Putting things together

[Phaz3d]

Not making the money but the strategy is coming more into focus. I’m in no rush to do this, just to do it right. My timeline for completion on this project is about another 3-5 years, depending on how busy I am. I can afford to lose $5-10 bucks a week on trades for quite a long time, and at this rate my account is doing fine. One or two trades changes everything, and I know how to be patient. It’s all about playing the spots I know and building the proper infrastructure at this point.

Looking to short for the week with the stop at 1.1230. Happy trading and catch you guys later.

[Phaz3d]

Market short at 1.1752 TP 1.1735 (1HR swing low) SL 1.1781 (1HR Swing high). basically 1:1 on this, I’m very interested to track this one til it hits.

[Phaz3d]

Very clean, very little drawdown. I will definitely be looking into this more!

[Phaz3d]

Same thing, looks like it happens about once a week so far but I’ll wait a couple of months to see this one play out.
The real questions will appear when the set up fails. So far this is quite a good set up though, primarily because the exits are fairly safe, and most importantly, there is plenty of time to get in. I work, have hobbies, and do love my sleep. Having a couple hours to get into a trade without heavily affecting R:R makes all the difference.I use to be a big fan of hyper low risk, hyper high reward, low probability, but each pip means too much and at an amatuer level it’s not worth pursuing.

[Phaz3d]

Was looking for a calm week and kind of got it. I’m not expecting much to occur until next week, as 1.1635 and 1.1850 looks pretty locked up. The Tuesday launch was slightly unexpected. I got most of the move but it wasn’t as big as I’d like. Fortunately, I have some ideas on how to add. Overall I’m pretty satisfied because I’m not full time in this and got in and out when it was possible.

The up move was textbook breakout mode.

The short was simply because I thought that the high of the week was locked in, so my risk was protected. I got out because I realized that the bulk movement (period) was probably done and we could be floating in dead space for the rest of the week and a 50% retracement of the down move was about as likely as a 50% extension of the low. So while I could have had a small loss, I took the chance and got out at a small profit instead.

THEN I came back later and realized that another low at that time was extremely likely, but I didn’t want to muck around in it so I entered short again and took a conservative TP and bailed.
9/10 on execution, 4/4 on calls, and enough money for a burger and some nice fries.

[Phaz3d]

Working smarter not harder is so true it hurts. When you get to the heart of TA, it’s really just as simple as it sounds. Find a pattern, test it, and respond accordingly. As I’ve developed in my journey, I’ve taken the approach to building a wave model to be my background. Then I look at the tops, bottoms, middles for signs of reversals or continuations. This use to be an extremely laborious task, and any changes in the base model would require me to start the process over again because the focal points (tops/bottoms/middles) can then be changed. Finding ways to effectively generate all of these focal points whenever a change is needed has saved me probably dozens or hundreds of hours, and in practical terms, weeks and months since I don’t spend 8 hours a day at a trading desk.

[Phaz3d]

A bit quickly here:

Got pretty handled today, and these sorts of bottoms make retailers go mad and into tin foil hat mode. But looking back, I took two longs when I should have taken jut one. Or rather, I took two longs when I should have taken one short and one long. Think I may still have been down overall, but it looks and feels a lot better than taking two losses. The key for me has been not to go into panic mode, but to clear my head and think back, “Was this the right trade, given all the information I knew and could have known on hand?”

Just as you are taught to not make decisions when upset, you should not make strategy changes to alterations after a loss. The absolute key is to have a rock solid trading strategy, and to be able to pin point problems and study them and look for solutions. It is easy to look at this type of movement and say “next time i’ll only close if my stop loss is hit AND if the bar closes under the stop”. This would have been a killer series of trades, but I know not to do that. First, because I know I can’t be awake during these hours and make that call, and secondly, I don’t have the capability to program an EA to make that call. I also don’t know how much extra average loss I would be incurring on trades when I am clearly wrong. These questions are not trivial, but they also do have real tangible answers. Being able to understand this aspect of trading has been critical in my experience.

As an aside, this is a slightly dangerous short, but played correctly will net a small profit to recoup some losses

[Phaz3d]

I thought I’d put in a little blurb here because… well, I can! I recently tried to get back into the trading game and after some coaching and therapy (not necessarily trading related), I’ve been keeping my mouth shut more because it keeps me out of trouble haha. I pick a lot of fights people.

