- Joined
- 11 October 2006
- Posts
- 231
- Reactions
- 0
Sorry its taken me so long to reply.
I read every post in the Nothing to Something Scalping System thread. It was definitely worth the read, and very interesting. I don't have much to weigh in on it specifically; the OP is on another planet to me. But its given me some ideas I'll try on my account (unrelated to scalping). In particular short-range stop losses and mid-range take profits is something I'd like to try adopting, in tandem with entry/exits at resistance points to try take advantage of reversal swings more effectively, and take action on more possibilities than I would have with a more open or long-term trade. The short Stop Loss level just puts more emphasis on getting in at the correct time, which I guess is what the DOM is all about - timing.
Regarding the DOM - does the indicator still track buy and sell orders after markets close? i.e. pending orders?
I was surprised to find the MM will take steps to stop you trading (understandable though). Now I understand why my friend* told me to use a DMA platform; given my 'skill' and inability to manage money effectively right now I don't think its making too much of a difference LOL.
I'll admit I didn't find the videos on LearnToTradeTheMarket helpful. That said, I did find some of the articles interesting, primarily the ones pertaining to pyramiding and stop loss leveling. It's something I've thought about each time I picked up on a large swing; but until I sort my money management issues I haven't bothered to research or attempt it. I think on largely expected swings it would be worth knowing for sure, and I will learn it eventually
Walter Peters videos (I've only seen 2) could be better than the LearnToTradeTheMarket videos, they seem to go into a little more detail, I'll watch some more tonight. Again I found interest in the pyramiding and booking profit while extending the position which I guess is a form of money management
The most important thing for me right now is trying to adopt a money management strategy that works; I will try the Scalping OPs very short stops in context with a new, shorter window, higher frequency swing setup, but I'll maintain the use of all my current indicators, as they seem for the most part do me well. (By shorter window, I will try to close my trades within a 4 hour window as opposed to 1-2 days. The only time I'll break the rule is when something looks like its making a run for the border)
*Frenemy.
P.S. I had to take a snap of this, its relevant to me haha.
View attachment 60459
But here is your problem---
(P.S. Worth noting, in all cycles I never made the peak and slowly lost it, each time I was wiped out in 1 bad position. )
LOL ... glad you posted some thing on topic.Was a great Video on all last night.
" Silence of the Muppets "
LOL ... glad you posted some thing on topic.
I read it several times it does not include everything (entry parameters) It's not a trading system but it does hold information usually hidden to most traders. +1
Unfortunately your black and white views are still flawed.
Good information and feedback comes in many forms, books, experience and media as the OP mentioned was helpful.
"Analysing ones trading performance" is a rarely mentioned few know of the tools / software and know to track trading performance. There's another thread all on it's own.
Take it away duckman .....
What is the difference between God and our very own tech/a ?Its a public forum ... jokes on you
By shorter window, I will try to close my trades within a 4 hour window as opposed to 1-2 days.
Glad to hear some things were useful, each one of us has our own perspective on what may help.
Take what you think is helpful and leave the rest it costs you nothing.
Cheers
+1.
And it's a easy problem to solve. Have a stop!
Run some backtest on your own trading to see the impact of having a stop. How often do you get spiked out? Are you still in net profit after that? If you are not profitable as a result, play around your stop position or strategy to see if it can be improved. Otherwise, you simply don't have enough of a profitable edge.
With most trading, but especially leverage instruments like FX/CFDs, not having a stop is simply a guarantee to being KO'd on a long enough timeframe. You may find success in the short term (as you have during the 3 cycles), as the market does have a mean-reversion tendency that works a lot of the time. So you can sometimes afford to be offside by a mile, hold and pray and have the position come back in the green (many learn the wrong lesson here about having conviction - when in fact they just couldn't admit they got it wrong). But over a long enough timeframe, this approach stops working and you lose all the little gains you've made in one go.
Risk management ain't free. There is no other way of avoiding big loss except for stopping a loss when it's small. The cost of that is potential profits foregone, and it's a cost of the trading business. It can be optimised / reduced, but it's not avoidable.
Further to SKC's comments.
Some positive and specific comment regarding our O/Ps problem.
There are 3 ways to profit in the market other than Arbitrage
(1) Have more winning trades than losing trades---where the cumulative total of winning trades exceeds the cumulative total of losing trades. (Having more winning trades in itself may not mean you are profitable--infact you can go broke).
