Trading Naked - Part 2

[tenbobtrader]

Nothing really 'works' in trading

"Nothing really 'works' in trading. You have to know what you are doing. It is like anything else: to perform well, you need skill.

Most people who say things like MAs work are talking based on what could have happened when they look at a chart with MAs on it. These indicators make no sense at all. Why would a moving average tell you anything? It is just a way to smooth the price series and moves all over the place depending on the time scale you use.

Take it from me

No one can come and make money from trading with simple systems. You can do certain things like never taking a loss and last for a while, but if you want to do this for any length of time, you need to aquire the skill and it will cost you more than money if you are like most people.

Don't listen to people who tell you it is simple but not easy or some bollox like that: for the vast majority of people it is neither simple nor easy

__________________
Is life so dear that we should blame men for dying in adventure? Is there a better way to die? "

By Fx Scalper

 

[tenbobtrader]

This forum is full of info showing how one should trade

This forum is full of info showing how one should trade but sadly nobody here or any mechanical system I have seen actually can define the way to produce consistent profits.

There are endless debates here about nature and nurture, thinking correctly, using indicators, not using indicators, support and resistance, elliot waves, the moon, etc

The Stages of a Trader is worth a read.
http://www.trade2win.com/boards/for...orex-strategies-systems/fore...ex-trader.html

If I could distill what turned me from a consistent loser into a consistent winner then I would package it up and sell it - but I can't.

There is no magic formula or set of rules/instructions which one can learn from reading a book or by browsing this forum. Why? Because every trade is different, and because every event in the market is a unique moment in time with its own unique set of circumstances driven by human emotions, yours and all the other traders in the market.

But do not despair, because if I can do it (and I'm no whizzkid) then you can.

I would consider these pointers.

First thing to do is preserve your account, because without that you cannot participate.
Trade mini lots and concentrate on pips.

Imagine you are starting from scratch and know nothing - try and erase all previous 'knowledge' of trading.

Take one currency pair (I suggest EUR/USD) and watch a naked bar chart (not candles)
with the price displayed in the top middle of the screen. I use an MT4 indicator called DailyData.

Display a H4 chart and see where the key levels are for each day. Remembering those levels switch to a H1 chart, then an M30 and M15 to see what is happening within each period. Do not draw anything on the chart or use any indicators, practice observation and memory of price levels.

Before each trading day check out any forth coming news releases on the forexfactory calendar. If there is a 'red' announcement at 1.30pm GMT then take the morning off, chances are you will chopped about or caught in the doldrums.

After a period of passive observation you may want to enter a trade. Try a mini lot for 10p a point.

What is important is observing what happens around your trade. I say 'your' because it is personal, and chances are that even with 10p a point it will have emotional meaning for you. The only thing I would strongly suggest is that you always enter a stop and target with your order, try to place them at strategic levels where the risk and reward are in your favour.

The essence of trading consistently in my experience is to develop a feel for the market and become part of it

The more rubbish you have displayed on your screens the less you are able to do this.

Trade like this for a couple of weeks then PM me for the next step if you so wish.

Happy trading.
________________________________________
The Learning Cycle for a Newbie Forex Trader

by Rols



http://www.precisefutures.com/free_doc/doc_1.html


link originally posted by Rols

 

[tenbobtrader]

45 ways to avoid losing money trading forex

45 WAYS TO AVOID LOSING MONEY TRADING FOREX

by Jimmy Young, CTA

Who is Jimmy Young?

Retired proven professional Bank FOREX trader with over 20 years of hands-on FOREX trading experience.


1) Knowledge Deficiency – Most new FOREX traders don’t take the time to learn what drives currency rates (primarily fundamentals).

2) Overtrading - Trading often with tight stops and tiny profit targets will only make the broker rich. The desire to “just” make a few hundred dollars a day by locking in tiny profits whenever possible is a losing strategy.

3) Over leveraged - Leverage is a two way street. The brokers want you to use high leverage because that means more spread income because your position size determines the amount of spread income; the bigger the position the more spread income the broker earns.

4) Relying on Others – Real traders play a lone hand; they make their own decisions and don’t rely on others to make their trading decisions for them; there is no halfway; either trade for yourself or have someone else trade for you.

5) Stop Losses – Putting tight stop losses with retail brokers is a recipe for disaster. When you put on a trade commit to a reasonable stop loss limit that allows your trade a fair chance to develop.

