# Triggering stop runs



## Naked shorts (20 December 2008)

Anyone had any experience doing this?
How do you know when to do it? and how risky can it be?

(I'm interested in opinions for any market)


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## tech/a (21 December 2008)

Sorry dont understand the question?


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## chops_a_must (21 December 2008)

tech/a said:


> Sorry dont understand the question?




People deliberately collapsing markets to get a cascade in their direction. Or the opposite of course.

MRC might know of a few people that put a heap of lots into some key support and watched the markets roll over...


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## tech/a (21 December 2008)

Ah I see.

Pretty common if they have enough on the other side of the trade.


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## chops_a_must (21 December 2008)

Yeah, it's pretty noticeable when you watch it.

A lot of short sharp moves, especially through support. Obviously has massive risks on the other side if someone bites back...


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## MRC & Co (21 December 2008)

chops_a_must said:


> Obviously has massive risks on the other side if someone bites back...




Yeh, there is definately big risk.  Some big institutional prop divisions sometimes try take other traders lots and squeeze them out (since the instos have more risk tolerance).  Unfortunately for them, it didn't work too well and they are shutting up shop.  

I would say most times people trigger stops are in pauses on a trend, you get sudden, violent sqeueezes the other way, sometimes simply guys wanting to get onto the trend at better prices.


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## kam75 (21 December 2008)

I've done it a number of times but not for the purpose to take advantage of short term moves.  There's no way of knowing how the market will respond on a break of resistance or support.  What you're describing is a ''hope trade''.  You're hoping there will be enough buy or sell stops to trigger a sufficient run.  Hope trades rarely lead to profits.  But like I said before, trading is about consistency.  If you can consistently pull money that way, keep doing it!!

regards


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## Cartman (21 December 2008)

Naked shorts said:


> Anyone had any experience doing this?
> How do you know when to do it? and how risky can it be?
> 
> (I'm interested in opinions for any market)




Forex is the best vehicle for this; becoming one of my favorite trades  Not always the stops being chased either;  smart money punishing the breakout traders will give you some of the best R/R in 1 minute you will ever see


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## MRC & Co (21 December 2008)

kam75 said:


> What you're describing is a ''hope trade''.  You're  Hope trades rarely lead to profits.  But like I said before, trading is about consistency.  If you can consistently pull money that way, keep doing it!!
> 
> regards




Every trade is a hope trade, if it was guaranteed, what would be the fun?


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## Cartman (21 December 2008)

MRC & Co said:


> Every trade is a hope trade, if it was guaranteed, what would be the fun?





Agree.  whats more risky fading a 50 point spike at the end of a cycle that happened in 30 seconds or buying a higher high that took 2 hours to get there  i take the fade everytime


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## MRC & Co (21 December 2008)

Sounds like your learning well Cartman 

If you want to get on the trend, buy the HL.  Fading sudden, sharp movements, is usually a good bet, but takes big ballz, going against natural instincts.


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## Wysiwyg (21 December 2008)

Cartman said:


> Agree.  whats more risky fading a 50 point spike at the end of a cycle that happened in 30 seconds or buying a higher high that took 2 hours to get there  i take the fade everytime




Gee, you must sit there fingering your mouse for the whole session.


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## Cartman (21 December 2008)

MRC & Co said:


> Sounds like your learning well Cartman




Y thankyou Mirc; i listen to those worth listening to 



MRC & Co said:


> If you want to get on the trend, buy the HL.  Fading sudden, sharp movements, is usually a good bet, but takes big ballz, going against natural instincts.




i hope people just listened to that Mirc 



Wysiwyg said:


> Gee, you must sit there fingering your mouse for the whole session.




 my relationship with my mouse is personal Wysi; 

seriously though a lot of these moves happen right at the end of a cycle so u dont have to be hanging about all night to pick up a few (on FX) but as Mirc says big ballz can be required  and you must have a contingency plan if it goes wrong


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## Naked shorts (21 December 2008)

So is there a way to see where people have their stops?


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## MRC & Co (21 December 2008)

Naked shorts said:


> So is there a way to see where people have their stops?




LOL.  Is that a joke?

Maybe if your the bucket shop.

If we gap up or down, out of the previous days range, you can bet your bottom dollar there is likely to be stops on the other side of that high/low from the previous day.  That's probably the most obvious level I think.


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## RobinHood (21 December 2008)

no.

you have to feel them out. An intimate knowledge of your market, its players and their risk appetite would help -- and the size to move it.


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## RobinHood (21 December 2008)

MRC&CO said:
			
		

> Some big institutional prop divisions sometimes try take other traders lots and squeeze them out (since the instos have more risk tolerance). Unfortunately for them, it didn't work too well and they are shutting up shop.




They did this in in exchange traded instruments? 
Do you know if this is the reason they are shutting shop? -- and not because their losses from other divisions.


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## Naked shorts (21 December 2008)

MRC & Co said:


> LOL.  Is that a joke?



No, MRC. No it isnt.



MRC & Co said:


> If we gap up or down, out of the previous days range, you can bet your bottom dollar there is likely to be stops on the other side of that high/low from the previous day.  That's probably the most obvious level I think.




I got the idea for this thread when I saw a run triggered in this fashion the other day. I did well of it too


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## chops_a_must (21 December 2008)

MRC & Co said:


> LOL.  Is that a joke?
> 
> Maybe if your the bucket shop.
> 
> If we gap up or down, out of the previous days range, you can bet your bottom dollar there is likely to be stops on the other side of that high/low from the previous day.  That's probably the most obvious level I think.




And conversely, you'll usually get strong resistance/ support from these levels as they come back through.


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## MRC & Co (21 December 2008)

Good work Naked, good pick up!

Robin, just know a few prop divisions are shutting down, not profitable at the moment apparently.  But one inparticular was doing what I was talking about on the last page.


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## Cartman (21 December 2008)

MRC & Co said:


> LOL.  Is that a joke?
> 
> Maybe if your the bucket shop.
> 
> If we gap up or down, out of the previous days range, you can bet your bottom dollar there is likely to be stops on the other side of that high/low from the previous day.  That's probably the most obvious level I think.





