Frustrated trader, need advice

[Splitlink]

Just skimmed over your post but how wide are your stops when trading the dailies and what markets do you trade?

I got anhialated trading the 4HR TF on EUR\USD because my stops were too tight. If you trade long TF's your stop must be protected by a decent support\resistance level or you'll get screwed. Also, ditch the notion that you need a certain RR ratio - 3:1 etc is ********.. If you have a 100 pip stop and market gives you 90 pips profit and you can see it turning then cut it quick... Don't wait for it to either stop you out or hit your 3:1 because the market couldn't give a **** about where your targets and stops are. It simply goes where it goes but gives plenty of clues on the way!

Yes, but you are talking forex and he is talking shares. A share trader, or even an index trader, IMO, should keep close stops. Why lose too many points in a losing trade? You have to get them back again, afterwards. Forex, I dont know too much about, but 100 points stop is what has kept me away all this time. Even now, when I trade cable or euro/$ I come to a decision to cut when I think I am wrong which, normally, is not much more than 25. I think that carrying too much risk is imprudent.

 

[meanreversion]

As I've said a near tiring number of times, this is the basic argument between fundamental thought and those who use TA: The basic belief in whether history will repeat itself or not. At the end of the day, you can attribute the reason for the success of this system to something that translates into fundamental thought if it eases your aversion to the risk of the trade.

Myself and thousands of others firmly believe that history in the market can and does repeat itself. Regardless of whether you use TA or Fundamentalism as the foundation for your trading, if you are successful I say continue doing what you are doing until it doesn't work any longer. As I mentioned before, nothing speaks louder than profit or lack thereof. In the end, the percentage of growth in your account is all that matters.

Good luck!

You're badly confused. Trend following, which relies on trends recurring, is based on the notion that humans are driven by fear and greed, and this leads to trends. We've seen this for hundreds of years. As long as humans have input to the market, trends will probably occur somewhere (e.g. commodities).

There is a rationale here for believing that "history repeats itself", which is that human nature doesn't change.

Ok, let's take what you've done. You've found a random pattern. You don't even care what might cause it (this is breathtaking - aren't you even slightly curious?). All you know is that it's worked more or less for eleven years, THEREFORE it will continue to work. AND you've made money for seven months, so hey presto, it's always going to work.

But wait.. you've said you'll keep trading it until it stops working. Well, how do you know it's "stopped working", or is merely going through a little underperformance?

TA at least attempts to tap in to the human psyche, namely momentum, overbought, oversold etc. But your method eschews all that.

But hey, you've made money for seven months therefore nothing to worry about.

 

[meanreversion]

To make you think a little further -

historically, when people have no food they get angry and rebel.

historically, when the stockmarket rallies, women's dresses gets shorter.

Do you see a difference?

 

[DashRiprock]

As I've said a near tiring number of times, this is the basic argument between fundamental thought and those who use TA: The basic belief in whether history will repeat itself or not. At the end of the day, you can attribute the reason for the success of this system to something that translates into fundamental thought if it eases your aversion to the risk of the trade.

Myself and thousands of others firmly believe that history in the market can and does repeat itself. Regardless of whether you use TA or Fundamentalism as the foundation for your trading, if you are successful I say continue doing what you are doing until it doesn't work any longer. As I mentioned before, nothing speaks louder than profit or lack thereof. In the end, the percentage of growth in your account is all that matters.

Good luck!

sorry but you are mistaken. I really think you have the wrong end of the stick here.

saying "history repeats itself" (i prefer teh mark twain version) is, infact, ok by most people. for example one of my personal beliefs is "in the short term markets over-react, in the long term markets under-react". This is a behaviour that i think will repeat itself, I put it deffo in the "technical analysis" camp,and it forms a part of my trading.

instead what you have here is an observed result that you cannot make an argument either for or against. Why are you not looking at the Yen? or the skandies? the reason you are not looking at thse is beause you didn't see a correlation.

What makes you confident that the correlation you have found will stay that way?

