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Thread: Trend Trading

  1. #171
    Quote Originally Posted by ;
    hello gram you state say your first stop is just 1 adr. What amount of days that are average is that.
    MJ, I'm not positive if you mean the amount of periods to the ADR? I'm just basing my ADR on 4 periods (4 times ) now. Allow me to know, OK, if you meant something else? - G

  2. #172
    Yes that was my query. Thank you

  3. #173
    Slimming nicely. (Component 4)

    At this point in the transaction management procedure we have exited entry losers with minimal loss or maybe even a bit of triumph. We really do want to let profits run, so we'll wait till price is up at 1/2 ADR before fixing stops any whatsoever. If price moves down again, we'll always exit with at least a little profit before it return to our entry. From that point on, we will never have a reduction. From here on outwe are able to chose we chose to take none and what losses we want to take. It is only a selection.

    In an up trade, we might find a warning that sellers are taking control when price makes a new down bar that is greater than any bars down. ATR can give some indication but it's not a reliable indicator as it includes up. That!

    I often trade visually and for a new commerce, say only a few older I will only search for the largest recent move against me about the hourly chart throughout the previous week and anticipate more moves of almost that size to happen. To remain in a good trade long enough to let profits run, I really don't want to correct stops shorter compared to that down bar if I could help it. In this phase of the commerce, the space from current price down the length of the largest recent down bar is a space for my stop, with a single exception. Below the entrance point this winner will return to a loser, and we never let winners turn into losers. The stop might be much higher and just how far the transaction has moved but not lower than the entrance. I put an at or just prior to my stop while napping, so I don't miss it.

    The authentic automatic stop loss should be at least 1.3 times that largest down bar. It might be much larger if the transaction is along with the largest recent bar that is down is little relative to the ADR. When price begins to drop much, it might be turning into a loser. It doesn't matter, although it might not be. As long we exit while there is still a little profit, that offsets a unavoidable loss somewhere else and we could always re-enter the trade or perhaps even enter a transaction that is greater afterwards. The bottom line is, once a transaction has moved nicely into profit we should never have a large loss, we should not even take a little loss. There is no reason to. There will always be thousands of them, more transactions. Many will be much better that we're in now. We try again and only exit when things seem awful, like a loss may be arriving. We do that over and over before a transaction doesn't go bad in it's early phases.

    So we wait till price is high enough to move stops up, being individual, realizing the transaction will wind up a little winner or a large winner. No other choices are allowed by us. When the entrance phase is finished and price goes nicely into profit, say 1/2 ADR or so, there are no real losers, there are dangers to lack of profits. Note that reduction of profits is a reduction and it succeeds our central tenant of losers short, so we now turn to minimizing loss to profits as the transaction matures and advances in our favor.

    (to be continued)

  4. #174
    Well, I'll take a break for a little and allow my fellow traders to digest what I have written. Please understand that I am trying very hard to write down my own system that is discretionary in a rules based format and it's a challenge. Not only is there great doubt in the outcome of any trade that is single that is particular, but the whole strategy depends on accepting that trading with the tendency, until it bends in the end, imparts a bias on the results of the transactions. I could provide any number of audited equity blessings of hedge funds and CTA's that transaction profitably this way, but the skeptic could saythey were just lucky.

    One could complain that I am just discussing trade execution rather than trading tendencies, but I believe trading tendencies profitably requires precise execution. It's the combination of execution and trading with the trend that creates the advantage. Like weighting the coin so it flips heads 60% of their time the advantage is. It does not predict the results of any single transaction that is particular, it forecasts the outcome of a number of transactions. In cases like this, our advantage does necessarily ensure that we'll have greater than 50/50 to a win/loss ratio. Many tendency traders will acquire less than 50% of the transactions, but their wins are so much greater than their losses that they are extremely profitable.