(2) Have larger winning trades than losing trades----where the cumulative total of winning trades exceeds the cumulative total of losing trades. (Bigger winners than losers will not in itself guarantee profit--in fact you can go broke)
(3) A combination of both.
This is known as a positive expectancy---but before we explore how to get there lets clear a few common mis understood "Facts"
Many believe a positive expectancy is determined at the point of placing a trade.
They believe that the trade which has a potential to move from $1 to $1.50 with a risk of 50c has given you the trader a positive expectancy. this is nothing more than a positive potential.
Positive expectancy can only be determined from closed trades where we know profit and loss.
If we have 2 x profit to every loss we have a positive expectancy of 2.
In your case you kill your positive expectancy with one bad trade---not once but 3 times.
Lets have a look at Trembling Hands Scatter chart to further illustrate during this discussion.
Click to Expand
View attachment 60462
Now have a look at AREA 1 here you'll see a sharp rise in profit
There are LOTS more wins than losses.
There are Much larger wins than losses.
This is clearly number 3 of the list above.
AREA 2
There are lots more losses than wins and you'll note that the
amount gained doesn't out weigh the amount lost.
This is what a breakdown in positive expectancy looks like.
AREA 3
Same number of trades but a clear increase in winning size to losing size.
Hence a sharp rise to profit again.
Stat 1
Less wins than losses
BUT
Stat 2
Average win nearly twice that of average loss.
Clearly this days trading has an overall positive expectancy.
So you can clearly see the adage of Cut losers short and let winners run.
Personally I'm more ruthless again. Those who know my trading style know I have a load of Break even trades.
These trades have a MASSIVE effect on my final expectancy not to mention my peace of mind.
Its common for me to set a B/E stop and go to bed. Often I'm stopped out but very so often I get 80-150 ticks on the DAX at $35 AU a tick.
Just consider this.
(1) If I set a 20 tick Stop loss and have that hit more often than not say 20 out of 25 trades
then I'm down 500 ticks.
(2) If I'm stopped out at B/E I'm down ----Brokerage.
5 trades at say 100 tick profit at (1) I'm at a net loss
at (2) I'm at a really healthy profit and expectancy.
So what I have come to do in refining my trading is.
(1) ENTRY
Hopping onto momentum is a lot easier than anticipating coming momentum.
I can move the B/E more often and far quicker if I've hopped on board momentum.
The only time my stop is hit is when momentum fools me. I have 4 momentum trade triggers.
Ill share one here.
View attachment 60463
(2) Trade Management.
Always get stop to B/E be very happy if stopped at B/E as 90% of the time you'd have been stopped at a loss stop!
Add to trades if momentum signals continuation
Treat this trade as a single trade.
Hold trades longer if they are coming to a known resistance or support level
Hold O/N ( I get up at 5 am so can close night trades first thing.) If that level is a long way away and it is clear enough that price is trending toward it--long or short.
(3) Exit.
Momentum comes in different intensities.
Low resists in lower time frames
Stronger blasts through. Identify suspected intensity to determine hold time.
(I hold from 1 min to 5 hrs) Rarely O/N unless its crystal clear in my mind.
Finally.
Trade on SIM for hrs until you can read exactly what your seeing on the chart.
It will be like you have a sixth sense.
You'll see a setup and know EXACTLY what its likely to do.
Don't trade if your Under-capitalized!---EVER!
Now back to my video!
What is the difference between God and our very own tech/a ?
Just a bit of Friday afternoon fun......
God doesn't loiter around stock forums thinking that he is tech/aWhat is the difference between God and our very own tech/a ?
Just a bit of Friday afternoon fun......
(1) Have more winning trades than losing trades---where the cumulative total of winning trades exceeds the cumulative total of losing trades. (Having more winning trades in itself may not mean you are profitable--in fact you can go broke).
(2) Have larger winning trades than losing trades----where the cumulative total of winning trades exceeds the cumulative total of losing trades. (Bigger winners than losers will not in itself guarantee profit--in fact you can go broke)
(3) A combination of both.
Blaze
Will look at some specifics with regard to the 3 profit makers with regard to strategy/trading plan development
Flat out with very elderly parents
But will respond when I can
Sunday is always demanding ----- you know how it is.
Firstly I will disregard the "Method" where by traders hold trades that are losers in definitely to claim they haven't liquidated a loss as they are still in a position and winners only are liquidated.
In this scenario (more winning trades than losing trades) you generally find there are more trades.
