FOREX PRO Weekly June 04-08, 2012

[Lolly Tripathy]

As sive sir said reverse H&S
its forming i thng

 

[Synchronicity]

Asif, your quote is spot on. I've started reading Marks book and have even downloaded the audiobook from Audible so that I can listen to it when I'm out walking - I do that a lot just now.

One thing that I have realised already is that what I thought was a strict trading plan was just a set of guidelines. I was using it to get a hint of whether to trade then making the decision based on all sorts of other stuff which wasn't in the plan. No wonder I couldn't be detached from my trades - I had no idea whether they were going to plan
I genuinely didn't realise that was happening until I read about this in Marks book.

Once I finish the book I'll be re-reading DiNapolis book, writing down every detail of my plan and then I'll be writing down the justification for every trade I make. Hopefully that way I'll be able to spot when I start going off plan...

All the best

Michael

Hi Mate,

One professional trader to a another, You should have a WRITTEN TRADING PLAN of your stragedy defining your edge.... And if according to your plan an opportunity occurs you enter it THATS IT!!! without any thinking of what you may think will happen or not... After this your edge will either work or not if it doesnt that should not effect you one bit!

You just move on to the next trade according to your plan.....

If this is not happening you need to review your plan otherwise you are not professionally trading just gambling..

I have quoted this One from my personal experience in the quest which i have achieved but is a daily ongoing exercise..from the book by Mark Douglas... As this is all you need to be successful as believe it or not you dont need to know much about the markets to earn money!!!!!

This is not a critism just hopefully to help... )))))

 

[Lolly Tripathy]

This is not a critism just hopefully to help... )))))[/QUOTE]



I am 100% agree with you Asif
just calculate ur stoploss and take profit (R:R) and
"set & Forget"
it will work either way.
Its nt criticism at all but a lesson for all newbies..
Thank you for sharing ur valuable experience

 

[asif faryad]

Asif, your quote is spot on. I've started reading Marks book and have even downloaded the audiobook from Audible so that I can listen to it when I'm out walking - I do that a lot just now.

One thing that I have realised already is that what I thought was a strict trading plan was just a set of guidelines. I was using it to get a hint of whether to trade then making the decision based on all sorts of other stuff which wasn't in the plan. No wonder I couldn't be detached from my trades - I had no idea whether they were going to plan
I genuinely didn't realise that was happening until I read about this in Marks book.

Once I finish the book I'll be re-reading DiNapolis book, writing down every detail of my plan and then I'll be writing down the justification for every trade I make. Hopefully that way I'll be able to spot when I start going off plan...

All the best

Michael

Hi Michael,

Thats good to hear,as most of us have fallen for this without knowing as most of what we do is based on conditioned thinking we make decisions on auto pilot....

Trading can be defined as going into something that can have an unknown outcome...
We can use the best of the best tools (anyalis) in our case we have Sive and Felix to thank for great anayalis..

But the Markets can do anything as all it takes One big gun ie fed ecb intervention to change direction so a plan defining your edge is essential...

And the main thing is your money management.... If your edge is even 50% successful and your take profit is 2:1 ratio you will do very well!!!!! indeed..
I have found using my edge my plan achieves 75% my take profit according to my trading plan is a minuim of 1:1 or 3:1 locking in profits to make it a risk free trade...

 

[asif faryad]

This is not a critism just hopefully to help... )))))

I am 100% agree with you Asif
just calculate ur stoploss and take profit (R:R) and
"set & Forget"
it will work either way.
Its nt criticism at all but a lesson for all newbies..
Thank you for sharing ur valuable experience [/QUOTE]

Thanks Loly,

Looks like you have the correct MINDSET for a professional trader..)
Wishing you great success in your business....

Asif

 

[Damian1987]

Speaking about "set & forget"...How do you guys manage the term "cutting your losses short"? I use Joe Dinapoli's time stop wich is the "3 period rule"...meaning..if after 3 periods of entering the trade I am not on the winning side, I look for a way out. But that's the only tool I've got. I like the idea of "auto pilot" but still I hear over and over again "cut your losses short", wich is giving me some troubles lately. Any ideas/techniques, Louis, Sive, Asif? any?

Btw..Asif you should really post more often, your comments regarding traders psicology are most usefull to every1.

 

[asif faryad]

Speaking about "set & forget"...How do you guys manage the term "cutting your losses short"? I use Joe Dinapoli's time stop wich is the "3 period rule"...meaning..if after 3 periods of entering the trade I am not on the winning side, I look for a way out. But that's the only tool I've got. I like the idea of "auto pilot" but still I hear over and over again "cut your losses short", wich is giving me some troubles lately. Any ideas/techniques, Louis, Sive, Asif? any?

Btw..Asif you should really post more often, your comments regarding traders psicology are most usefull to every1.

Thanks Damian,

For the kind words..

Ok my personal take on cutting stop losses are in my plan..

To give an example of this... I am in trade according to my plan i will go in at 2% of my trading capital my take profit will be a minuim of 1:1 on how the trade takes course what i mean by this that if i am in this trade for a few days at minuim i will take the profit at the 1:1 ratio or i will be taken out by my stop loss..

Normally as i trade personally on the longer time frames (monthly to check my edge if a trade is there) and weekly chart to dertimine take profits.

If my trade is going well i will bring my risk (stop loss) to break even after hitting 1:1 ratio and then gradually keep locking in profits example when trade hits 2:1 i will lock in my profit at 1:1 on some trades have achieved up to 5/6:1 ratio..

But my main factor is that once i am in i dont worry about being taken out or altering the trade as THIS ALL SHOULD BE DONE BEFORE ENTERING THE TRADE....

