2/28/09
25 pip stop loss on volatile Daily pairs - WOW!
Quote: Originally Posted by Todd  First time using these, I put a 25 pip trail on them I set the EJ, EU, GU shortly after these were posted. All 3 stopped out. What are the chances of all 3? 4% of acct for each trade. Story of my life.  25 pip stop loss on a daily time frame? This shows how very inexperienced you are! The average daily range over the last 2 trading days are: EURJPY 174 pips EURUSD 246 pips GBPUSD 259 pips 25 pips on these will stop you out on a hiccup! Also, the posting of my trades was not a recommendation to trade. 4% on EACH? That's a total of 12%! Good MM is that your TOTAL trades do not exceed 2% to 3% of your account. Absolute madness!! On that basis, you only have 8 more losing trades to go before you blow your account! May I suggest you learn the basics of trading before going any further - PLEASE
3/2/09
Hello mea,
OK, maybe I need to feel like an 18 year old! unchallenged close on volume higher Can you explain this to a total Newbie in every aspect of this game? I somehow get the feeling that you are taking the p*ss with your 2 posts but I will give you the benefit of doubt No, I cannot explain this without you first understanding Price Action. More important - THIS IS NOT A GAME - this is a very serious business. Treat it like a game and you will lose and then lose again and continue to lose forever after that. Q: When are you going to buy or sell what you just bought or sold all the way up or down? And do you still believe this strategy is working today, because the moves are so fast changing direction! I had to count to 10 before answering this. If you have to ask this question, you need to go to the Introduction page of any manual you can find on trading whether it be stocks, forex or lean hogs BEFORE even thinking about trading. BTW: where can i find a volume meter? Have you tried the Volume Meter shop? Seriously, you don't need anything right now other than a good formal understanding and education of what trading is, how it works and HOW MUCH you can LOSE. 3/2/09 mea,
You answered yourself with your PS: directly below your name. I like to learn a long term strategy for more than one reason, but one reason is very imminent. The trigger finger! If one is day trading the chance to get in to early and way to often is very present. I have the feeling I need to go with a strategy that keeps me not only away from the PC and therefor from the attached mouse which makes it so easy to lose my money. Also it is much nicer to do other things than only to stare at a screen and moving candle sticks all day long! Therefor I like to ask you if you have advice where can I find a strategy or the knowledge which can help me to become a long term FX trader? ......8,....9,......10. The best strategy I can think of to answer all the questions above is to take up fishing (I was going to say skydiving without a parachute but that might have been too complicated). read all you post and you sound so relaxed after all those years off stress ( 3 x 20 ) and still feel 16 how you do this?? By taking 17 years to learn and still continue to learn, by doing what is wrong until eventually I found what is right (for me), by blowing my accounts and over $200K, by going through the trading machine wringer, by finding out who I am (strengths and weaknesses), by accepting I will never, ever get it right, by accepting that it is OK to lose are what come to mind right now, Oh and a good dose of Rock n Roll with my 59 Fender Stratocaster. OK, now you have had your fun in the sun, what are your real questions? 3/4/09
This answer is going to seem like the blonde joke when she was
asked about the impact of higher gas prices on her budget. Her answer
was that it doesn't affect her as she only puts in $20 at a time!
3/14/09
Take that stupid Hull Moving Average off and the
3_Level_ZZ-Semafor repainting pieces of junk and any other worthless
indicators you are hiding behind and then we'll talk!
3/17/09
In case you missed it, start at page 444 on Jacko's thread where
you will witness a discussion between two of the most successful and
respected traders here on FF - Wayne Jackson (Jacko) and Jim of James
16.
Nothing further needs to be said. 03/28/09
Thinking of EURJPY and whether it's at the end or beginning of a
trend just hit my Memory Recall button. Back in the 90s when we were
drawing charts and indicators by hand and I was desperately looking for
guidance, I joined a futures trading club. There were no Forums or
trading computers then just ads in Stocks and Commodities magazine.