6) Demo Accounts – Broker demo accounts are a shill game of sorts; they’re not as time sensitive as real accounts and therefore give the impression that time sensitive trading systems, such as short-term moving average crossovers can be consistently profitably traded; once you start dealing with real money, reality is quick to set in.

7) Trading During Off Hours – Bank FX traders, option traders, and hedge funds have a huge advantage during off hours; they can push the currencies around when no volume is going through and the end game is new traders get fleeced trying to trade signals. There is only one signal during off hours – stay out.

8) Trading a Currency, Not a Pair – Being right about a currency is half a trade; success or failure depends upon being right about the second currency that makes up the pair.

9) No Trading Plan - 'Make money' is not a trading plan. A trading plan is a blueprint for trading success; it spells out what you see your edge as being; if you don’t have an edge, you don’t have a plan, and likely you’ll wind up a statistic (part of the 95% of new traders that lose and quit).

10) Trading Against Prevailing Trend – There is a huge difference between buying cheaply on the way down and buying cheaply. What was a low price quickly becomes a high price when you’re trading against the trend.

11) Exiting Trades Poorly – If you put on a trade and it’s not working make sure you exit properly; don’t compound the damage. If you’re in a winning trade, don’t talk yourself out of the position because you’re bored or want to relieve stress; stress is a natural part of trading; get used to it.

12) Trading Too Short-term – If your profit target is less than 20 points don’t do the trade; the spread you pay to enter the trade makes the odds way against you when you go for these tiny profits.

13) Picking Tops and Bottoms - Looking for bargains works well at the supermarket but not trading foreign exchange; try to trade in the direction the price is going and your results will improve.

14) Being Too Smart – The most successful traders I know are high school graduates. They keep it simple and don’t look beyond the obvious; their results are excellent.

15) Not Trading Around News Time – Most of the big moves occur around news time. The volume is high and the moves are real; there is no better time to trade fundamentally or technically than when news is released; this is when the real money adjusts their positions and as a result the price changes reflect serious currency flow (compared to quiet times when Bank traders rule the market with their customer order flow).

16) Ignore Technical Condition – Determining whether the market is over-extended long or over-extended short is a key determinant of near time price action. Spike moves often occur when the market is all one way.

17) Emotional Trading – When you don’t pre-plan your trades essentially it’s a thought and not an idea; thoughts are emotions and a very poor basis for doing trades. Do people generally say intelligent things when they are upset and emotional? I don’t think so.

18) Lack of Confidence – Confidence only comes from successful trading. If you lose money early in your trading career it’s very difficult to gain true confidence. The trick is don’t go off half-cocked. Learn the business before you trade.

19) Lack of Courage to Take a Loss – There is nothing macho or gutsy about riding a loss, just stupidity and cowardice. It takes guts to accept your loss and wait for tomorrow to try again. Getting married to a bad position ruins lots of traders. The thing to remember is the market does crazy things often, so don’t get married to any one trade. It’s just a trade. One good trade will not make you a trading success; rather it’s monthly and annual performance that defines a good trader.

20) Not Focusing on the Trade at Hand– There is no room for fantasizing in successful trading. Counting up and mentally spending profits you haven’t made yet is mental masturbation and does you no good. Same with worrying about a loss that hasn’t happened yet. Focus on your position and have a reasonable stop loss in place at the time you do the trade. Then be like an astronaut – sit back and enjoy the ride. No sense worrying because you have no real control. The market will do what it wants to do.

21) Interpreting FOREX News Incorrectly – Fact is the press only has a very superficial understanding of the news they are reporting and tend to focus on one element and miss the point. Learn to read the source documents and understand it for real.

22) Lucky or Good – Your account balance changes don’t tell you the whole story about your trading. Fact is if you are taking a lot of risk and making money you will eventually crash and burn. Look at the individual trade details. Focus on your big loses and losing streaks. Ask yourself this, "If I had a couple of consecutive losing streaks or a couple of consecutive big losses, how would my account balance look?" Generally, traders making money without big daily losses have the best chance of sustaining positive performance. The others are accidents waiting to happen.

23) Too Many Charity Trades – When you make money on a well thought out trade don’t give back half on a whim. Invest your profits from good trades on the next good trade.

