Making Money Trading

[trader_dante]

Post Trade Analysis

ive set an alert for the dow @ 12232 to see what happens there,reasons are it will possibly be a triple bottom also @ the 50 fib.i also think there will be bigger fish than me looking at this,we will see.i seem to be watching and waiting a lot more for PA.

One of the best ways to improve your performance is to constantly review your trades: there is a huge deal to learn from both the good and the bad.

Even the most experienced trader is susceptible to making mistakes. That is one of the reasons that trading is so hard. No matter how good you are, if your concentration or emotional stability slips you can find yourself in a world of trouble.

After each trade I want to look at it from as many angles as possible:

At the minimum I ask myself:

- Did I follow my plan?
- How good was my market timing?
- What can I LEARN from this trade?
- Did I remain emotionally stable throughout the trade?

Here are just two considerations I have in my mind from my recent win in Wheat:

1. This win was the result of trading with a SB broker rather than in the actual futures market. The reason for this is that when I enter a trade I usually put a stop just one tick beneath the low of the pin bar. In the actual futures market, the low of the pin bar was taken out in electronic hours (before my SB broker opened which is when pit trading begins). Therefore, this trade which caught a huge move and made me a significant profit, would have been a LOSS in the futures market. This is a very important point for me and something I will think about carefully.

2. I am aware that I deviated significantly from my plan. No matter how much you tell people what they SHOULD do, it doesn't make it any easier to actually DO IT YOURSELF when the time comes to take action. I made a post clearly stating a plan (to exit the trade in increments) and yet when I saw a pin bar at the previous highs, I changed the plan to exit everything on a break lower. The market initially broke and then the bull run quickly resumed and the market made new highs. Look at the attached chart. It is the hourly TF. The exit on my long entry came not far from the lows of the move. If you have followed this thread from the beginning and understood my STEP theory you will realise it is not a coincidence that the lows of the pullback were TO THE EXACT PIP that of the previous highs. If I had followed my carefully constructed plan I would have exited 2/5th of the position and still be trailing 3/5th of it now. The market is currently +54 on my exit which at £15 a point is a very significant sum of money (£810). So why did I exit? The reason is FEAR. I had a warning signal and at £25 a point I let fear of losing profits take over and cloud my judgement.

You should regularly analyse your performance so you can BE THE BEST YOU CAN BE.

 

[black bear]

Good Post TD & a good trade IMO

One of the best ways to improve your performance is to constantly review your trades: there is a huge deal to learn from both the good and the bad.

Even the most experienced trader is susceptible to making mistakes. That is one of the reasons that trading is so hard. No matter how good you are, if your concentration or emotional stability slips you can find yourself in a world of trouble.

After each trade I want to look at it from as many angles as possible:

At the minimum I ask myself:

- Did I follow my plan?
- How good was my market timing?
- What can I LEARN from this trade?
- Did I remain emotionally stable throughout the trade?

Here are just two considerations I have in my mind from my recent win in Wheat:

1. This win was the result of trading with a SB broker rather than in the actual futures market. The reason for this is that when I enter a trade I usually put a stop just one tick beneath the low of the pin bar. In the actual futures market, the low of the pin bar was taken out in electronic hours (before my SB broker opened which is when pit trading begins). Therefore, this trade which caught a huge move and made me a significant profit, would have been a LOSS in the futures market. This is a very important point for me and something I will think about carefully.

2. I am aware that I deviated significantly from my plan. No matter how much you tell people what they SHOULD do, it doesn't make it any easier to actually DO IT YOURSELF when the time comes to take action. I made a post clearly stating a plan (to exit the trade in increments) and yet when I saw a pin bar at the previous highs, I changed the plan to exit everything on a break lower. The market initially broke and then the bull run quickly resumed and the market made new highs. Look at the attached chart. It is the hourly TF. The exit on my long entry came not far from the lows of the move. If you have followed this thread from the beginning and understood my STEP theory you will realise it is not a coincidence that the lows of the pullback were TO THE EXACT PIP that of the previous highs. If I had followed my carefully constructed plan I would have exited 2/5th of the position and still be trailing 3/5th of it now. The market is currently +54 on my exit which at £15 a point is a very significant sum of money (£810). So why did I exit? The reason is FEAR. I had a warning signal and at £25 a point I let fear of losing profits take over and cloud my judgement.