I realized that I really want to keep people away from making the mistakes I did, but that it’s not always my place to force that ideal onto others. If people want to donate their money, so be it. Of course, I didn’t come up with all my ideas myself, it came with the help from reading what a lot of other really great (and articulate) people have written over the many many years. Here’s what I have to say.

From a philosophical (logic) standpoint, everyone must understand that the routes they choose as traders have pros and cons. Traders must understand that these should be FIXED. If I trade manually, I cannot complain that ‘I would make money, if only I had a robot’. If I trade with an EA, I cannot complain that ‘I wish sometimes there was an override button’. These are FIXED. Now, I can trade both with an EA, and I can turn off the EA and trade manually. However, EACH trade can fall under only ONE category. Such is the same with how we approach TA/FA.

IF you choose the TA route, you have 2 options, discretionary vs mechanical. These are FIXED. If you trade discretionary, you will NEVER know your true edge or profitability. You CANNOT. Yes, you have past p/l, win rate, charts, graphs, whatever, but the fact that there was no precise moment of trade means that no 2 traders of the same system will make the exact same trade at the exact same time.

If you follow, you’ll understand that when we demand a REAL EDGE from the market, or proof, the instant we do that, we are no longer trading discretionary systems. If you want your edge to be defined, you must do so with math.

I used to think many people were okay with being discretionary traders, that things would just ‘flow’ and they would ‘get it’ or not. But other time I’ve come to see that a lot of traders really just want success at any cost. They want a system that REALLY wins. This means they want mathematically based models. It MUST be. But so many traders are scared of math for some reason. It’s what I call trader hell - the desire to make money, without the desire to put in work into it. This is where almost all true failed traders fall. It is without question. How many traders quit saying ‘yea I tried it but I couldn’t get the hang of it’ or it wasn’t for me, or I realized I didn’t want it that badly, or something like that. How many traders say ‘it’s rigged, there’s no proof, it’s all bs, it’s 100% random’?

I know these traders do not really mean what they say. I know they are mad, but have not really cared about winning, as they wanted justification for their losing. What was that quote? Every man gets what they want from the market? It’s more true with time I believe. I know they do not really mean it because you’ll find that these traders know almost nothing about the market. Truly. There are so many FACTS about the market. Things that if you take the data, do something to it, and count it, are true. People say ‘oh but if something is 60% now, it might not be 60% later’ But just look. If you take 5 minute data from last month, and then you take 5 minute date for every other month this year, and they all fall within expected standard deviation, there is no arguing. It is simple math. I mean really. If you’ve tried your hand at the numbers, and couldn’t find anything, then great. You’ve given it your best shot, and you can at least say you know of things that statistically are random, or have no traceable edge, etc. but at least you have that.

To end, here are some things I think about. Traders:
-do not care enough about math
-do not question things enough to look for answers
-do not understand that any trader HAS to create a model of the market. They may not call it one, it may not be written down, but it must exist.
-do not question the model enough

To be concrete, here are some things I am thinking about:
What makes an MA good?
Should an MA minimize the number of bars that do not touch the line?
Should it have minimum variation in slope from bar to bar? (because MA = 1 is very accurate but useless)
Should it have a maximum number of bars before price touches the MA? (mean reversion strategy)
Should it minimize the time it takes between moving from a positive slope to negative slope? (MAs at trend reversals)
Is it possible to combine MAs without using multiple MAs?
Is there a way to know when price is moving towards the fast MA vs the slow MA?
Is it possible to have a “morphing” MA that slows down or speeds up based on price volatility?

[Phaz3d]

From a pure probability standpoint, it is not very hard to find 80+% or 85+% probability trades. The reason why they are untradeable is because of what the trader must sacrifice to obtain that probability’s in terms of risk reward. In the 10% that they trade doesn’t work out they get killed. The difference between a martingale that works and one that doesn’t is the difference between a gambler and an extremely successful trader.

The goal is to obtain as many 90%+ nuggets from the market, and find maximums to contain risk. Due to sizing, there can be a considerable amount of leverage, but one still must retain a strong pure edge in the market… these spots must be picked very carefully.

