What's wrong with my system?

[FX Bandit]

Thanks FX, great advice; patience can indeed be a hard thing to master, so when I've learnt a bit more I'll certainly try to employ a technique of fading weaker setups.

Will study up on the James16 thread on Forex Factory too.

By the way, are PA bars just another word for Candles?

Sorry, bars are just another way of displaying the same information. A candle is just a bar with a solid "body" - they both show exactly the same thing, high. low, open close.

Some people say that they are different, but they aren't, hence my sloppy use of the names. I use candles because I prefer the way they look - they just stand out better in my opinion.

PA is just price action, so a PA bar / PA candle would be any of the price action set ups. For example, you might call a Pin bar / shooting star candle / hammer candle a "PA bar / PA candle".

Hope that's clear, let me know if not.

 

[oreo19]

Sorry, bars are just another way of displaying the same information. A candle is just a bar with a solid "body" - they both show exactly the same thing, high. low, open close.

Some people say that they are different, but they aren't, hence my sloppy use of the names. I use candles because I prefer the way they look - they just stand out better in my opinion.

PA is just price action, so a PA bar / PA candle would be any of the price action set ups. For example, you might call a Pin bar / shooting star candle / hammer candle a "PA bar / PA candle".

Hope that's clear, let me know if not.

Completely clear, thanks.

 

[timsk]

Had a look around, but no luck, could you point me in the right direction?

Hi oreo,
The thread by bbmac that kwickwool recommends is a good one and I too would recommend it - in due course. But why not start at the beginning? bbmac's thread is not for newbies, IMO. My recommendation would be to start with the 2nd link in my signature. That thread contains very specific step-by-step info', instructions and additional links which, hopefully, will provide you with a well rounded introduction to trading the financial markets. Try it and see and - if it falls short of your expectations - let me know and I'll do my best to improve it.
Tim.

 

[counter_violent]

Any possible guidance on the below guys?

oreo, your chart shows what is termed a "trend channel" .

http://www.investopedia.com/terms/c/channel.asp

 

[oreo19]

Thank Tim, will check out both!

 

[oreo19]

oreo, your chart shows what is termed a "trend channel" .

http://www.investopedia.com/terms/c/channel.asp

Ah, cheers!

 

[trader_dante]

It looks like a downward sloping support / resistance, but I'm guessing there's an actual term for this?

Any criticism on what I'm doing / learning / looking for is, as always, greatly appreciated.

If you've read my thread, you will know what to have expected once that broke out the TL you have on your chart

Have a look at the relationship between price and that line as time went by.

You then have one of the key foundations that mark the rhythmn of the market.

 

[TRADEFUTURES]

This game is not difficult at all. No disrepect intended to those that are struggling.

The key is to do less work. Sitting infront of a screen 14 hours a day does not make good trading. Risking more than 1.5%-2% on any trading idea is just plain silly. Exposing more than 8-10% of your trading account in a period of 4 weeks is silly.

Intra day / short term trading should be considered a hobby...not an occupation, unless you're flipping 8 to 9 figure transactions, which is highly unlikely if you're a retail player.

There is good volatility and bad volatility. Avoid bad volatility...and yes thats intra day volatilty that must be avoided otherwise you will lose again and again even though your view of the market will probably be spot on.

Harness and exploit good volatility, and yes i'm referring to setting yourself up to capture larger moves in a multitude of markets over periods of weeks and months.

Setting yourself up for good volatiilty means that you must make drastic changes...1st change is to STOP intra day trading.

2nd. Cut your stakes right down.
3rd. Utilise much larger stops while ensuring that no more than 1-2% of your trading account is at risk for any given trade.
4th. Expect to be holding positions for potentially months...yes this is boring...but successful trading is boring...if you want thrills go to the casino or start to day trade with leverage (tight stops / high stakes).
5th. Do your research and analysis when the markets are closed.
6th. Make your descisions & Order your trades on the weekend - its really OK to ONLY order 1 trade a week.
7th. Let your losing trades stop out at the predefined risk tollerances.
8th. Let your winning trades run...yes expect them to run for potentially months.
9th. NEVER manually close a winning trade. If the trade is in profit, move stops up to eliminate risk. Move stops up to lock in profit...but there is no rush to do this as you will be relaxed knowing that you only have 1-2% at risk. This 1-2% risk can potentially return 5-25%..maybe more.

TAKE SOME TIME TO BUILD A SMALL PORTFOLIO TO WORK ON. - Research / analysis should not take more than 2-3 hours on the weekend.

