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  #1882  
Old Sep 2, 2010 11:05am
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Quote:
Originally Posted by VEEFX View Post
Looks like you are based in pacific time zone like me. I am also having similar time zone challenges and find it quite stressful to my eyes to stare at a 5 min chart. I am also trying 4H breakout zones with entries in 5M and getting some success doing that. One has to define 'attack zones' and send out soldiers only in these zones where price volatility is expected. Just patiently look for every 5M FB is not advisable.

Once we have a few 500+ pips legs open, we could easily move to 1H TF and take FB entries. Only the scale is different. If one...
Good evening, all

Correct.

Im addressing this post for all and not just veefx.

Many of the traders cannot get over the mentality of drawdowns.

In trading, loss is part of creating profit.

There is no such thing as the perfect system or the perfect method that creates a 'surefire' guarantee for profit without losses.

Everyone needs to become a bigger person.

Im hoping/anticipating that the least I can achieve from this project is to get the message across to all potential professional traders that losing is part of winning, and that can be said for life as well.

I hope that many traders evolve their mindset through the project. Im not wishing traders to win but I want traders to lose.

Flying buddha is not the holy grail. I already mentioned it few times:

1. Participation
2. Low-risk entry
3. Growth

You only need to add 3 ingredients.

Few have already started to make connections.

They will soon connect that if 5 min chart is the same as a weekly/monthly/4hr/1hr/30min then..... ????

Once traders start adjusting to endless, countless, rows of losses on 5min entries that dies on breakeven. ................................... .......

They will evolve.....

To higher timeframe with same trading method/focal interpretation.......

And thennn... ??

They notice that scale is different and few candles on 1hr/4hr chart is worth few hundred pips.

And thennn... ??

Endless, countless, rows of losses on 5min entries that go forward for few candles which is about 10-15pips only is now the exactly the same scenario on higher timeframe but the scale has changed and the profit pips much larger.....

And thennn... ??

Something clicks.

Entries on 5min chart that goes against you might lose you -15 pips
Entries on 4hr chart that goes against you might lose you -40 pips

But....

The scale has changed and the potential profit from just few candles become much bigger profit.

BUT...

You notice a change in your emotional stability. You are now trading on 4hr timeframe but you dont worry about the drawdown. Why?? Cause you know that the price action will at least go forward by few candles which will be stretched out on all the smaller timeframes.

You have a thick skin of resistance against drawdowns and you dont care about positions going into drawdown as long as they dont close above your sell opening price or lower then your buy opening price.

You start looking at losses as positive contribution.

So... ??

Stacking happens in the lower timeframe whilst the scout on the higher timeframe grows.

Voila.

Does all readers feel like they have just went back 100 pages of this thread when I pleaded to all readers to practice x3 20 pip take profit exercise?

Well everyone is doing this exercise now.

Remember the explanation of using a scout on higher timeframe?

You use the same price interpretation of any timeframe on higher timeframe to justify your hindsight first and then zoom in the lower timeframe to stack.

Hindsight -> Price Action -> Scout -> Stacking

Which is first? Chicken or egg? It starts where it ends and it ends where it starts.

Can all readers in this thread acknowledge that everything I have mentioned so far is all linked?

Ladies and gentleman, you are still looking at profit and loss statement too closely.

You are not allowing the enlightment to come to you.

Not the method, but the approach.

Sincerely,

Graeme

P.S This post might sound like random rambling or something that really hits you. I hope its the latter.
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  #1883  
Old Sep 2, 2010 11:11am
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I might have confused some readers with my last post so please allow me to ask all a question.

Which timeframe does a new trend start..?

Would you say on 5min?

or Would you say on higher timeframe like 4hr?

Look forward to your replies.

Once again no right or wrong but perhaps an useful insight on how everything in the market really is all relative and there is no answer because there is no question..

Sincerely,

Graeme

P.S There is no method. You can enter after every small up/down candle with tight stop loss and let it run. This also works and I can prove it on the charts. Watch how all traders now ask for more detail and try implement it as a method when its not a method but just participating at a low-risk entry anticipating growth.
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  #1884  
Old Sep 2, 2010 11:21am
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There is no method

ATR, ADX, Fibs, ema, sma, RSI, macd...

Flying buddhas, inside bars, pin bar, engulf...

They all work while they dont work.

1. Participation
2. Low-risk entry
3. Growth

Sell when its down and buy when its up

Thats all its required.

It is so much simpler to trade very effectively..

Think about it please.

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  #1885  
Old Sep 2, 2010 11:38am
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Tomorrow,

I will show to all readers on charts what I mean of the posts today.

I will show again that

1. Participation
2. Low-risk entry
3. Growth

+

Sell when its down, Buy when its up is applied.

Sincerely,

Graeme
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  #1919  
Old Sep 2, 2010 6:16pm
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Good morning all

Thank you for the continued interest and the compliments. They are greatly apperciated.

Today I would like to step in and if I may re-adjust/ammend mindset that is required.

Before I begin, everyone is doing fine and it is all part of the learning curve.

First post of today, I would like to tell a quick story and this will answer the small quiz from last night.

When does trend start?

Thank you for your contributions and they are all correct to some degree. If market is universal and neutral then all your answers are correct whilst they are wrong as well.

Having said that, if the market is universal and neutral then trends start anytime, anywhere.

It can start from the tick of the minute chart or the double wick bounce of the 4hr chart. No one can ever state with proof that trends start on any particular timeframe. Nothing is pre-defined and destined.

All you could ever do is participate at the cost of a low-risk entry and let it grow. <-- And that is all about trading.

Many of the traders are trying to implement/add mathematical variables to an equation with no numbers.

Trust me when I say, you cant. Look around for many of the established traders on this forum. They had an 'aha' moment which was simply throwing out everything they were doing and finally just following the market.

Market is coming down, they enter sell, and then they risk control the position. When they enter, they want to see price continuing, not stalling or indecisive. So the pros start honing their skills to when they can enter so the price will at least go towards their direction by at least few candles.