24) Courage Under Fire – When a policeman breaks down the door to a drug dealer's apartment he is scared but he does it anyway. When a fireman climbs onto the roof of a burning building he is scared but does it anyway, and gets the job done. Same with trading. It’s ok to be scared but you have to pull the trigger. No trigger – no trades – no profits – no trader.

25) Quality Trading Time – I suggest 3 hours a day of quality, focused trading time. That’s about all your brain allows. When you are trading, be 100% focused. Half way is bull**** - it doesn’t work. Don’t even think that time spent in front of the computer watching the rates has any correlation to profitability - it doesn’t. Spend less time but when you're trading, be 100% focused on trading.

26) Rationalizing – Killer. Absolute Killer. Put your trade on and let it run. If it hits your reasonable pre-determined stop, you're out. Think of yourself as a prizefighter. You just got knocked out. Moving your stop is like getting up after being crushed with a knockout blow. It’s pointless. Things will only get worse. Don’t ignore the obvious. You're wrong – get out. Come back the next day and try again. A small loss will not hurt you - a catastrophic loss will.

27) Mixing Apples and Oranges – Have you ever done this? You see the EURUSD trading higher so you buy GBPUSD because it “hasn’t moved yet”. That’s a mistake. Most of the time the reason the GBPUSD hasn’t moved yet is because it's already overbought or some 4:30am UK news was bearish. Don’t mix apples and oranges. If EURUSD looks bid, buy EURUSD.

28) Avoiding the Hard Trades – Bank FX traders have an axiom "the harder the trade is to do the better the trade". This I learned from experience. When I needed to buy EURUSD and it was hard to get them, that’s when it’s necessary to pay up and get the business done. When it’s easy to get them, then sit back and wait for better levels. So if you are trying to get into a trade, or more importantly get out of a trade, don’t putz around for a few points - get your business done.

29) Too Much Detail – If your trading more than 2 indicators then you need to clean house. Having many indicators stifles trading and finds reasons not to trade. A setup and a trigger is all you need.

30) Giving Up Too Easy – Your first trade of the day may not be your best but certainly it’s no reason to quit. I have a preset daily trading limit and I use it. You can’t make money by making excuses. Getting trades wrong is natural and should be expected.

31) Jumping the Gun – Don’t be penny wise and dollar foolish. Wait for your trade signal to be clear. Put on your trade and give it a decent size stop loss so that you don’t get knocked out by random noise.

32) Afraid to Take a Loss - trading is not personal, it’s business. Don’t think that a poor trade is a reflection on you. It could be you're just ahead of your time or a commercial order hits the market and temporarily creates a small unexpected move. Again, place your stop beforehand and NEVER increase your pre-determined risk. If it’s going bad, it will probably get worse. I think that’s Newton's “body in motion tends to stay in motion…”

33) Over-Relying on Risk Reward – There is zero advantage in risk reward. If you put a 20 point stop and a 60 point profit your chances are probably 3-1 that you will lose. Actually with the spread its more like 4 to 1 (from entry point if it goes down 17 points you lose, or up 63 - you win; 17/63 is close to 4-1).

34) Trading for Wrong Reasons – Because the EURUSD is going up is not in itself a reason to buy. Buying EURUSD because it's not moving much is even worse. You’re paying the toll (spread) without even a hint that you will get a directional move. If you are bored, don’t trade; the reason you're bored is there is no trade to do in the first place.

35) Rumors – Rumors are rumors almost 100% of the time. Think about where in the motion you heard the rumor. If EURUSD is up 50 points in last 15 minutes and the rumor is dollar negative, well - then you missed it. Whenever you in motion with the trade, determine where you are entering.

36) Trading Short-term Moving Average Crossovers – This is the money sucker of the century. When the shorter term moving average cross the longer term moving average, it only means that the average price in the short run is equal to the average price in the longer run. For the life of me, I cannot understand why this is bullish or bearish. Easy to set up on software, complete with lights, bells and whistles, and good for the seller getting thousands for the software but in terms of creating profit - it’s a zero.

37) Stochastic – Another money sucker. Personally I think this indicator is used backwards. When it first signals an overdone condition, that’s when I think the big spike in the “overdone” currency pair occurs. To be overbought means strong and oversold means weak. Try buying on the first sign of overbought and selling on the first sign of oversold. You’ll be with the trend and likely have identified a move with plenty of juice left.

38) Wrong Broker – A lot of FOREX brokers are horrible. Get a good one. Read forums and chats in several different places to get an unbiased opinion.

