FX Trade Setups, Entries, Management and Exit

Jeeeezuz... I meant to say I wouldn't lose enough at 588. Can't even type straight now.

Not going to edit posts - don't want you thinking I'm falsifying all these great calls....
 
Thank goodness for that. Another one bites the dust - and for additional risk too!

I've still got a few quid left so I'm going down the pub.
 
eur/gbp pulling back within an up trend. If it creates a trough and shows greater momentum climbing out than going in, I'll be looking to potentially enter long.
 
gbp/chf pulling back within a down trend. If it creates a peak and shows greater momentum coming out than going in, I'll be looking to potentially enter short.
 
aud/cad pulling back within a down trend. If it creates a peak and shows greater momentum coming out than going in, I'll be looking to potentially enter short. It is a rather shallow trend so (a) less probability of triggering a short setup and (b) if triggered, it'll need a tight stop to make th elikely run worth the risk.
 
Purple Brain said:
This is absolutely pointless.
Click to expand...
darktone said:
No its not, youre learning.
Click to expand...
I agree - PB, I'm guessing the feeling thats its pointless may be coming from
the time required to generate a decent live test sample?
Carry on with that as it gets you used to live trading with real money.

I'm hesitant to suggest this, but it may help, provided you treat SIM the same as live.
If you want something else to possibly help speed up the test
process of ideas, then this might be worth a look:
http://marketreplaydata.com/

Its free replay data for Ninjatrader.
FX replay data is OK but has wide spreads.
The futures are better.
Don't let the fact its futures put you off.
YM is near enough the same as DOW cash most of the time.
Same with currency futures, the prices vary slightly, but the overall moves
are pretty much the same.
Lots of instruments, FX, indices, oil, metals, treasuries etc.

You can rapidly test discretionary ideas entering limit entries / exits on chart,
and also using Ninjas advanced trade management (ATM):
http://www.ninjatrader.com/support/helpGuides/nt7/index.html?advanced_trade_management_atm.htm
You can test at realtime speed or anything in between and up to 500x.
 
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piggybridges said:
Purple Brain gave up?
Click to expand...

I gave up posting pointless live trade calls which weren't improving my trading skills nor were they likely enhancing other members' endeavours - save for those enjoying the frisson of schadenfreude/joie maligne.

LV is right in that I have my head down doing more research - but wrong in that I'm building a test base of data based on demo trading. All my trades have always been on a live account with real capital. You don’t get the same level of ‘interest’ on a demo account. Skin in the game and all that.

I also got a tad distracted with superficial issues relating to the site and decided I didn’t have sufficient capacity intellectual or intelligence to spare to squander it on fripperies while I was bleeding capital and enthusiasm.

I’m hanging in, but quietly.
 
As a directional trader you’re trading trends. Those trends must exist at the trading timeframe you are trading - or a lower one which you hope will subsequently manifest in your trading timeframe. Whether you wait for the trend to manifest in your operational timeframe or choose to take an early – and less probable – punt based on a trend in a lower timeframe, you’re still looking only at and possibly below your operational trading timeframe. Price action in higher timeframes have no bearing on your trading timeframe.

Does anyone have a logical refutation for the final sentence in the paragraph above?






I always believed almost as a Universal Truth that the higher timeframes somehow ‘carried’ the lower ones as an ocean swell might lift ripples on the surface, but as with all beliefs, they don’t suffer from an occasional challenge.

Yesterday saw a considerable number of FX pairs make useful moves on the 15 min chart counter the longer term underlying ‘trend’. Whether they subsequently revert to this underlying or not is immaterial. For the purposes of yesterday’s trading, it is my current view this could, and should have been ignored.
 
Yes, I have watched, in vain, for suitable entry points on 15 minutes and, when the opportunity had passed, I have looked at a 5 min chart and seen, in hindsight, of course, a very attractive trend, including pullbacks that I could have used very profitably.
 
Purple Brain said:
As a directional trader you’re trading trends. Those trends must exist at the trading timeframe you are trading - or a lower one which you hope will subsequently manifest in your trading timeframe. Whether you wait for the trend to manifest in your operational timeframe or choose to take an early – and less probable – punt based on a trend in a lower timeframe, you’re still looking only at and possibly below your operational trading timeframe. Price action in higher timeframes have no bearing on your trading timeframe.

Does anyone have a logical refutation for the final sentence in the paragraph above?


I always believed almost as a Universal Truth that the higher timeframes somehow ‘carried’ the lower ones as an ocean swell might lift ripples on the surface, but as with all beliefs, they don’t suffer from an occasional challenge.

Yesterday saw a considerable number of FX pairs make useful moves on the 15 min chart counter the longer term underlying ‘trend’. Whether they subsequently revert to this underlying or not is immaterial. For the purposes of yesterday’s trading, it is my current view this could, and should have been ignored.
Click to expand...

Given a set of 10000 coin tosses, if I have 5500 heads and 4500 tails, then if I pick any set (at random) of 100 trades within those 10000, would you say it is more (than 50%) likely that I will have more heads than tails in that set?

Now consider that the bias of the coin dynamically changes (between favouring heads and favouring tails) over every 50 tosses (say) in such a way that over the long term heads are more likely over 10,000 tosses. Again does it mean that over a set of 100 trades within these 10,000 I am more likely to get more heads than tails? Does it work the other way, i.e. bias changes and we know heads are more likely over the first 100 coin tosses, so does that mean over 10,000 tosses we will have more heads?

Or if coins are too annoying, suppose I am a knowledgeable fan of football, and based on my knowledge I think Man City are the best team in the premiership and will either win the title over 38 games or finish very highly. Does it mean that the probability of them winning one game is higher than 50%? What would you say to someone who said 'yeah that's all well and good that Man City will finish highly, but it has no bearing on any 45 minute half in any game'?
 
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I wasn’t thinking about switching to lower timeframes to take trading opportunities absent from my normal operational timeframe – although there’s nothing wrong with that in principle or practise.

Rather the complete irrelevance of any timeframe longer/larger than your operational one. I don’t believe it offers any context.

The lower timeframes inform the higher ones – not the other way round. When you consider each larger timeframe’s price action has as its basic component the price action of the lower timeframe, I can’t understand why I’ve missed this obvious fact for so long.
 
Shakone said:
Given a set of 10000 coin tosses, if I have 5500 heads and 4500 tails, then if I pick any set (at random) of 100 trades within those 10000, would you say it is more (than 50%) likely that I will have more heads than tails within those 100 coin tosses?
Click to expand...
Probabilistically you would say that there is a 55:100 chance of there being more heads than tails in any subset of this set.

Shakone said:
Now consider that the bias of the coin dynamically changes (between favouring heads and favouring tails) over every 50 tosses (say) in such a way that over the long term heads are more likely over 10,000 tosses. Again does it mean that over a set of 100 trades within these 10,000 I am more likely to get more heads than tails?
Click to expand...
You’ve stated that the mechanism will favour more heads than tails so obviously the answer is ‘Yes’.

Shakone said:
Or if coins are too annoying, suppose I am a knowledgeable fan of football, and based on my knowledge I think Man City are the best team in the premiership and will either win the title over 38 games or finish very highly. Does it mean that the probability of them winning one game is higher than 50%? What would you say to someone who said 'yeah that's all well and good, but it has no bearing on any 45 minute half in any game'?
Click to expand...
The answer to the first part is that based on your assessment you believe that to be the case. To the second part I would say “Yes, you’re correct it has no bearing”.

As interesting a diversion as this has been though, it has no bearing. Man City’s performance over the last 20 years has no bearing on Man City’s performance during the next game, or the next 5 minutes of play.

Or was that your point – in that you were agreeing with my hypothesis that the longer periods have nothing to tell us about the shorter period’s performance?
 
Shakone said:
Given a set of 10000 coin tosses, if I have 5500 heads and 4500 tails, then if I pick any set (at random) of 100 trades within those 10000, would you say it is more (than 50%) likely that I will have more heads than tails in that set?
Click to expand...

May have misunderstood your example in relation to my position, but if you're suggesting the 10,000 coin tosses are 'the trend' and therefore any subset will 'more likely' mirror that trend then yes you're correct as all the datapoints that constitute that trend are already known. But for the next coin toss #10001, it provides no context at all.
 
Purple Brain said:
Probabilistically you would say that there is a 55:100 chance of there being more heads than tails in any subset of this set.

You’ve stated that the mechanism will favour more heads than tails so obviously the answer is ‘Yes’.

The answer to the first part is that based on your assessment you believe that to be the case. To the second part I would say “Yes, you’re correct it has no bearing”.

As interesting a diversion as this has been though, it has no bearing. Man City’s performance over the last 20 years has no bearing on Man City’s performance during the next game, or the next 5 minutes of play.

Or was that your point – in that you were agreeing with my hypothesis that the longer periods have nothing to tell us about the shorter period’s performance?
Click to expand...

But you are speaking only historically when you mention the past 20 years. I'm speaking about detecting the bias in advance for the future. It's your knowledge of the game and the players that tells you the bias. The season hasn't finished, I am saying Man City will finish highly this season and would have said so (as many others would) before a ball was kicked. Man City's past 20 years doesn't come into it that much.

Now, if them being one of the better teams (a bias to win) has no bearing on 45 minutes of play, then they are equally likely to win as lose over those 45 minutes, and the next 45 minutes. Which means they are equally likely to win or lose each game. Which means you'd expect them to have a fairly even split at the end of the season between wins and losses (they'll have draws too). Which means they will finish midtable. Something in this logic is incorrect. Other than the conclusion that over 45 minutes it does have a bearing, what else is there that resolves this contradiction?
 
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