Looking for a coach to help me wade into the deep end

Trading Discussion
1

I am my own worst enemy…and having trouble taking the next step. I left a very successful 23+ yr career in financial services industry earlier this year and concentrating on this new path on a very full time basis (10-12hrs a day, no kidding).

First, what I am good at:

I am very good at identifying the trend, finding the S/D zones and understand the big picture macro themes in the economies, interrelationships with bonds, commodities, etc. I am a WSJ junkie and just eat the macro-fundamental stuff up like candy. Sometimes though I am finding my macro views are getting in my way of trading (e.g. I simply refused to long the EUR this summer).

But I am having trouble actually putting my money where my convictions are. And also, where best to put it! I am monitoring 8-10 pairs daily along with commodities, treasuries, dollar index and stock indexes…but where do I dive in? I am only risking 10-20 pips now on 1 mini lot at a time. Getting stopped out because stops too tight but hesitant to put more on the line.

I am an Online Trading Academy platinum member and they are very good at what they do. However, they do not know me, my goals, my stumbling blocks. [B]What I am looking for here is someone who can mentor me forward.
[/B]
I am dedicated, driven, disciplined.

PS-yes, I am a female trader…in case that matters. Please don’t hold it against me :wink:

2

That’s the kind of work ethic it will take.

Most people can identify trends, they just refuse to believe them. It takes courage to buy dips, or sell rallies, as price is doing the exact opposite of what you see on the long term.
As for macro views clouding vision, you could have made plenty of money this summer shorting the euro. Just don’t expect counter trend trades to run as far.

1)If you are monitoring that many, give them order. Look for the ones that exhibit the strongest likelihood of a positive move, and concentrate on those.

  1. If you don’t want to put more on the line, don’t. Put less on the line. As the trade moves positive, scale in.

  2. Don’t use market orders. Put pending orders where your stops are. And move up your stops quickly. You won’t always get an entry, but that’s okay. And you’ll get stopped out at B/E a lot, but it’s not a loss. If you still have conviction about the trade, set up another pending.

Don’t worry about looking for a mentor. Read anything and everything, and take the stuff you can identify best with.

Use that dedication.

I don’t think that is even a factor.

3

The only mentors I have heard of are those who also offer training, and then the mentoring follows on from that - that is what I did, and it worked well for me. One of my motivations in seeking structured training was to avoid the uncertainty that you seem to be experiencing, and to have a dedicated, contextualized support network of whom I could ask questions and walk through examples. But many on here will say that that is wholly unnecessary and that I wasted my money - trouble is, we are all different, so one person’s epiphany is another’s irrelevance.

It sounds as though you almost need help with the psychology of trading, at least as much if not more so than with the technical side. You perhaps need to decide what sort of trader you are, what sort of timescale you want to your trades etc. For instance, and to pick up on your Euro example, while I agree with you that over the medium-long term it would have been brave to go long on the Euro any time recently, there have been some fantastic long opportunites on the Euro on an intraday basis. I have made pips taking it in both directions - that is one of the advantages of Forex trading. The psychology of the various styles of trading can be quite different: as you point out, going long on the Euro at various points this summer would have meant going against the prevailing fundamental wind - that doesn’t mean that it would have been a bad trade, however. There was some terrible Euro news all summer, but I went long, off the Daily chart, on 12th July, and made pips. Then in August I shorted, again end of day, and made pips again. In between those trades, there were intraday opportunities in both directions.

You say that you are good at identifying trend, but it is possible to get an uptrend on one timeframe, and the opposite on another timeframe, at the same time - each can be traded successfully, as long as one understands the relationship.

If you feel that your Stops are currently too tight, but that you might be resisting making the wider as you do not wish to risk too much, it could be that you are achieving the opposite of your intention: if you are right about the overall direction of the move, but are being stopped out, is the move then going as you expect? It might be that widening your Stop a little would give the trade room to ‘breathe’ and enable you to survive the intial bounce then hit a your TP. I would recommend going back over your losing trades and experimenting with different Stops. Had the Stop been 40 rather than 20 pips, for instance, what would your trading result have been? Personally, I do not favour a fixed Stop level, preferring to ‘hide’ my Stop behind a level of Support/Resistance.

