great posts guys
D pip I think you ask a very good question and I think RCarter has given a very good answer.
Its Funny even before I read the last few posts I was thinking today that I am going to try some longer time frame trades I have 2 FX accounts at 2 brokers one is Oanda the balance is small but as you mention the flexible lot size will allow me to run with a big stop. My concern and problem I have had in the past is I do not get a chance to check my trades during the day. It could be 16 hours from placing a trade to seeing how its going. I would be relying on the SL and TP to manage my trade. Maybe I should be looking at the weekly and daily charts:eek:! I am a 15 min chart kind of guy.
I am not giving up my 15 min charts and scalping quite yet:D I have come up with a method that I feel takes advantage of the market characteristics of a small time frame. The pitfalls of trading based on small time frames with large lot size are real and RCarter does not even list them all. That said if you know what you are up against and trade accordingly I do believe good high frequency trading will grow your stake faster.
With 2 accounts at 2 brokers I can trade both ways should be a win win right. we’ll see.
Thanks RCarter and Sanm for sharing your experience I am going to try to start copying how you trade on one my accounts. You guys have laid out exactly how you trade successfully I would be a fool not to at least give it a go.
Sorry about that first part, my work days are 10 1/2 hours to 16 1/4 hours, today was 15 hours 15 minutes. So i have to move quickly before my head falls, drool starts, and i got qwerty imprinted on my face…But I do, after i wake up, continue to work out to the best of my ability the whys and hows. So thank you again, i will take the next week, while you are gone, to practice and watch and use it before any questions.
I talk about the 15m and 4m a bunch, cause when you got 2 hours before bedtime, its hard to trade. And it is a nice explosion of price action in the face, I personally think it can be a good aid for training.
Thanks for continually sharing, it is very helpful.
I am in my second reading of this thread, on page 310 now. You did mention using 2 lwma high/low and a close and this way to trade, right around page 308 or so… It was interesting coming across it early, to see what i missed and how much my understanding has increased.
I sometimes have a few hours at work where i’m free, and use my phone to read.
My phone dropped 2 feet, and died, only the screen doesnt work, so no more gaining info at work…Boooooooooo…now like 3 days or so with no phone.
To all, and I think this could apply to Sh1rk especially.
Broker Hunting.
Dukascopy seems to be my number 1 right now.
And Wh selfinvest is my number 2.
Dukascopy is opening at 1k$ usd and seems to be actually real life true ecn, and scalping there might be awesome for you shr1k.
The WH Selfinvest, is interesting, cause they have a ‘max spread’…Where it ranges between those particular amounts and only that. They do have mini, micro, standard etc.
The only concern I really have, is that they are located in luxemberg.
Tight spreads, ECN (havent dont a full check about whether or not they are 100% free of that marketing BS, ECN versus STP etc…)
If anyone has had any past experience or knowledge of either, post it on my wall or here if it benefits peeps.
I would post a link, but since I dont have 50 messages, i get infractions…Ya think that would be aimed more towards spam instead of informational links. (Only 1 infraction so far!)
Oh well, take what you can get. Even if its just 1 pip.
I thought I’d chip in a little because for the most part I trade multi timeframes on EURUSD and the indexes and Daily charts on any FX pair that I don’t follow on an intraday basis.
Multi timeframe analysis for me is Daily, 1hr, and 10/15m charts.
I think you’re comparing apples with pears a little in the above post. Also, it’s very difficult to get a definitive answer as everyone trades a slightly different way. The trade size/risk should be adjusted accordingly whether you’re trading the longer TFs or the shorter ones.
But you’ve hit the problem, most people starting don’t have a big account and don’t like to trade small amounts on the daily charts. After all, psychologically trading a small amount on the daily TF and having to wait 10 days or more for a result just doesn’t hit the emotions and positive feedback that traders need to learn. ie if you make a trade on the 15min TF and you win or lose your 20 pips, you get an immediate feedback in your brain to learn from it.
Also, there are a variety of hedge funds out there now, not all institutional / position traders look for 20%, there’s a whole mix and match of day traders, short/long hedging, equities only, FX only, etc. etc.
