Getting started in Forex

[Wysiwyg]

My recent first time experience in the foreign exchange, commodities etc. gives me the impression the dealer pulls the strings.Another game where the house has the advantage.Or maybe every decision i make is wrong.Nuh.

 

[Wysiwyg]

Hi. I`m having trouble holding longer term. For example i enter and hold a good profit position with a belief there is more downside/upside only to see the profits wittled away and price go past the entry .This happened to me a fair bit over the last week and i was wondering if it is not the go to hold for very long.Anyone takers?

p.s. it`s probably a case of adjusting to the constant price changes hey.

 

[disarray]

regardless of the time frame you are trading it sounds like you are doing badly because you keep buggerising around with the trade. once you have a profit, set a stop then profit is assured. only ever adjust the stop up (profit wise) and that will solve that problem

 

[Stormin_Norman]

Hi. I`m having trouble holding longer term. For example i enter and hold a good profit position with a belief there is more downside/upside only to see the profits wittled away and price go past the entry .This happened to me a fair bit over the last week and i was wondering if it is not the go to hold for very long.Anyone takers?

If you are scalping on a narrow (<20 pips) stop loss you should take your profit i think.

+1R I move my stop loss up from -1R to 0R.

at +2R I move my stop loss up from 0R to +1R

etc.

But I will exit on discretion too.

I set my take profit to +3R or higher depending on discretion. But as above I will exit on discretion too if the market starts to go down.

 

[tayser]

If you're scalping you should never let a 20 pip stop loss get hit... that's suicide.

In fact: Wysiwyg what sort of trading strategy are you using?

 

[Trembling Hand]

If you're scalping you should never let a 20 pip stop loss get hit... that's suicide.

yeah scalping is looking for less than 10 pips. More like 5 avg with the occasional bigger win.

 

[Stormin_Norman]

yeah scalping is looking for less than 10 pips. More like 5 avg with the occasional bigger win.

obviously im not very knowledgeable in scalping. (Really short term trades technically isn't scalping either. Scalping is arbitrage gains between currencies. - but that's besides the point)

because im a fundamental trader; i am looking to 'ignore' what the scalpers are looking for. ie short term jumps. so my R = 20 pips.

 

[Wysiwyg]

If you're scalping you should never let a 20 pip stop loss get hit... that's suicide.

In fact: Wysiwyg what sort of trading strategy are you using?

Hi tayser,

Well i started off with a go long/short and hold with entries at pre-determined levels.I suppose i don`t really have a hard and fast rule for closure except for a safety stop loss.I rather monitor the movement and determine the closure with discretion.Most here seem to use trailing stops which is a good idea.(except when they are tipped and reverse )

I`m also learning how the currencies,futures in real life trading works and with the constant movement i have decided it is mainly a short term trading situation that i have to adapt to.Sometimes very short if it feels wrong.


thanks too norman.

 

[nizar]

If you're scalping you should never let a 20 pip stop loss get hit... that's suicide.

In fact: Wysiwyg what sort of trading strategy are you using?

You are correct in principle.
But you should expect even correctly placed stop losses to be hit at some point.

If your stop loss gets hit and you are "dead" (suicide), then you are obviously risking too much per trade. Regardless of the strategy.

Obviously how often your stop gets hit depends on your win% which is part of your overall system.

This post probably makes no sense at all, lol.

 

[julius]

nizar - the stop loss is a worse case scenerio, ie. price spike, computer crash, unfavourable news. not the same as the predetermined risk level when trading other instruments.

the real stop is mental because it needs adjustment according to the particular set up & the market conditions, but i'd suggest R/R is probably around 1:1

 

[prawn_86]

You are correct in principle.
But you should expect even correctly placed stop losses to be hit at some point.

If your stop loss gets hit and you are "dead" (suicide), then you are obviously risking too much per trade. Regardless of the strategy.

Obviously how often your stop gets hit depends on your win% which is part of your overall system.

This post probably makes no sense at all, lol.

I havnt read all of this thread admittedly, but scalping involes a lot of discretion.

I would doubt you could set up a system that works on short term scalping, but i could be wrong.

Also with scalping, trailing stops would probably see you with less profits if they got hit, because the exit is usually at the scalpers discretion rather than relying on a stop being hit.

my

EDIT - my R:R is also generally 1:1 to 1:1.5 as the supports are usually at all the .1, .2 etc marks

 

[Stormin_Norman]

If you're scalping you should never let a 20 pip stop loss get hit... that's suicide.

only if youre 1% leveraged and risking 20% equity it would be.

otherwise it's just a 1R loss. Id have at least a 25% stop loss hit rate.

i also dont like trailing my stops too close, cause like someone mentioned; they get stopped out on a rebound before continuing in the initial direction. that really pisses me off when that happens.

or when the market moves dramatically while your away and the take profit gets hit before it can be moved out although by this time if it's got to 3R i should be bloody happy anyway!

