Graviton
One of the things that i learned from all your trades is to never let a winning trade become a loser! and to always lock some profits. I like your rule of locking always at least half of your profits. The key is to know WHEN to lock half of the profits, because if you do it too early then you wont let the trade enough room to develop. And if you do it too late then you will end up giving back some valuable pips!
So i have an a idea that i will try, and is to take a percentage of the profits according to the reward/risk ratio ÂŽ, so that way i give the trade enough room to develop. I will do it this way:
As soon as R=1 thne i will move my SL to BE
As soon as R=2 i will lock 25% of the profit
As soon as R=3 i will lock 33% of the profit
As soon as R=4 i will lock 50% of the profits.
And after that if the trade keeps going up i will trail my stop with bigger timeframes and try to maximize the profits.
I will try it this month, to see the results, and do some adjustements in the percentages
Wow, its funny that you ask that gasanvill, because i wanted to ask the same thing.
At the moment i am pretty good at cutting loosers. Thats cool!
I now notice that im probably bad at protecting my profits. Or even taking them.
I made three trades today so far.
All trades went into little profit and then starting against me. I took the small pips near breakeven. But little after that all three trades went directly to my profit target.
I mean its cool to see that i made right decisions but if i cant make any pips with it its pretty⌠uhm⌠uncool!
Would love to hear some more words on that topic from you gravitation
Regarding the management of retracements, I think the TF is very important, and that FT is more your great less chance you have a downturn, but only a retracement as your entry is much safer (personally TF 4 hrs)
How to manage it, well I am using ART 25 periods to get an idea of possible retracements.
My MĂŠtode trading is not exactly DNA BB but I adapted to my previous system, which is even more naked than the one we showed Tymen.:eek:
It does not matter, what matters is to avoid a retracement is taken for a turnaround, for me two methods:
ATR 25 periods
Fibo 38.2%
With that I try to get by.:rolleyes:
Anyway it will be time to reenter the trade if the opportunity arises
Good pips, cordially, Didier.
I was always thinking to ask you how did you trade long time ago when you was a trader-newbie.
At that time I guess was no computers and no tools and no indicators that is available for us now. You may didnt have a mentor that could explains to you in such great way as you do.
I just finished to read your wonderful post Good Trades Turned bad
there is your trader -soul that was rising with you.
thanks
This just needs patience. You canât force the trade to do right. If you keep exiting for just a few pips gain when the trade turns around, eventually one wonât turn around enough to force you out and youâll have the opportunity to make a good profit. You might have to exit trades all day or several days for small pips before that one perfect one comes along that doesnât turn around enough to force you to exit early.
Of course you can re-enter again if after youâve looked carefully at the trade and you decide itâs basis is still sound and you were just caught in a short retracement. I somtimes will have to try several times to get a good entry, but if Iâm making 1 or 2 pips on every try, I donât care how many trys it takes.
Long ago we bought paper charts from a provider and they were delivered on a regular schedule by mail, say once a week. For shorter timeframes, we charted those by hand. We manually calculated moving averages and hand plotted those as well. Some people used other indicators, but they were very calcualtion intensive. That was a time when there were no calculators and most calculations were done with pencil, paper and a slide rule. The first computer program I used to calculate indicator values was encoded with paper punch cards and it was amazing. The first programable calculators by HP and then TI allowed fast and powerful calculations. They were the laptops of their day. All other computers at the time were mainframes. So many hours of calculation was required to create a simple indicator like an RSI. There were no 24 hour markets, so we traded during the day and calculated and plotted at night. We didnât sleep much
Hey graviton, good to have you back!!
May i ask whatâs the max amount of spread are you willing to pay for any pair? Cus i have some like aud usd is about 5pips spread, and if i keep re entering, i need to make an extra few pips just to break even.
And also could you please take a look at my SL management, is there anyway it could be improved?
Risk 2% max on any trade, meant for sudden spikes. Exit trade when it goes 1% against me.
If trade goes 0.5% in my favour, set both lots SL to 2 pip profit.
If trade goes 1% in my favour, set SL for 1 lot at 0.5% and the other at breakeven.
If trade goes 1.5% in my favour, set SL for 1 lot at 1% and the other at breakeven.
If trade goes 2% in my favour (Or hits mid BB), exit 1 lot and other at breakeven.
if i get stopped out, I will re-enter the trade at cbl entry and SL per rule #1.
If i get stopped out for second time, i will find another pair to trade.
If last lot exceeds 2%, i look down into lower TF and use 2 cbl entry as trailing SL.
As you can see, the problem i face is when PA whipsaws against me. Thatâs when i may need to re enter quite a number of times.
Am i setting it too tight?
I enter on 1HR and 4 HR TF.
