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prochargedmopar
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Postby prochargedmopar » Thu Aug 20, 2009 10:19 pm

es/pip wrote:tough action today


no momentum really anywhere to trade



i was +60 on the e/j at 1 point on the second trade----- target was 170ish pips i got zl'ed---- i honestly thought we were going to go up--- i liked the formation on the bars so i stayed in got out on 5 min close against me---- oh well

this week was made in the early parts with all the action we have had----- today blew--- lets see what the rest of the week brings----

on days like these you try to grab what you can and not get hurt---- or dont trade at all----lol

Image

Image


Whew,
I thought it was just me.

I did end up with 38.x live on 13 trades but it was a struggle.
Had two I thought were gonna take off when they were up around 10 pips and both ended in a small loss.
My first 2 losses of the week.
Lots of movement in market but it was always just as I exited and in the wrong direction.
#1BODY in direction of profit #2INCREASE lot size Obsessively
My Losses cause me Great Laughter!
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Postby monolisa » Fri Aug 21, 2009 12:35 am

Interesting read (Brad Gareiess from FX360):

Trading psychology is the most important aspect of a trader's success. This may surprise some readers, specifically those that are new to trading. However, the psychological makeup of a trader is more important than market knowledge, market analysis, and even money management. The reason psychology is so important is that even the best information can be distorted by a poor mindset.

Most new traders think the key to profiting in trading is knowing more about the market. For instance, most new traders clog their screens with every indicator they can find, read up European GDP trends, and feel that pro traders have some sort of secret knowledge. However, this inevitably does not provide the lofty results the novice trader hopes to achieve.

After realizing that excessive market information doesn't help (and may hurt) results, the next moment of truth most traders have is money management. Instead to trading 1 lot every time, or even trading the maximum lots their account will allow, these traders realize losses will happen no matter what. When you realize that everyone loses on occassion, it is easy to see why money management is necessary. This is a big step, but does not ensure success.

Now, don't get me wrong, you need to have a form of analysis and a form of money management to profit in the long term. In other words, you need an edge that when applied with proper money management leads to positive returns over the course of many trades. Great money management with no edge will only mean you lose your money more slowly. A great strategy without money management will lead to an inevitable blow up. However, without the proper mindset, it is nearly impossible to continue to get good results in the long run.

The bottom line is that a poor mindset can sabotage even the best trading strategy or money management strategy. I could write about this at great length, but we will look at one key example for now. The biggest test in trading psychology occurs during a drawdown. This occurs when a trader gets in a "slump" and has bad results for a given period of time. Usually the most devastating drawdowns eliminate a significant amount of a hard earned profit.

Keep in mind, drawdowns are completely normal. Everyone has them on occasion. However, the key is reacting properly to drawdowns. This is why trading psychology is so important. The natural reaction during a drawdown is to change your strategy. Sometimes traders will even take trades for no reason at all except for a desperate chance at a profit. Assuming you believe your methodology is sound, there is no reason to change anything during a drawdown. In fact, that is the most important time to follow the basics. Think about a baseball hitter in a slump. Sometimes they will change their stance, but usually they keep the same basic stance and swing. Instead, they focus on the fundatmentals of keeping their head still, keeping their hands back, and so on. For some reason traders tend to panic in this situation and change everything up. This leads to a larger drawdown, which usually ends when the trader reverts back to their primary strategy.

As this is a key topic with many topics to discuss, we will come back and discuss another aspect of trading psychology soon.

-----

Trading psychology is the most important aspect of a trader's success. I have made this statement before, but it is worth repeating. There are many factors that contribute to a trader's psychological makeup, and there is no easy way to attain a trader's mindset. However, there are certain factors that influence a trader's psychology that are important to be aware of. Several weeks ago we published a feature that covered how a trader should deal with a drawdown ( Trading Psychology- Dealing with a Drawdown ). That feature discussed the psychological implications of losing over a series of trades. Today's topic, accepting risk, pertains to individual trades rather than a long string of trades.

The best traders typically are the most consistent traders. In order to be a consistent trader, it is important to consistently apply one's methodology to the market and make as few errors as possible. A trading error is when a trader deviates from their methodology. Common errors include taking a bigger loss than planned, exiting a trade earlier than planned, taking a trade that does not fit the trader's usual criteria, or passing on a trade that fit the trader's usual criteria. These errors can be destructive to a trader's capital and sanity.

