That's cool.
If you lost money trading in 2016 here is my xmas gift to you
- Thread starter propwarrior
- Start date
That's cool.
It's completely your decision whether you invest any time at all. As I said in my original post if you are a profitable trader already you should just close this thread and continue and refine what you are doing. If you are a losing trader then investing the time and studying examples as per this thread yourself is the only way you will be able to judge if it is worth your time. 95%+ of traders who try and use the material in the thread will fail and I have explained why in the posts.
That is why I showed a live example in advance in post 1. I have also provided another live example and will update on that once further time has passed to see how it played out.
Trading doesn't work like this I will explain why. What you are trying to do to generate an edge is to identify a particular nuance or market condition that exists and get to know it intimately. As I explained in previous posts most people dont get this and it's one of the reasons they fail. Once you have identified your edge it is up to you to then wait for the conditions of your edge to appear and act then and only then. The losing trader will take 'the next set up' or the next trade that looks vaguely similar or mix/match/distort other strategies. We are in the business of doing the same thing over and over again with patience. So the little task you have set me is equivalent to saying to me 'up or down' in the next 15-30 mins. Of course with my experience I have an idea of where i think price will go and any given time however I only act when my isolated conditions occur. A losing trader will look for reasons to justify a trade as soon as they have opened up their platform. A winning mindset is to not even consider a trade until the conditions are in line with your edge. When i first started trading I would severely over trade, it took me many years to be able to trade for a full day 6-8 hours and be able to not trade AND be completely ok with that. This is completely different to not taking a trade all day but be chomping at the bit.
Hopefully you can see that from my viewpoint the question is meaningless and the answer to the flawed question should also be meaningless to you. Profitable traders dont know where price is going all of the time they just wait for the highest probability setups in their chosen conditions which they have studied intensely. If you however came back to me with 10 scenarios that match my scenario initial conditions for me to be interested in trading I would then be able to say if the following occurs I will then take a trade here with stop at A and manage it with targets B,C & D. You also have to remember that even if you did find scenarios that are personal to my methodology then whether I am right or wrong will have little bearing on your results. I have explained why <5% of people will fail even if they are told explicitly how to find an edge.
An example to illustrate is a trader who trades volatility crush on earnings. You question is equivalent to asking them how they would take a volatility trade when there are no earnings scheduled. Just because a price-time chart is constantly updating doesnt mean a trade is always available.
GL.
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PW,
Hope you had a nice XMas and was thinking about asking questions in the end of your 10 part, but decided to ask now as it might clear any wrong understanding moving further.
You said one has to compare the higher time frame charts before entering the trade on lower tf. I would like to know how you measure or gauge which are related tfs to do the above? And also on the stops/reversal levels have questions and I am giving them below.
1) If you are entering on a 15m tf, what is the nearest higher tf you would consult/verify to take a trade?
1.1) Is it possible to trade using one tf (lower) chart alone? or comparing higher tf chart is a MUST?
2) Also you said the price retraces either 50/70/80% to clear stops or even further retrace levels before going further on the previous move(after going long and retrace and then continue long ). In this scenario, how you would compare the 15m to the next higher tf and decide on any entry for trade. Because what you see as retrace or 80% retrace, may not be much in a higher tf. So on what basis you compare the higher tf before entering the trade?
3) To understand more, if you can provide any past examples of entering a real trade with respect to a lower tf and comparing higher tf and if there is an example of a trade in profit and also a trade went in a loss which would help us to understand your logic more clearly. I understand if this is too much work, I can wait until the entire 10 parts are complete.
Thanks again for your time/efforts.
Hope you had a nice XMas and was thinking about asking questions in the end of your 10 part, but decided to ask now as it might clear any wrong understanding moving further.
You said one has to compare the higher time frame charts before entering the trade on lower tf. I would like to know how you measure or gauge which are related tfs to do the above? And also on the stops/reversal levels have questions and I am giving them below.
1) If you are entering on a 15m tf, what is the nearest higher tf you would consult/verify to take a trade?
1.1) Is it possible to trade using one tf (lower) chart alone? or comparing higher tf chart is a MUST?
