Profiting from noise. Price Action Trading on tick charts

So it’s 9 o’clock New York open. Got caught by what looks like now a fakey long. But had the straddle trade in place so have caught the move back. Have cancelled the TP but set a level marking a 2n return. Will now manually close out the trade.

Edit. Stop loss moved to break-even.

Congrats! I don’t know that it matters how you did it - money is money, and the bank ain’t going to ask if it was skill or luck that got you your check :slight_smile:

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Totally Brilliant @_bob - 10 x 5 weeks in a year - = $1,024,000.00 if you continue to double every 5 weeks ! :slight_smile:

How many trades mate ?

Thats a pretty impressive performance by any yardstick. Congrats

See this is the kind of flexibility that you need to have to trade profitably, even if you flip the trade for a beakeven, including fees of course, it is a Psychological win. Well done Braugh, and trade on dude.

The Ever Sebastian Inlet VIPER

I am not sure that I would generalise quite that much.

Certainly, as a short-term, e.g. intraday, trader I think there is a strong benefit from managing one’s trades and being ready to adjust according to rapid changes in price development and outlook. But that can also restrict profits if not handled professionally and with experience such as @_bob does and has (thats just to guarantee a “like” from _Bob! haha!). For example, prematurely moving a stop to BE and getting hit,

But with longer term trades, I am not so sure it is so relevant apart from the normal periodic review such as end-day, etc? Or what do you think?

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Thanks all, but lets put this in perspective. I lost more over the years leading up to this.

I’ve taken a total of 93 trades in this period in line with the 4 trades/day target. I have made a nett total of 153 pips. My base %risk has started at 2% instead of the 0.4% it’s designed for. I have used a lot more. If there was another zero on the end of the account balance would I still be using 2%, hell no. So in reality if I was following my rules I’d only be up 20%. Still that’s anomalous and I would call it an exception not the norm.

One key is the money management I have been using. There’s a lot, shit there is a duckin lot of talk about how MM is the key but no-one actually goes into facts in any detail. Could it be they are just repeating commonly marketed beliefs to help explain why people lose at this game.

I’ve been using a notional balance as suggested by the turtles plan. I have used the max account equity balance obtained as this balance. So when my account was at $1500 my risk was 2% of $1500. Then when I had a run of losses and the account balance dropped I still traded a notional balance of $1500.

This quickly recovers loses and amplified winners but it comes at a cost. Thats draw down. In this 5 week period I suffered a 42% draw down period. Back to reality, to protect the balance the plan calls into use a step notional balance instead. Meaning I would only review and adjust the notional balance up obtaining a target say 50% account increase. Those review point I have yet to figure out. For now I’ll keep the high risk plan active.

I think this is called taking responsibility for your trades. Again from the turtle book on trading, profit is made from one or two good trades a year, the rest of the time your’re happy to just break even - it keeps you in the game. I don’t think it’s that different at this level. The market doesn’t respect the ratios I want it to hit. Take yesterday trades for instant. I was only 5 pips from my target when I made the adjustments. A wiser man would of closed out and booked the profits as the markets reversed. By setting the B/E I was saying I accept I missed this opportunity but will survive to trade another day. And the B/E was hit and I’m trading again today.

As for longer term traders, I think they have it much harder than me. Don’t know how they do it.

Anyhow, starting to collect some good data. Can’t wait to see how this evolves of the next few months.

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Well, even if you are long term you have to be flexible enough to realize something is not working. For example, lets say you are working on the weekly euro, you enter at .1600 short, thinking that the trend is down, and drawing a trend line from the down bar top, in the double top formation, to the top of the next leg down, 1600 seems like a reasonable position, and a hold through 100 pip stop, to ride the break below 1600 seems worth it. So since it did not work out at what point do you capitulate and close the loss, then reverse, seeing as the trend line was broken. It is all the same, just a different fractal.

