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Postby razorboy » Sun Apr 12, 2009 11:18 am

It's don't think its that simple.

Think about the post were TRO wrote about entering 3 times using the semifor and dfsr set up on a 15 minute chart. Can you open 3 different positions simultaneously with the pip values you are playing.

you are playing all or nothing it seems.

You may be willing to risk 10 dollars a trade, but I would seriously spread that out over a number of positions rather than putting it all down on "the green double zero".

From what I have seen, with the exception of a few, not to many people talk about position sizing in any detail.

Think about it for a second. You know when you get a signal to go long, say off of a support line - price then moves against you, knocks you out, and then finally goes your way and say just by coincidence, TRO posts a Drain the bank image that shows some 20 point gain.

Do you think he put all of his money down on the exact "right" spot and nails it every time? I suspect he had a number of positions open on that trade and made money on the over all trade, not each individual position. Price may have just popped 20 points, but do you think he makes that 20 points on every position?

Don't just set your risk in pips, set it relative to your overall account size. You need to be bigger when you are right than when you are wrong.

Think about your maximum risk in dollar terms for an entire trade, then work out the position sizing and then your relative stop losses

Don't go in with a predefined position and SL - this is what is killing you and leading you to "system hop"

Don't get carried away with everyone who says they are making xx% a day. Unless you see their trading accounts, you really don't know. Yes, I suspect that MO and TRO and others are really good at this, but until you see exact trading records, you don't know how many times they are just getting out at BE or taking a loss or what their position size is when they are right.

Think about this situation - lets use a long setup off of a DFSR

Price gives you a long signal - crosses the trigger line and goes up hard - a potential MOMO bar. Is it going to retrace back to the support line or is it going to keep going? Don't know, but you want to be part of it, don't you? it gave you a signal, now take it, but don't put on a 1$ per pip position - put on a 30 cent position.

Now if price retraces, you can decide, do I add another position to the trade. Price hasn't fall thru your support and you are still within your risk tolerance, so you can add another position....etc, etc etc.

Like i said, talk about trade management. The entry signals are easy


prochargedmopar wrote:Razor,
The way I see it you are either able to make pips or you lose pips.
If I'm risking 1% per xx amount of pip stop/loss or 10% per that same amount is irrelevant if I'm able to make + pips consistently day in and day out. Limiting the "off" days will preserve capital too.
That is, other than the times when someone who lets their account implode from to many outstanding trades or to big of or no stop/loss. Being this is not the case for me I'll either build it up or have to keep adding money to it's balance.

I think I'm expecting to grow my account when I have not yet been consistent and that is as you say, unrealistic for the time being. I like to have to PAY for my mistakes as I feel it will implant more meaning behind the lessons learned.
I do not feel that with a 10pip s/l that I'm expecting to much to get 10 pips a day min. I've just been out of control and not sticking to and perfecting ONE system or pattern in the marketplace.

As the account grows and more income becomes available then I will scale back the % risk and simultaneously increase the stops to have more staying power in each trade. I could also do as M.O. says by starting with 10 and then adding each win to the stop amount until I reach my goal of daily pippage. 20-30 should be a cake walk from what I've seen other people do. Just think, that would be 10%- 15% a day. 30 pips may be unrealistic at the moment but not in the near future.

I don't know if these #'s add up for others but $30 pips is just 3 lots. With a 5000 account and 400:1 margin that's only $300 risk at 6%. 30 pips a day would be $900 a day. That's peanut shucks. I only need to pull $100 a day for bills and the rest could just grow. You could hit 3 stops and still have $4100 in the account and never even get close to your margin requirements. Where's the fear in that? NONE. Crank it back up the next day and pull in your 30 pips to square things up and then the next day continue to grow. A couple weeks of that and now your $300 risk is only 3.9% risk. Maybe I'm being overzealous but once I get 30k-40k in the account the stops will be BIG and the reward will be good and the risk % will be small.

Lets calculate:
$30 pips (only 3 lots), 30 pip stop and/or 30 pips a day. $900 income. Risk percentage on 35k account = a measly 2.5% with 30 pips stop in stead of 10 pips stop. The bigger the account gets the less we risk.
I don't see needing more than $50k in the account to use as "business" capital for earnings. Funnel the rest off.
BTW, $50k and $50 pips and a 10 pip scalping s/l would only be risking 1% per trade. 20 pips a day is $1000. Who NEEDS more than that?
Is pulling 20 pips a day unrealistic? Not from what I've seen so far.
What do you think/See?

My thing is to get consistent. The money will take care of itself.
We'll see.

Pro

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Postby prochargedmopar » Sun Apr 12, 2009 1:56 pm

Razor,
Thanks for your candidness and honesty.

You have very valid points and I myself have wondered about others win/loss ratio's and true total pip values day in and day out.

No matter what though, when a person gets to making xx pips a day like clockwork they can throw down the gauntlet.
It is possible and some are doing it.