If you are still trying to work out things in % and numbers, you will soon realize there is no such parameters to an infinite variables. And trading effectively is so much easier.

Continuing on..
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  #1923  
Old Sep 2, 2010 6:49pm
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Its all relative.

Although age, marriage, children, grandchild finally dawned the meaning to its full extent on myself but surprisingly I still have moments of enlightments when I connect the happenings of reality to that very sentence.

I can only imagine what thoughts was going through Einstein's thought process when he cemented that phrase for the centuries to come.

There is no one definitive or conclusive answer.

What is love?
What is death?
What is evil?

Throughout the thread I have given examples from casino games. I have great interest in gambling and believe that is the best business in the world. Since I know statistics very well, gambling is one business that you cannot lose unless there is no customers. However, I do agree that the moral behind the business is questionable and I justify myself by donating much of the profits.

Although I didnt quiet financially succeed enough to purchase a casino, I do have minor stakes in gambling operations overseas and various local and interstate pokie machines.

And they are absolute gold mine. Gambling interest is highly sought after and very hard to purchase for a realistic amount.

From my personal minor stakes in overseas gambling interest, I have become very well accustomed to all table games and its 'house edge.'

The least favourite game from the owners point of view is poker and blackjack. House only takes ante from poker and professional card counters take advantage of any shoe of cards without CSM (continuous shuffling machine).

Apart from the above 2 games, everything else cannot be beaten without any mechanical intervention.

Today I would like to tell you a true story that happened during one of the routine visits some time ago.

There was a gentleman who made an exorbitant amount of money whilst he was staying at a casino. He only played roulette and seem to have the midas touch. The management couldnt work out if this person is experiencing a genuine stroke of long lasting luck or something else. There was 20 personnel watching his every move and only on the 3rd day of his gambling spree did we notice that he was continuously tapping his feet before placing his bets. It was a definite set routine of action before placing his bet. Is it a habit? We wondered. Many of the large gamblers have telltale signs and habits whilst they gamble. After few hundred bets, the computers calculate the gamblers % of edge and it was alarmingly higher than most gamblers. A % that cannot be sustained continuously and it seems to be rising whilst it should be decreasing. Something was going on. We thought perhaps the wheel had a fault and it was aligned on an angle to cause a bias but this person would sit on different tables and different dealers.

Soon it was realized that this person had a mechanical palm device with a camera attached in the middle of his heavy framed glasses he was wearing. The camera takes few still images of the ball rotating around the wheel and then calculates the orbital decay of the ball and forecasts the trajectory on the 'segment' of the wheel the ball will land. And then the 'segment' is broadcasted in a very concealing earpiece. So before the ball is launched by the dealer, he would place few small bets here and there. You can continue placing bets whilst the ball is in motion and whilst it was in motion he would receive an insight to which segment it will land so he will place bets in that segments before the dealer calls out no more bets. He tapped his feet to reset the program for the next spin but since the palm device was in his shoe he couldnt tap it correctly without few attempts to reset. So we caught him out.

Continuing on..
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  #1927  
Old Sep 2, 2010 7:07pm
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And there was another gentleman.

He was a swedish person. Very quiet and calm and soft spoken. He was a regular patron who respected other gamblers and the dealers and would often be comped by the management. He was genuinely liked.

Some days he won, some days he lost.

He played few table games but stayed mostly on roulette. And then our tech team analysed that he had an edge over the game of roulette. After calculating his last few hundred bets he had a % edge over the house. It was miniscule but definitely alarming. Genuine stroke of luck or something else?

Is he a feet tapper? No, but technology always gets better.

And we couldnt catch him out. He became our target and every action was monitored and archived. After more data, it was hard statistical fact that he had an edge. We called him in.

What happened was amazing, he admitted he has a skill. He honestly upskilled his focal interpretation enough to actually calculate the orbital decay though his eyes and mind. It was not as accurate as using a mechanical device but it definitely beat over the house edge and he was making money. We had a long debate whether it is classified as cheating as many punters try to imagine the orbital decay but this person took it one step further and actually upskilled in it. And to call this person a cheater would place all other gamblers who try to calculate the orbital decay as cheating as well. We were cautious as this gentleman was very calm and collected and above all educated. Before we even asked how, he admitted to practice it at home on a real size roulette table. It took him many many many thousands of live viewing and now it became second nature. A single look at the ball spinning for a normal punter doesnt mean anything whilst a single look from this gentleman gave him 1000 details of the next outcome. This was the first time he was caught as he preferred to gamble on our grounds more often as it was closer to his home.

We let him keep the winnings however banned indefinitely from our grounds.

As far as I know he travels around the world doing what he does best.

Continuing on..
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  #1930  
Old Sep 2, 2010 7:57pm
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SO what does my story has to do with trading?

Well the underlying mathematical variables between gambling and trading is very similar.

Both dealing with infinite variables.

There are average gamblers who think they can come up with patterns on the previous win/lose streaks, increasing bet size, decreasing bet size, martingale, anti-martingale and all sorts. They all fail as they try to attach a mathematical variable to infinite randomness. And amusingly this happens in trading with so many traders looking at indicators of past history to forecast future. Thats why all admit that indicators do not work well but when they do work, do you think it worked cause of the indicator or just pure randomness that happen to give the trader using that indicator a stroke of luck?

There is one very large advantage to trading then to gambling. Even though both are dealing with infinite possibilities with both similar 'patterns' of past history but trading has the key element of growth.

Growth.

In gambling, you cannot let a bet ride since sooner or later the next hand will go against you and will lose everything that has grown in a single instance.

However, in trading, you can let a position grow and grow and grow and you could possibly diversify and capture the short/medium term profit when it goes against you.

And everything else is the same..

Participation.
Gambler placing bets, traders placing entries

Low-risk entry
Gambler placing a bet on red as the last 7 outcome was red believing this is prime opportunity, trader placing an entry on volatile breakout

But growth alone cannot make you the best trader. You also require that special edge that the swedish gentleman had. And the great thing about trading is that there are special edge already proven by professionals of past era and present era that have worked wonders over and over and over again.