In that club was a very successful lady who was very good on Soybeans, Sugar and Coffee (more memories of Ken Roberts flooding in!), and she had just made a killing on what I thought was a fantastic trend. Although I knew she was very independent and strong and I was an absolute nobody, I made the mistake of congratulating her on her "trend trade". Her reply, in front of everybody was, "Hey little guy, that was no trend, it was no better than sex, - you don't know how long it's going to last or how many inches you're going to get!" Lesson learned - Stay away from strong, independent, controlling women 3/31/09 How to Succeed in the Forex Market
More excerpts: First off, if you are new and frustrated let me tell you I know exactly how you feel. When I started out I made every mistake you could. First I tried scalping (I didn’t know that was what it was called then, I just sold if I saw a huge green stick and bought if I saw a huge red one). I made a few pips at a time. If I got too far under I just bought more lots to get a “net position”. That worked great for a few weeks even until a one giant trade where I had bought four extra lots to “get a net position” wiped out all of my profits and then some! Big mistake. Next I tried trading the news. There was always a rise or fall with interest rate changes and all you had to do was buy or sell in the right direction, right? Sounds simple. In practice it is a little bit harder. Liquidity drops like a rock. The market tends to whipsaw, knock out stops or even go in the wrong direction you would expect it to. Again, Big Mistake. Lost a hundred pips on that one too. And this a regular lot sized account, too, not a mini-lot account. Ouch. Many new traders at this point give up and go back to their day jobs. Maybe I was smart, maybe it was dumb of me to stick with it but I did and I’m glad every day that I did. I went back to my demo account and figured out some trading systems that worked for all occasions. I read some books, took some online classes and kept plugging away at the demo account. After I felt confident enough that I knew what I was doing I started slowly trading real lots again. And I started winning. Occasionally I still will go back to demo accounts every once in awhile if I suffer too many losses and I lose confidence. Usually though I just keeping using the same systems I know to be profitable in the long-term and it works! That being said, below are some things I’ve learned along the way that have helped me go from a horrible trader to a consistently profitable one. If you can master these I think you can make it in the currency exchange world too: 1) Use a demo account - and go back to a demo account every time you start to lose confidence or a significant portion of your equity - you should use a demo account until you’ve got your trades down to a science. You should get your trading style down to a consistent, systematic approach. Do the same thing every time. The hardest thing about trading real money is the emotions. When using demo account it is no problem to trade 2 lots with a 50 pip stop - the setup and risk/reward looks good right? When you start trading real money all you can think of is that you have 2 50-pip stops (or $1000) at risk that you don’t want to lose. Practicing over and over with the demo account gives you the confidence to say: “I’ve seen this chart setup over and over, I know that it will probably move in my favor. If it doesn’t and I take a loss I know that this trading technique is solid enough that over time it will be profitable.” 2) Keep a journal of every trade - and review them once a month or once a week. Preferably take a screen shot of the chart when you make the trade so that when you go back to review them you can see what you were looking at when you made the trade. Write about what was good about the trade and what was bad. If you keep doing this you will find that you start making less bad trades and more good trades. You will also hone what techniques you like and what works for you. 3) Take a loss as a learning experience. Write about in your journal what went wrong and what was right. Start making less bad trades and more of what you know to be a good trade. Remember that failure, if analyzed and learned from, is just a stepping stone to greater success. 4) Always use stop-losses. Every trade you enter you should have a stop loss. You should also at a minimum know what your goals (limits) are. If you are a beginner you should have both a predefined stop-loss and limits. Don’t be sorry if you miss out on some pips because of it. Write it down in your journal as far as what went right and what you could have done better. Remember this too: if you stop at at 40 pips and the currency continues to go against your prediction for a total of 80 pips you can always buy or sell then and skip the whole being 80 pips in the hole. Now you are only 40 pips in the hole! Only do this though if your original and follow-up analysis still hold true (for example, that the trend you were trading with has not been broken). 5) Educate yourself. Read some books. Take some online classes. One of my favorite books is “Forex Patterns and Probabilities:Trading Strategies for Trending & Range-Bound markets” by Ed Ponsi. I keep this one on my desk at all times in case I need to consult it. 6) Win at least 2:1 pips than you lose. Not in terms of number of trades (some great traders lose more than 50% of trades) but in terms of pips. This is called money management. If your wins are twice as big as your losses you will be profitable winning just 50% of your trades. If you in a setup you can’t win twice as much as you are risking don’t trade it. There are always other opportunities. For example, if you make 4 trades and only two of them are successful that is a 50% win rate and doesn’t sound great. But if you earn 100 pips on the wins and lose only 50 on the losses then you just netted yourself 100 pips profit (100+100-50-50=100)! 7) Rinse and repeat. Keep at it! If you lose confidence, go back to demo trading until you feel confident in what you are doing. Keep journaling every trade so that you can keep learning and improving. Keep reading books and other people’s analysis. Try to see the charts how I am looking at them and understand support/resistance and candlesticks. Come to your own conclusions about chart setups and try them out on your demo account. __________________
