Baruch's Forex System Journal

[Baruch]

Quote from Scientist:

Added more to short here at 1.2320 level.

Holding firm and tight...

Also just entered ES short at 20.25 small size, then after the news I went large size at 20.50. OK, this might seem like an unbelievable entry now, and you really don't have to believe it. It was witnessed by trimdax in the chat, though, you can PM him.

Planning to cover most of ES around this level, a bit lower, maybe go for 5pts on that part, and keep the rest for a swing short. I think markets might tanks for the next few days...

Scientist

So you are adding to losers?

 

[Baruch]

Quote from Scientist:

Added more to short here at 1.2320 level.

Holding firm and tight...

Also just entered ES short at 20.25 small size, then after the news I went large size at 20.50. OK, this might seem like an unbelievable entry now, and you really don't have to believe it. It was witnessed by trimdax in the chat, though, you can PM him.

Planning to cover most of ES around this level, a bit lower, maybe go for 5pts on that part, and keep the rest for a swing short. I think markets might tanks for the next few days...

Scientist

Why do you fight the trend?

 

[Jayford]

I've been writing too much also. gotta concentrate on the trading more.

baruch, your systems say long obviously. Are you in a position or two.

i missed all of Yen, but caught Euro. covering right here.
look at time stamp as i think you are forex, I'm futures.

Jay

 

[Scientist]

Quote from Baruch:

So you are adding to losers?

No, never!

"Losers" are only that once the original plan is negated. Once that is the case, I will exit totally.

Position scaling / pyramiding depends on my plan. If the R:R of the play justifies it, yes, I will add on adverse excursion levels.

That isn't "adding to losers". Don't forget that the higher the level you add, the more your R:R grows also. Many people don't quite understand this. There is a big difference between adding to a trade you have planned well and isn't over yet and a trade that has obviously violated your plan. Once your "out" trigger is hit, you don't add - you run.

Averaging down, "Adding to losers", as you call it, is one trading style that is employed by some of the biggest traders out there. I've heard of traders at the CBOT that make a few hundred K a month that trade exactly like that. The only example I can think of on ET is AMT4SWA. He trades like that, too. People say he's got balls of steel, but he doesn't. He knows how ratios work. The levels of maximum excursion are the levels of highest R:R, so why not add there? Do the maths on this and you'll understand. AMT4SWA is one of the best traders I know, he's posted his trades for months LIVE in NihabaAshi's chatroom, and he regularly trades the ES with anywhere between a few dozen and a few hundred contracts, doing just that.

That said though, I think he's a little more extreme than me. I'm actually quite conservative.

This trade showed declining volume on the retrace to the top, so I decided to close all at the 320 level, got out almost BE on 1/2 and ~-10T on the other 1/2.

This one was a good play within my game plan, I lost a little bit - ah well! But if I win - very high reward!

For me, trading is not about being right. It's all about ratios. If the potential R:R is 4:1, I can be wrong 75% of the time...

OK?

P.S: ES short from 20.25 starting to look nice.

 

[Baruch]

Quote from Jayford:

I've been writing too much also. gotta concentrate on the trading more.

baruch, your systems say long obviously. Are you in a position or two.

i missed all of Yen, but caught Euro. covering right here.
look at time stamp as i think you are forex, I'm futures.

Jay

Hi Jay,

Yes, my system is long in all 3 pair. Have a position i CHF. Maybe I should look at yen? But heard a lot of sudden moves (50-100 pips) in a few seconds. Someone told me that AUD also trending nice. True?

I had decided not to write before the trading day was over - to focus only on trading. But I had to warn Scientist. I am afraid that he destoys himself! Maybe he should write a book about his trading - and life. Scientist is a great writer.

 

[Jayford]

Quote from Baruch:

Hi Jay,

Yes, my system is long in all 3 pair. Have a position i CHF. Maybe I should look at yen? But heard a lot of sudden moves (50-100 pips) in a few seconds. Someone told me that AUD also trending nice. True?

Aussie is a great trending mkt over time, as is CD, but too thin short term imo.

No, yen doesn't make those kind of moves unless major shit hits the fan, or you are right at a big intervention level (and then it pops right back when the intervention stops much of the time).

problem with yen is that it often is not smooth. hard to figure with TA at times. But also better than euro currencies at other times (past week for example). i would trade yen also if i was you, but sticking to what works now is good too. these are great mkts lately.
OK, i'm out of forum for a few hours.
rockin day!
Jay

 

[Scientist]

Quote from Baruch:

So you are adding to losers?

Quote from Baruch:

Why do you fight the trend?

Baruch... Why all these shallowly thought-out one-liner questions?

I have explained the scaling down to you already. As for the trend part - Which trend? On the 15m? 5m? 60M? D?

