And no I am not on the edge, or anything like that. This is a calm but enthusiastic expunging of crap. And I don’t need a break either, I have taken several breaks (of many months, even as many as 6, 7, 8 months) over the last few years and in terms of forex, they do nothing for me. I mean well they help clear my mind and I casually wait to jump in when I see, when I think I see and clean and irresistible movement and have a good feel but then the cycle almost always ends up starting again.
So what I potentially see now is a 38.2% retracement (@.8753) of .7700 to .9405 and continued movement upwards in a 5th wave of a 3rd wave). Well maybe a 5th wave.
Come on!!! Who’s with me?! I’m sick of flipping failing and I know I/we can figure this out, let’s seriously destroy this pair! The market is not smarter than us! Eventually through endless intelligent discussion the picture has to be clear, I am convinced of this. It has to eventually make a major move one way or another and I want to know which direction. FOR ONCE I want in on the ground floor and then sit back smiling and laughing when this pair does EXACTLY what I expect to do!
Short at market .8977
Stop: .9077
Target: .8600
Have you traded FX this whole time Dre? I hear you on losses being frustrating, my last trade was a bit impulsive, but I kept my stop tight to keep risk down. This trade was what I actually planned for, thus the bigger stop. How long of a losing streak have you been on? Are you risking more than 1% per trade? How many trades per day on average are you taking?
I just saw the two additional posts…
Have you read ‘Trading in the Zone’ Dre?
I must beg to differ, I do think the market is ‘smarter’ than us. How can we know what’s going to happen at any given moment? I’m a firm believer that all we can do is figure out how much we’d like the market to ‘charge’ us to find out if our view is correct.
How wide are the stops your using as well? My ideas rarely work out unless I give my trades one daily ATR level or more (and I’m by no means a ‘master trader’… yet!)
This whole time Zeke meaning since since 2003 or since June?
More recently no. I had my good hot streak, the BEST I’ve ever had in fact, that ended in early June and then from there downhill through the rest of June. Now that I checked I peaked June 9th and pretty much everything I had earned (in the few weeks leading up to June 9th…actually since May 18th, I checked, well eroded by May 21st, chipped in a bit again May 24th) was eroded by July 3rd. I then chipped in a bit more money and by July 16th I was out again. I usually trade with a couple of hundred or so and try to build with that. The highest I ever got (this is back in in early June) was a realized balance of about $3900, unrealized just over $5000. Yes I made it THAT fast and lost it almost just as fast.
Then I had family over from Italy for a couple of weeks so I stopped trading, got back in August 4th and was essentially eroded out again by August 21st, though I had one last trade active until it was margin called on September 8th. Then absolute break until December 3rd.
I don’t know how much I risk. How much I trade per day, well it depends on what I see, or what I think I see, the market action, how high my balance is (higher balance, easier to earn money with fewer pips). While active I can go from executing several trades per day to to maybe one or two week if I am convinced about a particular target and just need to wait it out. Maybe I’ll give an average number later on, though I’m not sure what that ultimately has to do with becoming a successful trader.
I quite rarely use stops.
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I am convinced that a trader who truly knows what they are doing does not need stops. The steps to minimize and eliminate risk should be taken beforehand. When the average healthy person walks down the street in good weather, do they wear padding to minimize the risk of getting hurt should they fall. No, because they know how to walk, just pay attention. And if the weather is bad they slow down and make the necessary adjustments or they just stay home altogether.
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I think that a trader should believe in a trade and read of the market 100% Believe in a trade enough to execute without stop or it isn’t a trade worth executing.
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I don’t want to get knocked out of an ultimately successful trade because I set a stop 5 or 10 pips too high/low.
If I truly believe in a trade I go as big as I can afford with a decent amount of margin left. Again if my trade is truly right and I know what I am doing then no stop necessary, the more I risk the more the profits roll in. The more I risk, if the trade goes horribly bad, the sooner I get margin called with a good amount of balance left and the sooner I can reassess instead of sitting there watching my balance erode.