3/31/09
More stuff from my files: 45 WAYS TO AVOID LOSING MONEY TRADING FOREXby Jimmy Young, CTA Who is Jimmy Young? Retired proven professional Bank FOREX trader with over 20 years of hands-on FOREX trading experience. 1) Knowledge Deficiency – Most new FOREX traders don’t take the time to learn what drives currency rates (primarily fundamentals). 2) Overtrading - Trading often with tight stops and tiny profit targets will only make the broker rich. The desire to “just” make a few hundred dollars a day by locking in tiny profits whenever possible is a losing strategy. 3) Over leveraged - Leverage is a two way street. The brokers want you to use high leverage because that means more spread income because your position size determines the amount of spread income; the bigger the position the more spread income the broker earns. 4) Relying on Others – Real traders play a lone hand; they make their own decisions and don’t rely on others to make their trading decisions for them; there is no halfway; either trade for yourself or have someone else trade for you. 5) Stop Losses – Putting tight stop losses with retail brokers is a recipe for disaster. When you put on a trade commit to a reasonable stop loss limit that allows your trade a fair chance to develop. 6) Demo Accounts – Broker demo accounts are a shill game of sorts; they’re not as time sensitive as real accounts and therefore give the impression that time sensitive trading systems, such as short-term moving average crossovers can be consistently profitably traded; once you start dealing with real money, reality is quick to set in. 7) Trading During Off Hours – Bank FX traders, option traders, and hedge funds have a huge advantage during off hours; they can push the currencies around when no volume is going through and the end game is new traders get fleeced trying to trade signals. There is only one signal during off hours – stay out. 8) Trading a Currency, Not a Pair – Being right about a currency is half a trade; success or failure depends upon being right about the second currency that makes up the pair. 9) No Trading Plan - 'Make money' is not a trading plan. A trading plan is a blueprint for trading success; it spells out what you see your edge as being; if you don’t have an edge, you don’t have a plan, and likely you’ll wind up a statistic (part of the 95% of new traders that lose and quit). 10) Trading Against Prevailing Trend – There is a huge difference between buying cheaply on the way down and buying cheaply. What was a low price quickly becomes a high price when you’re trading against the trend. 11) Exiting Trades Poorly – If you put on a trade and it’s not working make sure you exit properly; don’t compound the damage. If you’re in a winning trade, don’t talk yourself out of the position because you’re bored or want to relieve stress; stress is a natural part of trading; get used to it. 12) Trading Too Short-term – If your profit target is less than 20 points don’t do the trade; the spread you pay to enter the trade makes the odds way against you when you go for these tiny profits. 13) Picking Tops and Bottoms - Looking for bargains works well at the supermarket but not trading foreign exchange; try to trade in the direction the price is going and your results will improve. 14) Being Too Smart – The most successful traders I know are high school graduates. They keep it simple and don’t look beyond the obvious; their results are excellent. 15) Not Trading Around News Time – Most of the big moves occur around news time. The volume is high and the moves are real; there is no better time to trade fundamentally or technically than when news is released; this is when the real money adjusts their positions and as a result the price changes reflect serious currency flow (compared to quiet times when Bank traders rule the market with their customer order flow). 16) Ignore Technical Condition – Determining whether the market is over-extended long or over-extended short is a key determinant of near time price action. Spike moves often occur when the market is all one way. 17) Emotional Trading – When you don’t pre-plan your trades essentially it’s a thought and not an idea; thoughts are emotions and a very poor basis for doing trades. Do people generally say intelligent things when they are upset and emotional? I don’t think so. 18) Lack of Confidence – Confidence only comes from successful trading. If you lose money early in your trading career it’s very difficult to gain true confidence. The trick is don’t go off half-cocked. Learn the business before you trade. 19) Lack of Courage to Take a Loss – There is nothing macho or gutsy about riding a loss, just stupidity and cowardice. It takes guts to accept your loss and wait for tomorrow to try again. Getting married to a bad position ruins lots of traders. The thing to remember is the market does crazy things often, so don’t get married to any one trade. It’s just a trade. One good trade will not make you a trading success; rather it’s monthly and annual performance that defines a good trader. 