I have observed that _bob has hit a market that suits his current style/system, but that may not last forever. The challenge in the future will be to recognize when the market has shifted, and either stay out, or use another tool to match the market.

Right now range trading using momentum works very well, but will it work next week, who knows. You have to take some losses to find out, even in long term range trading, your last trade of the range will be a loss, either you will be short and it will break up, or you will be long and it will breakdown.

The “daily review” would be about right for a longer term trader, weekly/daily, it is my observation that it seems like this translates to what _bob and I do every day, within minutes or even seconds. It is also my observation that longer term traders hesitate to flip, or “break even” because of the thinking it will always come back. Well maybe if you wait 20 years, but unless you are an “Investor” and not trader, 20 yrs is a bit long.

The Ever Fractal VIPER

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I am not so sure about that with the longer term trades. I think it is maybe easier to act according to pre-set rules such as line breaks etc with longer term trades rather than spontaneous reactions to a sudden spike/blip or reversal that occur in the short term environment. I don’t see why a weekly trader would keep moving the stop level just to keep a position open in that it “should come right eventually”. But that goes for all levels, I think?

My trading has historically always been on intraday 1hr / 15m / 5m charts because I like to trade when I feel like it, take days off when I feel like it, and because I believe personally that it is easier to make “10 pips with 10 lots than 100 pips with 1 lot” - but mostly precisely because I enjoy the spontaneity and originality of the short term markets and the dexterity and mental agility that it requires.

But I think this is really all part of the process of developing one’s own personal approach and learning how to combine flexibility with discipline - or how to change your mind in an instance without being a cowboy trader! :smiley:

The ever enjoying chatting with VIPER, or the Pieman, (or even with _Bob :smiley: :smiley: ) Simple_Simon :slight_smile:

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Well my experience with longer term traders, and not just retail, is the tendency to not take a loss. Dennis Gartman, Bill Ackman, even G. Soros Group before it went private family holdings, are some pros who are guilty of this, and it led to massive losses. Also the Usual suspects here and other boards, MarketSurfer comes to mind.

One would think that with more time to analyse what the market is doing, would lead to a better outcome, but human nature is what it is, and the fiddling is still there only on a longer timeframe.

I know what you mean by a sudden spike and the feeling of I have to do something, it still happens to me, because I have more of a weakness for missed opportunity than for loss. But over the years I have learned to stop and think before touching the mouse, sometimes purposely placing my hands in an exact position on my knees, this helps break the cycle in the brain, and I am able to look over the Context and Premise to see if they are still valid, before taking action.

The Ever Handy VIPER

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That is very interesting!! (I hope @_bob , you don’t mind this little interlude?). I just wonder how much such people were reliant on, and reactive to, technical analysis rather than a fundamental outlook?

I could imagine that a fundamental basis would be far more loose in its interpretation, and also maybe sheer position size makes it difficult to decide when to adjust various exposures and profiles in a portfolio-type matrix. Certainly not as easy as yes/no, in/out, open/close, sit on hands.

There are so many unappreciated benefits to being a sole trader in retail forex, if only people could recognise them and utilise them beneficially!

Happy Thanksgiving! :slight_smile:

Go hard lads, the pie-man knows who the junior trader is here

[quote="_bob, post:281, topic:67048"]
There’s a lot, ■■■■ there is a duckin lot of talk about how MM is the key but no-one actually goes into facts in any detail. Could it be they are just repeating commonly marketed beliefs to help explain why people lose at this game. [/quote]

Interesting observation @_bob and very true! Made me think back a bit to some things I used to use for this purpose and after a bit of hunting I found this old template and adjusted it a bit to suit a typical small starting account of around USD 1000 for a Newbie who is just starting out and without your kind of experience.

I guess there are many ways of approaching MM and I dont think a Newbie necessarily always needs to have a system that is overly complex.

