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The PandaWarrior Chronicles


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The PandaWarrior Chronicles

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  #1901 (permalink)
 PandaWarrior 
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xelaar View Post
I have spent a day programming my strategy in Ninja to full automation, well my most mechanical strategy. So I did a lot of back tests and some real time tests. From back tests I could see that going for an outlier indeed can squeeze a bit more profit per car but also increases drawdowns a lot as well as number of subsequent losers. From I see if you can get smaller profit per car with less drawdown and higher win rate, then look if increasing size will be more beneficial than going for larger runners with less size. It was certainly the case for me. Thus said I still look for more win than losers and larger win than losers.

When I say outlier, I mean something that is less than the average leg for your instrument. CL moves in 35-70 tick ranges most of the time, based on how I trade, its around 50. So I use 50 ticks as my target....I get a 50 tick trade every 7-8 trades...most of my trades are trailed out at 40 or 38 or 42 or 30...something less than 50. That being said, of the ones I trailed out, 95% of them I should have left alone. It seems the best trade management is no management at all.

I do not mean looking for that one day where it runs 300 ticks and I get 275 of them. Thats not how I currently trade, although I can see a day when that is part of my plan to some degree.

Have a great weekend.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1902 (permalink)
 xelaar 
prague, czech republic
 
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PandaWarrior View Post
When I say outlier, I mean something that is less than the average leg for your instrument. CL moves in 35-70 tick ranges most of the time, based on how I trade, its around 50. So I use 50 ticks as my target....I get a 50 tick trade every 7-8 trades...most of my trades are trailed out at 40 or 38 or 42 or 30...something less than 50. That being said, of the ones I trailed out, 95% of them I should have left alone. It seems the best trade management is no management at all.

I do not mean looking for that one day where it runs 300 ticks and I get 275 of them. Thats not how I currently trade, although I can see a day when that is part of my plan to some degree.

Have a great weekend.

Brian, I used this term is exactly same meaning. I do lean more and more in a same direction as you do, and consider the tape now just an attempt to get a good timing, but no the actual reason to trade. Thus said, I value smoother equity curve even more than absolute returns, and therefore I can see a value in scaling out at typical rotation distance. However, the next step would be to add to the trade, by scaling in again if setup confirms again and I have my first part closed already. We had some pretty good discussions with @podski about this approach.

Happy Thanksgiving.

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  #1903 (permalink)
 Deucalion 
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For example, the first one is piss poor high risk low reward setup. The second one is misdirection, and an outlier



 
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  #1904 (permalink)
 bobwest 
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Slightly off the topic of this thread, but, on your recommendation (in the budfox thread), I watched the Kung Fu Panda movie last night. You're right, it's an excellent movie, and the relevance for trading, and anything else, is very clear.

"There is no secret ingredient." Huh. Wish I'd known that years ago.

Now I know why the name of your thread is a good choice Thanks for the experience.

Bob.

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  #1905 (permalink)
 PandaWarrior 
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bobwest View Post
Slightly off the topic of this thread, but, on your recommendation (in the budfox thread), I watched the Kung Fu Panda movie last night. You're right, it's an excellent movie, and the relevance for trading, and anything else, is very clear.

"There is no secret ingredient." Huh. Wish I'd known that years ago.

Now I know why the name of your thread is a good choice Thanks for the experience.

Bob.

Lol, that's great, glad you enjoyed it.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1906 (permalink)
 tderrick 
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PandaWarrior View Post

Typically, I am only interested in the initial breakout. Once in, I want to add to the position, not exit and re-enter on every leg. This is something I did for a long time and could never make it work. I never chase an entry, if you miss it, you miss it. And limit orders mean you will miss a fair number of good trades. So I just click In or use a stop market order.

Brian


So let's see if I have this right.

I'm going to try some BO / momentum entries this coming week, so let's set up some rules.

The key seems to be GET IN when the criteria is met that price is moving out.

Now, when the inevitable heat comes from price edge traders like me, do you add at some point
on this PB leg back into consolidation or is this a "wait and see" period to see if price truly continues?

I realize it is a fine line between scaling into a loser and adding to a position at this point.

Would the trade only be invalid if it attempts to break out the other side?

When is your "I give" point ? A set amount of ticks? A PA landmark? A volume Landmark?

... or just plain wrong, as it leaves you in the other direction ?


grazie


AJ
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  #1907 (permalink)
 PandaWarrior 
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There's a pretty good example a few posts back in my thread.

I never add to a trade that is red. It has to be in profit. And I try to only add if the combined entry can be break even. This is gonna vary depending on what the structure looks like.

But I think it might be easier if we just talked on Skype. I can show you easier than I can type.

Send me an email or PM. We can set up some time. Today is good for me as I'm not trading or anything else for that matter.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 tderrick 
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PandaWarrior View Post
There's a pretty good example a few posts back in my thread.

I never add to a trade that is red. It has to be in profit. And I try to only add if the combined entry can be break even. This is gonna vary depending on what the structure looks like.

But I think it might be easier if we just talked on Skype. I can show you easier than I can type.

Send me an email or PM. We can set up some time. Today is good for me as I'm not trading or anything else for that matter.


OK, buddy... I'm just heading out the door to get some auto parts and will look for you when I return


AJ
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  #1909 (permalink)
 trs3042 
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@PandaWarrior

Hello Brian. I was wondering if you would share what ADR indicator you are using.

Thank you,

Rick

"If you're going to panic during a trade............. panic early."
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  #1910 (permalink)
 PandaWarrior 
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trs3042 View Post
@PandaWarrior

Hello Brian. I was wondering if you would share what ADR indicator you are using.

Thank you,

Rick

Its @Fat Tails volatility indie with most of it set to false or transparent. I only wanted the ADR component.

I tried to find the zip file on my machine but can't seem to find it so here is the updated version from the man himself.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 trs3042 
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PandaWarrior View Post
Its @Fat Tails volatility indie with most of it set to false or transparent. I only wanted the ADR component.

I tried to find the zip file on my machine but can't seem to find it so here is the updated version from the man himself.


Sorry to bother you, but this one is ADN indicator and doesn't look like the one you have on your current chart.
Any ideas?

Rick

"If you're going to panic during a trade............. panic early."
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  #1912 (permalink)
 PandaWarrior 
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Been away from the charts for a few days due to unforeseen circumstances. Was in sim mode today and probably tomorrow as well.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 trs3042 
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trs3042 View Post
Sorry to bother you, but this one is ADN indicator and doesn't look like the one you have on your current chart.
Any ideas?

Rick

@PandaWarrior

Never mind. I found it. The one you posted is v39 of @Fat Tails indicator. The one you are using is v38.

Thank you for your effort.

Rick

"If you're going to panic during a trade............. panic early."
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  #1914 (permalink)
 PandaWarrior 
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trs3042 View Post
Sorry to bother you, but this one is ADN indicator and doesn't look like the one you have on your current chart.
Any ideas?

Rick



This should do it.

My settings:


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
Attached Files
Register to download File Type: cs anaVolatilityBandsV37.cs (74.2 KB, 13 views)
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  #1915 (permalink)
 Fat Tails 
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PandaWarrior View Post
Its @Fat Tails volatility indie with most of it set to false or transparent. I only wanted the ADR component.

I tried to find the zip file on my machine but can't seem to find it so here is the updated version from the man himself.



There will be no more maintenance for the SessionVolatilityBands indicator. All the features have now been integrated with the SessionPivots. The current version is V42 and can be found here:



The integration has a few advantages

-> it simplifies indicator maintenance
-> besides average daily range and average daily expansion, the package also allows to display weekly and monthly ranges

I have reworked the SessionPivots recently. The code is much more efficient, the graphics features have been improved, so I recommend to switch to the newer indicator. Plots that are not needed can be set to transparent.

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  #1916 (permalink)
 PandaWarrior 
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I've started a new thread....I'd like people to find it so more likely you'll find it here..


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1917 (permalink)
 PandaWarrior 
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Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1918 (permalink)
 PandaWarrior 
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14 Characteristics Of Highly Successful Traders ?

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1919 (permalink)
 PandaWarrior 
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A few months ago, someone told me to put my entries where my stops would otherwise go...didnt seem to make sense at all...nice if you could get it but not practical from my perspective.

And then, my perspective changed almost overnight. Was doing some work for a friend, helping him out on his method and I opened a naked 5M chart and then something happened and I saw the entries where the stops should be going.

So I traded it on a naked 5M chart for a while on the other instrument, couldn't seem to lose. Then I decided to look at my instrument. Lots of opportunities there as well....and smaller risk to boot....so traded it today on NQ...small tick size to help with the uncertainty, also on GC and CL...all winners....and no set ups worth taking on my 800T chart. This produced 2 40 ticks opportunities on CL and a 40 tick one on NQ.....slight perspective change but it seems to have a decided advantage over how I was seeing price previously.....not that there is anything wrong with that method, just that there seems to be a few advantages over it.

We will see this coming week how this plays out but I think it will add another dimension to my trading....