20) Not Focusing on the Trade at Hand– There is no room for fantasizing in successful trading. Counting up and mentally spending profits you haven’t made yet is mental masturbation and does you no good. Same with worrying about a loss that hasn’t happened yet. Focus on your position and have a reasonable stop loss in place at the time you do the trade. Then be like an astronaut – sit back and enjoy the ride. No sense worrying because you have no real control. The market will do what it wants to do. 21) Interpreting FOREX News Incorrectly – Fact is the press only has a very superficial understanding of the news they are reporting and tend to focus on one element and miss the point. Learn to read the source documents and understand it for real. 22) Lucky or Good – Your account balance changes don’t tell you the whole story about your trading. Fact is if you are taking a lot of risk and making money you will eventually crash and burn. Look at the individual trade details. Focus on your big loses and losing streaks. Ask yourself this, "If I had a couple of consecutive losing streaks or a couple of consecutive big losses, how would my account balance look?" Generally, traders making money without big daily losses have the best chance of sustaining positive performance. The others are accidents waiting to happen. 23) Too Many Charity Trades – When you make money on a well thought out trade don’t give back half on a whim. Invest your profits from good trades on the next good trade. 24) Courage Under Fire – When a policeman breaks down the door to a drug dealer's apartment he is scared but he does it anyway. When a fireman climbs onto the roof of a burning building he is scared but does it anyway, and gets the job done. Same with trading. It’s ok to be scared but you have to pull the trigger. No trigger – no trades – no profits – no trader. 25) Quality Trading Time – I suggest 3 hours a day of quality, focused trading time. That’s about all your brain allows. When you are trading, be 100% focused. Half way is bullshit - it doesn’t work. Don’t even think that time spent in front of the computer watching the rates has any correlation to profitability - it doesn’t. Spend less time but when you're trading, be 100% focused on trading. 26) Rationalizing – Killer. Absolute Killer. Put your trade on and let it run. If it hits your reasonable pre-determined stop, you're out. Think of yourself as a prizefighter. You just got knocked out. Moving your stop is like getting up after being crushed with a knockout blow. It’s pointless. Things will only get worse. Don’t ignore the obvious. You're wrong – get out. Come back the next day and try again. A small loss will not hurt you - a catastrophic loss will. 27) Mixing Apples and Oranges – Have you ever done this? You see the EURUSD trading higher so you buy GBPUSD because it “hasn’t moved yet”. That’s a mistake. Most of the time the reason the GBPUSD hasn’t moved yet is because it's already overbought or some 4:30am UK news was bearish. Don’t mix apples and oranges. If EURUSD looks bid, buy EURUSD. 28) Avoiding the Hard Trades – Bank FX traders have an axiom "the harder the trade is to do the better the trade". This I learned from experience. When I needed to buy EURUSD and it was hard to get them, that’s when it’s necessary to pay up and get the business done. When it’s easy to get them, then sit back and wait for better levels. So if you are trying to get into a trade, or more importantly get out of a trade, don’t putz around for a few points - get your business done. 29) Too Much Detail – If your trading more than 2 indicators then you need to clean house. Having many indicators stifles trading and finds reasons not to trade. A setup and a trigger is all you need. 30) Giving Up Too Easy – Your first trade of the day may not be your best but certainly it’s no reason to quit. I have a preset daily trading limit and I use it. You can’t make money by making excuses. Getting trades wrong is natural and should be expected. 31) Jumping the Gun – Don’t be penny wise and dollar foolish. Wait for your trade signal to be clear. Put on your trade and give it a decent size stop loss so that you don’t get knocked out by random noise. 32) Afraid to Take a Loss - trading is not personal, it’s business. Don’t think that a poor trade is a reflection on you. It could be you're just ahead of your time or a commercial order hits the market and temporarily creates a small unexpected move. Again, place your stop beforehand and NEVER increase your pre-determined risk. If it’s going bad, it will probably get worse. I think that’s Newton's “body in motion tends to stay in motion…” 33) Over-Relying on Risk Reward – There is zero advantage in risk reward. If you put a 20 point stop and a 60 point profit your chances are probably 3-1 that you will lose. Actually with the spread its more like 4 to 1 (from entry point if it goes down 17 points you lose, or up 63 - you win; 17/63 is close to 4-1). 34) Trading for Wrong Reasons – Because the EURUSD is going up is not in itself a reason to buy. Buying EURUSD because it's not moving much is even worse. You’re paying the toll (spread) without even a hint that you will get a directional move. If you are bored, don’t trade; the reason you're bored is there is no trade to do in the first place. 35) Rumors – Rumors are rumors almost 100% of the time. Think about where in the motion you heard the rumor. If EURUSD is up 50 points in last 15 minutes and the rumor is dollar negative, well - then you missed it. Whenever you in motion with the trade, determine where you are entering. 36) Trading Short-term Moving Average Crossovers – This is the money sucker of the century. When the shorter term moving average cross the longer term moving average, it only means that the average price in the short run is equal to the average price in the longer run. For the life of me, I cannot understand why this is bullish or bearish. Easy to set up on software, complete with lights, bells and whistles, and good for the seller getting thousands for the software but in terms of creating profit - it’s a zero. 37) Stochastic – Another money sucker. Personally I think this indicator is used backwards. When it first signals an overdone condition, that’s when I think the big spike in the “overdone” currency pair occurs. To be overbought means strong and oversold means weak. Try buying on the first sign of overbought and selling on the first sign of oversold. You’ll be with the trend and likely have identified a move with plenty of juice left. 38) Wrong Broker – A lot of FOREX brokers are horrible. Get a good one. Read forums and chats in several different places to get an unbiased opinion. 39) Simulated Results – Watch out for “black box” systems. These are trading systems that don’t divulge how the trade signals are generated. Great majority of them are absolute garbage. They show you a track record of extraordinary results but think about it. If you could build a trading system with half a dozen filters using the benefit of hindsight, couldn’t you too come up with a great system. Of course going forward is an entirely different story. High-speed number crunching capabilities allows for building great hindsight trading systems, so BEWARE. 40) Inconsistency – Every business (FOREX trading included) requires a business plan (trading plan). Unless you have taken the time to write down a set of rules that you can and will follow, it’s likely your trading will remain unfocused and directionless. Make a plan, have rules, follow them. Set goals that are realistic and you will achieve them. 41) Master of None – Focus on one currency for technical trading. Each currency has a unique way of trading and unless you get intimate with it, you will never truly understand its underlying idiosyncrasies. Don’t spread yourself too thin – focus, master one currency at a time. 42) Thinking Long Term – Don’t do it. Stay in the moment. Especially if you’re a day trader. It doesn’t matter what happens next week or next month. If you are trading with 30 to 50 point stops, restrict your thought process to what’s happening right now. That is not to stay the long-term trend is not important. It is to say the long-term trend will not always help you when your trading a significantly shorter time frame. 43) Overconfidence – Trading is simple but not easy. Statistics show 95% failure rate of those attempting to become traders. If you're doing well, don’t take your success for granted. Always be on the lookout for ways to improve what you are already doing. 44) Getting Pumped Up – The trick is to maintain an even keel. When you are in a trade, you want to think exactly as you would if you didn’t have a trade on. To do this requires a relaxed disposition. This is not a football game. Don’t get psyched up. Relax and try to enjoy it. 45) Staying in the Game– I don’t recommend demo trading because traders learn bad habits when trading with play money. I also don’t think “letting it all hang out” right away is wise either. Start off doing trades and taking risk that is relatively small but still makes a difference to you if you win or lose. About a quarter to a third of what you expect to reach as your trading matures is reasonable. 3/31/09 Best Times To Trade Currencies Forex is a 24 hour market and there will be
good setups for profitable trades in the Asian, European and US
sessions. It pays to look at historical price data on forex charts to
see what time of the day you could be watching the market and what time
you could be doing something else. The aim is to trade when the average
trading range is worthwhile and stay out of the market when price is in
a narrow sideways range.
The Major Trading Sessions in the Forex Market The FX market is active 24 hours a day - it is important for the active forex trader to identify the times where there is the most volatility and largest trading ranges. TOKYO 7PM-4AM EST Tokyo is one of the principle dealing centers in Asia and is the first major Asian market to open. USD/JPY, GBP/CHF and GBP/JPY have large ranges, and offer short term traders opportunity. LONDON 2AM-12PM EST London is the most important dealing center in the world and the majority of forex trading takes place during London hours. For traders looking for volatility GBP/JPY and GBP/CHF provide large daily ranges. NEW YORK 8AM-5PM EST New York is the second largest Forex marketplace. For active traders GBP/USD, USD/CHF, GBP/JPY and GBP/CHF are good choices, with large daily ranges. US EUROPEAN OVERLAP 8AM-12PM EST = 5am – 9am PST This period is the most active - the best period for day traders looking for volatility. London Trading Session London opens at 8 am GMT or 3 am EST. Closes at 4 pm GMT or 11am EST. The most active pairs during this session are EURUSD with 39% of the trading volume, GBPUSD with 23%, USDJPY with 17%, USDCHF with 6% and USDCAD with 5%. European Session Europe opens at 7am GMT or 2 am EST, Closes at 3 pm GMT or 10 am EST. The European session is the most volatile session most of the time. New York Session New York Opens at 1pm GMT or 8 am EST. Closes at 8pm GMT or 3pm EST. New York is the second largest forex market place.The busiest time is 8 am to noon EST. News releases can result in a volatile market. Trading activity usually winds down after the U.S. afternoon trading period. Asian Session The Tokyo session opens at 1am GMT or 8 pm EST and closes at 8am GMT or 3am EST. Sometimes volatility is low and sometimes good moves occur. The USDJPY is the most active pair with 78% of the volume followed by EURUSD with 15% and EURJPY with 5%. 3/31/09
More stuff from my files: From a Professional Floor Trader who goes by the name - Phantom of the Pits PHANTOM OF THE PITS RULES RULE # 1
Assume your position is WRONG until the market proves it to be correct. REMOVE position early if it doesn’t prove correct. Don’t keep a position UNTIL it proves to be correct. Don’t wait for the Stop Loss to take you out. LEARN to be WRONG THINK – When position is correct you have nothing to do. This keeps losses SMALL – may not always be right but will keep you funded and trading. RULE # 2 INCREASE your position CORRECTLY when you are correct. Always start with SMALLER position, THEN add to it – NEVER have your entire position on until the position proves correct. If initial position is 6 contracts, next add 4 contracts, then add 2 contracts. In a WINNING trade, instead of taking profits – ADD positions Most of your profit will come from winning trades which take off QUICKLY. _________________ 4/1/09
Amin,
There is a saying "One man's meat is another man's poison" which means what might be good for me, may be bad for you. As you build and develop your style of trading you will try different things until you get to a place where you feel comfortable. As I was developing my style, I tried just about everything I found, so with regard to these rules: Rule #1 Assume your position is wrong - didn't work for me, made me negative Remove position early - not part of my plan Don't keep a position - not part of my plan Don't wait for the SL - not part of my plan Learn to be wrong - made me negative Think - when position is correct...............correct Rule #2 Increase your position - definitely Always start with a smaller position - yes and no If initial position.......yes and no In a WINNING trade - most definitely Most of your profit - depends what type of trader you are __________________ 05/17/09 http://www.forexfactory.com/showthread.php?p=2739084#post2739084 ""If I remember right, strat wanted us to use swing highs/lows for starting points. Then said if it makes sense to you it's OK. I dunno."" For those new to trading PASR, I want them to learn hammers and shooting stars first. Learn them until you can trade them in your sleep. Then move onto the next step. This is the basic building block which needs to be in place if you are to be successful at trading PASR. ""I spent 2 hrs this morning looking over the Eur/Usd and had everything ready to post, and then remembered we were asked to do that after we had seen the set up and got in. So waste of time."" Waste of time if you don't know what you're doing but very valuable time if you do. You can post at ANY TIME - where is it said we were asked to do that after we had seen the set up and got in? Lotuselanman isn't in and he's posting his analysis so that we can check his work. ""What I have realised is I need to be more organised, need some kind of template and tick the boxes as I'm going through the time frames. In the past I've only concentrated on one or two currencies, but I see now doing this daily I might have to watch 10 or more. Three time frames x 10 currencies is a lot for me to think about."" Organisation is SO important, more so if you're trading the devil's time frames. For us, we just need to be set up, PATIENT and DISCIPLINED as we lay in wait for PASR set ups. Until you can trade PASR in your sleep, you have to practice on THOUSANDS of charts and when you're done doing that, practice on THOUSANDS of charts. Recognising and trading PASR is NOT a learn as you go process! Trading while learning is financial suicide. The more pairs you have, the MORE you have to practice on but not necessarily trade. Practice makes perfect. Checking 3 time frames for trading the Daily and up is a doddle. Once you are trading, unless there is PASR on the Daily, there is no need to check anything else after you have your BIG BOSS and BOSS analysis in place. The BIG BOSS analysis is in place for a month and the BOSS analysis for a week so we only need a couple of minutes at the NY close to check our Worker charts. I don't know of any other business that produces such a high ROI for such little effort as trading the Daily time frame and above. As Jacko says "It's the best business in the world" 06/03/09 http://www.forexfactory.com/showpost.php?p=2775628&postcount=3549 Be aware that the big boys and brokers are always one step ahead of the game and know where your stops are. Take the recent Bond Shooting Star on EURUSD for example. This was a low of 1.4113. The big boys and brokers know that this is the signal for many to take a short trade. They also know that the majority of traders will have their sell stops anywhere from 2 pips below the low to 10 pips below the low. Knowing that their forward orders give them more buying pressure, they drive the price down to 1.4102 to take out all stops and therefore fill you short, before sending price on its merry way higher. So with your SL above the high of the Bond Shooting Star, you have now been taken to the cleaners for 150 pips or so. Hopefully, everyone on here recognised the strength of the bull trend but more importantly, the Bond Shooting Star. This is part of the reason why you sometimes see my stops 20 or 30 pips or so below/above the signal. I would much rather sacrifice profit pips than pay in lost pips. # 1 RULE: CAPITAL PRESERVATION 06/18/09 http://www.forexfactory.com/showpost.php?p=2814000&postcount=3780 