39) Simulated Results – Watch out for “black box” systems. These are trading systems that don’t divulge how the trade signals are generated. Great majority of them are absolute garbage. They show you a track record of extraordinary results but think about it. If you could build a trading system with half a dozen filters using the benefit of hindsight, couldn’t you too come up with a great system. Of course going forward is an entirely different story. High-speed number crunching capabilities allows for building great hindsight trading systems, so BEWARE.

40) Inconsistency – Every business (FOREX trading included) requires a business plan (trading plan). Unless you have taken the time to write down a set of rules that you can and will follow, it’s likely your trading will remain unfocused and directionless. Make a plan, have rules, follow them. Set goals that are realistic and you will achieve them.

41) Master of None – Focus on one currency for technical trading. Each currency has a unique way of trading and unless you get intimate with it, you will never truly understand its underlying idiosyncrasies. Don’t spread yourself too thin – focus, master one currency at a time.

42) Thinking Long Term – Don’t do it. Stay in the moment. Especially if you’re a day trader. It doesn’t matter what happens next week or next month. If you are trading with 30 to 50 point stops, restrict your thought process to what’s happening right now. That is not to stay the long-term trend is not important. It is to say the long-term trend will not always help you when your trading a significantly shorter time frame.

43) Overconfidence – Trading is simple but not easy. Statistics show 95% failure rate of those attempting to become traders. If you're doing well, don’t take your success for granted. Always be on the lookout for ways to improve what you are already doing.

44) Getting Pumped Up – The trick is to maintain an even keel. When you are in a trade, you want to think exactly as you would if you didn’t have a trade on. To do this requires a relaxed disposition. This is not a football game. Don’t get psyched up. Relax and try to enjoy it.

45) Staying in the Game– I don’t recommend demo trading because traders learn bad habits when trading with play money. I also don’t think “letting it all hang out” right away is wise either. Start off doing trades and taking risk that is relatively small but still makes a difference to you if you win or lose. About a quarter to a third of what you expect to reach as your trading matures is reasonable.


originally posted by Rols

 

[Bloodhound]

Hi Andy,

Your post 522 is something I have read before somewhere and in fact completely answers part of my question (if indeed with the benefit of hindsight there really is / was a question aside from the issue of instinct etc.). I'm not sure when I read that but it had a profound effect on how I started to view trading and probably had a major influence in my turning to trading the way I do trade.

All the best

Rob

 

[D70]

Re: Hoping for some advice from experienced traders

Anyway, to my question. All over this forum (and other forums, books etc.) there are people advocating 'taking every set-up' etc. regardless of what one may think about it, but then I read somewhere recently that instinct is a powerful tool in trading and that one shouldn't simply take every set-up as it appears. Now the question is, some trades work and some don't - even 'the best' set-up will fail, so should one, to an extent be trading on instinct / gut? Sometimes when I scan through my charts a set-up just leaps out at me and screams 'trade me' (AUDUSD from Thursday being a classic example) - should one aim to avoid any trade that doesn't provoke that thought / emotion etc.? We can couch our entry methodology in rules such as trade with the H4 trend etc. etc. but, quite often, those trades fail as well, but the trades that jump off the chart at one, which may not have quite ticked all one's rule boxes, work. Why is this? In musical terms I know that, if a song were being played in G, overlaying a guitar solo in F is going to sound terrible, so maybe there is a contextual issue in trading that my eyes are seeing but that I'm not managing to define in terms of a set of rules to hone my entry methodology. What is the best way to overcome this problem (if indeed it is a problem) - I am guessing that it is a case of analysis of trades after they have closed to look for common themes between the ones that worked and the ones that didn't. Should I actually care as I am in fact a firm believer that the set-up / entry is irrelevant and that it is how one deals with the trade once it is triggered that will define whether one is profitable or not?

Rob

I am unsure what Tenbobtrader's posts are about? They do not seem to be a response to your interesting question.

