Jerome's Journal

[Jerome32]

Turning a Losing trade into a campaign

or, in other words, ‘Lose a battle but win the war’

My NZDUSD trade. I went short on Strategy 1. Perfect
setup except Stochastic wasn’t overbought, not even
close!

so price went up. no big surprise there

but I kept the trade open in case it returned back in my
original downward direction

It went 169 pips against me but still remained open.

Finally a perfect Strategy 2 setup formed this
time with overbought Stochastic. I targeted
70 pips x 2 still above centre BB.

In an attempt at Damage limitation I placed
a negative SL at the same price level (3) resulting
in a 44 pip loss on the original position, but
2 x 70 pip wins on the subsequent Strategy 2 setup

A +96 net pip win on the campaign

Strategy 2 works particularly well when in direction
of a good trend

It may be worth letting a losing Strategy 1 keep running
and look for an opportunity to re enter with double
position size to recoup the loss and end up in profit

[Jerome32]

Two winners in the results terminal below were undeserved
because they did not fully qualify

Silver, illustrated, lost due to pilot error because I was
too hopeful or greedy and TP wasn’t hit. but a modest
50 pip TP would have been hit

But supposing the modest TP wasn’t hit?

So far there has been no basis for a recoup campaign,
price may just be consolidating for all I know.

In which case do I leave the original trade open
indefinitely until another setup appears

No clear answer to that

At some point there should be an opportunity to recoup,
but it might take time and patience

back to my long winning runs, trades theoretically never
lose unless you allow them to be stopped out,

at some point they should either

1. eventually hit TP or
2. provide an opportunity to recoup in profit.

I will monitor Silver as a case in point.

It may take a very long time, (as military
campaigns usually do)

and so essential that a recoup strategy never be allowed
to degenerate into revenge trading

They are completely different things

One is cold blooded and tactical

the other is just blind emotion

[Jerome32]

Less Ambiguous

In the case of EURJPY, good setup that went against me
but now might move back up to hit modest TP

I think thr Railway tracks on a Strategy 2 indicate
an obvious place to close the trade manually,

otherwise may need to wait patiently for recoup
opportunity, like Silver

[Jerome32]

@dpaterso

Obviously I check in here from time to time because I like the way you’re doing things. And I’ve been keenly watching this Hello Moto line (the yellow one) that’s being used for support and resistance. Call me dumb but I’m not seeing the merit in a lot of cases. Or is it just me??? That yellow line is nothing more than the closing prices offset backwards by 26 days. My point is: what’s so special about 26 days???

I was checking yellow line on weekly for prior support. it showed nothing.
However, as we see below, there is most definitely a Support level that
only an imbecile would ignore, meaning, even I can see clearly what
yellow line can’t see

maybe it highlights major zones, and it is easy to use, but it obviously
has blind spots and it can’t compete with human eyeballs

I’m not using it any more

[dpaterso]

Yeh. I’m not knocking it. Just not seeing it. This being said: I myself can only see those idiot proof lines of support and resistance as on your chart. If it’s any more complicated or not as clear cut then I’m useless at it and at that point it becomes more of a guess than anything for me. Maybe that’s where the thing has merit.

[frandlost]

Yeh. I’m not knocking it. Just not seeing it.

Gave it a shot as well after seeing here and on a few other threads. I put the moto line on a few of my charts and spun them back in time and incrementally moved forward. It didn’t “do it” for me. Doesn’t help clarify things from my perspective.

@Jerome32, How satisfied are you with your current strategies? You’re still in the game and positioned positively a presume based on the posts I’ve been reading.

KC

[Jerome32]

It didn’t “do it” for me. Doesn’t help clarify things from my perspective.

exactly, if you rely on it, you will make some expensive mistakes.
I find best results are manually checking weekly for S/R when
trading Daily. On weekly its amazing how often key levels are respected
historically,often to the pip! but even then yellow line just doesn’t see them

[Jerome32]

@Jerome32, How satisfied are you with your current strategies? You’re still in the game and positioned positively a presume based on the posts I’ve been reading.

I’ll have more information shortly, but I have no winning system, its about
how adept I am at reacting to the market. sometimes I;m in great form
and sometimes not. I believe it is about getting your money back with
interest without revenge trading

[dpaterso]

Well I am sure I don’t have to mention that apparently it is being used to great effect on that other thread by my “friend” over there. An no I am not trying to make trouble here I assure you. I can only go by the screenshots of the trade results as shown. From what I can see: he could accomplish exactly the same thing without the Hello Moto line. But I don’t claim to understand it so there is that to bear in mind.

Thing is and as I noted: it’s nothing more than today’s closing prices projected backwards by 26 days. That is the same as saying that if price closes today at a certain price and reverses tomorrow then in 26 days from now and if the same thing happens at the same price then that is support or resistance going forward. What is so special about 26 days is what alludes me.

Then again: it is has been proven over years and years of testing that simply buying the S&P today at the close and selling it at the close in 22 days time is an overall profitable strategy. So there’s that of course.

[Jerome32]

@dpaterso

I can only go by the screenshots of the trade results as shown.

That might be a little misleading. Profitable trades are more
an endorsement of the trader rather than the indicators he
is using. There are no good or bad indicators, some traders
are doing well on some of the worst repainting indicators out
there - my STR indicator phase proved that. Perfect in
hindsight, post repainting, but absolutely deadly in real time,
but I know one guy had 80 straight winners with it. I was so
impressed I kept persisting with it but it was hopeless

The natural assumption is that we are all looking at the same
charts, yes, perhaps with the same indicators, and are all
therefore seeing the same thing. We are almost certainly not!

Although, yes, there are groups who are doing well who
likely are all attuned and in sync, seeing things the same
way.

For example, I was very confident about the trade below
but most wouldn’t necessarily see it as clearly, or at all

and similarly I frequently wonder what guys are imagining
they can see on their charts

There is a whole lot of subjectivity involved, much more than
I first realized

I was previously involved in an Elliott Wave group. I rest my case

[dpaterso]

Very nice post. Very good points.

[Jerome32]

So at the moment I am experimenting with Strategy 1, having
added SuperTrendProfit4 which I make absolutely no claims
about.

I would say STP4 is very close to my Bands strategy. With the
Bands, in hindsight, price always returned to the bands, in
realtime it was actually the bands were moving to price, yet
another optical illusion. not repainting technically the Bands
are continually recalculating, but the mind is tricked in the
process.

With STP4 if you can see a strong trend, you can enter in direction
of trend and preempt the market which will turn against you,
( it nearly always does so get over it ) by placing Limit orders.

At the moment I am winning on all my trades, which only tells
me that next week I may likely be losing on all of them, because
that is how it seems to go.

The markets seem to go through periods of orderliness followed
by crazy randomness

or have I just described my own state of mind?

I think that when I am in good form and the markets are
behaving well, I win most of the time

if either of those factors are absent I will lose.

Another critically important factor, is confidence

When my account was 35%DD I recovered most of it
by reversing my position with a much higher Lot size.

I am currently about 12% DD because I have lost that
confidence and am now only trading peanuts.

No strategy seems to be consistently profitable

but its all in my head. if the money really didn’t matter
I could easily double my account every month

Walking ten metres on a plank of wood is childs play

but who would walk a plank connecting two high rise
buildings 50 meters above the ground?

its exactly the same thing

and that is exactly the same situation that describes
Demo and Live accounts

They are exactly the same except one involves risking
a lot of real money

[Jerome32]

This is an example of the above, pre empting the market

Price has moved against me so a larger Limit order
has been put in place, if it isn’t hit price should move
down to hit the original TP, if it is hit I should still
come out in profit despite small loss on first position

[Jerome32]

Previously I used this tactic on NZDUSD where I had
a small loss followed by two much larger wins. I
include that campaign here again followed by my
present Limit order hoping to get in at the best price

Thats what we do in non Forex, real life buying and selling,
check Amazon and Ebay for the best price

Forex trading is no different, we are just tryng to buy or
sell at the best price

[dpaterso]

Can I give you some advice??? And probably the best advice I can give even if you (by “you” I mean anybody) ignore anything and everything else contained in my thousands and thousands and pages and pages of posts and inane drivel???

