On the forex front I’m devoting the majority of my time to support and resistance levels and PATIENCE.
Uni course is Occupational Health and Safety, which believe it or not, involves Risk Assessment. So if I do eventually pass that, I should be able to determine when my forex account is at risk of crashing !! LOL.
Hi all,
I hope you are all are enjoying the weekend. Mother Nature has decreed that Ireland shall have another day of rain…although I won’t complain because I know our neighbours in the UK are having a tough time of it with much more testing weather conditions.
I wanted to contribute to the R:R topic if I may. Well to an element of it at least. This is something I have been thinking quite a bit about lately.
It concerns the costs of trading - the admission price you must pay Mr. Forex in order to get into a trade. For the liquid pairs each trade costs us about 3-5 pips to enter. Depending on your value per pip this will work out at some euro value. This admission price must be paid on each and every trade we wish to enter.
This cost should remind us of the importance of doing our analysis, planning the trade set up and entering only when we have clear signals and a high probability of success. I know this might seem obvious and it is.
But think about what itchy fingers can do to your fixed costs of trading. If one entry costs 3-5 pips, 2 entries 6-10 pips and so on then very quickly your fixed costs of trading can increase. Imagine what this does to your balance - imagine what it does to your confidence.
The point I am getting at is that the more eager we are in to be in the trade and the less we consider the likely success of the trade the more expensive our trading becomes and that is even before we consider our stop loss.
I mention this simply because it is something I had not personally thought too much about and perhaps it is something that a lot of people do not fully consider. I hope it serves as a small introduction to the R:R discussion.
Take care,
Padraic
Excellent post. Everyone seems to know that paying high spread can be folly. Even the low spread pairs, over time, can cause an account to slowly whither away. This is why I now try to ignore any methods that focus on very short scalps. Entering into tades that hope to gain a quick 10 pips can easily pay 30-50% in costs before the trade even begins! That is a quite a handicap to overcome. If one accounts for the spread on top of those 10 pips then you are seeking to achieve a move 30-50% larger than what the market may be willing to give. Stretching a trade out by an additional 50% is often just looking for some sort of divine intervention on your behalf in the markets.
I never had much of a problem doing well for myself investing for the long term in stocks. I struggled quite a bit at first when I tried my hand at swing trading stocks and ETF’s. After a bit of learning and practice I was able to get ahead of the curve and become profitable as a swing trader. Eventually I decided to test the waters of intraday trading in that intraday trader’s paradise known as forex. I actually had a decent win%. The profits, however, remained quite elusive. After looking at my trades, comparing my win%, money risked v. money gained, etc. I realized that the spread, as low as it was on most majors, was slowly eating away at my account like some bizarre flesh eating bacteria. The more I traded the more shaky the end of quarter number became.
I thoroughly enjoy trading off the 1 hr and 15 minute charts. Any substantial profits I realize, however, always seem to come from trading the 4 hr and daily. The win% remain roughly the same but the size of the move is so much greater (usually) on the larger time frames that the spread becomes a pesky annoyance on the larger timeframes instead of a beast devouring huge chunks of any profits. The spread may account for only 4% of a swing trade whereas it may suck 40% out of trade off the 15 minute charts.
Going forward, as much as I dislike the complete boredom and lack of anything to do while swing trading, I may have to put a bit more focus on the longer term trades.
Just to be clear for any new readers of BP who might be skimming, when you say “Riff Raff”, you mean people who post without consideration or courtesy for other members or the thread topic, or who try to beat others over the head un-yieldingly with their own views as to what trading should be etc?
I am a fan here who hopes this thread (and it’s members) thrive in 2013
Sometimes I enter just with S/D levels… if the level is not that good then I wait for a PA signal
Sorry to hear that S/D levels haven’t worked for you… here is an example of a couple of trades I took in the EUR/NZD that showed really good setups… clear market bias and excellent consolidation areas…
I want to stay with the trend…
So do you wait for price to enter your noted “zone” yunny, then wait for it to retrace out of the zone to make your trade, if you see what I mean?
And incidentally, yunny, Hogarste and John Leonard. What on earth are you 3 doing up at this time ???
