Hi, yesterday I tried to short EUR/JPY but I’ve been punished.
I played it as a breakout around about 118.85 area. I’m new to this approach, so my question is: should I had waited the price going under this wk opening price at least before shorting? I assess the trend on 4H TF and it was still going down without any violation of prior day’s High. Thank you in advance
no, not especially.
i wouldn’t have waited had i been tracking that pair around that area.
it simply didn’t work out & you exited via your stop loss.
do you mean you played it as pullback rather than a b/o mc? because it rolled over into monday’s close off friday’s high & was continuing to ease into yesterday’s european open when i assume you entered.
or is your b/o comment referring to yesterday’s tokyo low by any chance?
Hi Corpellan, I entered at about 13 GMT when I saw the price going down through the short term support area (gray rectangle): on 15m seems like a breakout setup. I also considered the stoch hook at about noon but that support had been rejected many times so I preferred waiting a break.
aaah right i see where you’re coming from now.
i can’t really comment on that tactic then mc because i don’t play support or resistance levels in the way you’ve described. the only key levels i observe are prior session (day/week/month/quarter etc) highs & lows.
we also probably differ on our definitions of a breakout too.
mine would typically describe that which cad/jpy experienced yesterday through the current years lows or gold in january through 1220 & again recently through 1245.
those are the characteristic type of breakouts i look to identify & focus on, but if you’re experiencing success identifying & tracking your preferred technical breakout set ups in the way you’ve described, then keep batting away!
those setting long bounce orders y’day had their stops captured when it fell through the years lows y’day & the breakout players have had theirs captured this morning 
so the only ones to escape the double clubbing were the intraday shorters who primed their entries ahead of the b/o & cashed out down at the average day’s range extreme into the european close.
Exactly, & as you’ve noticed from the evidence presented, it’s the same story virtually every time significant levels come into focus. But I doubt it’s a surprise to you guys, or at least by now it shouldn’t be.
You’re more than well aware by now how these areas contain large collections of stop orders, & yesterday that area was absorbing them from the bounce brigade hiding their long defensive exit stops looking for another reversal back up off circa 85, & sell stop orders from the blind breakout crew below 84.90
Whenever a level such as that pops, price can accelerate aggressively which is when you need to be tuned into your daily & weekly average range barriers to gauge the momentum flow & prepare for your next decision.
oh don’t worry i intend to.
my fxstats activity data tells me what i’m doing is right so i have no intention of becoming distracted or nudged off track.
when i first began adopting the background/foreground chart set up routine i kept waiting for the roof to cave in & inform me i wasn’t plotting enough pre-trade groundwork, especially considering the advice dispensed throughout the forum relating to tuition time & longevity of learning etc, but the selection criteria kept producing quality opportunities & the resulting returns are confirming the routine is adequate enough to keep things ticking along nicely.
if it aint broke it doesn’t need fixing!
well, the proof of the pudding is in the eating isn’t it & i’ve dipped in & out of the content here several times now & each time certain statements & comments hit home harder than they did the first couple times i read them, but i keep dialling back to soultrain & billy’s posts on page 59 following my introductory contribution.
soultrain was right & it’s only now, 12 months down the line that i’m beginning to realise & appreciate the wisdom in the top half of that post.
but then i guess that kind of advice only comes with the correct level of experience & of course the recipient has to buy into & trust the advice being dispensed as well as trust their own hunches & judgement.
so far i’m not in the least bit unhappy about backing that hunch
I’m facing something of a conundrum with this…
For example, back at the end of Feb (27th/28th) I was in an AudNzd long, which I had entered the week before as it broke through 1.0700. I had kept my initial stop at 1.0625 risking the usual 0.5% of my equity which gave me my position size. I scaled out of the position as it fell back throough 1.0700 a couple of days later which happened to also be the low of the 22nd so it made sense. I held the rest because we were still holding above the week’s lows…then we got a dip on the 28th which took me out, right before reversing higher.
So if I had waited for the close of the day, sure it would have been great. But intratrade, the market pushed below prior day & prior week’s lows. So it seemed like a logical place to be stopped out?
More in general: how do you balance the “spike risk” with your bet size? To make things clearer: we don’t know what’s going to happen but what if the market spikes way below your initial stop loss level? Do you not exit? Do you actually hold on until the close? But the market may very well close beyond your initial stop, hence taking a larger piece of your equity with it, than initially planned. For example, AudNzd might very well have continued lower on the 27th…costing me more than the inital amount I was betting.
But the same goes for any position we trail yes? For example EurCad. I’ve been tracking this for the past couple of weeks (long of course). After yesterday’s rejection of the highs and stronger momentum to the downside, I was quite cautious today as we were consolidating near yesterday’s lows during the asian session and when Europe opened, we pushed lower. So I’m out of the trade for logical reasons, because for all I know we could have travelled much further down. Yet now we’re back above.
The only “solution” that comes to mind with this dilemma is what some CTAs use, I believe: the initial % allocation is a function of the Daily ATR…so a 1ATR move = X% of equity. In this way, the levels can be used to judge the market’s behaviour without fretting about a rogue spike eating up more equity than was planned. But the trade-off seems to be lower profitability for the bet?
Love to hear your thoughts on this…there’s very little (if any) good material to be read on this. I’ve found bits & pieces in TradersUnplugged but this really isn’t clear to me yet.
Thanks!
forexspot99, I will watch for the other comments on your scenario, but will also offer my 2 cents. In the spirit of k.i.s.s. - would this just be one of those unforeseen events, and just determine that the action is unsuitable to trade at the moment?
Wait for a more clear movement?
Hey Perchtird,
I wouldn’t call it an unforseen event at all. We have clear boundaries with which to judge the market’s intent and I must say that there’s no guesswork whatsoever about whether the market is performing well or not.
My question was purely about the trade-off between trailing the actual stop below a prior day/week high/low or actually keeping it a ways away and acting on the close. For all we know, the market could violate the prior day/week high/low and keep pressing into the close. So I’m just wondering what wyntac and the others think about this and how they juggle this trade-off.
There is no conundrum forexspot, neither is there a trade-off between anything.
There are a clear set of specific parameters laid down for identifying & filtering high probability candidates.
You also have parameters & guidelines from which to observe, manage & close out your bets & gambles.
The guys have impressed on a very regular basis that each individual is free to use & utilize those parameters & guidelines to fit their own styles, risk appetites, financial profiles, objectives & experience levels.
It’s not important what wyntac or any of the other regular contributors/participants would do in those particular circumstances, only what [B]you’re[/B] looking to do based on the information you have to work with at the time.
You’re all individuals & you’ll all make different decisions. Some will be right at the time & some won’t be. That’s life.
You’ll adopt & practice varying degrees of risk, will have very different funding allocations available for highly speculative participation, possess very differing levels of experience & will definitely express views & opinions which will conflict. That’s what makes a market.
If [B]you[/B] don’t like or feel comfortable about how something is playing out after you’ve entered, or you’re not happy with how a currency or pair is reacting to specific criteria then fold & turn your attention elsewhere.
You can’t follow someone else’s template. Neither can you mirror the decision making of another player because there are far too many variables at play.
Play your own game based on the information & material available to you at the time.
It did yeah.
So there’s your decision made for you with no conflict or second guessing.
Is that your planned action whenever that scenario materializes?
If so, then the decision is already made for you with no conflict or second guessing.
True, but if you’ve already got a firm exit plan in place that scenario will be of no concern to you.
That was your action plan for that eventuality which you followed based on your decision. What occurs or occurred after that decision is of no concern to you.
Yeah, it’s a pain in the f*ckin arse isn’t it, but get used to it coz it happens a lot
Thing is though you can always leg back in if it sets up according to your entry profile, but for now you’re out & flat so what it does after that decision is of no concern to you.
I order to ascertain that you’re going to need to do what you’ve been adivised when you’ve raised similar concerns & questions, which is to record the data & discover whether or not that’s a viable alternative.
There’s no magic pill mate & no perfect answer to your questions.
This is a son of a b*tch endeavour that will frustrate the crap out of you virtually every week of every month.
You are aware aren’t you that most institutional/cta types are (also) long-term net losers. It would make your eyes bleed if you could see the carnage they cause on a regular basis. I wouldn’t trust most of that mob with my kids pocket money let alone the vast amounts of punters dough they casually throw around like confetti.
As skip say’s & todd alludes to, there’s no magic pill or perfect scenario.
Some days & weeks you’ll keep all your plates spinning efficiently, other days & weeks the stop-start frustration will drive you bonkers.
Just continue to spin your plates each day to the best of your ability based on the logical cycles the market continuously offers & ensure you manage your pot & stakes with a disciplined structure.
Thank you Double 6 & On The Bid for offering your perspective - which is what I was after anyhow.
