And I should probably add that those trades won’t be moving over the weekend as OANDA doesn’t trade after NY close on Friday.
Never apologize for influencing my trades They are my trades and the responsibility for them lies with me.
I agree wholeheartedly. I am hoping that with more time and practice the emotional side of trading gets easier. Right now I am still learning and with any skill those initial mistakes are a lot harder to deal with emotionally than mistakes made after becoming proficient.
Thanks for the recommendation on the book. I am going to see if I can get a Kindle version of it. I am not a huge fan of physical books. I have a small home and they tend to take up a lot of space.
I am also going to be spending some time today breaking down daily charts and posting them to get some more practice reading price action.
So after taking a swing down to @TradeViper Store, I got to thinking about risk.
My plan coming into this trading business was to get good (win rate > 50% with 1:1 risk reward, or win rate > 40% with 2:1 risk reward) and then open a small live account. I planned to start with $2,000 but the more I think on it, the more I think starting with $100 or $500 might be better off. I can always add more money later, right?
With a $100, and allowable total risk capped at 2%, that gives me $2 to risk at any time. If I trade a $.10 pip value, that gives me 20 pips for risk. That is certainly not enough to withstand market retracements at any level, well, maybe trading on the 1 minute chart. The problem with the 1 minute chart is that the spreads kill you unless you are trading large positions.
Let’s say average move on the trades I would take is 10 pips (1:1 risk reward) either direction. Let’s say the spread is 1.4 pips and commission averages around to another pip. So that is 2.4 pips against me the second I open a trade. I don’t know if commissions are charged round trip, but let’s assume they are so I give up another pip to close the position. If I am trading $.10 pips that means on an average move I give up $0.34 cents per trade, leaving only $0.66 profit per trade. When I lose, I lose the whole $1.00 at risk.
This means that I should only take 2:1 trades. With a 2:1 trade in the above scenario, I would risk 10 pips to gain 20. 20 pips would be $2.00 gross profit - $0.34 trading costs = $1.66 net profit. A losing trade would be $1.00 loss.
Assuming I take 20 trades a month at this setup, and win 60% of the time, I would gain gross profit of $24, gross losses of $8.00 and total trading costs of $6.80. Net profit would be $17.20 or average of $0.86 per trade.
Since I know that I need a minimum of 2:1 risk reward now to be profitable at a 60% win rate after figuring in spread and commissions, is starting with a smaller account around $500 worth while? 2% risk limit would be $10 spread across all open positions. If I limit myself to 1 trade, then I get to risk 100 pips, whereas with 2 trades I would only get 50 pips, and 4 trades I would only get 25 pips.
100 pips would make it easier to swing trade, but 4 trades at 25 pips on the lower time frames might give me a better chance of being profitable because my win rate percentage would have a bigger impact.
Am I even thinking about this right or is something in my analysis flawed?
Personally, I think your figures are in the right ball park, except maybe your spread/commissions sound high, but better to work on a worst case scenario.
It is true that no one is going to get rich trading such a small account within the normal recommendation of 1-2% risk exposure - but I don’t think that should be your prime motivation at this stage.
In theory, the demo stage is where one experiments, learns and develops a suitable trading plan that is shown to work on “paper” as it were. But this lacks the psychological and emotional factors associated with putting one’s own, real, cash on the line. This belongs in the second stage with a small live account trading small positions. The objective here is not significant profits, but consistency and confidence and living the trading plan.
Once confidence and consistency are achieved in the small account then one can consider upping the stakes a bit.
I guess I will get slapped by many others here for saying this, but I don’t really think one needs to be overly rigid with these risk percentages on a small account provided one is aware of what risk is actually involved. I mean, what are we talking about in real terms - $10-20? This is really peanuts and if this amount is a serious worry for a trader then they certainly should not be trading at all! If you drop $50 on a bad trade so you top your account up and put it down to the educational costs of learning. It is all down to what works for you and how much you are willing to risk. But I think if it is a choice between affording realistic stops on a trade and keeping them (too) dangerously tight just to fit some risk formula, then I would rather choose the more realistic stop level and higher risk even though it might cost a smallish fistful of dollars more!