[Phaz3d]

Observe, model, question, answer, adjust, repeat. Should I find something that seems worthy, move onto system design, backrest, adjust, clean, demo. Not going to be active much while I wait for the demo to play out. If it does (~10% likely, 2-3 weeks to determine), it’ll be back to the board with intent focus

[Phaz3d]

Took a while to debug an issue with trading through the oanda api. When placing orders, it doesn’t appear that their backend properly formats price to be traded, and takes whatever you give it. Floats in programming languages can be very strange sometimes - what looks like 1.2312 can be read into the language as 1.23119999999, and oanda will neither round nor accept up to its precision number (pipette). Instead, it will try to place the order using the long variant, and result in an error. I suppose it’s technically the coders job, but I would think oanda would write it as a note somewhere or at least have their customer support be aware of how to deal with it is the nature of floats in programming.

First full week of demo today, end of this cycle should be end of this week to move into a small live account.

[Challenge11]

Hope you don’t mind me chiming in for some suggestion.
You’re thinking too much ! to be precise of the wrong things.

Everything you need to understand market movement is on your bare charts.
Instead of brainstorming ideas in your head which often tend to be useless (I’ve been there) study your bare charts.

Learn to see High’s and Low’s on your chart and on your specific TF.
HH HL up
LH LL down does it make sense.

And if you see a HL where would you buy ?
and vice versa for LH

previous support becomes resistance
previous resistance becomes support.

go from there…
learn the language that market speaks! not your ideas.

[Challenge11]

And if you think market is random you’re in some serious trouble !
Because it isn’t.
You can’t simply assume it is random because of your inability to read market movement.

Thats a friendly reminder.

[Phaz3d]

Thanks but I understand how highs and lows work. I also don’t ever recall saying that the market was random so if you could kindly quote where I said that it would be helpful.

[Phaz3d]

Live looks good and will be in full trade mode soon. Another Oanda API note:
The “environment” for the API itself is defaulted to practice, which is fine (and preferable even) but they sure don’t make it obvious to new coders how one goes about switching the environment from demo to live. Once you switch the API token itself and the account token, it will happily give you an authorization error.

“errorMessage”:“Insufficient authorization to perform request.”

Their documentation for trouble shooting?

1.The URL provided to the curl command is correct. Click here to learn how to configure curl examples that can be copied without further modification.
2.The authentication token is valid and has been added as a Bearer token in the HTTP Authorization header.

It’s easy to get lost here as they don’t provide any good examples of how one actually configures curl, or uses the url in their API call. The answer of course, is quite simple.

Practice code: api = oandapyV20.API(access_token=practice_access_token)
Live code: api = oandapyV20.API(environment = ‘live’,access_token=live_access_token)
the acess token of course being the one they generate for you for your specific account (xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx-xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx)

That’s it! just an additional parameter in the API call from nothing (default) to environment = ‘live’. No need to curl yourself, no need to ping some url and attach the key yourself, just a switch to turn on.

Heading into the next full week of trading next week (excited) and continuing to work on debugging.

[Phaz3d]

My stuff isn’t as pretty as sendex’s, but it works for me! Maybe one day hehe.
One of the things that took me a little learn in research is that there’s so much that goes on behind the scenes. The stuff we see in the forums is really just the end product and off-time, as opposed to the meat of it.

The finished product really took a lot of hours, and what I really wanted was just price with some Bollinger bands and a marker on the chart! The advantage, of course, is that now I can more or less query any set of bars that I want that I have access to - no need to spend minutes scrolling only to come up with a new idea and scroll again the other way to check. I can more or less instantly generate, screen cap, and edit on demand. My approach is to keep the window as small as is reasonable. I want to be able to identify consolidation areas and then trade a breakout. Defining those two are worth years of work.

[Phaz3d]

The power of programming

It can take hours and hours to get it to run right, but when you do it’s all worth it. More specs, better readability, easier to tweak.