AIM TO BUILD A PORTFOLIO OF 'OPEN' PROFITABLE POSITIONS...LET LOSING TRADES STOP OUT.

DON'T WASTE YOUR TIME WATCHING THE MARKETS DURING THE WEEK.

DON'T EVEN WASTE YOUR TIME TRYING TO TRADE THE MARKETS IF YOU HAVE LESS THAN £15K-£20K OF CASH FUNDS THAT YOU CAN AFFORD TO FORGET ABOUT FOR ATLEAST 6-12 MONTHS.

DON'T EVEN THINK ABOUT TRADING AS A MEANS TO PAY FOR ROUTINE EXPENDITURE SUCH AS LIVING EXPENSES FOR ATLEAST THE FIRST 12 MONTHS.

90-95% of intra day / short term traders lose...This is a realistic statistic

The 5-10% that succeed and that will continue to succeed...well you know how they trade now!...expect 150-300% annual returns...day traders / short term traders try to make 150-300% returns quarterly...thats why they blow up time and time again....

peace!!!

 

[leonarda]

This game is not difficult at all. No disrepect intended to those that are struggling.

The key is to do less work. Sitting infront of a screen 14 hours a day does not make good trading. Risking more than 1.5%-2% on any trading idea is just plain silly. Exposing more than 8-10% of your trading account in a period of 4 weeks is silly.

Intra day / short term trading should be considered a hobby...not an occupation, unless you're flipping 8 to 9 figure transactions, which is highly unlikely if you're a retail player.

There is good volatility and bad volatility. Avoid bad volatility...and yes thats intra day volatilty that must be avoided otherwise you will lose again and again even though your view of the market will probably be spot on.

Harness and exploit good volatility, and yes i'm referring to setting yourself up to capture larger moves in a multitude of markets over periods of weeks and months.

Setting yourself up for good volatiilty means that you must make drastic changes...1st change is to STOP intra day trading.

2nd. Cut your stakes right down.
3rd. Utilise much larger stops while ensuring that no more than 1-2% of your trading account is at risk for any given trade.
4th. Expect to be holding positions for potentially months...yes this is boring...but successful trading is boring...if you want thrills go to the casino or start to day trade with leverage (tight stops / high stakes).
5th. Do your research and analysis when the markets are closed.
6th. Make your descisions & Order your trades on the weekend - its really OK to ONLY order 1 trade a week.
7th. Let your losing trades stop out at the predefined risk tollerances.
8th. Let your winning trades run...yes expect them to run for potentially months.
9th. NEVER manually close a winning trade. If the trade is in profit, move stops up to eliminate risk. Move stops up to lock in profit...but there is no rush to do this as you will be relaxed knowing that you only have 1-2% at risk. This 1-2% risk can potentially return 5-25%..maybe more.

TAKE SOME TIME TO BUILD A SMALL PORTFOLIO TO WORK ON. - Research / analysis should not take more than 2-3 hours on the weekend.

AIM TO BUILD A PORTFOLIO OF 'OPEN' PROFITABLE POSITIONS...LET LOSING TRADES STOP OUT.

DON'T WASTE YOUR TIME WATCHING THE MARKETS DURING THE WEEK.

DON'T EVEN WASTE YOUR TIME TRYING TO TRADE THE MARKETS IF YOU HAVE LESS THAN £15K-£20K OF CASH FUNDS THAT YOU CAN AFFORD TO FORGET ABOUT FOR ATLEAST 6-12 MONTHS.

DON'T EVEN THINK ABOUT TRADING AS A MEANS TO PAY FOR ROUTINE EXPENDITURE SUCH AS LIVING EXPENSES FOR ATLEAST THE FIRST 12 MONTHS.

90-95% of intra day / short term traders lose...This is a realistic statistic

The 5-10% that succeed and that will continue to succeed...well you know how they trade now!...expect 150-300% annual returns...day traders / short term traders try to make 150-300% returns quarterly...thats why they blow up time and time again....

peace!!!

i've come to this conclusion as well over my 2 years of learning this stuff...
intra-day is far too stressful and unnecessary (and not possible!) for me. I trade stocks, typically in a trade for 1-3 months, but my aim is to capture the big moves and let them run and cut the losers quickly. For example, this week has been fantastic for me, the previous 4 weeks I suffered a drawdown of about 10%, but this week the remaining "good" runners that I am in just moved big time gaining 15% of my (small) account in the last 3 days. I'm currently in FENR, GKN, BT, HOC, ECM, FXPO.