Steve, You are not alone in knowing which BOSS trend to use to trade the Worker. Let's first just make sure we understand that even within one time frame there are several trends. We must establish what the dominant trend is and to do that, zoom out as far as you can go and it should be obvious. I have done this on eurusd weekly and you can see the dominant trend is UP as shown by the deep sky blue channel line. Then zoom in to find the intermediate trend as shown by the magenta line. Then zoom into that trend to find the short term trend as shown by the gold line. Then zoom into that trend to find the immediate trend as shown by the lime green line. You need to be aware of all these trends when trading the Worker to know whether you are with or against the trend. So, to trade the Worker, you need to know the IMMEDIATE BOSS trend since this governs the Worker direction. Remember also that if you draw TLs as I do, you can use them as your Momentum indicators which tell you far more than a squiggly line. So, where we are today on the BOSS, the IMMEDIATE trend is DOWN but it is at the cross - roads of it's short term trend meaning that something has to give. Whichever way this breaks IS the IMMEDIATE trend and will provide direction for the Worker. Don't forget that even 3 bars on the BOSS is 15 bars on the Worker. Hope this helps. 08/12/09 http://www.forexfactory.com/showpost.php?p=2947786&postcount=4499 STRAT’s BOOT CAMP Not having sufficient screen time to test my cycles stuff was becoming a worry for me especially as I saw how they reacted and were a little unstable on shorter time frames. I decided to ramp up my testing and give them the acid test – M5! Although I needed a lot of movement and action, I didn’t need it so fast that I couldn’t decipher what was going on so I decided the Asian trading session would meet my requirements. I also didn’t want a fast moving pair for the same reasons. I devoted Sunday to use the complete Asian session on EURJPY. This was not for the purposes of trading, only for watching how my cycles performed on shorter time frames. My strategy was that if I could get them to be useful and meaningful on short time frames, they would be good for the time frames I trade. M5 on EURJPY on Sunday was ideal for what I wanted – not too fast and not too volatile. After 30 minutes or so on M5 watching my cycles move relative to prices, I decided to drop down to M1 for an even greater test. How anyone can trade M1 is beyond me – even on the Asian session, things move so fast with such volatility that your brain (well mine anyway), can’t keep up. Since our brain is, and always will be, superior to any computer and software, imagine the problems indicators have taking prices from “x” bars ago and doing their calculations all in a split micro - milli - second to be immediately changed by a new price in the next milli - second. Just for the fun of it, I put up the usual suspects to see what they looked like – Stochastics, RSI and MACD. What a joke! Even making the settings longer was a futile task – they jumped about, crossed for a milli - second then didn’t cross and then shot to extremes and back again – I was dizzy just watching them and couldn’t wait to delete them. Unfortunately, my cycles were not as good as I hoped. Unlike oscillators, they were not jumping about all over the place but were calling cycle tops and bottoms far too early to be tradable (at this time frame). This then made the whole exercise very valuable as I now have to go back to the drawing board with my cycles. What was even more valuable was the acceleration of learning and understanding PASR concepts this M1 time frame brings. I accept the arguments that learning PASR on our trading time frames is slow and tedious and I fully understand the need for “action” to test ourselves in the field. While doing what I propose is far from perfect, it will, to some degree, accelerate your learning and understanding of PASR. Here is my recommendation to all new and beginning traders to PASR: Read AND understand the whole thread – do not flash read or skip posts. Make sure you fully understand the main candles: Shooting Star Hammer Bearish Outside Bar (BEOB) Bearish Engulfing Bar (BEEB) Bullish Outside Bar (BUOB) Bullish Engulfing Bar (BUEB) Dojis Small range bars Double and multiple tops and bottoms DO NOT CONSIDER INSIDE BARS (IB) Make sure you fully understand SUPPORT and RESISTANCE Make sure you fully understand how to determine SUPPORT and RESISTANCE. Make sure you fully understand what price does and how it behaves at S&R Make sure you fully understand Fibonacci retracements Make sure you understand CONFIRMED swings Make sure you understand the OPEN and CLOSE prices on candles Make sure you understand the WICKS and TAILS on candles Make sure you understand our use of the 20 and 50 moving averages If you understand all this then you will know and understand the concept of trading PASR. If you have reached this point and, with hand on heart, honestly don’t fully understand the concept, then go back to the beginning and keep recycling until you know it inside and out and upside and downside. I know there will be some of you that will just jump in and do this thinking you “know it all” – if you do, and you don’t “know it all”, it will be a meaningless exercise and a waste of your time as you will learn nothing from it. Even for those “experienced” traders, it is worthwhile to do a check to ensure you still know your “stuff”. Now decide on a time and date where you can put aside several hours to “watch” with 100% concentration, without interruptions, the Asian trading session. Select the slowest moving pair at the time you decide to