Making Money Trading

[trader_dante]

I took a long from 22960, which is 20 pips below the break of the PDH. The mischief behind this idea was to allow a tighter stop and get a slightly better entry - however, the pin signal is not valid until the high is broken, so I'm a little annoyed at jumping the gun.

This comes down to a lack of discipline. Although your intention (to reduce risk) is good you are actually taking MORE risk.

The probability of the trade working increases ONLY when the PDH (previous day high so in this case the pin bar) is broken.

If you can't afford the proper stop then you should either pass on the trade or look for an entry on a lower timeframe as you mention below.

Again, this pair had a valid hourly pin which turned into a daily pin on Friday close. I'm thinking it would always be better to go for the hourly pins, and then perhaps add to the position if they are confirmed on a daily.

This happens from time to time and when it does you get some incredible R:R opportunities.

 

[lurkerlurker]

I have put my order in to go long Gbp/Chf above the high of the daily pin.

Since this morning's retracement took us not far past the level of the left eye before it found support I am putting my stop beneath todays low rather than beneath the pin to reduce the risk.

Hmm. We're testing that level again. I has acted as support twice today, but I'm wondering whether I should move my stop up to 70, which is just under the morning support. That would save me a further 50 pips if I am wrong.

I feel somewhat silly for taking that long before the pin had triggered.

 

[1Pipped]

Good thread trader_dante thanks for all your work and the other posters.

Im not even that new to trading (my first trading was in 1998) but I still found your posts to be very helpful and interesting which led me to read all posts from number 1 over the course of today and last night... I have a bit of the old reading burnout now, but some new ideas to think about !

Cheers.

 

[lurkerlurker]

Hmm. We're testing that level again. I has acted as support twice today, but I'm wondering whether I should move my stop up to 70, which is just under the morning support. That would save me a further 50 pips if I am wrong.

I feel somewhat silly for taking that long before the pin had triggered.

Stopped out for -90 pips. Not a good start to the week. I was right to amend the stop to just under the morning lows, however I should never have taken this trade.

 

[Reas]

Last Friday i entered a trade on the pinbar shown in the chart.
Because i had no time to monitor this trade during the day i entered my stops on forehand.
It worked out great, but could have been beter (as always )
TD, maybe you could tell more about youre exits, at the start of this thread you mentioned that the MA's also help you to determin how long to stay in the trade.
How does that work?

 

[forexbee]

Last Friday i entered a trade on the pinbar shown in the chart.
Because i had no time to monitor this trade during the day i entered my stops on forehand.
It worked out great, but could have been beter (as always )
TD, maybe you could tell more about youre exits, at the start of this thread you mentioned that the MA's also help you to determin how long to stay in the trade.
How does that work?

Hi Reas,

Thats a excellent chart. Better TD would explain more. I remember based on S/R , Pivots confluence on fibs you take profit.

@ TD, If Pin is not broken above for GBPCHF, how long you keep that valid to enter into trade...?
Fxbee

 

[trader_dante]

Gbp/Chf - order cancelled

The pin was invalidated by a break to the downside first. Therefore I have cancelled my long order.

 

[trader_dante]

Last Friday i entered a trade on the pinbar shown in the chart.
Because i had no time to monitor this trade during the day i entered my stops on forehand.
It worked out great, but could have been beter (as always )
TD, maybe you could tell more about youre exits, at the start of this thread you mentioned that the MA's also help you to determin how long to stay in the trade.
How does that work?

Reas,

This was an excellent trade. I entered off this pin bar too although I was out shortly afterwards for a minimal gain.

There is a lot of discretion in my exits but I will do some work on them with you.

It's a busy morning here. I'll write more soon.

Tom

 

[firewalker99]

Reas,

This was an excellent trade. I entered off this pin bar too although I was out shortly afterwards for a minimal gain.

There is a lot of discretion in my exits but I will do some work on them with you.

It's a busy morning here. I'll write more soon.

Tom

It will be interesting to hear you talk about exits

The GBPJPY chart posted is only a snapshot and I don't follow forex, so I might not be in the best place to comment. But... a short observation shows that the "pin bar" coincided with a level that was previously support. Which means the bar was a typical test "from the other side", which confirms that level was indeed important. A potential first target would've been the previous lows (around 224.70). That leaves it up to the trader to manage his position & stop.

As I hear and read a lot about "I exited too soon" (not to mention say it to myself too often!), I'm looking forward to an interesting discussion.

Nice work on the thread.

 

[firewalker99]

Hmm. We're testing that level again. I has acted as support twice today, but I'm wondering whether I should move my stop up to 70, which is just under the morning support. That would save me a further 50 pips if I am wrong.

