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Yamato
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Watching this one right now. Very very good one.
http://transcripts.fxstreet.com/2008/07/short-term-fore.html
Minute 25 (more or less):
I guess there's some conflict between support/resistance and moving averages which measure trend.
Basically one should trade trying to take both into account, looking at price like you look at a ball that bounces on the floor. Where the ball is going is trend, but you also have to be aware of where the floor and the ceiling is, because, regardless of the trend, somehow those will affect it. Except for the fact that the floor and ceiling are made of paper, so the ball can actually go through, depending on how fast it's going.
I thought trading according to trend (and therefore using moving averages) could not agree with trading according to support and resistance. But you have to make them agree, just like predicting the direction of a rubber ball bouncing around in your house.
The fluorescent ball is bouncing around in my room, it's night (see picture above). The paper sheets stopping the ball can be broken, depending on how fast it goes, and there's also other levels and stuff that I don't see, but I can tell where the invisible stuff is by how the ball bounces on it (also have to keep in mind the 0.0100s levels, such as 1.4300, 1.4400, etc., as they act as walls). That's all there is to it: where it's going, and where the sheets are. The rest is betting accordingly, with a stoploss for when you're wrong and it's deviated by something you didn't see.
In the picture above it just broke through a wall and it should be falling until the next wall. It could be played like this: going short after very little retracement, or going short from wall to wall. I am not confident enough to go short from wall to wall. I'd rather make a bunch of 10 ticks trades. I'd rather make 100 dollars per day, than make 1000 dollars one day, and nothing for the next 4 days. I'd be making half as much money, but I'd be able to take it much better psychologically, because the 1000 dollars trades fail more often than succeed, and I can't take being wrong that often. I need a strategy that gives me a majority of wins, and a positive balance every day.
http://transcripts.fxstreet.com/2008/07/short-term-fore.html
Minute 25 (more or less):
I guess there's some conflict between support/resistance and moving averages which measure trend.
Basically one should trade trying to take both into account, looking at price like you look at a ball that bounces on the floor. Where the ball is going is trend, but you also have to be aware of where the floor and the ceiling is, because, regardless of the trend, somehow those will affect it. Except for the fact that the floor and ceiling are made of paper, so the ball can actually go through, depending on how fast it's going.
I thought trading according to trend (and therefore using moving averages) could not agree with trading according to support and resistance. But you have to make them agree, just like predicting the direction of a rubber ball bouncing around in your house.
The fluorescent ball is bouncing around in my room, it's night (see picture above). The paper sheets stopping the ball can be broken, depending on how fast it goes, and there's also other levels and stuff that I don't see, but I can tell where the invisible stuff is by how the ball bounces on it (also have to keep in mind the 0.0100s levels, such as 1.4300, 1.4400, etc., as they act as walls). That's all there is to it: where it's going, and where the sheets are. The rest is betting accordingly, with a stoploss for when you're wrong and it's deviated by something you didn't see.
In the picture above it just broke through a wall and it should be falling until the next wall. It could be played like this: going short after very little retracement, or going short from wall to wall. I am not confident enough to go short from wall to wall. I'd rather make a bunch of 10 ticks trades. I'd rather make 100 dollars per day, than make 1000 dollars one day, and nothing for the next 4 days. I'd be making half as much money, but I'd be able to take it much better psychologically, because the 1000 dollars trades fail more often than succeed, and I can't take being wrong that often. I need a strategy that gives me a majority of wins, and a positive balance every day.
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Yamato
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The whole thing is a gold mine:
http://transcripts.fxstreet.com/
You can do a customized search and find videos on any subject. Great great stuff.
http://transcripts.fxstreet.com/
You can do a customized search and find videos on any subject. Great great stuff.
Yamato
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After hearing some of these seiden's videos, and seeing there's some people who know little about trading and are attending his video conferences (someone asked "what is an oscillator?"), I am realizing that first of all you need to have understood quite a bit on your own before understanding his videos. Another thing is that I see that other people attending his video conferences seem to have studied a lot of technical analysis books (and obviously are not profitable yet or else they wouldn't be there paying and asking questions). So I would say that overall the problem is not in finding out any secrets from seiden or others, because there's quite a few profitable traders willing to share what they know, like seiden. The right stuff is all there, and we've all heard it before. The problem is getting rid of all the bad stuff and keeping just the good stuff. Which, once again, reminds of that michelangelo quote: "I saw the angel in the marble and carved until I set him free". Also, it reminds me of a puzzle with thousands of pieces. The pieces are all there, but you have to combine them together in the right way.