Please allow me to show you something new today on the charts..
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  #1931  
Old Sep 2, 2010 8:16pm
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Look around this forum and notice few established and followed traders.

Some mention volatile breakout.

I have mentioned volatile breakout twice before but it had less reception than the flying buddha.

Reason?

Flying buddha gives the trader a definite answer to when to enter whilst volatile breakout requires slightly more lateral thinking.

Volatile breakout is my bread and butter.

Where is the volatile breakout in this established volatile downtrend?





2 things happen.

1. Price will hit your sell stop and clearly close below the sell stop. That is volatile breakout.

2. Price will hit your sell stop and stall creating a new support at your sell stop. This is failed and you close the position if the price closed above your sell open price or below your buy open price.

Lets see what happened to the above



What happens at the circled? Price retraces all the way back to sell open price but doesnt close above it. There is possbility that you have moved your SL to BE after the bold down candle but for me I usually dont place stop loss unless there is important news coming up. Most often I will leave the position and when I need to go out for the day then I would move SL to BE.

Let me show you a failed volatile breakout.
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  #1932  
Old Sep 2, 2010 8:28pm
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This is failed breakout





Most likely I wouldnt have SL but be very cautious about the triple wick bounce.



But what if a different trader using same breakout method came little later than the first trader and went towards the opposite direction.



And we all know what happens..

What about another example..
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  #1933  
Old Sep 2, 2010 8:43pm
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What happens if the next 4hr candle hits the sell stop but doesnt close below it?



So it became a failed breakout. I usually close it for a small loss.

Sell stop gets hit and price closes below it. Leave it to grow.
Buy stop gets hit and price closes above it. Leave it to grow.

Sell stop gets hit and price closes above it. Close it.
Buy stop gets hit and price closes below it. Close it.

This way we are only taking volatile breakouts. Please allow me to show you on eur/usd daily chart.

And only sell when 5ema is down and buy when 5ema is up



And it happens everywhere.. but the trick is to always pick your volatile breakout so your hard stop loss if you use one is very small
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  #1935  
Old Sep 2, 2010 8:58pm
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Just with breakouts is profitable.

So why is everything seem to work?

It all works because we add 3 ingredients.

1. Participation
2. Low-risk entry
3. Growth

Then everything works.

I chose gbp/aud as my project the next 2 weeks. It was one of my examples from the weekend and I mentioned I will be keeping this pair close to me.

See how I only used breakouts to have positions comfortably. I purposefully did not use any flying buddhas just to show all that everything works whilst it doesnt work.

Weekly gbp/aud


Daily gbp/aud


4hr gbp/aud


Some areas on 4hr chart where I would zoom into 5min chart for razor sharp entries

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  #1936  
Old Sep 2, 2010 9:06pm
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Quote:
Originally Posted by cameron1st View Post
Graeme, excellent lesson, thank you very much ! It's 1:50 AM UK time but I had to stay awake and see these posts :-)

I trade volatile breakouts when I can find them, but now with this information I am going to be more confident when doing so.
Thank you for the compliments, Cam

It makes my efforts worthwhile.

And my last chart. 5min of gbp/aud this week
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  #1939  
Old Sep 2, 2010 9:21pm
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Im currently

9 positions; unrealized 2200+ pips

21 breakevens (mostly on 5min)

18 losses; Average 21 pips loss per position, total just over 380- pips.

Current r:r if I close 1:6. This is not great and I wouldnt even consider it.

The only reason Im currently ahead of the group is not because im a super trader but:

1. Im not in a rush
2. I keep things simpler
3. Hindsight is working to my favour
4. Profit taking is stretched out

I have to admit, I could have been super aggressive and stayed up tuesday and wednesday and stacked heavier but I know everything is all relative and there is no point to overexpose myself.

I took it much slower and missed most/all of range and also missed few golden ones. It doesnt matter.

I want to say it again but the only reason Im in profit is because the market allowed it and my price interpretation/weekly forecast is correct.

My forecast for next week on gbp/aud?



Next week, I will watch for retrace.

But here is a list of things that I anticipate in preference of order

1. NO retrace. Just volatile breakout down
2. Less than 33% retrace and then volatile breakout down
3. 50% fib
4. Uh oh... Price coming back near open price of this week's candle which means I will start again.

Most likely will be 2 or 3. But who am I to judge the market but just follow.

If next week is 1 or 2 then I would be easily 4000+ pips end of 2 weeks.

I prefer not to see 3 because 50% retrace would mean most of the legs will be closed out on BE and then I would have to start again at 50% fib which I dont mind and I know its part of my job requirements.

Godspeed to all and I will take a step back again.

Sincerely,

Graeme

Last edited Sep 2, 2010 10:03pm
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  #1942  
Old Sep 2, 2010 9:37pm
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Just before I go and start answering private messages;

We are currently practicing on one pre-selected pair.

Once your trading 'habit' per se becomes professional level, you will pre-select 5, 6 pairs and monitor them together and notice that even though the pair of currency is different there is striking similarities with all of them.

When you start trading multiple pairs with the same method you are practicing at the moment, you are spreading your risk thinner whilst increasing your potential profit larger.

When you focus on one pair of currency, you either have one loss or one breakeven or one win.

When you focus on multiple pairs, you have mix of loss, breakeven, win BUT with the r:r encoded in your trading method/habit you will find almost all the time that few pairs that does loss = 1 pair of currency that did win. And you can be versatile/universal and diversify the winning profits from the winning pair of currency to replenish what you lost on the losing pairs of currency and keep the rest of the positions spread around alive on all the other pairs. Hiding and growing.

Voila. You are keeping the principal of diversification same and diversifying multiple pairs of currency. Hence you are now spreading your potential profit/exposure across the whole board of pairs of currency.

Welcome to my world

Sincerely,

Graeme
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  #1943  
Old Sep 2, 2010 9:42pm
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Quote:
Originally Posted by leggo View Post
Morning Graeme,
Could I please ask a couple of questions.