I feel somewhat silly for taking that long before the pin had triggered.

Although I now little or nothing about that particular instrument, I feel the following are general comments and applicable to any market. Hope nobody minds me interfering, but I've been following this thread with great interest. So, some thoughts & suggestions:

(1) Some pin-bars have a higher probability of success than others. Why is that?
(2) You said it acted as support twice "today". If you are trading of daily bars, what does intraday support mean to you?
(3) As others have said before, always have several reasons to enter a trade. Did you have enough objective reasons to warrant your entry? Or were you just impatient?
(4) Technically, going longs was against the trend. We just had a swing high that didn't travel very far, so the market looked weak (see chart). Taking a pin-bar there, looks like trying to catch a falling knife. We all have different tolerances for risk, but I would've never taking a long there. Have you thought about what the potential reward of that trade would/could be? Perhaps a small retracement upwars... but does that warrant the risk?

Finally, although trader_dante also said he was looking to enter a trade (for about the same reasons), he did not execute his trade but you did. This should ring a bell...

You could attribute this to the discretionary factor or discipline or patience. But in the end it illustrates the fact that copying somebody else's trading style won't make you profitable overnight. An edge is something personal and trading pin-bars is only a concept. Getting the feel of it and making it your own requires time and effort.

Just my 2c

 

[combotrader]

Hi Fxbee,

I determine risk the same way on all my trades. Firstly I work out what percent of my account I am willing to commit to a certain trade.

Let's say my account is at £3,000 and I am willing to risk 5% per trade.

TD

Do you ever consider volatility when taking a trade ? For example, reasearch shows that a stop that is 3 times the ATR keeps you in the market despite the noise. For curencies, this can be large - say for 1hr in cable it will 90-100pips. But it consistently
keeps one inthe market.

Yrs
CT

 

[Splitlink]

Although I now little or nothing about that particular instrument, I feel the following are general comments and applicable to any market. Hope nobody minds me interfering, but I've been following this thread with great interest. So, some thoughts & suggestions:

(1) Some pin-bars have a higher probability of success than others. Why is that?
(2) You said it acted as support twice "today". If you are trading of daily bars, what does intraday support mean to you?
(3) As others have said before, always have several reasons to enter a trade. Did you have enough objective reasons to warrant your entry? Or were you just impatient?
(4) Technically, going longs was against the trend. We just had a swing high that didn't travel very far, so the market looked weak (see chart). Taking a pin-bar there, looks like trying to catch a falling knife. We all have different tolerances for risk, but I would've never taking a long there. Have you thought about what the potential reward of that trade would/could be? Perhaps a small retracement upwars... but does that warrant the risk?

Finally, although trader_dante also said he was looking to enter a trade (for about the same reasons), he did not execute his trade but you did. This should ring a bell...

You could attribute this to the discretionary factor or discipline or patience. But in the end it illustrates the fact that copying somebody else's trading style won't make you profitable overnight. An edge is something personal and trading pin-bars is only a concept. Getting the feel of it and making it your own requires time and effort.

Just my 2c

I have had two trades with, what I thought were very good pins and got stopped out of both of them with stop losses of about 30 points. My trading style has developed over many years and my character does not allow me to accept those losses without squeamishness! In a recent post TD was writing about 150 point stops, which I find unacceptable, so I still read this thread but am not trading. I prefer to go back to my old ways of closer stops until :idea: :idea: the light comes on, if it does. My time frame will, of course, have come back, too, to something much less than 1 hour.

Split

 

[trader_dante]

Although I now little or nothing about that particular instrument, I feel the following are general comments and applicable to any market. Hope nobody minds me interfering, but I've been following this thread with great interest.

Hi Firewalker, we're privileged to have your insights. This is a fantastic post

I feel your questions are rhetorical but I would like to answer them nonetheless:

(1) Some pin-bars have a higher probability of success than others. Why is that?

What gives some pin-bars a higher probability of success is WHERE they appear.

(2) You said it acted as support twice "today". If you are trading of daily bars, what does intraday support mean to you?

Intraday support should rarely merit consideration when you are trading daily bars.

(3) As others have said before, always have several reasons to enter a trade. Did you have enough objective reasons to warrant your entry? Or were you just impatient?

Looking at Lurkers entry I would say there were enough reasons to warrant an entry on the break of the pin but entering early was a bad decision. I think this was less a result of impatience and more to do with poor discipline.

Lurker said his reason for entering early was to LIMIT his risk. This implies that the added risk of entering on a break of the pin was UNACCEPTABLE. The number one rule for me is this: If you cannot afford to take the risk on a trade with its proper stop, then pass on the trade.