Trading errors are usually induced by emotions caused by previous trades. The most dangerous emotional catalyst (in my opinion) occurs when a trader loses a trade they felt was a certain winner. After losing this trade, a trader feels sad, angry, or even vengeful against the market. This causes a trader to enter a trade irrationally in order to win back what they felt they were cheated out of. Of course, this trade usually is a loser. If it wins, this can be even worse, because it encourages this type of decision making in the future, which could lead to even larger losses.

In my opinion, the reason the aforementioned scenario is common among traders is that they did not accept the risk when they placed the trade. They thought the trade was a sure winner, so it was miserable to take the trade as a loss. In fact, traders may even refuse to take their loss because they were so sure it was a winner, which can lead to devastating losses. This is why traders must accept the risk of each trade before they enter their position. In other words, a trader must view the amount of money they are risking as an expense to see if their trade idea will work. Once a trader accepts the risk, they will typically feel far less distress if the trade does indeed lose.

Accepting the risk of each trade is not easy, especially for inexperienced traders. Of course, there are some steps we can take to make it easier to accept the risk. First, it is very important to plan out each trade. This means we should know where we will enter the trade, place our stop, and place our take profit level(s). That way there are no decisions that need to be made once the position is entered. The human brain will view information differently once that position is entered and it thinks much more clearly before the position is entered. Additionally, if we know the distance between the entry and the stop, we know exactly how much capital we are risking. This is important because it is impossible to accept a risk when we do not know how large the risk is. After entering the pre-planned trade, emotion is inevitable, but at least it won't impact the result of the trade.

As we said earlier, a trader must view the amount of money they are risking as an expense to see if their trade idea will work. Every trader has losses. However, consistent traders view losses as business expenses. Losses are a necessary aspect of trading, and there is no way to know which trades will win or which will lose when the trade is entered. Therefore, if we can accept the risk of each trade before placing it, these losses can more easily be viewed as part of trading rather than a personal attack from the market. Once a trader learns to accept the risk on every trade and concede they don't know which trades will win, it will be much easier to control one's emotions and achieve consistent results.
"Know your enemy and know yourself, find naught in fear for 100 battles. Know yourself but not your enemy, find level of loss and victory. Know neither your enemy or yourself, wallow in defeat every time." - Sun Tzu

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Postby razorboy » Fri Aug 21, 2009 1:41 am

the big move in the ej in the NY session (that continued in to the following asian session) after the big move down in the earlier T session tired the ej out for thursday............

es/pip wrote:tough action today


no momentum really anywhere to trade



i was +60 on the e/j at 1 point on the second trade----- target was 170ish pips i got zl'ed---- i honestly thought we were going to go up--- i liked the formation on the bars so i stayed in got out on 5 min close against me---- oh well

this week was made in the early parts with all the action we have had----- today blew--- lets see what the rest of the week brings----

on days like these you try to grab what you can and not get hurt---- or dont trade at all----lol

Image

Image
Ya, I manufacture clear shoe boxes.....http://www.clear-shoe-boxes.com.............who would have thunk!

http://thejoshkerbelproject.com/

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Postby razorboy » Fri Aug 21, 2009 1:50 am

If you want to see something neat on the EJ (im sure it works on other pairs, just dont play them) - find yourself a Murrey Math Line plug in and set it so the lines are about 160 (156 to be exact) pips apart on a 5 minute chart and then use momo bars for your entries.....(long 5 pips above a bullish momo and short 5 pips below a bearish momo)

use the math lines as your profit targets
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Postby razorboy » Fri Aug 21, 2009 2:02 am

Pro........

You sound like one of my trading partners -

its not about the number of losses you have. Depending on which "system" i use.........my win percentage is 15 to 30% with an EV of 2 to 4 - 2 to 3 trades a day. I say this not to show off, but to give you some encouragement as I was as clueless as you were until i started flipping quarters

once you have accurately defined your edge, it will all come to you. You need to think in terms of probabilities - buy the tops and sell the bottoms......when momentum comes into the market


prochargedmopar wrote:
es/pip wrote:tough action today


no momentum really anywhere to trade






i was +60 on the e/j at 1 point on the second trade----- target was 170ish pips i got zl'ed---- i honestly thought we were going to go up--- i liked the formation on the bars so i stayed in got out on 5 min close against me---- oh well

this week was made in the early parts with all the action we have had----- today blew--- lets see what the rest of the week brings----

on days like these you try to grab what you can and not get hurt---- or dont trade at all----lol

Image

Image


Whew,
I thought it was just me.