watch, then pull up your 1 minute (M1) chart. Add the 20, 50 and S&R lines, then DO NOTHING. DO NOT ADD ANY INDICATORS Remember, WE ARE NOT TRADING – only OBSERVING. If we were trading this horror of a time frame, we would first have to study the M5 time frame but for now, we are only VOYEURS. If you haven’t already done so, ADD S&R from the next higher time frame. The first thing to do is acclimate yourself with the time frame – just observe the motion of the candles (price). (As I write this, I am watching USDJPY M1 test it’s Worker support.) When you feel comfortable with the speed at which price is moving, then start paying attention. Look at where price has been and what it has done in the 300 or so bars to the left of where price is at now. Don’t have a preconceived idea of where price is heading, just understand what price is doing at the levels it is at. If the pair you are watching is active, you will see the 1 minute candle moving up and down as buy and sell orders are triggered. It is also important to know, if you don’t already, that the BIG BOYS are using highly sophisticated computer software and programs to trigger trades at various conditions (prices, differentials, spreads, gaps, volumes, forward order loading, aberrations, anomalies etc.) Watch where price opens and how it moves within S&R, watch what it does at these levels. Watch where it CLOSES. Observe the wick and tail left behind. Watch where the next candle opens relative to the prior candle and the wick and tail it leaves behind relative to the prior candle. Watch how PASR works AND DOESN’T WORK on this time frame. Watch how price exhausts itself. Watch how the sentiment swings to and fro between the buyers and sellers. Watch how price behaves relative to the MAs in conjunction with S&R. Watch the ebb and flow of price activity – watch the calm before the storm. Watch how price “trends”. Watch how a “trend” ends. Watch how another “trend” starts. Watch how price moves in “waves” – watch the tide, watch the waves, watch the rip tides, watch the currents, watch the ripples, watch the backwash, watch the surf. Watch how these waves are “Impulsive” and “Corrective” or, in simple terms, with the trend and a reaction to the trend. See how a reaction turns into a new “reverse” trend. Watch again how important S&R levels are to prices. Watch how prices move from one level to the next – and back again. Watch how the buyers are rejected at ultimate resistance and the footprints they leave behind. Watch the same for the sellers. From all this screen time, one of the first things you should be observing and understanding is HOW and WHY the CLOSE is the MOST IMPORTANT level on a candle/bar. If this is not apparent to you, then keep watching and observing until it is. When you study and watch this for hour after hour, you really don’t need S&R lines anymore – you can just “eyeball” the candles for these levels for they have given all their secrets away and left huge footprints behind. Exactly the same is true for PA. After you have watched it for long enough, you can “tell” where price is headed next. I could keep writing forever on what to see but it would only bore the pants off most people. The objective of this exercise is to reach that point where you can “see” S&R without having to draw lines and to “see” where price is headed at these levels. When you get to this understanding you have truly reached the level of the 5% of successful and profitable traders. Don’t worry that you can’t do this at the first “sitting” – remember, it takes thousands of charts and thousands of hours of practice time – this is just a way of possibly reducing that learning and practice time. If you have sat through a complete Asian trading session and are no better, knowledgeable or wiser for doing that then trading is not for you – take up tiddly winks or something equally passive! When you do get to this level of understanding, transfer your knowledge to your chosen time frame. Whatever you do though, do not think you now know it all and can walk on water – this is still only the beginning – remember what happened to the last bloke who thought he could walk on water? 09/23/09 http://www.forexfactory.com/showthread.php?p=3087842#post3087842 IMPORTANT TO REMEMBER Trading is a game of probabilities We want ALL the odds, sods and variables ON OUR SIDE when we make a trade. Our success on our trades is NO BETTER than 50/50. When we are trading in the direction of the trend, we have, statistically, a higher probability of the trade going in our favour. Now, reverse this and trade AGAINST the trend, and statistically, you have INCREASED the probability of the trade GOING AGAINST YOU. Yes, you can look back at charts where you see good counter trend trades and I have been in many of them but EQUALLY, I have been in counter trend trades where PRICE reversed sharply in a short space of time (to continue the trend) and left me with unexpected and most unwelcome LOSSES. Remember, Professionals think about LOSING first, Amateurs only think about profit. The # 1 Rule of the Professionals is CAPITAL PRESERVATION. Counter trend trading is NOT capital preservation. I know many Professional traders who point blank, refuse to counter trend trade. When Jacko, who trades $2,000+ per pip, was trading EURUSD on the Daily, he NEVER used to counter trend trade. The times when he decided to try it, he always LOST. 11/10/09 http://www.forexfactory.com/showthread.php?p=3221845#post3221845 This just proves what I’ve said over and over and over. ONLY TRADE OPPORTUNITIES. An OPPORTUNITY stands out like a sore thumb – it is there for all to see. |
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Miscellaneous |