I like this type of template because it breaks development into a series of progressive, manageable and identifiable levels ( in column 1) and each level only requires the new trader to focus on an interim profit objective (column 6) with a controlled max stoploss (column 5) (after which they then move up to the next stage) whilst simultaneously highlighting a loss level at which the Newbie drops back to the previous level again (column 8).

I just invented some typical numbers in this chart where, as an example, we start at level 1 with capital of 1000. This level is only using 1 microlot and has a target of USD 10. There is no time limit or number of trades,or fixed risk/reward etc the trader just uses his method within the stoploss parameters to reach this target.

Once USD10 is exceeded then the trader moves to level 2 and targets now a profit of USD30 using 2 microlots. If the account balance drops back below for example 1005 then the trader drops back to level 1 and 1 microlot.

After eventually reaching a further profit of USD 30 then the trader moves up to level 3 and so on.

This table is purely a theoretical example and the values and position sizes within the levels can be set for however much suits a trader and their typical trading win/loss sizes.

The main aim here is to keep the trader focussed on a controlled, progessive, achievable, defined, concrete, near-term target plan without overlooking that a rashly overlarge exposure is going to drop them to at least one lower level - kind of carrot and stick approach. I think it also helps train a trader to always think in terms of profit objectives and capital preservation.

Not very slick nor very sophisicated but provides some simple parameters for keeping one’s account on a progressive path. Of course, at any time the trader can vary the position size and individual trade targets and loss levels, provided they stay approximately within the overall scope of the particular level.

This example trader is now on level 6 with a balance of 1210 and a position size now of 6 microlots. (I emphasise again that this is only a template and these parameters are purely fictitious and a trader should always check and adjust them so they are realistic relative to their own trading style).

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Dennis Gartman uses “secret” anal isis, you can catch his greatest hits at Zerohedge, but it basically is technical, fundy and a whole heap of ego, mostly focused on ego. B Ackman was Fundy (read herbal life) and Ego, and Soros group was a combination of Tech, Fundy, Ego, they kept moving the Tech lines, and looking for whatever little bit of news that would confirm their position, massive losses, and why they no longer trade OPM.

Naaa, they just get lazy and arrogant, don’t forget a lot of these folks charge high management fees, of course there are incentives, but sometimes the salaries from the management fees end up being a really good chunk just for sitting and doing very little or nothing.

The position size can be a question, but never enough to limit the returns, if you look at the top funds, you can see that their returns are not limited by size.

Ok back to our regularly scheduled program

The Every Watching The _bob Show VIPER

Hi Bob, I am newbie and I try improve my trading performance. I saw your trading system and caught my eye. I already download your Bobs Magic Boxes. I try to applicate. But I just wondering why the box is not pop out? I must use tick chart to pop out the box automatically? Thanks Bob

G’day @dms21

Unfortunately, because of my skill level coding and the actual algorithm used to detect a box, the bot won’t search history to find past boxes. Only as each new box is formed will it get displayed on the chart. So on a minute or tick chart you’ll get 20-30 boxes a day formed. However as you go up in time frames they appear less and less. I see your chart is the hourly. It might be days before the first box is detected. May I actually suggest you drop down to the half hour chart. Although my work is down on ticks, I have experimented with other time frames and think the half hour provides better signals over the hourly.

Also please remember the bot is fully customized for my speculating habits. If you enjoy using it but need some work down to customize it for you let me know and I’ll be happy to help. Always here to help anyone willing to explore the wonderful world of boxes

But now to amuse myself I say bite me Martin. This is how you help others, not long winded lectures on life and generic trading habits. Pompous ass.

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Hey Dude, who is Martin???

The Ever Clueless VIPER

Martin I’ve noticed is one of those with a lot to say but nothing worth listening too. They come and go and the forum is welcome to him.

Thanks alot for introducing Volman’s scalping strategy!
I just finish reading both his books, very interesting and useful.
Trying out his strategy now, hopefully it works well.
First time trying out a scalping strategy =)

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Lets us know how you go bro