 

[DashRiprock]

To make you think a little further -

historically, when people have no food they get angry and rebel.

historically, when the stockmarket rallies, women's dresses gets shorter.

Do you see a difference?

hi meanreversion

about the skirt length bit, i know its in one of the wilmott books but in this book "Manwatching" from the 70s there is a bit on that to. Only a paragtraph actually but the pictures are better. Anyway its a really interesting book about body language and social displays and everything but the best part is the pictures that show what hes talking about. you wont be disappointed
(dont ge the paperback or the newer one peoplewatching its sh1t no pictures)

http://www.amazon.co.uk/Manwatching...=sr_1_2?s=books&ie=UTF8&qid=1297459744&sr=1-2

i said id link to the other book and its this one but thats not actually the one I was thinking about

http://www.amazon.co.uk/Advances-Behavioral-Finance-Richard-Thaler/dp/0871548445

 

[meanreversion]

I read 'Manwatching' when I was 7 or 8, I found it fascinating (especially the naughty bits). I can still remember some of the sections now, e.g. there was one on altruism, namely that humans are by nature selfish, not altruistic. It didn't really make sense to me at the time but now it does. I should re-read it.

 

[DashRiprock]

oh deffo re read ive got the 70s hardback edition in front of me now

good taste but 7 or 8? :-0

 

[marketpupil]

Sorry for the late update.

For those of you who are interested. I believe that the gap in the EURUSD over the weekend will gap down on Sunday's open. Look for around a 10 pip gain if you are short selling the gap.

Have a great weekend. Cheers!

 

[DashRiprock]

its ok to be late its your blog sorry for book reviews

can you go over that again please?

on kiwi opening its best to go short eur/usd looking for 10 pips

what stop? 40 pips like in the blog?
why?

 

[marketpupil]

its ok to be late its your blog sorry for book reviews

can you go over that again please?

on kiwi opening its best to go short eur/usd looking for 10 pips

what stop? 40 pips like in the blog?
why?

Ha! Thanks for adding the comedy act, I'm not sure if this forum would be as interesting without your and meanreversions' unique points of view. Have a great weekend :clap:

 

[DashRiprock]

Ha! Thanks for adding the comedy act, I'm not sure if this forum would be as interesting without your and meanreversions' unique points of view. Have a great weekend :clap:

honest question: If you've been trading this "strategy" for 7 months, why werent you a member of trade to win from 7 months ago?

 

[marketpupil]

honest question: If you've been trading this "strategy" for 7 months, why werent you a member of trade to win from 7 months ago?

I honestly had no idea of the existence of this message board until sometime in December. Overall, I enjoy the forum. There are some generally helpful people that mostly offer valuable advice. Also, I remember when I was just starting out and how I wished that someone would give me solid trading advice. I sure wish I knew about message boards like this when I first began trading.

 

[meanreversion]

Ha! Thanks for adding the comedy act, I'm not sure if this forum would be as interesting without your and meanreversions' unique points of view. Have a great weekend :clap:

You're resorting to an ad hominem attack because you can't defend your reasoning. Also, technically, if three people (Dash, amit and myself) each share the view that your "logic" is fatally flawed, our opinion is not unique. As it stands, YOU are the unique one as I've seen no-one else here support your method (such as it is).

I would strongly advise reading this article from Wikipedia -

http://en.wikipedia.org/wiki/Correlation_does_not_imply_causation

and also 'Fooled by randomness' by Taleb.

 

[brettus]

You're resorting to an ad hominem attack because you can't defend your reasoning. Also, technically, if three people (Dash, amit and myself) each share the view that your "logic" is fatally flawed, our opinion is not unique. As it stands, YOU are the unique one as I've seen no-one else here support your method (such as it is).

I would strongly advise reading this article from Wikipedia -

http://en.wikipedia.org/wiki/Correlation_does_not_imply_causation

and also 'Fooled by randomness' by Taleb.

The gap trade does work or has been for months now. I'm not sure about guessing which way it will gap though.