The aim is to learn and achieve. If a too tight risk policy on ultra small accounts destroys that learning process through limiting proper trading scenarios then it is defeating the object of the whole exercise. But one has to know what one’s risk is and whether it is acceptable but that does not exclude trades exceeding 2% risk at these absolute levels in dollars.
Having said that, it is important that demo and small size live trading should be based on the same principles that will eventually be applied on a larger account.
Each person has to decide for themselves what style is the best fit for them. Again, I don’t want to tell anyone what to do - but I would feel guilty if I didn’t at least explain why I think price action/swing trading is the way to go as opposed to scalping/day trading.
First of all, the art of reading price action applies to all charts (currencies, commodities, indices) so doing it well is in my opinion what makes a trader good.
A true master of price action can look at a bare chart and read it like they are reading a book. It’s their language and they understand what the charts are telling them. So, naturally it gives the trader an advantage in trading.
There will always be an element of unpredictability to trading because humans can be unpredictable. But there are also many patterns that repeat over and over again, so we can harness that by learning them and learning what they mean.
It gives us a statistical edge over the person who is just relying on delayed indicators to tell them when to get in and out / go up or down, etc.
The way that I have been taught to trade discourages using the lower time frames because the candles and patterns do not mean as much. A lot of it is just “noise”. The back and forth tug and pull of price - not very meaningful in the big picture.
When trading in a scalping style, you are in and out quickly with many trades per day…it encourages a type of recklessness because you are not giving each trade much thought and analysis, plus the risk/reward ratio is low. This is bad for money management over time.
My understanding of scalping is you’re trying to skim some pips off of volume moves, and I know that some people must be successful at it - but I have sure seen a lot crash and burn as well. Most traders (including myself) go through different methods of trading when trying to find their “fit” - there’s no harm in trying out your various options on demo. Scalping can be fun, thrilling even, the high’s and low’s offer a constant adrenaline surge, and it’s almost addicting if you’re one who enjoys being in front of the screen all day.
But if you’re a person with limited time on your hands, it’s my opinion that analyzing your end of day data and setting up some trades and letting them play out, is the way to go. You can learn from your mistakes and change the plan accordingly.
Not 100% sure that I am getting where you’re going with that question, but I’ll take a stab at it… Do you mean Asia session isn’t worth trading due to it’s low volume and typical retracement activity?
But the way someone else is taught to trade might very well encourage & advocate the use of lower time frames, or no time frames at all, because the information or noise as you describe it, makes perfect sense.
[quote=“cndlstckchic, post:105, topic:116275”]When trading in a scalping style, you are in and out quickly with many trades per day…it encourages a type of recklessness because you are not giving each trade much thought and analysis and the risk/reward ratio is low. This is bad for money management over time.
[/quote]
Try telling the programmers who design, develop & manage high frequency algorithm based execution models they’re reckless & risk negative.
It used to be the sole domain of the institutional crowd, but high quality automated models are now within the scope of well capitalised individuals with the capabilities to exploit & profit from repetitive situations offering just the type of opportunities you prefer to avoid.
I agree there are many ways to make money out of the market. But I can only teach the method that I know and understand. I don’t have access to high frequency algorithms and execution models, nor am I well capitalized (yet). The retail traders who I have witnessed scalping do not have any special tools at hand either; they are basically gambling with their money while guessing on entries and exits trying to ride the bull, and while it may be exciting - it’s not usually lucrative.
Wow, what is wrong with you? Do you own BabyPips? Am I breaking some rules by kindly offering what knowledge I have painstakingly acquired over the years?
I’m sorry did you invent Price Action? Do you own all proprietary rights to the internet? I am not a scammer, whatever that means. I am selling nothing, I have offered help - nothing more.
And I am able to do it kindly, I think you need to cut back on the protein shakes, bro.
It’s also important to keep the environment positive and recognize that some people have good intentions and are genuinely just trying to be nice. When a thread gets hostile it ruins it for everyone.
JSeymour, I don’t want to monopolize your thread. If you ever have any questions just hit me up on my journal thread or in direct message. See you guys tomorrow at market open…
Price actionis the movement of a security’s price. Price action is encompassed in technical and chart pattern analysis, which attempt to find order in the sometimes seemingly random movement of price. Swings (high and low), tests of resistance and consolidation are some examples of price action.