Once you have confidence that your overall strategy is working, then you should find that the confidence to back it with greater sums of money comes naturally.

I monitor 20-odd Pairs and have done since I started out, so I personally do not think that that is the problem. I am a largely technical trader, so I scan a number of Pairs, then zero in on the ones that might give a setup that fits my strategy at any given time.

10-12 hours a day is perfectly plausible, and as Master Tang has said, that suggests that you have the work ethic to make this work.

And I can’t think of any reason why your being a lady trader should have any bearing on whether you success or fail, entirely irrelevant!!

Apologies, this has been something of a random assortment of thoughts, but I hope you find something useful in there!! The basic message is, stick with it and it does get easier, assuming you discover some aptitude.

ST

4

hi, just a thought about your position size, i hear you saying that your dont wanna risk more then 1 mini lot with 20 pips. have you considered going 5 mircos with a 40pip or 2 micros with 80 pip stop.

in truth you are risking the same total on your account. and you might find you wont be stopped out as much

5

have you learned about the position sizing techniques, taught in babypips school. if you are bothered by going higher then 20 pips on 1 mini lot, then do 5 micros with 40 pips. or 2 micros with 80 pips. you are risking the same amount.

also as a female i understand you have an advantage on trading a plan. something to do with male egos or something.

and definitively less pairs, i only look at 1.

6

Thank you ST for your thoughts.
I am initially an intraday trader but want to work towards more swing timeframe. I do not like to scalp or momentum trade. I was taught to ONLY trade the direction of the primary trend, not to chase trades and not to hop aboard in the middle as the risk is too great. This is giving me the most trouble right now as I sit here today from 6am and have not done one trade today…and yesterday I spent all day mapping out my strategy.

I determine primary trend using monthly, weekly and daily. Then I look at 240 and drill to 60 to find an opportunity. So if daily and weekly trend is up, i am looking for 60 to show me retraces back to demand where i will only go long. (I use monthly and weekly also as I am also trying to invest my IRA for longer term)

Was also taught only take fresh retests…there do not seem to be many ‘fresh levels’ as there is a lot of consolidation and ranging going on. so my levels of entry are way off where the market is.

Here is an example of something I was struggling with just this morning and caused me not to take the long trade that was right there in front of me…USDCAD is not making higher highs and there is divergence with the CCI 60m making lower highs . Thus, I was hesitant to take a long until the pair showed some conviction. On the other hand, I did not want to short USD as it is still climbing higher and VXX way up today and treasuries gaining also…so, I sat on my hands with no trade.

My other stumbling block is how to jump on board a trade…today EURUSD and EURJPY down but I am taught wait for the retrace back to a good supply level before entering…well there is not retrace in sight today so again…no trade.

I am trying to use CCI (20) on 60 and 15m to confirm overbought/sold for my entry because I was getting into trades too early (CCI was originally set by platform at 14 so I moved it to 20 to give me less false signals). This has helped me with timing.

I am a CPA and very versed in risk management so position sizing and micro v. mini are concepts I do not have an issue with. I try to place my stops beyond major psych levels or previous pivot high lows but right now if that is more than 20pips I pass. I also draw trend lines/channels on all my charts to help me with entry and stops. FIBS are also on my charts but are more interesting than useful to me currently.

It is these type questions that lead me to believe I would do well with one on one help. I am not having an issue with losing money…my issue is getting into a trade, sigh.
ET
PS the female thing was mentioned because I grew up working with traders my whole career…mostly male oriented. I was COO and CFO of large Hedge Funds prior to becoming full time trader.

