The Trader's Arms 2nd Floor

Beginner Questions
47

Love every word of that post. I remember telling SimonTemplar quite some time ago that although I had been trading for a while, I still had the feeling that I knew nothing. ST commented at the time that he didn’t accept that I hadn’t learned anything at all, and looking back now, I can see that we were both right in a sense.

I was right because I HADN’T taken the time to go through the very basics and progress from there. And ST was right because although my trading was suffering due to a lack of education, what I WAS learning is that this isn’t a “take it lightly, make a million.” game. You need to work, and work pretty damn hard to get anywhere with this. But the good news is that it’s possible, for anyone to succeed.

Truth of the matter is that as things stand, I have no plan, no strategy, as I am going way back to the beginning to build these things for the first time. I’m lucky though, I’ve got a great bunch of experienced guys and a great bunch of new guys in my corner, all enjoying each others “company”.

Of course you’re welcome. The mark of any successful person, in any walk of life, is their ability to adapt, to change and be flexible. You seem to have recognised that your plan wasn’t working and have made moves to change that, and you’re to be commended for that.

As for this being educational, well that may be slightly misleading I suppose. Because this is not experts training beginners (I’ve grown to hate the word “Newbies” for some reason) This is about learning FROM THE BEGINNERS POINT OF VIEW, with the experienced guys being our “Nudge” (Re: the stick in the river quote ) I could reel off half a dozen names of experienced guys on this forum that I really can’t thank enough for the time and input they have given me since I started here.

Shame I wasted that input previously though. And even though my account has came and went, my confidence came, went, grew too big, got destroyed and left again, the same half dozen names remain regular conversationalists with me every day, or most days at least.

Point is, I feel able to make a point with these guys without fear of being shot down in a ball of flames if I am wrong. They have their own subtle ways of telling me I’m on the wrong path. So please do hang around here, and I’m sure we will all move forward together. It may be basic for a while, but better to make sure the foundations are strong before we build a tower in the sky. All we have ever asked on the Trader’s Arms threads is the same level of honesty you showed in your last post and we are good to go.

Welcome aboard

HoG

48

MNVS, do you really think you can figure out the market within 7 pips??

When you trade lower time frames with such a low targets you trade with machines and uncertainty, read this working paper written by Oanda’s Richard Olsen. It was an eye opener for me…

http://www.olsenblog.com/wp-content/uploads/2010/07/How_to_Trade_5.2.pdf

49

Hey Yunny, Not necessarily figure it out, but not letting it drag you down…

My system is more of a breakout/swing set-up, i think, lol, not sure how to describe it…

I will post my current set-up to show you what I am doing now…

50

51

Like I said, my internet was off till around 4PM est today, and I was delighted to get my system on my chart, and see what it would look like today…

Now, this system is set-up using a certain hour to hour calculation i seen while backtesting, then threw this together with what I found…

And guess what, My SToploss is 3 pips with this system… after 15 pips in profit, then Breakeven will be placed, and then I will use a close trade on a certain varible ( stoch )…

Also, want o add, I fully expect this to make a break to the lower side, but never know, lol,

52

I know we are trying to stay on topic, so I will link this to trading as best I can. There is a psychological phenomena known as “inattentional blindness.” or “perceptual blindness”. If you haven’t already done so, or have never heard of it, I urge you to google “The invisible Gorilla Experiment”

Basically what happens here is that you fail to notice something that is in plain sight of you, because you are either too focused on one thing, or are being overloaded by multiple inputs at the same time.

How do I link this to trading? Never focus purely and wholly on one “indicator” alone, and don’t overload your charts with all sorts of complicated bells and whistles because they might just cause you to miss the obvious.

Tomorrow I start on Support and Resistance. Although to be honest I am having a hard time separating that subject from time frames. Maybe they should be discussed together.

53

[B]Basically what happens here is that you fail to notice something that is in plain sight of you, because you are either too focused on one thing, or are being overloaded by multiple inputs at the same time.[/B]

Right on HOG, right there, " Would you Look at that",

55

Ok guys since we want to start with the basics between today and tomorrow I will post some basic definitions about S/R or at least the way I see it :slight_smile: and hopefully answer questions and maybe learn something new…

56

No doubt Ak,

Im using this for a contest this month, I have 15 days to catch up, already down by $23,000 (1st)

Se what happens, at least its more real then demo, lol…

58

You know what, lets go back to that video HOG posted… I watched like 10 seconds, but I seen it along time ago… I guess you can say, Im that guy with the water just below my nose, and about to be under it… I need to breath, and my savoir is money… The lack of it is holding up my plans, and sidetracking my life… Look, money isnt the most important thing in life, but it runs a close 2nd…

Im at the point where every single penny i spend is accounted for… I should write a cook-book for " Everything from Dollar General", because let me tell ya, its getting tuff… You go to get gas, and you just want to collapse at the pump. I go shopping, Im not even in the mood to talk, as prices are horrible… I just want o throw stuff around, and grumble, because its just so dang depressing, while you mentally count up the food bill… Im so good at it, Im always like 4-5 cents off at he end, thats how much I penny pinch… That Pile of change, HOG, yeah bro, Im on it, never again will I walk past a beat up penny, just lying there, waiting to be picked up…

Yeah, Im all about money Bro, dang right, now lets make some…

59

No, I havent,

Im in the Trade2Win contest, been there since the first one, just never really worked because the set-up… It difficaul to scalp, which, as you know, I WAS,

Have to check it out, for sure, thanks for the heads up Banker

60

(please bear with my bad english :slight_smile: )

FX is a game based on supply and demand forces, is an auction. So one of the best ways to be successful is to learn how to identify those levels/areas where imbalances might occur. The ideal way to trade would be if we can see the flow of orders of the instrument, but you know that unless you work for a big bank there is no way we can pinpoint those imbalances, so what is left to us is the trail that “big guys” leave behind… that is S/R using historic price, is not an exact science but with a good MM plan can be profitable.