I did end up with 38.x live on 13 trades but it was a struggle.
Had two I thought were gonna take off when they were up around 10 pips and both ended in a small loss.
My first 2 losses of the week.
Lots of movement in market but it was always just as I exited and in the wrong direction.
Ya, I manufacture clear shoe boxes.....http://www.clear-shoe-boxes.com.............who would have thunk!



http://thejoshkerbelproject.com/

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Postby Patch » Fri Aug 21, 2009 2:36 am

razorboy

How do I know when momo comes into the market? What time frames am I looking at?

I've cut and pasted all of MO's posts for about 100 pages and reading them, then will do the same with the next 100. Right now I look at you all's 101 charts and I don't see much, and don't hear what the red and green bars are whispering to me.

Could you post a chart of the Murray Math line on a EJ chart? What kind of line does this make anyway?

Patch
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ENOUGH being a Yalie for me Back to the Sea. "What i can lose, i can win" "YES YOU CAN" - dragon33 -"Pick one method and one pair and stick with them until you master it. "The choice is yours - success or failure." TRO

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Postby cfabian » Fri Aug 21, 2009 3:17 am

es/pip

Great you mention this point. Can you examplify with charts your "i knew from the way that the 1-4r bars were forming that there was going to be a good chance for good movement in the asain/euro session and the start of the us session"

It can give us a great idea of future movements and probably take some time for procrastination.

I also thought you were based in Europe as you trade Eur and NY mostly.

Cheers



es/pip wrote:
aliassmith wrote:
es/pip wrote:
aliassmith wrote:
es/pip wrote:
aliassmith wrote:
es/pip wrote:
aliassmith wrote:
es/pip wrote:
aliassmith wrote:Stage 1: 1 lot at 1.6312 58 pips
Stage 2: 2 lots at 1.6297 73 pips
Stage 3: 4 lots at 1.6288 82 pips
and out at MZ of 1.6370 about 15.5%

This is how I build a position using the H1 charts


nice trade

what was the 1st entry at 1.6312 based on?


es/pips,

I build my position with stage 1 being placed at the open of the next candle after a momo candle. That takes care of when the price just breaks and runs like hell. Stage 2 is at the 50% level of the momo candle and Stage 3 is at the 75% pull back of the momo candle.

It makes it easier for me to get into a position without worring if I am entering correctly. I developed it when Mightyone told you to break your order up.


ok

i was just wondering why you would enter in the place that you did on the first one

there is not really a right or wrong---- i was just curious

thanks


es/pips,

I am attaching another chart with a stage 1 and 2 position. If stage 3 was filled the order would have been worth 9.5%. Since stage 3 was not filled it was worth 3.3%.

How long do you trade with your method? I am going to study it more to see if there is an advantage (time wise) to your method. Currently I only trust H1 since it is the highest timeframe that is the same for everyone in the world. Maybe I can work the lower timeframes, I'll have to research it.
ZL is at 1.6490 looks like I cut it off with my croping.



not sure i follow you

can you rephrase

"How long do you trade with your method? I am going to study it more to see if there is an advantage (time wise) to your method."


i use h1-the monthly charts for my higher timeframes

btw

to post your charts

save the pic as something then go to tinypic.com and upload it then paste the img tag in the body of the message --- it is a lot easier and u do not have to crop anything


ES/PIPS,

I guess that was worded akward. I was just asking how many hours per day do you spend trading?


usually 12-16 ish

it is always different--- but i start out committed to trade at least the first 3 hrs of asian, london and us sessions----- then depending on how much movement there is will result if i continue to sit here.

but, i also have a roll away cot in my office just in case--- everyone i know thinks i am nuts---- :D


es/pips,

you are nuts, just playing :) Well If you spend that much time then I don't think I'll change what I am doing to much then. I figured I will have to spend about that much time also. I was hoping you was only spending about 4 hours a day and I was going to figure out how you trade :)



at the same time it just depends on what you want out of it

with the right money management there is no need to make 100-200 pips a day

it just depends on how things look

some days i trade all 3 sessions---

some days i sleep thru the euro session

some days i dont trade the us session

today i stopped at 11 am est

i knew from the way that the 1-4r bars were forming that there was going to be a good chance for good movement in the asain/euro session and the start of the us session

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Postby cfabian » Fri Aug 21, 2009 3:29 am

I have a question for you...

In the attached image you'll see 4H candles. There's 2 oposite momentum candles embrazing good "setups".

Now, were will price head to???? (don't look at your charts now). Candle in yellow circle provides a ZL in same color. Same thing for the one in light blue. Price action is supporting both lines.

