Making Money Trading

[bansir]

From what I recall, TD will take pins at tops and bottoms of swing lows and highs so moving averages are not relevant in these situations. However, I would argue that he is experienced with this method so don't beat yourself up too much. I have taken these sort of sets ups where for example I have shorted into potential resistance based on the "look" of the pin and a few other converging factors. I think this sort of set up is for the more experienced. If in doubt, do a Lurker and paper trade it.

Thanks for your comments tafita, much appreciated. I think I did the right thing in the end; There's always another decent set-up just around the corner.
I am just paper trading at the moment.

Good trading,
Neil

 

[bansir]

Not traded on the strength of a single 4 minute bar because price went both up and down within 4 minutes. This timeframe is not suitable for trading pin bars.


In my view you were quite right to leave it alone, regardless of what price did next. If you can devise, backtest, and papertrade a system using 4m pin bars, and that system has positive expectancy, you might be on to something, but that is not likely.

I had a high probability hourly pin bar setup, of a 50 period EMA, a 50% fib retracement, a resistance zone, combined with a classic bearish reaction to bearish fundamental news and I passed up the trade because my short entry would have been 7 pips lower than the setup required. By the time I had calculated the risk of the pin (to work out my position size) the market was 15 pips lower than my entry. The whole move turned out to be worth in excess of 50 pips with a tight stop, and would most likely be worth more if given more room, but the important thing is that I didn't chase the market. I had the discipline to let it go, even if it caused me the same emotional anguish as you experienced.

You did absolutely the right thing. If I had banged on a position 7 or 15 pips worse off I'd be up either £129 or £105 on that trade (and on a £1700 account that is nothing to sneeze at). However, I would have chased the market, broken my rules, and reenforced a type of behaviour that would likely get me severely burned in the end.

Thanks for taking the time to comment Lurker.
I have had some modicum of success just paper trading 4min candles but agree they can be a bit flaky; I used to be on 1min candles a while back but found I tended to over-trade a bit on these.

I think you have made a good point regarding not reinforcing bad habits; it's all too easy to just slide into situations without a proper plan, then if you get away with it and make a profit the temptation to repeat the stunt soon kicks in again later on, gradually drawing one into total anarchy.

Again, I think T_D put up a great post on this a while back, must have a look...
Thanks again for your response,
Neil

 

[Reas]

Gbpchf

I saw an interesting pin on the hourly GBPCHF, wich i took but got stopped out on the left eye.
Now this left eye is developing into a second pin, what should i do?
I think i am gonna take it a second time, afterall the first pin was reason to enter for me, so why should this second one not be?

any thoughts anyone?

Reas

Edit: transmitted the order, the dotted lines on the chart are entry and stop levels

 

[bansir]

I saw an interesting pin on the hourly GBPCHF, wich i took but got stopped out on the left eye.
Now this left eye is developing into a second pin, what should i do?
I think i am gonna take it a second time, afterall the first pin was reason to enter for me, so why should this second one not be?

any thoughts anyone?

Reas

Edit: transmitted the order, the dotted lines on the chart are entry and stop levels

Hi Reas,
Is your pin supported by any form of confluence? As I understand it, is critical to get as many factors working in your favour as possible.
I can't pull decent charts up whilst at work so can't really perform any evaluation.
edit- oops, just spotted your attached chart. For me, the second pin doesn't look very pinnish; there's a pretty long upper shadow. Could be worth a second opinion though.

Possibly, the bearish pin around 17:00 looks good, pointing straight into a local pivot level at about 2.3180 But thats easy to see in the past action.
Best Regards,
Neil

 

[Reas]

Hi Bansir, thanks for your comment.
Yes i saw some confluence, in the form off a pivot and a trendline (blue line on my chart not very vissible) also the 68 fib retracement isn't far away, i'll attach another more zoomed out chart.
I allready entered on this second pin, and agree with you it's not the best pin i've seen.

 

[trader_dante]

Just look at this lovely little 4min candle pin.
mmmm...nice.
Formed right before my eyes but wait.... no confluence! What to do?
I stayed out, sob, sob no long for me
I mean, just look at the move, but resistance lines were hovering overhead and EMA's were pointing down. What would you have done?

I chalked in the positive divergence on RSI after the market closed. Have I missed something more? Should I have taken the pin on its own merit or was I right to sit on the side and watch it...... fly..........away?
In retrospect the pain of watching the move take off without me is, I think bigger than the pain of a stop loss hit just under the tail. I think this came up a few posts back. Might have just answered my own question.

Best Regards,
Neil

Hi Neil,

I know how annoying it is when you see a move take off without you.

