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"It Always Comes Back"


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"It Always Comes Back"

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  #11 (permalink)
Honolulu, Hawaii
 
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sorge2000 View Post
Please let me clarify my point.
It did come back. So far, it always has. But at what expense? Obviously my "stroke of genius" was based on stupidity, laziness and a total lack of a clue.

I now use stops. I must say though, despite the inevitable conclusion to the strategy, I made more money (short term) than if I had used stops (If I hadn't been margined. IF IF IF)

You commented on moving average crossovers.

If you have a strategy which utilizes them (I've used them in the past) I would be very interested in the details.

Currently I'm using a Stochastic/MACD crossover system and scalping with it. I haven't found this in indicator form for NinjaTrader yet but I created it on my thinkorswim charts.

Thank You for the reply and I'm definitely looking forward to future dialog.

I ran the Nanningbob system for about 9 months from forexfactory. It doesn't use stops and you add positions for a semi-martingale. I was up 16% for 6 months, then I went big and put in 100K and it was October! EUR ran straight up, along w/ AUD etc.. I lost 12K within a month and I didn't have the guts to stick with it. haha....

Stops are good, but some systems can handle without stops if you have the heart.

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  #12 (permalink)
Wauseon, Ohio
 
Experience: Intermediate
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The book reference I read simply suggested trading small to allow your account the room to move without being margined.
That was my mistake (one of many). My position was too big (30%) and shortly after the call the price moved back and in a couple weeks it moved into what would have been my profit zone.
I may take a random trade w/o stops and only profit targets in a sim account to see what happens.

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  #13 (permalink)
Market Wizard
Berlin, Europe
 
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bluemele View Post
Stops are good, but some systems can handle without stops if you have the heart.

I fully disagree. For every setup there is a pain threshold. Remember that video game called Domination in "Never Say Never Again" between Bond (Sean Connery) and Largo (Klaus-Maria Brandauer)?

Not having set a stop, means that you are not prepared, when your pain threshold is reached.

Unlike LTCM, Citadel could fend off waiting predators, because it was still above the pain threshold due to its policy not to use term transformation for its lending.

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  #14 (permalink)
Wauseon, Ohio
 
Experience: Intermediate
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Currently I'm using 2 platforms.

The first is NinjaTrader, which I like, but the jury is still out as to whether it will be my forever love. The other is Thinkorswim, which is my Brokerage. (I don't know if brokerage is the right description).

On the thinkorswim platform I have modified Stochastic, EMA and MACD crossover indicators that display arrows on the chart when these events occur.
When a trade is indicated, I enter with a market order, 2 targets, 1 at 3 pips, the other at 10 and a stop at 8 pips.
When the first target is hit, I move the stop to just above breakeven and monitor the trade using the stochastic indicator to determine an exit.(I know this is a very tight stop and I may get stopped prematurely too often)
Usually I trigger the first target and would get stopped before I reached the second but often I will let it move up a little more, usually to 5 or 7 pips profit then close the position.

This scalping method fits my temperament as I'm somewhat impatient and don't much enjoy the "thrill" of watching my position for more than 15 to 20 minutes.

I also don't mind making several small trades.

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  #15 (permalink)
Wauseon, Ohio
 
Experience: Intermediate
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Posts: 63 since Jan 2011
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Here is an example of the method described in the previous post:
The Green arrow is the EMA crossover and the Blue arrow is the MACD.
The Stochastic had crossed earlier indicated by the Purple arrow.

The chart is deceiving because it was captured after the trade was long completed.

I took the 3 pip target very quickly, moved the stop to break even, then was stopped out with no loss.

3 pips isn't all that impressive, but it's still green (and Green is my favorite color).



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  #16 (permalink)
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MetalTrade View Post
Another way is to open 2 forex accounts, one you go long, the other you go short.

One will have the margin call, one will have the profit plus more.


Hey Metaltrade - why will the hedge account have a profit exceeding the loss of the other one? Must be missing something?

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  #17 (permalink)
Market Wizard
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MetalTrade View Post
Another way is to open 2 forex accounts, one you go long, the other you go short.

One will have the margin call, one will have the profit plus more.


If it was written under Off-topic -> Jokes, I would fully agree with this. But let us have some fun explaining the concept. The position has two legs, so it is similar to a straddle without the insurance offered by the option, but of course it is not an option position.

The long and short positions cancel out, until one of them is hit by a margin call. In this case the losing leg is canceled and the profitable leg is kept open. This is the same, as if the remaining position had been entered at the moment of the margin call.

So you do not need to have two accounts to play that strategy. You can simply enter two OCO (one cancels the other) orders, a stop-buy order above and a stop-sell order below current price. Once the stop-buy or the stop-sell is hit you enter the position in the direction of the trend.

This is a simple break-out strategy, which is used by some traders after a news release, such as economic news or an earning announcement. Once you enter on the stop, you still have to manage your position, as you cannot be sure that price will continue its move in the current direction.

An alternative would be a straddle, which is always a bet on a breakout and increasing volatility. The straddle will - unlike the straight position - cost you some money, which is the insurance premium. But unlike the two-account-strategy, you can easily close out one of the legs at any stage. You might even close out the profitable leg first, if you think that a price reversal is imminent.

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  #18 (permalink)
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MetalTrade View Post
Another way is to open 2 forex accounts, one you go long, the other you go short.

One will have the margin call, one will have the profit plus more.

What happens if you get your margin call and then the market turns around on you?

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  #19 (permalink)
 
 
Posts: 1,081 since May 2010

You can have bad luck that the trend just reversals after your margin call, but normally a trend goes on, the profit margin you want to take just depends on the time frame you are trading on.

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  #20 (permalink)
Wauseon, Ohio
 
Experience: Intermediate
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February was a dismal month.
Lots of snow in NW Ohio, which isn't pleasant for a "tropics lover" like myself.

My last trade of the month was a quick +2 pip scalp before my computer and NinjaTrader had an argument.

After looking through my hard copy journal I've come to the conclusion that so far this year I've lacked discipline and have been guilty of not sticking to the strategy. I've been impatient and have jumped into trades without waiting for my setups to develop.

The goal for the rest of the year:
  1. Stick to the rules
  2. Make fewer trades
  3. 10 pips /day target

Summary

45 trades total
-112.3 pips

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