Be VERY careful when adding to losing positions by adding to them with the express intent of improving your break even or better price. It is acceptable under one circumstance and one circumstance only and that is if you have calculated what your maximum risk is on ALL aggregated positions and that you are going to be able to honor that loss if all of the trades continue against you. And this should be calculated preferably BEFORE you even enter the trade. It may work today. It may work tomorrow. But the day will come when price just carries on merrily against your trade and without so much as a brief look back or reach around or pause. And WHEN, NOT IF, this happens and because we as human beings are not wired to accept losses especially big losses: the tendency is to hold on and hold on to these losses until a certain pain threshold has been reached. If you are lucky your pain threshold is reached before your capital is all but gone.

[frandlost]

Price has moved against me so a larger Limit order

has been put in place, if it isn’t hit price should move

down to hit the original TP, if it is hit I should still

come out in profit despite small loss on first position

this is a very similar approach to how I trade. I have been refining my entries as of late. One thing that I have added to my strategy is sending out a .01 scout, see how it goes and set limit orders from there.

Be VERY careful when adding to losing positions by adding to them with the express intent of improving your break even or better price. It is acceptable under one circumstance and one circumstance only and that is if you have calculated what your maximum risk is on ALL aggregated positions and that you are going to be able to honor that loss if all of the trades continue against you. And this should be calculated preferably BEFORE you even enter the trade.

I know that I have to do this but still haven’t made it second nature.

But the day will come when price just carries on merrily against your trade and without so much as a brief look back or reach around or pause. And WHEN, NOT IF, this happens and because we as human beings are not wired to accept losses especially big losses: the tendency is to hold on and hold on to these losses until a certain pain threshold has been reached. If you are lucky your pain threshold is reached before your capital is all but gone.

I have experienced this and agree 100%!! Unfortunately I have a very high pain threshold. This is something that I have been improving as of late.

I don’t know why it takes me soooo long to implent some of the basic tenets of good trading. I know it but have to do it!!

KC

[dpaterso]

It’s learned behavior. And unfortunately usually takes dozens of small losses and then one massive loss and of biblical proportions before it sinks in. Ask me how I know!!!

Told you before: I never post anything that I myself have not done or not personally experienced!!! LOL!!! No pie-in-the-sky regurgitated theory from me!!! LOL!!!

[dpaterso]

For what my opinion is worth though and in spite of my always warning about things and being negative: I somehow get the impression that you’re (@Jerome32) one of the few that will actually make it in this business.

[Jerome32]

my strategy is sending out a .01 scout

This is basically my approach. You can’t merely watch then
take bigger action, you do need to lose a little real money

Be vigilant and ready to close for a small loss, and ready to re enter
or reverse according to how strong a new setup is, and only if
it fully qualifies, with no hint of revenge trading

If you get good at this methodology you can almost never fail, were
it not for the ominous threat DP mentions, yes price can continue
hundreds of pips in the wrong direction. You really can’t let that happen

There are a variety of skills needed to know when to bail out and
when to hang in. Entry is relatively simple. Even TP is simple
when things go to plan

but managing a trade when it isn’t so obvious what the Market
is doing, reversing, or just retracing, or consolidating.

one approach that works well if you have enough discipline
is patiently wait for that opportunity to recoup, not profit
necessarily but just come out break even.

a very modest TP but high Lot size. It is the one thing that
has always got me out of trouble so far but it does take a
great deal of discipline and courage

I’m more disciplined these days but lack courage.

I need to see consistent results before I can return to that
strategy.

DP mentions another important truth … when ALL trades turn
against you.

that really does happen. sometimes they seem to conspire together
and all take a perverse turn for the worse

even so, you can usually salvage most of them providing you can
keep your head

[Jerome32]

For what my opinion is worth though and in spite of my always warning about things and being negative: I somehow get the impression that you’re (@Jerome32) one of the few that will actually make it in this business.

Thanks, thats encouraging. I’ve been playing around with Forex for longer
than I can remember. I think some have a natural aptitude and seem
to pick it up fairly quickly, the rest of us have to be hit on the head with a
mallet a few times before we stop self sabotaging, or before we move
on to a different self sabotage behaviour.

whilst that does sound a bit cynical, I fear it may simply be the hard truth of
the matter