USD/CHF. We’ve also posted the charts below with corresponding Fibs.
Welcome rynlds2 to the thread. Like you, my thoughts on trend changes normally do follow your view, price takes out previous swing high and then retraces to form higher swing low for bullish reversals, I hadn’t looked at the longer view as I was zoomed in too far! I agree, if price was to take out the swing high, this would be a stronger signal. I think I may sit this one out a little longer to see if this happens, if it does I may wait until price rotates back to the swing high level before going long. This of course would mean many pips may be given up.
@D-pip, also welcome. You may have a point in your analysis, maybe Mastergunner would like to comment on your approach. Will be interesting to see how you fare.
I’m not going to directly comment on the trading strategy as it’s not mine and I wouldn’t give it the proper respect to analyze it with back tests, etc. As long as he’s confident, it maintains an edge, then that’s good enough for me.
I think the secret ingredient most methods need is the diversity that money management methodology allows.
So in that regard I would love to hear about the successes it may bring.
I’ve already made one adjustment, just cut back my 23 positions to 2500 units each from 5000. If the account was real money I know I would be uncomfortable with the 2% to 5% P&L swings that I noticed overnight. Way too much risk for my taste. :56:
I might think about cutting back the position sizes even lower. Maybe limit the max total position value to somewhere around 10x of the account balance.
A work in progress! :44:
Hey Guys, I’ve been lurking since the start of the thread and I thought I would jump into the discussion.
Thanks for the thread mastergunner99. I love the thoughts behind this method and It is basically what I was looking for, only better. I like the simplicity and the fact that even though the trades are based on a daily TF we can stay active due to the extensive portfolio that we work with. I think it inherently solves some of the pitfalls that new traders struggle with, such as overtrading, impatience and trade micro-management. I feel very comfortable with it… even the risk management and lack of stop losses. Now I just have to get this thing to work for me.
As rynlds2 and others have pointed out, I’ve been partial to seeing the previous swing H/L broken to confirm continuation of an existing trend and/or a reversal of that trend… and therefore give me a good signal for an entry. The issue i find, is that this break of the previous swing H/L is usually followed by a retracement and therefore a drawdown if the entry is made.
mastergunner99, is this why you said that your trades start negative? Because you wait for a strong move to enter, which is then followed by a retracement before continuing?
Do you guys trade all the JPY pairs or pick a particular JPY pair?
It seems that most JPY pairs have the same bias and are pretty volatile. And any move against your bias will badly hurt your P&L if all JPY pairs are traded.
I work better with pictures, but I am trying to mentally think about what you’re talking about.
I’m going to go with the easy answer first and let me know if you need more.
While you may experience an initial growth in equity, it’s likely you’ll experience an initial drop in your balance because as you wait for the winners to keep on going, the losses are cut much earlier.
There is no perfect entry here. That’s why this allows for price to be volatile and us to hang in.
I trade most of them. It won’t hurt all that much. It’s not likely I am completely wrong across all 28 pairs. My losses are generally hedged by my profitable pairs.
There have been days when I chalked up a 200 pips loss, only to have it offset with winners.
This is exactly what happened to me late last week. I had 4 trades open, and almost immediately, 3 of the 4 went against me. Based on my research, I was confident that those 3 were going to go back in my favor. The one I was the least confident in, actually went in my favor immediately.
I’m not sure, but I think that this sort of thing is what psychs new traders out, and why embracing a longer term strategy is better. MG’s philosophy of “YOU WILL LOSE TRADES, SO GET OVER IT!” rings true w/ a book I’m reading right now that delves into psychology of trading. Others have harped on him in other threads b/c this thread focuses more on psychology than technical analysis, but I strongly believe that psychology is just as, if not more important than the technical. However, I’m very new to trading so take that opinion with a grain of salt.
For what it’s worth, Monday morning was a happy one - my three “confident” trades have all turned around, are in the green, and I don’t see any reason to get out of them anytime soon. My less confident trade, that went in my favor right away? It took a plunge, and I cut it off.
I get as much satisfaction out of watching losers that I’ve cut off continue into the negative as I do watching my winning trades rack up the pips. I have a feeling that having that mindset will drastically help me in the future. Time will tell.
You’re going to lose trades. Learn to identify and cut them off early, and be happy about it! Watch them crash and burn; those are pips you’re effectively “gaining”, since you cut the loser off! All you have to do is let your winners run up more pips than the losers drag down.
Thanks for the StopLoss example, MasterGunner.
If I recall correctly, your Entry Stop orders are [B]DAY[/B] orders only; if they’re not triggered, you then re-evaluate (I imagine potentially placing the same orders again if your analysis so dictates).
It sounds like for your StopLoss orders, you make those [B]GTC[/B] (Good Til Cancelled) – and then trail those as appropriate to your analysis. Is that correct?