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Yamato
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Yamato
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Yamato
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Yamato
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Ok, one more step ahead in my quest for profitability: basically I set up my weekly one hour EUR chart, with pivots and everything. I set up my 4 hours 1 minute chart, on which I'll trade via Chart Trader function (for speed). Then I look for just one level, or maybe two at the most, where prices seem to have bounced the most. Then, once identified those two levels I just trade the bounces and the breakouts, back and forth, for my ten ticks target.
Yamato
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Yamato
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If you're dealing with support/resistance levels from the past week, bet on the bouncing until the breaking has taken place. If we're beyond those recent levels, don't expect any bouncing (except on pivot lines), because there's no limit to the move.
Useful also to look at what time it is during the day: after a while price gets tired and stops running, usually by bed time in europe. Well, which coincides with the New York close at 4 PM. So, trend until then, and then range or reversal for the next few hours.
Until now I was afraid of betting on these moves, because I considered my risk illimited, since I didn't like to place stops. And I didn't because they were always taken. And they were taken because I didn't know where to place them. The truth is: it's ok if they're taken, as long as you don't lose a lot. You could also lose a majority of the time. But without support/resistance awareness, you won't place them in the right place, whether large or tight. You must be aware of support and resistance to trade properly. Trend as well.
Another thing is this: I do not follow support and resistance at all with my automated systems, but they work because they follow very much the time of the day, and at the end of the day price has usually run to one of those levels. And during the day it is running to those levels. So either way they work, because they look at where it's running and bet on continuation during the day, and reversal at night.
Anyway, opening up to support and resistance is so complicated but it's starting to make sense. What was important was seiden's and shoot's videos, because I was positive that these people are profitable, so I listened to them. And as I said, becoming profitable is not about finding out new information, but finding out what information to value. Seiden is also quite critical in general of "book writers" because he suspects, like I do, that they are not profitable traders.
Anywa, it's hard to think simultaneously in terms of diagonal and horizontal moves. But that's what it is: you have to look at where it's running, and at where the walls are. Kind of like predicting the direction of a car without having a map. It won't go straight to its destination. There's roads, that go around buildings. Some streets are one way only. There's traffic and there's traffic lights, both holding the car. And other things.
Seiden explains all and he's very honest, but he's still not totally clear to me. Still listening to this:
http://transcripts.fxstreet.com/2008/07/short-term-fore.html
Useful also to look at what time it is during the day: after a while price gets tired and stops running, usually by bed time in europe. Well, which coincides with the New York close at 4 PM. So, trend until then, and then range or reversal for the next few hours.
Until now I was afraid of betting on these moves, because I considered my risk illimited, since I didn't like to place stops. And I didn't because they were always taken. And they were taken because I didn't know where to place them. The truth is: it's ok if they're taken, as long as you don't lose a lot. You could also lose a majority of the time. But without support/resistance awareness, you won't place them in the right place, whether large or tight. You must be aware of support and resistance to trade properly. Trend as well.
Another thing is this: I do not follow support and resistance at all with my automated systems, but they work because they follow very much the time of the day, and at the end of the day price has usually run to one of those levels. And during the day it is running to those levels. So either way they work, because they look at where it's running and bet on continuation during the day, and reversal at night.
Anyway, opening up to support and resistance is so complicated but it's starting to make sense. What was important was seiden's and shoot's videos, because I was positive that these people are profitable, so I listened to them. And as I said, becoming profitable is not about finding out new information, but finding out what information to value. Seiden is also quite critical in general of "book writers" because he suspects, like I do, that they are not profitable traders.
Anywa, it's hard to think simultaneously in terms of diagonal and horizontal moves. But that's what it is: you have to look at where it's running, and at where the walls are. Kind of like predicting the direction of a car without having a map. It won't go straight to its destination. There's roads, that go around buildings. Some streets are one way only. There's traffic and there's traffic lights, both holding the car. And other things.
