Making Money Trading

[superspurs]

gb/chf

this is one for me,im already short from the breakdown line,pin will be my stop and reverse,support in nov 2004

 

[lurkerlurker]

Let me tell you a little story.

Back when I started my first journal on T2W I made a call to trade an inside bar that appeared on the daily Usd/Cad chart. The plan was to trade it with a long and short order on each side.

The first post I made was met with the response: (I won't name the person here)

"I've absolutely no idea why u r trading usdcad in the morning.
because the us market is closed usdcad is forced to move by random.
u can do everything u like but trading in the secondary market is a waste of time and it is stupid by the way.
i dont get wat people like u r thinking and doing"

Shortly after, I got my FIRST ever REPUTATION comment which went as follows:

your credibility is zerooooooo u cant offer anything but u r talking like a winner, loser

I'll respond briefly to the comment you refer to. I'm annoyed that someone would say that!!!

When the US markets are closed, USDCAD is not "made to move by random". Even if there isn't much interest in USDCAD during the euro morning session, there is enough interest in....GBPUSD, EURUSD, EURCAD, etc to cause differing supply and demand for USD and CAD. After the US markets close, the USDCAD cross will be affected by volume on NZDUSD, AUDCAD, USDJPY, etc.

What an idiot. I'd also be very surprised if a truly profitable trader found any satisfaction in trading insults on an internet BB, especially calling other folk "losers".

 

[lurkerlurker]

this is one for me,im already short from the breakdown line,pin will be my stop and reverse

Could I suggest you just make it a stop, and don't reverse on the strength of that one bar?

 

[lurkerlurker]

You call that a parabolic exhaustion phase? Try Chart 1 of the Usd/Cad. I'd say the blow off here is more extreme but the pin bar calls the market bottom and it comes on its own with nothing to back it up, just like the Gold one did.

One of the things I have learned is that these weekly pin bars are more effective than on other timeframes. However, most of us can't afford to trade them.

Take a look at chart 2. This is the gold market back in December '05. That looks like a very sharp and extended rally and what does it culminate in? A position that went well over twice the amount risked.

Yes, for every pin which fails there will be one which worked.

Have a look at chart 3. Another extended run. Another pin bar that attempts to "pick a top". And another win.

True.

Chart 4 shows the last major "parabolic phase". The nose doesn't stick out too far on this pin bar but is it not still calling a top?

Are you detecting a theme here?

Yes, but the latter was a bad example because the nose didn't stick out. Then again, it is a "tweezer top".

Wasn't it? See chart 5.

There is no confluence there. We're just over 1,200 pips up from that entry right now. How many points did you lose in your Gold trade? 200? If you've got the patience to stay with a move when it starts, picking a top like one in Gbp/Usd would pay for 6 failed attempts. So far.

Different timeframes, but point taken.

But I did EXACTLY that (in reverse) and made the biggest profit of my career to date in a single trade. I BOUGHT a market (Wheat) despite reading every day on the CBOT that commodity funds were heavily SHORT and ADDING to their positions, even as my profit increased

Mmmm. Lets not try to do fundamentals and the opinion of market commentators too much. Sure way to the poorhouse. However, I keep an eye on fundamentals. For example, for a long time I would not even consider a trade which involved going long USD, no matter what the other pair was.

Losing trades WILL come along.

And traders that tell you NOT to pick tops or bottoms by trading pin bars at swing highs/lows in isolation will come along also.

I'd do your own research and come to your own conclusions, Tom.

Listen to yourself. Not other people.

Interesting point - I generally don't listen to others while in a trade, but do listen when flat. I see what you are saying though.

I have a trading history infront of me.

No matter how many people tell me what I should or shouldn't be doing, this is what I answer to.

Yes. So do I. Except my recent history tells me three things:

I have been profitable trading one kind of setup since November.
I broke my rules recently and lost money.
I've lost quite a few of the recent "pin bar" trades, so in addition to cutting my permitted risk I also need to look at the strategy and try to filter some of the less attractive setups.

 

[counter_violent]

Could I suggest you just make it a stop, and don't reverse on the strength of that one bar?

This is excellent advice

If in a trade....a pinbar/ exhaustion /blow off, call it what you will, is an exit before it is anything else...only when said set up meets your entry criteria can you take an entry from it.

 

[Nordtrader]

I'll respond briefly to the comment you refer to. I'm annoyed that someone would say that!!!

When the US markets are closed, USDCAD is not "made to move by random". Even if there isn't much interest in USDCAD during the euro morning session, there is enough interest in....GBPUSD, EURUSD, EURCAD, etc to cause differing supply and demand for USD and CAD. After the US markets close, the USDCAD cross will be affected by volume on NZDUSD, AUDCAD, USDJPY, etc.

What an idiot. I'd also be very surprised if a truly profitable trader found any satisfaction in trading insults on an internet BB, especially calling other folk "losers".

Lurker,
If I read your setup for the gold trade correctly then you risked 10% on the trade (maybe I misunderstood...). If correct then this seems like a lot for one trade. Like TD says, losing trades are inevitable, but to paraphrase one of the greats, it's how much you lose when you're wrong that is the key thing. I know you know this, but for me it's the risk management that was the sailent issue here.
Good trading,
NT

 

[superspurs]

thx,for the advice chaps but ill take my chance,each to their own,peace and love.

 

[lurkerlurker]

Lurker,
If I read your setup for the gold trade correctly then you risked 10% on the trade (maybe I misunderstood...). If correct then this seems like a lot for one trade. Like TD says, losing trades are inevitable, but to paraphrase one of the greats, it's how much you lose when you're wrong that is the key thing. I know you know this, but for me it's the risk management that was the sailent issue here.
Good trading,
NT

I completely agree. From my journal:

Today, 06:58 PM

I am going to modify my plan until further notice.