2) Also you said the price retraces either 50/70/80% to clear stops or even further retrace levels before going further on the previous move(after going long and retrace and then continue long ). In this scenario, how you would compare the 15m to the next higher tf and decide on any entry for trade. Because what you see as retrace or 80% retrace, may not be much in a higher tf. So on what basis you compare the higher tf before entering the trade?
3) To understand more, if you can provide any past examples of entering a real trade with respect to a lower tf and comparing higher tf and if there is an example of a trade in profit and also a trade went in a loss which would help us to understand your logic more clearly. I understand if this is too much work, I can wait until the entire 10 parts are complete.
Thanks again for your time/efforts.
You are reading it wrong. The concepts I outline in this thread are part of my decision making process but they are not my complete methodology. The material is enough to gain a solid edge. It would be futile for both writer and reader to post their whole methodology.
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Post 6/10
Trade Management
Effective trade management is critical to your success. In my opinion you should not enter a trade unless you have the prospect of earning a 2:1 RR on your higher time frame. I say prospect because the trader never knows the outcome of any one trade. Poor trade management is the hallmark of a losing trader. It takes no skill to make money on a trade. The skill lies in how much profit you have left after a long series of trades.
Let’s consider some examples of poor trade management and losing behaviour.
Example 1 – You identify a trade with 2.5:1 RR on your higher time frame. You enter and right from the outset you are onside and price moves quickly so you have reached 2R open profit. You decide to hold for the full 2.5R. Price quickly snaps back to 1.5R open profit. You decide you will hold as you still have 1.5R open profit, you tell yourself if it moves back to 1R open profit you will bank there. Price then moves back to 1R and you change your mind and decide to give it some more ‘room’. Price continues to come back on you and you end up banking 0.5R. You are annoyed at yourself as you could have made much more but also happy that you banked something. This is losing behaviour.
Example 2 – You identify a trade with 2:1 RR on your higher time frame and you enter. Price is sluggish and hangs around your entry. It then goes into drawdown and doesn’t seem to want to go in your direction at all. You are -0.4R in drawdown. (40% of your initial stop). It doesn’t look good for your trade, you think about closing it now but you tell yourself ‘I have to give it my full stop’ or ‘some more room to breathe’. Very soon after deciding to give it more time it quickly moves to -0.75%R (75% of your stop). Price hasn’t shown any willingness at all to go in your trade direction and it looks grim. You decide that since 75% of your stop is already lost you may as well hang in there for the full stop. You are stopped out for -1R your full stop. This is losing behaviour.
The above are 2 examples of poor trade management. There are even worse things you can do which I class as ‘toxic’. Toxic trade management errors are ‘school boy’ in nature.
Examples are:
· Showing a profit of 1R or higher in a trade then watching price come back on you and taking a loss.
· Increasing your initial stop to ‘give it more room’
· Deciding to increase your target or timeframe as your initial target was quickly met
A winning trader has an acute finely tuned sense of when to cut and when to bank. In example 2 a winning trader will rarely take a full stop out of -1R. When they get that initial feeling I outlined at -0.4R drawdown they will often cut on the next sign of a breakdown. The best trader I know will typically cut at around -0.5R. The only full stop he will take is if there is breaking news that goes against him. A good place to start is resolving yourself to never take a full stop out. How many times could you have taken a -0.75R loss instead of the full stop?
In example 1 the winning trader will often exit on an upswing (on a buy) or if price fails to hold a breakout of a smaller time frame level. They would typically already be looking to bank when they are in 2R open profit on an upswing. If the initial objective was 2.5R the decent traders I know would bank around 1.8R.
The best practical advice I can offer is to be on high alert when you are over 1R up in open profit on a trade, certainly 1.5R you don’t want to be giving back if you full target is only 2R to 3R. You should also resolve to never take a full stop out, even if you cut at -0.9R. The winning trader will be able to walk away without remorse after taking a small losing trade. If your setup failed you have to listen to the market and not go back in with a revenge trade. If you banked less than your target you have to be prepared to watch it then move to your original target without remorse and feeling the need to get back in. It doesn’t matter what price does after you close it only matters what it does whilst you are in a trade. A winning trader is content with their little slice of a move whilst occasionally catching the bulk of a move.
