Trading The Right Pair At the Right Time

Yes, in fact, the return on capital increases parabolically as you pyramid a winning opening trade, as compared to simply putting in one position and leaving it to run alone.

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True @Tommor, but a lot of trades must go from decent profit to zero or very small profit as well ?
I read quite a lot about “Turtles” many years ago and the theory was basically similar to what you do - but the details were 9 out of 10 trades fail ! - My psychology can’t cope with that, so my basic principle is “fade the turtles” !

So each of us needs to find a methodology their personal psychology is comfortable with - Trading that is teh best hope of succes imho :slight_smile:

Its annoying when a trade that has been in profit goes on to become a loser. But I don’t worry about the unrealised gain, only the capital at risk is important. Once I have made the decision to go in and allocated £x risk capital, I am prepared to lose it. But I don’t like to modify what is a good plan simply to protect unrealised gains: alright, if a trend shows terrible and obvious weakness after early strength, I might pull out early but that’s an exception, not a rule - usually by that int the stop is triggered anyway - my rule is let them run and let the market tell me what its going to do, not my TA.

This seems to be the essence of the matter. After reading the turtle traders and a lot more research, the most profitable traders over the long term seem to be trend traders. However to catch the trends it seems we must make lots of purchases at every signal (including choppy markets), which reduces overall profit. If we knew when a trend was ending and a range beginning, we could trade only the trends all all be millionaires! So to cut out the ranges. I found the ADX helps, but is not perfect. Another thing I used with good effect during the recent EURUSD daily trend was the COT analysis, where price was in a low range, slowly turning upwards and the COT showed buyers of EUR slowly returning from extreme lows (extreme oversold conditions) and taking more long positions (creating a type of bullish divergance against price). I also took into consideration the overall political situation, at that time threats of nationalism etc. Once the political scene cleared up then the price trend followed the COT analysis and the trend system worked.

I see a similar thing now, with a range developing with worries about Trumps tax plan, if it will work or not. This might be creating a smaller range in the EUR, GBP, YEN and gold. This time the COT isn’t giving me as clear a picture. So I expect a good trend to develop as a break out or reaction to success or failure of the tax plan, end November to December. Another technique I am using to good effect is something I do not know the term for, however I have seen it used in some good free courses / webinars I’ve seen. As far as I understand it is called trend analysis. It is basically trend lines drawn from the tops to bottoms of small trends, like Zigzags. I simply draw my own, but it makes the picture clearer for me. Also the terms, lower low, higher high apply to this technique.

If strong higher highs (or lower lows) are being made, I consider it is in a trend, if not, then it is in a range. I wait for a good break out of this (in combination with a momentum indicator such as RSI) to then look for entries. Another thing I note, and this is just a general observation, is that after a strong trend there is a period of consolidation or a range that develops. So I am planning that once I have caught a trend and closed at the end, I plan of stopping trading that pair for a good period, but it is just an observation for now.

I hope this provides some help and pointers.

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well there you go - :slight_smile:

Hi Pipa,
The biggest mistake that would be traders make is that they go long at the top of a trend and short at the bottom of a trend whereas you should actually do the opposite and follow the bankers.
Buy at the demand levels & sell at the Supply levels.
Let me ask you a simple question if I may, would you buy a dress or any garments when they are the most expensive or would you rather to buy when they are at the bottom of the price? You don’t need to answer but the big institutions buy when the price is cheap/low and sell when the price expensive/high. No need for indicators, just demand & supply zones…

Hope this information helps you.

[quote=“Quadricolor, post:20, topic:120403”]Another technique I am using to good effect is something called trend analysis. The terms lower low & higher high apply to this technique.

If stronger higher highs (or lower lows) are being made, I consider it is in a trend, if not, then it is in a range. I wait for a good break out of this (in combination with a momentum indicator) to then look for entries.