I only use the anyalis as a tool as 90% is sticking with the plan and 10% is the system (edge) we use..

We as the human race are conditioned we have to know what will happen etc etc etc...

Trading goes against all these beliefs!!!! its going against what we as children growing up being taught by our parents then teachers employers etc examples Dont do this money can only be earned by working hard....

These on a sub consciences level make us take actions even without sometimes realising after the event..we then say only in hindsight! lol

Trading is the most simple thing !!!! yet the hardest to overcome!!! as we as humans are out of our comfort zone we dont know what will happen next!!

But in the markets the more you know works aginst you!! as information overload!!! As everyone in the market has one GOAL TO MAKE MONEY!! THATS IT!!

I use to spend over 95% before (2 years ago to be exact) looking at charts listening to the news at bloomberg etc yet i made no serious money...

I know just look at my plan if there is a trade i put it on and then pursue my day by fulling my hobbies etc.....


Hope this helps mate )))))))

Asif

ps: Damian another book i advise is by Brendon Moynihan..What I Learned Losing A Million Dollars...
Highly recommend it its a brilliant and useful book to compliment Marks book.

 

[asif faryad]

You got me going know Damian lol on a roll..

Trading professionally is a business treat it like this.... Make sure you always pay your self from your profits... example what ever i make on a monthly basis i take 70% out leave the 30% and with compounding factor its great!!!!

When you use that money for living life it then starts to feel real!!!!!! and great that you earned this money !!! and as humans the brain then starts to help in the new process as it has a reference that it works!!! As if the brain has no experience of something its not done before (your previous experiences) it will on a sub consciousness talk you out of it as it is trying to protect you ,its doing by default what it is suppose to be doing so need to see a shrink

Hope this helps all trying to achieve Professional traders staus..

 

[seedof]

thanks Asif you've really got what it takes to handle trading psychology and your words are very helpful

 

[Damian1987]

You got me going know Damian lol on a roll..

Trading professionally is a business treat it like this.... Make sure you always pay your self from your profits... example what ever i make on a monthly basis i take 70% out leave the 30% and with compounding factor its great!!!!

When you use that money for living life it then starts to feel real!!!!!! and great that you earned this money !!! and as humans the brain then starts to help in the new process as it has a reference that it works!!! As if the brain has no experience of something its not done before (your previous experiences) it will on a sub consciousness talk you out of it as it is trying to protect you ,its doing by default what it is suppose to be doing so need to see a shrink

Hope this helps all trying to achieve Professional traders staus..

Asif, Thank you for the extent of your response. If I understand correctly then you do not cut your losses short? As per your commets "I do not alter a trade" I tend to think so, please correct me if I am wrong. I support and hence understand the importance of not letting a profit go to a loss and trailing a stop. However If I find myself on a loosing trade..or what I think it could be a loosing I tend to look for a way out. One way is by putting a time stop (3 period rule) .But another way is to analyze Dynamic pressure and some other factors. Actually..is no that that much of analyzing..it's just..that..when it is meant to be a good trade..it works well and pretty fast..it shuold be easy , just as you said,..so if market is not developing with ease in the way that would lock me profits..and I start loosing..I want out. My chances are less than before, market is not working the way I expected to work (Of course I do not feel betrayed by the market, I do not receive this information as painful, It's just a signal..from the market..that this edge..is not working..as simple as that) After all..when we hide our stop beneath 5/8 fibnode when we have entered at the 3/8, is to protect it, meaning...a retracement is expected so we can get out at a reasonable price if market don't go crazy. Let me put today's trade as an example. Earlier this morning I said that if EUR/USD would respect 4 hour K resistance I would wait for the 15 minute trend to go bearish and sell a retracement. This image show the context time frame (4 hour chart) and the proper K-resistance area around 1,2495

Of course we see three 4-hour bars now coz the picture has been taken just 10 min ago. For the original picture/post look earlier in this thread.
So, big bull candle closed at k-resistance. and then we saw consolidation. During this consolidation, 15 M time frame showed a nice crossing of the MACDP giving a sell signal, as shown in the picture below.

I entered some pips below .382 retracement at 1,2485 (where the red horizantal triangle stands). with a Stop loss Above the high at 1,2512.
This trade is based on the 4h time frame (im selling a 4 hour k resistance) so the 3 period rule applies on the 4 hour chart..meaning the time stop was 12 hours long, if after 12 hours i was not on the winning side I would look for a way out. However, I expected (coz i wanna see a nice quick follow thru of my edges) some fast reaction on 15 M chart aswell, So I apply 3 period rule on both (being less stric on lower TF and absolutely stric on higer TF). After 3 full 15M periods of entry I was barely on the winning side, two periods later I exited the position at 1,2502. Why did I exit? I've written down the reasons on my trading diary "Cutted loss short, no follow thru of minesweeper entry. Weak dynamic pressure, close above .618". I had a few other valid points at the time I took the choice(daily and weekly oversold weakening chances of 4 hour k resistance to work + last 4 hour candle closed above 4 hour expansion targets + juicy area right above)..but I will take those 3 as the only ones coz they are the ones who made it to the diary.
Market continued moving up..hence I "saved" myself 10 pips per contract.
Given trading is a probability game, the chances of having a winning trade with a good ratio at the point where market had close above .618 where much fewer than before.trade did not worked as expected..reaching .618 is expected..that's why SL is above the high. I take the trade at .382 coz I really want to be in but I know .618 is very much expected since previous move of minesweeper technique will always be much greater and carry strong momentum, but certainly I do not expect a close above .618.
I am not always right as in the picture below, but I like playing the rules. And one of the rules kinda says "if it aint looking pretty , look for a way out..cut your loss short"



Sive master we really need you in this conversation I think, .