So in summary, agree with everything above...

 

[oreo19]

If you've read my thread, you will know what to have expected once that broke out the TL you have on your chart

Have a look at the relationship between price and that line as time went by.

You then have one of the key foundations that mark the rhythmn of the market.

Thanks for contributing trader_dante, still reading through the thread, haven't finished it by any means - there's a lot to get through! I'll get there eventually. Free time is not in abundance for me atm hence the late reply

This game is not difficult at all. No disrepect intended to those that are struggling.

The key is to do less work. Sitting infront of a screen 14 hours a day does not make good trading. Risking more than 1.5%-2% on any trading idea is just plain silly. Exposing more than 8-10% of your trading account in a period of 4 weeks is silly.

Intra day / short term trading should be considered a hobby...not an occupation, unless you're flipping 8 to 9 figure transactions, which is highly unlikely if you're a retail player.

There is good volatility and bad volatility. Avoid bad volatility...and yes thats intra day volatilty that must be avoided otherwise you will lose again and again even though your view of the market will probably be spot on.

Harness and exploit good volatility, and yes i'm referring to setting yourself up to capture larger moves in a multitude of markets over periods of weeks and months.

Setting yourself up for good volatiilty means that you must make drastic changes...1st change is to STOP intra day trading.

2nd. Cut your stakes right down.
3rd. Utilise much larger stops while ensuring that no more than 1-2% of your trading account is at risk for any given trade.
4th. Expect to be holding positions for potentially months...yes this is boring...but successful trading is boring...if you want thrills go to the casino or start to day trade with leverage (tight stops / high stakes).
5th. Do your research and analysis when the markets are closed.
6th. Make your descisions & Order your trades on the weekend - its really OK to ONLY order 1 trade a week.
7th. Let your losing trades stop out at the predefined risk tollerances.
8th. Let your winning trades run...yes expect them to run for potentially months.
9th. NEVER manually close a winning trade. If the trade is in profit, move stops up to eliminate risk. Move stops up to lock in profit...but there is no rush to do this as you will be relaxed knowing that you only have 1-2% at risk. This 1-2% risk can potentially return 5-25%..maybe more.

TAKE SOME TIME TO BUILD A SMALL PORTFOLIO TO WORK ON. - Research / analysis should not take more than 2-3 hours on the weekend.

AIM TO BUILD A PORTFOLIO OF 'OPEN' PROFITABLE POSITIONS...LET LOSING TRADES STOP OUT.

DON'T WASTE YOUR TIME WATCHING THE MARKETS DURING THE WEEK.

DON'T EVEN WASTE YOUR TIME TRYING TO TRADE THE MARKETS IF YOU HAVE LESS THAN £15K-£20K OF CASH FUNDS THAT YOU CAN AFFORD TO FORGET ABOUT FOR ATLEAST 6-12 MONTHS.

DON'T EVEN THINK ABOUT TRADING AS A MEANS TO PAY FOR ROUTINE EXPENDITURE SUCH AS LIVING EXPENSES FOR ATLEAST THE FIRST 12 MONTHS.

90-95% of intra day / short term traders lose...This is a realistic statistic

The 5-10% that succeed and that will continue to succeed...well you know how they trade now!...expect 150-300% annual returns...day traders / short term traders try to make 150-300% returns quarterly...thats why they blow up time and time again....

peace!!!

Thanks for the advice!

Seems to make complete sense, but for the immediate future I can't plan to trade with the above mentioned amounts (15 - 20k). Is there any one who can vouch for long-term success intra-day trading with smaller amounts? Or is the general consensus that the odds would be far too stacked against me?

 

[TRADEFUTURES]

The odds are stacked against you especially if you're undercapitalized & inexperienced.

To intra-day trade IMO you'll need atleast 10k in cash funds. You can open accounts with far less cash, but this necessarily is not a good thing as you're likely to blow the account, then fund another account and blow it again. (Trading on margin can become trickey if you don't know what you're doing.)

Specifically, intra-day trading is a very very very elite sport. You gotta be completely switched on to achieve consistent account growth. You gotta exhibit the right mindset on a personal level. You gotta be prepared to sit infront of a screen for several hours a day. You gotta be prepared to lose significant chunks of your capital on a daily basis and then come back to your desk for potentially more beatings. You gotta be militantly decisive on whether you get in or get out....bottom line is that you gotta be a natural born killer otherwise you will die everyday. 90% of people can't handle the pain and are pushed over the edge and end up chasing intra-day losses which results in more damage to their account. It can quite easily become a nasty spiral.

