Chinook's EUR/USD (E/$)Mumblings

Quote from SteveL91:

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These are both positions where the setups are good for weeks, and quite possibly months. What happened? I checked it this morning, found I had a nice gain (about 160 pips between the two when I checked it) and after much battling, I couldn't justify leaving them open.

This is something I desperately need to work on.
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Basically, I sacrificed the potential for two 500+ pip gainers because I was scared of lossing the gain I had.
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I know how that "sure feeling" about equity positions works - and gives you better comfort because you feel you have an "information-edge".

With currencies it's all much more dodgy and "technical, mechanical" reactions (reactions more than actions it seems to me) that decides longer term direction.

What I am doing tonight is NOT LEAVING the position and then not looking back. I'm PAUSING it for a PURPOSE, and being watchful. The aim is it to IMPROVE an entry after the pause-exit by explointing shorter term swings in a range which seems fit. The purpose of this is to LOCK IN more profits, and continue the longer term positional trade.

Locking in more profits would let me withstand more mental pressure against closing in on the discretionary OCA stop limit - easily accepting it as opposed to being reluctant of letting it get there because of profit concerns.

I just thought of this when I was "looking ahead" on charts approaching 1.2950, so it can harldy be called an "very elaborated plan", but it sounds like a strategy which has some risks, but very good positives as well.

Do you think something like that could help you in staying in trades for longer time ? I.e knowing that you have better profits still if it gives back a little, or a lot, on the next step after entering with an improved entry over the exit.

edit: on second thought, the "pause" better not be extending over more than staying within the "perceived range" or else I guess they would all be separate trades at some point. No harm in that either, but the original OCA target price-area should be honored, as well as the original OCA stop before the pause. Violating any of those two would obviously violate any logical reasoning attached to the initial analysis for the positional trade.
No harm in pausing - and then seeing it hit that last OCA stop limit - simulated of course - not going opposite direction on it. That will just make the pause seem all that much smarter.

I guess an intermediate conclusion of this "strategy" is that the benefits are very, very good. Some of the negatives are like was mentioned a break-through via extension or continuation/rally of trend - and all the mental pressure consequences it brings. Perhaps if I muse a little on it I can get something reasonable "plan-" or "strategy-like" out of it.

Hey, then I guess this would be part of a "complete" strategy for taking long positions -- just what I've been looking for. :)
 
Quote from Gringinho:



Do you think something like that could help you in staying in trades for longer time ? I.e knowing that you have better profits still if it gives back a little, or a lot, on the next step after entering with an improved entry over the exit.
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I'm honestly not really sure why I'm more comfortable letting equity positions go; I suspect it has a lot to do with the nature of trading on margin and as such the "unlimited potential for loss." As it stands now, I simply don't have the experience to have the confidence when an FX position is retracing because there's always that possibility of lossing a lot more than the open gain.

Also, for what it's worth, while I believe FX can definitely be traded solely off technicals, I do think in the long-run, it responds to the fundamentals better than equity markets. I really don't have any facts to back it, and I haven't really followed any market long enough to say definitively; it's really just a hunch.

The problem I would have implementing your strategy goes back to the lack of confidence in myself. I think it would require precise, and more importantly, consistently precise timing to make it worthwhile over the long run. I just don't know that it's really do-able. The other factor is that ultimately, I want to trade the weekly/monthly/year long tends. I really don't know that trying to get the entry exact is worthwhile; if you're expecting to pull 500+ pips, I don't know that it's worth trying to get that extra 5 or 10.

Again, this is just me. I don't think I have it in me to be a scalper or even a day-trader. Your strategy would maximize those skills, I think.

The one thing that will help me is actual trades. Watching a chart move in the direction I expected is all well and good, but it doesn't mean anything. On the other hand, building a base of actual trades will add equity to allow for the mis-trade, and it'll also add in the confidence required to wait out the retracements.

Or, I could just go to Vegas for a week or two and play so much poker that I forget I have any positions in FX. Hmm... that might not be a bad idea! :D
 
Me talking, Globex EuroFX closed for a little, and spot FX continuing ... a little something I had forgot. :)
Tiredness from programming all night and staying up until 06 in the morning can attribute to that miss.
Well, Globex trading has it's disadvantages sometimes - but I'm pondering about taking the step into real spot trading not too far in the future.

I guess I should have "planned" for the Globex close too - getting in if I thought the risk would be to the upside during the close ... well, that made little sense saying. I guess I should have gotten whatever improvement just before the close if I should adhere to the initial logics and analysis. Or can the Globex close be a legitimate pause to reduce risk ? Hmm, several ways to look at this. Needs some more thought.
:)
 
I think if initially the trade was done for a longer time frame, trading around a partial position while leaving a core untouched is a good all-around compromise. Also the idea of exiting and being able to re-enter at a better price works better mentally I think if you view the closed profit as a temporary "cushion" for you to be fearless in extracting the best possible re-entry.
 
Quote from SteveL91:

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Also, for what it's worth, while I believe FX can definitely be traded solely off technicals, I do think in the long-run, it responds to the fundamentals better than equity markets.
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The problem I would have implementing your strategy goes back to the lack of confidence in myself.

I think it would require precise, and more importantly, consistently precise timing to make it worthwhile over the long run.
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My opinion is also that FX responds much better to fundamental news and events than equities. That's probably why I found it to suit my personality and interests better than the broad equity indices or very large companies.