Modifications as follows:

Reduce maximum risk per trade to 5% from 10%. This gives me twice as many bad trades before my account disappears.

Reduce maximum account risk to 5% from 30%. This means that I can only have 1 position open at a time.

This follows what I said I would do in this post written 20-12-2007, 12:16 AM

The pin bar system has a win rate above 80%. [in my backtesting] I am trading a small account, and most trades win at least the initial risk (R). So in the event of two back to back losers which both ate 10% of the account, I would most likely scale the risk down by half on the next few trades.

[my comment now]

So, I am still following my trading plan. You are right. 10% is far too much. My actual trades do not match the 80% win rate of my testing, (due to 2 back to back losers on a small sample size) so I'm cutting the risk.

5% is a maximum. However, I can see that I will be more likely to risk around 2-3% until I get another few winners in the bank, and I'm more confident about trading the system in real time. Capital preservation is key. Thanks for the post.

 

[superspurs]

gb/chf

pin never triggered,and i had a sell stop under nose,so im now 2 short

 

[firewalker99]

Ever wondered why Gisele is a Supermodel and you're a trader?

In the attached chart from that post you wrote:

"It is during this week that Bloomberg writes an article stating Supermodel Gisele Bundchen insists she is not paid in dollars and joins hedge funds in "dumping them"."​

I don't follow the currencies that much to be honest, but the first thing that I thought was "the bottom must be near" (or the top, depends from which way you look at it obviously).

When the public takes note of things...

 

[trader_dante]

In the attached chart from that post you wrote:

"It is during this week that Bloomberg writes an article stating Supermodel Gisele Bundchen insists she is not paid in dollars and joins hedge funds in "dumping them"."​

I don't follow the currencies that much to be honest, but the first thing that I thought was "the bottom must be near" (or the top, depends from which way you look at it obviously).

When the public takes note of things...

Exactly

 

[omni]

Hi guys, I read the reaction to the gold trade with interest. I happened to have been long since mid dec. I saw you calling the short yesterday and thought there was good reason in it. But from a long position perspective, i had only 1 stop triggered @ 870 (out of 3(am 3 units long)) and on the bounce that then shortly followed, added back to my position on the 2hr/1hr pin.

All I am suggesting is that when you are considering starting a new position. Maybe imagine what positions others are in. And considering the strong bull phase, maybe it was more of a chance to go long than take the short.

Just a view from the other side of the fence.

 

[smbtnt]

this is one for me,im already short from the breakdown line,pin will be my stop and reverse,support in nov 2004

Hi Mate,

good spot, eyeing the same setup but will enter on daily pin as opposed to 4hr.
Lot of support here on the weekly wouldnt you say?

 

[smbtnt]

I will be taking this pin along with the Crude, the latter looks like a HS on the daily. Fingers crossed for some commodities battering tomorrow.

Stopped out of Gold short for 105 pips loss, but crude performed slightly better, currently trailing.

 

[1Pipped]

My latest $/cad deal chart attached.

It has moved over 100 pips north since my position got taken out, but it was still a good trade I think as it made over 2:1 which is alright in my book !

Just posting chart to get some feedback about it.... Obviously if I hadnt moved the stop order a second time the position would still be on, but if I could see the future I wouldnt need stops Is this just one of those things, or should I have left it a bit more room ?

edit: I was moving the stop under the lows of the candles where I have written.

 

[trader_dante]

My latest $/cad deal chart attached.

It has moved over 100 pips north since my position got taken out, but it was still a good trade I think as it made over 2:1 which is alright in my book !

Just posting chart to get some feedback about it.... Obviously if I hadnt moved the stop order a second time the position would still be on, but if I could see the future I wouldnt need stops Is this just one of those things, or should I have left it a bit more room ?

edit: I was moving the stop under the lows of the candles where I have written.

I like to try and keep my stop under the 21ema when the market is starting to trend like this. As I have noted before, when the 50 is trending UP, the market will often come back into the zone of the 10 and 21 before continuing onwards. (see chart)

A stop under the 21 would have been safe in your example.

 

[1Pipped]

I like to try and keep my stop under the 21ema when the market is starting to trend like this. As I have noted before, when the 50 is trending UP, the market will often come back into the zone of the 10 and 21 before continuing onwards. (see chart)

A stop under the 21 would have been safe in your example.

Thanks TD, the thought did cross my mind about what you had said about the MA tunnel area. The plan was to add some more if there was another pin around 1.0080 and I could have been thinking more about that, than how to best move the stop at the time. Will put this in my notes. Thanks again for the feedback.

 

[omni]

Hi 1pipped.
I am long usdcad too, i (due to laziness) have my stop still down at the big 1 level (and another at 1.0020ish). The dip yesterday that touched 1.0050 was a good spot to add to holdings i thought.
From all I have read from TD's work, the longer you can stay in the trade the better..... i have my stops at the point where I would probably then be thinking about reversing pos. My aim from all this is not to crimp a few pips out per trade (i am not good at doing that type of trading) but to build on positions and ride them to completion, when you get 1 or 2 that go your way, keep pumping it, add at every point you can and rinse the sucker. I will add more to this usd/cad pos if i can.

 

[1Pipped]

Hi Omni, laziness is a great strategy, I am trying to be a bit less lazy at the moment as I often leave deals on too long and let a decent winner become a small winner or loser. Was probably a bit over zealous moving stop on this one. Anyway good luck with the position, perhaps you could come back and do a Jim Bowen impression next week for me... ' And, heres what you could have won !!!!! '

 

[omni]

After all of yesterdays talk of selling gold.
I have done a not particularly healthy thing and bought (more) today. Anyone else follow suit?
Consensus on this one?
Sorry, no graphs.