Hey Mirc, may be showing my ignorance here but i thought the big players had a record of the retail traders stop positions?


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## MRC & Co (21 December 2008)

Cartman said:


> Hey Mirc, may be showing my ignorance here but i thought the big players had a record of the retail traders stop positions?




ha ha, na.


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## Cartman (21 December 2008)

MRC & Co said:


> ha ha, na.





i hate you !!!!!!!


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## Cartman (21 December 2008)

Cartman said:


> i hate you !!!!!!!





X2 ----


 my world has been devastated


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## MRC & Co (21 December 2008)

ha ha ha.

If you figure out a way, let me know!


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## Cartman (21 December 2008)

MRC & Co said:


> ha ha ha.
> 
> If you figure out a way, let me know!




i have a cunning plan 

i know somebody that works at Comsec  

are you in?? 

forgot to mention ---- small initial installment to be part of the club ----- only $10,000 

i take cheques !!


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## Naked shorts (21 December 2008)

Cartman said:


> forgot to mention ---- small initial installment to be part of the club ----- only $10,000
> 
> i take cheques !!




Give $10k to some dude on a forum???


...sure, why not


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## Cartman (21 December 2008)

Naked shorts said:


> Give $10k to some dude on a forum???
> 
> 
> ...sure, why not




Sweeet ------ ill post a receipt on the last day of business next month (give or take a month or two)   now where are the goddamn keys to the porche


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## kam75 (22 December 2008)

MRC & Co said:


> Every trade is a hope trade, if it was guaranteed, what would be the fun?




I don't trade hope trades.


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## MRC & Co (22 December 2008)

kam75 said:


> I don't trade hope trades.




So you are completely emotionless?

Even a mechanical trader, hopes his system works well.

_To look forward to with desire and reasonable confidence._


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## Cartman (22 December 2008)

MRC & Co said:


> So you are completely emotionless?
> 
> [/I]





im completely emotionless ------

goddamn it where are the goddamn keys to my porche -----

sorry got a bit emotional there for a second 

sorry about that !!

so Kambo --- no hope trades eh --- i assume you set VERY tight stops then ?? (serious question)


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## tech/a (22 December 2008)

Those trading a positive expectancy method will see each trade as "Doing Business".

It will be without emotion.


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## Cartman (22 December 2008)

tech/a said:


> Those trading a positive expectancy method will see each trade as "Doing Business".
> 
> It will be without emotion.





welcome back Techno -- i hope u got me something nice for Xmas 

so when u have a trade running and it bombs out to within a point of yr stop, u dont even hope for a second that it might recover?? ---- U dont get even a little pi**ed off that the trade was a crapper??  ----- i sure do !!


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## MichaelD (22 December 2008)

Cartman said:


> so when u have a trade running and it bombs out to within a point of yr stop, u dont even hope for a second that it might recover?? ---- U dont get even a little pi**ed off that the trade was a crapper??  ----- i sure do !!




I'll answer this as well methinks.

Nope, not even for a second. A small loss simply signifies that I'm one trade closer to the inevitable big winner, which invariably comes along when least expected. You just move on and take the next trade.

There are no cr*p trades, there are only trades.

If you are reacting emotionally like this to an individual losing trade then you have a problem that needs addressing.


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## Cartman (22 December 2008)

MichaelD said:


> I'll answer this as well methinks.
> 
> If you are reacting emotionally like this to an individual losing trade then you have a problem that needs addressing.




U got that right Mike ---- i have serious problems --- i was reading the forum earlier and i missed my long entry on the EUR/USD at 7.20 pm (IG time) --- and im still emotional about that  --- now ive gotta sit around and wait for another entry --- next one might be short though


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## tech/a (22 December 2008)

MichaelD said:


> I'll answer this as well methinks.
> 
> Nope, not even for a second. A small loss simply signifies that I'm one trade closer to the inevitable big winner, which invariably comes along when least expected. You just move on and take the next trade.
> 
> ...




Ditto.


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## Cartman (22 December 2008)

ditto to my post 35 as well


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## Cartman (22 December 2008)

i should post a chart showing my discontent


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## MRC & Co (22 December 2008)

tech/a said:


> Those trading a positive expectancy method will see each trade as "Doing Business".
> 
> It will be without emotion.






MichaelD said:


> If you are reacting emotionally like this to an individual losing trade then you have a problem that needs addressing.




How about multi-millionaire traders who have green days nearly every single day, swearing their azz off when trades go against them?  Just as one gets a good rush when they make a great trade or have a fantastic day.  While it's not good to let it get to you too much, experiencing the emotions that come with trading, is half the fun of it, just the same for any athlete in a sport.

Must not have a positive expectancy method.  All luck I reckon.


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## tech/a (22 December 2008)

Yeh.
Just like baiting the hook when fishing eh.
When you get a bite--what a rush!


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## Trembling Hand (22 December 2008)

Since I'm a punch drunk boxer on ICE 







MichaelD said:


> If you are reacting emotionally like this to an individual losing trade then you have a problem that needs addressing.




I don't really agree. We are emotion beings. We get frustrated, hopeful, disappointed & 100 other emotions whenever we try to achieve something, including trading.

Nothing wrong with that. It is the response and reaction to the emotions that count. In this spaced out junkie's MHO.


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## MRC & Co (22 December 2008)

tech/a said:


> Yeh.
> Just like baiting the hook when fishing eh.
> When you get a bite--what a rush!




ha ha ha.

In all honesty though, being completely emotionless is not normal to me, rather than vice-versa and I would love to see someone experiencing tough times in their trading, say they didn't have one bit of emotion pass through them.  That is only natural to the human psyche.

Saying those who experience emotions must not have a positive expectancy, is the typical mechanical and book junk.  Complete nonsense.  Tech, I respect your VSA and love most of your postings, but some of these kind of comments are just completely wrong.


