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TheRumpledOne
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Postby TheRumpledOne » Mon Mar 16, 2009 3:14 pm

MO:

You must be writing in short hand.

"EURUSD M15 (480) = 18.78" AVERAGE RANGE

Divide 18.8 by 2 and add 1 pip for every 5 pips in 18.8 for a total of 12.4 pips risk.

(18.8 / 2) = 9.4

ROUND(18.8 / 5) = 3

9.4 + 3 = 12.4

I am LOST as to your stage numbers and calcs.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Postby es/pip » Mon Mar 16, 2009 3:19 pm

dragon33 wrote:8) Are you watching on my screen!



maybe :shock:

lol

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TheRumpledOne
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Postby TheRumpledOne » Mon Mar 16, 2009 3:23 pm

Image

I think we're all watching the same thing.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby TheRumpledOne » Mon Mar 16, 2009 3:47 pm

Five Typical Trades
Stockscores.com Perspectives for the week ending March 15, 2009

Remember, when you see a man at the top of a mountain, he did not fall there.

Achievement requires effort, but there are many paths to the top. In stock trading, our goal is simple; beat the market and make money. There are many ways to do that, as a trader that uses chart analysis as my chosen path to success; there are also a number of methods. Here are my Five Typical Trades, each a strategic method for putting money in your account.

Reversals
The first variety of chart pattern set up is the reversal. This class of strategies look for a shift in control from buyers to sellers, or sellers to buyers. I look for two different things when seeking reversals. The first approach is to find stocks that are in sustained price trends and then break their trend line. This can be the break of an upward trend line, telegraphing a downward move, or a downward trend that is broken as the stock makes a bottom.

The other set up is a shift from rising bottoms to falling tops (a topping pattern) or from falling tops to rising bottoms. This second approach to reversals is more conservative but also more reliable. You will get in later on the reversal but the success rate will be higher.

Generally, I prefer waiting for a move from falling tops to rising bottoms when looking for a bottom but I will short sell a simple trend line break on a strong stock rather than wait for the break down from a falling top.

Breaks
There are a lot of stocks that trade in boring, sideways trading ranges that show little price volatility. These stocks are marking time, investors having little new fundamental information to motivate strong buying or selling and a upward or downward trend. Stocks in these situations are opportunities waiting to happen, for abnormal price breakouts with abnormal volume signal that well informed investors have found a fundamental reason to buy or sell the stock aggressively. Since the spread of information in the market is not always fair, these well informed investors are leading the crowd. When the wider market learns of the information that caused the breakout, the stock will be accumulated by many, initiating a money making trend.

But buying breakouts alone is not effective. You have to be sure that the break is a signal that there is something going on with the company, that there is a significant change in company fundamentals behind the break. Understanding chart patterns is key to doing this.

Run Aways
Once a stock gathers momentum and starts moving up, the emotion of the market may cause it to move too quickly. A stock that goes up or down too fast has a greater potential for a short counter trend, caused by investors who take profits. If you bought a stock and make a very good return in a short amount of time, you will likely want to exit the trade to lock in profits.

One trading strategy is to play this process, shorting a stock that goes up too quickly or buying a stock that goes down too fast. This trade goes against the longer term momentum of the stock and is only a short term trade. For savvy swing traders, it can be a lucrative move.

Where do you choose to go against the grain? Look for stocks that are trading with emotion, high volume and a very steep trend. Recognize that these stocks will find barriers at historical support and resistance and will like begin their counter trends there. Anticipate a counter move at these price levels.

Pull Backs
Stocks have momentum once a stock has been in a trend for a while, and that momentum will dominate to bring the stock back on course when there is a short counter trend. Pull Back strategies look for stocks that have a long term trend in one direction and a short term trend in the opposite direction. Playing Pull Backs require you enter the trade when the stock pulls back to the trend line and give some sort of confirmation that it is likely to bounce off of the trend line and continue with the longer term momentum.

Anticipations
Some chart patterns show a mood but lack a trend. For example, those familiar with charts will know that ascending triangles show optimism, and descending triangles pessimism. However, they are consolidation patterns, which means price in general is going sideways over time.