The theme of this post is that it’s really important to understand your trading personality and the types of trading decisions you’re comfortable making.
Trading is always a balance between risk, reward, and probability. with 1:1 risk: reward, I need at least 50% win rate. with 3:1 risk: reward, I need to win at least 75% of the time. The edge is how much better than the minimum win rate required I can perform. Now most people prefer something like trading 1:3, so you only need 25% or better, and I’ve always preferred the other end, and I’ve only recently been able to specify why. The reason is when I win a lot more, I can create more opportunities within those trades to further increase success. Think about it this way: out of 100 trades, if I win 75 and the other guy is winning 25 but we have the same ending balance, it’s moot. But if we can both manage to squeeze out an extra 5 pips out of half the winners, I come out much more ahead. The other guy can try to cut his 75 losers by 5 pips, but as a mostly mechanical trader, it’s hard to find those kinds of opportunities.
-It’s easier to squeeze out pips when the targets are bigger (25, 40, 60 as opposed to 5, 10, 15)
-Having larger targets mean you spend more time in trades (100, 120, 150) which I don’t like doing)
Because I’m basically guaranteed to spend some portion of my trade in the negative, it’s easy to scale in some part of the trade at the lower parts. By “averaging down” it’s improving my RR while theoretically not changing my win rate.
-In trying to get 50 pips in a bull move, it’s easier to try to get 1 move of 20 and 1 move of 30, than it is to get 1 move of 50.

It’s because I’m a mechanical trader. It’s because I don’t like spending a lot of time in trades. It’s because it’s easier for me to see if averaging down is actually affecting my wr. It’s because I can find it easier to get 2 small moves as opposed to 1 big move. Your edge is your decision-making ability. You have to find what works for you.

[Phaz3d]

Watching charts tick is probably one of the most enjoyable things for me, but also probably one of the least productive hah.

Entered a decision point on eur/usd when price came back to the 30% retracement. Overall trend here is clearly down, and the spike up is strong and short. My thought process is that bears should feel comfortable loading in this area and bulls might need some more fuel to push higher. Both of these lead me to think that even if we are going to break 1.1250 going up, our current fuel is not enough. We should see a deeper retracement, at least closer to the 50% at 1.1125-30 than at it’s current levels.

I think we’ll break south of the yellow box before north of the blue box. Feeling healthy 60% on this one.

[Phaz3d]

update: Wrong prediction. EU in a lot of chop.

The question now is, which will be first, 1.13 or 1.11? Price is pretty solidly at 1.12 flat, my bet is 1.11 first

[Phaz3d]

It always feels good to develop some model or system and have it work out on the first go-around. It’s also a great way to become disillusioned if you don’t accurately track the future
After I made the call for 1.11 before 1.13, the chart played out pretty flawlessly.

I didn’t trade the m30 here, just using it as a way to get the chart to fill the space between entry and exit and have some info to play around with. Most people agree that you should use the higher time frame to guide direction, and the smaller time frame to fine-tune. Great. I used the HTF to determine where the max tp/sl should be. The question then becomes how do you enter?

Something that I’ve implemented in my style of trading that I think is critical is that I don’t use the same entry system in the LTF that I do in the HTF. So while I might be using trend lines in the LTF, I’m not using it to initially determine a target in the HTF. The second part is that even in the context of the LTF, I’m not using most of the entry systems as entry systems. They’re used as confirmation points. So in the example of the trend line break (1), I’m not using the break to enter, I’m using it to gauge if there is enough supply/demand at that level to break it down. In (2) there’s some SR and a little head and shoulders pattern, and (3) is a simple trend line break. My problems originally using these systems were that they were incredibly difficult to measure in terms of actual entry, as well as R:R and everything was “hindsight 20-20”. But now I use that hindsight as an indicator that the trade is going my way.

This has been a breakthrough because of the following hypothetical. Let’s say I used HTF to determine that direction should be bearish. If I take the trend line break as my first short trade, and I want that traditional “good” R:R ratio, it’s possible that I would have been stopped out in the creation of the H&S pattern later. If my long term direction is short, it makes no sense to exit in the first hour and a half of the break. The break is super clean and fast, and I would have immediately trailed the stop or moved the stop to BE.
Trade 1: null
Then the next 2 entry points probably play out okay, given that the stop is sufficiently far enough (which is decreasing the reward:risk ratio now).
Trade 2/3: 1-2 winners
In the next trade, the breakout is great but since it’s a momentum play, the RR isn’t great here.
Trade 4: 1 winner with meh R:R (half a winner)

In this scenario, given that I even had the foresight to know that I would have 4 cracks at this, I would have ended up with anywhere between 1.5-2.5 solid trades. Similar versions of this very hypothetical have happened to me too many times, so I had to work on a new method to deal with it.