Truth be told I should be doing .10 pips like MO says. Make $20 and then move to .50 pips and make $100.

Then it would be time to ratchet things up. LOL
Thanks.
Pro
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Postby prochargedmopar » Sun Apr 12, 2009 2:08 pm

Just to note,
I'm doing psych lines only the rest of the month minimum so there will not be 3 re-entries per trade. I'll cut the losses and move to the next opportunity.
I must learn price action and how to follow rules above all else.

$4 per pip is actually a lot of money compared to what I make at work and how much is available to burn up. But, it is getting much easier to sit through draw downs and take the triggers when they become available.
Overall goal is to lose the emotion because I've found when that happens I can have some pretty good trade and make really good decisions when in a trade. When I'm being a scaredy pants is when things go bad, all my fault too.

We'll just let stuff ride and see how it all pans out in the end.
Been a great learning experience thus far. Lots of great teachers on this board too.
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Postby eudamonia » Sun Apr 12, 2009 3:58 pm

razorboy wrote:It's don't think its that simple.

Think about the post were TRO wrote about entering 3 times using the semifor and dfsr set up on a 15 minute chart. Can you open 3 different positions simultaneously with the pip values you are playing.

you are playing all or nothing it seems.

You may be willing to risk 10 dollars a trade, but I would seriously spread that out over a number of positions rather than putting it all down on "the green double zero".

From what I have seen, with the exception of a few, not to many people talk about position sizing in any detail.

Think about it for a second. You know when you get a signal to go long, say off of a support line - price then moves against you, knocks you out, and then finally goes your way and say just by coincidence, TRO posts a Drain the bank image that shows some 20 point gain.

Do you think he put all of his money down on the exact "right" spot and nails it every time? I suspect he had a number of positions open on that trade and made money on the over all trade, not each individual position. Price may have just popped 20 points, but do you think he makes that 20 points on every position?

Don't just set your risk in pips, set it relative to your overall account size. You need to be bigger when you are right than when you are wrong.

Think about your maximum risk in dollar terms for an entire trade, then work out the position sizing and then your relative stop losses

Don't go in with a predefined position and SL - this is what is killing you and leading you to "system hop"

Don't get carried away with everyone who says they are making xx% a day. Unless you see their trading accounts, you really don't know. Yes, I suspect that MO and TRO and others are really good at this, but until you see exact trading records, you don't know how many times they are just getting out at BE or taking a loss or what their position size is when they are right.

Think about this situation - lets use a long setup off of a DFSR

Price gives you a long signal - crosses the trigger line and goes up hard - a potential MOMO bar. Is it going to retrace back to the support line or is it going to keep going? Don't know, but you want to be part of it, don't you? it gave you a signal, now take it, but don't put on a 1$ per pip position - put on a 30 cent position.

Now if price retraces, you can decide, do I add another position to the trade. Price hasn't fall thru your support and you are still within your risk tolerance, so you can add another position....etc, etc etc.

Like i said, talk about trade management. The entry signals are easy


prochargedmopar wrote:Razor,
The way I see it you are either able to make pips or you lose pips.
If I'm risking 1% per xx amount of pip stop/loss or 10% per that same amount is irrelevant if I'm able to make + pips consistently day in and day out. Limiting the "off" days will preserve capital too.
That is, other than the times when someone who lets their account implode from to many outstanding trades or to big of or no stop/loss. Being this is not the case for me I'll either build it up or have to keep adding money to it's balance.

I think I'm expecting to grow my account when I have not yet been consistent and that is as you say, unrealistic for the time being. I like to have to PAY for my mistakes as I feel it will implant more meaning behind the lessons learned.
I do not feel that with a 10pip s/l that I'm expecting to much to get 10 pips a day min. I've just been out of control and not sticking to and perfecting ONE system or pattern in the marketplace.

As the account grows and more income becomes available then I will scale back the % risk and simultaneously increase the stops to have more staying power in each trade. I could also do as M.O. says by starting with 10 and then adding each win to the stop amount until I reach my goal of daily pippage. 20-30 should be a cake walk from what I've seen other people do. Just think, that would be 10%- 15% a day. 30 pips may be unrealistic at the moment but not in the near future.

I don't know if these #'s add up for others but $30 pips is just 3 lots. With a 5000 account and 400:1 margin that's only $300 risk at 6%. 30 pips a day would be $900 a day. That's peanut shucks. I only need to pull $100 a day for bills and the rest could just grow. You could hit 3 stops and still have $4100 in the account and never even get close to your margin requirements. Where's the fear in that? NONE. Crank it back up the next day and pull in your 30 pips to square things up and then the next day continue to grow. A couple weeks of that and now your $300 risk is only 3.9% risk. Maybe I'm being overzealous but once I get 30k-40k in the account the stops will be BIG and the reward will be good and the risk % will be small.