8

Hey I have a suggestion for you that would probably help you alot, the use of ATR to know how much ranging ability your pair has. Because I see that you say you want to do swing, and you look at very very slow time-frames, [B]BUT[/B] you do a 20 pip stop loss. Let me tell you that trading is going to be extremely difficult for you, because now you will have to count on a PERFECT ENTRY, with no drawdown essentially.

When you look at slower time frames, the amount of pips that range within that frame go up. On AVERAGE, a 20 pip stop would suit most pairs if you were only doing 1H and FASTER. If you want to trade 1H/4H/D/W, I would suggest you increase that pip loss to anywhere from 50-200 pips instead, and lower your position size, otherwise you will have zero room for error, and everyone knows even if the market is plummeting it doesnt mean it can’t shoot up briefly, just to take you out, then resume its fall.

9

Thank you for your input
I use ATR for equities but FX been so volatile and range to big for me while I am finalizing my strategy. I do see what you are saying and will need to definitely widen stops when I do more swing.

Currently for my actual entry I am drilling to 15m to reduce the zone from 1hr. I like the longer time frames and I do not like going any shorter then 15m as they move to fast for me and I feel the fundamentals become irrelevant and instead feel like we are trading market manic behavior…and it has been crazed of late.

I have many examples in my journal of trades that whipped me out within 5 pips and then carried their way to 100 pip moves minutes later!

For the time being using 15m drill down and SCI confirmation do you feel 20pips still too tight?

10

on a 15 minute chart for most pairs you can probably find 20-30 pip stop set ups. Don’t expect it on the 1H and beyond though lol. Whenever I watch charts faster than the 1Hour I don’t really pay attention to the noise. I just watch how the candle sticks form when it gets near my level that I am watching, because if i’m monitoring my trade and staring at a 4h chart, it will literally look like its not moving much even though you see your +/- changing, and to me thats not very helpful.

11

Don’t make the mistake of thinking larger stops will help you.

20 pips can be, and often is all that is needed, depending on the spread.

You tell us you can identify trends. A straight line on a trend can often be all that is needed.
For instance, look at this chart:

If you had done nothing but sell at every tough of the line AFTER the red box that broke support, your stop at the most would have been 20 pips, and safe. If it goes the other way, why lose more? I had been watching the way price reacted at the zone between 1.6200, and 1.6100. When price couldn’t muster enough strength to break out past my trend line, which was fairly identifiable at that point, to only move left was to wait on my particular setup for a short with a small lot, and go along for the ride.

For more of that type approach, and it is IMMENSELY helpful check these three threads out:

http://forums.babypips.com/free-forex-trading-systems/6632-alternative-technical-templates.html

http://forums.babypips.com/free-forex-trading-systems/19076-technical-templates-2-a.html

http://forums.babypips.com/free-forex-trading-systems/29902-technical-templates-continued.html

And for a method that dovetails nicely with the above principles, read through, and watch the vids here: http://forums.babypips.com/newbie-island/36328-what-every-new-aspiring-forex-trader-still-wants-know.html

This is a game of capital protection. But static sized stops aren’t exactly the best way to make it work. You need the highest probability factor of a trade working for you.

That’s a bit discretionary, but if you can be patient, the opportunities do come, and they pay off HUGE without as much stress.

12

Master Tang, in regards to the picture you sent,

If you had drawn the trend line properly from the very top, it would skew away after connecting it to the first top (the one right before the first blue box). in order to draw the (accurate) trendline shown above, you would have to give up the first 3-4 blue boxes and aim for the last 3 boxes, assuming theres no news report that would easily provide a 20+ spike (which would knock you out), since this is gpb/usd.

Its true and I agree that you CAN make a profit using a 20sl stop, but I also believe that it would largely depend on your take profit, as spikes will decrease your win ratio, since you only have a 20 pip margin of error (not so bad during asian, okay during london, bad during LONNY crossover and NY).