    Many new traders will believe finding the right tendency to trade will be the single most important part, but in reality it has little to do with profitability. I use a very simple procedure of this 50X200 MA cross to enter tendencies and I shed a lot of these entrances. Can their method be improved by 100% or 200%, although I am sure there are other people with entry methods? No it can not. Incremental improvements in their entry method wont help their trading much whatsoever. I do propose though that their profitability can be improved 100% or 200% by enhancing their reward to risk ratio, and that is not really that tough. The profitability is the ratio, it is the anticipation of the win loss ratio times the reward to risk ratio. The combo of gambling with the trend and execution allows that anticipation to be altered to our favor as the casino has altered the anticipation of this roulette wheel in their favor. That's my own humble opinion. I would be interested in hearing the comets or queries of anyone. - G

  5. #175
    I am sure that although I've insisted many times it's not the entry, it is the execution, some people are still fascinated by entrances, so I'll talk one only to make these people happy. Here's the weekly chart of UChf (All Live charts). It seems to be in a trend up. That's not important, although the MA is your 10X50 EMA. It simply seems nice on the chart, to me. You don't require any indicator to see this tendency and a number of traders would prefer to exchange this tendency with no indicators in any way. In any case, see the tendency over the previous 8 months there?

    Now let us look at the daily chart. Same pair, see the tendency to the best for the last 36 days or so? Would you need it to be seen by the MA? Not really. Should you ask a 5 year old, which way is price going now? He say up.

    Exactly the Identical UChf chart in the 4 Hour time frame below. Again, the MA isn't necessary. The trend is obvious with no:

    The 1 hour Uchf chart is displayed below. Looks to be going up to me. How about you?

    Finally, here is your 15M chart. However looks like a buy to me, how about you?

    My point is, these entrances are simple. Can this commerce win or lose? I don't have any idea than the next number can be predicted by the casino on the roulette table. But I understand that if I exchange this tendency, or you like it, with perfect execution enough times, I will generate a positive expectation. I am not claiming a trader may enter any pair and be profitable with exact execution, though I have heard of that done in coaching classes. I am asserting that any technique to spot a trend may be used along with precise execution to generate profits. OK, off to dinner. - G

  6. #176
    Quote Originally Posted by ;
    hello gram you say say your first stop is 1 adr. What number of times that are average is the fact that.
    MJ, sorry, I misspoke. 4 Periods for my ADR is 4 weeks, not days. - G

  7. #177
    You are right regarding execution. The ability is underrated. It is quite simple to say another thousand trades but living them are a whole other thing especially considering that for someone like myself the 1000 trades will require 1000 days according to my trading frequency over.

    As for moving your stop rather than allowing a winner become a loser I really do it differently.I trade price and time breakouts and also my backtesting and actual trading has shown moving my ceases would affect my profits negatively. The best trades do breakout rather than return to their breakout points however some very good ones do and very often at that.Were I to move my stops to breakeven for any reason I would be stopped out on several transactions that otherwise would be quite profitable.This is again down to dread of losing.I possess lots of transactions that reunite hundreds/thousands of pips at time of closing, initially move for countless pips after breakout then turn around and come back into the breakeven point then continue on their way. Average traders just can't bear to see a 10:1,15:1 winner come back to their breakeven point in order that they move their stops and get stopped out and then the market continues in it's initial direction. All because someone out there said do not ever let a winner become a loser.If anybody cares to backtest these so called pieces of'wisdom' they can find out something which may improve their trading.

    The same goes for'you can't go broke taking a profit'.You can go broke taking small profits.

    People pay too much focus on winning instead of making money.If you should be prosperous in this industry you need to discover low risk ways of entering the market which have a provable edge.People are fearful of losing so they've really large stops.For instance the way I use indicated an entry a couple of weeks back with a stop of 3 pips.I was asleep and did not take the transaction but the same trade in up now over 400 pips for a risk:reward of over 130:1 and going.Imagine the profits potential when heaps of add on transactions are put and all these transactions are held until their final closing some months from now.The profits would be astronomical but because the method has a win percentage of around 25% individuals can't trade it.

    Someone said it and it's true. . .you can't make big profits taking small profits.The reason people take small profits is because they have never made a big profit.Train to create and take big profits and you'll never go back to trading for small profits.The way to do that is to find strong tendencies and milk them for all they are worth.