I see all these “experts” recommending stops here and stops there and the truth is 95% of experts just plain suck and are no better at trading then the average trader. The only difference is they get paid thousands of dollars to suck. They tell us where the fibo points are, where the resistance/support points are well you know what I can see those myself. Of course then once in while an expert I ignored is right and I end up getting burned. I don’t usually read the “experts”, although trading the opposite of what they recommend is intriguing 
Sorry for my long posts but I feel like getting it out, I would rather make my mistakes here then repeat the same endless cycle of failure, I’m really fed up. I know I am capable of soooo much more, and I have always felt that I can improve through discussion but I have never really had a partner to work with and have never bothered posting on a forum like this before.
I think below the surface I have evolved as a trader but the plain truth is after all these years I still suck and have no clue as to what I am doing. I think I am just fooling myself into believing that I am right around the corner from great success (“this time will be different” and that I am some grand master trader and I am not, not yet anyways Seriously a chimp could have done just as well as me since my peak in June.
Well your last trade Zeke looks good, but I challenge you on it. If you have no doubt(s) whatsoever that the price is moving down why the stop? Does that mean you see a potential scenario (consciously or subconsciously) where the Aussie moves up again? Do you see what I am getting at? When you walk down the street you don’t move out the way unless there is something there
Join Date: Jan 2009
Posts: 189
Short at market .8977
Stop: .9077
Target: .8600
Have you traded FX this whole time Dre? I hear you on losses being frustrating, my last trade was a bit impulsive, but I kept my stop tight to keep risk down. This trade was what I actually planned for, thus the bigger stop. How long of a losing streak have you been on? Are you risking more than 1% per trade? How many trades per day on average are you taking?
You don’t move out of the way unless you SEE something there.
I was margin called at .8980 of course NOW watch the price will go down straight down. lol.
Depending on the type of chart I look at, I see different possibilities.
A bar “OHLC” tells me the head shoulders neckline has been significantly violated. And that isn’t supposed to happen once a head and shoulders breaks out.
A “line” chart shows me that the price is right at the neckline and I think testing of neckline support is perfectly valid. But much higher and the H and S is done.
No Zeke, I didn’t read the book you mentioned, “Trading In the Zone” I think you said.
Sorry, but right now I feel it is better to continue constantly talking the continue constantly trading. I have $63.49 to work with. Not much but enough to build with for sure. Of course once I truly see what is happening, instead of guessing, I could add a bit more funds.
I don’t know. I think the market is smart enough to tell, well by market I mean chart/price action, us exactly what it is doing and and exactly where it is going. I think it is all there right in front of us. It is just that I can’t seem to read it, after all these years! I think the market can be reactive and even proactive but it can’t ultimately and independently act against us.
I have tried different mental approaches to the market and none have worked, maybe I just don’t follow through deeply enough on my mental approaches. I have thought of the market as my enemy (I’ll show you", lol), I have thought of the market as my friend, I have thought of the market as my partner (“alright me and you buddy, let’s do it”) and no success, nothing. As calm and rational as I am going in, I think there is still too much impulsiveness in my trading.
What’s your story/trading history Zeke?
Well I wanted to post an image but couldn’t quite figure it out yet.
So now if one draws a diagonal neckline (daily “OHLC” chart), todays high stopped almost exactly at the neckline in the .8990 area. So now what?
Oh! Added afterwards… .8989 is also the 38.2% retracement of the move down from .9405.
If the price sets a new high, I have to think or I would think that means more gains to the upside. I mean to significantly exceed a trend line has to be pretty significant. The question then is how high… and what pattern is forming? Okay two questions. Probably more.
If it continues to the downside… why in god’s name did it come up so high? How does that retracement fit into any logical pattern? Why did it seem to randomly stop @ .8733? There seems to be a triangle from .9321 to .9014 which could have brought the price down to the .8760-.8740 area.
Edit: accidentally wrote “randomly stop @ .8933?” instead of .8733.
Dre,
My question was what your trading experience has been over the last 6 years. What were your stats like before this year as far as win rate and sharpe ratio? What are they now?
You wrote a lot, so let me see if I can hit some of the key things…
I think trading without knowing how much one is risking ahead of time is dangerous. I’ve also learned that it’s more important to have a big win once in a while, lots of small gains/scratch trades, and of course take small losses occasionally. Over time it adds up statistically.