For me, because I place stops at previous areas that I feel are significant, it has more ‘meaning’ to me, meaning that my loss isnt just a random number I wrote up and hope it doesnt get hit. In my case, my analysis makes it so that wherever my sl is is an area of resistance, so price action would have to have some huge movement to knock me out, but in return my rewards are smaller (smaller size due to bigger sl), but higher rate of success.

For a trend line like the one you posted, after 4 to 5 tests with a very “clean” movement, I would personally also risk 20-30 pips as well, and increase my position size in return for a larger yield.

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[Edit] Sometimes this place just makes me shake my head…

14

You are either saying that a news spike that occurs when the price action touches the trendline (great news for gpb, high impact, or horrible news for usd/ high impct) won’t trigger a 20 pip + spike, albeit duration, or you are not understanding what I am saying about the fact that if you were to draw the trend line as price action is live, your initial line would not be accurate, but after the 2nd or 3rd blue box you can re-draw the trend line to make it an accurate one, because the original one would be ~30 degree slope, where-as your current one is ~45 degree slope, and cuts through the preceding top. Unless you want to explain what your reply meant?

15

A day spent mapping out a strategy is a great idea, I do that regularly, so don’t mourn it as a trading day lost. I spend a lot more time planning and scanning than I do actually trading. Trend traders don’t want to be in the market all the time, it’s the nature of the beast.

That all sounds good to me (although I don’t know what an IRA is lol) so for my part you are certainly on the right track with all of that, although there are many successful styles out there.

Obviously we have a timezone issue, but I entered a Long on USD/CAD this morning, based on the Hourly chart, I entered off the short (18 or so pips) doji at 7am (UK time). I don’t know what CCI is (I am not a fan of indicators), but Price was certainly making higher highs and higher lows on the Hourly on my chart. I exited at the previous high, it was just better than a 1:1 trade, and was about the time you were scanning, I think?

There will always be another trade. My feel is that if there is no obvious Entry, or I feel rushed or something, I will sit it out. One can’t take all setups, after all, as one would have too much exposure to the market too often, and could not keep up with it! It does not take many trades a week to make good money at this, as long as they are the right trades.

I don’t know what CCI is, and I am afraid that I do not know what a CPA is (probably looking like an idiot about now lol!) but in my experience it is better to be out of a trade wishing one were in, than to be in a trade wishing one were out. You can learn and refine your Entries over time, it sounds as though you are thinking the right way so it will come with practice.

In a past career I was a well-spoken, university-educated 20-something with no kids working within a large team of burly, middle-aged, chain-smoking, seen-it-all-before law enforcement officers - on the face of it I was a fish out of water (I turned up to my first surveillance wearing a tie lol!) but it soon became apparent to all of us that trusting one another’s judgement, getting along and doing a good job was all that mattered - we’re all still good pals now, so I have never worried about traditional barriers and sterotypes, it should be irrelevant. Although being COO and CFO of large hedge funds must give you an insight many of us lack, and makes me feel a little odd about doling out advice as though I have seen everything before - I have not!!

Anyway, sorry to ramble on at such length. I completely understand your desire for coaching (I have a coach myself and find it invaluable!) but they are hard to come find, and one wants to be sure that they know what they are talking about, which is tough to judge. But this site is great for impartial advice on all aspects of trading, it has helped me enormously, so I would just say stick with it, don’t rush it, and start with a small risk and ramp it up as your confidence grows.

ST

16

Sorry, but isn’t that quite rude?! Trendlines are pretty subjective, so I am not sure that one should talk in terms of drawing them ‘properly’. But quite apart from the lack of manners, I happen to disagree with the content of what you are saying, too.

To my eye, the chart posted by Master Tang shows a top followed by a trend. Some would call that a rough head and shoulders, some would call it a treble top, others might just call it congestion/consolidation ahead of a trend reversal. But regardless of labels, I would certainly not include the earlier bar you mention as part of the trendline. According to your own post, this would mean that the trendline would then miss the subsequent peaks, and would be useless to you: either you would monitor it, waiting for a touch that never comes, or you would ignore it and trade the drop anyway. I though that Master Tang’s post was one of the most helpful I have seen on here, as it basically laid out a trading style that works and did so with minimal fuss and waffle. A great chart with limited text highlighting the key point that was directly relevant to OP’s question.