Kitejedi,
What you have come to is level 2 (or maybe level 10) of trading.... what I mean is that you have now done enough hours to start to develop a natural talent. It starts to kick in after x many hours (depending on your aptitude and focus). It is similar to that of anyone who is proficient at anything, be it rugby, tennis, football, chess, poker etc etc.... first you learn the rules...... then the strategies...... ie, in tennis, if player hit down the line you play a cross court shot to make his next shot as difficult as possible...... when you first start out, you just try to get to the ball and hit it back, after time you begin to "play" the shot appropriate to the occasion...... but it takes practice and time to get to these levels and to be able to play this shot...... and after x many hours of practise you do it instinctively. I would suggest you are getting near this instinctive level....... so congratulations. You are reading the situation and your instinct is talking to you. You started with rules, you moved onto a strategy and now you are taking it to the next level, one that cant be taught...... why arent i a professional footballer? Show me how to play and sign me to Man U..... ridiculous right..... ? Trading is no different.

There is a problem tho, many think they are at this stage before they really are and instead of trading on instinct, trade on emotions and ego....... the fall from grace is swift.

So how do you harness such powers? Well..... pay attention to your instinct and see how it goes..... after time you will probably drop all your "setups" because you will "know" what you are looking for on a purely visual basis using your "minds eye".

I think many people forget that trading is a skill like any other discipline and it doesnt bear fruit overnight. Federer has been playing tennis since he could walk, it isnt by coincidence that he is no.1.

Regarding taking every "setup".... it is essential in the learning process but after many many many hours.... you can begin to filter accordingly as some "you know" wont work.

Hope the above makes sense and maybe provokes some inner thoughts.....

 

[Bloodhound]

Thank you D70 for your reply. It makes plenty of sense and, as I am sure you are aware, it has already provoked a multitude of inner thoughts. I think I need to reflect and will reply by pm if I may as I am fearful of this topic becoming too introspective.

 

[morgan_edge]

possibly of interest? (or not)
http://www.trade2win.com/boards/general-trading-chat/42356-after-thousands-hours-screentime.html

 

[tenbobtrader]

Ego

To the ego, the present moment hardly exists. Only past and future are considered important. This total reversal of the truth accounts for the fact that in the ego mode the mind is so dysfunctional. It is always concerned with keeping the past alive, because without it - who are you? It constantly projects itself into the future to ensure its continued survival and to seek some kind of fulfillment or release there. It says 'One day, when this, that or the other happens, I am going to be okay, happy, at peace'. Even when the ego seems to be concerned with the present, it is not the present that it sees: It misperceives it completely because it looks at it through the eyes of the past. Or it reduces the present to a means to an end, an end that always lies in the mind-projected future. Observe your mind and you'll see that this is how it works.

The present moment holds the key to liberation. But you cannot find the present moment as long as you ARE your mind"

Eckhart Tolle



you mentioned it so --- a re-post for you



you take care of yourself Rob

hope everyone gets aboard a good wave or two next week :clover:

 

[HawkTrader]

Re: Hoping for some advice from experienced traders

At the risk of derailing this thread, although I hope what I am about to say / ask may be extremely relevant given the discretionary nature of trading based solely on support and resistance, I wanted to discuss 'filtering'. This comes from a discussion I had with a trader yesterday and also from a current discussion on another thread and has got me thinking.

A long time ago I used to have aspirations of playing guitar in a rock band. For years I practiced and, without wanting to blow my own trumpet, I got quite good. Anyway, during the course of my time playing guitar, I remember reading an interview with Clapton (I think it was) who said that what denotes a good guitar solo from a bad one is not the notes that are played but the notes that aren't. As I developed as a guitarist there were many 'turning points' along the way where suddenly stuff that a few weeks / months before had seemed impossible, suddenly became second nature - be they learning a new scale through to an advanced technique etc. What I did notice, and I was very much an improvisation based (discretionary!) guitarist, was that when it came to playing live on stage the more experienced I became, the less I actually played during a set but, conversely, the better my peers felt I had become as a guitarist. I'm sure the analogy to trading is already pretty obvious.

Trading by price alone is, by its very nature, a pretty discretionary form of trading IMO. Set-ups can be learnt, levels pre-drawn etc. but, at the end of the day, it is 100% at the trader's discretion which trades to take and which ones not to. Since I started trading this way I know I have started to 'filter' even my M5 cable trades to some extent. To give an example - if cable has made a big run one day I may avoid trading her M5 the next day as I am 'expecting' there may be at least a day's worth of consolidation on the cards. Another being that, if I were trading a break of resistance I would probably look for clear air of about 15-20 up to the next resistance level to avoid a possible bounce back through my stop.