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## Cartman (22 December 2008)

anyone that says they can trade with no emotional input is either kidding themselves or they are goddamn psychopath ----- psychopaths would make good traders but theyd probably kill their broker 

Tech and Mike ---- U cant even admit that you get a little pleasure when u close out a good trade for a nice profit ??

ps I missed the short on the Euro this time cause i was still reading the forum --- this site is costing me ---- and im getting very emotional about that --- now i gotta wait for the long again -- ill be up all night at this rate


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## MichaelD (22 December 2008)

Cartman said:


> Tech and Mike ---- U cant even admit that you get a little pleasure when u close out a good trade for a nice profit ??




OK, I'll admit to these. A nice multi-R winner DOES make me happy...for a short time (since drawdown usually follows), and trading errors (regardless of actual $ outcome) make me upset.

None of these emotions, however, will make me deviate one iota from my trading plans.


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## skyQuake (22 December 2008)

MichaelD said:


> OK, I'll admit to these. A nice multi-R winner DOES make me happy...for a short time (since drawdown usually follows), and trading errors (regardless of actual $ outcome) make me upset.
> 
> None of these emotions, however, will make me deviate one iota from my trading plans.




That's the crux of the issue isn't it? Emotions are fine as long as they do not overly influence how you trade. Otherwise you'll spend too much effort suppressing your emotions rather than concentrating on a trade.


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## Cartman (22 December 2008)

MichaelD said:


> OK, I'll admit to these. A nice multi-R winner DOES make me happy...for a short time (since drawdown usually follows), and trading errors (regardless of actual $ outcome) make me upset.
> 
> None of these emotions, however, will make me deviate one iota from my trading plans.




Thankyou Michael  honesty is respected  ---- and i respect you are true to your plan --- i confess im still a bit naughty sometimes


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## tech/a (22 December 2008)

> Saying those who experience emotions must not have a positive expectancy, is the typical mechanical and book junk.




Your words not mine.



> Those trading a positive expectancy method will see each trade as "Doing Business".




And they will. Everyone I know who does--does.

Sure a good win gives a warm fuzzy sence of satisfaction as does taking a stop or 2,3,5,10 in a row.
Or completing a nice profitable project (in business).
Or seeing an investment property double in 3 or so years.

But the point Michael (I think) and I are making is that our decisions and the results of those decisions are not emotion based.
I dont get Pizzed off because I missed a trade or I suffered slippage. It truely is business.


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## chops_a_must (22 December 2008)

kam75 said:


> I don't trade hope trades.




All trading is hope. All probability theory is, is a philosophy based on hope and faith, right to the fundamental level. Every trader is basing their decisions on this.



tech/a said:


> Those trading a positive expectancy method will see each trade as "Doing Business".
> 
> It will be without emotion.




Nope. All those with a positive expectancy will be hoping it carries on into the future.



MichaelD said:


> I'll answer this as well methinks.
> 
> Nope, not even for a second. *A small loss simply signifies that I'm one trade closer to the inevitable big winner, which invariably comes along when least expected.*



And thanks for giving the best example of hope in this thread.


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## MRC & Co (23 December 2008)

Yeh, that was my point Chops, but not put quite as well.

lol.

Hope does not mean you don't know what your doing and only have a small chance/probability, but one NEVER knows his exact probabilities or 'expectancy'.  It is forever changing, it's dynamic like the markets.  I think Michaels stats on his trend following system show this.  

If your on a great run, you hope it continues, it's simply the markets suiting your style.  If you begin to feel angry, you know it's time to take a walk or analyse your trading.  Emotions are only bad if you begin revenge trading, or getting greedy.  But experiencing emotions and 'feeling' is not a cardinal sin of trading as some like to make it out to be.

Ultimately, this may just come down to a discretionary V mechanical mindset.


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## Trembling Hand (23 December 2008)

MRC & Co said:


> But experiencing emotions and 'feeling' is not a cardinal sin of trading as some like to make it out to be.





Aaah!! You have crossed over to the dark side :evilburn: :vader:


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## Trembling Hand (23 December 2008)

LOL, "Give yourself to the dark side"


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## chops_a_must (23 December 2008)

MRC & Co said:


> Yeh, that was my point Chops, but not put quite as well.
> 
> lol.
> 
> Hope does not mean you don't know what your doing and only have a small chance/probability, but one NEVER knows his exact probabilities or 'expectancy'.



:

It's even more simple than that. The word expectatio, which is the basis of our words to do with expectancy, was a replacement for the word spes, meaning hope (de-spes = de-spair, literally, without hope) in the literature to do with probability.

And probability and decision theory was never ever meant to be quantifiable in an open ended 'game' like the markets are. 

This dogmatic view that you can apply an expectation onto the future, is absolute pure nonsense. It is the most absurd of all hopes, and the markets in the last 12 months, and Nizar's blog should do more than enough to disprove this sort of nonsense.

There are those that do everything they conceivably can do to eliminate this "hope", but all they do is reinforce it. And then there are those that acknowledge it, recognise it, and deal with it.


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## MRC & Co (23 December 2008)

Trembling Hand said:


> LOL, "Give yourself to the dark side"





ha ha ha ha ha ha ha ha ha ha ha ha ha.  ha ha ha ha ha ha ha ha ha ha.  Man, that brings back some memories of good times!  I am all dark side now and moving deeper and deeper into the realm!  :vader:

Agreed Chops.


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## Cartman (23 December 2008)

chops_a_must said:


> :
> 
> It's even more simple than that. The word expectatio, which is the basis of our words to do with expectancy, was a replacement for the word spes, meaning hope (de-spes = de-spair, literally, without hope) in the literature to do with probability.
> 
> ...




you are velly wise man oh great Chopsui san   --- we are humble in your plesence   --- preese tell us more  :bowdown:


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## MichaelD (23 December 2008)

chops_a_must said:


> This dogmatic view that you can apply an expectation onto the future, is absolute pure nonsense. It is the most absurd of all hopes, and the markets in the last 12 months, and Nizar's blog should do more than enough to disprove this sort of nonsense.