  8. #178
    Quote Originally Posted by ;
    You are right about implementation. The ability to do is quite underrated. It is quite easy to say the thousand trades but living them are a whole other thing particularly considering that for somebody like myself the 1000 trades will require 1000 days based on my trading frequency over. As for moving your stop and never letting a winner turn into a loser I really do it differently.I trade price and time breakouts and also my backtesting and actual trading has shown moving my ceases would affect my profits negatively. The top transactions do breakout and never...
    Thanks Nivad. That's a superb post. You are 100% right on all points. As not allow a winner turn into a loser, I introduced a complete rule that should be analyzed for the strategy of this trader. I should have explained. Of course I consider transactions with large profit abilities and risks when ever I can find them. A better way is to say, never allow a winner turn into a loser that is large. Large can subsequently be defined concerning the traders objectives. Surely, in case a breakout strategy (which I like) yields 400 pips to get a three pip risk, you are going to take those transactions daily. But, you've defined large already. Would you take a 400 pip risk for 400 pip profit? Probably not. Would you take a 200 pip risk to get a 400 pip profit? I don't know your trading strategy, but I'm guessing no. There's some risk that's optimized for your strategy that you feel is best for you to take. That might be adjusted for the pair, current volatility, anticipated profit, or other factors. Anything beyond your maximum risk level left on the table and will probably be considered too large. Together with my 50/50 win loss ratio my best risk is about 40 pips to get a 3 to 1 benefit to risk ratio. I'll take those transactions all day . Are you at the minimum risk for your specific strategy? By the sound of your article, I'm guessing you are close if not already there and you have thought this through.

    So far as shifting a halt, I mostly am concerned about a winning commerce going into a reduction while I sleep at night and I can not respond. If I could stop out instead of have into shedding land, the commerce go far while I sleep, I'm ok with this trade off. In reality, it occurred when a profitable 2 stack trade on the EU ceased out with just a few pips profit while I slept. EU price remains moving at this instant and had I remained in that trade no more I have taken a sizable reduction this morning or be sweating bullets right now wishing I had gotten out while the getting was good. I'm too old to sweat. I could strain something. I might be back in that EU short commerce following the trend reversion to imply finishes in a few days, but it cost me nothing and it's as if it never occurred. The market just has to breathe a little to have the ability to breathe back in later out. Unless we allow it us can not hurt.

    Of course, being too aggressive on trimming ceases is counter productive as well. I can not count the amount of times price has retraced back to close my entrance point or even a little beyond just then to take off to new highs (or lows for shorts). As soon as I traded breakout strategy, I called those transactions, Kiss and Move transactions, because I thought that was adorable. Largely my stops are there for emergencies. I trade with a mental risk limit are manual. Stops save your ass and ruin excellent trades. They have to be used.

    So far as letting a commerce run into 10:1 or 15:1 or longer, what a fantastic sense of accomplishment. I wake up each day searching for that. If a trader hasn't handled it, I say try! If for no other reason, do it just to say you did it at least once in your career. It will be a learning experience. Like making a hole it's really tough as hell. Once most traders accomplish that lofty goal they will be like us to letting our profits run. But of course, that is just half of the game. The other half is to reduce losses short and I bet there is something you and I could do just a bit to reduce losses shorter by just a little here or there and never affect our profits. To be effective, we have to master the art of reducing losses while letting our profits run. It is mentally feels like like juggling while riding a unicycle or perhaps it's a little tougher. If we believe we have it mastered, we go back and study it to see if we missed something. Yea, we did. Finest success on your trading. Thanks for the relevant coment. - G

  9. #179
    Obviously Nivad has a longer-term perspective than Graviton: generally months/years compared.
    It follows that the stop is a lot wider for Nivad after the transaction is moving.
    Within an uptrend, the stop may be triggered if price closes below the last greater non provided that the previous swing is not too shallow?
    Expect that Nivad is ready to enter details of how he trades.

  10. #180
    Slimming well. (Part 5)

    So at this stage we are proceeding through the transaction management phase. We have made it. We kept them small, although we had some modest losses across the way to get here. Let us give ourselves a pat on the back for accomplishing that goal. If we had a reduction greater than our goal went in, then that is an issue in the psychology of the trading that we have to fix before going. I'd suggest more reading and study and practice in a minimum money trade just like 0.01 lot per transaction prior to proceeding. My book shelf is full of many books and it is absolutely required reading to trade profitably.