Of late I have been trading a few other pairs using M15 but essentially using the same levels, set-ups etc. that I use on cable M5. Now some of my M15 trades are working and some aren't - with the benefit of hindsight one thing I have noticed (and please don't laugh at my naivety) is that in the main the M15 trades that work tend to conform to H1 / H4 trend direction. (This is not so much the case on M5 as it is, to my mind anyway, a very different timeframe.) I have also found myself gravitating on M15 to SbR and RbS levels rather than any old support or resistance level, regardless of what timeframe it is derived from.

Anyway, to my question. All over this forum (and other forums, books etc.) there are people advocating 'taking every set-up' etc. regardless of what one may think about it, but then I read somewhere recently that instinct is a powerful tool in trading and that one shouldn't simply take every set-up as it appears. Now the question is, some trades work and some don't - even 'the best' set-up will fail, so should one, to an extent be trading on instinct / gut? Sometimes when I scan through my charts a set-up just leaps out at me and screams 'trade me' (AUDUSD from Thursday being a classic example) - should one aim to avoid any trade that doesn't provoke that thought / emotion etc.? We can couch our entry methodology in rules such as trade with the H4 trend etc. etc. but, quite often, those trades fail as well, but the trades that jump off the chart at one, which may not have quite ticked all one's rule boxes, work. Why is this? In musical terms I know that, if a song were being played in G, overlaying a guitar solo in F is going to sound terrible, so maybe there is a contextual issue in trading that my eyes are seeing but that I'm not managing to define in terms of a set of rules to hone my entry methodology. What is the best way to overcome this problem (if indeed it is a problem) - I am guessing that it is a case of analysis of trades after they have closed to look for common themes between the ones that worked and the ones that didn't. Should I actually care as I am in fact a firm believer that the set-up / entry is irrelevant and that it is how one deals with the trade once it is triggered that will define whether one is profitable or not?

I would be very grateful for any thoughts anyone has on what I've written above. Maybe I should stop thinking so much about it and just accept that I will have winners and losers just as night turns to day? I just wonder whether Clapton's take on playing guitar may not have a lot of relevance to trading.

I hope I haven't derailed the thread - to me anyway, this style of trading isn't simply a case ticking boxes and pulling the trigger. It interests me as I have seen this moment when one has a chart screaming 'trade me' alluded to a number of times by both beginners such as myself and experienced traders and wonder what it's all about.

Hope everyone has a great weekend.

Rob

Hi Rob,

I see what you are saying about musicians etc, in fact there was a thread on T2W not long ago, something along the lines of "What kind of people make the best traders?". Not surprisingly a lot of people went for musicians, because of their ability to improvise and brain coordination. Also poker players because of their ability with numbers and odds, and a little more unusually, video gamers. Maybe we should get the teenage population of Britain to be our scalpers. Lance Beggs from YTC.com is a part time air traffic controller (or something similar) and he says the concentration from that has helped him become a great 5m trader.
I learnt to play an Arabic Lute before learning to trade, and it's been difficult because I've been used to Guitar and Arabic music has quarters unlike the full and half notes in Western music! It's all about improvisation too. I definitely think it has helped me with the unusual, and trading is certainly that! It seems trading is completely the opposite of everything we learn as children, hard work pays? Over trading doesn't ... etc. To be honest though we can go as deep as we like, but I'm just waiting for Monday morning so I can enter some setups, keeping it simple and trying not to worry about what’s happening in my brain!

Enjoy the rest of the weekend everyone,
Owain

 

[apmf]

Hi Rob,
How is your day so far? GJ is choppy and dry without momentum so far. Took 3 trades and managed to take some pips out untill now, so cant really complain considering my recent long break from trading.
All the best.
Paul

 

[Bloodhound]

Hi Rob,
How is your day so far? GJ is choppy and dry without momentum so far. Took 3 trades and managed to take some pips out untill now, so cant really complain considering my recent long break from trading.
All the best.
Paul

HI Paul,
Sorry not to have got back to you sooner but very busy with house move so may not be around for a couple of weeks. Just having a sneaky look at GJ and seems to be at an interesting level at the moment?!
All the best
Rob

 

[NVP]