You should regularly analyse your performance so you can BE THE BEST YOU CAN BE.

Hi TD

Good post TD, its not an easy task /mission you have given yourself, IMO your doing very good, sure its helping with your own trading to

did I do that


Thanks for your thoughts on my errrrrrrrrrrrr not yet printed Pin

I like to get in early to avoid the rush, and confess I sometimes end up at the wrong shopping centre.

Andy

 

[Reas]

Gbpusd

I closed the GBPUSD trade, it was a very good trade of more than 400 pips.
I thought i saw a new higher bottom this last hour, that's why i got out.

good trading all
Reas

Edit: Ho stop!! it was more than 300 pips, 323 to be exact.
Sorry for the big mistake..

 

[lurkerlurker]

Usdjpy H1

Bought £5pp @ 112.99. Stoploss 112.82 (below pin) - 17 pips - £85 risk.

Pin bounced off lows equal to earlier intraday double bar low reversal. On a daily chart, this is an important S/R pivot off the August and September lows. I will keep the stop where it is until a stop can safely be set at breakeven, and thereafter if the trade moves in my favour I will trail the stop to the low of each bar which makes a higher high.

The stop on this is quite close, and the spread is large in relation to the trade. This makes it easier to be shaken out. However, if this pair breaks to the upside, it will allow a BE stop quite soon. I see the first resistance being around 113.15 and if price slows there I may take as much as 3/5ths off. Next resistance is obviously the high of the day, which is also at a double top formation. I'll cover all here if price stalls.

edit - I couldn't help but wonder - is one tick below the pin enough room, or perhaps this was just a bad trade. I'll check back in an hour to count my losses. Can't seem to catch a break today.

edit2 - stopped out for a £85 loss. Ouch. Down quite a bit today.

 

[shadowninja]

EUR/USD

Hammer on 4H. Would you? It's trending downwards on this TF but daily is trending upwards. Advice?

 

[trader_dante]

edit2 - stopped out for a £85 loss. Ouch. Down quite a bit today.

Lurker, did you see the second pin bar that formed after stopping you out?

One of the hardest things to do in trading is to re-enter the SAME market in the SAME direction after it has just dealt you a financial wallop.

The emotional difficulty that traders face in doing this is one of the reasons why I believe so many people say that counter trend trading is hard. I personally don't think that it is any harder than trading with the trend but it requires a different approach.

No one truly knows when a trend is going to change. The way good counter trend traders make money is they take lots of small losses while they probe the market trying to pick a top or a bottom but once they get it and the market follows through, they scale in big.

Too many traders will try to pick a top or a bottom and simply give up once the market has refused to confirm it and they have been stopped out for a loss. Some traders will have another go but each time they go in and lose it gets harder. Lets face it, it doesn't take many losses in a row to leave a trader feeling disillusioned. This means that it is very likely that they are NOT in the market when it finally goes the way they anticipated and the large move gets underway.

To make matters worse, as soon as it has broken hard, many of the emotionally weak traders become so frustrated that they are missing the move that has already cost them a good deal that they then enter when it has gone a good distance and they then get shaken out on the first natural reaction.

 

[trader_dante]

Dax

Back to the 50 fib with s/r confluence and down we go...

I closed this for +40 (£120)

I let a previous loss get to me on this trade and made an emotional exit rather than keeping to my plan.

As a result I consider this trade a significant failure.

 

[shadowninja]

EUR/USD

Hammer on 4H. Would you? It's trending downwards on this TF but daily is trending upwards. Advice?

I noticed on the dailies it's a pin...

 

[lurkerlurker]

Lurker, did you see the second pin bar that formed after stopping you out?

One of the hardest things to do in trading is to re-enter the SAME market in the SAME direction after it has just dealt you a financial wallop.

The emotional difficulty that traders face in doing this is one of the reasons why I believe so many people say that counter trend trading is hard. I personally don't think that it is any harder than trading with the trend but it requires a different approach.