What extraordinarily myopic comments! For starters, as far as long term trend following goes in shares, to narrow down to such a short time frame as the last 12 months is egregiously wrong.


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## tech/a (23 December 2008)

> This dogmatic view that you can apply an expectation onto the future, is absolute pure nonsense.




What utter rubbish. Glad I dont work for you. My staff (who take a vital role in forward planning) would sack you on the spot. You would be seen as an employee who doesnt have the "culture" expected in our company. You certainly wouldnt earn a leadership role.

Said it before.
*Its a business.*

I have 3
A Civil Construction Business which is not run on hope but on a business plan of continued expansion. From our plan we expect expansion and increased profit.
Even in this so called period of hardship.We are currently up 10% on last year (Turnover) and 35% on profit according to figures for the last 6 mths.

Property.
Expectation and forward planning expect and are achieving growth--even now!

Trading
Expectation and forward planning expect and are achieving growth---even now.


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## MRC & Co (23 December 2008)

MichaelD said:


> What extraordinarily myopic comments! For starters, as far as long term trend following goes in shares, to narrow down to such a short time frame as the last 12 months is egregiously wrong.




There have been some periods in the past where the market has gone sideways for several years, I would call that a decent timeframe to be without any growing equity.

Why not adapt your system to suit current conditions?  Honest question.  Or will you wait in the hope that it begins to work once more in the not so distant future?  How do you know you won't be waiting for another decade+?  I remember the parameters of your system and thought it was very good, extremelly well thought out, but if it's not working, isn't it time to adapt, who knows what forward conditions will be and for how long, always have to try and exploit an edge in the current markets I reckon, Tech himself went to shorter-term trading and realised the value of shorting etc...........

Tech, I think Chops point is, you can plan as much as you want, but in the end, you cannot be SURE your current profits/expectancy will continue into the future, regardless of what has been prooven upto that point, there is always an element of hope. Sure you adapt, but that is bringing about a whole new expectancy, for which, at this current moment, you have no idea about.


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## tech/a (23 December 2008)

> isn't it time to adapt,




I agree with you on this point.
Adaptation is an intrugal part of continued growth.

One of my favorite quotes and one I have in the past found myself in is--

"Humans really are stupid creatures
They do the same thing day in and day out
and *EXPECT* a *DIFFERENT* result"



> you can plan as much as you want, but in the end, you cannot be SURE your current profits/expectancy will continue into the future,




I'll agree to the point that you cant be sure or certain but hope alone is no way to look at anything.
If you have a well laid out plan hope isnt or shouldnt be a part of it.


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## motorway (23 December 2008)

MichaelD said:


> What extraordinarily myopic comments! For starters, as far as long term trend following goes in shares, to narrow down to such a short time frame as the last 12 months is egregiously wrong.





This last year is the same size
as the the previous 7

12mths ? how does time trend
long term or short

what trends is not time
but events 

events can can have profound effects
through memory effects

Even if awareness of  events can  not be consciously remembered

eg Tree rings
climate
stock markets

long forgotten events ( causes ),
processes  have memory of.

time does not trend .
If you were never born ( event )
what use of time ?

2008 in events = the prior 7  years ( lot's of births )
They are the same size 

*There is symmetry there. In the coastline of prices.*
The way way down has been the same as the way up.
We profit from that coastline
not time...

motorway


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## MRC & Co (23 December 2008)

tech/a said:


> I'll agree to the point that you cant be sure or certain but hope alone is no way to look at anything.
> If you have a well laid out plan hope isnt or shouldnt be a part of it.




Which means you are looking forward with a faith and trust, which all comes back to hope.


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## MichaelD (23 December 2008)

MRC & Co said:


> Why not adapt your system to suit current conditions?




Because the system is producing exactly the results I expect it to produce in the current conditions. It was designed for optimal return from the markets over the long term. Any adaptations forced on it will lower long term system expectancy.

i.e. It's not broke so it doesn't need fixing.


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## MRC & Co (23 December 2008)

MichaelD said:


> Because the system is producing exactly the results I expect it to produce in the current conditions. It was designed for optimal return from the markets over the long term. Any adaptations forced on it will lower long term system expectancy.
> 
> i.e. It's not broke so it doesn't need fixing.




Ok, fair point.

But this is based purely on the assumption the markets will begin trending again before you pass maximum system drawdown?


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## MichaelD (23 December 2008)

MRC & Co said:


> Ok, fair point.
> 
> But this is based purely on the assumption the markets will begin trending again before you pass maximum system drawdown?




Yes, this is correct - the explicit assumption is that maximum system drawdown will not be reached, that sufficient trends exist within all markets at all times for this to hold true.


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## chops_a_must (23 December 2008)

Lol.

Some people are lacking some pretty basic comprehension.


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## Cartman (23 December 2008)

tech/a said:


> What utter rubbish. Glad I dont work for you.




Chopso may feel the same : ---- 



tech/a said:


> My staff (who take a vital role in forward planning) would sack you on the spot. You would be seen as an employee who doesnt have the "culture" expected in our company. You certainly wouldnt earn a leadership role.




re the dogmatic forward looking view ---- dont agree with the parallel between the market (where we have no control) and running a private business where you pay/control the staff and impart your way of doing stuff on them (or they get fired) ---- 

i think forward testing is more useful than back testing --- closer to the pulse


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## chops_a_must (23 December 2008)

tech/a said:


> What utter rubbish. Glad I dont work for you. My staff (who take a vital role in forward planning) would sack you on the spot. You would be seen as an employee who doesnt have the "culture" expected in our company. You certainly wouldnt earn a leadership role.




It's that exact attitude that got us into this mess, and exactly the sort of attitude people like Taleb have railed against, and what I am getting at.

"It can't be any different because our models don't say it" seems pretty pervasive, even in that spiel you reeled off there.

Acknowledging that future outcomes have a basis in hope, is not the same as doing things without attributing some level of justification to decisions made. But they are both based in hope, to some extent, regardless.



