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But why can't the tail also pass?

Discussion in 'General Forex Talk' started by D-Trader, Aug 4, 2010.

  1. D-Trader

    D-Trader Private, 1st Class

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    "When a buffalo goes out of his enclosure to the edge of abyss, his horn and head and his hoofs all pass through, but why can't the tail pass?"

    I up my one account to +800% and otherone ca +1000% with in 7 months. I was happy and near to cut my job and setup in trading to earn enough that I could start my new life. But suddenly all my trades were went negative and the account which I had ca +1000% fell down to 0% and whichone was +800% fell to 65%.

    BUT WHY CAN'T THE TAIL ALSO PASS??
     
  2. RahmanSL

    RahmanSL Major

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    Why can’t the tail (of the bull) also pass (through)???

    Hmmmm, I think the answer is right up Pharaoh, earnest8fingers, and Cowmadagan’s alley!

    As for your losing all your hard worked gains, it’s called “over confidentt”, and “greed”.
    I have done that quite a number of times too but, thankfully, the accounts were all Demo. Each time that I have carefully built a usd5k account to over usd70k, over confidence and greed took over and I soon blew the account with just a few bad trades.
    The trick to maintaining sustained profitability is to consider every trade as vital (which they should be) and not with contempt of market movements thinking we are invincible (which we bloody sure are) and can never lose.

    I don’t know how long you have been trading, but Newbies (as I am for just over 9 solid months now) have to train & strengthen our psychological frame of mind. If we let our heat rule over our brain, we might as well stop trying to be traders.
     
  3. D-Trader

    D-Trader Private, 1st Class

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    Hi Rahman,

    It can be over cofidence but not "greed". I want to ovoid or say want to control that whenever my trade ended negative I want to make a positive trade as quick as I can and make a mistake. So can be a reason that tail can't pass.
     
  4. RahmanSL

    RahmanSL Major

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    Not Greed?? : (( …..Ok, let’s chose a very familiar situation.

    Say we entered a “Sell” trade on AUD/USD at 0.9065. Few minutes later the pair goes down to 0.9055 and we have some profits. For the next few minutes, the price fluctuates between 0.9055 to 0.9061. We know the market is undecided, as buyers & sellers go in and out of the market, and that our position can change within seconds from profit to loss. But we held on, telling ourselves we will close position when the price reaches 0.9060.

    Suddenly, the AUD/USD start going upwards and we have the gut feeling that we are about to go into a lost, but we held on hoping the price will reverse once more. But the price kept going up, and up, and up as we watch in near panic as it approaches our SL. Rather than take the loss we have set for ourselves, we re-set the SL, but the price kept on following. End result, we either take a larger loss or keep moving our SL convincing ourselves that the price will reverse, but landed up wiping out our account.

    If we have been prudent and rational with our expected profits (from watching market movements of that AUD/USD), we would not have suffered that loss and our account would remain healthy. But, our desire, and our greed, to have that extra pip will kill us most times.

    That’s one of the many valuable lessons that I have learned (and still learning) from 9 months of Forex trading.
     
  5. Pharaoh

    Pharaoh Colonel

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    You'll almost never get the entire buffalo, but there are ways to increase the size of your slices on individual trades.

    Three come to mind.

    1. If you get good profits and then get taken out on reversals, go back to those trades and study the charts, especially 1 or 2 timeframes lower than what you trade on. What you are looking for is signs of reversals that could have told you it was time to bail or to . . . .

    2. Trail your stops. Reversal signs or not, it's never a bad idea to lock in some profits when a position moves strongly in your favor. If there are signs of a potential reversal, you can either leave the stops alone (hoping it's a small pullback) or tighten them up (to protect profits). Never, ever under any circumstances widen a sloploss.

    3. Partial closes. If a trade achieves a "healthy profit" (size of which depends greatly on the pair and the time frame you are trading), close part of it and move your SL at least to break even. Now you've made some money and are in a "no lose" situation.

    One note about stops - leave some room for slippage, and also don't trust a stop to hold if there's a big gap against your position over the weekend.


    Assuming your problem isn't with slices from individual trades, but from a sudden string of losses, it's time to do a more thorough analysis of what went wrong.

    First, please tell me that you are trading with stops and that no individual trade risks more than a small percent of your account. If you trade with stops that risk too much or with no stops at all, sooner or later, you'll learn to regret it, no matter how good your system is. The ONLY exception to this is for extreme long term trades where your leverage is 1:1 or less.

    If the problem isn't too much risk, but just loss after loss, examine your system and your trades. Did you violate any rules? Rules do need to be modified from time to time, but only after careful analysis, not after you went on a hunch and got lucky a couple of times.

    Did the market change? If you are a trend follower and the market went sideways, your system won't work so well. If you trade reversals and the market shifts into a solid trend, then those reversal signals that get you into trades might not move the market far enough for you to make any pips before the trend resumes. In either of these cases, you could have a very successful system and just be applying it at the wrong time. You need to find a way to "pre-screen" the market to see if your system is likely to produce any profitable trades for the day.
     
  6. Eric Alyea

    Eric Alyea Master Sergeant

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    Maybe you have those magic blessed cows from India

    Have you ever loaded a real “Bull or cow” into a trailer to take it to market, to sell it for it’s Weight.
    You have the lead halter on and your walking it in, just fine, head/shoulders/front feet, up in the trailer. Then all the sudden at the back of the ramp, the tail goes straight up in the air, then right, then left, then the hip sink, and the back feet magically find the edge of the ramp to brace themselfs on so as not to go in the trailer and it starts pulling away.
    Maybe you have those magic blessed cows from India you can’t kill, but here the head is not a guarantee of the tail unless you have a knife on the throat and a chain a pulley to move it once it is down (enough chit chat).
    I wake up to a 5 min chart, go in 10 secs, to see where the bullets are flying using cross hairs and writing down My guess of High/pivot/low numbers (not looking at what the computer will give me later. Then back out, 30 secs, 1 min, skip to (started at 5 min) 15 min, 30 min... and do this for each time increments, to train my eye/mind. Then I go to the computer stuff Daily PP (Pivot Point), Weekly PP, Monthly PP.
    Then when I have the “Centers” in mind I start looking at support and resistence. I don’t care which way.
    Here is where I go serious to use the cross hairs as a sniper again. Laying it as a observation tool to chart positioning and reading distances to prepare for fire positions (don't chase into an ambuse,... they always come back...heh..heh. heh,,, just wait, you can hit them{counter pivoit point trading}).
    The lines the computer give you, you won’t win with, they are always just short and you will lose.
    This is the most important part, after I do all that and get the numbers, I know they will change and go and clean my email box for all the reports and READ them.
    I have some obligations till Aug. 20, and have been updating my software to communicate better (My personal downfall) and hope to get back in the group actively.
    I thank all those that help me on my questions that I think others would like to know also...
    Thank you
     
    #6 Eric Alyea, Aug 5, 2010
    Last edited: Aug 5, 2010
  7. D-Trader

    D-Trader Private, 1st Class

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    Rehman it is realy not greedy but can be wrong calculation.
    Hi Pharaoh, You are right here "Never, ever under any circumstances widen a stoploss." Some time I did and suffer a hudge loss. Now I am working with point 3 also.
    Hi Eric, Realy the cow was magic but butchered. What writes Mumon in his poem
    "If the buffalo runs, he will fall into trench:
    If he returns, he will be butchered.
    That little tail
    Is a very strange thing."
    So my cow is butchered and now I have new cow (not magic) and I will let him to pass through (also tail) and will care not fall into trench.
     

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