The £10K Gamble - [The Journey]

Yes that is correct.

That makes sense. Looking back over the charts briefly it has become more clear with that reply. I knew we were looking at the lagging span but sometimes these details seem too obvious and simple. I’ll poke around over the weekend and if I see any that are now questionable, I’ll upload some screenshots. Thanks @The_Baller for your reply! It was very helpful.

Thank you. If I mention a couple of pairs next week are you up for sharing how you’d check them out? Really interested in your style and I totally take my own risks, (ie zero blame). Dev

I swear. If that’s you in that avatar pic. you must be the happiest person I’ve ever seen!!! LOL!!!

Of course, no issues with that.

Closed a few little trades, nothing special.

How things stand currently. Was down £7Kish but things slowly getting their act together.

This is something you gonna have to get used to if you don’t exactly time your entries.

It maybe something I decide to work on in the near future to speed things up.

latest

Total profit £6691.29 as of today.

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I took a short trade on NZD/USD as it approached an area I have as resistance on the daily chart on the 15th. I know a few other traders who took that same short and were stopped out. Now less than 10 days later I just bagged some profit +102 pips.

I am only sharing this as a little proof to encourage traders to give their trades some room.

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Hey The_Baller,

Have been following this thread since you started back in May, it has made for some very interesting reading so thank you for sharing. I’m a novice, but have completed the school of pipslogoy courses so like to think I have an understanding of the basics. I’ve opened up a couple of demo accounts prior to this thread and have either lost interest (not real money!) or have not been too structured with my trades and blew the account. I’ve also tried scalping when I’ve had time off from work but that’s really not for me, too many games to play and pizzas to eat. Thanks to your thread this the first time I’ve opened an account and applied a clear strategy (yours detailed here) and I thought I’d share my first week with the group. The loosing trade was a mistake, had I have taken into account the AUD was trading near it’s lowest point since records began against the NZD I wouldn’t have opened that trade. That’s what a demo accounts for…

Even with that losing trade first week ROI is 11%, I’m stunned.

Now the markets closed I’ve gone through some of the pairs, picked some trades for next week and thought I might run them past you and the rest of the group following here:

CHFJPY - sell 109.377 SL 110.075 lot size 1.55

EURAUD - 1.61020 buy SL 1.58810 lot size 0.65

EURCAD - broke recent chikou support zones - to watch.

EURCHF - sell 1.10502 SL 1.12645 lot size …0.46

The lot size equates to 10% risk per trade based on the SL. It would be great to know what you think of these, more specifically if you can confirm my analysis is correct (trending pair on the monthly/weekly) and the position of the stop loss (is it far enough away from the noise?). I just want to make sure the first week wasn’t luck and I’m following your approach correctly.

Thanks again for all you’ve shared to date.

TSC

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Yeah, must have been having a winning day!

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Please don’t be stunned, get used to making money.

CHFJPY - I’m already short.

EURAUD - I’m already long.

EURCAD - I’d be short.

eurcad

EURCHF - I’d be short.

Regarding your stop losses, i.e. CHFJPY, EURAUD - your stop losses are the thin yellow lines, they are a bit close to the noise, and in the most obvious places, mine would be near the thicker yellow lines.

chfljp SL

euraud SL

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Your take on stop loss levels is very interesting. While my natural inclination has been ‘safe’ (ie, wide) stop losses, I am actively working on tightening up my stops. My theory is essentially ‘fail faster’, for the following reasons:

  1. On the D1 or above, risk is not just a function of position size, but also a function of time. Because of swap fees, a trade that takes two weeks to fail costs you more than an otherwise identical trade that takes two days to fail. Yes, you sometimes get positive swaps, but those are not the norm.

  2. If you manage risk across correlated currencies (ie, no more than X% risk across all GBP pairs, for example), a failing trade also has an opportunity cost, as it keeps you out of other, potentially profitable trades.