You say you don’t believe in stop loss orders, but yet you’re taking margin calls which are essentially the same thing.
I agree that trading frequency without context of timeframe is irrelevant, but I guess a good question is what do you do after a trade is unsuccesful. When do you re-enter?
You obviously are proficient with technical patterns & setups, but I think you’re putting too much weight in their probability of success.
I think the market can suggest to us where it may go in the future, but never tell us for sure.
I’ve traded FX for a year and half now, the first six months on a demo account, and then live ever since.
One of my first trades sounded a lot like what you are experiencing. I was long EURUSD in the Dec '08 spike and tripled my account in a day and dubbed myself the next George Soros, then subsequently lost all the P/L an hour after when it dropped back to the floor. I learned about leverage the hard way. I’ve been absolutely obsessed with finding the proper risk/reward and position size for me since.
I don’t ever listen to experts either, although I hear what they’re saying because they’re traders just like me. There’s always an MA or a Fibo somewhere and I put the ear to the ground not for advice, but to make sure I didn’t miss anything in my analysis.
Jason, here, lets me know all the time that he thinks my analysis is getting stale and sometimes he’s right and sometimes not…
[B]Beware of the revenge trade and especially anthropomorphizing the market![/B]
Best of luck and nice chatting, let me know anything else on yer mind.
Best of luck to you too…I guess in my case if I don’t know what I’m doing I have to rely on luck right? Nice chatting with you too, sure let’s keep going. Knowing you are there on the other end listening is already helping my ideas progress without any financial losses. I know I have a lot to say but I think it’s important for me to say it, any little idea from either one of us can help.
I won’t get stressed out if you don’t touch on something I said, I mean we can just flow with it. I am convinced we will end up in a good spot, a GREAT spot eventually. If I can make you rich, I will. I mean that’s what we are here for, right? That is kind of a dummy email address I use and tony is not my name. I’ll give you that info later, but with all the spam out there I’ll give you this for now.
I am an unsuccessful trader. Otherwise I wouldn’t have to bother to continue putting money in. I haven’t kept stats, I have thought about doing it and have even started a time or two but didn’t bother with it. I always preferred to spend my time studying the charts and it’s no fun to keep stats when your trading sucks. If I had to guess, I would say I have a 33% success rate and half of my wrong trades probably would have been right if I hadn’t flip-flopped somewhere along the line. That’s a golden issue right there…patience, that’s what some experts preach but it can work against a trader too. I can definitely tell you I am thousands of dollars in the hole with forex, don’t know exactly how much. But once it clicks, if it clicks, that money can be made back with great ease.
Don’t know much about the sharpe ratio.
I have heard talk about risk and the such and if it works for you great but my main focus has always been understanding the big picture and figuring out what is happening. Because once you know that, the rest almost seems meaningless At that point I imagine risk wouldn’t matter at all because you’ll know, you’ll just know.
Your statistical approach sounds good. But I just don’t think I was born to be that kind of trader, it seems like it’s going to be all or nothing for me. One of the things I actually like about the market is the way it keeps pushing me out. It’s like it’s telling me that I am just not ready and it keeps forcing me to struggle my way out.
Margin calls, in a way that is essentially true but obviously margin calls are systemic and ultimately not user defined. All the more reason to avoid using stops. I am a master of margin calls You do see what I am fundamentally saying about stops right?
That is a good question. You mean after I curse at the computer screen???lol. No I am kidding, I mean I do that once in a while but seriously it depends. Sometimes I go right back in, I mean if what I thought went horribly wrong then it is SOMETIMES logical to conclude that the opposite must be right and that approach has worked for me sometimes but it is obviously not a sound approach to take. I hate going into the market without some plan or map in mind but sometimes it is worthwhile to dip into the market for a few pips, map or not. If I am asleep well I…self-explanatory.
Too much weight…I am quite aware that sometimes a pattern is not what it seems to be. I know they don’t always work but that is just the nature of the market in my eyes. I am convinced that, and I am repeating myself, that everything we need to know is right there in the charts. I am convinced that one way or another there is a pattern sitting right there telling you exactly what to do even if there is another pattern that is dead wrong.