1, Is there a reason you prefer bodies to wicks for resistance? I know its all relative but i'm interested if there is an advantage to using bodies?
2, What would happen next week if price bounced at a level you did not anticipate i.e. 60% or 20%? What i'm trying to say is do you only trade in specific areas or are you more flexible?

Thank you I am learning so much its untrue!
Regards,
Ben
Good morning, Ben

Good question and I will answer it before I go.

Please do not take any offence at my short answer but

Its all relative.

You can do wick/body at any time and still serve the same purpose in the aim of the bigger picture.

True, there is bounce at other areas such as 60%, 20%, even 80% and so on. I do not look at the very price of 33%, 50% however look at the area. If price is destined to bounce at 60% next week, trust me, there will be plenty of price action giving buckets of warnings before the bounce back down.

Now having said that, how do I know if price that is retracing is not the new trend? I cant. I can only participate at low risk entry anticipating growth.

However to be fair to all readers, I will adhere to the rules of the project and will only trade in one direction for now but yes, I would take both buy/sell normally.

I recommend any traders who just started preferably not to be taking both buy/sell, you will undoubtedly burn yourself out before any enlightment.

Sincerely,

Graeme
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  #1951  
Old Sep 3, 2010 2:26am
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Thank you very much for the compliments.

Apologies if I do not address them directly on the posts anymore. It is not from any ignorance however I wish to somehow keep this thread as condensed as possible for the newer readers.

But, I do deeply acknowledge all compliments and it does make my efforts worthwhile.

I hope I can touch as many traders as possible.

Tomorrow is 1st weekend after 1 week of project. I can already estimate where most of the participants are. I know some have already been unsuccessful in getting their weekly hindsight correct which is just normal part of trading however did they take any measure to reduce their drawdown is the importance.

If your weekly hindsight have been incorrect (but it still too early to tell unless price is going to close extremely far away from your hindsight at the end of this weekly candle) it can always be upskilled by opening any 5min chart and practicing endless amounts of entries. All you need is for the price to go towards your direction by just few candles. Once you hit 8 out of 10, you are just like the swedish roulette gentleman and ready.

Hitting the weekly hindsight correct is just as important as hitting the price action interpretation correct on any lower timeframe. Your interpretation on the weekly/or any lower timeframe must be constant and there must be no bias on the difference of the timeframes.

I will show all readers something important to add this weekend.

Sincerely,

Graeme

Last edited Sep 3, 2010 2:58am
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  #1954  
Old Sep 3, 2010 5:49am
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Quote:
Originally Posted by traderray View Post

Hi Graeme, in your posts you state that if the breakout closes above your sell entry or vice versa then you close the trade. Just for clarification if the breakout is on a 4 hour or higher TF candle then I presume the close you are talking about is on the monitoring TF, i.e. one hour or lower? Is that correct. Also if you get a volatile breakout and a 50% retrace on the major TF candle would you have two positions?
Good evening, traderray

Good question.

When a volatile breakout is based on 4hr TF then the close of next 4hr candle is taken into account.

Usually a good volatile breakout will not hit your sell stop and then retrace 50% fib of the previous 4hr candle. However sometimes they do and yes whilst my breakout position is still in play I will zoom into lower timeframe to trade a different setup. I will have as many low-risk entries as the market allows me to.

Feel free to pm me to work closer, traderray

Sincerely,

Graeme
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  #1983  
Old Sep 3, 2010 9:32pm
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Good morning, all

Thank you for sharing your results.

First topic I wish to discuss over this weekend is about hindsight

There are participants who:

1. Correct hindsight, positions entered accordingly
2. Correct hindsight, very few attempts with mostly breakevens
3. Incorrect hindsight, overexposure and bigger drawdown
4. Incorrect hindsight, less exposure and smaller drawdown

I would prefer all traders to be more number '2' then number '1'

If you are number '3' then it is your mentality and slower approach is required.

If you are number '4' (which means you have less than -200 pips drawdown this week) you are doing well and you will find a correct weekly hindsight will pay you back that -200 by few folds at the least.

So, having said the above, today I would like to talk little more about hindsight.

What is hindsight?
It is a certain degree of probability that an intended course of action will happen in the upcoming events.

What does this mean in trading?

It means alot of $$$

I have mentioned few times that many of the starting traders fail because they do not know what to expect in profit terms or losses. If you dont have a target or a goal in profit terms then you have no reasons/answers to justify the drawdowns/losses you have just encountered.

In life/trading/business you need goals. You need few multiple goals all inter-linked together. Especially in business, you have end of week targets to meet, end of month and end of year. And the business managers will push forward little by little but they know which way they are going.

Many traders do not know which way they are going, they are trying very hard to understand all the ins-and-outs of trading however they dont have a goal.

Unfortuantely, to justify their lack of understanding they plough deeper into depths of working out indicators, numbers, methods, systems. Many many threads/posts in this forum tell of an 'aha' moment. There is nothing much to 'aha' moment apart from the fact that you finally throw out all indicators and simply follow the market. Thats it.

Hindsight gives you that goal you require. Hindsight places a trader in the equation where it is now solvable. It is the guiding stars in the dessert.

How much is a hindsight worth?

Some hindsights are not much but still worthwhile.
Some hindsights will pay you for the next few years.

You will never know untill you participate
And how do we participate? Via low-risk entry that agrees with your hindsight
And then you let it do its job and grow

I know I may be reiterating what has been said in the last 40 posts but do all readers completely understand the critical importance that Im trying to relay here. Without hindsight you dont have a map to your destination.

I chose gbp/aud as my project and posted an analysis on Monday and yesterday (Friday)


My hindsight is working at the moment (for now) and im in good profits. Before the start of the week how much profit did I anticipate? How much is hindsight is worth?

Its an open ended question with no answer.

It can be the next 2 weeks or next 2 months or next 2 years.



However the true worth in dollar terms/traders effort is worth more than any previous hindsights that didn’t work out added together. This is a fact.

Using weekly or monthly is swinging with very large bat. It may be heavy to swing and you might miss few balls but once you hit it correct, it will score you a run to the 1st or 2nd base at the very least or a homerun.