I am in two minds about some of the comments that have been made.

Firstly, I believe price action, whether it be pin bars, inside bars, bullish bars, works across all TFs. The only difference is that smaller timeframes require a different skill set to win on. They require focus, the ability to think fast; to make quick mental calculations for position sizing, and stamina.

Larger timeframes require, among other things, a huge deal of patience.

Secondly it is true that MANY price action bars will work when there is nothing supporting them. There are many times that a good looking pin bar will work when it appears with NO support, NO resistance, NO fib levels, NO indicator divergence. However, a trader has to decide whether they are prepared to risk real money to find out and it is EXPERIENCE that helps in this decision making.

I think the pin on your chart would have been worth taking (if I traded the 4m bars).

The market made a low just before 17:00 and then formed a channel with a slight decline. Just after 18:45 you get another concentrated push down into the lows of the day and a false breakout of them which forms the pin bar. As you point out, you also have bullish divergence.

It is important to remember that it is EXPERIENCE that helps you make a decision. The more you watch the market you more you will realise what works and what doesn't.

 

[trader_dante]

Not traded on the strength of a single 4 minute bar because price went both up and down within 4 minutes. This timeframe is not suitable for trading pin bars.

I don't agree with this, see my post above.

In my view you were quite right to leave it alone, regardless of what price did next. If you can devise, backtest, and papertrade a system using 4m pin bars, and that system has positive expectancy, you might be on to something, but that is not likely.

This is, however, very good advice. Devise, backtest and papertrade a system.

It is through having an idea and watching the market to see whether it confirms it that you will find out what works and what doesn't.

The whole move turned out to be worth in excess of 50 pips with a tight stop, and would most likely be worth more if given more room, but the important thing is that I didn't chase the market. I had the discipline to let it go, even if it caused me the same emotional anguish as you experienced.

Good attitude Lurker.

You did absolutely the right thing. If I had banged on a position 7 or 15 pips worse off I'd be up either £129 or £105 on that trade (and on a £1700 account that is nothing to sneeze at). However, I would have chased the market, broken my rules, and reenforced a type of behaviour that would likely get me severely burned in the end.

Superb post

 

[trader_dante]

Hi Bansir, thanks for your comment.
Yes i saw some confluence, in the form off a pivot and a trendline (blue line on my chart not very vissible) also the 68 fib retracement isn't far away, i'll attach another more zoomed out chart.
I allready entered on this second pin, and agree with you it's not the best pin i've seen.

Reas,

Spot on in your analysis. This is an example of confluence (pivot, TL and key fib as support) however it is not backed up by the best looking pin bar.

 

[Reas]

Reas,

Spot on in your analysis. This is an example of confluence (pivot, TL and key fib as support) however it is not backed up by the best looking pin bar.

Thanks TD,

I'm now stopped out for the second time this morning
A third pin formed, this one looks even better, but now i'm not sure if i would like to risk more then i allready did today, i think i'm gonna let this cross go for today.
Looks like the trend is -in contrast of what the pins are telling- down on the GBPCHF cross.

 

[omni]

Hi Reas,
Maybe you should use order method on gbpchf..... so place your order at a point where you know this pin is following thru with a good move?
ps. the pin on the hourly gbpchf isnt that good........ the body is a bit low. There is no real rejection of the lower price here, its more a doji i think...............
Check out the pin on the 12/dec @ 12o'clock. that's a pin.....

For everyone else...... does anyone fancy going long nasdaq? I am tempted.

 

[Reas]

Hi Omni thanks for your comment,

I'm using TD's method to enter the trade, enter one pip below/above the pin and stop also one pip above/below the pin.
So far it has worked fine, so i'm not going to change that because of a few bad trades, but thanks anyway for the suggestion.
The good thing is that this method also has protected me for bigger losses because the stop was allready transmitted, so you know exactly what your risk is.

I have looked at the pin you mentioned but i don't see one on 12 dec. at 12 o clock.
Are you sure you are looking at the same chart? hourly GBPCHF?

Reas

 

[shadowninja]

Thanks TD,

I'm now stopped out for the second time this morning
A third pin formed, this one looks even better, but now i'm not sure if i would like to risk more then i allready did today, i think i'm gonna let this cross go for today.
Looks like the trend is -in contrast of what the pins are telling- down on the GBPCHF cross.

I accept no more than 3 losing trades in a day when I am more actively trading. Sometimes we have bad days and you have to recognise them and step aside until your mind is fresh.

