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Trading spot fx euro using price action


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Trading spot fx euro using price action

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  #571 (permalink)
 Adamus 
London, UK
 
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mokodo View Post
Hi Adamus,

Reading your posts it looks like you have a lot emotion going on when you have a trade on. It appears that it is getting into your decision process, maybe even taking control of it? I'm only talking from own limited experience - and I do not know what methodology you use so I do not know even if it is applicable - but can you test out a 'set and forget' order management. That is: do the analysis, set the orders (stop and target(s)), wait for the trade to finish.

I know I suffered getting far too emotional about live trades and the only way I started to overcome it was to set set and forget. I also have a time stop so I would close manually it if that was hit. And that was the only interaction I allowed myself. Initially I had to not only set and forget, but set and walk away!

Just my 2 pennies worth. Best of luck with the it.

Yes I often am quite emotional - nervous - when I've got a trade on. I hoped that I'd reduced that but actually pulling the trigger today shows that it's still pretty bad. Yesterday also, on the last trade, I should have bailed far earlier but couldn't.

I appreciate the suggestions - set and forget is a major option. Pretty much like my mechanical trading last year and earlier while I was still doing it. However with my price action methodology on break-out pull-backs, I don't know whether it would lose the edge because exiting on bad PA is a basic part of the plan - trade management-wise.

Trading 2 lots with a short target and a far target was also part of the plan but I found I couldn't deal with it on the 3min timeframe so I ditched it. The general consensus though is that splitting the trade like that is normally not good for the bottom line and only has psychological advantages - so I ditched it.

If I were going to ditch trade management and go for 'set & forget', I'd have to make sure of the edge over a long history - so obviously I can't do it without putting considerable work in.

So how did you develop the ability to control the emotions then, if you initially just walked away? When did you know to come back!?!?

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  #572 (permalink)
 mokodo 
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Adamus View Post
So how did you develop the ability to control the emotions then, if you initially just walked away? When did you know to come back!?!?

It's still a work in progress, as are all the elements of my trading. The walking away technique was just to train myself to be detached and objective. I was beginning to feel mentally exhausted which was having knock-on effects. Once I realised I actually felt better, calmer and in a better frame of mind away from the screen I could then watch the price action whilst I had a trade on. It was revealing just comparing how I felt either being there or not. It made no difference to the outcome of the trade. Once I got that I could watch and be (more) objective.

I also put a fair bit of effort into only thinking about my 'performance' on a monthly basis, which is usually across 20 trades or so. I found reading books on statistics/probability good for that. Puts you in a 'statistical' frame of mind. So any one trade is just that - a single trade. Really the corner was turned when I realised I was consistently breaking even or marginally better with my approach and money management and just believed in my self that bit more.

I still use a check box on my trade cards (one per trade) to ask if I haver held for a certain number of bars. This is part of my rules and is different for the two set-ups I currently trade live. If I do not hold I have to put a cross in the box and write an explanation to myself as to why I broke the rule. Sounds like your methodology requires you to actively manage the trade so this perhaps isn't relevant.

But this is an area I have to keep working at as I do have a tendency to falter.

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  #573 (permalink)
 Adamus 
London, UK
 
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This morning it was beyond my powers to take any of the setups on offer. The market was too quick, leaving me with the old situation of seeing clearly what I should have done afterwards but in action, I was too hesitant. Price action didn't mess around, no lingering around it just went for it. I need way more experience and confidence to tackle this sort of stuff. August might have been a quiet and choppy month, but at least I had time to think about the setups. I guess the big boys are back from holiday.

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  #574 (permalink)
 bnichols 
Dartmouth NS
 
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I don't have anything to offer that comes close to the insight you provided me after glancing at my P&L curve (thanks for your comment--extremely illuminating) I envy traders who are able to trade pure price action, hope to be able to do it some day.

