Making Money Trading

[combotrader]

You will not always get strong momentum straight after a pin triggers.

In addition, the price will often take off and then RETRACE to your entry point. Many, many times I move my stop to breakeven when the trade is in profit and then see price come back and take me out, before continuing on in the direction I had anticipated.

To overcome this I now try and hold the stop in its original place until price has based above my entry.


You too eh ? But psychologically - I still find this the hardest thing to do....and then 3 days later I`m thinking if only I had left the stop where it was, if only....

CT

 

[trader_dante]

have a look at the 50% - it acts as resistance.

Hi CT,

The 50 will always fall in the same place even if you draw the fibs wrong because it measures the half way distance between two swing highs.

PS - also note how the 61.8 is acting as support...

Fibs are equidistant e.g. 100 - 61.8 = 38.2

That is why, on your chart, which I believe is drawn wrong, the 61.8 lines up with the 38.2 on mine.

 

[lurkerlurker]

Not fond of correlated positions, but I've sold GBPUSD at 2.0683 (stop at 2.0718) and bought EURGBP at 0.7170 (stop 0.7162). Both trades are taken on the basis of hourly pins. GBPJPY is also heading into resistance.

Covered euro for +3 and dollar for +19.

 

[trader_dante]

Covered euro for +3 and dollar for +19.

Lurker, I see absolutely no reason why you would have closed these positions.

You're not giving the trade a chance to move.

The only "reason" I can think you are taking profit so quickly is to somewhat negate your earlier loss.

You said in an earlier post that your average loss is larger than your average gain.

Unfortunately that will be the case if you consistently cut your winning trades short.

 

[lurkerlurker]

Lurker, I see absolutely no reason why you would have closed these positions.

You're not giving the trade a chance to move.

The only "reason" I can think you are taking profit so quickly is to somewhat negate your earlier loss.

You said in an earlier post that your average loss is larger than your average gain.

Unfortunately that will be the case if you consistently cut your winning trades short.

Yes, you are correct. I seem to have a problem with classifying profits and losses according to time period. My trading behaviour changes when I am having a losing day/week, or when the risk involved in a trade has the potential to turn a winning day/week/month into a losing one. Do you have any suggestions on how I could work to improve this?

These distinctions are somewhat silly - I do not need to be in profit every day. If I set expectations of making a profit on the current trade, or the hour, week, or month, I am surely going to cause myself problems. Can't I just be content with having made a profit overall, and let my equity curve grow naturally without worrying about the small fluctuations in my account balance?

 

[1Pipped]

If I might offer a suggestion Lurker... it would be move to higher (slower) time frames eg: daily only. That way a trade if it affects you you have time to deal with it - which can take a while sometimes - before the next trade.

Another benefit of this is that the spread becomes less of an issue as the higher the time frame the bigger the moves, so less pressure that way too. 3 pips sounds a small spread but its 10% ! of your profit if thats 30 pips.

You have to make your trades smaller to deal with bigger moves but thats not a problem.

 

[lurkerlurker]

GBPJPY is setting up for a bullish pin off the 224. If the signal is still valid at 2AM then I'll be a seller of yen. We've had 2 higher lows and 3 higher highs now, and it is looking as though the trend could be up, especially if R at 225 goes. The challenge will be staying in this long if it is triggered. I can't really see a reason to get out unless the initial SL at the bottom of the pin is hit, or alternatively heading into strong resistance up at 225.85. I'm impatient for my account to grow so I can realise the benefits of scaling in and out of a position, which is obviously impossible at 1 unit. Based on spread and ATR/volatility, there are a few FX crosses which would accomodate multiple units, but GBPJPY isn't one of them, and I have no desire to expose my small account to excessive risk (especially since I'm risking anything up to 10% per trade - but what else can you do when the spread is 1% of your account!)

 

[lurkerlurker]

GBPJPY is setting up for a bullish pin off the 224. If the signal is still valid at 2AM then I'll be a seller of yen. We've had 2 higher lows and 3 higher highs now, and it is looking as though the trend could be up, especially if R at 225 goes. The challenge will be staying in this long if it is triggered. I can't really see a reason to get out unless the initial SL at the bottom of the pin is hit, or alternatively heading into strong resistance up at 225.85. I'm impatient for my account to grow so I can realise the benefits of scaling in and out of a position, which is obviously impossible at 1 unit. Based on spread and ATR/volatility, there are a few FX crosses which would accomodate multiple units, but GBPJPY isn't one of them, and I have no desire to expose my small account to excessive risk (especially since I'm risking anything up to 10% per trade - but what else can you do when the spread is 1% of your account!)