If I say just less than 50% of your weekly hindsight will be golden, what will you do? Do you have the patience and the unbending belief to continue on due course for the aim of a home run? Many don’t but I hope you do.

Imagine this for me.



A trader picks this pair of currency. 4 weeks of nothing. He/she may have captured short burst of profit between the weeks but in the overall long term perspective there is nothing exciting.

And that’s 4 weeks! Not many traders have the patience to even last 4 days let alone 4 weeks.

However this trader has a bigger picture and is holding on. Minimizing his drawdown yet taking all possible low-risk entry. At the end of 4 weeks, he/she may be already -1000 pips.
Then..

The week after shows something.



Engulf pattern; no long upper wick, closes past the previous week, descending wick pattern.

This trader is now wondering if this is the opportunity that has been waiting him.

Well.. what do you think?



I still have positions from the weeks after that engulf still surviving now after a year.

Largest is 3500+ pips whilst most legs are 2200+ pips.

Total unrealized is 20000+ pips so far.

I never knew that the weeks after that engulf bar was start of something huge. However, I continued with unbending belief of the bigger goal intended.

If I look at my largest leg of 3500+ pips and then see the loss from the 4 weeks before the engulf candle which was -1000 pips (roughly). Then that would mean if I close just the biggest leg right now, it would cover the loss of that 4 weeks + almost 8-12 weeks of future unsuccessful weeks? Then if I close out largest leg + few of the middle sized legs now then..

I cover myself for the next 52 weeks (1 year) of unsuccessful weeks?
But, how many golden opportunities will arise from now and the next 52 weeks?

Answer: There will be few more opportunities that will last the next 1-2 years.

So the more time passes, Im virtually trading for free?

Answer: Bingo. I mentioned few times before. “There is a surprise that awaits position builders. There will be so much more on the table and you wouldn’t be bothered wondering why or how.”
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  #1992  
Old Sep 4, 2010 2:21am
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Good observations, rdwatkins

If market is neutral and universal where the only constant variable is price (of supply/demand) then it is very true that any trading principal that respects the nature of randomness of the market will work.

I apply my trading method to many instruments of investing and it is amazing to see how universal and neutral all markets are. For the interest of all you can 'map' numerical data of median sale price of properties for a selected area for the last 10 years and you will be able to see dips and retraces, volatile breakouts. Yes, there are no specific governing force that controls the demand/supply of properties except the reserve bank increasing/decreasing interest rate but you will also be amazed how insignificant such releases will be to the actual price movement.

A trading method must work on all timeframes but also on any market.

There are very small percentage of elite traders who does have special advantage in trading which is inaccessible to most retail traders and there are special markets that do have somewhat pre-defined supply and demand which ofcourse will be a different story for a different discussion.

It is great to see that you understand how neutral and universal market is and you have confirmed yourself when you can connect your understanding to different investing instruments that are available in this world.

All traders must understand the principal of trading before the specifics on how to trade.

Sincerely,

Graeme

Last edited Sep 4, 2010 2:48am
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  #1993  
Old Sep 4, 2010 2:40am
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Quote:
Originally Posted by leggo View Post
Hi RD Watkins,
I feel I could have written the above myself. I agree whole heartedly. My entries are crap too, worse than yours looking at the stats. Everything improves with time though.
Cheers
Ben
Good afternoon, Ben

Please allow me to step in and explain something for the benefit of all.

I hope the information I provide in this post will be aide as an emotional support as Im well aware how you might perceive or feel.

And this applies to all traders who are currently down.

If you compare, my stats are very similar to yours (or if bigger drawdown). The only difference (for now) is the unrealized profit which can change this week.

The only reason I currently sit on unrealized profit is because the market has moved as anticipated as per my weekly hindsight.

If, the market did not move towards my hindsight, I would be far worse than you.

Market/life does not end with this one opportunity and will continue as long as 2 things still remain intact:

1. Your unbending belief which starts from believing yourself as a trader first.
2. Minimizing your drawdown/losses as per your skill in order to preserve your capital till the golden hindsight does inevitably happens.

I know you can.

Sincerely,

Graeme
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Old Sep 4, 2010 6:05am
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Good question, Tradestar

eur/jpy is showing a conflict of interest between monthly and weekly.

It is the conflict of interest that causes a trader to be uncertain of what to expect.

Do they take into consideration of monthly chart?

or

Do they take into consideration of weekly chart?

eur/jpy last month closed below the previous 2 months. This is a good sign. Price currently at 50% fib of last month candle which is nothing special (almost classic). If price retraces any higher than 50% I would be cautious but for now it is DOWN on monthly chart.

eur/jpy last 2 weekly candles has ascending wick pattern and long lower wicks. This shows weakness for sellers. So the correct price interpretation is UP for weekly.

So what do you do?

You know that trends start at any timeframe.

When there is a conflict of interest it is best to only take certain higher probability trades but keep your bias neutral.

The excellent thing about keeping your goals on the higher timeframe is that there are plenty of space.

Imagine the conflict is between 4hr and 1hr. Even if you are a super duper trader who takes both buys/sells you wont be able to catch both conflicts but when your dealing with weekly/monthly where the scale is much bigger there is chance that you can create short bursts of profits on both direction and then keeping the positions that the price finally moves onto.

For now, lets keep it simple and if you choose the weekly hindsight then I personally will choose UP as per my price interpretation. But im sure there are better pairs available than that one at the moment.

Hope this helps.

Kindest Regards,

Graeme
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Old Sep 4, 2010 6:29pm
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Quote:
Originally Posted by tjfxtrader View Post
September has started and we know the monthly open price. When the market opens next week we will have a new weekly open price. A weekly open above the monthly open would mean price is up for the month. Price dropping from the weekly open would mean price is down for the week. There is a conflict, yes? Price dropping below the monthly open would end the conflict, no? On the other hand, price going up above last's week's high price would indicator price is moving up. Would it not be wise to wait and let others resolve the conflict prior to entering...
Good question, tjfxtrader

Any trader with some degree of experience in trading will all agree that market indeed often have periods with conflicting interest in the difference of the timeframe.