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1920 (permalink)
 xelaar 
prague, czech republic
 
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PandaWarrior View Post
A few months ago, someone told me to put my entries where my stops would otherwise go...didnt seem to make sense at all...nice if you could get it but not practical from my perspective.

And then, my perspective changed almost overnight. Was doing some work for a friend, helping him out on his method and I opened a naked 5M chart and then something happened and I saw the entries where the stops should be going.

So I traded it on a naked 5M chart for a while on the other instrument, couldn't seem to lose. Then I decided to look at my instrument. Lots of opportunities there as well....and smaller risk to boot....so traded it today on NQ...small tick size to help with the uncertainty, also on GC and CL...all winners....and no set ups worth taking on my 800T chart. This produced 2 40 ticks opportunities on CL and a 40 tick one on NQ.....slight perspective change but it seems to have a decided advantage over how I was seeing price previously.....not that there is anything wrong with that method, just that there seems to be a few advantages over it.

We will see this coming week how this plays out but I think it will add another dimension to my trading....


Brian,
Looks like you normally focus on break out trades, of course they will suffer on inside days, so it all makes sense.

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  #1921 (permalink)
 PandaWarrior 
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xelaar View Post
Brian,
Looks like you normally focus on break out trades, of course they will suffer on inside days, so it all makes sense.



True enough, but I've been trading it on break out days as well and it works just as well there....

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1922 (permalink)
 PandaWarrior 
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I've added 4 more pairs to my forex trading. The forex trading is going pretty well, enough so that I think I may begin to feed some money into it slowly and perhaps begin to trade all five pairs. The trades are lasting anywhere from 3 days to a month with losers in the 30-70 pip range and winners in the 150-300 pip range with scale in ability so the winner is MUCH larger than the loser.

I LOVE the ability to size properly. It allows me to take trades and place stops that I would have never been able to take otherwise....and then scale in as it progresses. And I like that the trades take so long to develop and to play out. Its much less stressful than day trading.

I wish I had done this from the beginning. I'd still day trade because I like it but the forex swing trading has tons of potential but more important, it requires patience and discipline to wait for the set ups....much more than day trading. The difference I am trading 4 hour charts instead of 5 minute charts or even tick charts. Its like comparing apples and oranges. Its just much easier.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1923 (permalink)
 PandaWarrior 
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Looks like CL is going to sleep again...or just resting before a huge breakout...who knows.


Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1924 (permalink)
 xelaar 
prague, czech republic
 
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PandaWarrior View Post
I've added 4 more pairs to my forex trading. The forex trading is going pretty well, enough so that I think I may begin to feed some money into it slowly and perhaps begin to trade all five pairs. The trades are lasting anywhere from 3 days to a month with losers in the 30-70 pip range and winners in the 150-300 pip range with scale in ability so the winner is MUCH larger than the loser.

I LOVE the ability to size properly. It allows me to take trades and place stops that I would have never been able to take otherwise....and then scale in as it progresses. And I like that the trades take so long to develop and to play out. Its much less stressful than day trading.

I wish I had done this from the beginning. I'd still day trade because I like it but the forex swing trading has tons of potential but more important, it requires patience and discipline to wait for the set ups....much more than day trading. The difference I am trading 4 hour charts instead of 5 minute charts or even tick charts. Its like comparing apples and oranges. Its just much easier.


I like your progression very much, Brian. I look for the same in forex - long term trades with the trend. But currently EURJPY is very overbought and due for correction. Long term I want to long gold versus the yen.

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  #1925 (permalink)
 PandaWarrior 
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I let the slow price action lull me into kinda of a no action kind of attitude...and then it fell out of bed without me....and no chasing allowed. Classic mistake.

I did trade NQ on sim again today. I am killing it there....maybe add that to my repertoire in the future. Who knows.

The 5M chart was NOT speaking to me and the 800T chart had nothing I liked without large risk, so I just sat there the entire time. I have not had a session in a long time with no trades....there have been days I didn't trade or my session was cut short with no trades but one in which I sat the entire time and watched without trading is quite rare.

On the NQ trade, once again, no trade management seems to be the best course of action.




Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1926 (permalink)
 xelaar 
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Good trade, Brian, similar to my entry style.

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  #1927 (permalink)
 PandaWarrior 
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Missed opportunity today...well not missed, cut short. I try not to make this mistake but it seems its the achilles heel. Getting nervous once price goes my way for a bit. I kill it on the first little pull back knowing full well its just a pull back and to hold on.....Anyway it went exactly to my target on the 5M chart.....bugger....

Regardless, I am once again becoming more and more comfortable with the naked 5M chart and just using levels to enter at instead of the confirmation I normally required.

Still have 2 more finals to study for so short and sweet today.





Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1928 (permalink)
 trs3042 
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PandaWarrior View Post

I am once again becoming more and more comfortable with the naked 5M chart and just using levels to enter at instead of the confirmation I normally required.

Great work Brian. It's great to see you having so much success with the naked chart. You're a true inspiration, for this to is my goal for the future.

Thank you for posting,

Rick

"If you're going to panic during a trade............. panic early."
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 Deucalion 
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PandaWarrior View Post
Missed opportunity today...well not missed, cut short. I try not to make this mistake but it seems its the achilles heel. Getting nervous once price goes my way for a bit. I kill it on the first little pull back knowing full well its just a pull back and to hold on.....Anyway it went exactly to my target on the 5M chart.....bugger....

Regardless, I am once again becoming more and more comfortable with the naked 5M chart and just using levels to enter at instead of the confirmation I normally required.

Still have 2 more finals to study for so short and sweet today.

That CL pattern is magnificent, well recognised. Almost as good as this




PNF Rocks!

 
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  #1930 (permalink)
 PandaWarrior 
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Deucalion View Post

PNF Rocks!

Where is the 45 degree trendline? I thought PNF relied on those 45s pretty heavily?

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 Deucalion 
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Where is the 45 degree trendline? I thought PNF relied on those 45s pretty heavily?

Old Wives tales! Combine old school price action with position sizing and positive expectancy and things like 45deg lines don't hold a candle.
  • Impulse
  • Corrective (contraction)
  • Expansion

Add in position sizing, and it is now, more than enough. Plus I have never understood trend-lines, median lines yes, trend-lines - no. If I added 45deg TD channels (there are a couple here)some things do stand out, but the RR is considerably poorer. Maybe something like this -



It doesnt seem too bad, my instinct is to find the stop first, so I use the contraction abc pullback method. Using TD or PNF SR argument I could merit in this -

In fact I think this below is much purer than what I do, but this is very nuanced. It is something I am striving for - not that easy. Lot of very subtle things on this chart
  • Channel support
  • Break up
  • A break down
  • Retrace into measured area (short is here)
  • Stop is edge (inside price, not outside it)
  • RR is staggering (over 15R), if measured in contraction expansion terms


 
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Old Wives tales! Combine old school price action with position sizing and positive expectancy and things like 45deg lines don't hold a candle.
  • Impulse
  • Corrective (contraction)
  • Expansion

Add in position sizing, and it is now, more than enough. Plus I have never understood trend-lines, median lines yes, trend-lines - no. If I added 45deg TD channels (there are a couple here)some things do stand out, but the RR is considerably poorer. Maybe something like this -



It doesnt seem too bad, my instinct is to find the stop first, so I use the contraction abc pullback method. Using TD or PNF SR argument I could merit in this -

In fact I think this below is much purer than what I do, but this is very nuanced. It is something I am striving for - not that easy. Lot of very subtle things on this chart
  • Channel support
  • Break up
  • A break down
  • Retrace into measured area (short is here)
  • Stop is edge (inside price, not outside it)
  • RR is staggering (over 15R), if measured in contraction expansion terms


Makes perfect sense...then scale in on the way down yes????

Also: what about this?

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 Deucalion 
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Makes perfect sense...then scale in on the way down yes????

Also: what about this?

Perhaps, But I am terrible at scaling, I realize. How would you do that? I can see the merit of scaling totally, but the way I do it now is simpler, in out, and try not to interfere with the original RR. If I can do what Private Banker with Core-Satellite, it makes sense. But its much harder than I used to think

Scaling in only makes sense if you entered a very smal position initially. Otherwise, NO. As you can see both cases I have presented go all in, One entry, One target.

I am not sure how scaling would go in the above example. Give it a try. I have some vague ideas, not I don't trust them enough to give me additional RR.

I give you an example of what I think is ideal scaling in. and it is below -


I am very aware this goes against adding when price goes in your favour, but I have never understood how RR improves in that manner. Perhaps someone will indulge me

PS - I don't any weight a a single Fib by oneself, that's ridiculous, but the whole band is different, or some other price behaviour, or high volume bar. Generally something else in addition. But that is exactly why that initial trade idea was not taken by me. It was too flimsy

PPS - All ideas revolve around either AIAO od SIAO, I completely reject any AISO. AISO is the abhorrent and unacceptable to me. It is reversing RR. I don't care how many do it and how good they are with it. SISO is also same as AISO

 
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Perhaps, But I am terrible at scaling, I realize. How would you do that? I can see the merit of scaling totally, but the way I do it now is simpler, in out, and try not to interfere with the original RR. If I can do what Private Banker with Core-Satellite, it makes sense. But its much harder than I used to think

Scaling in only makes sense if you entered a very smal position initially. Otherwise, NO. As you can see both cases I have presented go all in, One entry, One target.