Usually I enter the trade with a small position as soon as the price reaches my zone… then I wait for some consolidation and place an new order above/below the consolidation zone in the direction of my bias…
in this side of the world is just 10pm 
Nice examples. Thanks. I think when using these S/D levels I just expect they will hold far more often than they do and then when price goes on past them I am left scratching my head. If the levels always held then price would just bounce back and forth in a tight range like a perpetual ping pong ball LOL.
Just after 11pm in upstate NY. I’m still thinking about watching Saturday Night Live in a little while. HoG you remember Eremarket from last year? His video introduction series to Supply and Demand zones via Sam Seiden is still available on Youtube: my weekly high probability trade analysis video 6 - YouTube. Kenneth Lee has a pdf file called BS Trading (Buying and Selling) which might also be helpful for those who like S/D levels.
That is why you need a bias, in order to filter bad trades and to stay with the trend… plus we all know that trading is not an exact science…so periods of losing streaks are expected
The night is still young here. Which begs the question, what are YOU doing up at this time? Never mind. We may not want to know! :30:
Aha, that would be the life of a taxi driver you’re talking about young man. 4:30 am in Glasgow right now and I’m just home from my night shift. Going to bed now though cos I’m off to snow boarding lessons with my eldest daughter in the morning and I’m knackered.
Thanks for the links Hogarste, will take a look at them through less red eyes Sunday evening.
Goodnight guys
There’s a whole series of Seiden’s videos on FXStreet… a lot of them, but they’re well worth going through. I couldn’t make this work at first either. Partly that was down to looking too hard for levels. None on the daily or 4hr? Let’s go down to the 1hr. Nothing? OK now 15 mins… let’s face it, if you drill down far enough you’ll see levels everywhere.
For me, it’s now a case of finding strong levels on what Seiden calls ‘the outside of the price curve’… when price is really stretched. In one of his earlier videos he describes a technique of using Bollingers (Perod 50, deviations 2) to help identlfy these set-ups. Basically you’re looking for price to be entering a level and touching or outside the Bollinger outer band. I take it a step further and try to idently ‘all star’ entries using Bollingers with a 50,3 setting.
Also, he describes two types of level. There’s the usual rally-base-drop or drop-base-rally where price has moved to a point, consolidated for a short while then reversed. Thene there’s the rally-base-rally or drop-base-drop where price has made a strong move, paused for a short time then continued in the same direction as before. I have found these second examples nowhere near consistent enough. Perhaps with experience that will come, bet even Seiden himself says that he’s very aggressive with profit taking when he trades these kind of set ups. It’s all in the videos.
This is a pretty common misconception. A key principle is that a level is at its strongest at first touch. If a level has been touched, price moves away then returns to it again, the level is weakened. The more times it’s touched, the weaker it becomes. So at some point the level fails and price moves on. There are some key ‘odds enhancers’ that can help you identify strong levels. One important one is to only trade ‘fresh’ levels… ie first touch. Others are:
How did price leave the level? It should ideally have exploded away, showing a massive imbalance of buyers and sellers.
How much time did price spend at the level? The shorter time the better. Ideally 2 or 3 to 6 candles.
How far did price move away from the level before stalling. The further the better to give you a better potential Risk:Reward.
How did price return to the level The faster the better with no pullbacks near the level showing that supply or demand is being soaked up.
Levels on top of levels. Stacked levels are particularly strong. I tend to combine them to create one bigger level.
Like all systems, there’s no magic bullet here. I’m convinced that whatever system someone chooses, they need to spend a lot of time with it, observing how price reacts and making that system their own. There’s simply no short cut. Like everything else, these are the building blocks. We have to put them together ourselves.
Anyway this has turned into a bit of a ramble sorry. Hope something in here helps though!
HoG,
Rather than type a lot of my own thoughts, please allow me to politely appropriate/reiterate everything contained in post #757. (Hope that UKDave and JohnLeonard will overlook my laziness by using their thoughts.) Those gentlemen hit the nail on the head for me and how I feel about this thread. It would be a loss for me and many others, [B]and[/B] BP, if you shut this down or privatized it. At the moment, I would likely fall into the “lurker” category, but I’m an interested lurker!