And sometimes it just takes off without you. Almost impossible that a pin bar would be formed now, and even if it were the risk is now almost 100 pips and in my view 224.90 is a little too high to buy so near to resistance. I wanted to enter down at 224.30 with a tight stop based on the 5M chart, but restrained myself. Interestingly the prices of CMC and IG Index differ quite substantially in the GBPJPY. I wish spread bets were fungible between providers - one frequently has a bid / offer up to 3 pips more favourable than the other...

 

[forexbee]

If I might offer a suggestion Lurker... it would be move to higher (slower) time frames eg: daily only. That way a trade if it affects you you have time to deal with it - which can take a while sometimes - before the next trade.

Another benefit of this is that the spread becomes less of an issue as the higher the time frame the bigger the moves, so less pressure that way too. 3 pips sounds a small spread but its 10% ! of your profit if thats 30 pips.

You have to make your trades smaller to deal with bigger moves but thats not a problem.

Hi 1pipped,

Thats a good suggestion. YOu wont have time to think when you are on faster timecharts and ultimately thinking to close the position with whatever profit in place.

Fxbee

 

[Splitlink]

Hi 1pipped,

Thats a good suggestion. YOu wont have time to think when you are on faster timecharts and ultimately thinking to close the position with whatever profit in place.

Fxbee

As I see it, the problem, as always, with higher time frames, are the stop levels. That is why TD uses hourly. My refusal to take large stops resulted in me making 0.7 points profit yesterday on two trades! That was because I was in profit and did not want those profits to turn into losses. I think a stop for Footsie should not be more than about 12 points. If you accept more risk, you have a lot to get back again.

Split

 

[1Pipped]

Thats true splitlink, on the FTSE I usually hold trades for a few days or weeks though so 12 pts is next to nothing. That's just how I prefer to trade, ( small trades + big stops + long times ) = ( no itchy fingers + a spread thats often less than 1% of the move).

I wouldn't trade like this if I was trading full size FTSE futures though ! you have to make the trade smaller to use the bigger stops, and you have to wait longer to see how the deal is going.

 

[trader_dante]

Yes, you are correct. I seem to have a problem with classifying profits and losses according to time period. My trading behaviour changes when I am having a losing day/week, or when the risk involved in a trade has the potential to turn a winning day/week/month into a losing one. Do you have any suggestions on how I could work to improve this?

These distinctions are somewhat silly - I do not need to be in profit every day. If I set expectations of making a profit on the current trade, or the hour, week, or month, I am surely going to cause myself problems. Can't I just be content with having made a profit overall, and let my equity curve grow naturally without worrying about the small fluctuations in my account balance?

It seems to me like you are too attached to your results.

It is a problem that many traders experience.

Unfortunately it is detrimental to your performance.

If you take each trade thinking "I am x amount down on the day...week...etc" then you are most likely analysing the next potential setup not in terms of whether it offers a good reward to risk in its own right but rather on the basis of whether it can make up a previous loss.

There is a good article on this subject called Psychology of Trading by Jason Alan Jankovsky. You can find it here: http://www.traderslog.com/jankovsky.htm

 

[combotrader]

[
That is why, on your chart, which I believe is drawn wrong, the 61.8 lines up with the 38.2 on mine.[/QUOTE]

TD, I think I see an uptrend where you see an uptrend. But I might still be drawing it wrong. If this is an uptrend, does the swing high extend to only the most recent high, and not the high from where price collapsed on 13th NOv ?

Yrs
CT

 

[trader_dante]

TD, I think I see an uptrend where you see an uptrend. But I might still be drawing it wrong. If this is an uptrend, does the swing high extend to only the most recent high, and not the high from where price collapsed on 13th NOv ?

The problem with your previous chart is that you are drawing the fibs from RIGHT to LEFT. You are starting at the bottom of the swing and drawing them back up to the top of the swing.

What you need to do is start at the swing HIGH and fib down to the swing LOW. That way you move from LEFT to RIGHT.