Anyway, to my question. All over this forum (and other forums, books etc.) there are people advocating 'taking every set-up' etc. regardless of what one may think about it, but then I read somewhere recently that instinct is a powerful tool in trading and that one shouldn't simply take every set-up as it appears. Now the question is, some trades work and some don't - even 'the best' set-up will fail, so should one, to an extent be trading on instinct / gut? Sometimes when I scan through my charts a set-up just leaps out at me and screams 'trade me' (AUDUSD from Thursday being a classic example) - should one aim to avoid any trade that doesn't provoke that thought / emotion etc.? We can couch our entry methodology in rules such as trade with the H4 trend etc. etc. but, quite often, those trades fail as well, but the trades that jump off the chart at one, which may not have quite ticked all one's rule boxes, work. Why is this? In musical terms I know that, if a song were being played in G, overlaying a guitar solo in F is going to sound terrible, so maybe there is a contextual issue in trading that my eyes are seeing but that I'm not managing to define in terms of a set of rules to hone my entry methodology. What is the best way to overcome this problem (if indeed it is a problem) - I am guessing that it is a case of analysis of trades after they have closed to look for common themes between the ones that worked and the ones that didn't. Should I actually care as I am in fact a firm believer that the set-up / entry is irrelevant and that it is how one deals with the trade once it is triggered that will define whether one is profitable or not?

one thing that is interesting in testing systems for me is this......you spends hours of energy valuing the compounded returns and profitability of a combined set of rules/signals and patterns to determine if it is sucessful ....thats fine...but compared to what ?............look at a simple Ma system....you wait until 2-3 Ma's are aligned and buy that pair (as alluded to in the previous excellent post above) ......but what about the huge money that has been made as the pair moves slowly into this scenario in the first place ?..........isnt this "anti system" therefore no better or no worse ?

all in all I have to say that naked trading "rules".... as its not worth the pain of beating yourself up seeking the perfect system....

N

 

[Bloodhound]

Couldn't agree more NVP. For me, a major turning point in my trading was when I stopped undertaking 'analysis', trying to 'forecast' and 'backtesting', and simply spent my time staring at charts watching what price did and how it reacted to easily identifiable horizontal levels.

 

[HawkTrader]

Finished for the day. Entry is blue line.

I bloody love these stop and reverse 15m setups! :clap:

 

[mb325]

Finished for the day. Entry is blue line.

I bloody love these stop and reverse 15m setups! :clap:

Great trade!

Noticed it this morning...just about 90 minutes after it setup

 

[Bloodhound]

Finished for the day. Entry is blue line.

I bloody love these stop and reverse 15m setups! :clap:

Nice going Owain!! Hats off to you sir.

 

[HawkTrader]

Great trade!

Noticed it this morning...just about 90 minutes after it setup

Yeah, I got fed up of missing these moves so I've began watching a few extra pairs, not too many so I get confused, but enough to "filter" the better trades. I've noticed that if there is big news due for the GBP, leave Cable and trade AUD/USD etc...

Nice going Owain!! Hats off to you sir.

Thank you both, but it's not me whistling) it's these awesome setups, and I have to largely thank BeachTrader/Rob and the rest of you guys here for putting it so simlpy for me, I've learnt alot.

Cheers.

 

[apmf]

HI Paul,
Sorry not to have got back to you sooner but very busy with house move so may not be around for a couple of weeks. Just having a sneaky look at GJ and seems to be at an interesting level at the moment?!
All the best
Rob

Hi Rob, GJ is behaving alright today for me. Took a short on T3 as price gave a false illusion that its reversing downward and got bit burned there soon I got my head straight and jumped on to T4 huh!!
Good luck with your house moving and hope you will be back with full energy.

Happy Trading,
Paul

 

[foredog]

Just a bit of thinking out loud here.....

If price is randon and we have no way of knowing what it will do then if we are buying a break-out of a level if price rallies 10-15 points away from our entry should you then be looking to move a stop to breakeven?

How do you know if the price is pulling back slightly with profit taking or is it the end of the trend/fakeout? Or do you not know? Is it worth leaving your stop where it is to discover thereby effectively giving back two times risk (15 profit + 15 stop) or do you get out for nothing and wait and see what the market does next?

Or would it make no difference overall so long as we do one or the other consistently as for every -15 you save another trade will deliver +15?

 

[Bloodhound]

I think FWIW that, as I don't know what will happen next, my job is to get my stop to b/e ASAP to protect against losses - but that's just what I do and it seems to work over time. Ironically I'm using swing highs and lows to trail stops when I am trading M15 and that seems to work as well - hmmmmm!! I guess it's down to one's personal view of risk?