Great feedback. Psychology is 95% of this industry as far as I’m concerned.
Correct. Once a stop loss is in, it stays in. And I move it only in the direction of the action, never against it. Assuming I move it in the first place.
Following are DEMO Trading results thus far, beginning Feb 10 – using my own interpretation/understanding of the [B]MasterGunner99 Methodology®[/B] (MG99M) – with an initial Account balance = $20,000:
[U]CLOSED Trades:[/U]
AUDUSD (Short 20,000 @ 1.0248) -0100 pips
CLOSED Equity = $19,800; Total -0100 pips
[U]OPEN Trades:[/U]
GBPUSD (Short 20,000 @ 1.5521) +0056 pips
AUDUSD (_Long 20,000 @ 1.0348) -0043 pips
NZDUSD (_Long 20,000 @ 0.8438) +0012 pips
EURGBP (_Long 20,000 @ 0.8631) +0001 pips
EURNZD (Short 20,000 @ 1.5886) +0098 pips
GBPAUD (Short 20,000 @ 1.5154) +0153 pips
GBPCHF (Short 20,000 @ 1.4280) +0004 pips
GBPCAD (Short 20,000 @ 1.5648) +0022 pips
GBPNZD (Short 20,000 @ 1.8685) +0395 pips
AUDNZD (Short 20,000 @ 1.2271) +0081 pips
NZDCHF (_Long 22,460 @ 0.7858) -0059 pips
NZDCAD (_Long 20,000 @ 0.8434) +0102 pips
OPEN Equity = $ 1,300; Total +0822 pips
_Total Equity = $21,100 (106% of account)
[U]Existing GTC StopLoss orders outstanding:[/U]
None
[U]STOP DAY orders placed in Feb 19 session:[/U]
EURCHF (_Long 21,100) @ 1.2346 [NewEntry]
NZDJPY (_Long 21,100) @ 079.54 [NewEntry]
AUDCAD (_Long 21,100) @ 1.0419 [NewEntry]
CADCHF (Short 21,100) @ 0.9118 [NewEntry]
I only have 3 trades open, but you and I are in agreement on all three I have - longs on NZD/JPY, AUD/CAD, and EUR/GBP. My watches for the week:
EUR/AUD - if solid support at 38.2 fib, 1.2957, long.
EUR/CAD - if solid support at 38.2 fib, 1.3390, long.
EUR/USD - if solid resistance at 61.8 fib, 13271, short.
GBP/CHF - haven’t had much luck with anything Frankenstein, but if resistance at 0.0 fib (1.5593)gets solid, short.
GBP/USD - looking for solid resistance at 23.6 fib, 1.556, short
USD/CAD - looking for good support at 61.8, 1.0142 long.
NZD/USD - looking for support at 23.6, .8423, long.
Thanks for the reply, and that answers it partially.
Here is an example in picture form.
Last week the AUD/CHF pair dropped and closed past the previous swing low, so based on the convincing move and the apparent downtrend structure I went short. Price immediately retraced and has now bounced off the 38% fib, but it still has not made it’s way to my entry point. I’m holding, but only as long as the 38% fib level holds. I do realize that the pair was ranging a bit with only a slight hint of a short bias.
Could you guys comment on entry and possible exits? Thanks in advance
My bias is short. I saw the same thing you did, but didn’t pull the trigger because I wanted to wait a day and see if price was coming along for the ride.
I would at this point be putting in a stop loss to cut this off if it keeps going the wrong way.
Thank you for a good thread MG99!
I have a few questions for you and I’m sorry if the’re already answered.
-Do you risk the same full amount of lots (units) on every trade, even if you’re gonna open several trades the same day?
-How many trades do you open (on average) every month?
-What was your gain in % last year?
I really like the methodology, keep up the good work!
Good example, abrsive.
Just another perspective to consider (likely a variation from MasterGunner’s Methodology): initially analyzing AUDCHF, I noted that – for me – the “long-” and “intermediate-term” trends were bullish, with (as you noted) a lot of ranging and a slight short-term downtrend.
Since my bias generally matches the intermediate-term trend (Long in this case), this is a rare case where I’m using a weekly chart instead of daily – and drew Fibonacci lines from the Aug 2011 low to the Aug 2012 high – to give me a sense of which direction this might eventually go (so have stayed away from it). At that level of granularity, it is ranging back-and-forth around the 23.6% retracement, and will have to travel a fair distance up for me to go long or a long way down for me to change my bias to short …
The risk per trade is one unit per dollar in my equity. That is regardless of how many or how few trades I enter.
Since the beginning of the year I’ve already taken a little over 100 trades in all.
I’m only posting my results from the beginning of this year for really the sake reasons I’m not providing a live myfxbook link.
Speaking of which, I need to update that front page.