^^^^^^^^^^^this is exactly what I am talking about.
Yeah I was going to post something in this one and CC’s thread, but I think I will post it at the store, I don’t want to clutter up someones thread, especially if it is a journal, unless asked. Seems to be the mannerly thing to do. Man Deja Vu, it’s like we have run around this tree before.
For what it is worth I find CSCs contribution to this site to be the most constructive, thought-provoking, helpful, valuable and realistic that has been offered by a genuine, authentic and honest person, for a long time.
Personally, I don’t care what labels we put on things… if someone comes here to share the results of their personal journey in an open, frank and indeed humble manner, including an open declaration and presentation of their actual trades, then I think we should be very grateful to that person.
The only “sin” I have seen so far in CSC is an abundance of enthusiasm in wanting to share. If people want to read her contributions then great, if not then that is also fine. There is no selling going on here - just the open enthusiastic positive and useful sharing by just another guy on the bus, like the rest of us, just trying to make their way home.
But then I’m just Simple Simon, what do I know about anything…
Hm, one of the more interesting threads I’ve seen in a long time on this site (not that I’m on it very much). You seem like someone who actually has their head on straight. Educated, patient, and thoughtful. TA traders generally end up in one of three camps (my classification): pure price, price + visual indicators, and pure indicator (indicator in the most purest sense, as in taking price, putting it through any sort of function, and receiving an output that cannot be argued with). As someone who can program, I’m surprised you haven’t tried it out a little more. Might be a fun project if you know what you want to know
Ok I’l take a stab at that one - although better on a different thread perhaps - EURUSD - long. With stop 1754 (Arbitrary 50 pips) Target 1930 (100% of last impulse )
[Edit - I think this one brings into question the “Rules of engagement” again - since I cannot give logical stop, someone with an appetite for risk might say "Well ok I accept it likely to retest 1800, but I think that will hold - so say 1780 as a stop and risk an exuberant move ripping them out, or another might say - "Well I risk 2% of my account on my normal bets, this one, with that big of a stop should be worth 4% " or some other arbitrary figure! ]
If you had bothered to read this whole thread before you assumed about the intent, you would have seen that I invited @cndlstckchic, @TradeViper, and the others to share any information they had that would help me. There have been well over 100+ posts of informative discussion, positive teaching, and high-quality education before you came in here and started accusing people of being scammers.
All the other people on this thread contributed value to my learning and my progress to becoming a professional trader. I learned more in the last week by posting questions in this thread and getting answers then I have in two years of self-study thanks to @cndlstckchic and @TradeViper specifically. I consider those two users my trading mentors because of the amount that they helped me.
You have not contributed anything of value.
Are you so presumptuous that you speak for everyone here?!?! Or do you just have the ability to read everyone’s minds and know their desires?!?!? Perhaps you are just a self-absorbed prick? I think that last one is the most likely. You come in here and start chastising someone for doing exactly what I asked them to. For that matter, who the hell even invited you to this thread? You’re like that one guy that crashes a party and starts punching the guests!
Did you miss this part of post #18 Mr. I Know What You Want Even If You Don’t, more commonly known as @_bob?
That quote would seem to make your statement that no one wants @cndlstckchic to teach anything extremely false. Now you would have known that if you had read the thread before commenting. Instead, you just jumped right to the end and started a fight.
Now, maybe, that’s the kind of community @Pipstradamus and the other moderators want to have. If that’s true, then it’s their house so their rules. I am ok with that. I will just set up a free blog on Wordpress.com then and post my journal entries there so my mentors and fellow traders can come and comment on them without being verbally assaulted by bottom feeding scum such as yourself who feel the need to berate others to make them feel like a man.
The better thing for you to have done was just not post in this thread at all. You added absolutely no value to a discussion that had been in positive mental pips for almost a full week. Instead, you came in and crapped all over the place.
The only thing you accomplished here @_bob was costing me my mentors. I looked forward to theirs posts. I could relate to both their trading syles and they both had way more experience than I did. More importantly, they both took time from their day to provide valuable lessons.
When’s the last time you ever provided anything of value Mr. Sewer Mouth? Is hate and division all you can come up with?
I do not accept your apology. In case it’s not abundantly clear at this point: STAY OFF MY THREADS YOU LITTLE TROLL!
Also, @TradeViper and @cndlstckchic have standing invitations to teach whatever they want to in this thread. My original intent in this thread was to have someplace where I could post charts, trades, and questions and get answers from friendly and knowledgeable traders so that I could build a location that was basically a giant reference post for me.
Congratulations @_bob, you killed that dream in just three posts.
I told you to stay off this thread. And stop being an Internet tough guy with your PMs threatening to respond and to let you have the last word. You have crossed the line into harassment.
MAKE QUALITY POSTS. You’ll get a friendly warning for low quality posts, or even get your post unpublished as to give you another try to make it better.
Not a single post of yours in this thread could be considered quality.
BE PASSIONATE ABOUT LEARNING AND HELPING, NOT INSULTING. New Members, invest some time into reading existing threads, getting to know the existing members, and getting a feel for the culture of the forums. Existing Members, please cut the new members some slack no matter how “newbie” they’re acting. Patience is a virtue.
Your conduct has been wholly insulting here. Bossing people around, accusing them of being scammers, and then not answering direct questions in not helpful to learning.
Improve the Discussion
Help us make this a great place for discussion by always working to improve the discussion in some way, however small. If you are not sure your post adds to the conversation, think over what you want to say and try again later.
None of your posts improve the discussion here. Focus in on that last sentence in the above paragraph.
Now, maybe, you thought you were helping. I am going to give you the benefit of the doubt. My first reply might have been a bit too passionate and a bit too harsh. That’s on me, and I am sorry for my behavior.
However, your handling of this is wholly inadequate, and looking at your posts in other threads, I just don’t see you helping a lot of people. Some yes, but mostly you just yell “Scam” on most of your posts.
Be respectful of the topics and the people discussing them, even if you disagree with some of what is being said.
Maybe our differences in upbringng, world experiences, and whatnot make our ideas of respect different. Perhaps most of your disrespectful and insulting posts were done in sarcastic humor. It’s hard to understand the meaning behind the words in a written forum such as this. Perhaps you should be a bit clearer in your communications if you want people to get value from your posts. If you don’t want people to get value from your posts then I just have to ask why are you spending time here?
I said my piece on this, and I sent this to @Pipstradamus and the moderator team both by flagging posts and mentioning their usernames here. They will have the final say on this, and whatever they decide I will abide by, or I will move on to a different community / start my own blog. Will you respect whatever they decide?
I am looking for this pair to be very bullish this week. It’s currently in an ascending channel (if I used to right terminology). If it breaks out to the upside of the channel, it could easily go to 1.46213. I plan to get long at market open with a 100 pip trailing stop so if the market reverses before breaking out of the channel or breaks out to the downside then I still get a little piece.
Right now the EUR/USD looks to be in consolidation. Before I get involved in a swing trade I want to see one of two things: A) price breaks and closes above 1.2093 signaling continuations of the uptrend, or B) price break and close below 1.1697 signaling a reversal into a downtrend. If A happens, then I go long. If B happens then I go short. In the meantime I will be looking for short in and out type trades in the EURUSD pair.
I think this pair is retracing for another downward move. We had a double top reversal signal followed by a bullish impulse leg. I will be getting short at the market open this afternoon with a 100 pip trailing stop. This might not catch me the whole move but I will get something out of it.
This chart is ugly to me. Long-term range bound movement makes me sad as a swing trader, but happy as a day trader. This will be the pair to watch for practicing @TradeViper short-term trading methods.
Plan for the week
This afternoon I plan on closing my open positions in my swing trade demo account and enter the two new positions I noted. After that, I plan on trading the EUR/USD and USD/JPY pairs in my day trading demo account as those would have more opportunities I think for quick in and out trades, whereas the AUD/USD and GBP/USD look ripe for a trend continuation swing trade.
@cndlstckchic what do you think of these charts? Also, please add in anything else you think might be valuable.
@TradeViper is there anything else at all that you can think of that would be helpful to me?
They are my trades and the responsibility for them lies with me.