How about the downtrend and triangle on the Daily? That's what I was looking at. It was a longer-term play, trying to fade the triangle. The triangle broke - I exited. It cost me little to find out. It would have made me lots of I was right.

The triangle was at 320. Once that triangle was broken, and no real resistance shown, all I had to do is exit for a small loss. I lost about -1 and -11 on each half, that's -6T on the entire play.

If the play was right, however, my upside (lower triangle line) was over +100T. My final R:R played out 10:1.

Try not to be right, biased, or god forbid, opinionated. It's not about being right. It's about being right big and wrong small.

I hope this answers all your questions. If you still don't understand what I did here, perhaps you should ask a good options player - they understand these things even better than I do.

 

[Baruch]

Quote from Scientist:

No, never!

"Losers" are only that once the original plan is negated. Once that is the case, I will exit totally.

Position scaling / pyramiding depends on my plan. If the R:R of the play justifies it, yes, I will add on adverse excursion levels.

That isn't "adding to losers". Don't forget that the higher the level you add, the more your R:R grows also. Many people don't quite understand this. There is a big difference between adding to a trade you have planned well and isn't over yet and a trade that has obviously violated your plan. Once your "out" trigger is hit, you don't add - you run.

Averaging down, "Adding to losers", as you call it, is one trading style that is employed by some of the biggest traders out there. I've heard of traders at the CBOT that make a few hundred K a month that trade exactly like that. The only example I can think of on ET is AMT4SWA. He trades like that, too. People say he's got balls of steel, but he doesn't. He knows how ratios work. The levels of maximum excursion are the levels of highest R:R, so why not add there? Do the maths on this and you'll understand. AMT4SWA is one of the best traders I know, he's posted his trades for months LIVE in NihabaAshi's chatroom, and he regularly trades the ES with anywhere between a few dozen and a few hundred contracts, doing just that.

That said though, I think he's a little more extreme than me. I'm actually quite conservative.

This trade showed declining volume on the retrace to the top, so I decided to close all at the 320 level, got out almost BE on 1/2 and ~-10T on the other 1/2.

This one was a good play within my game plan, I lost a little bit - ah well! But if I win - very high reward!

For me, trading is not about being right. It's all about ratios. If the potential R:R is 4:1, I can be wrong 75% of the time...

OK?

P.S: ES short from 20.25 starting to look nice.

OK, Scientist. I am so happy that you only got a small loss. But I think you are wrong.
When you have a 10 pips loss, and add more contracts to your position, you add to a losing position.
I know some traders do that - but how long will they be traders? Most of the time the prices comes back, but not all of the time.
It's much better to add to your winners.
And you were fighting the trend - that's not a good idea. It's
much better to follow the flow. Why did you go short? When I look at the chart, I see no reason to go short at 1.2310 and 1.2320. (maybe around 1.2335, but only maybe). But I could see a strong case to just follow the trend.
OK, Scientist. I think you are a great writer. I am very happy that you post to my thread. And as I told Jay: You should write a book about your trading - and yourself. We need a book from a real trader! Promise me that you will do it.

 

[Scientist]

Quote from Baruch:

But I had to warn Scientist. I am afraid that he destoys himself! Maybe he should write a book about his trading - and life. Scientist is a great writer.

LOL! Yeah right Baruch!

The actual truth is, I borrowed on all my credit cards, mortgaged all my houses and bet the farm EUR short @220 this morning, and I'm still holding!

ES short (the biggest play for today) still looking noooice...

 

[Baruch]

Quote from Scientist:

Baruch... Why all these shallowly thought-out one-liner questions?

I have explained the scaling down to you already. As for the trend part - Which trend? On the 15m? 5m? 60M? D?

How about the downtrend and triangle on the Daily? That's what I was looking at. It was a longer-term play, trying to fade the triangle. The triangle broke - I exited. It cost me little to find out. It would have made me lots of I was right.

The triangle was at 320. Once that triangle was broken, and no real resistance shown, all I had to do is exit for a small loss. I lost about -1 and -11 on each half, that's -6T on the entire play.

If the play was right, however, my upside (lower triangle line) was over +100T. My final R:R played out 10:1.

Try not to be right, biased, or god forbid, opinionated. It's not about being right. It's about being right big and wrong small.

I hope this answers all your questions. If you still don't understand what I did here, perhaps you should ask a good options player - they understand these things even better than I do.

Hi again,

Let me tell you this: I was afraid that you would destroy yourself. I am very happy that you did'nt. LOL!
Which trend? I don't care about day charts, when the market moves 150 pipes in a short time. Just call me a scalper! But for me 150 pips are a trend...
P.S. I think you are right about options (or poker).