I am not sure how scaling would go in the above example. Give it a try. I have some vague ideas, not I don't trust them enough to give me additional RR.

I give you an example of what I think is ideal scaling in. and it is below -


I am very aware this goes against adding when price goes in your favour, but I have never understood how RR improves in that manner. Perhaps someone will indulge me

PS - I don't any weight a a single Fib by oneself, that's ridiculous, but the whole band is different, or some other price behaviour, or high volume bar. Generally something else in addition. But that is exactly why that initial trade idea was not taken by me. It was too flimsy

PPS - All ideas revolve around either AIAO od SIAO, I completely reject any AISO. AISO is the abhorrent and unacceptable to me. It is reversing RR. I don't care how many do it and how good they are with it. SISO is also same as AISO

I agree, AIAO or SIAO is the only way to go. Mathematically AIAO is superior to all. However, scaling in does have an advantage. You get to test the waters so to speak with a small position. If the market proves your right, you add on the bulk of your position in either 1/3rds or you add most of it as soon as you can have a risk free trade and then the remainder sometime after that. So it might be 1/5, 3/5 and then 1/5. At that point, if you lose on any of it, its the small bit at nearer the end. So it falls into the idea of lose small win big. You are most vunerable at the beginning so have the smallest lot on. Don't add to it if it goes against you UNLESS you plan on that and are willing to lose with a full position on. The method you showed on your chart ensures you lose with a full position on, however each add loses less, still its a full bleed if you are wrong.

Scaling in is all about incremental profit if you are right and being small if you are wrong.

Initial thoughts on this: Keep in mind I am still working on this myself. Take it with a grain of salt.


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 Deucalion 
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I agree, AIAO or SIAO is the only way to go. Mathematically AIAO is superior to all. However, scaling in does have an advantage. You get to test the waters so to speak with a small position. If the market proves your right, you add on the bulk of your position in either 1/3rds or you add most of it as soon as you can have a risk free trade and then the remainder sometime after that. So it might be 1/5, 3/5 and then 1/5. At that point, if you lose on any of it, its the small bit at nearer the end. So it falls into the idea of lose small win big. You are most vunerable at the beginning so have the smallest lot on. Don't add to it if it goes against you UNLESS you plan on that and are willing to lose with a full position on. The method you showed on your chart ensures you lose with a full position on, however each add loses less, still its a full bleed if you are wrong.

Scaling in is all about incremental profit if you are right and being small if you are wrong.

Initial thoughts on this: Keep in mind I am still working on this myself. Take it with a grain of salt.


Indeed, well put, logical. If you add this way you are increasing the RR. The one thing you have to be careful of is what happen if shit goes to hell.

Theoretically, you have 3/4 entries, what about your stops. For example - such a trade should have active trade management (something I don't, not in FX). I set it and leave it.

If not, for active entries - you cannot subject new entries to old stops, so as you add, the stops have to get tighter other wise you would subject the whole position to greater risk. Perhaps something like this -


For day trading I think this is really delicate and has great potential. As I don't particularly watch my entries and exits on this account, I simply enter AIAO, either it works or not. Sometimes the markets stops me out and gives me a new entry. AS long I maintain 2R - 3R or higher, this is generally not an issue. I can leave these positions on over days and let them work out.

 
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Indeed, well put, logical. If you add this way you are increasing the RR. The one thing you have to be careful of is what happen if shit goes to hell.

Theoretically, you have 3/4 entries, what about your stops. For example - such a trade should have active trade management (something I don't, not in FX). I set it and leave it.

If not, for active entries - you cannot subject new entries to old stops, so as you add, the stops have to get tighter other wise you would subject the whole position to greater risk. Perhaps something like this -


For day trading I think this is really delicate and has great potential. As I don't particularly watch my entries and exits on this account, I simply enter AIAO, either it works or not. Sometimes the markets stops me out and gives me a new entry. AS long I maintain 2R - 3R or higher, this is generally not an issue. I can leave these positions on over days and let them work out.

You have nailed it...the stop must tighten, otherwise your risk goes off the charts. If done correctly, everything after the second entry should be risk free. I think the way you've laid it out works perfectly.

I've found that adding on is more difficult that I would have otherwise thought in daytrading...for me I want the secondary entry to produce a risk free trade once the stop is moved up to BE or somewhere close and that can be difficult to do if its a range day....it depends on how much your expect the instrument to move and where the pull backs are.

However, on forex, it makes brilliant sense. Especially if your time frames are longer than a five minute chart....I use 4 hour charts and once it gets into a trend, there are usually 2-5 opportunities to add on safely over the course of several days or even weeks. The profit potential is huge.

Here is a recent forex trade I did. Its in micros so don't get excited. I chart on 6E so I can monitor it in Ninja and execute on the web platform of my forex broker. Its not identical but close enough for what I need. It illustrates how this might work.....I went in with 25% of what I wanted to ultimately have on, added 50% at the second opportunity and 25% at the break out pull back. I exited the whole thing about 5 bars ago. It had reached the structural target which is not on this chart. All in all, a very nice win.


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I currently dont have the chops to do this real time but here is a possibility from today....this would be tough to execute I think so its presented more as a case study than as something one could actually do. Perhaps a very skilled trader could pull this off in real time. I know I could not on an intra day time frame. Still its interesting to see whats possible.



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 Deucalion 
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You have nailed it...the stop must tighten, otherwise your risk goes off the charts. If done correctly, everything after the second entry should be risk free. I think the way you've laid it out works perfectly.

I've found that adding on is more difficult that I would have otherwise thought in daytrading...for me I want the secondary entry to produce a risk free trade once the stop is moved up to BE or somewhere close and that can be difficult to do if its a range day....it depends on how much your expect the instrument to move and where the pull backs are.

However, on forex, it makes brilliant sense. Especially if your time frames are longer than a five minute chart....I use 4 hour charts and once it gets into a trend, there are usually 2-5 opportunities to add on safely over the course of several days or even weeks. The profit potential is huge.

Here is a recent forex trade I did. Its in micros so don't get excited. I chart on 6E so I can monitor it in Ninja and execute on the web platform of my forex broker. Its not identical but close enough for what I need. It illustrates how this might work.....I went in with 25% of what I wanted to ultimately have on, added 50% at the second opportunity and 25% at the break out pull back. I exited the whole thing about 5 bars ago. It had reached the structural target which is not on this chart. All in all, a very nice win.

Beautiful understanding of PA. Interesting, I had a recent EU long a while ago as well, I wasn't sure what the correct impulse was, but watch the symmetry either way, it turned out beautiful. Unfortunately it was done with a smaller position size, the problem is not just mashing risk but not allowing FX trends to run. That is a crime is FX. I am convinced that position sizing is what allows me to use simple AIAO entries and play simple impulse-corrective expansion moves to max effect.



Al-right, enough for now.

 
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I have two finals today so out of here as fast as possible.

A slow day again. I had a short bias coming into the day. But got back to BE +5 on the long side but honestly, I was really nervous on the long. I trailed out real fast as it started to stall. Good move as the short side was where it was today for me.

Waited for opening range to fail to the upside by one tick and then right out the downside followed by some stalling and then a break short.

I've tightened up my targets to 30 ticks for the time being. It seems like thats the number now with the narrower ranges we are experiencing. Especially since I am only trading about 2 hours or so, this seems relatively safe for now.

I've been thinking about the holidays and my trading schedule. I've decided I will stop trading real money on the 20th. Maybe not even sim until after the first of the year....not sure yet. Regardless, the 20th is my last "work" day of the year. Kinda looking forward to it.

My NQ sim trade went almost to target today and reversed hard. Stopped me out at BE but I was to busy to manage it today




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I missed the easy trade pre market. Waited and waited....it was slow...pre-holiday blues maybe????Who knows. I am trading Monday, if the action is the same as today, I might be done early for the year.

I did one trade outside my plan....action was slow, OR was FINALLY being "broken" only it wasn't....I forced and paid for it with 10 ticks.

Next I got a break above the previous swing high with a close, so I took it. The up bars went fast, as soon as I entered, it went back into slow dead crawl downward. ARG.....This is NOT the CL I signed up to trade. Daily ranges of 120 ticks does not make the trading easy....you have to be almost perfect to get any real ticks at all.

One reason I like CL has been its forgiving nature, you could be wrong about the overall direction and still make money. Not lately. You need to be right about direction, entry locations as well as exit locations. All must be executed with near perfection. Even though I've made money this week, its been tough.....I remember 2 Decembers ago, price was stuck in an ADR of about 75 ticks for several weeks. It didn't break out until around January 10th or so. If I remember right, it had something to do with the Arab spring.