4hr says UP
1hr says DOWN
Weekly says UP

and so on.

This is a normal part of randomness in the markets. Like any method/ideology/system in the markets there are both pros and cons:

If, you wait for the conflict of interest to line up between 2 different timeframes before entering, most often you will arrive late to the trend and most of the valuable and volatile movement have already happened. You can still create profit if the trend continues on for extended period of time.

If, you believe you have the flexibility to participate into the market via a low-risk entry at given opportunities for both buy/sell and attempt placing positions for the next upcoming big movement, I recommend using conflict of interest on daily and 4hr and nothing less. The reason is that any conflict of interest on lower timeframes, e.g; 4hr/1hr is too insignificant + potential profiting range too small (scale too small) + not enough space to move around. Eur cross has less than 30 pip range on most of the 1hr bar, which means it is very hard to quickly enter and exit when 2 pip spread is 7% of the movement already.

I personally prefer conflict of interest between monthly and weekly.

Sooner or later it will line up to one side of the direction. But I do know that waiting for the line up to happen first and then entering would have cut my potential profit greatly.

I anticipate and watch price action at important areas and for the example of eur/jpy I will watch the tip of the lower wick, 50% fib of the weekly candle that just closed, tip of the upper wick. However, I will also keep in mind if the intended movement of this week is volatile Im aware that less than 33% retrace before a move that continues all the way until friday. And to respect that I will have 1 or 2 positions early in a low risk entry to respect that. If they hit it will be big, if they dont I know I have to see what the market is telling me.

I hope this information helps.

Kindest Regards,

Graeme
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Old Sep 4, 2010 10:03pm
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Good morning, all

Thank you all for the updates. Everyone is doing well and it is all part of the learning curve.

In regards to answering VEEFX;

1. If your weekly hindsight did not work last week or still pending (price did not close against your preferred intended movement) it is wise to flick through the pairs and pre-selct a new pair. For example, eur/jpy is not a prime candidate for this week at the moment.

2. In regards to trading multiple pairs, you are welcome to attempt trading multiple pairs if you believe your actions are fast enough to handle the changes of price action on the fly. Many readers are having difficulties with one pair and if so please continue practicing one pair for now. For all readers who was successful with last week hindsight then you could try multiple pairs this coming week.

3. Diversification is at your own personal leisure. I have mentioned few times but as long as you are not diversifying for a loss and you have allowed time for the positions to grow then please go ahead and diversify. You will find that if you diversify early = you guarantee a small profit but stop the potential bigger profit. If you take slightly more risk and let the position grow or close on breakeven = you are aiming for the bigger growth but less accuracy. Its give or take.

4. There will be no major changes to the project however few recommendation that I will address little later.

Hope this answers your questions, VEEFX.

Kindest Regards,

Graeme
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Old Sep 7, 2010 5:54pm
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Good morning, all

Thank you all for the private messages/compliments.

I have been away for few days as I had few medical examination to be done. It is nothing new as it has been ongoing for awhile.

I will try my best to answer all the emails/private messages in the next 2 days unless Im unavailable again.

During the weekend, I spent most of the time in my bed with a laptop. I read this thread which was started 2 months ago.

It is great looking at past history to see how far you have come and also see that many of the readers have taken positive insight from the information I passed on into their trading.

Although the current project started just over a week ago, I know it will be the start to profitable trading to the traders that I have been able to touch or a new trading perspective to many of the traders.

There are 100+ pages in this thread and even though I was mainly responsible for the lengthy posts, a smart reader can notice that all the information can be condensed to a single post. However, whether the single post of information can be successfully interpreted by others is the concern.

There are only few things of importance in trading to make you profitable. And then time, positive expectation, exposure will inevitably create your profits.

It is now time to apply your understanding into your trading with respects to law of nature/probability/expectancy

If I try to summarise everything I do in one sentence:

I will risk/pay $10 for the chance of minimum $100 reward anytime, anywhere as long as I know by statistically that the given 'risk-taking opportunity' has a higher probability in 'potential profit vs time' compared to most given occurences.

And this perspective can be applied universally to any business/life/problematic models.

Please do not forget.

Sincerely,

Graeme

Edit: Stay away from forums.

Last edited Sep 7, 2010 6:22pm
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  #2145  
Old Sep 8, 2010 6:40pm
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Good morning, all

Thank you for the continued interest.

Although I am currently bed-striken I keep my word and continue monitoring your progress.

Im looking over the participants of the project and from the input some participants have provided I have noticed few things:

Their weekly hindsight from weekend 2 weeks prior is now well in intended direction and notice that traders are still in drawdown. How do you think this is happening? It is because your very own beliefs were shaken by yourself. Even though I urge all traders to keep a neutral view of the market at all times, the purpose of weekly hindsight is that it gives you a goal/aim to project your trading forward. In trading you are dealing with infinite combination of variations where there is no open/close equation, hence it is very easy to get lost in the 'randomness.' The weekly hindsight is the guiding stars in the dessert and you ruin the whole purpose if you and only yourself neglect its importance/agenda.

There are also traders who got the hindsight correct after a prolonged delay/retrace but the sloppy entries they punted too early has caused a critical dent in both emotional/financial capacity. This needs to be worked on your very own psychological traits. Why are you rushing? Is it the urgency to create money? I assure you, if you try creating profit at your whim you will be disappointed everytime as the market moves slower than traders expectation vs time.

There are also traders who unfortunately got their weekly hindsight wrong. This is just part of trading. The only important thing is to keep/maintain your beliefs/emotion/capital under control. I assure you Warren Buffet, Jessie Livermore also make wrong hindsights which are obviously never publically broadcasted but their winnings are always known. They are both very successful traders (per se) and they also know that the important element in their success is that winnings are maximized (held/added) and losses are minimized. There is nothing new to trading.

If there is nothing new to trading, then why do you think new traders all fail..?

If a trader knows 200 things on how to trade, then why do you think they still fail..?

Perhaps there is no such thing as failure but just the acceptance of loss which is mistaken for a failure? Failure and loss is different. Loss is temperamental whilst failure is permanent.

I have personally met many successful individuals. Many wealthy individuals who command vast commercial empires. They are all different to one another apart from one similarity. They are larger than most individuals. Not the physical attributes but in mental capacity. Or would it be easier to describe them half humourously that they have bigger cajones than most.

Joe is one of the individuals that I admire. He is an actuarian and an avid chess player. Even though I have an edge over most average chess players, I have only won twice against him and one of the occasion was his own personal forfeiture of a rook. At first, I was amazed and confused how the tide of the game drastically improves over time to his advantage. What was he doing that I wasnt? Was I too aggressive or too defensive? Perhaps I was thinking about it in too much detail. Most of the times I do take his knight or bishop first but I still manage to lose.

Then he said the magic phrase. He anticipates the next 5 movements from myself. He anticipates before it happens and when it does happen to his hindsight, he will move his pieces to take advantage of the situation. I was silently stunned at such remark. Its exactly what we do in trading and it was at that moment that once again I acknowledge how everything is all relative. He doesnt care that I have just taken his rook or bishop. That is just a small retrace/loss in the bigger scheme of things for him.

I believe most traders know how to trade. It is the emotional support they require.

Sincerely,

Graeme
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  #2148  
Old Sep 8, 2010 7:13pm
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Quote:
Originally Posted by cameron1st View Post
Hi Graeme,

Very enthusiastic to have read the new post, and happy to have you around. Wise words, and I think that if we really understand them, not just read, but understand them, it would help tremendously with the emotional struggles.

Kindest Regards,

Cam
Thank you for the kind compliment and your private message yesterday. It is greatly appreciated.

I personally love impressionist/comedians.

I have seen great impressions on Al Pacino, Nicholas Cage and they are all very amusing to watch. It is amazing to see such great impressions done so vividly and accurately.

Just on a lighter side, this is a great impression of Nicholas Cage



I thought it was very funny.

An impressionist does not focus on 'what' the actual actors say.

They focus on 'how' they say it. They step into the thoughts of the actual actors and envision on 'how' they say it.

If you search for any publically broadcasted trades/investments of Warren Buffet or Jessie Livermore, and carefully analysis their thought process. Ask yourself how they trade not why or what.

There is a constant repetition in their trading traits and same trading principals that are always consistent amongst all successful traders. Trading is nothing new.

Sincerely,

Graeme
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  #2152  
Old Sep 8, 2010 8:22pm
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Good questions, VEEFX

You have placed alot of effort into the questions so in return I will reply as detailed as possible.

1. Marion starts as soon as FB is formed. He prefers the entry to be closer to the higher price of the flying buddha candle as his stop loss will be tighter however sometimes it will be at the very bottom of the flying buddha if the flying buddha is a down candle. We both prefer volatile breakout to happen after the flying buddha and not a prolonged streak of stall or fluctuations. In the first chart you have posted with 4 circles. I can clearly see 2 or 3 of them with the price not closing above the FBs. There may be wicks that might pierce the high of the flying buddha but most importantly does not close above it. They are all good FBs.

2. Marion is an aggressive stacker. He will stack at every given opportuntiy on 1hr/15minutes as long as the 4hr FB is still in play. Once an engulf candle closes above a down candle, this will signal his half exit on all positions. I have viewed his proft/loss statement and noticed that he has many small -10, -20 pips against few +70, +100 pips. When marion places a trade on 1hr timeframe(or any timeframe) he places a hard stop loss above the previous candle. If price moves up and hits the stop loss, he will stop stacking on 1hr timeframe until a new engulf candle closes below it and will continue on. His/mine focus is on price closing above or below the open price.

3. I have one loss its over rule. He doesnt. Once a FB happens on 4hr timeframe and his position closes on stop loss, he will watch. His stop loss is just above the high of flying buddha. Does price close above the FB? If not, he will attempt again. See how he always only loses one position at a time. But once price moves into his favour he will keep stacking numerous positions whilst its moving into his way.

4. His positions on different timeframes are separate entitity from each other. He treats positions on 4hr timeframe as one group, 1hr timeframe as the other group, and separate group for 15min positions. There are always only 1 position in play in each timeframe. If he adds position at every 50% fib of previous candle on that particular timeframe, there are; 1 position on 4hr, 1 position on 1hr, and 1 position on 15min.

5. He considers 15minutes as just a big gamble and huge addition to his profit if it does happen. And most often few of them do. He always keeps the larger positions of each timeframe 'group' whilst closing out smaller positions from each group but more on 1hr timeframe and less on 4hr/15min. 15min closes often on breakeven or small loss which he doesnt care much. He knows just x1 or x2 positions from 15min timeframe that does survive for the 'duration' of the flying buddha will cover all the losses incurred on all timeframes (but this ofcourse depends on the logetivity of the FB in effect).

6. No. Independent. As long as the 4hr FB is in play he treats each timeframe a separate entity with same rule/principal. If price closes above the previous down candle (of 1hr/15min). He will stop stacking. If price closes above the previous down candle of 4hr, thats a warning that the FB opportunity is due to finish soon. But once the movement resumes on 4hr timeframe he will start again. His exposure increases and increases without any limit until he will cash out one giant profit. There are times when the FB only works for short time and then he would acknowledge his loss and move on. Sometimes few hundred pips. For him loss of few hundred pips is nothing to what he extracts on good opportunities.

I still remember the occasion when a FB opportunity on 4hr timeframe lasted 3 weeks or more. Joe still jokes that all his expenses are covered for the next 2 years.... How many more good FBs will there be in the next gap of 2 years?

Hope my answers help and please feel free to ask me if I have missed something.

Sincerely,

Graeme
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Old Sep 8, 2010 10:36pm
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Just continuing on with questions from VEEFX.

2. Marion considers the FB is still in effect until an engulf candle completely forms on the 4hr chart against the movement. So we are looking at a bold up candle that has a close price above the previous downcandle open price. Engulf pattern is when a bold candle forms opposite to the previous candle with the close price above the open of the previous down candle or below the open of the previous up candle. That is engulf and it is a strong indication. This price action alone is an alarm for both myself and marion. We do not want to see such action happen especially on higher timeframes against our intended movement.

Marion trades much larger lots than myself. I have restricted my lot size to 2 standard lots while he trades 8-10 standard lots per position. He closes 'one position' as a whole when he is diversifying. He does not reduce lot size. However, we all know everything is all relative and both you and Marion will arrive at same final door of profits with either methods of reducing exposure. He closes his positions out completely for the simplicity of it.

4. Marion stacks exclusively at 50% fib. 50% fib of 4hr candle, 1hr candle, 15min candle. He does it well mentally.

5. This is also at your personal discretion. As long as you are keeping legs on all timeframes to cover all aspects of result, you will still be profitable.

However, Marion has been using this method as a main source of income for the last 2 years so I will place trust/faith in what he is currently doing.

Having mentioned this, he is now reducing his lot size to 3 standard lots and looking at using timeframes daily, 4hr and 1hr with longer periods of growth.

My last correspondence was tuesday night and he is currently in eur/usd after monday FB on daily which happened to have a volatile breakout on the next candle (daily candle). If this week's weekly candle for eur/usd closes as an engulf pattern closing lower than last weeks open price of the weekly candle than he is in the best possible scenario for thousands of pips. Ofcourse this is all at the discretion of the market.

Sincerely,

Graeme
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Old Sep 8, 2010 10:39pm
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Quote:
Originally Posted by Ari Gold View Post
He probably means most people subconsciously or intuitively know what would make them money... but the constant battle with fear and greed muddies the water, we lose clarity and screw things up. Once we make a mistake its tricky NOT to enter some kind of downward spiral that throws the whole endeavour out of whack.
Thank you Ari Gold

Absolutely.

Sincerely,

Graeme
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Old Sep 9, 2010 12:10am
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Continuing on with VEEFX

1. Marion is also selective by only trading what he sees, when he sees. He does not stay on one particular pair. There are myth amongst traders that JPY cross has a stronger sell than buy... Could that possibly be from the fact that most JPY crosses has been in a strong downtrend for the last few years?

2. My explanation of spacing is slightly different and different context to Marion's method. I space out my opportunities across the width of the board, whilst Marion may spread his 'interest' across the board of pairs however once a FB works on a particular pair he is looking at its a different approach between him and myself.

3. Marion started with a large capital. It was 6 figure as well (not millions). If I may suggest: $5000 USD capital, 0.1 lot and double your lot size at every time your capital is trebled (300%). 300% increase and only 200% increase in risk (think about this). This will keep things under control. Im hesistant to apply such figures as a rule, as a long streak of losing FBs will dent your capital and emotion. And we all know bad things happen as soon as we turn the corner of anticipation.

4. Marion doesnt have any EAs as there is a certain factor of personal discretion he applies to his trading that an EA cannot decide for him. I believe the personal factor he is referring to his when price closes against him on 4hr timeframe he decides 'how many' positions he should close or leave open. I will answer this question with tommbstone below.

5. Marion has just switched form FXCM to Oanda. And in regards to keeping track I will answer with toombstone below.

Sincerely,

Graeme
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  #2164  
Old Sep 9, 2010 12:23am
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Originally Posted by tommbstone View Post
How does Joe keep track of so many positions? I guess if I ran 2 trading platforms on two screens, keep a 4h on one and 1h and 15m on another but still it must be never wracking. Or maybe I'm just not a good multi tasker. LOL
I can barley keep my hands off one winner/loser let alone multiple sets on same currency pair.
Good question, Toombstone & VEEFX

If you think about it for a moment you may realize that it is far simpler than most think or most actually do.

4hr candle closes as FB. Sell stop placed at 50% fib.

4 hours later (completion of the next candle), price has moved into our direction. He then places a sell stop at the 50% fib of previous candle with hard stop loss or opens a sell position if the price is already at 50% or higher. He opens 1hr chart; if price is already at 50% or higher, sell position is opened, if not, stop sell is placed with hard stop loss. He then opens 15min and does the same.

If you think about it, you are only placing trades at maximum only every 15minutes if you choose to trade 15min timeframe and once per hour on 1hr timeframe and once per 4hr on 4hr timeframe.

4hr = Once every 4hr
1hr = Once every 1hr
15min = Once every 15min

Your primary focus is on the current open positions which means you will only be looking at placing a trade every 15minutes if you choose to do so.

There cannot be multiple positions on one given 15min/1hr/4hr candle. There are only 1 position each. And if price closes against our direction in 15min/1hr/4hr then stacking stops and the 'last' position in play either hits stop loss or continues on hopefully.

If you want sleep place your last set of positions with hard stop loss and then go sleep. If the price continues when you wake up then you continue, if not, then shrug and move on. All part of the plan.

You can clearly see all 3 trades when you cycle through 4hr -> 1hr -> 15min, a distinctive green opened position line on our MT4 at 50% of subsequent candles of appropriate timeframe.

Sincerely,

Graeme

Edit: It sounds like many are interested in FBs so I will post some charts tonight.
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  #2177  
Old Sep 9, 2010 7:28am
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Good evening, all

Just a quick message from myself.

Earlier on, I promised to post some charts to further clarify FBs.

Unfortunately I was too strung out to make out to my desktop tonight. Hope this doesnt sound like an excuse.

Without any notion of ignoring any responsibilities, I ask for your understanding.

Im also still answering many PMs.

Sincerely,

Graeme

P.S Geoff - I would like to work closer with you as you only need a small nudge towards the right direction. Thank you.

P.PS - Trust me when I say that most of the participants of the project/thread is capable to be a profitable trader. Ask yourself why you may not be? Ari Gold summarised it very directly earlier today..

Cam - Correct. All 'sensible' method works in trading. However, to be profitable in the long run; profit taking needs to be maximized whilst losses are minimized. That is all that is required. It is that simple. You can trade trendline break with the same ideology and be equally successful.

Skyline - Thank you. Greatly appreciated.
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