Good luck with your studies, both Forex-related and at university!
Unfortunately 'cdog, I already know that time constraints will limit my presence on the thread for the next few months, however, it isn’t my intention to shut the thread down, nor do I seriously ever seeing us setting up a privatized version.
If I was to be 100% honest here, I would say that it’s NOT the thread I fall in and out of love with, but the trading itself. Sometimes I genuinely think the whole thing is totally random (usually when I lose). But then I think of the guys who ARE consistently making a living and I think well how can it be random if some people are doing well consistently?
I see no-one as better than me. I don’t mean in a class sense or anything. I mean that I have always been of the opinion that I am a reasonably sane, reasonably intelligent person. I believe that if some-one else can learn something, then there’s no reason why I can’t learn it too. Thing is, you’re not really competing against anyone else in this business, I think you’re mostly competing against yourself, and that really IS a battle.
This leads me to the conclusion that I am the problem and that frustrates me sometimes. It annoys me but I enjoy the fact that we can come in here, ask for advice and there will ALWAYS be some-one to give us a nudge.
The problem though, and this may well be self answering, is that when I wander outside into the forum, I invariably end up shaking my head at something or getting involved in some c**p that I shouldn’t really be bothering with. So I’ve decided not to wander anymore - stay within these walls - HoGard Hughes !
But I won’t leave here because I do really enjoy it. There’s a good bunch in here, talking sense, having a giggle but above all else being courteous to each other, that’s what I enjoy most. I would dearly love a REAL establishment like this, a place for a pint and a trade (or a good cup of tea and a trade) but since Templar and Carter refuse point blank to travel to Glasgow everyday (selfish buggers !) we’ll just have to remain on-line.
Anyway, I’m getting all mushy so I’ll stop it. I hope the boys do the R:R topic, I’ll look forward to reading it.
As I said at the start I may not be around on a regular basis, unless I get the mobile office up and running again which has been shut down for a week or two now. But I really need to get cracked on with the uni thing, there is an exam at the start of March and I’m way off the pace.
So I’ll be around as often as I can, but please understand if it’s not everyday, even every second day. Need to pass the baton on to you guys somewhat then to keep this rolling on, apologies for that but there’s nothing else I can do.
Just before I go I’d like to say thanks to Padraic for sending me the pdf, I have some stuff I’ll send to you when I get the chance.
Cheers gang.
HoG(ard Hughes)
Would be great since the other ones never came through correctly.
PM me your email again s I have no doubt I’ve lost it along the way
[QUOTE=bobmaninc;445826]Yep the mood around here has certainly changed for now. It does has some direct correlation with why the mouth from the south daily post count has dropped. I do miss some of the older members (dont think senior is quite the word I am looking for I dont walk with a cane just yet).
it can be my last post. I swear it will. I really don’t understand you all, and sorry if I was the one or amongst some few that troubled you with posts. HOg, I won’t even lurke here, I’ve unsubscribed.
As I haven’t show any progress in my trading, I quit trading too. maybe on demo I’ll play, but, thats all folks.
Wish you all the best, even if you haven’t liked me/a stranger.
Kores
I’m trying to work out what the problem is from the part of Bob’s post that you have quoted. I hope you don’t think we were saying we don’t like new-comers in this thread because of the talk of “invite only” thread.
There are, or at least certainly have been, members on this forum who we would rather did not come in here purely because regardless of what thread they land on they invariably cause a nuisance, but I assure you that you kores did not fall into that bracket and you were, and still are, very welcome here.
I’m sorry to hear your trading has not gone as you planned recently. I too have been to the point were I was so frustrated by my trading not going to plan that I decided to quit. And to name names, it was ST who, in private, convinced me to keep going. Which I am now glad he did.
Not saying my trading is perfect, but I’m a little wiser now, maybe not much but a little anyway LOL.
Please don’t quit trading, it’s tough I know, and sometimes we all fall out of love with it, but keep going.
I also send my apologies if we have in any way offended you here, or made you feel that you were not welcome. I feel quite confident that I can speak for everyone who uses this thread when I say that was never the intention.
I hope we do see you in here again at some point.
HoG