MichaelD said:


> What extraordinarily myopic comments! For starters, as far as long term trend following goes in shares, to narrow down to such a short time frame as the last 12 months is egregiously wrong.




It's more that he is operating the system although it is working outside its parameters, and appears to not have taken stops at certain times. To me, that is hope. "It is not a 'normal' market" therefore I will keep going with it in the _hope_ it will work once again, is the kind of attitude I'm getting at. You see? But it was hope that started him operating his system - the hope the system would perform as he felt it should, and it is hope that is still the basis of him operating it.

By the way, I thought you were at maximum draw down in January? Or was that just one system?


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## MichaelD (23 December 2008)

chops_a_must said:


> By the way, I thought you were at maximum draw down in January?




It was close to maximum drawdown, yes, but then there was a run of winners in Iron Ore and Oil (and some other area which I forget now - fertilizers I think) which reset the counters.


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## chops_a_must (23 December 2008)

So by reset the counters, you mean your max drawdown isn't peak to trough but longest losing streak? Or do you mean it isn't near that thanks to those winners in between?


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## tech/a (23 December 2008)

If I hop in my car and put it in first gear I know I'm going to go forward.
If I have more income than expenditure then I'll have a surplus.
If I have more winners than losers OR Bigger aggregate winners than aggregate losers then I'll be profitable.

I'm not hoping that something will happen in any of the above.
I know it will----if it doesnt Ive failed,if it does I have succeeded.
Dont have to hope.
Why cant you accept that some can and do live in black and white (Success or failure) and not in areas of grey (hope)?

You can all hope if you wish. I just dont hope.
I dont hope my wife loves me---I make sure she has a great life--that works.
I dont hope I'm healthy--I look after food and exercise--I dont do stress.
I dont hope I'm successful---I take positive steps to be successful--that also works.
I dont hope my next trade is profitable---I take steps to limit risk and maximise profit---that also works.

I dont hope you all agree with me---you will or you wont--thats fine and works for me.


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## chops_a_must (23 December 2008)

If I put it into first, I hope the tailshaft hasn't fallen out so I can go forward.

See... there are so many steps you are missing.

You hope you'll have more income than expenditures. These are all assumptive propositions and statements that we deal with in a day to day life.

But when you break it down, you can see that there is always more underlying.

Because we don't live in black and white. Life isn't like that.

You can also replace the word "expect" with "hope" in sentences and it will still retain a very similar meaning.


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## MRC & Co (23 December 2008)

tech/a said:


> You can all hope if you wish. I just dont hope.
> 
> I dont hope I'm healthy--I look after food and exercise--I dont do stress.




That's a big call.  

I hope your healthy, many times, food, exercise and no stress won't make a difference.  If you came down with something grave, I would like to hear your comments then.  

The entire trading arena to me, as with all of life, is nearly completely grey.

Guess we just have completely different outlooks, so I will leave it at that.


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## tech/a (23 December 2008)

One question.

Has hoping ever altered an outcome for you?
If so how?
If not then whats the point of hoping?


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## chops_a_must (23 December 2008)

Has expecting?


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## MRC & Co (23 December 2008)

tech/a said:


> One question.
> 
> Has hoping ever altered an outcome for you?
> If so how?
> If not then whats the point of hoping?




It's simply an emotion.

I'm sure those who contract a debilitating disease, hope for a cure, does that help them?  YES.  

When has not hoping altered an outcome for you?  Exactly what you describe you have achieved in your 'successful life' can be achieved by those who hope (I'm still unsure if it's possible to turn hope off, it is a natural instinct).  

This has really got off the trading topic. ha ha.  But interesting.


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## tech/a (23 December 2008)

Ok see both your points--well at least I hope I do.


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## chops_a_must (23 December 2008)

tech/a said:


> Ok see both your points--well at least I hope I do.




I hoped you were going to say that.


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## MRC & Co (23 December 2008)

ha ha, I hope you all have a merry xmas fellas.  

I look forward to it with desire and reasonable confidence.


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## Cartman (23 December 2008)

MRC & Co said:


> ha ha, I hope you all have a merry xmas fellas.
> 
> I look forward to it with desire and reasonable confidence.





well i gotta say the last few posts were just beeudiful  and merry xmas to yas all too

ps in relation to the thread topic --- what the crap was going on with the futs this arvo --- 200 point yo yo in a minute --- anyone game enuff to short the spike at the close? --- woulda been a good trade --- the yo yo was on steroids so i thought better of it --- good move


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## MichaelD (23 December 2008)

chops_a_must said:


> So by reset the counters, you mean your max drawdown isn't peak to trough but longest losing streak? Or do you mean it isn't near that thanks to those winners in between?




Max drawdown is indeed measured peak-to-trough, but since there was a run of winners a new equity peak was reached (as well as the # of losers in a row count being reset).


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## lindsayf (23 December 2008)

MRC & Co said:


> Sounds like your learning well Cartman
> 
> If you want to get on the trend, buy the HL.  Fading sudden, sharp movements, is usually a good bet, but takes big ballz, going against natural instincts.




can someone spell out what "fading a sharp move" actually entails please ...is it going short into the 'hoped' for 'top' of a bull momentum run for eg??   

what an enjoyable thread!  have a good break all..


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## Naked shorts (23 December 2008)

lindsayf said:


> can someone spell out what "fading a sharp move"  is



Its when you take the opposite position of the move.

i.e. if it shoots up, you short it.
if it tanks, you buy it

google investopedia, it will give you definitions for all things trading


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## lindsayf (23 December 2008)

thought so
appreciated...thanks!


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## Cartman (28 December 2008)

For anyone whos interested -- about a week or so of forward testing on what i call Spike Plays -- mainly EUR/USD

results are on a live account (not demo)--- mini contracts only atm --- early days but the %% certainly have my interest   29 trades --- 25 positive 4 negative

equity curve etc attached


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## MRC & Co (28 December 2008)

Interesting Cartman.

Good win %!  What is your average win and average loss?

