Ideas for increasing trader performance

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Most people seem to have latched onto the gap section part of my PDF.

I make money most weeks trading these gaps so I will try and go over the trades I do or the gaps I see each week (if they occur and when I get time).

I have a few points to make on last nights gaps.

1. Don't be unduly alarmed as to the size of the gap. Chart 1 shows the GBP/JPY which gapped just under 100 pips. It filled all the way with no drawdown if you hit it on the open.

2. Even if you think the gap is going to fill all the way, remember the levels in between. Chart 2 shows the 1.5250 level on Cable which one should have got at least half out of or made some move to tighten their stop.

3. Remember to read the PA constantly and not be married to a trade idea. USD/CAD in chart 3 looked good. It opened with a big gap. After the first hour we had a pin and a double bottom chart pattern. At this point, this looked like it had the highest probability of filling of most of the gaps last night. However, it tracked sideways, making no real effort to get that gap filled. By the time it finishes forming the bearish engulfing (marked with an arrow), you should be getting out for a small winner, a scratch or a very small loss (depending on your entry of course - I always enter on the open or before it if the broker I am trading with lets me)

4. I think I already pointed out that after filling the gap, most markets trade in the direction the market gapped in. I know more and more of you are now cutting and reversing their successful gap trades, only to capture all the pips on the way back up/down. Well done! It worked this week like last week.

5. Finally, here is last nights trade for me. Chart 4 is my entry and exit on a 5m. I usually get out before the gap fills completely.
 

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What do I do now?

Right now, I :

- Identify a level and put a limit in at it if I like the way price is approaching it. My stop goes below the last thrust candle to close above the level (if I am going long). If I am going short, it goes above the last thrust candle to close below the level I am playing.

Tom,
Is there any chance you could kindly put up a chart or two, to demonstrate this on a chart?

Many thanks

Glynn
 
packhorse said:
What do I do now?

Right now, I :

- Identify a level and put a limit in at it if I like the way price is approaching it. My stop goes below the last thrust candle to close above the level (if I am going long). If I am going short, it goes above the last thrust candle to close below the level I am playing.

Tom,
Is there any chance you could kindly put up a chart or two, to demonstrate this on a chart?

Many thanks

Glynn
Click to expand...


Sure Glynn but give me half an hour. My friend has just cooked me the most amazing dinner :)
 
packhorse said:
What do I do now?

Right now, I :

- Identify a level and put a limit in at it if I like the way price is approaching it. My stop goes below the last thrust candle to close above the level (if I am going long). If I am going short, it goes above the last thrust candle to close below the level I am playing.

Tom,
Is there any chance you could kindly put up a chart or two, to demonstrate this on a chart?

Many thanks

Glynn
Click to expand...


Hi Glynn,

Before I post a few examples, I want to say a few things:

Firstly, not every single trade I do is based on placing limit orders at levels.

The majority of my trades are but sometimes I enter "at market" when I am convinced that it is the right time to act.

At such times, price may already be moving away from a level and I will be paying a premium to get in. If I think the move will continue, I do not have a problem doing this.

Secondly, of equal importance to the level is also what price is doing before it reaches the level e.g. How it has been moving.

Thirdly, a very important part is whether I can "see" the move playing out. I have tried to explain this to people and usually struggle because it is a really difficult concept to explain. What I mean is, for a swing trade to make money, one has to see a sizable move. Remember, I am not playing for 20 - 30 pips. With that in mind, the moves I take on the H1 are going to translate through onto the daily TF. E.g. If I play a short on the H1 TF, I have to be able to go onto the daily TF and say "can I see the market falling to my target when I only look on this TF".

Finally, I talk to other traders and also people from T2W throughout the day. For the most part, if the people I talk to agree on a trade, I usually pass on it. That is because I have witnessed the market blindside people many times at the most obvious levels. I am usually only comfortable taking the trades that the people I talk too are not comfortable taking. This might come out in some of the examples I give.

Here is an example of a trade that looked "perfect" but which I did not take at the level.

There was a fantastic potential s/r pivot with 38 fib confluence on the EUR/JPY. (chart 1) The problem was the level was too "perfect". Not only was everyone all over it in terms of day to day chitter chatter but the market just didn't look set to reverse at this point. That is to say, I simply could not see the market rolling over at this spot on the daily TF. Sorry if this doesn't make sense, like I said, I really don't know how to explain this.

OK, sorry for the long post. Let me give you some examples of trades with the stops which is what you asked for! I'll do that in the next post.
 

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trader_dante said:
Hi Glynn,

Before I post a few examples, I want to say a few things:

Firstly, not every single trade I do is based on placing limit orders at levels.

The majority of my trades are but sometimes I enter "at market" when I am convinced that it is the right time to act.

At such times, price may already be moving away from a level and I will be paying a premium to get in. If I think the move will continue, I do not have a problem doing this.

Secondly, of equal importance to the level is also what price is doing before it reaches the level e.g. How it has been moving.

Thirdly, a very important part is whether I can "see" the move playing out. I have tried to explain this to people and usually struggle because it is a really difficult concept to explain. What I mean is, for a swing trade to make money, one has to see a sizable move. Remember, I am not playing for 20 - 30 pips. With that in mind, the moves I take on the H1 are going to translate through onto the daily TF. E.g. If I play a short on the H1 TF, I have to be able to go onto the daily TF and say "can I see the market falling to my target when I only look on this TF".

Finally, I talk to other traders and also people from T2W throughout the day. For the most part, if the people I talk to agree on a trade, I usually pass on it. That is because I have witnessed the market blindside people many times at the most obvious levels. I am usually only comfortable taking the trades that the people I talk too are not comfortable taking. This might come out in some of the examples I give.

Here is an example of a trade that looked "perfect" but which I did not take at the level.

There was a fantastic potential s/r pivot with 38 fib confluence on the EUR/JPY. The problem was the level was too "perfect". Not only was everyone all over it in terms of day to day chitter chatter but the market just didn't look set to reverse at this point. That is to say, I simply could not see the market rolling over at this spot on the daily TF. Sorry if this doesn't make sense, like I said, I really don't know how to explain this.

OK, sorry for the long post. Let me give you some examples of trades with the stops which is what you asked for! I'll do that in the next post.
Click to expand...

Guess who was one of the ones who took that trade?......................Yes, me.
 
packhorse said:
What do I do now?

Right now, I :

- Identify a level and put a limit in at it if I like the way price is approaching it. My stop goes below the last thrust candle to close above the level (if I am going long). If I am going short, it goes above the last thrust candle to close below the level I am playing.

Tom,
Is there any chance you could kindly put up a chart or two, to demonstrate this on a chart?

Many thanks

Glynn
Click to expand...


Ok here is an example from the Eur/Gbp. Chart 1 shows a significant level on the daily TF. Chart 2 shows how I scroll back to the left on the H1 to find the last time price punched through this level. My stop usually goes below these candles. So my entry goes at the red line, my stop would be at the yellow line.
 

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trader_dante said:
Ok here is an example from the Eur/Gbp. Chart 1 shows a significant level on the daily TF. Chart 2 shows how I scroll back to the left on the H1 to find the last time price punched through this level. My stop usually goes below these candles. So my entry goes at the red line, my stop would be at the yellow line.
Click to expand...

Many thanks Tom

Regards
Glynn
 
trader_dante said:
Ok here is an example from the Eur/Gbp. Chart 1 shows a significant level on the daily TF. Chart 2 shows how I scroll back to the left on the H1 to find the last time price punched through this level. My stop usually goes below these candles. So my entry goes at the red line, my stop would be at the yellow line.
Click to expand...


Hi Tom.

On average, how much do you risk per trade? How do you use your leverage? Do you get the most out of your account in terms of your expectancy?

If you think that a move to the upside will take a week, how do you get the most out of this expected move?

KOS.
 
kimo'sabby said:
Hi Tom.

On average, how much do you risk per trade?
Click to expand...

If it's all the same I'd rather not answer that. I try to stay away from the subject of risk because it's down to the individual. Notably, what their objectives are and then what they are comfortable with.

I take a whole lot more risk than is generally advised, particularly on the accounts I don't rely on an income from for a living because it's my personal belief that if you want to take a position, you should take a position.

You often find those that risk 1 or 2% of their account saying things like "this trade has a great R:R so it's worth a punt". You don't say that when 20% of your account is on the line on a trade.

And you certainly don't get the problem of overtrading :)

But I don't have the time or inclination to get into a protracted debate on the subject.

kimo'sabby said:
Do you get the most out of your account in terms of your expectancy?
Click to expand...

Definetly.

kimo'sabby said:
If you think that a move to the upside will take a week, how do you get the most out of this expected move?
Click to expand...

Regardless of how long a move will take to make, it is my job to get in at the best time - that is to say where I think I have the least chance of going offside.

If I think that a move to the upside will take a week - that is to say, if I think that the market will move up for a week I have one consideration and one consideration only: how can I get 100% of my account into this trade?

Getting 100% of your margin on the line in a trending market should be every swing/ position traders aim.

Unfortunately, for most it is is usually: how can I get my stop to breakeven as quick as possible?
 
Last edited:
trader_dante said:
If it's all the same I'd rather not answer that. I try to stay away from the subject of risk because it's down to the individual. Notably, what their objectives are and then what they are comfortable with.

I take a whole lot more risk than is generally advised, particularly on the accounts I don't rely on an income from for a living because it's my personal belief that if you want to take a position, you should take a position.

You often find those that risk 1 or 2% of their account saying things like "this trade has a great R:R so it's worth a punt". You don't say that when 20% of your account is on the line on a trade.

And you certainly don't get the problem of overtrading :)

But I don't have the time or inclination to get into a protracted debate on the subject.



Definetly.



Regardless of how long a move will take to make, it is my job to get in at the best time - that is to say where I think I have the least chance of going offside.

If I think that a move to the upside will take a week - that is to say, if I think that the market will move up for a week I have one consideration and one consideration only: how can I get 100% of my account into this trade?

Getting 100% of your margin on the line in a trending market should be every swing/ position traders aim.

Unfortunately, for most it is is usually: how can I get my stop to breakeven as quick as possible?
Click to expand...



Hi Tom.

This thread is dedicated to performance, not set-up, do you think that you may have given this thread the wrong title?

Performance and set-up are two totally different entities, would you agree?

Any old fool can choose a trade parameter, no skill required there.

Application is a different matter.

Can you walk the walk, Tom....for real?
 
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