No one truly knows when a trend is going to change. The way good counter trend traders make money is they take lots of small losses while they probe the market trying to pick a top or a bottom but once they get it and the market follows through, they scale in big.

Too many traders will try to pick a top or a bottom and simply give up once the market has refused to confirm it and they have been stopped out for a loss. Some traders will have another go but each time they go in and lose it gets harder. Lets face it, it doesn't take many losses in a row to leave a trader feeling disillusioned. This means that it is very likely that they are NOT in the market when it finally goes the way they anticipated and the large move gets underway.

To make matters worse, as soon as it has broken hard, many of the emotionally weak traders become so frustrated that they are missing the move that has already cost them a good deal that they then enter when it has gone a good distance and they then get shaken out on the first natural reaction.

I did see the USDJPY pin, but I took the GBPJPY one instead for £1pp and covered it for +60. Yesterday was quite expensive actually, but it was nice to have the losses reduced slightly. Haven't taken any setups today, but still watching the FX to see if there is one, and if there is I will trade accordingly.

I've just looked at the chart you posted and got very annoyed to see it. If I had taken the second pin, it would have covered my first losses, however, I missed it, and there will be other opportunities around the corner. Not every trade will win - I entered a high probability setup, it failed, the market gave me a second chance, which I missed, and then it took off. There are always opportunities and I'm not getting wound up for not trading every one of them. I'm happy with the system and the trades, so I will keep plugging away.

Saying that, I'm staying out of the Dow for the time being. Paper trades only while I work out a system, but I believe my time and capital would be better spent in FX


edit - also - those two pin bars confirm that the system works. Out of those two trades, there is around 3:1 risk/reward, and a 50% win/loss.

 

[Glenborrell]

Comment on a Pin??

Hi T_D and Co,

I've been reading this thread with interest. It has been very informative for me as i am a beginner (punter/bumbly as i would normally say). I've not read the full thread yet as am on catchup but so far (up to about page 50) i have gained an incredible amount of knowledge, both from T_D himself and also those who have possed Q's as they are similar to what most of us would have asked. So i'd just like to reiterate what others have said before me, a big thank T_D for starting the thread and all those who have contributed.

I've attached a file on here of the GBP/USD daily with what looks like a pin. Would appreciate your comments on it T_D (or anyone else). I've not traded it yet (if i do at all) as it's not broken above the top of the pin. I drew on some trendlines which i looks like it touches this nicely, however i did this afterwards (as per your comments on the thread T_D you note that you have all the trendlines etc pre drawn) as i've only just noticed the pin. It does appear to sit nicely on the weekly chart also. Per the attached it appears to be trading in countertrend however the weekly chart provides evidence that is still in an upward trend. Short term down. I'm not convinced of the risk reward ratio as the decending trendline could come into play after about 200 pips with 130 pips of risk. Feedback would be greatfully accepted.

Message to Lurker; I noticed your comment about the dow and that you want to find a strategy for it. Here is a link to a comentry which i have followed for over a year now and find very informative. I have followed some of the trades and done ok out of it.

SignalWatch - Market Dow Commentary

Not sure if you have seen this before. You can sign up to received the daily newsletter where Ed downs comments on the Dow.

Will get back to my reading

Cheers for now.

GB

 

[smbtnt]

Gbp/usd Pin

Refer you to my post 897 and Td's reply 909 (page 90 and 91) regarding crude on a similar sort of setup.

TD: The next bar has retraced too far........

 

[trader_dante]

Hi T_D and Co,

I've been reading this thread with interest. It has been very informative for me as i am a beginner (punter/bumbly as i would normally say). I've not read the full thread yet as am on catchup but so far (up to about page 50) i have gained an incredible amount of knowledge, both from T_D himself and also those who have possed Q's as they are similar to what most of us would have asked. So i'd just like to reiterate what others have said before me, a big thank T_D for starting the thread and all those who have contributed.

I've attached a file on here of the GBP/USD daily with what looks like a pin. Would appreciate your comments on it T_D (or anyone else). I've not traded it yet (if i do at all) as it's not broken above the top of the pin. I drew on some trendlines which i looks like it touches this nicely, however i did this afterwards (as per your comments on the thread T_D you note that you have all the trendlines etc pre drawn) as i've only just noticed the pin. It does appear to sit nicely on the weekly chart also. Per the attached it appears to be trading in countertrend however the weekly chart provides evidence that is still in an upward trend. Short term down. I'm not convinced of the risk reward ratio as the decending trendline could come into play after about 200 pips with 130 pips of risk. Feedback would be greatfully accepted.

Message to Lurker; I noticed your comment about the dow and that you want to find a strategy for it. Here is a link to a comentry which i have followed for over a year now and find very informative. I have followed some of the trades and done ok out of it.

SignalWatch - Market Dow Commentary

Not sure if you have seen this before. You can sign up to received the daily newsletter where Ed downs comments on the Dow.

Will get back to my reading

Cheers for now.

GB

Hi Glenborrell,

I would say that the body is too large and the nose is not long enough on this particular pin.

As Smbtnt also said, the price has retraced deeply on the next bar.

Although this retracement has not yet INVALIDATED the pin it would certainly have knocked my confidence in it, even if it had been a perfect looking setup in the first place.

 

[Glenborrell]

Hi Glenborrell,

I would say that the body is too large and the nose is not long enough on this particular pin.

As Smbtnt also said, the price has retraced deeply on the next bar.

Although this retracement has not yet INVALIDATED the pin it would certainly have knocked my confidence in it, even if it had been a perfect looking setup in the first place.

T_D & Smbtnt,

Thanks for your comments. I did initially think the pin was ok. Thanks for putting me straight. I have since seen the one you were looking at on this pair on the weekly chart T_D with a smaller body and longer tail. Will be looking for these in future.

I definitely agree on the next bar knocking your confidence to trade. As the day went on it got more and more bearish but as i wanted a comment on the pin i posted anyway.

Will get back to my reading and catching up.

Thanks,

GB

 

[lurkerlurker]

GBP/CHF hourly pin. I was just about to take that short, but it broke before the platform loaded and I didn't get the order in.

For those of you who spreadbet with CMC marketmaker - how many times do you get N/A - N/A in place of price on a deal ticket and "No Data for GBPCHF Cash" messages when you start the program to place an order?

Lesson learned - don't close MarketMaker, and have the web version handy for placing trades too. I was wanting the chart up so I could see where the entry and stop would be with the CMC price rather than the NF price. Very annoyed. Robbed of at least 30 pips.

 

[lurkerlurker]

GBP/CHF hourly pin. I was just about to take that short, but it broke before the platform loaded and I didn't get the order in.

For those of you who spreadbet with CMC marketmaker - how many times do you get N/A - N/A in place of price on a deal ticket and "No Data for GBPCHF Cash" messages when you start the program to place an order?

Lesson learned - don't close MarketMaker, and have the web version handy for placing trades too. I was wanting the chart up so I could see where the entry and stop would be with the CMC price rather than the NF price. Very annoyed. Robbed of at least 30 pips.

Anyway. That trade is now up 50 in 10 minutes, and sterling is getting its **** kicked. Cable at $2 again. I can't get the entry at the price I wanted, so I'm going to learn from this experience by making it a paper trade. I'm paper short 2.3130 with a stop now in at breakeven. I'll trail it down on the hourlies until I'm stopped out. There is a similar pin on EURCHF which I could get into if I wanted, but I'm not convinced, despite the pins at the double top. This will work sort of like "forward testing", and I'll see if I get closer to the optimum exit when there is no profit to snatch at.

Somebody please tell me you got into this! (to my credit, I didn't chase the trade, even though there were other opportunities to get in). Price coming into support now, so will watch how it reacts there.

 

[lurkerlurker]

GBP/CHF paper trade update.

Stop moved to the high of the last bar, at 2.3079 (which is +51 locked in). I really wish I had been able to get into that trade........

Update - no new lows made on the next two bars, so stop stays where it is.

