The ideas that I trade by:

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TheRumpledOne
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Postby TheRumpledOne » Thu Nov 27, 2014 6:47 pm

http://i60.tinypic.com/zmfme0.pngImage

MO:

I define RISK as the amount you are willing to lose on a trade

MAXIMUM RISK = 2% * ACCOUNT BALANCE.

POSITION SIZE = RISK / STOP LOSS.

As your stop loss increases, your position size decreases, so the risk is always the same.

In your annotation, you say less risk...

What is YOUR definition of RISK?

Thanks...
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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aliassmith
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Postby aliassmith » Thu Nov 27, 2014 6:59 pm

MightyOne wrote:
aliassmith wrote:
MightyOne wrote:After your initial entry your 'chart window' expands with the current price and can only collapse to x (your stop).

Adding size moves 'x' closer to the current price (think trailing stop) to normalize risk and so
trading the large chart is simply placing and trailing a stop loss.

I explain things as they appear in my head, I am sure there is someone who can come up with a better example :)

Image


That's interesting I came across a post in NLA where you was saying something similar about your teaching skills. :shock:

I find that my usage of BDP, WDL, ZL, Candle closing over something, and
profit cushion suit me the best from your teachings. Well I also look at a
Texas hold'em tournament style of money management.

You know in January take out $1000 to buy in and winner takes all...8 man satellite
Then roll the winnings from that $8000 into the next 8 man, $64,000 winner takes all.
Then buy into a $5000 game, etc ,etc.

There are many Mightyone-isms that I go by


If you always think of profits as 'your money' then it will just drive you insane.
The closer that you can get to a play money / 'their money' mentality the better.


I totally agree, that idea has made me gains bigger than I could
have ever imagined. Sitting at the poker table and the only ways out
are with zero or everything.

Happy Thanksgiving for those that celebrate.

As a side note...people usually make more in demo because it IS play money.
Trade Your Way as Long as It Makes Money!

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MightyOne
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Postby MightyOne » Thu Nov 27, 2014 7:46 pm

TheRumpledOne wrote:http://i60.tinypic.com/zmfme0.pngImage

MO:

I define RISK as the amount you are willing to lose on a trade

MAXIMUM RISK = 2% * ACCOUNT BALANCE.

POSITION SIZE = RISK / STOP LOSS.

As your stop loss increases, your position size decreases, so the risk is always the same.

In your annotation, you say less risk...

What is YOUR definition of RISK?

Thanks...


Lets take an example that you are familiar with :D

Say that you are trading from the daily+ extreme and you have decided that you can enter at any price within 20 pips from that extreme.

20 pips is your maximum risk ('space'), but if you enter at 10 pips from the daily extreme then you have entered for 50% less risk.

Now here is where we jump deeper into MO logic (you might want to get off the train!):

Since you planned on risking 20 pips, -20 pips (2%?) is your definition of a 'loss'.
If you enter at 10 from the extreme and get stopped out at -10 then you still have 10 pips.
If 2 units and 20 pips = 2% then your remaining 2 units and 10 pips = -2%...or 1 unit and 20 pips = -2% (reducing units 're-inflates' 'space').

Now lets say that you decided to re-enter later with 1 unit and 20 pips.

Price breaks higher, you double your position size to 2 units, cut your 'space in half, and shortly there after take profit.
If your total space was 30 when you doubled to 2 units then, at that point in time you cut your space to 15 pips and 2 units.
If you gained 10 more pips before you liquidated then you total space is 25 pips and 2 units...or 16.6 and 3 units ---> (2/3) * 25

And so the cycle continues of placing stops at the daily extremes, entering within the total space allowed, having 'space' left over to 're-inflate' so that you are never truly stopped out until you run out of units to reduce...

a constant 'toying around' with size and space until you either lose 2% or hit your % target.

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TheRumpledOne
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Postby TheRumpledOne » Thu Nov 27, 2014 8:01 pm

Let me convert that to English (LOL) and ponder for a while...

thanks MO
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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MightyOne
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Postby MightyOne » Thu Nov 27, 2014 8:23 pm

TheRumpledOne wrote:Let me convert that to English (LOL) and ponder for a while...

thanks MO


The idea of 'space' may be confusing at first but it is just visual math:

10 units at 30 space:

Fewer units / same risk:

or 8 units and 37.5 ---> (10/8) * 30
or 6 units and 50.0 ---> (10/6) * 30

More units / same risk:

or 12 units and 25 pips ---> (10/12) * 30
or 15 units and 20 pips ---> (10/15) * 30

Imagine a square as your initial risk.

The price where you enter is the top of the square so that your box is re-positioned lower.
The square might then hang below the extreme, where you stop is, leaving a smaller square after you are stopped out.

Once in a long trade the top of the box, the entry price, moves with the current price.
Now the math says that if you double your size you must cut your space in half ---> (1/2) * 30 = 15 <-- doubling from 1 unit to 2 units reduces 30 space to 15 thus 'trailing your stop' closer to the current price.

Or you might have just taken profit at 1 unit and 30 space and can re-position your stop at a new daily extreme for:

1 unit and 30 space
2 units and 15 space
3 units and 10 space

Once you can visualize 'space manipulation' your whole world changes and fear that you had about losing a trades evaporates & your goals appear as matters of time.

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Postby MightyOne » Thu Nov 27, 2014 9:05 pm

Crash Zones are called 'Crash' Zones for a reason:

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Postby MightyOne » Thu Nov 27, 2014 9:11 pm

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Postby prochargedmopar » Fri Nov 28, 2014 1:10 am

MightyOne wrote:
aliassmith wrote:
MightyOne wrote:After your initial entry your 'chart window' expands with the current price and can only collapse to x (your stop).

Adding size moves 'x' closer to the current price (think trailing stop) to normalize risk and so
trading the large chart is simply placing and trailing a stop loss.

I explain things as they appear in my head, I am sure there is someone who can come up with a better example :)

Image


There are many Mightyone-isms that I go by


If you always think of profits as 'your money' then it will just drive you insane.
The closer that you can get to a play money / 'their money' mentality the better.


"If you always think of profits as 'your money' then it will just drive you insane.
The closer that you can get to a play money / 'their money' mentality the better. " M.O.

The master key to Gazillionaire trading success.

THEN it's,

1. Pos.
2. Lot size
3. $$
#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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TheRumpledOne
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Postby TheRumpledOne » Fri Nov 28, 2014 3:57 am

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



Please do NOT PM me with trading or coding questions, post them in a thread.

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kate682
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cones & pennants

Postby kate682 » Fri Nov 28, 2014 10:04 am

MightyOne wrote:Keep in mind I make all of this up; it is not real technical analysis until someone sells it in a book ;)

Kate's Chart:
Image


Thanks Mo, Jalarupa, Captain
Ha, so i've drawn my triangles completely wrong. Just cannot see how to draw them.
Have copied Jalarupa and simply superimposed that type over as per chart below, however,
on what basis should they be drawn?
And then i just trade space from rejected breakouts at those lines.
Surely it can't work?!

Anyway focus today is to try and find the triangle drawing rationale
Hugs Kate

Image

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