    As always, price will now either go down or up. If price goes down, we should already know where our exit point is. In case it goes very far, we've got options, depart with a profit, depart with a reduction or leave with a large reduction. In this trading strategy, there are no large losses permitted, so that option is out. Losses are an option we opt to create for of the wrong reasons and we do not ever need to think about it because this strategy depends on eliminating all losses. When price is collapsing at this early stage, we do not wish to be overly competitive with our exits. Often only after a breakout or a continuation of fashion there's a shakeout change before price moves higher. Large scalpers, counter tendency traders and others are going to pile on to maneuver price sharply down and take out traders. Usually they take their profits and get out of the way.

    In this universe of probability distributions the depth of this counter trend move cannot be predicted, but we do know 1 thing for sure. If price goes under our initial entry point, each pip down is 1 pip we could have bought it cheaper. If we'd exited with merely a couple of pips profit, we could buy back into the trade. If the trend move ends only at the moment we depart with just a few pips profit, we can buy back and no injury is done. That's a risk course of action.

    Another alternative is to stay with the transaction a bit longer and possibly exit taking a couple of pips reduction, but no serious harm done. I usually think about the momentum of this movement against me, before s/r lines, candle formations and each tool and make my choice. It to get out with a couple pips profit. But when the momentum of this trend move is weakening as exhibited by down candles I have good reason will hold, I might risk a couple of pips. Since I am trading with the trend once I really do take the risk that I win it around half the time if I have an excellent reason to take it. It is rather like entering a new trade.

    The final option would be to ride this counter trend move deep into reduction land. As mentioned before, this option is out. It is not allowed in this strategy. This is one of those subsequent 1000 trades and when we get out a couple of pips ahead or behind it doesn't really matter much. If we journey a trade into a large reduction it signifies a major problem in our trading psychology (we do not wish to be wrong, we can't accept a little loss, cognitive dissonance, etc.) and we must cease, and fix that before we can continue.

    Frequently price wont reverse quickly shortly after we are well ahead. It keeps moving with just minor pauses and retracements across the way in the direction of this trend. The more it goes, the more profits we stand to lose on any major retracement. As always, our directive to to cut losses short, but we've got a new equally important target today, to let profits run. There is no way we are going to let price dive back into reduction class after it has been well ahead, say around 1/2 to 1 longer or ADR. I will usually cut my initial hard automatic stop from 1 ADR under entrance to about half soon and my mental stop (marked on my chart with a horizontal line and with an alert set) will be somewhere over entrance. Ilook at of the bars against me on the 1 hour chart for the past week and figure another is very likely to come across that big and I will move my mental stop just. If I have an line to tuck it under better.

    Which provides a careful balance between cutting loses of our earned profits short and allowing price enough space to let profits run. As price functions it's way up, I will trail my mental stop up about 1 pip for each 2 pips price increases so half of the profit goes into the (psychological ) bank and half to permit price more space to breathe. If price continues in my way, it gradually gains more space. I have trouble although a trailing stop is used by some here. Always using a very long trade for instance, in the first day it should have as much space to breathe as the largest 1 hour down pub (pub against my commerce ) that occurred in the past week. I use ADR, When the bars were all smaller than ADR then. I let it increase a max of 1/2 that number daily so it's about 3 times that largest down pub (or ADR when I had to use it) by the end of one week. I will let it run a second week using a little slower expansion in breathing space (like 1/3rd ADR every day) and faster expansion in banked profit if I am confident. More than fourteen days, usually trades do not run, but I know many do, so I will let them speak for themselves on the cushion they allow to let their profits run. Once I am up between 1.5 to 2 adr, I reset my automatic hard stop to break even to permanently lock reduction out of this trade.

    If everything still looks good by 1.5 to 2 ADR, I am usually ready to add to the position of this transaction, but that's the narrative of pyramiding a fantastic winner. I will leave that story for another day. Finest trading success to all. - G

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