Update 2 - stopped out on this hourly bar. As this is a paper trade, I don't know what the P&L would be, but assuming no slippage in a small position with CMC (who have yet to slip an FX stop on my account), this trade makes +51 on paper.

I'm very upset that the platform had errors which stopped me executing on the break of the pin, however I've managed the trade on paper according to the stop trail system I use, and it has worked out at a healthy profit, so I have no complaints. Another winner in the bag for the pin bar system!

The stop on this trade was 68 pips including spread. Risking 10% of the account, the position would have been taken at £3pp if the platform unfroze while I could still get the deal away. Profit of £153 would have added almost 10% to my account, so I am still a little sore. No doubt the next trade I do live will be one of the few losers that the system produces. However, stick to the plan and there will be pips made in the long run.

I've not done any impulsive or non system trades today, and on this paper trade I managed the exit properly. All is good so far.

 

[bansir]

arrrgh!!!

Just look at this lovely little 4min candle pin.
mmmm...nice.
Formed right before my eyes but wait.... no confluence! What to do?
I stayed out, sob, sob no long for me
I mean, just look at the move, but resistance lines were hovering overhead and EMA's were pointing down. What would you have done?

I chalked in the positive divergence on RSI after the market closed. Have I missed something more? Should I have taken the pin on its own merit or was I right to sit on the side and watch it...... fly..........away?
In retrospect the pain of watching the move take off without me is, I think bigger than the pain of a stop loss hit just under the tail. I think this came up a few posts back. Might have just answered my own question.

Best Regards,
Neil

 

[trader_dante]

No doubt the next trade I do live will be one of the few losers that the system produces.

Good spot Lurker. You are doing well.

Try and avoid negative thinking like this though. It can be emotionally destructive.

 

[tafita]

Just look at this lovely little 4min candle pin.
mmmm...nice.
Formed right before my eyes but wait.... no confluence! What to do?
I stayed out, sob, sob no long for me
I mean, just look at the move, but resistance lines were hovering overhead and EMA's were pointing down. What would you have done?

I chalked in the positive divergence on RSI after the market closed. Have I missed something more? Should I have taken the pin on its own merit or was I right to sit on the side and watch it...... fly..........away?
In retrospect the pain of watching the move take off without me is, I think bigger than the pain of a stop loss hit just under the tail. I think this came up a few posts back. Might have just answered my own question.

Best Regards,
Neil

From what I recall, TD will take pins at tops and bottoms of swing lows and highs so moving averages are not relevant in these situations. However, I would argue that he is experienced with this method so don't beat yourself up too much. I have taken these sort of sets ups where for example I have shorted into potential resistance based on the "look" of the pin and a few other converging factors. I think this sort of set up is for the more experienced. If in doubt, do a Lurker and paper trade it.

 

[lurkerlurker]

What would you have done?

Not traded on the strength of a single 4 minute bar because price went both up and down within 4 minutes. This timeframe is not suitable for trading pin bars.

Should I have taken the pin on its own merit or was I right to sit on the side and watch it...... fly..........away?

In my view you were quite right to leave it alone, regardless of what price did next. If you can devise, backtest, and papertrade a system using 4m pin bars, and that system has positive expectancy, you might be on to something, but that is not likely.

In retrospect the pain of watching the move take off without me is, I think bigger than the pain of a stop loss hit just under the tail. I think this came up a few posts back.

I had a high probability hourly pin bar setup, of a 50 period EMA, a 50% fib retracement, a resistance zone, combined with a classic bearish reaction to bearish fundamental news and I passed up the trade because my short entry would have been 7 pips lower than the setup required. By the time I had calculated the risk of the pin (to work out my position size) the market was 15 pips lower than my entry. The whole move turned out to be worth in excess of 50 pips with a tight stop, and would most likely be worth more if given more room, but the important thing is that I didn't chase the market. I had the discipline to let it go, even if it caused me the same emotional anguish as you experienced.

You did absolutely the right thing. If I had banged on a position 7 or 15 pips worse off I'd be up either £129 or £105 on that trade (and on a £1700 account that is nothing to sneeze at). However, I would have chased the market, broken my rules, and reenforced a type of behaviour that would likely get me severely burned in the end.