The strategy I was starting to outline perhaps has the benefit of improving confidence in the trade by increasing profits on the trade - not without risks of the opposite of course.

It is not so much precise timing, but rather a simplistic look at charts ahead to see where some retracement likely will accur.

Then taking advantage of this retracement - which logically could develope into a reversal at some time and hitting the stop limit - to better withstand mental pressure of abandoning the trade for smaller profits than the original OCA target.

Of course the OCA stop limit is discretionary - just like the OCA target. But rather than letting a very probable retracement from some range extreme (or well known S/R level) give back some of those profits, exploit the fact and entrench your trade with a clever pause. Admittedly the fiercest S/R levels can end up in a reversal which goes through the OCA stop limit, why not try and out-smart those retracements ?

The only timing is trying to get as close as possible to the perceived extreme of the range before the retracement or stalling. It helps with some scalping skills in those circumstances, but I think that any "reasonable" sign of stalling - like a fast rally or extension towards the extreme of the range (closing in on the S/R) with slowing and retracement or profits starting to happen would suffice. Then the risks start to play as it might go higher or lower for your next entry for the original OCA target.
 
Quote from illiquid:

I think if initially the trade was done for a longer time frame, trading around a partial position while leaving a core untouched is a good all-around compromise.

Also the idea of exiting and being able to re-enter at a better price works better mentally I think if you view the closed profit as a temporary "cushion" for you to be fearless in extracting the best possible re-entry.
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Exactly! I forgot that this is almost just the same as "letting half the profits run"-strategy - just with a twist.

It would be interesting to "know" which works better. I know the halve-the-position strategy is sought by a lot of traders. I will have to do some maths on this when my mind is less sleepy and fatigued.
:cool:

It probably depends a lot on the trader's skills too. So maybe it's an individual fit which must be sought out. I think that for now (without calculating risks etc.) the strategy I started to outline will have a lot more potential profits than the halve-your-position trading - unless you change the original target for the analysis and just "let it run" until some discretionary wildcard target. I think my approach is a little more "disciplined" and involves more "concreteness" as it involves a fixed long term target and stops.

edit: I think that I should have entered a bid at my perceived best entry before I let Globex close, but since trades are not executed when it's closed obviously - unlike the IB nightly close - it just makes sense for someone like Neal who can interchange the two markets easily.
:)

edit2: The central point in this pausing is the OCA stop limit and the OCA target. If those conditions still hold when restarting after the pause - it most probably still is a good trade.
 
It seems the perceived range-turbulence is stronger after the Globex stop, all of this makes me more sure that pausing was right - for this instance. Now if that was luck or is a viable strategy remains to be seen, proved.

It seems the lower 40s or perhaps below is still a possibility. Of course, now I have the luxury of calmly re-assessing the original analysis and target again. Or I could call it a chance to chicken out - and thereby returning to the old "scalp"-profit-fear mentality for the trade.

Nah, I think it was part of a working strategy template, and will continue to see it as this.

An adaption to the conditions now could be to see any reversal in direction towards my last OCA stop as the best re-entry level - as long as I don't fall into the trap of negating the underlying trend I still think exists towards my original target and analysis. It all gets grey and fuzzy here. :)


edit: Not many trades taking the bait to go below 1.2940 - but not a lot of support either. It's just feeling out traders here. :)
 
Quote from Gringinho:



It is not so much precise timing, but rather a simplistic look at charts ahead to see where some retracement likely will accur.

The only timing is trying to get as close as possible to the perceived extreme of the range before the retracement or stalling. It helps with some scalping skills in those circumstances, but I think that any "reasonable" sign of stalling - like a fast rally or extension towards the extreme of the range (closing in on the S/R) with slowing and retracement or profits starting to happen would suffice. Then the risks start to play as it might go higher or lower for your next entry for the original OCA target.
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My apologies. I clearly didn't fully understand what you were trying to get at.

I think you may very well be on to something as I suspect it would incorporate your scalping abilities. I've never felt comfortable trading S/R so I'm not sure it would work for me. Basically, the closest I come to what you do is checking a faster time frame for confirmation of the slower time frame. For example, I'll use the 2h to confirm the 8h; daily to confirm the weekly, etc.
 
The €$ is much closer to my previous stop (which was lifted upwards), but I chose to re-enter here because I think the trade still looks good. It's almost 15 ticks advantage on re-entry - which is most welcome if it progresses in a meaningful way.

Further extensions downwards is a risk, and would hit my re-entered OCA stop limit.
 
Quote from SteveL91:

My apologies. I clearly didn't fully understand what you were trying to get at.

I think you may very well be on to something as I suspect it would incorporate your scalping abilities. I've never felt comfortable trading S/R so I'm not sure it would work for me. Basically, the closest I come to what you do is checking a faster time frame for confirmation of the slower time frame. For example, I'll use the 2h to confirm the 8h; daily to confirm the weekly, etc.
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That's what I do too - just that I check the price-action in the book etc. So I get a little more finer grained time frame than you. But my "position" is also not of such a long time frame - maybe less than 6 hours or 12 hours, before the target could get hit. If we had a day or several days of tight ranges it would of course extend without hitting the stop.

Otherwise the check-ups you do are similar to what I do, and I think they are always prudent when "something happens".
 
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