 

[omni]

Hi guys,
Just thought I would give you my side of this thread.
I have been running the idea on paper - something I would urge all the new guys to do.......I see many of you have jumped straight in with cash (however small, it is still cash). I have been trading some 10 years and everything requires a learning curve - the "feel" of a trading strategy takes time - this one is no different.

Anyway, I have gone with daily tf and so far booked 11 trades, 8 of which are still live, 3 of which i have been stopped out of.

Taking just the smallest size that my sb would offer. I would be 139 quid down on the closed trades 1,426 quid up on my current open trades (TOTAL PROFIT 1,287). Some of which are approaching 4 days old.

I havent been super strict with the criteria as I want to interpret it my way and tune it going forward.

A note for lurker lurker about chasing gains - you need to detach yourself completely from the money, trading isnt about money, it is about making the right trade. I trade another system and now take up to 5,000 quid on a day. But i have to totally dissociate myself from the numbers. I dont even look at profit/loss til the day is done. I just look at the graph and ask myself "is this trade good? is it still what i got in it for? " If you have to, think of the p&l as units, never ever money. Only when you take it out of your sb account and put it in your bank account is it "real" money you have made.

I would suggest you hide/dont look at your profit/loss as you will find yourself exiting early and cutting losers that would be, in time, winners.

I will let you know how my paper trading goes.

james.

 

[lurkerlurker]

Panic exits and holding when "right"

Here is a chart of £/Swissy. I don't think I took the first pin shown, but for some reason I had highlighted the second pin on my chart when it closed and then not taken the signal. I'm not sure why I didn't take the signal, the pin being off an S/R pivot etc, but I didn't.

Anyway, the point is that even if I had I would most likely have been shaken out for +20 or so on what turned out to be a very large move indeed. The stop required for the second pin was only 20, so this would have allowed me 3 units using my position sizing method. After the trend took off, a simple strategy of moving the stop to the low of the previous hourly bar when long (reverse when short) when price makes a new high would have kept me in the trade for a couple of bars. Not moving the stop up until the trade made it through resistance would have kept me in until now. However, such a method would lead to losses on other trades.

TD - how do you exit your positions, and could you offer any general advice for our trade management since it appears that we can now make a reasonable job of entries?

 

[lurkerlurker]

There is a good article on this subject called Psychology of Trading by Jason Alan Jankovsky. You can find it here: http://www.traderslog.com/jankovsky.htm

And a good start from this article is this little gem:

So the first thing we do is impose the rule: After you execute you have to turn the screen off for at least one bar of your time frame as a minimum.

My new rule for today. I'm looking forward to seeing how it goes. Since I check for pins on the hour every hour, it shouldn't be too difficult to walk away from the screen until the close of bar. I think I also need to be more mechanical in rules for adjusting the stops. Finally, I wonder if it would be beneficial to work a target in advance by way of a limit order, and hold the trade until stop or limit is triggered, rather than working out where to cover at the market when in the trade. The only issue I see with this is the market changing direction before the target is hit, therefore causing a profit to turn into a loss...

 

[trader_dante]

Anyway, I have gone with daily tf and so far booked 11 trades, 8 of which are still live, 3 of which i have been stopped out of.

Taking just the smallest size that my sb would offer. I would be 139 quid down on the closed trades 1,426 quid up on my current open trades (TOTAL PROFIT 1,287). Some of which are approaching 4 days old.

I havent been super strict with the criteria as I want to interpret it my way and tune it going forward.

James,

You are approaching this strategy exactly the right way. Demo it and adapt it to your style. It's a great endorsement that you have demonstrated so much profit. Well done and thanks for sharing. Please do continue to let us know how it goes!

Tom

 

[lurkerlurker]

GBPJPY Live Call

Bearish pin bar on the hourly. Orders in to sell 226.25 with stop at 227.10. Note that I'm going to pull these orders if the resistance of the left eye at 226.73 is taken out. It seems to have capped a rally on this bar, but if that level is taken out the trade is much lower probability in my view.

I'll need to watch until the order triggers (so I can pull the orders if 73 is broken first), but if I get filled I'm walking away until close of bar.

 

[bansir]

stick pins in your ducks

Hi folks,
Current thread topic is fantastic, don't want to interrupt but couldn't resist posting this one. Amazing what you notice when someone points the way.

This pin-like candle piercing the SMA(60) gave me confidence I was on the right side of the trade having gone short at around 09:10.

Sorry to cut accross topic, please carry on.
Best Regards,
Neil