Seiden explains all and he's very honest, but he's still not totally clear to me. Still listening to this:
http://transcripts.fxstreet.com/2008/07/short-term-fore.html
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Yamato
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Somehow my 12 year long losses, elder, douglas and the readers made me understand the need for using a stoploss. You know what I am talking about: not like everyone speaks about it in their first two months of trading and never really understands it or uses it. I am talking about always. Cause every trader talks about it only after they've taken a huge loss because they didn't use it. What I am talking about is conceiving every trade based on how much you'll lose if it goes wrong. Every trade should begin by its risk.
So, once I got through my head the need for a stoploss, I've started to look at charts and at trades in a whole different way. Finally I could make any trade I wanted because they all had a limited risk. I didn't risk my whole account every time I traded.
So I searched, unconsciously, for a better way to decide which trade to make and where to place the stoploss, and I came across (thanks to this forum's journals) shoot's videos, and, on his web site, seiden's videos. And all seiden is telling me, over and over again, is: find support/resistance levels, and trade according to them, placing your stops beyond them. Look for good risk/reward ratios (not 1 to 1), and you might even be able to make money despite losing 2 trades out of 3.
So, once I got through my head the need for a stoploss, I've started to look at charts and at trades in a whole different way. Finally I could make any trade I wanted because they all had a limited risk. I didn't risk my whole account every time I traded.
So I searched, unconsciously, for a better way to decide which trade to make and where to place the stoploss, and I came across (thanks to this forum's journals) shoot's videos, and, on his web site, seiden's videos. And all seiden is telling me, over and over again, is: find support/resistance levels, and trade according to them, placing your stops beyond them. Look for good risk/reward ratios (not 1 to 1), and you might even be able to make money despite losing 2 trades out of 3.
Yamato
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Recapitulating, the lessons I made myself open to learning, after 12 years of losses, were:
1) By elder and douglas: use a stoploss
2) By shoot and seiden: support and resistance exist
It's funny because that's what all the textbooks talk about, the most famous topics, and that's all you hear on forums, along with "the trend is your friend". And, amazingly, these 3 things are the most important things in trading: support/resistance, trend, stoploss.
These are the the three things you have to know. The problem is that if you hear them from a trader that you know is making money from trading, you will listen. If you hear them on forum, or read "experts" talk about them, you're going to think it's nonsense, because they look like those ads, that are trying to sell you some car or something like that. So you feel very suspicious. On top of that, I've always been extremely against the crowds and whatever they do: so to me if everyone is talking about it, it's crap.
So, I've been trading without stoploss, and thinking support and resistance were crap. The only thing I believed in was trend: and I was betting on its reversal, all the time, without stoploss and without looking at support/resistance, which would have helped a lot. But I didn't use them because everyone was talking about them.
I believe that if you could force a novice trader, any novice trader, to use a stoploss all the time, this would force him to face reality and look for the right entry points. This in turn will force him to take into account both trend and support/resistance, or else he'll be faced with continuous losses. The early series of losses will force him to understand where and why to enter.
If you don't force him, which is usually the case, because we all open our accounts on our own, then what happens is that you can either put in a wide stoploss, and then if it gets hit you might even remove it, or after a while you'll stop using it altogether. This will give you a majority of winners, which will deceive you into believe that you're trading properly. And then you'll take a huge loss every 10 trades, which will make you think you were stupid not to use the stoploss, but not using the stoploss was the reason your last 9 trades were successful.
Another cause of deception is the ability to double up and triple up and so on. If you have a lot of money, and you start with 1 contract, and can go up to 10 contracts, you could go on, trading like crap for weeks, without incurring a loss big enough to show you that you were wrong, but you will again think that it was because you didn't use the stoploss this time or doubled up: you won't think you only won the other times because you doubled up.
But then, you'll resume your trading, after that huge loss, possibly after wiring more money, and you'll make the same mistakes because those mistakes allow you to win a majority of times, and because you know no other way of winning.
You might occasionally, after blowing out your account, try using the stoploss again, but without the proper "support/resistance + trend" recipe, you'll incur into so many losses, that, consciously or not, one way or another, you'll stop using it within a few days.