Also, how do you define your 'spike plays'?  After a certain pip move in one direction within a certain amount of time?  Where do you place initial stops and how do you trail them or exit?  Or is it simply more feel than anything?


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## Cartman (28 December 2008)

MRC & Co said:


> Interesting Cartman.
> 
> Good win %!  What is your average win and average loss?
> 
> Also, how do you define your 'spike plays'?  After a certain pip move in one direction within a certain amount of time?  Where do you place initial stops and how do you trail them or exit?  Or is it simply more feel than anything?




hi Mirc, hope u had a good Xmas ---- pretty much as you indicate --- time relative to depth/height of spike --- position of cycle v important --- (1 minute charts for trend/1 second charts for entries

very early in testing so not getting too worked up over the results ---
more interested in % than actual figures atm due to testing with mini lots--  

---average net loss relative to average net win as a percentage is 61% --- so even a 50/50 win loss ratio would be very profitable --- 

the current 86% win strike rate is   wonder what that might be after another cupla hundred trades  --- interesting exercise though


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## MRC & Co (28 December 2008)

Yeh xmas was good, hope the same for you Cartman.

Those are some good stats, your win% will probably not remain so high, but still that is excellent with an average winner larger than an average looser.

Just don't let losses run offside too far, as one big loss outlier is a killer for the equity curve.  But your equity curve looks very good, so looks like you cut losses reasonably quick already.

Using 1 second charts for entry, is perfect for the EUR/USD, same as using the order book, but I'm not sure for currency pairs that you can get exact depth.

Excellent stuff.  Keep us updated.


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## tech/a (28 December 2008)

Cartman.

Very small D/D do you run without stops?
Whats the average win/average loss in pips?
Is it both long and short?
Whats your average hold time?
How long did it take to trade your 29 trades.


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## Cartman (28 December 2008)

MRC & Co said:


> Yeh xmas was good, hope the same for you Cartman.




too much food --too much alcohol --  yeah pretty good Xmas 



MRC & Co said:


> Those are some good stats, your win% will probably not remain so high,




totally agree --- no false illusions on the small amount of trades so far --- and as a follow up on that my software showed the % average loser to be only 60 ish% of the average winner --- but in fact the actual pips per trade were similar as mentioned below to Tech --- i think the software included the B/even trade  two cancelled trades as part of the loss % which made it appear better than it was so the average pips lost/won per trade were similar --- the high win % was the difference --- hope that makes sense



MRC & Co said:


> Just don't let losses run offside too far, as one big loss outlier is a killer for the equity curve.




yeah - probably my main reservation at this stage -- my third trade was a real crapper --- 18 pip loss in quick fashion -- but to be expected due to the nature of the system i spose  --- position sizing and staking plan need to be adjusted to suit






tech/a said:


> Cartman.
> 
> Very small D/D do you run without stops?
> Whats the average win/average loss in pips?
> ...




howdy Tech, these types of trades usually happen really quick so its either in or out --- stop losses have so far been discretionary which is working well atm --- would not take a trade like this unless happy to sit glued to the screen though

average pip loss is 4 trades/33 pips = bit over 8 pips/trade

average pip win is 25 trades/174 pips = bit under 7 pips per trade 

so pretty much B/Even on that score --- so far the advantage has been the % winners vs losers at over 85%  

long vs short % pretty much the same--

average hold time ----   shortest trade was about 5 seconds (2 pip win) --- longest trade about about 18 minutes (break even trade )

28 of the 29 trades were made between the 19th and 24 th December

for the record what im trying to do here is find an advantage in the spike plays and marry it into my regular system which is a little more conservative --- so far these trades which on face value require heavier ballz  are actually proving to be less risky --- very early days though --- forex can be a nasty beast --


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## tech/a (28 December 2008)

> what im trying to do here is find an advantage in the spike plays




Fading or going with the spike.
Is the spike range of bar closing in the upper or lower quartile OR
Volume spike 
OR Both?


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## Wysiwyg (28 December 2008)

Looks more like a sit and click method.No parameters met, just a discretionary trade on the spike.


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## MRC & Co (28 December 2008)

Wysiwyg said:


> Looks more like a sit and click method.No parameters met, just a discretionary trade on the spike.




Yeh it does.

Looks like Cartman is aware of what he is trying to do though, so it's not blind trading, he has a plan, but exact entry and exits are taken on feel.

I find personally when fading spikes, better to cut loosers very quickly and just try again if it stops you out.  Otherwise, these loosers can run offside, very very quickly (afterall, you are fading a rapid move).  If it continues, better to be out with a quick little loss or two.


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## tech/a (28 December 2008)

No he has a parameter.--The spike.
The question is what is it saying.
Is it demand or supply?
Introduction of other confirming "parameters" should give a better indication.
IE
(1)Where is it in the chart--following strength or weakness.
(2)How does it react to a test.
(3)What do the next few bars tell you

This spike is in a timeframe higher than the entry timeframe so perhaps the timeframe is too low to give a reliable indication.
Perhaps a 15 min spike entered from a 2 min chart may give more information.

Just thoughts.


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## Wysiwyg (28 December 2008)

MRC & Co said:


> I find personally when fading spikes, better to cut loosers very quickly and just try again if it stops you out.  Otherwise, these loosers can run offside, very very quickly (afterall, you are fading a rapid move).  *If it continues*, *better to be out with a quick little loss or two*.





Obviously spike fading and to have 25 out of 29 winners is good darts i reckon.




p.s.   Loosers is spelt losers


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## MRC & Co (29 December 2008)

Wysiwyg said:


> p.s.   Loosers is spelt losers




Thx mate, should stop me having anymore loosers


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## chops_a_must (29 December 2008)

tech/a said:


> This spike is in a timeframe higher than the entry timeframe so perhaps the timeframe is too low to give a reliable indication.
> Perhaps a 15 min spike entered from a 2 min chart may give more information.
> 
> Just thoughts.



The lower the time frame, the better the entry for these type of moves.

Just an observation without trading it.