I can live with the way you put it in that the market suggests and doesn’t explicitly tell you. But even then knowing that, if one is aware enough to pick up on the suggestions that is a great thing. Sometimes a woman will say, “I have nothing to do tonight” instead of saying “let’s go out” but either way it should be crystal clear what is happening.
You don’t put much faith in patterns? What do you primarily base your trades on?
Anyways, I’ll share my chart thoughts but I have a doctor’s appointment in the morning should get going. I have so much more to say anyways but this post is getting quite long and this seems like a good point to stop for now. I promise I’ll touch on the other things you said soon, probably sometime tomorrow.
I live in Toronto by the way, you Zeke?
Edit:removed quote that was used for reference
Edited for solicitation pipsygirl? lol. That is your incorrect judgement, not fact. It was an invitation, read the context and figure out the difference. Everybody on this forum is soliciting in one way or another, soliciting advice, information. God I hate it when people interfere like that.
At last check the price is at .8916.
Right now my thinking is moving towards AUD bullish. I was convinced there was no way it would reach the 2008 peak so soon as that seemed like too steep a movement on the charts. That is one thing that made me so sure there was a head and shoulders formation. But the reality is that that peak and the 1.00 mark are pretty significant psychological targets and at this stage hitting those targets may be quite irresistible to the market. And right now that reading seems to be falling into place best for me.
I mean the aforementioned 38.2% retracement at .8756 fits with the triangle .8760 to .8740 range I mentioned. I can see a potential A-B-C decline that has probably ended with the aforementioned triangle as the B wave.
So there could be a 5th wave coming up ending right around the old peak.
.618 of the .7700 to .9405 move is 1,053 (.1053). Add that to .8733 and we’re looking at .9786…pretty close to .9849, which seems like natural resistance area/stopping point.
1.618 times 672 (the distance of the recent move down) is, gives us 1087 (.1087). Add that to .8733 and we get .9820.
There is some potential future mapping…to be used as a guideline.
I mean right now my thinking is if the AUD was going to move down it had the PERFECT opportunity and impetus to do so with that apparent H and S and right now that pattern isn’t far off from failure…though it probably hasn’t failed yet. But if the market passed on that glorious opportunity to move down, I don’t see how it doesn’t go up…or I should say that suggests potential, maybe even probable upwards movement.
Right now I am looking for the price to slowly curve down in wave 1 retracement of anywhere from .50 to .786 of the move up to .8992. That would serve as base for upward movement.
Signs
- If I see that type of movement/wave 1 it would serve as a sign to me that my AUD bullish thinking is correct.
- If I see some potential wave 1 action forming AND the price moves up above the .8990ish neckline/trendline that would further serve to reinforce my view that the price is moving up towards the 2008 peak in a 5th wave.
Whether there is any kind of wave 1 action or not if the price clears that neckline I am going to feel pretty good about upwards movement and am not ruling out some type of triangle formation. Though a good feeling does not always guarantee a successful trade.
Take care Zeke, keep an eye on those pips you’ve earned thus far, share your thoughts too.
Sorry, I tried to give an email address to contact me but “pipsygirl” removed it on her basis of solicitation. I guess people on this forum aren’t allowed to become friends. If we were out in public and I offered you my email address pipsygirl probably would have had me arrested for solicitation.
Dre,
I really think that the lack of success you are describing is completely due to your aversion to risk management. Your tech analysis is fine, although I must admit I know nothing of Elliot Wave Theory… but without risk mgmt you’re basically ‘betting the farm’ on every setup you trade. It’s almost as if you would rather play the slot machine, than design a slot machine which has an edge to pay you. If you only risk 1% of your account, you can be wrong ~100 times before you are in serious trouble. One step further, if you seek an R/R ratio of 1:3 you could string together 10 losses in a row, and only need 4 successful trades to be back where you started, plus some. Point being, if you don’t design an approach which allows you to be wrong many times over, you’re going to fail. If I could guarantee my win rate to never drop below 50/50 I would be on top of the world!