(4) Technically, going longs was against the trend. We just had a swing high that didn't travel very far, so the market looked weak (see chart). Taking a pin-bar there, looks like trying to catch a falling knife. We all have different tolerances for risk, but I would've never taking a long there. Have you thought about what the potential reward of that trade would/could be? Perhaps a small retracement upwars... but does that warrant the risk?

I realise that what I am about to say may prove to be rather unpopular. However, in my PERSONAL experience I have found that counter trend trading is profitable if the pin bars are at extreme highs and lows.

The important thing to remember is that reversals are often sharp and travel far. Therefore, IF you can hold a position through such a move you can often make far more than the amount you have lost attempting to find a top/bottom.

...in the end it illustrates the fact that copying somebody else's trading style won't make you profitable overnight. An edge is something personal and trading pin-bars is only a concept. Getting the feel of it and making it your own requires time and effort.

I'll be completely honest with you all here. When I started this thread I wanted to show you all exactly how I am managing to make profitable trades consistently but the more I respond to peoples questions the more I realise that my edge is personal and many times I will have a reason to enter or exit that I find very hard to explain. What I am trying to do is give you the tools to arm yourself.

This methodology works. TRADING PRICE ACTION IS A PROFITABLE STRATEGY.

You should all go away, practice it and make it your own.

But that is not the end of the matter. Once you have an edge you have to hone it. This is something that I am still doing every single day. I am constantly trying to improve my performance and I do this by always evaluating my trading and my feelings regarding it.

 

[trader_dante]

Do you ever consider volatility when taking a trade ? For example, reasearch shows that a stop that is 3 times the ATR keeps you in the market despite the noise. For curencies, this can be large - say for 1hr in cable it will 90-100pips. But it consistently
keeps one inthe market.

Hi Combotrader,

I don't consider volatility when taking a trade.

When I am in a position I place my stop at a level where my reason for entering the trade is WRONG. If the setup is good, then the level of "noise" should make no difference regarding whether it is hit.

Tom

 

[trader_dante]

I have had two trades with, what I thought were very good pins and got stopped out of both of them with stop losses of about 30 points. My trading style has developed over many years and my character does not allow me to accept those losses without squeamishness! In a recent post TD was writing about 150 point stops, which I find unacceptable, so I still read this thread but am not trading. I prefer to go back to my old ways of closer stops until :idea: :idea: the light comes on, if it does. My time frame will, of course, have come back, too, to something much less than 1 hour.

Split

Split,

Sorry to hear about your losses. If you remind me of the trades you did and can attach some charts I am more than willing to give you my views. I know one of them was Cable and if I remember correctly you entered short prematurely. Infact if you can show us a chart with entry on it I will show you how patience is very, very important in trading because I took the market short that day too.

Tom

 

[kenobi]

Split,

Sorry to hear about your losses. If you remind me of the trades you did and can attach some charts I am more than willing to give you my views. I know one of them was cable and if I remember correctly you entered prematurely. Infact if you can show us a chart with entry on it I will show you how patience is very, very important in trading because I took the market short that day too.

Tom

If you took a short there too, I'm sure you also got skinned as that trade was a short on an inverted head and shoulders on the 60 min that was breaking out north and price still moved another 100 pips above his stop

 

[Splitlink]

Split,

Sorry to hear about your losses. If you remind me of the trades you did and can attach some charts I am more than willing to give you my views. I know one of them was cable and if I remember correctly you entered prematurely. Infact if you can show us a chart with entry on it I will show you how patience is very, very important in trading because I took the market short that day too.

Tom

Its getting late for me to post them today, but I'll take you up on it. Nevertheless, I don't feel very comfortable with the stops that you find the norm.

Good trading.

 

[forexbee]

gbp pin 1hr chart

Hi TD,

Pls see iam attaching a chart GBPUSD 1hr pin with fib 50% peek. Whats your insight on this trade?

Fxbee

 

[Splitlink]

Split,

Sorry to hear about your losses. If you remind me of the trades you did and can attach some charts I am more than willing to give you my views. I know one of them was cable and if I remember correctly you entered prematurely. Infact if you can show us a chart with entry on it I will show you how patience is very, very important in trading because I took the market short that day too.

Tom

Its getting late for me to post them today, but I'll take you up on it. Nevertheless, I don't feel very comfortable with the stops that you are talking about.

Probably, I'd have to go to the phsycology board and get convinced about that

Good trading.

 

[trader_dante]

If you took a short there too, I'm sure you also got skinned as that trade was a short on an inverted head and shoulders on the 60 min that was breaking out north and price still moved another 100 pips above his stop

Good point Kenobi but the trade moved at least 1:1 before reversing meaning most traders could have got a breakeven stop in and as a result a loss would not have been taken.