Fools rush in.

You'd be better off waiting until you have the correct level of funds, and then trading on a larger time frame of weekly, rather than intra-day ; and once you've got a grasp of what drives a variety of markets, you can then start to look at shorter time frames.

If you're adamant to jump into the ring with heavy weight thugs & pick pockets (intra-day trading), then you'll need a crash course in kung fu, otherwise they'll eat you alive. If you take this route to intra-day trading, you'll need intensive vocational training, this also present hazards as most training service providers are failed traders themselves, and all they are doing is recovering their career losses from the coaching fee you pay them. There are good services out there, but as most people fail to succeed intra-day trading, there are few good and far between.

If you decide to opt for intra-day vocational training, then it is imperative that you chose a vendor that has atleast 10 plus years in the game, & that can substansiate atleast 6-12 months of trading statements which you can verify with their broker. Bear in mind that third party testimonials & recommendations can be false, therefore you must perform your own due diligence by verifying the trading history of the prospective vocational trainer so that you ensure that you won't be taught useless skills & bad trading habits.

In the mean time, I think you should consider constructing a portfolio of instruments to watch and eventually trade as part of your trading plan, this will give you an angle to observe what drives markets and how they effect each other.

Check out this website, the futures section gives you slightly delayed snapshots of what's up, what's down, what's hot & what's not. : www.finviz.com (it's free).

Good luck!

 

[LiamH]

Some excellent advice there but I wouldn't agree about account size. If you're planning to only trade Forex then by far and away the best thing to do first is open a micro account. With $2-500 at $0.10 per point you will learn an awful lot.

Throwing £10K at a trading account first time out may have been the only option 10 years ago but now, with micro accounts all over the place opening an account of this size before proving yourself as a profitable trader first would be stupid.

I believe that most traders at least blow their first account whatever the size... It is just part of the learning curve... From what I've read the ones who are immediately profitable are very few and far between...

 

[TRADEFUTURES]

Some excellent advice there but I wouldn't agree about account size. If you're planning to only trade Forex then by far and away the best thing to do first is open a micro account. With $2-500 at $0.10 per point you will learn an awful lot.

Throwing £10K at a trading account first time out may have been the only option 10 years ago but now, with micro accounts all over the place opening an account of this size before proving yourself as a profitable trader first would be stupid.

I believe that most traders at least blow their first account whatever the size... It is just part of the learning curve... From what I've read the ones who are immediately profitable are very few and far between...

True say, you need less money to trade just FX.
However, IMO, a good portfolio should contain more than just currency exposure.

Commodities, Bonds, Currencies & Equities should be included in the arsenal.

A slice of each in a portfolio would allow risk extention as well as opportunities to hedge out risk in underlying instruments, while profitable positions are allowed to breathe, the losers would be allowed to stop dead at pre-defined risk tollerances.

Again my opinion is that Oreo would do better to take the approach of trading on a larger time frame of atleast a week, rather than focussing on the intra-day trading of just one asset class or even just one instrument.

As he becomes more familiar with larger time frames, he could zoom in to smaller TF's if he so chooses.

IMO new traders make the unforgiving mistake of trading smaller time frames before learning about the big picture (larger time frames). Larger time frames should be traded and studied before shorter term price action is even considered.

 

[rathcoole_exile]

but for the immediate future I can't plan to trade with the above mentioned amounts (15 - 20k). Is there any one who can vouch for long-term success intra-day trading with smaller amounts? Or is the general consensus that the odds would be far too stacked against me?

take a look at using WEEKLY Pivot Points as pre-defined Entries and Exits.
Takes a lot of the guess work out.
And if price doesn't hit your trigger, no trade.

So, occasionally, you might wait all week and get no trades. Believe me, thats 100% better than jumping all over the place with some harum scarum intra-day trading BS

Other weeks, you might get as many as 5 or 6 trades.

But the point is that having pre-determined levels
(whether they are Pivot Points, Round Numbers, previous Week Hi/Los, whatever) creates discipline, which is one of the biggest weapons you can have in your armoury.

 

[Chartsy]

yeh i agree rathcoole, i used to try and find a way of riding every trend and pyramiding without much drawdown.
now i just see the trend, wait for a pullback to s/r, wait for the signal ( pin bars are great) and target the previous retracement's high/low. set and forget. for sometimes really good r/r....