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MightyOne
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Postby MightyOne » Mon Jan 30, 2012 7:14 pm

Largest correction is not a new concept; many traders measure correction sizes as well as impulse waves.

The idea is that there is a size where a correction is no longer a correction.

The funny thing about corrections is that you don't really know they are corrections until price returns to the extreme.

The original rule was: If there is a greater correction, larger than the largest correction in a trend, then price is probably not correcting.
Later I would use new corrections that form steeper TL as a reason to use a smaller box.

As with everything else, sometimes you have to step back and make a judement call based on the idea instead of making purely mechanical decisions.

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Postby prochargedmopar » Mon Jan 30, 2012 11:42 pm

dojirock wrote:Pro

Here are a couple charts, after the bad loss I had last week, Im struggling to see entries and am still trying to get that back. Is what your showing me the space concept? I have to take a step back to take 2 forward. Im trying to get what you posted. The GU chart I closed at breakeven and then went long, based on it not making a previous lowest low? Then it failed to return to the low and made a new high?

If what you were showing me is the space concept, then on my usd/jpy chart please explain. You can see my entry... or does this only work on a higher time frame? I have always been a scalper, so im having trouble grasping hanging on to a trade for hours or days? Because I scalp, I dont know how to tell the longer trade, it has never mattered to me?

dojrock


Doji,
Not trying to be a dick, but your a scalper/loser because YOU ARE afraid.
Trying to figure out the ENTRY is barking up the wrong tree, IT WILL NEVER FIX YOU!!! (or me)

Adding profits to your stop is a VERY small part of what i'm trying to convey. Getting 2,5,10:1 on the amount you have/want to risk is getting closer.

I'll post another section of what M.O. has written a few years ago(cant find it in NLA so I'll have to type it out by hand) and then I'll add my input.
Give me a day or so, very busy today.
90% of all psychological ills and market direction difficulties will disappear WHEN YOUR LOSSES CAUSE YOU GREAT LAUGHTER.

Relax, there is plenty of time for Riches.

Cheers.
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My Losses cause me Great Laughter!
Trading Bible here> therumpledone/the-ideas-that-i-trade-by-t3256/page1670

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Postby prochargedmopar » Tue Jan 31, 2012 12:27 am

The reason I decided to join bredin at Insanity Industries Trading school was because I found some printouts in my old lunchbox that I use to read over and over. I wanted to chat at least ONCE with like minded traders.
All it took was ONE exercise to get my mind right about what I was trying to accomplish and how to go about it....(we are all different and will take different approaches)
I knew back then (09) space/re-investing was the way, but was too caught up in perfect entries/exits and losing.

Now, I feel this info has been converted from knowledge to wisdom.
I wanted someone to trade space with and II was the only group I knew who is doing/teaching it and I also did NOT have access to M.O. himself.

Here is part
By MightyOne:

How powerful is color that we should buy if it's green or sell if it's red?
How powerful is the line that leads us to believe that price is supported or resisted?

EVERY OBJECT ON YOUR CHART HAS A POWERFUL IMPACT ON YOUR PERCEPTION!

If you sat down to trade and bought on a green candle could it decline or change to red before it closes?

h1/h4/D1/W1/Y1, what do these mean to you?

No matter the time frame and no matter the color price will either go up or go down from the time you sit down to trade to the time you get up.

In the beginning it may go up and down, but price cannot run horizontally for long periods of time in fact price moves up or down by hundreds of pips most every day.

Do you want hundreds of pips?

The secret to surviving is to re-invest your gains into your stop, Let price retrace and then trade in the same direction with the larger stop.
Keep reinvesting your profits into your stop and do not exit without new profits or move your stop closer.
(THIS IS ONLY PART OF MAKING $$, pro)

WHAT EVER YOU ARE RISKING YOU ARE RISKING

If you risk 2% over 10 pips and add 20 pips in profit then you are risking the initial 10 and the 20 pips for a 30sl.
If you risk 10 pips every trade without inflating it with profit then you may find your self getting whipsawed and no one can recover from that.

If you increase your SL to 20 and then take 20 pips in profit then you are going to risk all of your profit on the next trade for another medeocre profit.
Even if you made 40 pips you are risking 1/2 your profit and for what a 2:1 return?
Even if you go for big pips you just sliced your profit potential in 1/2.

(HE'S GETTING CLOSER..............pro)

By reinvesting your profit back into your stop you give your self "option like" staying power.
You use your day trading abilities to make a push on the small tf and then you retreat (stay out DO NOT REVERSE) as the animals give chase. Add more pips to your armor and then advance.

Keep retreating, adding, retreating, & adding until you reach your goal or your line dissolves.

What line?

The line that tells you which way you are trading!
This one.......................

You are not here trying to make baby pips(there is another forum for that) you are trying to drain all the cash right out of the pockets of hte Illuminati.