Except perhaps this. After a struggle similar to yours to trade price action, just a little compressed by making 10's of thousands of trades practically 24/5 for a very long while I finally opted for a number of tried and true indicators (trend, momentum, cycle, S/R; which in my case means 50 SMA, MACD(5,20,30), Stochastics(3,5,2), variety of S/R indicators) to guide me. This doesn't mean I depend on them or intend to rely on them forever, just as an objective aid to interpreting price action that seems to cut through the fog I was experiencing. Like my mother-in-law's walker after she broke her hip. I, like she, insist we will not need that crutch forever. In her case unfortunately, less humble than I've learned to be--my toughest lesson, humility--she defies Dr's orders and keeps trying to use a cane before she's ready, always with the expected outcome (more broken hips, having to start from scratch).

It's not possible to compare 2 traders' journeys, but I suspect it's possible to compare destinations, so I'll add this.

These days I rely less on indicators the more I learn to trade price action. The downside is for our chosen time frame (short) price action turns us into short time frame scalpers. Seemed like a good idea early on, to trade within the limits of our budget and still capture every nook and cranny price concealed itself in, profits increasing the way the length of a fractal coastline does the smaller the dimension, but IMO 50 to 100 trades/session is way, way too much when e.g. price is in a trending channel--too hard on the flesh, not so much for a bot, in any case unnecessarily expensive in terms of commissions. At my stage (more or less profitable) the decision is whether to conceive a bot that scalps price action (haven't begun to figure out how) or admit defeat & go back to where I came from--longer time frame currency trading, which means bigger stops and a deeper pocket assigned to currency trading--just wiser (presumably less costly drawdowns) from having acquired some understanding of price action.

Thanks again for your insight.

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  #575 (permalink)
Schaefer
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Adamus View Post
... I need way more experience and confidence to tackle this sort of stuff. August might have been a quiet and choppy month, but at least I had time to think about the setups. I guess the big boys are back from holiday.


If you're an emotional type, then using shorter time frames will only increase your anxiety, and decrease your account.

Also, using higher time frames require deeper pockets, and bigger accounts is also a myth. By the end of the day, if you add up all the commissions, and the tiny little losses from the scalp trades, you will see that it's still a lot more than one, or two stop outs from trading off a higher time frame charts.

However, once you've become proficient with your system, and emotionally stable, you could always trade the shorter time frames. In the end, it all comes down to screen time. The key is to last long enough to survive that required screen time.

Good luck,
Schaefer

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  #576 (permalink)
 Adamus 
London, UK
 
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Need time to digest such suggestions. I need to review my trading plan - I mean, my trading plan says I review the week gone by every week-end, something I don't do because my week-ends are pretty unstructured and time runs out too quick.

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  #577 (permalink)
 Adamus 
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Reduced trading session for me for a few weeks.

Not much going on today.

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  #578 (permalink)
 Adamus 
London, UK
 
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I think even the 3min time frame is a bit too big for 1 hour of trading at this time. Doing what I'm meant to do rather than just random uncontrolled trading is good practice though.

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  #579 (permalink)
 Adamus 
London, UK
 
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Life has swamped me and drowned out my plans for trading. I think I lost the drive to trade the hour in the mornings because it is so short and everything often kicks off right after I finish - in the meantime other events have overtaken me and I'm super busy at home and in the project I'm working on 9 to 5 - in fact the company has extended my contract through until Christmas.

Basically the money I've earned from six months of work was only just enough for my plans to get back into trading and pull myself up to the self-supporting level. however with another 3 months of money in my pocket, I think that will give me a clear 9 months for another shot at it and enough risk capital in the trading account.

It was such a difficult decision to make, to take the extra 3 months work. I knew it was necessary, but the emotional beast in the lower regions of my mind wanted me to trade, and now!!! Signing the contract extension was really tough, I felt I'd lost something. Well, I had, I've lost 3 months - I won't trade (sim-trade only!) a whole session again until 2013. So I tamed my feelings now, because I had time. I just have to learn to deal with it in the same way when those bars are building in 3-min time.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #580 (permalink)
 bnichols 
Dartmouth NS
 
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Chin up. It's a fact of life until we are profitable we need a source of income--savings/investments, understanding spouse with an unassailable income sufficient for the both of you. Unfortunately profitability chooses its own path & timeframe. Al Brooks writes it took him 10 years and my guess is he was eventually profitable only because for some reason he considered it his only option. I suspect to be profitable we have to discover for ourselves why it is our only option.

ETA: Especially we do well enough without the urgency of a deadline to profitability looming over us.

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