Fund management/asset allocation is a very different game to day trading.
I’ll tell you what I do, and I’m sure most will disagree with it but it is something that works for me. I trade both the longer timeframes (Daily) and the shorter ones but intraday trading for me is a hedge when I have any swing trades on and also the bread and butter. Oh, and intraday for me is usually the 1hr timeframe.
When I open a swing trade, I do it with 15% risk and I expect the trade to run over a couple of weeks or until it hits 15% profit +. Sometimes, when I do this it can take 2 months before the stop loss is hit or target profit. During that time, I continue to day trade on EURUSD and that is essentially the hedge for me - I take 20-50 pip trades with a 2.5% risk and I need 6 of those to make up for any swing trade loss. I will also open up swing trades with the same 2.5% risk but smaller stop losses.
Not sure how to divide the above but I guess I essentially use:
short term swing trades (SL in the 100pip region)
very short term intraday trades (SL in the 20 pip region)
long term swing trades (SL in the 5% FX movement region) with much bigger risk but carefully picked.
Now, I’m not suggesting you do this at all…I wait very carefully for the right swing trade and I might only make 1 of those a month but it suits my trading style. If you can do what RC does with all charts loaded then go for it. For me, I simply can’t look at multiple charts and feel like I have a clue what’s going on even with the relevant indicators.
My point is simply that it doesn’t need to be long TF vs short TF, you can do both but the more pairs you look at, the harder it is going to get hence why for the most part I only trade EURUSD now intraday (although I do some other stuff with the indices too).
After trading FX for 14-15 months (and losing lots more than winning)
Now, here’s a question for you. Of your losing trades, what caused the loss, bad trades, bad entries, bad exits, bad money management - there is a difference. Everyone knows the “cut your losers” phrase but that is by far what causes the most problems, it’s always money management that causes the issues.
I’m not going to pretend I’m some know it all trader, but I turned the corner in my trading a few months back and analysis wasn’t the area for me that I had to change to do that.
Thanks for the thoughtful feedback lots of good points!
I’m going to take some time off from trading, maybe a few days, or even a few weeks. I’ve learnt a lot about FX in the last year and a half and I need to rethink what I’ve been doing. It’s time for a paradigm shift LOL!
It’s been a tremendous learning process and now I need to figure out how to best apply it. I’m so stuck in the trees I can’t see the forest!
This morning I’m leaning towards picking one pair ie AU and trading it on the daily, a second pair ie EU with the 4h, and a third pair ie GU intra day, but I don’t know for sure yet.
Yes, money management! When I first started FX I traded like a cowboy… Hopefully I’ve corrected my ways
Weekly…Trend Down…Current PA under 20:2 BB.
The Lwma Close is slightly above current price and the 2 lwma Low.
Daily…Last 5 days (including today) Trend Down. Current PA under lower 20:2 BB.
Lwma Close is slightly above current price and the 2 lwma low.
4hr …6 bars all headed down = Trend Down. The bar at this time is white (downward facing) with a very long wick 50% on the base, zero wick on top, at this time.
H1 is on a current bar retrace up after an extreme white candle low, and a 2 white candle low, which is higher than the extreme.
15m is showing divergence since 5/17/10 5:15 GMT, 2 HA candles white, 2 HA candles red, and now 4 HA candles white —> small with wicks on both ends.
When i first looked at the Weekly/Daily, i had a though that for some reason, the 2 lwma low, must meet with the 2 lwma close during the trading on this daily candle.
Also, it gives me the impression that it tapped out on the bottom and is headed for an upwards movement at this point.
2nd thoughts, were that weekly was in a long downtrend and so was daily, so if the 2lwma close is higher that the 2 lwma low at this point, both downward facing, that if was going to enter (at this point just cause its bed time ((sad face))) that I should use a short and place a stop loss (this is all demo) slightly above mid 20:2 BB 1Hr or 50% of the Daily Bar.
So, for initial thoughts…If i want to make pips on the 1hr retrace, I could, but I should expect low pips…If I was able to watch it, i would wait for a downturn on the 1h and short the Eur/Usd thus getting a good entry on the Daily/Weekly Trending towards the short side.