Trade Management
Effective trade management is critical to your success. In my opinion you should not enter a trade unless you have the prospect of earning a 2:1 RR on your higher time frame. I say prospect because the trader never knows the outcome of any one trade. Poor trade management is the hallmark of a losing trader. It takes no skill to make money on a trade. The skill lies in how much profit you have left after a long series of trades.
Let’s consider some examples of poor trade management and losing behaviour.
Example 1 – You identify a trade with 2.5:1 RR on your higher time frame. You enter and right from the outset you are onside and price moves quickly so you have reached 2R open profit. You decide to hold for the full 2.5R. Price quickly snaps back to 1.5R open profit. You decide you will hold as you still have 1.5R open profit, you tell yourself if it moves back to 1R open profit you will bank there. Price then moves back to 1R and you change your mind and decide to give it some more ‘room’. Price continues to come back on you and you end up banking 0.5R. You are annoyed at yourself as you could have made much more but also happy that you banked something. This is losing behaviour.
Example 2 – You identify a trade with 2:1 RR on your higher time frame and you enter. Price is sluggish and hangs around your entry. It then goes into drawdown and doesn’t seem to want to go in your direction at all. You are -0.4R in drawdown. (40% of your initial stop). It doesn’t look good for your trade, you think about closing it now but you tell yourself ‘I have to give it my full stop’ or ‘some more room to breathe’. Very soon after deciding to give it more time it quickly moves to -0.75%R (75% of your stop). Price hasn’t shown any willingness at all to go in your trade direction and it looks grim. You decide that since 75% of your stop is already lost you may as well hang in there for the full stop. You are stopped out for -1R your full stop. This is losing behaviour.
The above are 2 examples of poor trade management. There are even worse things you can do which I class as ‘toxic’. Toxic trade management errors are ‘school boy’ in nature.
Examples are:
· Showing a profit of 1R or higher in a trade then watching price come back on you and taking a loss.
· Increasing your initial stop to ‘give it more room’
· Deciding to increase your target or timeframe as your initial target was quickly met
A winning trader has an acute finely tuned sense of when to cut and when to bank. In example 2 a winning trader will rarely take a full stop out of -1R. When they get that initial feeling I outlined at -0.4R drawdown they will often cut on the next sign of a breakdown. The best trader I know will typically cut at around -0.5R. The only full stop he will take is if there is breaking news that goes against him. A good place to start is resolving yourself to never take a full stop out. How many times could you have taken a -0.75R loss instead of the full stop?
In example 1 the winning trader will often exit on an upswing (on a buy) or if price fails to hold a breakout of a smaller time frame level. They would typically already be looking to bank when they are in 2R open profit on an upswing. If the initial objective was 2.5R the decent traders I know would bank around 1.8R.
The best practical advice I can offer is to be on high alert when you are over 1R up in open profit on a trade, certainly 1.5R you don’t want to be giving back if you full target is only 2R to 3R. You should also resolve to never take a full stop out, even if you cut at -0.9R. The winning trader will be able to walk away without remorse after taking a small losing trade. If your setup failed you have to listen to the market and not go back in with a revenge trade. If you banked less than your target you have to be prepared to watch it then move to your original target without remorse and feeling the need to get back in. It doesn’t matter what price does after you close it only matters what it does whilst you are in a trade. A winning trader is content with their little slice of a move whilst occasionally catching the bulk of a move.
I don't entirely agree with above, as when you are "content with little slice of a move" you could be at the same time be compromising by giving up on a potentially more profitable outcome if you were to hold. Once I commit I hold. More than one way to skin a cat.
That's cool. As I said in my first post this thread is only for losing traders. If you are consistently profitable then you shouldn't listen to anyone and refine what you are doing.
You have to realise that 95%+ of traders will lose money no matter what strategy they use. I have outlined many mistakes in this thread. Most traders dont give themself a chance as they wont put the hours of study in. They wont go away and find 50+ examples and then study price nuances intensely and make it their own. A small minority of traders actually put the work in and master a nuance that is present in the market. A proportion of these traders will never be able to act only when their nuance presents itself, the majority will continue to mix/match/distort strategies. It really is that simple. Its just human nature. You can tell someone exactly what to do but people wont do it. You state that you found it difficult to take profits right. I can assure you if you cannot learn how to manage trades properly no strategy will work for you.