 

[Reas]

Good advice Shadowninja thanks!
I didn't enter anymore, and when i look at GBPCHF now i'm glad i didn't
Some strange are happening there, it looks like the price is rejecting from both sides.
There's a battle beeing fought between the bulls and the bears, and i don't want to be in the line of fire.
But it's not all bad today, i also shorted the EURUSD yesterday, and that is more than covering my losses today.

Reas

 

[trader_dante]

Today was my last day at work.

But I want to let you all into a secret.

A huge dream of mine has come true and I have been given the chance to work as a professional trader.

I took my trading records to a prop firm and they have accepted me to trade as a fully backed local providing I can continue with the success I have had.

I start in mid January and I am afraid that as a result, from that time onwards, I will not be around to continue this thread with the degree of frequency that I have done up until now.

Still, I promise I will do my best to answer any questions even though it will take longer to get a response.

I hope that some of you have taken something away with you from this thread that helps you in your trading.

I have built my account by 2,811% in six months and as I have said before, although this percentage masks a relatively small CAPITAL increase, I am now consistently profitable and my equity is growing.

If you understand the price action setups and you are PATIENT and WAIT for the market to come to you and are DISCIPLINED to take only the setups that have everything going for them, there is no reason why anyone reading this cannot achieve the same result I have.

For all those traders that have had a difficult year, take some time out as we come into the year end and look back at where you went wrong and where you can improve.

With the New Year just around the corner, I also think it would be an invaluable exercise for every single trader to write down their goals for 2008.

Think about what you want and focus on it. Whether it be a financial goal, a new skill you want to develop or something you want to learn, write it down and work towards it.

Get your goals straight in your mind. And go get them.

This is your year.

 

[shadowninja]

Congrats! Sounds like you deserve it. Have a great Christmas!

 

[black bear]

Wishing you continued success TD, well done

Today was my last day at work.

But I want to let you all into a secret.

A huge dream of mine has come true and I have been given the chance to work as a professional trader.

I took my trading records to a prop firm and have they have accepted me to trade as a fully backed local providing I can continue with the success I have had.

I start in mid January and I am afraid that as a result, from that time onwards, I will not be around to continue this thread with the degree of frequency that I have done up until now.

Still, I promise I will do my best to answer any questions even though it will take longer to get a response.

I hope that some of you have taken something away with you from this thread that helps you in your trading.

I have built my account by 2,811% in six months and as I have said before, although this percentage masks a relatively small CAPITAL increase, I am now consistently profitable and my equity is growing.

If you understand the price action setups and you are PATIENT and WAIT for the market to come to you and are DISCIPLINED to take only the setups that have everything going for them, there is no reason why anyone reading this cannot achieve the same result I have.

For all those traders that have had a difficult year, take some time out as we come into the year end and look back at where you went wrong and where you can improve.

With the New Year just around the corner, I also think it would be an invaluable exercise for every single trader to write down their goals for 2008.

Think about what you want and focus on it. Whether it be a financial goal, a new skill you want to develop or something you want to learn, write it down and work towards it.

Get your goals straight in your mind. And go get them.

This is your year.

TD

Wishing you continued success TD, well done

Great post and a great thread, I am sure you have helped plenty of new traders and some older ones to.

Have a really good Christmas and New Year TD, put your feet up ready for the new job, it sure can not have been easy keeping up with this thread.

another picy for your collection

Andy

arrr before you go, huge one yr pinbar spotted, nrrrrrrrr only kiding ya

 

[trader_dante]

TD

Wishing you continued success TD, well done

Great post and a great thread, I am sure you have helped plenty of new traders and some older ones to.

Have a really good Christmas and New Year TD, put your feet up ready for the new job, it sure can not have been easy keeping up with this thread.

another picy for your collection

Andy

LOL thanks Andy.

I like your pics. I'm getting a nice little collection here

Happy Christmas and a prosperous New Year to all of you.

 

[black bear]

LOL thanks Andy.

I like your pics. I'm getting a nice little collection here

Happy Christmas and a prosperous New Year to all of you.

TD

Your welcome, just keep killing them at close range, its a dam sight easier than that Sh..t I was up to this week, ran my not so little legs off chasing that one

I Will Stick to sitting in the tree tops and falling on the odd limp one that walks past in future

Andy

 

[trader_dante]

TD

Your welcome, just keep killing them at close range, its a dam sight easier than that Sh..t I was up to this week, ran my not so little legs off chasing that one

I Will Stick to sitting in the tree tops and falling on the odd limp one that walks past in future

Andy

ROFL

That's the way :clap:

I forgot my rifle today. Packed the shotgun instead.

Thought I saw something moving. Wasn't sure if it was prey or not but pulled the trigger anyway. Suffice to say I missed. TWICE.

 

[superspurs]

good luck TD,happy xmas:cheers: