Making Money Trading

[trader_dante]

Market call - Aud/Cad *Update 3*

And out we come for break even...

This call will hopefully have shown you how I plan a trade and how I manage it whilst I am in it.

It will also tell you a little bit about exits.

A trader could have made profit on this trade.

Remember - WE KNEW BEFORE IT GOT THERE that the market could stall at this level. And it did.

When the S/R didn't hold and the market started coming back, a trader could have closed.

I put the word "could" in bold because I still believe that it is worth giving a trade like this that has a good, solid reason for entry, some room to move.

Some traders would argue that with the risk being what it was (36 pips for me) and the first resistance being so close (22 pips from entry for me) that this wasn't the best risk/reward trade to take in the first place.

Here I would ask you to remember that the two levels on the chart: 0.8801 and 0.8833 are MINOR pivot levels. They are places to watch for but I wouldn't personally take them into the risk/reward calculation.

The key level - the main target - at 0.8894 was the level I had in mind. This was 115 pips above and gives a potential reward well over three times that of the risk taken.

At any rate - this was not hit and we are now flat with no profit.

A new trader will often berate themself when something like this happens. They will be annoyed and question themselves. They will ask why they let a winner turn into a breakeven trade. Why they didn't exit when the momentum turned.

An experienced trader knows that this trade didn't work out as planned but is confident that if they continue to play these trades in this way, they will come out ahead. This is their edge and they understand it.

 

[forexbee]

Hey there! First things first - don't worry if your support/resistance areas don't match up with mine to the pip. You should think of them more as zones.

Also, don't take my charts as definitive. Support/resistance will always be a subjective art. Draw the lines at areas that make sense to you.

Sometimes they will go right through the middle of candles. This is fine.

Try and have this phrase in your mind when you are drawing your lines:

One man's ceiling is another man's floor.

You will start to see that the highs of many areas are the lows of others. This is the support/resistance flip and it is a powerful tool in your arsenal.




If you miss a great setup: Shout. Curse. Bang the table with your fist.

Move on to the next.

NEVER CHASE THE MARKET.



A daily pin par is valid WITHOUT having to be confirmed on the hourly. And vice versa.

If you have already drawn your areas in before you take the trade you will see the lines you draw on the daily filter on down to the hourly.

Play a pin bar on the timeframe you see it. Remember to exit on the same timeframe you entered. I think this is very important.

P.S That GBP/CHF chart with the circled pin would have been a very good call but you have made one mistake. You have drawn your fibs wrong. They should be drawn from the low to the high to measure the retracement. You seem to have drawn yours the inverse - from the high to the low.

FORTUNATELY IT WOULD NOT HAVE AFFECTED THE DECISION BECAUSE IT WAS A PIN BAR AT AN S/R FLIP AND IT WAS/IS PROFITABLE. BUT BE CAREFUL

Also note that on my chart once again we have different price action setup. No pin bar for me!

Hi TD,

Bingo, that makes me feel good... well, clear explanation about the pivots and need not match same like yours, as everyone draws / sees things differently.

Bit surprised on you couldnt see pinbar in ur chart!, iam using SBFX platform (MT4), your chart also looks similar like that....still there is mismatch...! strange, may be the datafeed server might be different (i think mines is moneytec)...

Fxbee

 

[rathcoole_exile]

For some reason, DT has decided to edit the live call post. For the avoidance of doubt, this call was made in real time. I refer to my post above indicating my intention to follow this call, and attach a screenshot of my fill.

DT - please don't edit your live calls - you could be accused of changing the direction or fill price after the fact. I can imagine that this thread will contain many successful trades, with positive expectancy in the long run - it would be nice to preserve an accurate timestamped public record of your insights.

DT, you DID say to be careful of Lurker, he DOES remember everything. I was just about to jump on you for this but saw that Tom got in before me.
You can't post saying you're going Long and then less than 90 minutes post extolling the virtues of how you called the Top to within a pip. Credibility issues are raised.
Leave your live calls unedited please. Everyone accepts and understands that you'll never make 100% accurate calls all the time, but
1) it's still interesting to see the logic behind calls that fail, and
2) it stinks when you try to manipulate posts to make yourself look better

carry on the good work, it's far from being the "crap" I had so rudely anticipated

Rathcoole_Exile

 

[rathcoole_exile]

This kind of post scares me.

believe me, +3 points is a GOOD week for Lurker


sorry, couldn't resist

 

[trader_dante]

DT, you DID say to be careful of Lurker, he DOES remember everything. I was just about to jump on you for this but saw that Tom got in before me.
You can't post saying you're going Long and then less than 90 minutes post extolling the virtues of how you called the Top to within a pip. Credibility issues are raised.
Leave your live calls unedited please. Everyone accepts and understands that you'll never make 100% accurate calls all the time, but
1) it's still interesting to see the logic behind calls that fail, and
2) it stinks when you try to manipulate posts to make yourself look better

carry on the good work, it's far from being the "crap" I had so rudely anticipated

Rathcoole_Exile

Understood!

A couple of points to make though:

1. The main reason I edited the call (a minor one was spelling) was to add a number of charts detailing why I was entering the trade. I actually saw this setup only a few minutes before it happened so I didn't have time to explain the reason I was entering it in the way I would have liked. So I posted the initial call and then the only thing I added was clear sections (with charts) of why I entered and how I would manage the trade based on the charts. I could have done this in the following post but at the time I just thought best to keep it all together. Fully aware it looks a bit dodgy but as Lurker attested, it was all above board and legitimate, At any rate, it won't happen again. Honest!

2. The second post (directly after) refers to much earlier in the trading session. Not sure if this is clear from my posting. It is nothing to do with the live call. It is the same market but different time. It is there to illustrate that a chart I posted early in the thread had its resistance line touched to the pip (making a very profitable top). I didn't see this at the time and didn't call it. It was just an attempt to show that this can work beautifully and give you a lot of confidence if you catch the setup.

Tom

 

[milan47]

Audusd

How about this pin?

 

[rathcoole_exile]

aware it looks a bit dodgy but as Lurker attested, it was all above board and legitimate, At any rate, it won't happen again. Honest!

Tom,
no worries, as you'll become aware, I do like to occasionally provoke in order to keep people on their toes. Just ask Lurker, he'll attest to that :cheesy:

Garry

 

[trader_dante]

How about this pin?

That is a nice looking pin that comes back to a key fib.

Remember though, the more you factors can get in your favour when you take a trade, the more chance it will be a winning one.

I would rarely, if ever, play a pin off a fib alone. I would want to see that it is also bouncing off an area of support or resistance and preferably an area that has flipped between the two.

If you have experience with a particular moving average that you have found reliable, add that to your chart and see where it comes in.

Many traders also use calculated pivots. You can download a pivot calculator very easily and for free from the web, enter in the details including open, close, high and low and it will give you a pivot point. Traders DO use these so it can be another tool in your arsenal. However, I will tell you that although I have looked at them in the past, I no longer use them. I really like to keep things as simple as possible.

One element that you can also use is bullish or bearish divergence on your preferred indicator. This is the only reason I ever use an indicator and even then it is rare I check for this. Having said that, it can give a good signal if you have, for example, a sustained move down to support, with bullish divergence (indicator making highs while price makes lows) and then a pin bar setup.

I am not going to get into divergence now but I may mention it in the future.

The next element I will be showing you all is an excellent moving average system that you can play with the price action I am teaching. I will do this soon.

 

[trader_dante]

Hi T_D - Thank you for sharing your charting and technical analysis in this thread. I am new to trading and have learned more from this thread than any other book I've read or video that I've watched.

Appreciate it.


Gavin.

Hi Blackey - thanks for your kind words. For a long time when I was going through losing periods and wondering whether I would ever make it, I would spend all my time wondering how real traders traded. How did they make decisions? How did they act when they were in a trade?

At the time I went to visit a member of these boards and this person (they know who they are) greatly inspired me to persevere in this game. I didn't understand almost anything of the scalping he was doing in the interest rate futures but I took a strong impression away with me of how a professional trader operates: they will be patient in looking for a profitable opportunity, they will calculate the odds and when they are certain the market will show them a profit, they make their move. I may be starting to sound like a broken record but I will keep on saying this because it is VITAL in becoming consistently profitable.

No trader can beat the market all the time. A phrase that J16 uses is:

"Hunt with a rifle not with a shotgun"

Anotherwords, stalk your prey and get it in your sights rather than just blazing away when it starts to run.

I hope that whether I am right or wrong in my calls, I can convey this in the way I wait for them and take them.

A good trader will also always have a plan on how to manage a trade. Even if they have an open target they should, in my opinion, know that if the market does X they need to do Y.

The market will frequently make huge moves that will surprise even the most experienced trader but they will always know how to act in a given situation.

NEVER LET THE MARKET CATCH YOU OFF GUARD.

This is not a casino. YOU are creating the odds.

 

[forexbee]

Hi TD,

Thats a cool message...

As you pointed, i agree, i have been in a mentality that everyday i should be in trade (though its learning process demo trading), if i didnt get a trade then i feel that iam not worth to do trading, after a long long search, i started to realise to start looking into 4Hrs & above charts (Longer timeframe) for potential opportunity and then came accross J16 postings. Now iam comfortable with it, In short its all about patience patience patience . In Oct07 sometime from 2nd week i started paper trading marking my entries, exit's , stoploss etc, i had good trade and last week didnt do any trade as due to my studies exam time...Anyway have PM'd you...

Good day
Fxbee

 

[forexbee]

pinbars questions

Hi TD,

A question about Pinbar, in simple terms when pinbar occurs in swing high its head will be long and tail should be short , body of candle again should be short.

In Swing low can we say that tail of candle will be long and head will be short , again candle body will also be short....! Is this right...!

If you see the Daily Chart attached, 28th dated candle circled looks like pinbar appearance... (feel like body needs to be bit more smaller, but its head looks like peeking nose on fib lines (confluence) 50% & 61.8% for short entry!

Fxbee

 

[lurkerlurker]

believe me, +3 points is a GOOD week for Lurker


sorry, couldn't resist

My 12 week winning streak aside, since I've now had 4 losing weeks in a row you are probably right!

 

[trader_dante]

i have been in a mentality that everyday i should be in trade (though its learning process demo trading), if i didnt get a trade then i feel that iam not worth to do trading

Many traders, including me, have thought like this. And almost all of them end up losing money.

Your reason of not feeling worthwhile is likely down to the fact that society has taught us that unless we are extremely fortunate, we are rewarded for how hard we work.

For most of us it is a natural thought process to connect hard work with time spent working.

A new trader takes this attitude into the marketplace.

It seems fairly logical - A trader makes his money being IN the market. Therefore the more I trade, the more time I am in the market and the more chance I have of making money.

HOWEVER, this thinking is, in most cases, fundamentally flawed.

Traders don't work for a living. They take risk. There is a subtle but very important difference.

For most traders, the WORK we put in is in the time we are NOT trading. In the time we spend studying the markets past movements to gain an edge, reading up on the market to improve our understanding, analysing any trades we may have taken, constantly thinking about how to improve ourselves.

When we ARE trading, the WORK we will do is WATCHING and WAITING. CONCENTRATING and being PATIENT.

Actually entering the market by buying or selling is the reward for the work we have done.

JUST LIKE those that work in almost every other career (for example an IT technician gets paid by the company he works for) we make our money from other people when we trade (the party that assumes our risk by taking the other side of our trade).

BUT UNLIKE those that work in almost every other career, we risk something.

As traders, we bring more to the table than your average worker who brings a skill to a job that enables him to do the job.

In addition to our skill we also bring our capital. And for most of us that is our hard earned money.

If a skilled worker loses his job (unless it is due to something like an injury) he STILL has his skill but NOT his income. Anotherwords, he STILL has a means of making money but has to find another job.

If a trader loses his capital, he loses his MEANS of making money.

 

[fibonelli]

Many traders, including me, have thought like this. And almost all of them end up losing money.

Your reason of not feeling worthwhile is likely down to the fact that society has taught us that unless we are extremely fortunate, we are rewarded for how hard we work.

For most of us it is a natural thought process to connect hard work with time spent working.

A new trader takes this attitude into the marketplace.

It seems fairly logical - A trader makes his money being IN the market. Therefore the more I trade, the more time I am in the market and the more chance I have of making money.

HOWEVER, this thinking is, in most cases, fundamentally flawed.

Traders don't work for a living. They take risk. There is a subtle but very important difference.

For most traders, the WORK we put in is in the time we are NOT trading. In the time we spend studying the markets past movements to gain an edge, reading up on the market to improve our understanding, analysing any trades we may have taken, constantly thinking about how to improve ourselves.

When we are trading, the WORK we will do is WATCHING and WAITING. CONCENTRATING and being PATIENT.

Actually entering the market by buying or selling is the reward for the work we have done.

JUST LIKE those that work in almost every other career (for example an IT technician gets paid by the company he works for) we make our money from other people when we trade (the party that assumes our risk by taking the other side of our trade).

BUT UNLIKE those that work in almost every other career, we risk something.

As traders, we bring more to the table than your average worker who brings a skill to a job that enables him to do the job.

In addition to our skill we also bring our capital. And for most of us that is our hard earned money.

If a skilled worker loses his job (unless it is due to something like an injury) he STILL has his skill but NOT his income. Anotherwords, he STILL has a means of making money but has to find another job.

If a trader loses his capital, he loses his MEANS of making money.

Superb advice!

 

[trader_dante]

If you see the Daily Chart attached, 28th dated candle circled looks like pinbar appearance... (feel like body needs to be bit more smaller, but its head looks like peeking nose on fib lines (confluence) 50% & 61.8% for short entry!

You've done this before haven't you!

Spot on. This is the closest you can get to a free lunch in the markets.

Setups don't get much better than this in my opinion.

 

[black bear]

Post of the Week

Many traders, including me, have thought like this. And almost all of them end up losing money.

Your reason of not feeling worthwhile is likely down to the fact that society has taught us that unless we are extremely fortunate, we are rewarded for how hard we work.

For most of us it is a natural thought process to connect hard work with time spent working.

A new trader takes this attitude into the marketplace.

It seems fairly logical - A trader makes his money being IN the market. Therefore the more I trade, the more time I am in the market and the more chance I have of making money.

HOWEVER, this thinking is, in most cases, fundamentally flawed.

Traders don't work for a living. They take risk. There is a subtle but very important difference.

For most traders, the WORK we put in is in the time we are NOT trading. In the time we spend studying the markets past movements to gain an edge, reading up on the market to improve our understanding, analysing any trades we may have taken, constantly thinking about how to improve ourselves.

When we are trading, the WORK we will do is WATCHING and WAITING. CONCENTRATING and being PATIENT.

Actually entering the market by buying or selling is the reward for the work we have done.

JUST LIKE those that work in almost every other career (for example an IT technician gets paid by the company he works for) we make our money from other people when we trade (the party that assumes our risk by taking the other side of our trade).

BUT UNLIKE those that work in almost every other career, we risk something.

As traders, we bring more to the table than your average worker who brings a skill to a job that enables him to do the job.

In addition to our skill we also bring our capital. And for most of us that is our hard earned money.

If a skilled worker loses his job (unless it is due to something like an injury) he STILL has his skill but NOT his income. Anotherwords, he STILL has a means of making money but has to find another job.

If a trader loses his capital, he loses his MEANS of making money.

Hi,

Super Post, the business great advice and observation.

It will be a good post to beat this IMO

Lurker read it 50 times, wait a week and read it 50 more times, stop method hopping and stick to one, and this ones probably in your best time frame, so sit down and shut up and take some notes only kidding Lurker

Andy AKA

 

[fibonelli]

Thinking more about what trader_dante has just written.

It's a shame that this thought process isn't taught in schools, colleges and uni's.

 

[shadowninja]

It's a shame that this thought process isn't taught in schools, colleges and uni's.

Isn't this what that Robert Kiyosaki hints at in Rich Dad, Poor Dad: the concept of financial intelligence vs what people are taught in school including accountancy; it's the reason why you read about so many highly educated doctors, lawyers, accountants, entrepreneurs failing in trading, apparently. It does make sense; I come from a business and technical background, and the only aspect of that background that is used in my day-to-day trading activities is recording and analysing my trading performance, testing strategies plus plotting my equity chart. Fear, greed, patience and self-sabotage were never issues when I worked in a 9 to 5 job!

 

[forexbee]

You've done this before haven't you!

Spot on. This is the closest you can get to a free lunch in the markets.

Setups don't get much better than this in my opinion.

Hi TD

Havent tried pinbar method, i was using trendline methods, but J16 thought the basics of which timechart would help a lot, though i had thought of joining for it pinbar method, i was not sure where to start ( i was thinking of learning this little later at one point, as iam familiarizing in trendline methods) . Luckily i was happened to see your thread and was really very glad that you have pinbar as one of arrows to strike in market.

By the way the explanation (In Swing low can we say that tail of candle will be long and head will be short , again candle body will also be short) i gave for pinbar candle was it right? and sometimes the body of candle doesnt matter as like 28th dated candle in daily chart? right?

AUDCAD signals for short entry as its nose peeks thru 61.8% and 50% fibs...Dont know if TD has taken this trade....

Fxbee

 

[trader_dante]

By the way the explanation (In Swing low can we say that tail of candle will be long and head will be short , again candle body will also be short) i gave for pinbar candle was it right? and sometimes the body of candle doesnt matter as like 28th dated candle in daily chart? right?

AUDCAD signals for short entry as its nose peeks thru 61.8% and 50% fibs...Dont know if TD has taken this trade....

Fxbee

Hello fxbee,

Yes, your explanation was right. As I said above - SPOT ON.

The AUD/CAD as it appears on your chart looks like a good short setup but on MY chart the candle looks very different and so I have not and will not be taking this trade.