By the time it would have come up on the 15min, it most likely would already have been and gone once printed. And even if it was possiible, the DD becomes greater on the larger time frame, which seems to be the opposite of the goal in his trading method.


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## tech/a (29 December 2008)

Yes *Chops* I understand.
A spike in a 1 minute bar would more than likely not be seen in a 15 min bar or a 5 min bar for that matter.

However a spike in a 15 min bar is likely to have a reaction time longer than that of a 1 minute spike.

A 1 minute bar traded by the second would see 60 price prints in the next minute which is likely to have a move a consolidation and retracements with in it all happening at break neck speed.

From my observations choosing a higher timeframe with less bars in your trading timeframe give less "noise".
15min to 3 min gives 5 bar prints for the next 15 min.

One of the principles of VSA is that anyone bar has a life---with regard to impact on the following bars of 3 bars.
So a 15 min spike will play out in the next 45 mins or 15---3 min bars.

In the 1 min example thats the next 180---1 second bars.
3 x 1 min x 60 seconds each = 180

My personal view is the timeframes dont sync.
1 min is to wide for 1 sec trading.

I personally work in 5s.
1 week = 5 daily bars.
1 daily bar splits to 5---125 min bars (Rounded)
125 min bars split to 25 min bars
25 to 5 min
5 to 1 min.
1 min to 12 sec.

In these timeframes you will know how the 1st bar has impacted on the price action going forward as seen by the lower timeframe.
You will see how tests both of the high and lows of the bar in question react.
How patterns play our in the lower timeframe relative to the next bar print in the higher timeframe.

You'll get spikes in all timeframes.

This is certainly a topic within itself.


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## MRC & Co (29 December 2008)

tech/a said:


> From my observations choosing a higher timeframe with less bars in your trading timeframe give less "noise".




Definately.  But Cartman is scalping, so he is trading the noise.  An institution buys up without care, you will see this begin to pick up momentum on a 1 second chart and more than likely once he is done (within a minute or two or even less), that spike will fade back.  You won't even know exactly what was happening within a 5 minute bar.  

Most scalpers use DOM for this, but I can see why a FOREX trader would use 1 second charts instead (lack of proper depth, and I am not just talking about what is sitting in the book, but also a continuous flow of everyone who is in the market and what they are doing, including crossing spreads etc).


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## chops_a_must (29 December 2008)

tech/a said:


> Yes *Chops* I understand.
> A spike in a 1 minute bar would more than likely not be seen in a 15 min bar or a 5 min bar for that matter.
> 
> However a spike in a 15 min bar is likely to have a reaction time longer than that of a 1 minute spike.
> ...




I think you are on the wrong track, and missing the point.

I'm not sure anyone trading like this would give two hoots about VSA, nor want to extend time frames.


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## MRC & Co (29 December 2008)

Yes I would agree, I think you are missing the point a bit tech.

Cartman is watching a 1 second chart to try and _feel the flow _of the market.  

Whilst the 1 minute chart or perhaps even 5 minute chart, can give him a basic depiction of where price is moving and patterns which are developing, he will also use the 1/5 minute chart to draw on important levels to be careful and take notice of next time price flows towards these.  

I think motorway talks about it in Wyckoff, the ripples and the currents start somewhere.  No better place to see them early than on a 1 second chart or through live DOM IMVHO.  

Scalping portions of this flow is a way to minimise risk.  One can also try and ride out the trends longer if they want, of course, knowing the difference of when to scalp and when to ride out larger flows, is the key but a very hard art to master.


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## cuttlefish (29 December 2008)

chops_a_must said:


> I think you are on the wrong track, and missing the point.
> 
> I'm not sure anyone trading like this would give two hoots about VSA, nor want to extend time frames.





I've been doing a bit of intraday chart observing lately as part of my options trading - including observing volume and attempting to apply some VSA.

I think that its worth considering VSA as a tool to help assess the likelihood of getting a fade vs a continuation - it can be a useful indicator of strength for a spike imo. I wouldn't necessarily be going out to 15 mins but out to 5 mins from the 1 min and tic charts can provide some useful insight. A general understanding of where current price sits in the intraday price/volume (vwap) histogram is also useful - as TH recently pointed out in another thread.

For example a down spike towards median price points (based on volume) is likely to hit congestion as it approaches the medians - but also possibly getting a free run on its way back there. Spikes away may be more likely to run - but the 5 min volume charts can be useful in seeing where supply is starting to come in - could be helpful in picking an entry point for a fade opportunity if one exists - I've seen the 5 min charts reveal quite a different picture on supply to what the 1 min charts appear to be showing.

Its also worth keeping an eye on the support/resistance/congestion from the longer time cycles because although not always relevent there are often times when a strong intraday move will hit resistance that aligns with a longer term support or resistance on the daily or weekly charts (and of course the broader intraday top/bottoms and trends as well).

Its easy sometimes when observing only the 1 min and tic charts to miss some of the more glaringly obvious broader structures that may influence the overall price action, so while using the shorter charts as the primary tool its still worth having an occasional glance at the broader picture.


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## Cartman (29 December 2008)

chops_a_must said:


> The lower the time frame, the better the entry for these type of moves.




absolutely!



chops_a_must said:


> the DD becomes greater on the larger time frame,




agree Chop san --- 

only prob ive found is if you get on the wrong side of one of these trades (usually by being too aggressive/ not patient enuff)  you can get crucified quickly --- so i use a specific staking strategy (-- not doubling up!!  im slightly crazy but i aint mad )  so i have room to maneuver if it goes a bit pear shaped --- position sizing relative to capital base is just as/more important than the entry



MRC & Co said:


> Whilst the 1 minute chart or perhaps even 5 minute chart, can give a basic depiction of where price is moving and patterns which are developing,  also use the 1/5 minute chart to draw on important levels to be careful and take notice of next time price flows towards these.




another good point 



MRC & Co said:


> Scalping portions of this flow is a way to minimise risk.  One can also try and ride out the trends longer if they want, of course, knowing the difference of when to scalp and when to ride out larger flows, is the key but a very hard art to master.