I just simply must continue to disagree with your views on stop loss orders. Without them one has no control over their account.
I have no desire to become rich ( I won’t object to it though! ) from trading. I DO however have a insatiable desire to be successful with what I do. For me, that’s defined by protecting my capital and striving to have it grow consistently in the process.
Also, I should point out that it sounds like you’re letting emotions creep too much into your trading.
These are a few things that improved my success in the last 6 months, take 'em or leave 'em as you see fit:
1.) I only look for directional bias on the Daily or Weekly charts. I use H6 charts (used to use H4) for setups. These are the only charts in which price action appears ‘logical’ and ‘rational’ to me. The only use I have for smaller TF charts is to watch what is going on with price in a more detailed manner. This comes in handy when actively managing a position (moving a stop closer, exiting on unanticipated strength/weakness, watching the trade from across the room , etc…)
2.) I never change my plan. But my plan can have changes built in. I start a trade with a certain amount of risk in mind, and only reduce it over time. I never increase the initial amount risked.
3.) I judge a trade to be successful only if I follow my plan, thus a loser according to plan is a success, while a winner without following the plan is not.
4.) I have a watchlist I observe day & night which includes FX pairs, US equity indexes and their respective futures, commodities, bonds, VIX, and my personal favorite, $TICK (unfortunately only available during the NY session.) This gives me a snapshot of where things are. Sometimes FX drives the other markets, other times the other markets drive FX.
5.) I enjoy tracking my progress, it’s another chart to watch! I agree that seeing negative results is never fun, but I never could see what I was doing wrong until I started keeping a log. Killing the trading demons when you discover them IS fun!
6.) I constantly watch a certain webpage which has bloggers who trade actively for much larger accounts. They have access to order book information which I don’t. It’s much easier to short a pair (like yesterday for example) when my own analysis agrees with the fact that an upcoming price fixing has an imbalance of sellers. They can see orders which will give an idea of where ranges should hold during sessions too. Of course, they aren’t always correct, because no one can be!
Just a few things that come to mind, there’s infinite ways to approach trading so realize that these are just things that have worked for me. I’ll PM you the link to that site, my blog too if you’d like. Also, if you would like to know where I got my tracking log I can tell you that as well.
Oh and last but not least, this is probably the most illiquid time of year to be trading. I wouldn’t expect too much in the way of logical ‘moves’ until after the New Year.
P.S.
7.) I NEVER trade the Pound any more! 
So the small short I attempted was unsuccesful, and rightly so as it was an impulse trade.
-31 pips
However, the trade which I had planned has behaved well thus far. Price spiked on the retest of the broken neckline and broke pretty hard into the 16:00 GMT price fix. Word was that there was a large imbalance of excess sellers and events unfolded accordingly.
Price traveled to a low right near .8900 and subsequently bounced. A bomb scare in Times Square squeezed the dollar bringing the AUD right back near entry, but it seems as though that is subsiding now…
I’m moving my stop down 25 pips to .9052 to take some risk off the table.
Unrealized P/L: +39.5 pips
I’ll try to keep it to some quicker points. Thank you for your honesty, it wasn’t all pleasant to hear but I am sure I will be better off in the long run. I mean for me to keep doing what I was doing reminds me of a definition of insanity I have heard…doing the same thing over and over and expecting different results.
I’ve traded FX for a year and half now, the first six months on a demo account, and then live ever since.
-Do you consider yourself a successful trader?
Year and a half…Dec.08 spike.
-I wasn’t actively trading at that time. I put in some hard time up at the top and was out before the big drop and spike you referred to. I didn’t go back in until early this year when your spike had come down. Have you found your proper risk/reward position? I was amazed to see that massive drop and I still haven’t definitively figured out how it fits into the big picture. EUR/USD is primarily what I trade and have traded, I’d say at least 85%-90% of the time
I don’t ever listen to experts either…they’re traders just like me…put the ear to the ground not for advice, but to make sure I didn’t miss anything in my analysis.
-That sounds like what I basically do…although when my own ideas work well, I don’t check the experts at all, unless I want to see what they all thought would happen (to see how brutally wrong they PROBABLY were, lol). They are traders just like you and me…in a sense I agree.