First I want to start with some definitions of S/R, [B]please if you know some other definitions share them[/B]:

[B]Support and Resistance Levels Defined[/B]
Before delving further into the analysis, it is important to
explore the definition of support and resistance levels provided
by technical analysts themselves. According to one major
technical analysis manual, “support is a level or area on the
chart under the market where buying interest is sufficiently
strong to overcome selling pressure. As a result, a decline is
halted and prices turn back again. . . . Resistance is the opposite
of support” (Murphy 1986, p. 59).
A review of technical analysis manuals reveals that there is
little disagreement among analysts on this definition (Arnold
1993; Edwards and Magee 1997; Hardy 1978; Kaufman 1978;
Murphy 1986; Pring 1991; Sklarew 1980). For example, Pring
states: “Support and resistance represent a concentration of
demand and supply sufficient to halt a price move at least
temporarily” (p. 199). Likewise, Arnold (1993) observes: “A
support level is a price level at which sufficient demand exists
to at least temporarily halt a downward movement in prices”
(p. 67).
1

Carol Osler http://www.ny.frb.org/research/epr/00v06n2/0007osle.pdf

Support and resistance represent key junctures where the forces of supply and demand meet. In the financial markets, prices are driven by excessive supply (down) and demand (up).

Support is the price level at which demand is thought to be strong enough to prevent the price from declining further.

Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further.

Support and Resistance - ChartSchool - StockCharts.com

Theoretically a support or resistance level is an area (not a specific price value !) in which price finds a natural difficulty to continue to move in its previously acquired direction.

Defining Support & Resistance Levels Mathematically, A True Challenge for Automated Systems | Mechanical Forex

62

I did google it at the time you first mentioned - great experiment and an awesome way of getting their point across.

If i can throw it out and suggest something - as we are tackling this subject by subject, i think we should also include some discussion on mindsets and thinking towards trading, and also risk management. I think the psychological aspects of trading are just as important - if not more important that the actual strategy you chose to trade. These may be a lot more subjective than other topics as i guess everyone will have their point of view, but i think its an important topic…

63

I think there are about 3 or 4 subjects we should discuss before I personally will be doing any trading. Then I will start to post charts of how I have used the subjects we have discussed to make actual trading decisions.

My initial 4 would probably be;

Stop losses
S&R/timeframes
Psychology
Candle formations

And I believe you are right again in saying that the whole topic IS subjective. That’s why I ghink when we get on to it, I will only post from a “This is what I experienced,” point of view rather than a “This is what everyone else should do.” angle.

And on the subject of Support and Resistance, I thought it might be a worthwhile experiment for us new guys to all choose one currency pair, (the same one obviously) preferably one we are not too familiar with, and post some charts on Sunday night with our “S&R levels to watch for the week ahead.” marked on them. Might be interesting to sed if we come up with the same things or not. And interesting to see how it works out over the week

Anyone interested let me know.

64

Hi Hog, just a quick post. As I see it (EU) high is already set @ 1.2936 and am in fact short off that point’ish on the 4h and daily. Because (as you know) I’m not a traditionalist re the subjects your covering, I’ll refrain from posting my reasoning. I’ll be trading the two positions independantly of each other… 4h as I try and pick off the retraces/corrections and daily independantly, probably longer dependant on PA.

Keep up the good work guys… so far I’m liking what I see!

65

Good morning traders,

Seems my S/R are pretty dang accurate… last night it hit my buy limit, and I had a trail of 2 pips, So made a profit. But didnt breakout… Few more adjustments needed, as far as momentuem, and stopping a Limit, or deleting, because I cant have a touch and burn…

I dont want it to seem like Im thread jacking, as I figured this thread was about stops and S/R… So Im throwing my idea out there…

Great profits to all today folks,

I do think we have a nice breakout today, havent checked news calander yet, have a horribler sinus headache…

66

todays set-up

67

I must also tell you, this set-up is only valid from 12:00-23:00

It also allows me to see a potential breakout type day, and today is one of those days… At this point, Im not sure of the direction, but it will happen, and usually 55 pips on the average…

68

My s1 got hit, +6 pips, but had Trail on, got 1 pip, ugg. ANyways, now, first break was low, so I again will set a sell limit when price above my s1,

69

I just mixed two definitions of S/R, tell me if you agree :slight_smile:

Support and resistance represent a concentration of demand and supply sufficient to halt a price move at least
temporarily or where prices turn back again.

In the meantime, let’s interact a bit… Look at this chart, E/U daily

Use only horizontal lines and draw them where you think the next resistances lay…

1023×541

http://i1086.photobucket.com/albums/j449/yunny11/eurusd115.png