  3. If you maintain a relationship between your stop loss and your profit target, then a wider stop also means a wider target, increasing your failure rate in another way. If you don’t maintain a relationship between your stop loss and your profit target, then a wider stop means a lower R:R ratio, requiring you to hawe a higher hit rate to be profitable over time.

I’d be very interested on your thoughts, if you feel so inclined. I suspect that psychology plays a big role in determining the ‘right’ stop level, and I find prolonged periods of drawdown very difficult. But I’m also aware that this makes me inclined to accept arguments in favour of tighter stops with less critical analysis than I might otherwise like.

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Thanks for taking the time to respond, good to know I’m on the right track.

Will re-evaluate the stop losses for next week and see how I get on.

Cheers.

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Well for what it’s worth and as counter intuitive as the below may be…

I posted way earlier on this thread (and my own) about risk based position sizing. And it has transformed my trading in a way that you cannot begin to imagine. And oddly enough not for the reasons that I initially thought i.e. more than anything it’s the psychological effect (I’ve come to realize).

Take @The_Baller’s method for instance (which I do not trade but I do believe is profitable and has merit).

If I were to take some of these trades: my stops (which would not be hard stops i.e. I don’t trade with stop losses at all) (only exception being is if I have to step out for something with open trades) would be so far away it just wouldn’t be funny. This being said though: they’d be based on a mathematical formula as opposed to simply being based on thumb suck or conjecture. So what this inevitably means is that my trades are far smaller than they could be if I were to be placing hard stops at some of your more obvious and generally accepted levels (you know: just below the low of X or just above the high of the last swing point or whatever your poison). So what this means in real terms: if a trade is going against me and I’m not happy about it (for whatever reason) I can with ease close that trade out manually at a loss and move on to the next and this without being upset or wanting to throw things across the room or find something high to jump off of. And the loss is usually a mere fraction of what my overall maximum intended loss was on the position. Now I know one could make the argument of “well: just risk less on a trade”. Technically and mathematically that makes sense and is totally logical and mathematically sound. But in practice and for some reason: it’s just different doing it this way. Furthermore and with this method: if a trade is about to reach such wide stop then you can be sure it ain’t ever coming back to you and it’s a bad trade period and no amount of hoping and praying and nursing it is going to change the outcome. And this in and of itself makes it easier to take the loss on the chin. Best case in this scenario: price may turn but now you’re in a whole different market dynamic and price range and this could end up being the new status quo for weeks and months on end.

How about GBPAUD & USDJPY ?

There are other components of the system that you should be using in addition imho.
There are pairs being mentioned that need more confirmation .
You may be getting in early and i am being over cautious .
The cloud seems to be being ignored which i find odd considering the whole system is based around it

eur/aud was not the actual example. I was not referring to that actual pair although on daily it is below the cloud

Thanks for your insights, @The_Baller.
Can I ask if you’d be okay with the lot sizes TSC is proposing? I guess for CHFJPY short I’d be much smaller in at around 0.4 or 0.5l. This is so I could sell again, if the price moves up. This is the approach I’ve learned from the guy I’ve been following. What’s your take?

If you want to use other components then use them and prove it, don’t just base it on your opinion.

This strategy hasn’t got anything to do with the cloud, so its being ignored.

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I’d probably be short on both of them - if you want to put a tight stop loss, then I would try to time your entry at least.

For a sane person this is all valid stuff.

I’m not really into risk ratios. All I know is, the SL is in a place where the chances of it being hit are very low.

Secondly the money in the account is a small amount, and purely there to trade high risk.

It just so happens for this experiment I’ve been closing trades and jumping in and out.

If I’d simply held a lot of the early trades, averaging from 1 lot to 1.7 lot size, I would have made £3K on most of them, around 18% return per trade.

Everyone has a different goal when it comes to trading, I’m not to worried about draw down. If you were trading stocks and had a long term mindset and your portfolio was down, you’d just wait and tell yourself its all long term.

Likewise I’m ready to be proven wrong until something hits the SL otherwise I’m still game.

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