Risking even 0.5% per trade and re-investing profits until you reach your goal is enough to make the same as a trader risking 5% per trade in and out of the markets.
END


One more section after this BY M.O. to lay the groundwork and then I WILL EXPLAIN WHY 90% OF ALL TRADERS LOSE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Last edited by prochargedmopar on Tue Jan 31, 2012 12:38 am, edited 2 times in total.
#1BODY in direction of profit #2INCREASE lot size Obsessively
My Losses cause me Great Laughter!
Trading Bible here> therumpledone/the-ideas-that-i-trade-by-t3256/page1670

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Postby prochargedmopar » Tue Jan 31, 2012 12:33 am

BTW,
In this most recent post by M.O. at the end of the page he is getting closer to helping the loser/scalper/chicken little, but still NO CIGAR.

http://kreslik.com/forums/viewtopic.php ... c&start=70
#1BODY in direction of profit #2INCREASE lot size Obsessively
My Losses cause me Great Laughter!
Trading Bible here> therumpledone/the-ideas-that-i-trade-by-t3256/page1670

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Postby dojirock » Tue Jan 31, 2012 3:22 am

Pro,

Im glad your telling me like it is! Dont be afraid of what I think of ya. Im here to learn, your willing to help, I will take it. After reading the above, and I will continue to read it over and over until i get it, what I hear you saying is look at longer time frames to determine a direction? Then enter with a stop lets say 10 pips. I scalp, so i take 15 pips profit. So instead of reversing and scalping back down, take my profit and add it to my stop to enlarge it. When price turns again to continue in the long term direction up my lots, but keep the 10 pip stop? am i close?

If i am, the problem I have is every time I try to trade more than the 5 min chart I lose. I cant see longer term direction, or trend. Or maybe im making it way to hard. Today i made 80 pips scalping up and down 4 trades. I can see kind of how if I had added to my stop I could have survived the drawdown which did stop me out today by 4 pips. But this is where im blind, where does the confidence come that the trend is going to continue?? With a short term mindset, I dont know how or what to look for for longer term?

May be im missing the point completely. I can see price moves 100's of pips per day, looking at the daily. I have no idea when to enter unless its a scalp. Is it possible that i could be going the wrong direction adding to my stop and losing my 1% lets say 5 times in a day?

Im trying, really i am....

thankyou for your patience

dojirock
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Postby prochargedmopar » Tue Jan 31, 2012 10:59 am

A little closer, BUT your still talking about trading, entry, stops, ect.
That is NOT your problem. How do I know this? 4 trades and 80 pips!!!!!!

One more section then we show what the brokers/banks will NEVER teach.

MightyOne again:

I was talking to a friend IRL and to paraphrase, I said that if you always focus on the zig and the zag then you will never see the zoom.

How many of you have looked at a daily chart?

Do you not know that price moves a hundred or hundreds of pips from the open to the close of the day?

How many of you have looked at a weekly chart?

Do you not know that price moves HUNDREDS of pips during the course of a week?

Based on that information why do you find it so frackin hard to be profitable?

If you always know where you are going then you will alwys make it to where you are trying to get

So where are you going?

Several hundred pips in some direction!!

How are you going to survive the journey?

Now that is the quetion...

By way of the smallest risk crammed into the tightest space so that your reward can be seen from the heavens. (this has haunted me for years......pro)

The probability of any particular trade surviving such a journey is small compared to short term (only) trading so you have to remind your self that your suffering is in the name of a reward that can be seen from heaven. A reward so great that it looks like an e-book fairy tale promise.

Some fail to realize just how important a trade is that dwas not immediately wrong.
Your stops should be expanded with your profit prior to a correction and then, considering that price moves hundreds of pips in either direction, see if you happen to be right about the long term direction.

The initial risk you take is small because the probability of success is lower, but you compensate for lower probability and longer duration with your ability to trade multiple currencies due to your low risk.

I know it doesn't make sense:

I tell you to risk little and then I have you risk all of your profit.

I tell you how to trade against people holding onto profit and then turn around and suggest that you hold onto yours.

This is a completely different set of psychological edges we are dealing with.

You are offering your profits while others are "protecting" them.

You are investing in your future while they are living for today.

You are long becasue the longer duration charts suggest that price eventually moves great distance from the point of your entry.
They are long because they are trying to make 10 or 50 pips a day out of some sort of physical need for money that has nothing to do with anything.

The list continues with you prospering and the others sweating through the days only to achieve four decimal places to the right of what you are bringing in.

Let not the talk of long duration tire you as I am still taking about trades which are entered and exited within the same day.
If you have already made an enormous gain on your account then it doesn't hurt to try a weekly and see if you can't land a 30, 40, 50% additional return.
END

MightyOne does the best he can here and this passage was the content that really, really, got me to thinking. He does NOT have the same losers mindset/difficulties so it's hard for him to relate too those that do.
#1BODY in direction of profit #2INCREASE lot size Obsessively
My Losses cause me Great Laughter!
Trading Bible here> therumpledone/the-ideas-that-i-trade-by-t3256/page1670

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Postby newscalper » Tue Jan 31, 2012 11:05 am

Pro, there's a lot of questions on these charts that I wondered if you were able to help with?. I know I'm close but not quite there yet. The additions is space which I've not gone into here. My overall problem with space atm is the notion of not closing out when yo're in the red, markets do not always come back. You can get a range expansion of 100% against just as easily as for. It's not just about bottom line, it's also about risk and drawdown getting that bottom line. To me, at the moment space looks no more than an accumulator on the GGs. Sooner or late you will lose the lot if you don't know when to take your winners or when to cut your losers.

