Since discovering a few edges myself, I've been a little shocked at how little most people care. One guy I know did actually take some of my suggestions and seems like he might get it. He's the millionaire next door type (high net worth, beat up chevy truck).
What Really Turned My Trading Around
- Thread starter chrh1234
- Start date
Since discovering a few edges myself, I've been a little shocked at how little most people care. One guy I know did actually take some of my suggestions and seems like he might get it. He's the millionaire next door type (high net worth, beat up chevy truck).
Don't worry about it. I will say it here 1st : I intend to release my indicator here for everyone for free. Its just that I also don't want to throw it down without some consideration.
Yes I admit risk capital is a problem. I don't trade too heavily, only around 4 digits worth of capital, but I got to know a few successful traders who trade amounts around 6 digits. Like I said earlier, they saw what I was trying, liked it and encouraged me to go on. I asked many questions. So its kind of a combination of both : I finally found them + they somehow took notice.
Yeah, 4 years aren't enough. But I am glad at least, I am no longer bleeding onto my capital as compared in the past. That is quite important, as a start, I believe.
I will reveal slowly, as I do intend to release the indicator to the public on a free basis. Basically, if I'm to break it up into its various components :
- Modified Barros Swings
- Supply and Demand Zones extracted from the various extremes of the swings
- Trendlines running off from the last 4 extremes of the swings
- All 3 above run across Multiple Timeframes
Hope you guys had heard about these before. At least Barros Swings I hope. It forms the core of the indicator.
So overall, it shows the trader 'everything' he needs on 1 screen, without the need to 'switch' timeframes. This also allows him to see how every other timeframe affect each other, making better sense of why price moves in certain ways or why certain levels hold or break....etc
The indicator is created in such a way the trader uses less time to analyse, since 'everything is in 1 screen' in the most simplistic manner possible.
Wide Tailz got it pretty much actually. Its simple once you 'get it' and able to 'see it'.
Quote from Wide Tailz:
As Hershey would say, the right trend line defines each. Draw a line to the right of each best fit sequence. This technique is 100 years old.
*edit* now I see it, the first one is the higher order (longer time frame) chart. The left trend line is your exit.
In that case it would mean the final long would be countertrend.... not worth taking IMO. Sounds like you did fine though.
Yup. You are seeing what I am seeing now. Thank you for the compliments =>
Interesting things that I had found so far :
The survivability and longevity of a well taken position from a price extreme, WILL ensure some kind of profit eventually.
Just look at your trading logs. If you have positions dying too fast, it might be a good sign that you are just wrong about the direction taken. Time is an effective tool by itself to tell us if our diagnosis is correct. Its weird, coz I got this advice from a medical doctor. When they are not certain about something, but only know its probability, they do some basic treatment, let time play itself out, then react accordingly.
The interesting thing is that when one takes this approach, it makes learning price action 'an active process', not 'a passive process'. Try it.
So what is considered a good SL to take? So far from my research, for most FX pairs, an optimal SL to take is 20 pips.
But why? Let's see what we can find out from this picture. It shows statistics of price movement + overlaying bell curves.
This one is for EURUSD : What do you see?
This one is for Crude OIL : What do you see?
The survivability and longevity of a well taken position from a price extreme, WILL ensure some kind of profit eventually.
Just look at your trading logs. If you have positions dying too fast, it might be a good sign that you are just wrong about the direction taken. Time is an effective tool by itself to tell us if our diagnosis is correct. Its weird, coz I got this advice from a medical doctor. When they are not certain about something, but only know its probability, they do some basic treatment, let time play itself out, then react accordingly.
The interesting thing is that when one takes this approach, it makes learning price action 'an active process', not 'a passive process'. Try it.
So what is considered a good SL to take? So far from my research, for most FX pairs, an optimal SL to take is 20 pips.
But why? Let's see what we can find out from this picture. It shows statistics of price movement + overlaying bell curves.
This one is for EURUSD : What do you see?
This one is for Crude OIL : What do you see?
Starting with multiple contracts and peeling them off as the trade goes your way does not give you "versatility". It forces you to have higher winning pcts to compensate for the full all-out losses you take on the immediate stop-outs. You are putting yourself under a lot of pressure to perform well a majority of the time.
You are far better off to either go all-in / all-out or add as the trade goes you way. You want the market to catch you at your worst when you're holding your lowest level of risk, not your greatest.
If you add as the trade goes your way in a strong trend, you can be profitable with as little as 30% long-term winners. If you go all-in / all-out within either trend segments or range-bound price action then 45-50% long-term winners can produce consistent profits.
On the contrary, if you go below around a 60% long-term winning pct with a contract peeling approach, you will not make it. The desire of a trader to win a majority of the time is rooted in emotion/ego, not the math.
Fantasy Land: high winning pct combined with a 2:1+ avg win/loss ratio. Why? Because the two have an inverse relationship.
What you never emotionally want to do in the markets works best: ADD in strong trends. On the CL, on a DAY TRADE with a 5 min chart, using only 1 contract positions where your highest initial capital risk of loss is $150-$200, you can accumulate a 4-10 contract position spanning from 1 to 2.5 pts which can yield $2500 - $10,000 (within 30 mins to 3 hours exposure). You get 1-3 opportunities per day for these kinds of rewards. They're obvious moves with no more than a 20 ema to give you a point of reference.
Good luck.
You are far better off to either go all-in / all-out or add as the trade goes you way. You want the market to catch you at your worst when you're holding your lowest level of risk, not your greatest.
If you add as the trade goes your way in a strong trend, you can be profitable with as little as 30% long-term winners. If you go all-in / all-out within either trend segments or range-bound price action then 45-50% long-term winners can produce consistent profits.
On the contrary, if you go below around a 60% long-term winning pct with a contract peeling approach, you will not make it. The desire of a trader to win a majority of the time is rooted in emotion/ego, not the math.
Fantasy Land: high winning pct combined with a 2:1+ avg win/loss ratio. Why? Because the two have an inverse relationship.
What you never emotionally want to do in the markets works best: ADD in strong trends. On the CL, on a DAY TRADE with a 5 min chart, using only 1 contract positions where your highest initial capital risk of loss is $150-$200, you can accumulate a 4-10 contract position spanning from 1 to 2.5 pts which can yield $2500 - $10,000 (within 30 mins to 3 hours exposure). You get 1-3 opportunities per day for these kinds of rewards. They're obvious moves with no more than a 20 ema to give you a point of reference.
Good luck.
I understand and agree where you are going, especially about the need to perform well. This is why I work so much on the indicator, to give me very sound entries. Maybe we are disagreeing on other points as my intention is to let trades run for more than 1 day; I don't intend to 'day trade'/close my positions on a trading session basis.
To clarify about the 3 lot idea, Ray Barros explains it better than I do :
Subsequent Trade Management : Rule of 3