Anyway, glad the week is over. With finals, shopping, trading and taking care of the family, I'm pretty tired.

Rest day I think....nothing really pressing to do today...yeah me!!!!!!!

I left money on the table today in NQ....mistake, keep the targets intact. Its almost always the best policy. I even missed the best trade of the day...short after the open but so what, after all, you only need one good trade per day.




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 Rad4633 
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@PandaWarrior @Deucalion

I too have been playing around with scaling recently I ve been watching your posts, I dont think it will be more profitable over AIAO but who knows, wish there was a guide line book

edit: I just saw where you guys move stop up on each LH which i agree, my first entry if pa goes against me I ride to next level up or down this is where I added then let stop ride up with LH....guess were all on the same page....Now one of you tell me if this is more profitable than AIAO on 80% of range days, I know other trend days this method would kill it.. So whatcha think lol

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 Deucalion 
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@PandaWarrior @Deucalion

I too have been playing around with scaling recently I ve been watching your posts, I dont think it will be more profitable over AIAO but who knows, wish there was a guide line book

edit: I just saw where you guys move stop up on each LH which i agree, my first entry if pa goes against me I ride to next level up or down this is where I added then let stop ride up with LH....guess were all on the same page....Now one of you tell me if this is more profitable than AIAO on 80% of range days, I know other trend days this method would kill it.. So whatcha think lol

Brian already mentioned (and so did I) that mathematically AIAO is the purest and most profitable of them all as long as you have positive expectancy. SIAO adds profit, if you are able to add for incremental profit while moving your collective stop tighter (I use ATR stops for this), theoretically - the idea is, let the ATR stop move up or down and then add positions on pull-backs to some median price (middle of Bollinger, on touch of 10EMA, something like that). Or retest of broke S/R

Secondly, the example you mention the context is off in my opinion.....on your image, why is this a long? If the idea is to add on weakness in a strong market or on strength in a weak market then look at your picture again. Where is the dominant current force. What is the difference between the two patterns below, what is the higher probability direction?

If you are long here, you are currently against the current trend, there is little justification in my book to add to what looks like a CT Trade.


If you did want to add on your CT Trade, this maybe one way =


But this is too dangerous IMO, I would not do this. I would stick with AIAO if I was long today

 
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 Deucalion 
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Here is an actual trade I took today on NQ, it wasn't a long. I had an idea, I had a GO-NOGO level and I built a position around it until the dominant force revealed itself.


PS - this was my one and only winning trade, I had 3 - 2 were wrong, the third had more than enough expectancy in it.

 
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@Deucalion Thx for the reply...yes I know AIAO is better from my testing but when ur right ur right add CT or trend if u know correct target and levels.. I took the trade off RGD divergence and others once confirmed I added till target was met. I agree with you on trend is your friend

Boy I need to read more before I post, but sometimes I just throw it out there for response....and then leave it up to you to have a stern reply back,lol you wrote "dang that trend was down man r u stupid" sorry for me not seeing that.... Lmao but I gotcha....

ttys Have a Great weekend all

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 Silvester17 
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I'm not a scale in or scale out person. but if I absolutely had to build a position, it would definitely be a long position in my books.

pretty significant support, almost textbook


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I'm not a scale in or scale out person. but if I absolutely had to build a position, it would definitely be a long position in my books.

pretty significant support, almost textbook


Yes, I concur, but is that expected on an intra-day time frame? Also, first touch is already done, and far more importantly, where is the stop on that big chart. You could easily go 5/6points further down without violating the support idea. If that is the stop, then the target must be 12-15points. Does one reasonably expect that range intra-day given the current ADR on ES. Now if you said, swing trade, then yes.


 
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 Silvester17 
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Yes, I concur, but is that expected on an intra-day time frame? Also, first touch is already done, and far more importantly, where is the stop on that big chart. You could easily go 5/6points further down without violating the support idea. If that is the stop, then the target must be 12-15points. Does one reasonably expect that range intra-day given the current ADR on ES. Now if you said, swing trade, then yes.


lets put it this way. even day trading with smaller stops and targets, I would have a hard time to go short at these levels.

and if you want to play bigger moves, then probably a swing trade is needed. but that's not what I do with futures.

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And I like that the trades take so long to develop and to play out. Its much less stressful than day trading.

I wish I had done this from the beginning. I'd still day trade because I like it but the forex swing trading has tons of potential but more important, it requires patience and discipline to wait for the set ups....much more than day trading. The difference I am trading 4 hour charts instead of 5 minute charts or even tick charts. Its like comparing apples and oranges. Its just much easier.


With Low Volatality in CL and other instruments, I turned into Swing Trader( 1 or 2 trades max. per day), next step is changing into Position Trader holding multiple days. It is helping me much better than Day trading.

Here is an interesting article on Day Trading .
11 Or 12 Things I Learned About Life From Day Trading Millions Of Dollars | TechCrunch

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EdgeExecution View Post
With Low Volatality in CL and other instruments, I turned into Swing Trader( 1 or 2 trades max. per day), next step is changing into Position Trader holding multiple days. It is helping me much better than Day trading.

Here is an interesting article on Day Trading .
11 Or 12 Things I Learned About Life From Day Trading Millions Of Dollars | TechCrunch


Thank you for the post, I added the link to my Quick Summary page at the beginning of the thread....That is an important article....

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 learning0101 
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I've added 4 more pairs to my forex trading. The forex trading is going pretty well, enough so that I think I may begin to feed some money into it slowly and perhaps begin to trade all five pairs. The trades are lasting anywhere from 3 days to a month with losers in the 30-70 pip range and winners in the 150-300 pip range with scale in ability so the winner is MUCH larger than the loser.

I LOVE the ability to size properly. It allows me to take trades and place stops that I would have never been able to take otherwise....and then scale in as it progresses. And I like that the trades take so long to develop and to play out. Its much less stressful than day trading.

I wish I had done this from the beginning. I'd still day trade because I like it but the forex swing trading has tons of potential but more important, it requires patience and discipline to wait for the set ups....much more than day trading. The difference I am trading 4 hour charts instead of 5 minute charts or even tick charts. Its like comparing apples and oranges. Its just much easier.


Hi @PandaWarrior, hope all is great with you.
I guessing there might be numerous, but if you were inclined to only recommend a book for a beginner interested in swing trading forex. What would it be?
Thanks in advance and Happy Holidays

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Hi @PandaWarrior, hope all is great with you.
I guessing there might be numerous, but if you were inclined to only recommend a book for a beginner interested in swing trading forex. What would it be?
Thanks in advance and Happy Holidays

I have no idea about forex books, but if you want a basic education about forex specifically and trading in general, you can check out these two sites....the first one is pretty comprehensive and the second is a series of videos about a specific trading system taught by a vendor. I use it more or less as presented to trade forex. I like it because its visual and doesn't require lots of thought. I've adapted it to fit my style and beliefs about the market but you get the idea.

All that being said, there is no substitute for just watching charts and learning about price and how it moves.

School of Pipsology | Learn Forex Trading

and

Learn Forex Live Members Area - 3SMA system

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Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #1953 (permalink)
bwasi
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EdgeExecution View Post

This is called "Pendulum Swing Effect"...
that's why when we are happy, make sure not to be too happy. And vice versa.
Detach yourseld emotionally from trading is a good tech. encouraged by Tom Basso (one of Market wizard)

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  #1954 (permalink)
 PandaWarrior 
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Still on sim....testing ideas, execution in real time. Practice sessions are great and I do them, but theres nothing like real time testing to validate ideas.

My system was on lockdown mode this morning so missed every early morning set up...still, my trade logic played out on NQ which is what I've been watching.....CL also more or less played out according to plan today but did not really pay that much attention as I was on a phone call today as well as trying to get Ninja working again...

Anyway, here is a screen shot of how one might use the ADR to set targets....Doing this, one might find themselves taking one or two trades per day instead of 5-10 trades trying to capture all the swings and miss the pull backs.


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  #1955 (permalink)
 trs3042 
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@PandaWarrior

Just wanted to say.....................MERRY CHRISTMAS and HAPPY NEW YEARS to you and yours Brian!!! Wishing you all the best in 2014!!!

Rick

"If you're going to panic during a trade............. panic early."
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  #1956 (permalink)
 PandaWarrior 
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@PandaWarrior

Just wanted to say.....................MERRY CHRISTMAS and HAPPY NEW YEARS to you and yours Brian!!! Wishing you all the best in 2014!!!

Rick

Thank you and to you as well....have a great holiday!. This is probably my last post of the year....getting ready for full on Christmas mode beginning tomorrow!!!!

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  #1957 (permalink)
 PandaWarrior 
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Sim trades...testing some stuff...

100 ticks on CL and 40 on NQ

















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  #1958 (permalink)
 pbts 
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Would you mind sharing why you took that NQ setup, or rather what your setup was?