Image
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Postby es/pip » Fri Aug 21, 2009 3:35 am

cfabian wrote:es/pip

Great you mention this point. Can you examplify with charts your "i knew from the way that the 1-4r bars were forming that there was going to be a good chance for good movement in the asain/euro session and the start of the us session"

It can give us a great idea of future movements and probably take some time for procrastination.

I also thought you were based in Europe as you trade Eur and NY mostly.

Cheers



es/pip wrote:
aliassmith wrote:
es/pip wrote:
aliassmith wrote:
es/pip wrote:
aliassmith wrote:
es/pip wrote:
aliassmith wrote:
es/pip wrote:
aliassmith wrote:Stage 1: 1 lot at 1.6312 58 pips
Stage 2: 2 lots at 1.6297 73 pips
Stage 3: 4 lots at 1.6288 82 pips
and out at MZ of 1.6370 about 15.5%

This is how I build a position using the H1 charts


nice trade

what was the 1st entry at 1.6312 based on?


es/pips,

I build my position with stage 1 being placed at the open of the next candle after a momo candle. That takes care of when the price just breaks and runs like hell. Stage 2 is at the 50% level of the momo candle and Stage 3 is at the 75% pull back of the momo candle.

It makes it easier for me to get into a position without worring if I am entering correctly. I developed it when Mightyone told you to break your order up.


ok

i was just wondering why you would enter in the place that you did on the first one

there is not really a right or wrong---- i was just curious

thanks


es/pips,

I am attaching another chart with a stage 1 and 2 position. If stage 3 was filled the order would have been worth 9.5%. Since stage 3 was not filled it was worth 3.3%.

How long do you trade with your method? I am going to study it more to see if there is an advantage (time wise) to your method. Currently I only trust H1 since it is the highest timeframe that is the same for everyone in the world. Maybe I can work the lower timeframes, I'll have to research it.
ZL is at 1.6490 looks like I cut it off with my croping.



not sure i follow you

can you rephrase

"How long do you trade with your method? I am going to study it more to see if there is an advantage (time wise) to your method."


i use h1-the monthly charts for my higher timeframes

btw

to post your charts

save the pic as something then go to tinypic.com and upload it then paste the img tag in the body of the message --- it is a lot easier and u do not have to crop anything


ES/PIPS,

I guess that was worded akward. I was just asking how many hours per day do you spend trading?


usually 12-16 ish

it is always different--- but i start out committed to trade at least the first 3 hrs of asian, london and us sessions----- then depending on how much movement there is will result if i continue to sit here.

but, i also have a roll away cot in my office just in case--- everyone i know thinks i am nuts---- :D


es/pips,

you are nuts, just playing :) Well If you spend that much time then I don't think I'll change what I am doing to much then. I figured I will have to spend about that much time also. I was hoping you was only spending about 4 hours a day and I was going to figure out how you trade :)



at the same time it just depends on what you want out of it

with the right money management there is no need to make 100-200 pips a day

it just depends on how things look

some days i trade all 3 sessions---

some days i sleep thru the euro session

some days i dont trade the us session

today i stopped at 11 am est

i knew from the way that the 1-4r bars were forming that there was going to be a good chance for good movement in the asain/euro session and the start of the us session


i was just saying that since there was momo present that there should be some good movement following
Bend over and assume the position for another 4 years of hope and change.

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Postby es/pip » Fri Aug 21, 2009 3:46 am

cfabian wrote:I have a question for you...

In the attached image you'll see 4H candles. There's 2 oposite momentum candles embrazing good "setups".

Now, were will price head to???? (don't look at your charts now). Candle in yellow circle provides a ZL in same color. Same thing for the one in light blue. Price action is supporting both lines.

Image



i say down

the way i look at it is you have momo on your yellow circle it gets zl'ed on the blue momo circle creating a new and more current momo short--- it comes back up to zl thoes blue circle shorts and now is free to move in the direction of the down momo. so i would trade it short

of course- the market is going to do whatever it is going to do so watch the PA and trade accordingly.

as far as where it is going to go---- our data is a little different--- but on your chart i would say to the next small green MZ you have on your chart. I would be be paying close attention to the possible double bottom before the zone and looking inside to decide if i stay in or not

edit---------------------------------------

it is obviously going down now----- but, you also have to take note that the yellow circled momo was greater--- but since i consider those traders to be zl'ed i will trade new momo after it. If they(the yellow) traders had not be zl'ed yet then i would be looking long not short

if that makes sense
Last edited by es/pip on Fri Aug 21, 2009 4:01 am, edited 1 time in total.
Bend over and assume the position for another 4 years of hope and change.

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