What Every New & Or Aspiring Forex Trader... Still Wants To Know

[fury]

Ok, but where’s the “bad” news? lol
So where is it?
I have been waiting all morning.

holygrails daytrading

[piptronix]

holygrails daytrading

Thanks Fury, found it.
Its pretty nice up there isn’t it? hehe, Can’t stop smiling

[longandshort]

That is a great post. It’s funny, i have been learning FX intensively for almost 5 months now (i decided to learn fulltime as my job) and the hardest thing in my opinion is controlling human emotion and sticking to a well thought out and robust (not overly complicated) trading plan.

Once again, great post

N

[kays]

@sjonas50

Attached is what i am using.
MASTER TRADE SHEET.zip (112 KB)

Thanks a lot sjonas50 for your kindness.Truly appreciate it.

[PippyTheGrt]

Transcript from a part of PTC 02-13-11 video (from appr. 14:30 into the video)

[I]If you really want to have the best trades then determine the long term trend based on COT and only trade if the H4 is in line with the COT data, e.g. if you want to trade Long then look for COT with commercials displaying a net Long position. There doesn’t have to be a premium between the nearby contract and the next one but if there is (backwardisation) then it adds more fuel to a rapid price advancement or range expansion to the upside. Once Market Flow on H4 is Bullish, and preferably on the D as well, that really puts things in line for a no-brainer trade. While we’re under that environment, you simply wait for your trading sessions trading near the opens and closings of each session like for instance the LO (0300 EST) look for price to trade in the Buyzone (at CPP or below); look for price to trade to a Support-level, an overlapping Fib, with a H1 Fractal H or L as a Key S/R level to key off of and monitor the ICT SMT to look for failure swings at the Key S/R. With all these long-term key factors in place, you have a really outstanding trading condition for a Long and that’s about as close as you can get to a no-brainer sure-thing deal in trading.[/I]

:41:

[PippyTheGrt]

I’ve started to re-watch a couple of videos that I have watched in the beginning (early Dec 2011) without taking screenshots and it’s amazing how much info is in these videos that I missed simply because it was the beginning ! You see things over and over and over and it’ll sink into your subconscious mind. That’s the Jade-effect. Or call it brain-washing :22:

[newbabyfxx]

Does anyone know ICT’s new thread? I cannot find it. Please give a link if you have seen it! :21:

[Lumpybd]

Does anyone know ICT’s new thread? I cannot find it. Please give a link if you have seen it! :21:

We have graduated from Newbie Island and can now be found in “Holy Grails” -> Show me the money! Daytrading -> The Inner Circle Trader’s Millionaire Traders Guild

[PeteSchweaty]

Does anyone know ICT’s new thread? I cannot find it. Please give a link if you have seen it! :21:

http://forums.babypips.com/show-me-money-daytrading/43211-inner-circle-traders-millionaire-traders-guild.html

[fury]

Interested in how PROCHARGEDMOPAR is gonna try to explain space to ICT, and if it will been in laymen’s terms or their oddly worded convoluted mess ahahha (I jest).

I will give my explanation of what it means; It is essentially reinvesting profits, or is reinvesting profits.

Say i have $10k risking 2% is $200; our average recommendation on a stop is 30pips, it would be a waste of our money to let this 2% blow up in one trade so we place the actual destruction of this 2% at the nearest swing point ie. 100 pips away.

[fury]

Interested in how PROCHARGEDMOPAR is gonna try to explain space to ICT, and if it will been in laymen’s terms or their oddly worded convoluted mess ahahha (I jest).

I will give my explanation of what it means; It is essentially reinvesting profits, or is reinvesting profits.

Say i have $10k risking 2% is $200; our average recommendation on a stop is 30pips, it would be a waste of our money to let this 2% blow up in one trade so we place the actual destruction of this 2% at the nearest swing point ie. 100 pips away.

We still use the 30pips as an if/then line, meaning if price goes against us then we must act/liquidate. We never let the initial position get destroyed.

If price went against us 30pips we would lose $60 dollars cause $200/100pips = $2 per pip so we would have 200 - 60
$140/100pips = $1.4 and the destruction of our original position is still 100pips away. This works clearly until you run out of lots, but that should take a long time.