 

[Wysiwyg]

only if youre 1% leveraged and risking 20% equity it would be.

otherwise it's just a 1R loss. Id have at least a 25% stop loss hit rate.

i also dont like trailing my stops too close, cause like someone mentioned; they get stopped out on a rebound before continuing in the initial direction. that really pisses me off when that happens.

or when the market moves dramatically while your away and the take profit gets hit before it can be moved out although by this time if it's got to 3R i should be bloody happy anyway!

Completely agree about the downside of trailers being hit.Though there is many times the trailer would save on a sharp change of trend.

I suppose to guarantee profit the trailer is the only way but to maximise profit, well is there a surer way than to stay with the trend (time frame related) until it turns.This determining of trend change (within our time frame) is an education in itself because the maximising of profit is bought into the equation.

Not a problem if percentage, indicator or contentment targets are met and executed.

 

[nizar]

In reply to prawn86

I havnt read all of this thread admittedly, but scalping involes a lot of discretion.

LOL Really?

I would doubt you could set up a system that works on short term scalping, but i could be wrong.

Im setting one up now, I doubt im the first.

Also with scalping, trailing stops would probably see you with less profits if they got hit, because the exit is usually at the scalpers discretion rather than relying on a stop being hit.

With a mechanical system, no discretion will be used at all.

my

EDIT - my R:R is also generally 1:1 to 1:1.5 as the supports are usually at all the .1, .2 etc marks

I hope you take enough trades to make such a poor expectancy system worth trading.

 

[Trembling Hand]

EDIT - my R:R is also generally 1:1 to 1:1.5 as the supports are usually at all the .1, .2 etc marks

until you go live and trade at least 100 times you probably don't know what your R:R is.

It all changes when there is real $ on the table over a long period.

 

[Trembling Hand]

I hope you take enough trades to make such a poor expectancy system worth trading.

Nizar my system with the poorest expectancy is the most consistently profitable. Its not FX but its a scalping "system" on the HSI. Point is its not really one aspect that is the be all and end all but combination of many. What make this system profitable is the 300 odd trades it produces each day!!

Which maybe what you were getting at?

Have a look at the two charts below. Two days of scalping the HSI. One very good one not so good but still very profitable. I do the same with all my trading FX & Futures none have a high expectancy. Points is the expectancy is razor thin but very profitable over 50,000 trades per year per instrument!!

 

[Stormin_Norman]

Nizar my system with the poorest expectancy is the most consistently profitable.

Point is its not really one aspect that is the be all and end all but combination of many.

What make this system profitable is the 300 odd trades it produces each day!!

Which maybe what you were getting at?

Have a look at the two charts below.

good graphs to exemplify what you mean.

i found more regular smaller trades were a much more stable way of trading. sure, making a 60% return in one trade is good. but i think people concentrate on the wrong side of the equation.

rather then worrying about how to get returns, i found it was more important to limit risk.

my expected return is R0.66. (risk/return ration of 1.66). about 25% of my trades hit -1R. another 40% hit my 0R adjusted break even point (or are heading at great speed for it so I take a small profit).

only about 1/3 of my trades are profitable. but they are quite profitable. the average is probably at least 2.5R for my successful trades.

 

[nizar]

Nizar my system with the poorest expectancy is the most consistently profitable. Its not FX but its a scalping "system" on the HSI. Point is its not really one aspect that is the be all and end all but combination of many. What make this system profitable is the 300 odd trades it produces each day!!

Which maybe what you were getting at?

TH.

I did say i hope you take enough trades.
And you do!!!

Good work by the way, Im a big fan of high frequency systems, especially if you can automate them. Its the fastest way to compound your account.

 

[wayneL]

Good work by the way, Im a big fan of high frequency systems, especially if you can automate them. Its the fastest way to compound your account.

Have you had experience with this Niz?

 

[prawn_86]

So let me get this straight Nizar.

You are looking at setting up a scalping system, which will generally have a low expectancy (due to the nature of scalping), and yet it is still ok for you to have a go at discretionary traders who use a similar method?

Just because you use mechanical systems does not mean they are the be all and end all, like you so often like to make out.