The trades are shorter in time frame and may not have a formal stop loss. I have found traders who are instantly decisive are best suited to this style.They don't hesitate when taking a trade---closing a trade or stopping a trade. They are very fast and are generally all in --- not loading up a trade. This is suited to DOM trading/Volume/price/Bots--- trading where its clear to the trader instantly and risk can be very minimal.
Smaller time frame charts I find best (1 min)
Extended time frames but very tight stops and I have found bringing to B/E quickly increases my closed trade Profit to Loss ration dramatically. I can trade more often (Not sticking around in no mans land between buy price and stop loss (When its wider) waiting to profit or having my stop taken out. This suits my trading style where I look to hop on momentum and ride it until I can see its stopping. If I miss time it ill miss a few ticks as it comes back on me to stop me out at B/E.
Every now and then Ill be taken out because I get it completely wrong fro the get go. There is ALWAYS a technical stop very close that I use. This is suited to Volume/Price and Pattern Analysis. I'm sure there are other methods but that is my chosen analysis.
Id don't trade every session I wait for volatility in other markets before I trade. I want momentum and I don't care which way. 1 min then 3 min charts I find best
For me this is additional to 2. If I'm on a clear momentum trade I will add quickly. I'm a small futures trader with 3 being my max placement.(For the DAX that's around $110 a tick.)
Here I'll either close contracts as weakness appears and hold one or 2 longer or Ill just close them all on an obvious fast rally ---If I'm at the screen. My aim is to have a contract running if possible in the key direction.
On Rare occasions Ill hold one over night and have traded short term around it.
In these trades you'll always have to give back some profit to gain more profit. Often its adding to the position while its correcting that helps the bottom line. but it takes a long time to identify corrections in a move or a reversal of sentiment.
One is profitable and one is a profit killer.
1,3 then 9 min I find best here.
I can post some chart later if your interested
Here I'll either close contracts as weakness appears and hold one or 2 longer or Ill just close them all on an obvious fast rally ---If I'm at the screen. My aim is to have a contract running if possible in the key direction.
I really do appreciate these scenarios being written out; I've written 3 or 4 different responses so far and deleted them because I come to an answer at the end.
With regard to your 1 min, then 3 min charts - are you looking to trade within these windows, or are you looking for Entry/Exit points? I'm assuming the 9 minute is to identify bigger signals to allow you to synchronize with the 1 or 3 minute charts more accurately?
If you get time I'd really like to see a chart, and how the 1, 3 and 9 minute frames are utilised as part of the whole picture.
This is something I need to work on, recognising that the good times are over and cashing in on them - the moving Stop Losses to book profits did help immensely on Friday - I will likely always use these to move further ahead than just B/E to compensate for this problem until I find another solution. This worked well for me yesterday, so thanks.. this thread has already been of value!
P.S. Given these shorter time-spans, what technical studies are best applied? Stochastic/ROC come to mind, but these tend to show what is happening - is there anything that provides more foresight like the DOM?
P.P.S I just checked the DAX, wow that things been flying!
I initially have a look at the big picture--longer term. Then drill it down to the immediate trade timeframe.
Sometimes it will be obvious in the 9 min frame the position that should be taken--continuation or reversal.
In particular I'm looking for Support and resistance areas and their strength. Longer term ones with multiple tests are stronger than those found in the lower timeframes. High volume particularly on APPROACHING S or R indicates that its likely to hold. Volume as it pushes through----or where it is low and just continues to rise or fall---indicates continuation. This can and is seen in the various timeframes 1,3,9. Some trades don't last past 1
I will shift timeframes as pivot's in a lower timeframe move me to the next. Of course as soon as I have a pivot in any time above my buy price I move to B/E. If stopped rinse and repeat.
The earlier I'm on a move (In a session) the better.
When I'm on Ill attempt to do one win lose or draw as it happens. But have a few things on at the moment.
This will happen in various timeframes. Immediate exit means less profit more often---calculated holding means larger wins less often. Unfortunately and experience thing.
What I'm describing here are discretionary shorter term methods. Personally I find ALL indicators far to slow. Infact the only place I've found useful for some indicators is in system design on a weekly or EOD basis.
Its the European Hang Seng
Id suggest cutting teeth on Index futures using the FTSE or SPI.
If you get time I'd really like to see a chart, and how the 1, 3 and 9 minute frames are utilized as part of the whole picture.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?