i hope people are listening to you Mirc   -- everything u say is spot on  --- thats y i listen to ya 



cuttlefish said:


> I think that its worth considering VSA as a tool to help assess the likelihood of getting a fade vs a continuation - it can be a useful indicator of strength for a spike imo.




agree re the vol. etc cf   -- 
but as Mirc said getting real volume on FX is a bit of an unknown --- i like to use the (fake) volume i get dished out as a (relativity) indicator -- 
there are patterns in the vol just like there are in the price --- if the patterns marry up then the baby patterns usually look like brothers and sisters  ---- all ya gotta do is pick the right family


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## Cartman (29 December 2008)

tech/a said:


> (1)Where is it in the chart--following strength or weakness.
> (2)How does it react to a test.
> (3)What do the next few bars tell you




Techno,  strength or weakness is often hard to define in FX --- smaller breakout traders who trade full size lots in fx will most likely get crucified in my humble view cause the deep pockets traders will just push them over their stops every time (thats why this thread is so interesting to me)  

i like to try and think outside the square --- ie how would i be trading this if i had deep pockets etc. etc.

i did some very interesting testing a fair while back (when i was getting caught all the time by reversals) where i took trades the exact opposite of what i thought they should be --- short instead of long vica verca -- it was interesting how many times the trade turned positive from what seemed a ridiculous position ---- (time to rethink i thought cause regular T/A wasnt working on this instrument!!) --

ps wouldnt recommend that with real money by the way 




tech/a said:


> This spike is in a timeframe higher than the entry timeframe so perhaps the timeframe is too low to give a reliable indication.
> Perhaps a 15 min spike entered from a 2 min chart may give more information.
> Just thoughts.




i know what yr on about-- i think this particular strain of s/t trading will struggle with that -- BUT--

i actually consider myself a pretty crap scalper but i figure if i can gain an edge with a scalping based plan and slot that into my normal short term possies then i might just find a niche sytem for my troppo trading style --

as i said above im more interested in staking plans and compounding --- its just that getting the entry right make all the other stuff work better ---

and it lowers the stress level lol


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## MRC & Co (29 December 2008)

cuttlefish said:


> Its easy sometimes when observing only the 1 min and tic charts to miss some of the more glaringly obvious broader structures that may influence the overall price action, so while using the shorter charts as the primary tool its still worth having an occasional glance at the broader picture.




ha ha yep!  This is what I meant about putting important levels on your 1 or 5 minute charts if observing 1 second, tick or DOM charts.  Draw in your trendlines, horizontal resistance and supports from multiple timeframes.  

I personally, get caught with this ALL the time.  So busy watching the DOM and concentrating on learning the 'feel of the flow' that I will place a short in 2 ticks above a monthly support or even a confluence of support!  lol!  

All one big learning curve ey!  

As Tech always states, you can know everything in the book in this game, but if you don't know how to apply it, you ain't good for nothing except writing a book!


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## tech/a (29 December 2008)

chops_a_must said:


> I think you are on the wrong track, and missing the point.
> 
> I'm not sure anyone trading like this would give two hoots about VSA, nor want to extend time frames.





No It was a suggestion in its own space.
Not a suggestion which would be used in conjunction with Cartmans method.
If he is happy with what he is doing --- fine.

Timeframe for me is far to short.
For others like TH and Mirc too long!.


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## Cartman (30 December 2008)

good example of a spike trade earlier-- got lucky and nailed the entry right at the peak 
(470987 2008.12.29 15:05 sell  eurusd 1.4307  2008.12.29 15:09 1.4276) 

logic behind the trade

-- EUR had been dropping off its highs for about an hour--
-- looked like a final shakeout just b4 the spike up  --- 
-- bottoms in any time frame are usually retested --
-- so when the spike up stalled for a second time -- short it 

i min chart shows trend still down  1 sec chart shows the entry point clear as mud


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## Cartman (30 December 2008)

ps  traded on demo last night trying some new shorting ideas on EUR/USD -- 10 cent micro trades  

tip for new players:-- 
(always trial new systems on micro cause u dont get caught up with big numbers tainting yr perception --- its all about *percentages* ! ) 

-- handful of spike trades like the one above but mainly regular trades -- results were ok 

27 trades -- 26 positive -- 1 negative -- gotta be happy with the new system so far  --- equity curve attached


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## Stormin_Norman (30 December 2008)

nice work cartman.


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## Cartman (30 December 2008)

Stormin_Norman said:


> nice work cartman.




thank u Norm --- work in progress for me like everybody else  but getting pretty happy where its heading


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## Stormin_Norman (30 December 2008)

what are u doing? trading the reversals?


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## Cartman (30 December 2008)

Stormin_Norman said:


> what are u doing? trading the reversals?




Norm, yeah reversals are good but the time of the current cycle is important --- ie a spike  at the end of a cycle has a totally different 'meaning' to a spike at a mid point of a cycle ---- (talking FX here  not stocks etc)     

been studying the Eur/Usd for prob 6 months solid  -- just looking for an edge ---- all i try and do is think like a 'big player' would and try different systems based on that --- think outside the normal square -- market is driven by money -- follow the money and try and work out what its doing --- (and just when u think uve got that sorted the deep pockets will crucify you  LOL - )

Im a novice in my own eyes but i like to think on tangents --- this current system may crash and burn in a weeks time but when enough systems marry up and turn positive all ya gotta do is 'join the dots' ---


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## Stormin_Norman (30 December 2008)

sounds too complicated for me. i keep things as simple as possible.

a moving average + my fundamental thoughts for direction.

stochastic for timing.


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## Cartman (30 December 2008)

Stormin_Norman said:


> sounds too complicated for me. i keep things as simple as possible.
> 
> a moving average + my fundamental thoughts for direction.
> 
> stochastic for timing.




funnily enuff Norm your indicators are pretty much the same as mine   --- once u add the 'human' factor in the 'indicators' become the '*result*' rather than the indicator   --- Mirc may like to add more weight to that statement ??


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