thing !
 

tar

Legendary member
10,443 1,313
Also, you really do need to think about the first obstacle to overcome, which is spread cost.

How many trades might you do in a typical year? For me it could easily be 10 a day. Which equates to 2,500 a year. So lets assume a 2 spread x stake, even at a quid that's 5k large. A lot of traders would be very happy to make 5 large as opposed to losing 15!

+1

You will always read that the daily charts looks exactly like the short time frame ones , thats true but the costs are enormous on the short time frame charts , the spread is the same but the ATR is totally different , so instead of trading 10 pips moves and pay 2 pips in costs , one could pay the same spread and trade 100 pips moves . 20% vs 2% !
 
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Splitlink

Legendary member
10,850 1,234
Commission or spread will affect this.

It will, but it is not too dificult to circumvent. If the trader uses 20 points loss and aims for a 15 point gain, for example, which is what I do. That would take into consideration the spread, wouldn't it?

I believe that short time frame trading is doomed to fail because it entails a shorter stop loss distance that the market is able to reach with no difficulty, at all-- and I mean in either direction, a kind of road roller effect.

Where trading is dangerous, on a 50-50 view is at all points where price touches any kind of line where traders have stops. You have to be very fast to take profit when it appears and hope that it goes into profit at once. If it does go into profit first and the trader does not take it, he has had it because the price will roll against him.

My problem with that is that, instead of reaching the traders target of 15, it goes to 12 and the trader waits. Too late! Perhaps the best thing to do is move loss up to breakeven, asap, but I have found that I go a long way in a long time, by doing that and is a waste of time.
 

Trader333

Moderator
8,655 981
No trader333, it doesn't.

I was referring to overall profitability which it has a big impact on. It is comparable to the roulette wheel where many punters bet on red or black and for the most part the ball will land on one or the other. However, when it lands on white then everyone loses and the more times punters play the more that statistical probabilities will prevail giving an edge to the house or in the case of trading the brokers.
 
 
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