1) By elder and douglas: use a stoploss
2) By shoot and seiden: support and resistance exist
It's funny because that's what all the textbooks talk about, the most famous topics, and that's all you hear on forums, along with "the trend is your friend". And, amazingly, these 3 things are the most important things in trading: support/resistance, trend, stoploss.
These are the the three things you have to know. The problem is that if you hear them from a trader that you know is making money from trading, you will listen. If you hear them on forum, or read "experts" talk about them, you're going to think it's nonsense, because they look like those ads, that are trying to sell you some car or something like that. So you feel very suspicious. On top of that, I've always been extremely against the crowds and whatever they do: so to me if everyone is talking about it, it's crap.
So, I've been trading without stoploss, and thinking support and resistance were crap. The only thing I believed in was trend: and I was betting on its reversal, all the time, without stoploss and without looking at support/resistance, which would have helped a lot. But I didn't use them because everyone was talking about them.
I believe that if you could force a novice trader, any novice trader, to use a stoploss all the time, this would force him to face reality and look for the right entry points. This in turn will force him to take into account both trend and support/resistance, or else he'll be faced with continuous losses. The early series of losses will force him to understand where and why to enter.
If you don't force him, which is usually the case, because we all open our accounts on our own, then what happens is that you can either put in a wide stoploss, and then if it gets hit you might even remove it, or after a while you'll stop using it altogether. This will give you a majority of winners, which will deceive you into believe that you're trading properly. And then you'll take a huge loss every 10 trades, which will make you think you were stupid not to use the stoploss, but not using the stoploss was the reason your last 9 trades were successful.
Another cause of deception is the ability to double up and triple up and so on. If you have a lot of money, and you start with 1 contract, and can go up to 10 contracts, you could go on, trading like crap for weeks, without incurring a loss big enough to show you that you were wrong, but you will again think that it was because you didn't use the stoploss this time or doubled up: you won't think you only won the other times because you doubled up.
But then, you'll resume your trading, after that huge loss, possibly after wiring more money, and you'll make the same mistakes because those mistakes allow you to win a majority of times, and because you know no other way of winning.
You might occasionally, after blowing out your account, try using the stoploss again, but without the proper "support/resistance + trend" recipe, you'll incur into so many losses, that, consciously or not, one way or another, you'll stop using it within a few days.
Yamato
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http://transcripts.fxstreet.com/2008/07/short-term-fore.html
Problem at minute 35-36: he says how a support shows it's strong by the fact that price shoots up after touching it, but he doesn't explain nor notes that a few candles later that level was taken out without the slightest bounce. So the question arises: can we trust or not even these supposedly strong support levels? He might have replied that we can't always trust them and that is why we have stoplosses in place. Or he might say that price came down so heavily and fast that it was clear that it wouldn't have bounced.
Problem at minute 35-36: he says how a support shows it's strong by the fact that price shoots up after touching it, but he doesn't explain nor notes that a few candles later that level was taken out without the slightest bounce. So the question arises: can we trust or not even these supposedly strong support levels? He might have replied that we can't always trust them and that is why we have stoplosses in place. Or he might say that price came down so heavily and fast that it was clear that it wouldn't have bounced.
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Yamato
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Very very good:
http://transcripts.fxstreet.com/2008/10/conventional-ch.html
Minute 15: very interesting how he talks about "pockets of resistance". What he's saying is that if price goes straight up without making steps/stops (retracements), going up one green candle after the other, when price will come back down it won't find any resistance to keep it from falling just the same way. But then he's also implying that all other levels of support get cleared and since that's an hourly chart, he's basically implying that the only levels of support/resistance that count are today's. That's quite important to me.
Minute 16: "any time frame". Very very interesting. He's saying that support and resistance levels that you see on charts (he says volume is irrelevant because it's within the size and disposition of the candles) are applicable on any time frame. I will need to do a lot of thinking about this.
Minute 23: This is not bull****. This guy talks very clearly and to the point. Sometimes he repeats himself, when he talks about supply and demand to explain a strategy, which in reality is not an explanation at all, but another definition of go long and go short. Or when he says you have to look for the novice trader and take the other side of his trade... all this seems nonsense to me. But otherwise he talks clearly and straight to the point. This is great stuff. For example he says here, at minute 23, how textbooks would tell you to go short at a breaking through the previous support, but he would go short at the testing of the high (see picture, he'd sell at red circle on top, rather than the lower one). Basically the concept is: always bet on a bounce as long as price is overstretched and has been running for a while. If it gets there tired, bet on a bounce. If you're wrong, no problem because your stop is tight anyway, and you have a great risk/reward ratio to compensate for a potential low % of wins.
In many ways seiden is not considering trend, nor does he look at chart patterns. What I mean is that if the trend is up, and like in the picture above, you anticipate a bounce (since price gets there tired), you're totally ignoring the trend. You're definitely going against the trend. But then... I am thinking out loud... why does he say repeatedly to keep the trend in your mind? I think I understand, even though he didn't state it clearly. The trend matters as long as it's not overbought/oversold. Once it runs too much, support and resistance levels start being more important than the trend. Just like the ball that's going up and down in your house. Even if the ceiling and walls are made of paper, if the ball gets to the ceiling after losing momentum it won't break through it. It's similar to this ball.
He basically picks tops and bottoms, but according to support and resistance and only if the ball has run quite a bit, and most important thing: with a tight stoploss. With a high risk/reward, this is possible, even with a majority of losses. I think he's counting on a risk/reward of 1 to 3 at least. You could lose 66% of the time and still make money.
The trend is still important, but totally irrelevant if price is up against support/resistance and it's oversold/overbought. Then you can go against your friend trend, and pick tops/bottoms.
http://transcripts.fxstreet.com/2008/10/conventional-ch.html
Minute 15: very interesting how he talks about "pockets of resistance". What he's saying is that if price goes straight up without making steps/stops (retracements), going up one green candle after the other, when price will come back down it won't find any resistance to keep it from falling just the same way. But then he's also implying that all other levels of support get cleared and since that's an hourly chart, he's basically implying that the only levels of support/resistance that count are today's. That's quite important to me.
Minute 16: "any time frame". Very very interesting. He's saying that support and resistance levels that you see on charts (he says volume is irrelevant because it's within the size and disposition of the candles) are applicable on any time frame. I will need to do a lot of thinking about this.
Minute 23: This is not bull****. This guy talks very clearly and to the point. Sometimes he repeats himself, when he talks about supply and demand to explain a strategy, which in reality is not an explanation at all, but another definition of go long and go short. Or when he says you have to look for the novice trader and take the other side of his trade... all this seems nonsense to me. But otherwise he talks clearly and straight to the point. This is great stuff. For example he says here, at minute 23, how textbooks would tell you to go short at a breaking through the previous support, but he would go short at the testing of the high (see picture, he'd sell at red circle on top, rather than the lower one). Basically the concept is: always bet on a bounce as long as price is overstretched and has been running for a while. If it gets there tired, bet on a bounce. If you're wrong, no problem because your stop is tight anyway, and you have a great risk/reward ratio to compensate for a potential low % of wins.
In many ways seiden is not considering trend, nor does he look at chart patterns. What I mean is that if the trend is up, and like in the picture above, you anticipate a bounce (since price gets there tired), you're totally ignoring the trend. You're definitely going against the trend. But then... I am thinking out loud... why does he say repeatedly to keep the trend in your mind? I think I understand, even though he didn't state it clearly. The trend matters as long as it's not overbought/oversold. Once it runs too much, support and resistance levels start being more important than the trend. Just like the ball that's going up and down in your house. Even if the ceiling and walls are made of paper, if the ball gets to the ceiling after losing momentum it won't break through it. It's similar to this ball.
He basically picks tops and bottoms, but according to support and resistance and only if the ball has run quite a bit, and most important thing: with a tight stoploss. With a high risk/reward, this is possible, even with a majority of losses. I think he's counting on a risk/reward of 1 to 3 at least. You could lose 66% of the time and still make money.
The trend is still important, but totally irrelevant if price is up against support/resistance and it's oversold/overbought. Then you can go against your friend trend, and pick tops/bottoms.
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Yamato
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I've watched about 4 videos and he says the same things over and over again, and it's good because it tells me there's little to learn, and it helps me learn it by repeating it, because it's not easy to get used to these concepts, for someone who's been using moving averages as entry signals.
There's still a problem: he draws lines and so on, but he still didn't say exactly how he identifies support and resistance levels and how far does he go back to find them. I am not counting on him explaining this, ever. He sounds like someone who knows what he's doing, who's willing to share it, but who doesn't have a perfectly clear idea on how to teach it, or maybe doesn't care to teach it 100%. Still, much better than most other profitable traders who are never willing to share anything of what they do. They just post their sarcasm on forums and discourage novice traders. Who knows, maybe the traders writing such posts are not even profitable.
RESUMING tomorrow from minute 23 of:
http://transcripts.fxstreet.com/2008/10/conventional-ch.html
There's still a problem: he draws lines and so on, but he still didn't say exactly how he identifies support and resistance levels and how far does he go back to find them. I am not counting on him explaining this, ever. He sounds like someone who knows what he's doing, who's willing to share it, but who doesn't have a perfectly clear idea on how to teach it, or maybe doesn't care to teach it 100%. Still, much better than most other profitable traders who are never willing to share anything of what they do. They just post their sarcasm on forums and discourage novice traders. Who knows, maybe the traders writing such posts are not even profitable.
RESUMING tomorrow from minute 23 of:
http://transcripts.fxstreet.com/2008/10/conventional-ch.html
Yamato
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If you take a 4 hour chart with 1 minute candles, you can find 4 good levels, as in the picture above, that will most likely cause bounces. You shouldn't ignore them (I am talking to myself).
If you take a 1 month chart with daily candles, it will be just the same (as seiden says, it works on every timeframe). The difference is that if you trade on the monthly chart your losses will be x times higher than on the lower timeframes. I suppose the same applies to trading a chart of two days.
Now I still have to figure out how to process this information, and whether I should look at all levels on all timeframes, because that would be a total mess. I wish there was an automated way to do this (there certainly is, but I don't about it).
The thing is this: I realize support and resistance exist and even work, at least on a 4 hour 1 minute candle level. Ignoring them means getting screwed. On the other hand, if I go any further than the 4 hour 1 minute candle chart, I'm going to have problems managing all the lines that could be drawn on a chart...
However, as someone told me in a chat yesterday, I don't have to worry about s/r on the lower timeframes if I am looking at a month...
Hmm... I could get 4 lines out of... say a daily chart of the past 6 months and see if they affect today. Then I'd do the same for an hourly chart of the past month. Hmm... it is still a mess, but I can't just dismiss it because it's complicated, because I now know that I cannot ignore support and resistance.
If anything, if I am lazy, tired or whatever, I'll ignore the higher timeframes and just focus on the micro level, because, by itself it takes care of the macro level, since if there's a nearby level, we should have been bouncing on it yesterday.
Overall, I''ve decided: I'll use a two days' chart with 5 minute candles. And draw every line on it.
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Yamato
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the fascinating world of support and resistance...
What did I say: trend, support/resistance and stoploss. The three most important things.
Correct: except today I got screwed really badly because I used them. I was short 2 contracts on the CL, counting on the resistance at 82. False breakout: CL went up 50 ticks in a few seconds. Stoploss got executed 40 ticks higher. Lost 1000 dollars. Went LONG 1 contract, expecting the breakout to continue, but I was upset and didn't use a stoploss. The breakout didn't last (obviously since the CL was too overbought on a daily level) and prices came back down by 100 ticks in a few seconds, and I lost another 1000 dollars.
The first loss wasn't my fault (yet it was my fault that I was short 2 contracts), but from now on I'll have to be aware that if the support/resistance are really really good, there might be a false breakout that will cause all the stoplosses and the conditional orders to go off (thereby closing shorts and opening longs) and your stoploss order might not get executed at the price you expected (I use a stoploss at MKT, because it would be too dangerous to do otherwise). From now on I'll either have to stay out, or not use a stoploss. Or place a stoploss much lower, before the other guys and therefore before resistance (which I don't know if it makes sense).
The second loss would have made sense only with a stoploss and only if the CL hadn't been so overbought. Then, after losing all this money, it went back up to where I went short so I guess I wouldn't have lost anything by keeping it from the start and never using... bleah... I am so disgusted and depressed that I don't even want to think what could have been.
Now I have a bit over 3500, because this interesting lesson cost me 2000 dollars. So basically those three rules are still very valid, but I have to be careful when I am close to very very good support and resistance levels.
Now the first reaction would be to say "**** the stoploss", "**** support/resistance" and **** the ****ing diaz brokers. But the truth is that NOT using the stoploss has ****ed me over much more often than using it. Same applies to support and resistance, whose existence I ignored until recently. So I'll go back to patiently studying and trading support and resistance WITH a stoploss on the only contracts I can afford: the EUR and the GBP. I think I'll have to postpone my retirement by another six months. I've never had such a low balance since a year.
The picture below is from the simulated trading account but the trade was on the real account.
What did I say: trend, support/resistance and stoploss. The three most important things.
Correct: except today I got screwed really badly because I used them. I was short 2 contracts on the CL, counting on the resistance at 82. False breakout: CL went up 50 ticks in a few seconds. Stoploss got executed 40 ticks higher. Lost 1000 dollars. Went LONG 1 contract, expecting the breakout to continue, but I was upset and didn't use a stoploss. The breakout didn't last (obviously since the CL was too overbought on a daily level) and prices came back down by 100 ticks in a few seconds, and I lost another 1000 dollars.
The first loss wasn't my fault (yet it was my fault that I was short 2 contracts), but from now on I'll have to be aware that if the support/resistance are really really good, there might be a false breakout that will cause all the stoplosses and the conditional orders to go off (thereby closing shorts and opening longs) and your stoploss order might not get executed at the price you expected (I use a stoploss at MKT, because it would be too dangerous to do otherwise). From now on I'll either have to stay out, or not use a stoploss. Or place a stoploss much lower, before the other guys and therefore before resistance (which I don't know if it makes sense).
The second loss would have made sense only with a stoploss and only if the CL hadn't been so overbought. Then, after losing all this money, it went back up to where I went short so I guess I wouldn't have lost anything by keeping it from the start and never using... bleah... I am so disgusted and depressed that I don't even want to think what could have been.
Now I have a bit over 3500, because this interesting lesson cost me 2000 dollars. So basically those three rules are still very valid, but I have to be careful when I am close to very very good support and resistance levels.
Now the first reaction would be to say "**** the stoploss", "**** support/resistance" and **** the ****ing diaz brokers. But the truth is that NOT using the stoploss has ****ed me over much more often than using it. Same applies to support and resistance, whose existence I ignored until recently. So I'll go back to patiently studying and trading support and resistance WITH a stoploss on the only contracts I can afford: the EUR and the GBP. I think I'll have to postpone my retirement by another six months. I've never had such a low balance since a year.
The picture below is from the simulated trading account but the trade was on the real account.
Yamato
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what trading suits me...
Ok, been practicing quite a bit. I opened a short trade on the CL, almost carelessly (that happens every time I lose 2000 dollars: I feel lighter). Probably I will make a 1000 dollars back by the end of the day.
Other than that, as I was saying, been practicing quite a bit on the demo account (with real prices). It's just great. I'm learning little by little what kind of trading suits me.
Tell you what. The 1 minute candles chart is not for me.
I've been making lots of money in the past two days on the demo account on the 2 days chart, 15 minutes candles. Take profit of about 0.6% and stoploss of about 0.3%.
Basically, every couple of hours, I look at my 9 symbols, and take a position, up or down. That's all. It takes me 5 minutes. There's no stress (of course partly because it's simulated trading). If it works for a few days, I'll just trade this way. It is using support and resistance and it is using trend.
http://fr.wikipedia.org/wiki/Henri_Salvador
Ok, been practicing quite a bit. I opened a short trade on the CL, almost carelessly (that happens every time I lose 2000 dollars: I feel lighter). Probably I will make a 1000 dollars back by the end of the day.
Other than that, as I was saying, been practicing quite a bit on the demo account (with real prices). It's just great. I'm learning little by little what kind of trading suits me.
Tell you what. The 1 minute candles chart is not for me.
I've been making lots of money in the past two days on the demo account on the 2 days chart, 15 minutes candles. Take profit of about 0.6% and stoploss of about 0.3%.
Basically, every couple of hours, I look at my 9 symbols, and take a position, up or down. That's all. It takes me 5 minutes. There's no stress (of course partly because it's simulated trading). If it works for a few days, I'll just trade this way. It is using support and resistance and it is using trend.
http://fr.wikipedia.org/wiki/Henri_Salvador
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