I trade a little different I guess then most but here’s a few of my views. I believe your wanting to trade the longer time frames is a good idea but it all depends on how you look at things. I trade with four time frames on one chart. Yes that is correct and not a typo. It is one chart which has the 1M, 5M, 15M and the Hourly. Each time frame has it’s own SRs and the hourly has a few of my own indicators but nothing else so I have a fairly clean view. On another screen with another broker I have just the hourly with all the bells and whistles with a lot of indicators. I don’t trade off this screen and is just for information.
What I see is a view of everything that’s happening to that particular pair and the interaction of the TFs. I’m trading the Hourly but make all my trades on the 1M. The reason for this is quite simple. All the higher timeframes within each timeframe itself move to a low and then to a high or to a high and then to a low and all this movement can be substantial.
On the Daily GBP/USD chart of 5-7-2010 the price moved up $517 from the open. It then moved down from the high to the low $4,399 and then moved back up from the low to the close $1,552. The total movement was $6,468 compared to the open to close of $2,330. This represents a 277% increase in potential profit.
Some traders put their money in the Daily and then trade the lower time frames if they see the Daily going against them. All this gets them is a break even if they are lucky. I don’t know about you but breaking even is not what I have planned on doing here trading on the Forex nor am I a gambler. I cut my losses very quickly and I could care less on the win/loss ratio.
I don’t put my money on anything and just walk away unless I’m very sure of the end result. I don’t sit and stare at the screen either but have alerts that tell me when the PA has reached an SR. When an alert goes off I quickly look at the two screens and make a decision. If the PA has hit a major resistance level which it can 30-45 minutes of every hour then I get an alert. If the PA is riding the Bollinger UpperBand with no major moves to the downside then I let it ride but this usually only happens for a few hours at most before a countertrend occurs unless the market is moving as of late.
On the example above the $517 occured in one hour, the $4399 occurred in 9 hours and the $1552 occurred in 14 hours. Within this 24 hour period of each up and down were $1000 countermoves as well which pushes the 277% to above 360% of the Daily. If you cannot get $2,330 out of a potential of over $8,500 then your trading methods need changing. Using a Heiken Ashi/Gann would get around $6000 on this example if you’re a nervous trader.
Now nobody can watch the screen for 24 hours at least not for very many days so the high volume times will always get you the most profit. In this example profit making was pretty easy but it’s not always this good as you know. If you were only watching the higher timeframes the $517 would have slipped right on by or even prompted a bad trade or a stoploss hit.
The point I’m trying to get across to you is you can trade the higher TFs without actually trading the higher TFs. If you are watching the screen all day then it’s not your most profitable timeframe. If your not watching the charts then you better know the pairs direction as it can kill your account very quickly. The problem that most traders have in trading the higher TFs is the stoploss setting and usually set it so tight that it guarantees a loss. I normally don’t use a stoploss and if I do it is only for catastophic loss but that is a decision only you can make.
Johnny,
Thanks, your description of the potential pips GU offered on the 7th is a great example of the “balance point” or “compromise” and “comfort zone” I’m trying to figure out for my trading.
You’re right, the market offers up a lot more pips on those “ping-pong” like “back & forth” round trip moves vs the difference between the opening and closing price!
I look at price action as nothing but a series of small oscillations within larger oscillations within even lager oscillations. I guess I’m getting to the point in my FX “education – experience” where I need to decide what set of oscillations is best for me to play. I see how money can be made trading ticks, yearly highs/lows/, and every where in between.
My goal-hope-dream is to compound and build a stake, consistently booking 1% to 2% profit per day, over time it can start to add up! I’ve been trading under the assumption to meet my goal I need to trade on the smaller oscillations represented on 15m 20:2 bolls and the 1h 20:2 bolls. Trade a tight game with small SL, minimal draw down, and the largest position size a 2% risk would allow, capitalizing on the intra day moves and grabbing as many pips as I can.
But I’m finding it’s a tough time consuming gig, some days booking 3-5% is easy as shooting fish in a barrel, but other days I end up giving too much of it back. And a lot of hours and sleepless nights in front of the screens watching flat markets going nowhere.