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  #1959 (permalink)
 PandaWarrior 
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Would you mind sharing why you took that NQ setup, or rather what your setup was?

It was the breakdown of the pre market support level followed by the opening range confirmation breakdown.

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  #1960 (permalink)
 PandaWarrior 
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More sim:

Cl trade is counter trend but at support on the daily and the 240M as well as on the 800T....50 ticks was around the 50% pull back area....so ok to try for that. Missed being stopped at BE by a couple of ticks....I moved stop to +42 once price was within 2 ticks of the target, of course I was stopped out only for price to make it all the way to my target and now its reversing off the trend line.

NQ, I took the break out from the globex HOD, moved to BE at +20 and was shaken out there before price resumed its upward move. I stayed away from that one as I have no experience with NQ being stopped at BE, this is the first time its happened in 2 months....go figure. Looks like I will add this symbol to my trading in late January. I'll have three months of trading it sim and so far I really like it.










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  #1961 (permalink)
 PandaWarrior 
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  #1962 (permalink)
 Big Mike 
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  #1963 (permalink)
 PandaWarrior 
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Virtual Sim today....didn't even click the button to buy or sell....just watching and getting ready for next week.

I played around with colors on my NQ chart....trying to make things even simpler and just focus on the important details...like levels. Not sure if I'll keep it that way but I kinda like it so far.

CL has range expansion today which is nice to see. Triple the ADR from the previous 10-15 days or so. Hopefully that will continue into the coming days and weeks.

The trades today were pretty much perfect with great follow through. Regardless, its rinse and repeat.




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  #1964 (permalink)
 PandaWarrior 
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Weakness exposed:

1. I still have an issue with closing trades to soon....especially as it gets closer to my intended target. I trail my stop much closer only to have it take me out then reverse to my target. This seems to happen over and over....one of those things I know NOT to do but do it anyway....I am afraid to give any back....I do it on both sim and live....so its not a live money thing.....I have an appointment on Monday with a shrink to talk about it...we will see.



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  #1965 (permalink)
 PandaWarrior 
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Arggg...just when I thought things were getting better healthwise, I came down with a severe case of tendonitis in my wrist and shoulder just a few days before Christmas. I spent most of the holiday's away from the computer and my wrist and shoulder got "better". Yesterday and today I have spent a bit more time at the screen...and my wrist is killing me...I can barely type....so gonna have to limit my posting to the bare minimum until I can type without pain....could be weeks according to the doc......and yes I've tried Dragon Naturally Speaking and I hate it.....I wish it worked better for me, I love the idea....I've moved my casual internet browsing and email primarily to the iPad and that seems to really help....but trading and posting are still at the keyboard...and that is painful.

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  #1966 (permalink)
 mykee 
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Take it easy PW. Health is the most important thing in our life. Without it, nothing matters. Take care.

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  #1967 (permalink)
 tderrick 
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Heal up, you Ninja Panda critter, you


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  #1968 (permalink)
 trs3042 
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Hope you feel better soon Brian. I know what your going through as I have experienced the same in the past. For me only time and limited use of the mouse hand is how it healed.

Take all the time you need. We're not going anywhere so we'll patiently wait for your insightful posts.

"If you're going to panic during a trade............. panic early."
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  #1969 (permalink)
 tigertrader 
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Weakness exposed:

1. I still have an issue with closing trades to soon....especially as it gets closer to my intended target. I trail my stop much closer only to have it take me out then reverse to my target. This seems to happen over and over....one of those things I know NOT to do but do it anyway....I am afraid to give any back....I do it on both sim and live....so its not a live money thing.....I have an appointment on Monday with a shrink to talk about it...we will see.



@PandaWarrior -Brian, this is a classic example of "prospect theory", which states that people are willing to settle for a reasonable level of gains (even if they have a reasonable chance of earning more), and are willing to engage in risk-seeking behaviors where they can limit their losses. In other words, losses are weighted more heavily than an equivalent amount of gains. My wife thinks this way every time she looks at her paycheck and sees how much money has been deducted for taxes. She doesn't want to work anymore, and earn more money, because she does not want to pay more taxes. Although she would benefit financially from the additional after-tax income, prospect theory suggests that the benefit (or utility gained) from the extra money is not enough to overcome the feelings of loss incurred by paying taxes. It is also one of the reasons why last year's bull market in equities, was missed by most. I find that many people who missed the stock rally (and I wish I had been more aggressive) rationalized the opportunity cost and inherent risk of "chasing" the market by thinking that the people who participated were "wrong". The rally had been "engineered" by the Fed. The long term fundamentals didn't support the expectations. It's going to end badly. The Nikkei didn't go anywhere for X years so the S&P will do the same. Blah blah blah - and a ton of money was subsequently, left-on-the-table.

Hedonic framing is suggested as a way of overcoming this bias in decision making. I've attached a pdf. on the subject for you to read. Try these methods of framing your thoughts and see if they make you more positive and help change your mental approach.


Also, purchase and read the following. I don't agree with everything that is posited in the book, but it does offer many insights into decision making and helps you understand why you make the decisions that you make.

Thinking, Fast and Slow: Daniel Kahneman: 9780374533557: Amazon.com: Books




The PandaWarrior Chronicles-frankparker5ce_ch08.pdf

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  #1970 (permalink)
 tigertrader 
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@PandaWarrior: Once again, this is one of the main problems that inhibits consistent profitability in trading. Learning what to do, and actually doing what you learned under pressure are two different things. And once again, it goes back to one's desire to maximize the chance of gain, not to maximize the gain itself. Getting out of winning trades prematurely, is an obvious manifestation of this phenomena. All it serves to do however, is make one feel better AT THAT MOMENT IN TIME. In reality, it is to the severe detriment of long-term performance. One has to realize that trading is a big-picture endeavor, and what feels good in the short term, is most likely counter-productive in the long term. Quite simply, leaving a large amount of money on the table, or worse yet; missing a major winning trade, is just as bad , if not worse, than a losing trade. The market however, lulls you into complacency, and even reenforces this natural behavior, because it spends more time in ranges than in trends, where small profits quickly vanish. You then learn to instinctively cover trades before they return to your entry point, or turn into losers.

What makes matters worse, is that that your exits command top priority in the trade decision hierarchy, followed by trade size, and entry point. Liquidations are far more important than initiations, and harder to get right. When you enter a trade it is the most hopeful point in the trade cycle, but come exit time, stress, cognitive load, emotions and bias, have reared their ugly heads, just in time to distort your expected value of the trade. Having a predetermined target and sticking to it is not the answer, in my opinion. In most cases, people are going to get out early anyway, and it is tantamount to trying to predict the market. It is more important to concentrate on projecting losses, risk management, and finding signals that produce trades that are well defined, have a proven edge, and are reproducible, rather than trying to out-guess the market.

This means that path dependency is what matters and awareness of it's variability, duration, and signal are critical components to optimizing any trade, not some arbitrary line or inferred sufficient profit. If price action or your expectation dictates the market should continue in your favor, why get out ? And, why use a target, that you're not going to allow yourself to hit as your exit point? Exit the trade when price action/signal tells you the trade is not good anymore.

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  #1971 (permalink)
 PandaWarrior 
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@PandaWarrior: Once again, this is one of the main problems that inhibits consistent profitability in trading. Learning what to do, and actually doing what you learned under pressure are two different things. And once again, it goes back to one's desire to maximize the chance of gain, not to maximize the gain itself. Getting out of winning trades prematurely, is an obvious manifestation of this phenomena. All it serves to do however, is make one feel better AT THAT MOMENT IN TIME. In reality, it is to the severe detriment of long-term performance. One has to realize that trading is a big-picture endeavor, and what feels good in the short term, is most likely counter-productive in the long term. Quite simply, leaving a large amount of money on the table, or worse yet; missing a major winning trade, is just as bad , if not worse, than a losing trade. The market however, lulls you into complacency, and even reenforces this natural behavior, because it spends more time in ranges than in trends, where small profits quickly vanish. You then learn to instinctively cover trades before they return to your entry point, or turn into losers.

What makes matters worse, is that that your exits command top priority in the trade decision hierarchy, followed by trade size, and entry point. Liquidations are far more important than initiations, and harder to get right. When you enter a trade it is the most hopeful point in the trade cycle, but come exit time, stress, cognitive load, emotions and bias, have reared their ugly heads, just in time to distort your expected value of the trade.

Having a predetermined target and sticking to it is not the answer, in my opinion. In most cases, people are going to get out early anyway, and it is tantamount to trying to predict the market. It is more important to concentrate on projecting losses, risk management, and finding signals that produce trades that are well defined, have a proven edge, and are reproducible, rather than trying to predict the market.

This means that path dependency is what matters and awareness of it's variability, duration, and signal are critical components to optimizing any trade, not some arbitrary line or inferred sufficient profit. If price action or your expectation dictates the market should continue in your favor, why get out ? And, why use a target, that you're not going to allow yourself to hit as your exit point? Exit the trade when price action/signal tells you the trade is not good anymore.


I embrace this thought process.....up to the point where I try to embrace the prospect of the uncertainty of where I might eventually exit the trade, either for profit or loss. My brain runs over the countless days where I've seen CL reverse a 200 tick short move and end the day positive.....or where its ranged in between two levels all day...and letting a trade simply go all day ends with a small net loss or a small net gain or flat, when you may have been up 30-60 ticks at any one point.....

I functionally understand letting it run on the 200-400 tick days and adding size as it goes makes up for the flat or small gain/small loss days.....but emotionally it still doesn't feel right. Something tells me I need to make money every day or at least give it my best shot......

What does FEEL good is capturing some pre-planned portion of the day's move regardless of what that amount is...as long as its more than I normally risk....and even if I've left a reasonably large portion of the day on the table.

It seems to me there needs to be or should be a happy medium somewhere in here??????????????

EDIT:

This being said, I fully recognize the secret to winning long term is letting the winners run....the question has always been, how far???????

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1972 (permalink)
 PandaWarrior 
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A classic case:



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  #1973 (permalink)
 pbts 
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I embrace this thought process.....up to the point where I try to embrace the prospect of the uncertainty of where I might eventually exit the trade, either for profit or loss. My brain runs over the countless days where I've seen CL reverse a 200 tick short move and end the day positive.....or where its ranged in between two levels all day...and letting a trade simply go all day ends with a small net loss or a small net gain or flat, when you may have been up 30-60 ticks at any one point.....

I functionally understand letting it run on the 200-400 tick days and adding size as it goes makes up for the flat or small gain/small loss days.....but emotionally it still doesn't feel right. Something tells me I need to make money every day or at least give it my best shot......

What does FEEL good is capturing some pre-planned portion of the day's move regardless of what that amount is...as long as its more than I normally risk....and even if I've left a reasonably large portion of the day on the table.

It seems to me there needs to be or should be a happy medium somewhere in here??????????????

EDIT:

This being said, I fully recognize the secret to winning long term is letting the winners run....the question has always been, how far???????

I think what @tigertrader is talking about is how to take trading to the next level. Once you're consistently profitable, how can you extract the most out of the volatility provided each day. That said I'm definitely not at that stage yet, I missed the early downtrend action today on the NQ.

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  #1974 (permalink)
 Deucalion 
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.... Once again, this is one of the main problems that inhibits consistent profitability in trading. Learning what to do, and actually doing what you learned under pressure are two different things.

And once again, it goes back to one's desire to maximize the chance of gain, not to maximize the gain itself. Getting out of winning trades prematurely, is an obvious manifestation of this phenomena. All it serves to do however, is make one feel better AT THAT MOMENT IN TIME.

In reality, it is to the severe detriment of long-term performance. One has to realize that trading is a big-picture endeavor, and what feels good in the short term, is most likely counter-productive in the long term. Quite simply, leaving a large amount of money on the table, or worse yet; missing a major winning trade, is just as bad , if not worse, than a losing trade.

The market however, lulls you into complacency, and even reinforces this natural behavior, because it spends more time in ranges than in trends, where small profits quickly vanish. You then learn to instinctively cover trades before they return to your entry point, or turn into losers.

What makes matters worse, is that that your exits command top priority in the trade decision hierarchy, followed by trade size, and entry point. Liquidations are far more important than initiations, and harder to get right. When you enter a trade it is the most hopeful point in the trade cycle, but come exit time, stress, cognitive load, emotions and bias, have reared their ugly heads, just in time to distort your expected value of the trade. Having a predetermined target and sticking to it is not the answer, in my opinion. In most cases, people are going to get out early anyway, and it is tantamount to trying to predict the market. It is more important to concentrate on projecting losses, risk management, and finding signals that produce trades that are well defined, have a proven edge, and are reproducible, rather than trying to out-guess the market.

This means that path dependency is what matters and awareness of it's variability, duration, and signal are critical components to optimizing any trade, not some arbitrary line or inferred sufficient profit. If price action or your expectation dictates the market should continue in your favor, why get out ? And, why use a target, that you're not going to allow yourself to hit as your exit point? Exit the trade when price action/signal tells you the trade is not good anymore.



tigertrader View Post
.....My only edge is I'm smart enough to know, that Iím dumb enough to know, that I donít know the answers. Instead, I observe, and try to uncover what game is working and play that game. I don't cling to labels - breakout trader, trend trader, mean reversion trader.


So much gold in this that its difficult to fully appreciate. 2013 will go down as an year in my quest for what TT postulates. And I have failed in that endeavor. It is very difficult to do this. And as TT says, that is where the pot of gold is. The last step of the 38 steps.

And man, is it elusive. Not only that, it is also ephemeral. You think you have it, but a string of losses can insidiously completely change your mindset. I don't know how to change to get into the truly free mindset that TT talks about in the 2nd quote, bu that is convergent completely with the first quote.

For 2014, in order to protect my capital from myself, i have decided to split my capital into two strategies. One, that provides my daily nut (a risk averse approach) and the other that attempts to maximize the chance of gain, exactly as TT projects. The latter is the builder of wealth and the former to provide an income. The profoundness of what his statements are unquestionable and most of us will likely talk a long to appreciate the power of this. Fewer still will attempt it, and most that attempt will fail. However, that is why I must try.

At the same time, the fearful (prudent!) in me says, I must split capital strategically enough to make sure that I don't go down in flames while attempting to do so. Ironically this brouhaha about CME fee hikes and my general move into FX has made this transition (realization) easier. I hope to report my trials and failures (of which, no doubt, there will be many) in the future.

 
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  #1975 (permalink)
 Deucalion 
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A classic case:



There are at least a couple of scenarios that I think, are worth looking at, on these shakeouts. One is to identify a re-entry trigger bar, this involves a re-application of risk-reward sizing, such as this.



The other one, is to watch correlated markets (ES / NQ / TF / YM) for a retrace or a better looking swing (one where the impulse/ correctives are more easily identifiable). AS such - neither ES nor TF were clean, but the YM was. This is different approach to yours, but a robust one. Relying on the correlated nature of the index markets to produce at least one good signal for a measured expansion.


Your approach is based on ADR expansion, probably more suited to approach #1 (identifying a re-entry bar). While I would use an unrelated methodology to identify this bar (MTP), but one could also ID this using a volume VSA spike bar or some thing else and target the expansion that was expected on the first failed trigger.

Which one is more robust, more easily reproducible? I prefer the 2nd approach. But, the first one is very much valid if one can clearly quantify the re-entry and target and assess the position sized risk simply

 
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  #1976 (permalink)
 tderrick 
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Excellent discussion on the problems / emotions we all face. Thanks, guys.


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  #1977 (permalink)
 Sazon 
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Deucalion View Post

For 2014, in order to protect my capital from myself, i have decided to split my capital into two strategies. One, that provides my daily nut (a risk averse approach) and the other that attempts to maximize the chance of gain, exactly as TT projects. The latter is the builder of wealth and the former to provide an income. The profoundness of what his statements are unquestionable and most of us will likely talk a long to appreciate the power of this. Fewer still will attempt it, and most that attempt will fail. However, that is why I must try.

At the same time, the fearful (prudent!) in me says, I must split capital strategically enough to make sure that I don't go down in flames while attempting to do so. Ironically this brouhaha about CME fee hikes and my general move into FX has made this transition (realization) easier. I hope to report my trials and failures (of which, no doubt, there will be many) in the future.

I was going to say something similar to this but deucalion beat me to it

anyways, for the first half of the day/week/month/quarter you should consider taking quick profits on some or all of your position to build up a profit cushion. Then, leverage that profit cushion for the last half of the day/week/month/quarter to let trades run further or going all-in-all-out on every trade.

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  #1978 (permalink)
 tigertrader 
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Sazon View Post
I was going to say something similar to this but deucalion beat me to it

anyways, for the first half of the day/week/month/quarter you should consider taking quick profits on some or all of your position to build up a profit cushion. Then, leverage that profit cushion for the last half of the day/week/month/quarter to let trades run further or going all-in-all-out on every trade.


No, you don't trade your p&l - you trade the market. You make trade decisions based on the kind of market you are trading, i.e., range vs. trend, volatility etc. - not your p&l.

Imagine that trade management is like grilling a steak. If you like your steak well-done, you're not going to take it off the grill after 3 minutes, because you're hungry and can't wait for it to fully cook. And you're not going to take it off the grill at some arbitrary time, because some cookbook said a well-done 2-inch steak should be cooked for 8 minutes. Instead, you are going to observe the steak, maybe poke it with your finger, or cut it open a little to see if its done. And only when it is cooked to perfection, do you take it off the grill. This applies to EVERY steak you cook.

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  #1979 (permalink)
 Sazon 
Roswell, GA
 
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tigertrader View Post
No, you don't trade your p&l - you trade the market. You make trade decisions based on the kind of market you are trading, i.e., range vs. trend, volatility etc. - not your p&l.

Imagine that trade management is like grilling a steak. If you like your steak well-done, you're not going to take it off the grill after 3 minutes, because you're hungry and can't wait for it to fully cook. And you're not going to take it off the grill at some arbitrary time, because some cookbook said a well-done 2-inch steak should be cooked for 8 minutes. Instead, you are going to observe the steak, maybe poke it with your finger, or cut it open a little to see if its done. And only when it is cooked to perfection, do you take it off the grill. This applies to EVERY steak you cook.

Of course, that all depends on how YOU trade. Heck, in some cases, I might take a trade off because I didn't like the way the wind blew across my a$&, and in other cases I'm more comfortable to let my entire position or a portion of my position run and run and run because I've already built up substantial profits from a previous trade. I hear what you're saying but successful trading in general is not like cooking. It's not a black or white thing. Often you will need to adjust your size if you see something that you don't like or your money management strategy if it's not working for you. That's how I trade anyways and it works masterfully.

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  #1980 (permalink)
 tigertrader 
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Sazon View Post
Of course, that all depends on how YOU trade. Heck, in some cases, I might take a trade off because I didn't like the way the wind blew across my a$&, and in other cases I'm more comfortable to let my entire position or a portion of my position run and run and run because I've already built up substantial profits from a previous trade. I hear what you're saying but successful trading in general is not like cooking. It's not a black or white thing. Often you will need to adjust your size if you see something that you don't like or your money management strategy if it's not working for you. That's how I trade anyways and it works masterfully.

@Sazon: I'm sure you're the second coming of Ray Dalio, or Jeremy Grantham, but I really don't think you hear what I'm saying, or you wouldn't be spewing out such nonsense. If a trade is good enough to make its good enough to make at full size, if a trade is not good enough to make at full size, then don't make it at all. If a trade is no longer good, get out. If a trade is still good, don't get out. The decision to initiate a trade , and the determination of whether to stay in or get out of a trade should not have anything to do with your P&L - there is no grey area here. The kind of fine tuning you describe may give you the feeling of being very accurate, but in fact, appears to be as arbitrary as the wind blowing across your ass.

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  #1981 (permalink)
 Sazon 
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tigertrader View Post
@Sazon: I'm sure you're the second coming of Ray Dalio, or Jeremy Grantham, but I really don't think you hear what I'm saying, or you wouldn't be spewing out such nonsense. If a trade is good enough to make its good enough to make at full size, if a trade is not good enough to make at full size, then don't make it at all. If a trade is no longer good, get out. If a trade is still good, don't get out. The decision to initiate a trade , and the determination of whether to stay in or get out of a trade should not have anything to do with your P&L - there is no grey area here. The kind of fine tuning you describe may give you the feeling of being very accurate, but in fact, appears to be as arbitrary as the wind blowing across your ass.

Have you ever traded with real money on the line or, as I suspect, you're most likely sitting in public housing and cashing your welfare checks. But you're one helluva writer. In fact, some of your posts are spot on or shall I say,...too perfect. Almost, like you've never traded a day in your life with real emotions. 95% of traders are loser wannabes. Now I know you're in the 95% piker crowd but if I ever need someone to pretend to be guru, my way or the highway, I have all the answers and mine are better than yours, then I know who to go to.

Edit: don't even bother responding. I don't compete with gurus for attention. That's a game I'm sure to lose. I'm done here.

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  #1982 (permalink)
 tigertrader 
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Sazon View Post
Have you ever traded with real money on the line or, as I suspect, you're most likely sitting in public housing and cashing your welfare checks. But you're one helluva writer. In fact, some of your posts are spot on or shall I say,...too perfect. Almost, like you've never traded a day in your life with real emotions. 95% of traders are loser wannabes. Now I know you're in the 5% piker crowd but if I ever need someone to pretend to be guru, my way or the highway, I have all the answers and mine are better than yours, then I know who to go to.

Edit: don't even bother responding. I don't compete with gurus for attention. That's a game I'm sure to lose. I'm done here.

if it is that easy to push your buttons and upset you emotionally, then i believe this thread, isn't the only place you're done

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  #1983 (permalink)
 afranco562 
Los Angeles
 
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Sazon View Post
Have you ever traded with real money on the line or, as I suspect, you're most likely sitting in public housing and cashing your welfare checks. But you're one helluva writer. In fact, some of your posts are spot on or shall I say,...too perfect. Almost, like you've never traded a day in your life with real emotions. 95% of traders are loser wannabes. Now I know you're in the 95% piker crowd but if I ever need someone to pretend to be guru, my way or the highway, I have all the answers and mine are better than yours, then I know who to go to.

Edit: don't even bother responding. I don't compete with gurus for attention. That's a game I'm sure to lose. I'm done here.


I guess we all now know what time of the month your period is on.

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  #1984 (permalink)
 Big Mike 
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  #1985 (permalink)
 tderrick 
Nashville, Tennessee
 
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Wow ... can't wait to see what happened to Brian's thread ... yikes


AJ
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  #1986 (permalink)
 tderrick 
Nashville, Tennessee
 
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Sazon View Post
Have you ever traded with real money on the line or, as I suspect, you're most likely sitting in public housing and cashing your welfare checks. But you're one helluva writer. In fact, some of your posts are spot on or shall I say,...too perfect. Almost, like you've never traded a day in your life with real emotions. 95% of traders are loser wannabes. Now I know you're in the 95% piker crowd but if I ever need someone to pretend to be guru, my way or the highway, I have all the answers and mine are better than yours, then I know who to go to.

Edit: don't even bother responding. I don't compete with gurus for attention. That's a game I'm sure to lose. I'm done here.

Wow ... I have to jump in here. We frown upon this type of nonsense around here. There is no reason
for me to think that TigerTrader is anything but a fully funded successful trader. His grasp of the markets
is stellar .

I think the same thing about you. What would make me think you weren't a successful trader.
Nobody really knows what anybody is worth in cyber world , so why not just try to learn from everybody if what
they say is logical and makes sense to your trading style.


AJ
Nashville, Tennessee


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  #1987 (permalink)
 pbts 
Bay Area
 
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Sazon View Post
Have you ever traded with real money on the line or, as I suspect, you're most likely sitting in public housing and cashing your welfare checks. But you're one helluva writer. In fact, some of your posts are spot on or shall I say,...too perfect. Almost, like you've never traded a day in your life with real emotions. 95% of traders are loser wannabes. Now I know you're in the 95% piker crowd but if I ever need someone to pretend to be guru, my way or the highway, I have all the answers and mine are better than yours, then I know who to go to.

Edit: don't even bother responding. I don't compete with gurus for attention. That's a game I'm sure to lose. I'm done here.

@tigertrader is on the other end of the spectrum. A good skill to have is to know who knows what he is talking about and who doesn't. There isn't any point in insulting others as there is no benefit for you and just reflects poorly on you.

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  #1988 (permalink)
 Chuck T 
Hannibal, Mo, USA
 
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This post isn't really aimed at anyone in particular. I am home today because of snow & wind and couldn't go to our church meeting. So I have some time this afternoon that I don't usually have.

I have really enjoyed reading Panda Warrior's thread over the last months. I admire anyone with the perseverance and tenacity to do what Panda has done and is doing.

I tried to create my own method by mix and match over the years but I am not smart enough even if I had the time to do it myself. So for the last couple years I have been putting in my time learning a real method that is taught over and over by the guys at Max Trading System. This chart is not a live trade. It is simply a marked up chart from Jan 3, 2014 CL 02-14 futures contract using the entry and exits I have learned and continue to practice with in NT7 replay, sim 101 and to a much lesser degree in my live account. It includes things taught in several levels of the MAX.

I can't elaborate on what the indis are or what the settings are for them. That is taught in the MAX courses and I signed a non-disclosure agreeing not to give away their proprietary info. Their focus is price action using indicators to help discern better where price may stall, turn or continue to run.

My purpose in posting is to just show that there is a methodical way to maximize profits while containing risk and emotions. The chart speaks for itself. I don't have to pay attention to which way the wind blows across my ... well, whatever As a bi-vocational pastor & HVAC technician I don't have time to invent something. I just want to learn something real that works. I don't mind paying for something legitimate. So I have been slowly learning and applying what I have learned from some guys that know how to teach and help you learn if you are willing to exercise patience and discipline. I am on the verge of having enough knowledge and screen time to start trading for real soon, Lord willing.

Thanks to all for your continued participation in lots of profitable discussions. I have learned a lot of good things here on futures.io (formerly BMT). Everyone has a different turn to their personality and different trading styles suit different traders. We learn from all things that will help us down the road.

After all, life is short. I hope to learn how to hold on loosely to the things God blesses me with in this world so I can in turn be a blessing to others as I honor the LORD. As the Apostle Paul wrote: "let him who stole steal no longer, but rather let him labor with his hands that he might have something to give him who has need." (Ephesians 4:28).

Brian, thanks for your candid and faithful work in journaling your trading journey. I hope your ailments don't last long and that you continue to grow in your understanding of the markets and how to capture profit in your account. May you be a blessing to many others.

Blessings in Christ Jesus,

Chuck T

P.S. I have no connection to the owners of the MAX TRADING SYSTEM other than as a student continually benefiting from their teaching and updates. But after spending lots of money on junk I have finally found something real that I don't regret spending my money on to learn.

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  #1989 (permalink)
 PandaWarrior 
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I go to church, have some lunch and I miss all the fun!

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  #1990 (permalink)
 Superdoug3 
Vernon, BC, Canada
 
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PandaWarrior View Post
my wrist is killing me...I can barely type

these have helped my wrist
Prevention - https://boingboing.net/2009/03/31/carpal-tunnel-syndro.html
do these 5 exercises once an hour for a couple of days

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  #1991 (permalink)
 PandaWarrior 
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Capitulation anyone??????? anyone????

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  #1992 (permalink)
 tturner86 
Portland, Oregon
 
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Sazon View Post
Have you ever traded with real money on the line or, as I suspect, you're most likely sitting in public housing and cashing your welfare checks. But you're one helluva writer. In fact, some of your posts are spot on or shall I say,...too perfect. Almost, like you've never traded a day in your life with real emotions. 95% of traders are loser wannabes. Now I know you're in the 95% piker crowd but if I ever need someone to pretend to be guru, my way or the highway, I have all the answers and mine are better than yours, then I know who to go to.

Edit: don't even bother responding. I don't compete with gurus for attention. That's a game I'm sure to lose. I'm done here.

Live trading is nothing but grey. There is no right or wrong. Better to start small and scale into a good trade then jump full force into every signal.

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  #1993 (permalink)
 tturner86 
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tigertrader View Post
@Sazon: I'm sure you're the second coming of Ray Dalio, or Jeremy Grantham, but I really don't think you hear what I'm saying, or you wouldn't be spewing out such nonsense. If a trade is good enough to make its good enough to make at full size, if a trade is not good enough to make at full size, then don't make it at all. If a trade is no longer good, get out. If a trade is still good, don't get out. The decision to initiate a trade , and the determination of whether to stay in or get out of a trade should not have anything to do with your P&L - there is no grey area here. The kind of fine tuning you describe may give you the feeling of being very accurate, but in fact, appears to be as arbitrary as the wind blowing across your ass.

I agree. You should also have a target and loss limit set before you enter the trade. (Again those limits should be set on the market and not what you want for p&l). I like the steak metaphor.

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  #1994 (permalink)
 PandaWarrior 
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Sazon View Post
Have you ever traded with real money on the line or, as I suspect, you're most likely sitting in public housing and cashing your welfare checks. But you're one helluva writer. In fact, some of your posts are spot on or shall I say,...too perfect. Almost, like you've never traded a day in your life with real emotions. 95% of traders are loser wannabes. Now I know you're in the 95% piker crowd but if I ever need someone to pretend to be guru, my way or the highway, I have all the answers and mine are better than yours, then I know who to go to.

Edit: don't even bother responding. I don't compete with gurus for attention. That's a game I'm sure to lose. I'm done here.

Anonymity is the mother of courage.

Please do not trash talk my guests publicly. If you want to do this, please contact them directly outside this thread.

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  #1995 (permalink)
 PandaWarrior 
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Not much time nor are my wrists feeling real great....

TWIT (Thoughts while in trade)

I traded without a target today on the first trade....couldn't really handle that very well....but I did it and I will do it again tomorrow.

I then compromised by using a 100 tick target. That worked better. Closed at +51 and netted 43 after the foolishness in the compression zone.

I ran out of time to hold the final short any longer.

NQ got me for a small loss but I re-sold it and rode it for 15-16 handles....cant really remember right now and I need to leave so thats close enough for now....It went further, even to my 60M chart target but not until after a number of bars had went by....I'm ok with the trade for now, I held it almost to the 10 ADR....

Til tomorrow....



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  #1996 (permalink)
 josh 
Georgia, US
 
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PandaWarrior View Post
Capitulation anyone??????? anyone????

Maybe, but I doubt most of the buyers in the November range (and for that matter, any holding positions initiated in Q1 and Q2 of 2013) have felt pain yet. Let it get below 90, and I'll bet you see some pain.

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  #1997 (permalink)
 PandaWarrior 
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josh View Post
Maybe, but I doubt most of the buyers in the November range (and for that matter, any holding positions initiated in Q1 and Q2 of 2013) have felt pain yet. Let it get below 90, and I'll bet you see some pain.

I agree....I was just wishing for capitulation DOWN to those levels so my trade would work faster....I was getting impatient!

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  #1998 (permalink)
 PandaWarrior 
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I got my win today on the 5M chart since I didnt like the way the 800tick chart looked. I got my order in, it filled and it took off. I was using a 100 tick target and it started stalling out in the 45 tick area, I ended up trailing out at +40. It went 50 ticks and reversed. By the time it started stalling, I knew I would be looking for 50 ticks and I moved my target up to the 50 tick location. And still it refused to fill me on the first impulse move down.

I skipped the NQ trade this morning as I was mostly done already before the NQ open and I didnt really feel like working any more. However, the NQ morning break out trade worked today like its worked nearly every day the last 2.5 months. A couple more weeks and I will put live money on it. I keep waiting for it to have an open and then stall inside the range like CL does....so far I think its done it once or twice since I've been watching it....crazy.



Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #1999 (permalink)
 tturner86 
Portland, Oregon
 
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PandaWarrior View Post
Al Brooks has done the trading community a disservice by stating that 80% of breakouts fail. His definition is every bar whose high is broken is a break out and under that definition I suppose he might be right. But real breakouts have tell tale signs. A fast tape, clear consolidation areas, and occasionally a false breakout followed by the real one much like we saw on one of the NQ charts.

I do not use bracket orders. I try to figure out which way it's going and go that way with a confirmed breakout.

Yes you can use limit orders on the breakout pullback but depending in the nature of your instrument, you may not get those very often.

Typically, I am only interested in the initial breakout. Once in, I want to add to the position, not exit and re-enter on every leg. This is something I did for a long time and could never make it work. I never chase an entry, if you miss it, you miss it. And limit orders mean you will miss a fair number of good trades. So I just click In or use a stop market order.

I can't speak to VP or the other items you mentioned but I'm sure they're beneficial in timing this stuff.

Have a wonderful holiday!

Brian

I agree with you on breakouts. The way I see it is EVERY breakout fails. You have the breakout then you have some type of pullback. That pullback can happen within a 5 min candle or over the next few bars. From that pullback the market either decides to continue the breakout or reverse (reverse can be opposite direction or sideways).

Usually I wait for this pullback to determine whether to trade the breakout or look for a reversal signal.

So example: This morning's NQ breakout. Market opened up, first bar started down. This is the pullback. Bar finished doji. At this point I am looking to see if breakout will continue. Entered on second strong bar at 3540. And I was taken out at 3545 with the doji while trailing my stop.

Another example of the opposite side is yesterday: @ 10:15 we had been in a trading range for over an hour. We have a spike down through the floor. Instead of following it in I waited for the next bar. With the next bar being a doji I was looking for an entry in either direction. The following bar was a large bull closing high on it's tick, took the trade around 3512. I got out early later as I had to go and couldn't wait any longer. This setup would have yield 16 points if held all day. And quite possibly the best trade of the day.

Anyways thank you very much, I have enjoyed reading your journal over the last week or so.

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  #2000 (permalink)
 PandaWarrior 
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tturner86 View Post
I agree with you on breakouts. The way I see it is EVERY breakout fails. You have the breakout then you have some type of pullback. That pullback can happen within a 5 min candle or over the next few bars. From that pullback the market either decides to continue the breakout or reverse (reverse can be opposite direction or sideways).

Usually I wait for this pullback to determine whether to trade the breakout or look for a reversal signal.

So example: This morning's NQ breakout. Market opened up, first bar started down. This is the pullback. Bar finished doji. At this point I am looking to see if breakout will continue. Entered on second strong bar at 3540. And I was taken out at 3545 with the doji while trailing my stop.

Another example of the opposite side is yesterday: @ 10:15 we had been in a trading range for over an hour. We have a spike down through the floor. Instead of following it in I waited for the next bar. With the next bar being a doji I was looking for an entry in either direction. The following bar was a large bull closing high on it's tick, took the trade around 3512. I got out early later as I had to go and couldn't wait any longer. This setup would have yield 16 points if held all day. And quite possibly the best trade of the day.

Anyways thank you very much, I have enjoyed reading your journal over the last week or so.

Glad you are enjoying the thread...so many people visit and either don't thank or don't post...its nice when someone does...

I have tried and tried to find 3540 and 3512 on my charts....I am trading NQ which at least on my charts moves in .25 increments....3500,3500.25. 3500.50. 3500.75, 3600...etc....are you watching something different?

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futures io Trading Community Trading Journals > The PandaWarrior Chronicles


Last Updated on May 14, 2014


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