You can disagree about the placement of the trendline, of course - although I think you would be wrong, this is a discussion group, after all. But telling people so bluntly that they are not doing things properly, when they are trying to be helpful? If you want others on here to be motivated to help you, that is a short-sighted attitude.

ST

17

I am not saying that his trendline is wrong. I’m just saying that in order for someone to draw the exact same trendline as the one he showed in the picture, they would have to wait until roughly the 3rd blue box in order for THEM to draw it correctly. If the person were to try drawing it any earlier than that, the trend line THAT PERSON draws would not look the same as the one in the picture, and will be “wrong” in the sense that they would not be able to capture the opportunity provided by the later boxes.

In no way I am disagreeing about the placement of the trendline, I’m just pointing out in the context of DRAWING trendlines, timing is key. I think you and master tang both read my post wrong.

18

This is the inital “wrong” trendline I was talking about

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This is the trendline that you will draw after waiting. I’m just pointing this out in the reference view of a person trading LIVE, and seeing peaks as they come. Of course if you draw lines in hindsight, its very very easy to get it right. But when its live, TIMING is important. Does my post makes more sense now?

20

Well perhaps it is not so much a case that Tang did not draw the trendline properly, but rather that you did not phrase your post properly lol…! I must confess to being a bit of a drafting pedant, so really don’t think that he and I would have been alone in reading it that way. In any case, thank you for the clarification and apologies for my part in any misunderstanding.

Back to the business at hand - I think that all this is doing is reinforcing the point that trendlines are subjective. I often no longer use them for this very reason - I much prefer to use a relevant ema, or simply an overall view, rather than a line that others might be seeing differently. A trendline is only a Support & Resistance zone, after all, so overly-strict adherence to a specific line is not what I, personally, look for.

When I do use them, I tend to draw an initial, skinny line from the first two peaks. To take Tang’s chart as an example, I would have had two touches that match his initial two touches, then waited for Price to confirm or break that provisional trendline. We then got the slightly choppier PA, which breaks this provisional line, but which would not work as a third peak from the original two peaks marked by Tang. At this point I would not consider this a valid trendline for trading, in agreement with both you and Tang. Then the next peak, Tang’s first blue box, does interact with the provisiona trendline. This gives a third touch. I would not trade it at that point, given the previous choppy break, but Tang’s second blue box also hits the same line, at which point I would double the thickness of the line on my chart and treat it as a working trendline. Depending on TF, fundamentals etc I would then look to trade Tang’s next blue box, the one following the break of Support, the same one that Tang indicates that he would look to trade.

I think that what this boils down to is that you consider the choppiness between Tang’s second and third touches to invalidate the trendlines as drawn by him, and I do not - no S/R zone is concrete, adhering to a fixed number or level, so there can be the odd breach which does not invalidate the overall level, providing that that breach does not have any conviction. That is what I believe we have in this example.

I don’t entirely follow the placing of the new, darker trendlines in your two posted versions of the chart - one of them appears still to intersect with the early choppiness, so is just an adjustment to Tang’s version, as I see it, rather than making a different point - and in your other chart, the wider trendline that misses most of the action, that is a trendline that I might have drawn in as provisional but then deleted without trading it when it failed to yield subsequent touches.

But it is likely that neither of us is wrong, here; trading is very subjective, and trendlines are one of the more subjective elements within the overall topic, so I think that our criteria are just different.

I make money from my approach, your confidence suggests that you do from yours so, as so often with Forex, perhaps we are both right?

I would caution any newbie traders to tread carefully around placing too much faith in trendlines without having a wider understanding of what else is going on, as an incorrectly-placed trendline can give false confidence in a move.

ST

21

I am not sure but here in the usa the have an individual retirement account = IRA they are very good things to have