Lets calculate:
$30 pips (only 3 lots), 30 pip stop and/or 30 pips a day. $900 income. Risk percentage on 35k account = a measly 2.5% with 30 pips stop in stead of 10 pips stop. The bigger the account gets the less we risk.
I don't see needing more than $50k in the account to use as "business" capital for earnings. Funnel the rest off.
BTW, $50k and $50 pips and a 10 pip scalping s/l would only be risking 1% per trade. 20 pips a day is $1000. Who NEEDS more than that?
Is pulling 20 pips a day unrealistic? Not from what I've seen so far.
What do you think/See?

My thing is to get consistent. The money will take care of itself.
We'll see.

Pro


Razor,

Some good points here.

I agree that most beginners want to enter with 100% of their size and nail the exact high or low. It is probably why 95% don't make any money.

Yes, TRO may post a semaphore with a 20 pip gain reversal. But he's stated many times he only seeks to make 5 pips on his overall position. If he makes more great, but that's not what he's looking for.

Statistically speaking this is another newbie myth. What is so mystical about making 2 times more than you risk? This may work well for some, but if you have a 85% win ratio do you really need to make 2:1? Nope. Strive for your risk/reward to have a positive expectancy. Don't get hung up on statistics.

I believe TRO when he says he's making 10% per day, because I am not as good as him (and only trade a couple hours per day) and can usually make 2-5%. This is not some sort of mystical power. It is simply following the flow of the market (trading the system) and executing money management so that I have a high winning % and a positive expectancy.

To get that your losers will inevitably be larger than your winners (or at least 1:1). Also you can't do this with 10 or 20 pip hard stops from a single fixed entry. I average into my position and let the market tell me if I'm right or not. When I'm wrong is often a great place to reverse my position (and I will do so), not some arbitrary line in the sand based on the fact that I can't risk more than X pips or I blow my account. This sounds SCARY and goes AGAINST all that you've ever learned from a trading book/seminar/video. Hmm, could be why it works...

Doing this will have you making $ more consistently. This is the actual goal of trading IMHO. Not satisfying trading gurus who preach but don't actually trade.

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

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Postby TheRumpledOne » Sun Apr 12, 2009 4:10 pm

Image

Do you SEE the EDGE?

Pro, if you show a profit at the end of the month, will you continue with this or will you chase after some other system?
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Postby prochargedmopar » Sun Apr 12, 2009 6:00 pm

I will follow the profit all the way to the bank.
I only came here to profit.
Doesn't matter to me how it's done.

EDIT:
We are not static creatures or living in a static world. Everything is in constant change. Knowing this, I will grow over many years of trading. Not sure what you call this. As we see more we will react accordingly/differently. Eudo's post above describes his evolution and what he sees now. That may not be the same thing he see's 3 yrs from now.
I must not get stuck as I get old and decrochity, I must leave doors open or die.

When we truly believe something we are changed forever, we can't go back, we can never believe in santa the same way again. LOL
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Postby TheRumpledOne » Sun Apr 12, 2009 6:37 pm

DON'T YOU BE DISSIN' SANTA

LOL!!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby razorboy » Sun Apr 12, 2009 10:27 pm

In all seriousness, you are only about 3 or 4 paces behind where I am at this point.


I have experimented with a variety of strategies, including boosting my pip value, thinking it would make me more serious and then being able to sit thru large draw downs and SL's


So as my jewish grandmother would say.......Mazel tov (congratulations) - you and i both know how to take a loss when applying a strategy - unfortunately, it may not be the right strategy -


you need to build positions and spread risk. Don't play 4 bucks a point if you cant afford to build a position at 4 bucks a point. you are essentially killing the beauty of microlot fx for yourself. Microlot FX gives you the opportunity to learn to trade without a huge bankroll.

Don't DO IT!!
Ya, I manufacture clear shoe boxes.....http://www.clear-shoe-boxes.com.............who would have thunk!

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Postby prochargedmopar » Sun Apr 12, 2009 11:45 pm

Here is the trade TRO:
EUR/JPY 40 S 132.252 132.334 -8.2 -32.68 0.00 4/12/2009 19:17 4/12/2009 19:19
40 -8.2 -32.68 0.00
This is what an 8 pip stop will do for you.

Here is the hr chart:
Perfect setup, I did not take the last hr as the spread was to big. Current hr cross was perfect!!!! Big Down push.
H1 Chart:
Image
Here is M5
Image

It's not what you trade it's how you trade it. ;)
Sooooo.
I switched to .20 pips and removed my stop.
I'm going mental. I may put in a 40 or so just in case the computer or internet crashes.
Last edited by prochargedmopar on Sun Apr 12, 2009 11:51 pm, edited 1 time in total.
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Postby prochargedmopar » Sun Apr 12, 2009 11:49 pm

I'm listening to Mark Douglass, switching between charts and reading disciplined trader while I wait for the next setup.
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Trading Bible here> therumpledone/the-ideas-that-i-trade-by-t3256/page1670

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