If we have a few consecutive wins; 100pips of space is lots on the 15m for us so we keep using it.

$400/100pips = $4 per pip… 100 pip win = $400 dollars…

$800/100pips = $8 100 pip win $800

$1600/100 = $16 $1600

$3200/100 = $32

profits become exponential and we have only ever risked our initial 2% and keep it shielded so many pips away. If your not comfortable with 100pips use 200 and plug it in.

The traditional method, saying we got our 2% risked over 25pips and got 100pips so we made 8% everytime would garner

100001.08= 10800 vs. 10400
108001.08= 11664 vs. 10800
116641.08= 12597.12 vs 11600
125971.08= 13604.89 vs. 13200
136041.08= 14693.28 vs. 16400
146931.08= 15868.74 vs. 22800

Eventually reinvesting explodes profits and our initial 2% is all we truly risked…

This is what swordofmanangemnt (the cryptic one) loves talking about, you can trade lots for space or space for lots. He usually uses a 5lot example and so taking away 2 lots adds 2/5= 40% space.:53:

[newbabyfxx]

We have graduated from Newbie Island and can now be found in “Holy Grails” -> Show me the money! Daytrading -> The Inner Circle Trader’s Millionaire Traders Guild

301 Moved Permanently

Many thanks for the info guys!

[TalonD]

Fury, I asked swordofmanagement about that ‘space’ but never got a clear answer. You make it clearer but it’s still confusing!

[fury]

Fury, I asked swordofmanagement about that ‘space’ but never got a clear answer. You make it clearer but it’s still confusing!

It took me alot of posts and pen to paper to figure out.

Going back to our example Space is the amount of pips you want to risk per trade; on a 15min chart I would said 100pips is plenty of wiggle room, but we never let that 100 get destroyed, we take action at 30.

Again 10000 at 2% 200. 100 pips of space

$200/100 = 2 dollars per pip. if it goes 100pips we gain $200 and 100pips of space

so it could be $400/200 which still equals $2 per pip but since we feel good with 100pips of space we change the equation to $400/100 and can now increase or per pip value, and if we keep doing this eventually it gets crazy. Kinda like using house money when at a casino, you just keep reinvesting and never lose your initial 2% risk, even though technically you are risking money you won.

[Amanfx]

It took me alot of posts and pen to paper to figure out.

Going back to our example Space is the amount of pips you want to risk per trade; on a 15min chart I would said 100pips is plenty of wiggle room, but we never let that 100 get destroyed, we take action at 30.

Again 10000 at 2% 200. 100 pips of space

$200/100 = 2 dollars per pip. if it goes 100pips we gain $200 and 100pips of space

so it could be $400/200 which still equals $2 per pip but since we feel good with 100pips of space we change the equation to $400/100 and can now increase or per pip value, and if we keep doing this eventually it gets crazy. Kinda like using house money when at a casino, you just keep reinvesting and never lose your initial 2% risk, even though technically you are risking money you won.

Fury
Are you risking 100 pips or trying to make 100 pips. Little confused here still. What is r:r here?

[piptronix]

The Space Cadets would tell you r:r is to the moon, because if you close out a trade and start up another one, you do not see it as a new position, it is simply a continuation or your original trade.

You risk 2% of your account and open up a position with a 100 pip stoploss if you want to call it that, but you never let it get to 100 pips, you only let it take out 30 pips then you either reduce lots or liquidate the whole position.

So 2% of 10k is $200. with a 100 pip stop loss I risk $200/100pips or $2 per pip = 0.2 lots
I NEVER LET IT GO THE FULL 100PIPS AGAINST ME; i liquidate at 30 pips, and if it hits the 30pip s/l I lose 30*$2= $60

For my next trade I have $200-$60 = $140 to play with, I want to make it so I dont destroy the whole thing so I use another 100pips of space; $140/100pips = $1.4 per pip
I NEVER LET IT GO THE FULL 100PIPS AGAINST ME; i liquidate at 30 pips, and if it hits the 30pip s/l I lose 30*$1.4= $42

For my next trade I have $140-$42 = $98 to play with. $98/100 = $.98 per pip.
Eventually if I keep losing I will not be able use a small enough lots size, but it will take some time before that happens. I used a losing scenario to show what happens.