As you know a lot can be learned about price action grinding it out on the 5m & 15m time frames. I’m starting to think I should be thankful for the experience and education I’ve gained grinding it out trading the small oscillations. But maybe it’s time for me to move on, adjust my position size and try applying my experience to the longer time frames.
Robert & SM have shown some good examples of how they are doing it. But your right, and GU on the 7th clearly shows I’d give up a lot of pips not trading the short term back & forth “ping pong” action within the long term trend. Like everything else in life, I guess it’s a big compromise!
…or perhaps just the pongs in line with the Daily trend…
This is an important distinction to me. Its the difference between basing trades on the random and chaotic PA that you can see on any chart below 1 hr or even 4 hr, or looking to long term PA to make decisions about when to look for a trade and what direction it should be in even if you have a small (in terms of pips) goal.
Ya I definitely agree with that, by the way Shr1k, how is that indicator workin for you? I’m having a slight problem with the email/txt alerts, it keeps saying that theres not enough “space” for the mail or something.
There are many ways to skin a cat.
You can for example leave 10% of every trade open to run and just forget about it. If your conviction is that the trend is down why not leave a tiny bit to see if you really can get all the pings and the pongs. A swing trade is the only way to do that. Ideally you shouldn’t really turn a day trade into a swing trade but if it’s a small amount of the remaining trade then you can occasionally…
I’ll only speak for myself and my experience, [B]no![/B] Some days I can but not consistently!
I spent a lot of time over the weekend flipping back through some of the daily and even weekly charts. It’s slowly becoming pretty clear to me that if you wait and carefully pick your entries, control the money management and catch even a small piece of a multi-day swing, it can be just as profitable and less stressful as trying to grab every little 15m swing.
[B]BUT… [/B] sitting on my hands waiting for the right entry might be the hardest thing for me to learn!
BUT… sitting on my hands waiting for the right entry might be the hardest thing for me to learn!
Agreed but that takes time simply because the learning process isn’t as fast. If you only make 1 swing trade a month, then how are you supposed to learn, maybe you got lucky, maybe you didn’t
So, perhaps take the approach where you swing trade to catch all the pings and pongs and you intraday trade to just get the occasional trade with trend for a 2% trade or something. In this way, you will also day trade while waiting patiently for the correct swing trade setup.
…or you have a hunch that the £ is going up or the EUR down or whatever, so you leave a small portion of every day trade open at break even with that trend. Sometimes you will get taken out, sometimes you will get a long run out of it. Obviously, this approach sucks if your conviction is wrong and every trade you leave open gets hit at break even but thems the breaks. I used to know someone who would leave 50% of every trade open - I wouldn’t be comfortable doing that but it worked out for them at the time, I think that was even on this forum, someone who used to trade GBPJPY…I’ll have a search through my old posts.
It’s a slightly different way of thinking about it, ie using the swing trade to catch all the pings and pongs and I’m not saying it’s the way to do it but it might work out for your trading, it really depends on what you prefer.
If you want to start with a basic rule, then watch for a candle like this on the Daily charts outside the bollinger bands. Any hanging man or hammer candle indicates a swing day. You will take the immediate swing trade at that point with a 2% risk, stop loss above/below the wick and add a little extra for safety. Then continue to do your day trading stuff.
You can aim for take profit at 2% or 4% or close a portion and leave the rest to run. It must be a proper hanging man or hammer, the longer the wick the better and aim for a body close in the top/bottom quarter of the entire candle length. ie the 4th and 5th candles after this swing day are not important, you would not go long based on those.
SanMiguel,
Right… I guess there’s a lot of ways to play a multi-day-week swing, hold a small position all the way and when the intra day trend is going in the same direction, jump in with some bigger size positions etc. Even try something like Gravotion’s (Multi-time frame thread) 5 lot strat. I’m a little pissed with myself, while I’m been focusing too closely on the small intra day swings, I’ve missed a really huge move in the market since the beginning of the year. If I had been looking at the big picture more carefully and caught just a small piece of it I could have really added to my account. I’m still learning LOL!