Jason, here, lets me know all the time that he thinks my analysis is getting stale and sometimes he’s right and sometimes not
…this seems kind of ambiguous, either he is or he isn’t. When you do well, he is wrong? When you don’t do well, he is right?
Beware of the revenge trade and especially anthropomorphizing the market!
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Yes. Anthropomorphizing…interesting point, I say beware not anthropomorphizing the market. Good word.
Elliottwave…I forewarn you that it should only be used as a guideline and you probably won’t see patterns as nice and clean as they are in the educational material but I think it would do you some good to put some elliott wave knowledge into your processor. I believe the market is a natural phenomenon.
Just wanted to add…Maybe you haven’t gotten around to describing it yet but it seems, to me, like your trading could use a bit more structure. Sometimes it is best to just keep it simple and ride the most recent trend but that’s good way to get burned too.
Dre,
I feel successful in the sense that I’m very grateful for how much progress I’ve made in the last year.
Could you be more specific what you mean by structure? I use S&R, trendlines, and traditional technical patterns for analysis. When there’s a confluence of events which indicate a high probability trade that I see coming ahead of time, I plan for it. If it looks likely to occur I take the trade.
As for risk/reward, I’d take anything that looks to be 1:2 or higher. 1:10 would be lovely!
Happy New Year!
Sure Zeke, send me your links.
I am still on the sidelines. You referred to two trades, one planned, one impulsive, which one is the one you specified, opened at .8977 I believe? At this point there doesn’t seem to be much downside conviction.
My thoughts at this point:
-AUD bullish is starting to look quite irresistible to me. The counts and projections seem to fit best.
-I still haven’t ruled out a deep retracement of the move down from .9405 and then further subsequent downward movement. I have seen that happen often.
-I would be surprised to see a move straight up. I am thinking some up and down action, well significant up and down action, maybe triangle action before bursting upwards.
-There has to eventually be some multi-month pause in the bullish AUD trend. If it hasn’t started already I wouldn’t be surprised to see start in the event the price hits resistance at the 2008 peak.
-I am surprised there hasn’t been, at least not yet, further testing of support below the .8900 area
-If the price convincingly breaks through the 38.2% fibo/“neckline” resistance area (.8990/.9000) my confidence in AUD bullish will grow but that confidence will be somewhat tempered by the aformentioned respect for further downward movement.
i) What has me concerned is that little potential wave 1 (.6248 to .6848) from early this year. There could already be a completed 5 wave move which could mean further downward action. Otherwise there is definitely potential for 4th and 5th wave action that would at least test the 2008 peak.
I don’t have a perfectly clear vision for this pair yet.
Why does it seem like I always end up trading towards the end of long term trends instead of the juicy middle?
Peace.
Zeke, I saw your message.
Thank you, Happy (and prosperous) New Year to YOU.
Studying the charts and price action as the price is struggling with the .9000 resistance area.
I decided to throw a 100 day moving average onto a daily chart (been a while since I checked out a MA) and noticed that in this pair that moving average holds some pretty good looking weight, well at least as far as the July move from .7700.
-It broke through (downwards), fine. It broke through upwards, fine, it can fail as resistance like on a first that but quite interestingly that 100 MA acted as very good resistance on the next upwards test around .9180.
Right now that MA is at .9112 so there seems to be a very key confluence of points coming up. I am very interested in seeing how the price behaves at the MA.
If it holds as resistance again that could be the impetus necessary for further downward movement…below .8733
“conquer your fear with knowledge”
Dre,
I have a 100SMA on my Daily chart and I don’t see what you’re describing. Mine reads .8893 today. Price broke the line on the 21st, when it read .8854 and has come back up through since.
What type of MA are you using?
Oh, and the trade I’m currently in (.8977) is the trade I planned. I try to log my plans in this thread, and on my blog. It works wonders for my discipline to put ideas in writing.
The impulsive trade was the short down at .8868, with a 30 pip stop. I saw a intraday session level break, and I was antsy because I was waiting for my current trade to setup.