You are never shooting for a specific pip amount, but if you gain enough pip space you add lots and it reduces space. I know SoM uses a ratio sometimes to explain how much pip space to use, but I like to look at it from a perspective of how many pips do I feel safe that if I left the trade open all day and my computer crashed how much can it move against me. 100pips might not be much and if the Average Daily Range on the cable is 150 pips, then use 150 pips instead of 100 in the calculation.

The whole point of this space thing is to keep injecting your profits back into your trading so your $per pip value is very high. Eventually you may be at too high of a leverage or something but you can have a goal in mind, like I will trade 1 month where i keep injecting in my profits, or after i double my account I will recalculate and only risk 2% of that amount until I double again, eventually you will get to a point where you will want to take profits and call it a day.

If you are going to keep injecting profits, never let the original position get blown up, that is why there are two stoplosses, one being the absolute death of your initial risk, and the second being where you have to do something to your position before it gets too far against you.

If I risk everything over 30pips that gets destroyed easily, but if I risk it over 100 pips and readjust the position every time it goes 30pips against me, I can manipulate lot sizes to always have my ultimate destruction 100pips away. Not talking about blowin up the whole account, just the initial 2% that is risked.

Isn’t it just another way of reducing risk?
Because $2 per pip is only risking 0.6% if you get out at 30 pips.
Sorry, I’m only trying to understand it.

[piptronix]

I am only getting into this because PCM was tweeting ICT and I really believe this is the stuff he is trying to get at, and for some reason it is not that easy to understand, because small points get caught up here and there haha.

After every loss i reduce risk by resizing, just like in ICTs methods every time you lose you are using less risk so your loss doesnt explode on you. This is the shield.

After every win i resize the position and technically I am increasing risk, but the people who are followers of this space thing would say I am not increasing risk I am only using these profits to fuel longer term investment, I am risking house money, not my own money. This is how you see explosive gains. This is the sword.

Ok, I admit I need to read your posts a bit more to get a better understanding of it.
So you are saying that ICT is using this as well?
Or does PCM use it?
Anyways, it does sound interesting, its one of those puzzles that I just can’t turn away from.
Guess I’ll be awake for a few nights…

[PippyTheGrt]

Thanks for your explanation Fury.

This is the first time I see an explanation that gets halfway into my thick skull instead of a quarter way :64:

[Amanfx]

Got it. Actually that’s what I have been doing. The new word ‘space’ just confused me.
Thanks a bunch for your time.

[fury]

@piptronix

Ok, I admit I need to read your posts a bit more to get a better understanding of it.
So you are saying that ICT is using this as well?
Or does PCM use it?
Anyways, it does sound interesting, its one of those puzzles that I just can’t turn away from.
Guess I’ll be awake for a few nights…

ICT does not use this PCM does, and if you see on twitter, PCM is trying to hint at something to Michael. I am pretty sure it is this.

With our traditional method of risking 2% every trade with a 30 pip s/l It would look something like this.
$10k initial investment; I risk 2%=$200; lets say i earn my 30pips and 2%

I now have $10200; I risk 2%= $204; i earn 30 pips and 2%

I now have $10404; I risk 2% = $208.08

With our space method I risk 2%, and add in the profits of every trade with a 30 pip s/l It would look something like this. REMEMBER IN THE SPACE EXAMPLE I WOULD NEVER USE A 30PIP STOP FOR THE ENTIRE THING TO BLOW UP BUT FOR THIS EXAMPLE I WILL USE A 30pip S/L TO COMPARE.

$10k initial investment; I risk 2%=$200; lets say i earn my 30pips and 2%

I now have $10200; I risk that initial $200 + profits (10.2k-10k= $200) = $400; I earn my 30pips and and $400 dollars

I now have $10600; I risk that initial $200 + profits (10.6k-10k= $200) = $800; I earn my 30pips and and $800 dollars

I now have $11400…

It will eventually explode, and in this example the profits keep doubling simplistic but the point.
200
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51200…