One strategy is to anticipate a breakout by buying stocks in ascending triangles or shorting stocks in descending triangles. Since price volatility is low, the risk of the trade is less and the upside greater if the stock does what we expect of stocks in these patterns, breakout.

I have mixed feelings on this strategy. It makes good logical sense but in my own trading I have not had great success anticipating breaks. While the risk reward trade off is better, the probability of success is lower. I think you can trade this way, but my preference is to wait for the break with the understanding that the probability of a trend developing is higher.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby MightyOne » Mon Mar 16, 2009 3:50 pm

TheRumpledOne wrote:MO:

You must be writing in short hand.

"EURUSD M15 (480) = 18.78" AVERAGE RANGE

Divide 18.8 by 2 and add 1 pip for every 5 pips in 18.8 for a total of 12.4 pips risk.

(18.8 / 2) = 9.4

ROUND(18.8 / 5) = 3

9.4 + 3 = 12.4

I am LOST as to your stage numbers and calcs.


I am always writing in short hand as I assume that people have read my prev. posts :wink:


EURUSD M15 (480) = 18.8

Image

With a 12.4 pip stop I scalp for 2/3 risk (12.4 * 0.6666 = 8.26p)

Assuming a $10,000 account and 4% risk you are risking $400 to scalp $266.64; this is stage 1.

Stage 2. Risk the profit of $266.64 over the same SL and grab as many pips as I can (8.3+).

If my last trade was a winner then I am risking 2/3 of the risk taken on the prev. trade ($266.64 * 0.6666 = $177.74)

Stage 3. Risk $177.74 over the same SL and grab as many pips as I can (8.3+).

Now I am at the point I call the trading of the Eternal.

Final Act: 2 trades are then allocated half of $177.74 ($88.87) and
are given RIDICULOUS profit targets.

In the Final act I am taking a shot a 4HR+ ZL's and massive profits.

If I finally manage to lose both trades in the final act (or 1 loss on a stage) then it is back to scalping.

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Postby es/pip » Mon Mar 16, 2009 3:56 pm

flipped the long to a short got out of the short at the red zero line

:D

Image

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Postby MightyOne » Mon Mar 16, 2009 4:03 pm

es/pip wrote:flipped the long to a short got out of the short at the red zero line

:D

Image


If price keeps blasting your exits like that then do not be afraid to
move your profit target down stream 2 or 3 pips and if it still blasts
through a majority of the time then push it down 2 or 3 pips more.

2 more pips over 10 trades is 20 more pips and over 100 trades it is 200p!

Observe how price responds to your exits as well as your entries.

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Postby es/pip » Mon Mar 16, 2009 4:35 pm

MightyOne wrote:
es/pip wrote:flipped the long to a short got out of the short at the red zero line

:D

Image


If price keeps blasting your exits like that then do not be afraid to
move your profit target down stream 2 or 3 pips and if it still blasts
through a majority of the time then push it down 2 or 3 pips more.

2 more pips over 10 trades is 20 more pips and over 100 trades it is 200p!

Observe how price responds to your exits as well as your entries.


simple---makes sense

thank you sir

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Postby MightyOne » Mon Mar 16, 2009 6:26 pm

Worth repeating over and over again:

1. DO NOT SCALE DOWN
2. DO NOT MOVE STOPS TO BREAK EVEN
3. DO NOT USE TRAILING STOPS AS EXITS
4. DO NOT TRADE LIKE A COMPUTER
5. DO NOT FAIL TO TAKE THE TRADES YOU SEE
6. DO NOT CONSIDER YOUR ACCOUNT BALANCE 2B REAL MONEY.

...I am starting to sound like my mother :roll:

One thing I forgot to include in the posted trade strategy is that if I start with $1,000 and risk $40 and lose then I DO NOT SCALE DOWN.
I risk the same amount in dollars and take on a greater risk % until I get
back to $1,000.
If my account grows to where I can add another micro, mini, etc
then I risk the new amount (say $52 per trade) until I can add more
or until account death...which is an impossibility :wink:
Last edited by MightyOne on Tue Mar 17, 2009 1:48 am, edited 1 time in total.

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TheRumpledOne
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Postby TheRumpledOne » Mon Mar 16, 2009 10:25 pm

"or until account death...which is an impossibility "

ANYTHING CAN HAPPEN!!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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