Hello fartist
i like your method for taking profits, i have a similar one, but i use a percentage of the winning. i lock profits according to the risk/reward ratio.
The question of whether a stop is too small or too large depends on so many factors itâs almost impossible to give a one size fits all answer. I would suggest you begin looking for the reason for each stop out and keeping track of it. It will always fall into one of the four catagories I have outlined and each will have a different solution.
Bad entries-use the three good reasons to enter a trade rule, which requires at least one reason to be a price action confirmation of the trade. This stops overtrading cold in itâs tracks.
Sudden spikes-donât trading during red flagged news to stop expected spikes. unexpected spikes should be very rare, like once every two weeks or less.
Good trades turned bad-always exit these with enough pips to pay spread. Even exiting with just a few pips profit on these keeps you in the game for the long haul.
Moving stop to close to price action to fast-This takes some work to develop a system that minimizes stop outs but protects your capital. Itâs a trade off that needs to be maximized.
Once you know where your stop outs are coming from, you can concentrate on that specific area to minimize them. If you are trading correctly, you should be able to trade with small stops and not hit a stop at all most weeks. There is an analytical method to minimize stop out losses and maximize take profit points. Go to google and search for Maximum Adverse Excursion pdf (the same thing as I call Maximum Move Against) and read and apply to minimize stop out losses. Then search for Maximum Favorable Excursion pdf and read and apply to maximize take profit points.
Hereâs an example pdf for the Maximum Favorable Excursion discussion:
There is a book Maximum Adverse Excursion by John Sweeney that you can download and it goes deeply into this subject. You can find much discussion of this subject on the web.
Your homework is to read up on these subjects and collect the data you need to optimize your trading. Then your special project is to try to trade one week with no losses (not even one) due to good trades turned bad, expected spikes or moving stops too close to price action too fast. That only leaves unexpected spikes (very rare) and bad entries to deal with. Bad entries are actually easy to fix if thatâs all you have left to concentrate on. You only need good entry rules and to follow them with discipline. As you improve entry rules, this source of loss will tend to go toward zero. Unexpected spikes will be all that remain and they will be rare. There are things you can do for unexpected spikes too, but I donât believe thatâs your problem right now. Without knowing the source of your losses or stop outs, I canât say what to do about them, but you can figure that out easily and then the solution should be clear. Let me know if you have additional questions
Thank you graviton, i have that book and im currently reading it right now!
I know whatâs my problem. It is actually more of an emotional state of mind rather than my SL.
Every time a good trade turns bad, i probably exit with 1 or 2 pips profit.
Then i see the trade retrace even further more. However as the trade turns around and comes back, im too afraid to pull the trigger once more. And somehow that trade is always the one that made the profits!!
This has happen all the time this week.
I gave myself a rule. 2% MM for each pair. I will keep re entering the trade until my 2% is hit, if not i just keep re entering like you said.
The trade can turn from good to bad as many times but i will earn profit of 1 to 2 on those trade, till i finally get the one that goes all the way right?
Correct me if im wrong, but when our trade starts retracing back and forth between our entry price and SL, it simply means the bull and bears are fighting. Thus whenever it reaches back our re- entry price again, the chances of it going our direction gets even higher as the bears are being wiped out?
After a couple of times, most bears are wiped out thus the PA will go into our direction?
Thatâs my own theory, is there any truth to it?
And by the way, what do you mean by âif the basis of the trade is still the sameâ? , i usually would enter on the very same cbl entry that i started off with.
Hi gasanvill, could you share what you mean by locking profits according to your R:R ?
Once my 1:1 ratio has been met, i will use a trailing SL.
For example i enter long on a 1 HR TF, i will look down into the 15mins TF.
By the it should probably be a bubble or sausage, bubble likely.
Then i will use a 2cbl or 3cbl method as trailing SL.
As soon as my risk/reward ratio is 1:1 i will lock 10% of my profits
At 1:2 i will lock 25%
At 1:3 i will lock 33%
At 1:4 i will lock 50%
At this point the price will be next to a peak and will make a retracement, so i will consider to close the position because as graviton said, dont wait to hit your SL because the SL will give you the minimun profit. So i close my position and re-enter later. 1:4 is a really good ratio.
I´m still evaluating this percentages, incorporating MFE so that way i can analyse my Profit efficiency. I will post my results at the end of the week
The article shows figure #1 where I can see resistant level and how the price is behaved until its break out resistant level. I wouldnât mind to take all 3 trades A,B and C and exit A and B just with few pips even one pip. The problem is to find appropriate support level. When I recognized the price is trying to break the level its already late. Could you please describe how to find that support level or even appropriate support and resistant levels where the price attempt to go up and down until it breaks the level. thanks
