The Legend of The Gambler - page 17
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^ Thanks for reading.
I will try to keep the thread up to date.
With my new conservative risk mitigating approach, I think my returns will be relatively average for 2009. Although I plan on rolling out a few more higher risk systems to help me retain "THE GAMBLER" status and allow me to reach the Black Label.
Currently I have 4 Accounts for 2009 that I'm trying to figure out what to do.
1) Main Account (On Hold - Deciding on what to trade in 2009, leaning to trade hedge strategy, still testing on demo)
2) 2nd Account (Not Funded Yet - I may trade the toned down original version of the trend following strategy from main account)
3) Tortoise Account (Currently Trading Slow Gaining Trend Follower)
4) Hare Account (On Hold - Deciding on what to trade in 2009)
I'm still trying to figure out how to create a strategy with the combination of all the disciplines I've learned through the years. I have most of the frame works in my head:
- I trade only the busiest time periods which will give me good liquidity. (Which means better spread, less stop hunting, and faster price movement)
- I determine the trend direction on the higher timeframes
- I trade only in the direction of trend
- I use lower time frames to enter trades
- I don't revenge trade if I make some losses (manage my losers early)
Some things I'm still not sure on and mulling over: cost averaging, anti-martingaling, hedging. I think I can make this work, but it's all still in my head, and the time needed to forward test the strategy will be extensive.
I don't know if anyone is still reading this, but if there are any, let's talk some more shop (trading principles).
First of all, there is no Grail. Just you and the market doing the tango, so if you want to dance, get in the game.
But...But...How does one become profitable?
I've already talked about positive RR ratio as being a major benefit, and the importance of S/R and good MM management.
So besides those tools, let's see what else out there to be used...Is it to stack indicators upon indicators? There are so many indicators out there, but one needs to dissect them to see what makes them tick. 90% of the indicators out there are built on price of some form, delayed, lagged, projected, shifted, manipulated etc etc.
I would love to use the volume, but in Forex, it is quite difficult or impossible to use from the broker. Ideally, you would want to know the up volume vs. the down volume, that is how you can tell the true market sentiment. I haven't found anything suitable, and I'm not even sure the broker's data source even have this. Tick charts or volume charts are quite handy. On balance volume and accumulation/distribution indicators are too generic as they lump all volume as up or down depending on the bar direction.
So we are pretty much left with price, time, and other relationships to use. I'm going to focus on price, since that's what all the new traders love to use anyways. Let's say theoretically I go ahead and built a generic indicator based on price, does this give me an edge? Not really. It's just fallacy to think that stacking a couple indicators that are derived from price will get you some kind of magic system able to predict the future, umm..no. The sad thing is most new traders don't even bother to look at the code to see how the price is being manipulated, or to understand what the indicators are showing. They just keep stacking them up...LOL. What's next?
Using multiple time frames is a relationship that I would utilize next to get me closer to profitability. In the equity/future world, the old timers are always talking about drilling down. "Drilling down" means to go from higher TF to lower TF to get better resolution. You are using this principle to find a better entry, and every pip saved is getting you closer to profitability, so don't discount it. I use it, and it works.
That is why you often hear people talk about determining the trend on a higher timeframe, and using that bias to trade the lower timeframe. The caveat is that your higher timeframe market bias better be right.
Personally, for intraday trading, I prefer looking at the 1hr and 15mins, or the 30 mins and 5 mins.
Hopefully that little information above can get some new traders to start THINKING about the inner workings of an indicators and how it is being applied.
Knowledge is power.
I contacted Michal regarding purchasing his offline charts conversion for MT4. Most of the time, I don't believe in spending money on indicators or other magic systems. But charting is something I would at least take a look at. Let's see what the pricing is, not sure if I really need it either. If I do get it, I will make an evaluation of its accuracy and "tradeability". (<--Hmm..I think I just made that word up...LOL.)
I wanted to trade the US Open this morning, but I thought better to just sit out the short day.
After much thought and soul searching, I have decided that for 2009, I will return to higher timeframes and trade the swings that is on the 4H/daily candles. I think that will reduce my overall stress level during trading. And I will focus mainly on the Pound and Euro currencies, and other majors due to lower spreads. My equity is going to be swinging much more at the higher timeframe as I assume larger stop losses to stay in trades.
For each pair, I resolve to let my winners run and cut my losers short, and my monthly target is about 250 pips. Of course, the market will dictate how much my monthly profit will be.
Cheers, and a happy 2009.
I think a trader is constantly changing, hopefully for the better. And concepts that once seemed ridiculous or foreign to me, is now part of my knowledge base. So I guess it is always to keep an open mind when one is a student, and let's face it, we are all students and the market is the teacher.
For example, we all know that the correct TP is one of the hardest part of a strategy. I struggle with it on a daily basis, and it can make or break a strategy. There are a million ways to do this. Some use a fixed TP, others used optimized TP, more use trailing stop, some use price projection like Fibs and others just use their gut.
I have my own views on price projection that I have observed using previous price action, S/R, speed of the market, and historical % movement. The key is knowing the statistics of human behavior...which is why Fibs is thrown around because it is a pattern someone else observed to be in nature. Remember what I said about DNA and human emotions, somethings we can't even help ourselves, it is already programmed into us from birth.
For instance, Euro is sitting at 1.3850 right now.
If you were short, I would project the ideal TP @ 1.3765.
If you were long, I would project the ideal staggered TP @ 1.4105, 1.4230, 1.4310, and 1.4400.
I added 2 more levels of short projected TP @ 1.3565 and 1.3325.
So on the chart I have the aqua blue horizontal lines as my projected TP for the longs, and the red horizontal lines as my projected TP for the shorts. These are all manually drawn in because it would be very difficult to program what the eye/brain can see/determine very quickly. Just using historical price action, and areas where I determine to be support and resistance.
And for kicks, I added the fibonnaci lines from the dip to the peak. It is scary how close the fib lines at the 50% retrace and the 62% retrace is to my projected TPs...which I didn't use Fibs to draw.
Maybe it is a coincidence, maybe not. I don't know the answer. And I guess if enough people use fibs, it becomes a self fulfilling prophecy.
Like I said before, I'm going to post less in 2009, and focus back on trading starting Monday.
I have to be very careful at the start of 2009 because I'm moving to higher timeframe trading, and stops could be 300-400 pips wide. I hope to get out of the gate with winners, that would make subsequent trades much easier to take.
Seeya.
Following up on the target profit chart previously posted on the weekend. The market opened to weaker Euro$, and prices went through the first TP easily, and hit the proverbial wall at the second TP. If it breaks down more, the 3rd lower red horizonal TP line is where it will go. Whether it will go up or down from here, I don't know. All I know is that if it breaks this level, it is more than likely to reach the next TP line @ 1.3325.
I also had to adjust the Long TP targets from this current price. TP need to be constantly adjusted as new information (Prices) come into the equation.
New Format for the New Year. All Profit & Loss (PnL) is based on account equity.
Account #1 Summary:
Deposit (Inception April 08): 20 000.00
2008 PnL: +20 3XX.xx
2009 PnL: + 5 5XX.xx
Account #2 Summary:
Deposit/Withdrawal: Pending
2009 PnL: 0
Tortoise Account Summary:
Deposit (Inception December 08): 5 147.29
2008 PnL: + 6XX.xx
2009 PnL: - 1XX.xx
Hare Account Summary:
Deposit (Inception January 09): 5 000.00
2009 PnL: 0
Just put in a pending trade.
Sell Limit, 5 mini lots, EURUSD, 1.3815, 1.4001 SL, 1.3580 TP.
Current Price: 1.3682
This is one of my manaul trades, not based on any particular system, just price action. Looking for trading opportunities, and picking a direction. Unless there is new data (price action) coming in, I will leave this pending trade going. Trade management will start if the trade is entered. The price is still far away, so I can go take a nap.