Anyway, that's by the buy.

My charts show my questions. Thanks very much:

Image

Image
+ When price does not come to your line do you look for the same thing on the smaller TF (say 15 minute in this case as it's the H4 chart - i.e looking for a long, so some king of breakout of a swing high on the m15? Or do you look for a rat on the lower TF? Cheers

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Postby newscalper » Tue Jan 31, 2012 12:14 pm

dojirock wrote:Pro,

Im glad your telling me like it is! Dont be afraid of what I think of ya. Im here to learn, your willing to help, I will take it. After reading the above, and I will continue to read it over and over until i get it, what I hear you saying is look at longer time frames to determine a direction? Then enter with a stop lets say 10 pips. I scalp, so i take 15 pips profit. So instead of reversing and scalping back down, take my profit and add it to my stop to enlarge it. When price turns again to continue in the long term direction up my lots, but keep the 10 pip stop? am i close?

If i am, the problem I have is every time I try to trade more than the 5 min chart I lose. I cant see longer term direction, or trend. Or maybe im making it way to hard. Today i made 80 pips scalping up and down 4 trades. I can see kind of how if I had added to my stop I could have survived the drawdown which did stop me out today by 4 pips. But this is where im blind, where does the confidence come that the trend is going to continue?? With a short term mindset, I dont know how or what to look for for longer term?

May be im missing the point completely. I can see price moves 100's of pips per day, looking at the daily. I have no idea when to enter unless its a scalp. Is it possible that i could be going the wrong direction adding to my stop and losing my 1% lets say 5 times in a day?

Im trying, really i am....

thankyou for your patience

dojirock


No, he isn't saying keep the 10 pip stop - he's saying that on the next trade the profits from the first trade is added to the stop and you keep your lot size the same. This gives you more space and effectively more time. You can go as big as you like with space and each time your time outlook grows bigger: it takes time for price to move.

If you can't get out of the scalping mentalilty think of it like this - you found your setup on what? the 5 min chart? which has say a 2xATR of 10 pips: over X period of time it's statistically known to wiggle up and down X amount., which you used as your stop.

You bet a dollar a pip and won 20 pips. You now have 30 pips to play with. Still not enough space, so you scalp another 10 pips on the 5 minute chart, which over X period of time is statistically know to wiggle up and down X amount.

You now have 40 pips to play with and now have enough space to move to the 15 minute chart and look for the same 'scalp' setup. You still only risk a dollar a pip, just the same and the initial risk to your starting account is still actually only one dollar over 10 pips (this is all a mind trick where you say profits are not profits until you decide they are realised profits), but you are holding for longer. ATRs on 15 minute are larger than 5 minute yes? So the potential move is going to be larger, so your profits, from only 1 dollar per pip are potentially larger.

Now there two or three ways to play it....and they all assume you never lose :roll:

1. You stay on the 5 minute chart but keep increasing your space. i.e. you get more and more wiggle room each time you win, therefore life gets much easier as you can wait for trades to 'come back'...problem: they don't always come back, you can lose the lot and end up at 0 space again.

2. You progressively go up the timeframes as you gain space, and do this or a combination of this and 1 above.

3. If you have too much space for the timframe you wish to trade you can increase the dollar amount per pip.

All of the above, the risk to your INITIAL capital never changes. However, there is nothing anywhere in this way of thinking that says you cannot lose 50%, 80%, 100% of your gains at any one point. It's all or nothing. It's an accounting and mind trick where you are saying that money gained so far isn't your money - your money is just your initial capital. All very nice as long as you don't have a series of losing trades. Drawdown is still there, it's just in a different column in the accounts because you're not realising it until you put money from column B into column A.



Do I have it right? Personally I'm still not 100% sure: concepts on the site would be so much easier for everyone to understand if plain english was used, it would save a lot of messing about and re-explaining for years on end.

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Postby bredin » Tue Jan 31, 2012 4:10 pm

newscalper, you seem to be assuming that a trader is actually foolish enough to allow his stop to get hit.

That what all the talk about IF/THEN lines is about.

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Postby MightyOne » Tue Jan 31, 2012 4:22 pm

You have three easy addition types:

Finger Fibonacci: 5 + 2 + 1, 8 + 3 + 2, 13 + 5 + 3 (70-80 rets)
Fibonacci: + 3 + 5 + 8 + 13 (~618 rets)
Kamikaze: x2 (usually a resize after exit).

On small charts I would use Finger Fibonacci but start with say 8 lots instead of 5.
Fibonacci has a way of magically resting positions behind swings without calculation on your part.

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