Speedbump I apologize if you’re annoyed by my questions but I’m seeking understanding and perspective, and since the only examples of successful coin flippers are in this room, I need to use the methods & setups I see here as a basis for asking these questions.
Trade management is (in my humble opinion) the most difficult part of the puzzle. And amongst the various management methods I think TIME stops are the most complex also. And once again there isn’t any quality material out there.
Cheers
I’m not in the least bit annoyed by your questions forexspot, but the solutions to a lot of them lie at your own feet.
Often you appear to be the architect of your own barriers & obstacles, most of which wouldn’t even be an issue if you had in place a concrete plan & a solid eventuality for each stage of your activity (prep/entry/management/exit).
Revisit the content because there are multiple examples, tips, advices & solid statements relating to that process throughout the thread. It’s exactly the same content that has led sketcher to where he’s currently at & also responsible for the impressive track record that wyntac & stakz are presently proofing.
Don’t overthink or overcomplicate it. I realise sometimes it’s difficult, but focus solely on your own activity, not that of other posters because you simply don’t have a window into their (whole) world.
Haven’t seen him around since before xmas, but do recall him mentioning he’d be off the radar while he familiarises himself with his new regime.
If you’re looking in, how’s it going sketcher?
As a matter of curiosity, what was the driver or drivers that legged you up into your current situation?
I’m not looking to replicate it (well not for now anyhow), but I’m interested to know what & how you/they were seeking when looking to enter into a business relationship.
It’s going all right mate.
On reflection it’s been a bit of a springboard operating at this level because much of what i’m currently exposed to, working alongside Art Krantz, jjay, Kevan & Jocelyn bears little resemblance to what i’ve previously been doing on my own funded accounts.
I’m much more heavily involved in, & exposed to stock & currency options & futures with slightly less emphasis at the moment on spot activity. There’s a lot of automated/algorithmic template work going on which i’m finding challenging, but interesting.
When i initially met with Tess, JimmyMac & Andre, they focused more on behavioural attitudes, such as how i applied myself to, & operated under a strict disciplined model, especially the problem solving side, overcoming & readjusting to obstacles & setbacks etc.
My performance record merely indicated & evidenced i possessed the ability to identify, correctly filter, execute & manage higher probability gambles using their profiling guides, as well as the ability to quickly recognise when the approach was underperforming & make the necessary adjustments to ensure i was responding to the templates strengths v/s its weaknesses in a timely manner when experiencing dissipating volatility conditions.
The structure & framework the guys offer up here affords a huge advantage in operating the type of approach from this particular angle. It’s presented in a manner that makes the process more efficient, less complex & ultimately more profitable, which is obviously intended to increase & maintain confidence. There’s definitely a method to their madness.
But essentially they were interested primarily in behavioural disciplines & competencies as well as observing how using initiative directly related to applying & operating under a simple set of rules & guidelines with minimal outside interaction.
The point being if i could make headway & progress as well as problem solve playing at this less frenzied level of the game with very limited resources, experience, software & input utilizing a simple approach, then stepping up & playing under slightly different conditions utilizing differing rule sets shouldn’t pose too many barriers.
Apparently it’s a similar process one or two of the other guys from here & FSR went through, all of whom are still engaged in one form or another.
Who knows what’s round the corner, but for now it fits with my current aims & expectations. It’s certainly an eye opener but also a welcome financial step up, which helps to grease the wheels!
I’m going to spend a little time with Scott (double echo) & AltTab + Dan’s crew & hopefully laine for a few weeks during the summer to observe how it all routes through the order flow process at the different brokerage tiers.
That part i’m definitely looking forward to.
We initially made a decision to begin winding down our activity in 2013 corpellan to focus on & maximise our other business interests, but circumstances always seemed to force us to postpone the timing. Early last year we agreed we’d step back at the end of 2018.
We wish to retain a percentage of our core client portfolios + our own speculative holdings, hence the structured & gradual handover to ensure that continuity. Why take this route rather than appoint industry trained personnel you might ask?
Well we do have a small core team of long standing experienced colleagues onboard, but what started as a bet a few years ago between us & our pop has actually morphed into quite a successful set up. He maintained we would fall short attempting to integrate non-industry trained folk into the fold & Jocelyn, being the gamer she is, took the bet.
Long story short, last year a pleasantly impressed old school campaigner divvied up his side of the bet contributing $25k to our chosen charity (cancer research) as a gracious concession.
Carll, Kevan & catcher who we first encountered on here & another outlet actually were 3, admittedly of very few successful integrations who are still live & kicking, but nonetheless we proved a point & it was definitely a worthwhile exercise because sometimes savvy, switched on individuals from outside the industry bring different views, skill sets, angles & perspectives to the table from the usual array of musical chairs industry job hoppers.
Choosing personnel, from wherever they’re sourced, is not too dissimilar to backing a financial instrument. Providing you do the simple things consistently & correctly like identifying & filtering the quality, the higher probability opportunity pendulum generally tends to swing your way more often than not.
That tactic sound familiar at all?
We now have a small clutch of 5 non-industry trained colleagues onboard to compliment the team who will hopefully continue to carry forward the aims & objectives agreed at the quarterly performance updates/reviews.
Would you usually hang onto a bet that long if it only scaled one higher high in 5 or 6 trading days forexspot?
It’s by no means criticism of your activity because I have no idea what your performance data records show for this type of gamble, but don’t lose sight of what this approach is all about. You’re seeking confirmation of shifts in [B]dominant[/B] directional momentum.
If that shift begins to fade & dissipate then might your efforts & financial outlay merit keener value elsewhere until your focal pair begins exhibiting the type of behavior you’re seeking? Just a suggestion.
Don’t be afraid to cut, run & redistribute if a currency or pair isn’t performing as you expect, because there will likely be another 2 or 3 candidates showing more promise & if your focal pair decides to go on a bit of a jog you can run alongside it whenever you choose to by hopping on via the pullbacks.
As skip (on the bid) rightly advises, you should always adhere to your pre-entry plan whenever circumstances take a turn for the worse because as you correctly state, no-one knows where the eventual price will bounce or ease following an erroneous, rogue or price influenced shift.
Quite often, if the move is influenced by, or attracted to an area containing a mish mash of stop orders or a big round number for instance which more often than not is a magnet for options traffic, once the orders settle & aggregate you often witness a resumption of the dominant cycle as was the case in your AUDNZD example of the 27th February.
This typical scenario will usually offer you another opportunity to engage via a pullback or breakout trigger as prices attack & consume a prior day or week high/low level. If the dominant theme fails to resume your stake is free to pursue a similar behavioral set up on another dominant/passive pairing.
If your data records show a positive pattern & expectancy tracking & trailing your bets in the manner which you’ve presented then carry on in that vein & take the guys advices about ignoring other posters preferred stance & stick to your own tried & tested game plan.
Ah, but how many did you have to sieve to filter those out?
It’s been mentioned by Dan & the other guys on here before, but although they gently dissuade & discourage any kind of range trading at this level of the game, presumably due to the opportunity costs & sub par execution etc, do you folks play that role much either in fx or alternative instruments?
& since you departed here back around 2010 & these fella’s picked up the slack a few years later, would you all kick anything else off over & above the template format presented here if you were starting from fresh again?
We’ve only faced off with, & taken forward 8 individuals via video link & live meets having filtered out well over 60 prospects through the usual performance & Q&A route. They didn’t all materialise through the forum network though.
There are very few retail based performance stats that stand up to scrutiny over an acceptable timeline when you drill down into the important elements.
Even those with a reasonable handle on things eventually drown through under capitalization which tends to fuel impatience resulting in excessive risk taking & holding onto stale positions too long. Once you get dragged into that spin cycle, psychological issues begin taking hold & it all goes to hell in a handbasket very quickly.
Only via high frequency bots engineered around either percentage deviations or anomalies usually (but not exclusively) influenced by event driven plays on specific candidates likely to offer a playable edge for that particular opportunity.
No, because we still believe it represents the best value to cost ratio over the long haul for the types of restrictive constraints you have to operate under down at this level of the food chain & that is borne out by the actual stats we’ve been exposed to when interacting with the guys mentioned above.
The margins at this activity level are as tight as a ducks ass & you absolutely can’t afford to waste energy, effort or money experimenting with sub par approaches that ramp up & minimise risk to oportunity costs. There’s a reason why the brokers steer punters towards the glamorous, fancy pants strategies & methods & offer tuition seminars highlighting the popular indicator led systems pushing moving averages, pivots, fibonacci, volume & the like.
Add into that, most folks simply don’t have the aptitude, psychological disciplines & maturity or financial wherewithal to fight & claw their way through the tough stages & you don’t need to look too far to justify the high failure rates.
It’s an awful tough gig down at this level unless you’re playing the game merely for fun. But as we always say, it’s just my/our view. It’s up to each individual to ensure they’re familiar with every aspect of their operation before screwing their serious head on.