So I am planning that once I have caught a trend and closed at the end, I plan of stopping trading that pair.[/quote]
That’s a smart observation even if I say so myself – seem to have seen that somewhere on here before….you’re definitely onto something there my good man! :wink:

I’d even go as far as to say at this end of the food chain you don’t really need to widen your field of view very much further at all because the way you play this game offers fantastic benefits & opportunities rarely available to those several layers higher in the food chain.

At this level less is definitely more & thinking too hard about too many things tends to not only drain your betting account but also give you annoying headaches.

MissPipa, yes I have, since Christmas of 2013 until October of 2016 when the ‘flash crash’ in the GBP wiped me out of all my positions. Two accounts buried by that point, I went back to demo, with mixed results. All in all, since beginning in Sep. 2012, it has been five years of many hours and lots of pain, but not much to show for it. Turbo is great and we have talked a lot, away from BabyPips, and he has helped me with understanding my own trading. If he lived closer we would be mates, but sadly we are too far apart. I hope that you are doing okay now, and it sounds like you are.

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Yes, we talked about that at length on other threads, but it is patchy because
if you trade exotics you do not get any volume information below the daily candle
and sometimes even that is full of blanks… In the last few months I have been
betting on exotics, for which the equivalent charts in the CME futures have pretty
useless (=too patchy) volume data.
Bottom line is: it is okay if you trade more liquid pairs, but then again, they are not
what I want to trade at present.
There is always a ‘but’ in every fix :slight_smile:

I’m doing just that “ok” not great lol

I’ve started getting somewhere now that I am not focusing on individual candles and more looking at the swing. Also I am looking at lot more at higher time frames than I used to, So instead of for example placing my s/l at the top of the swing on the one hour chart I am looking at the 4hr and daily to see just where we are in the current swing.

Also using divergence and Elliott wave a lot more.

As I said still light years off trading live but getting a little better.

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The drawing a line from the low to the high is what I also have started doing, I find it makes my charts more simple to understand.
Ive been experimenting using the zigzag indictor and also Awesome Oscillator for finding swings but far to early for me to give any results.

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Had to introduce a modification to my own plan - if the account gets up by 25% in unrealised profits, close all trades, bank the proceeds and re-enter when new signals print.

looks like one of mine lol
Good minds think alike :wink:

A question of millions of dollar really …
We start from the assumption that any strategy, at a time of market laterality, does not work. That said, in my opinion, our job is to eat only part of the cake that is on the table. It’s almost impossible to get into a trend as it starts, and often when that happens is because we have missed entry and by pure chance we are from the right part of the market. We have to get on a train already running and get off before it stops. I do intraday trading almost exclusively on Dax and therefore long term is different, but are we sure we need to seen 28 or more currency pairs to be profitable? Or is it better to choose one with good volatility and specialize on it?

Nobody said or suggested that, at all.

But the more choice you have, in principle, the more likely you are to find something suitable for your own purposes and methods.

No; it’s worse.

Because most of the time, at the moment, it won’t have “good volatility”, and markets are only trending for around 15-20% of the time as well, which means that choosing one instrument, for most retail traders, is a bit of a dead loss.

You realize that this is primarily a forex forum??

Seems others talking about Dax and index

No, The Dax, or mini Dax etc in low volatility made a medium of 130 pips Daily… isn’t enought?

And once you have a trading method or strategy,
you can trade everything also the charts of electrocardiogram.
There aren’t difference to trade stock, commodities or forex cross.
Change volatility and spread.
So you have to choose what’s better for you.
that’s it.

Best

Fail setup, bite the bullet and SCREAM! OMG!

Mr Dennis may have been right all this while!
Pairing up the strongest with the weakest.

Hahahahaha

at the end of the day, after all this many hours doing analisys, your brain is doing technical analisis of every chart you found in the world :wink:

that touched my inside, because i can “hear/imagine how could be the sound” of almost every wave i see.

because i was looking at soundwaves most of the time of my live, so i can spot the “anti-natural” movements and listen to the song of the money :smiley: