Jhx's Journey

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Re: Jhx's Journey

Postby Jhx » Fri Jun 29, 2018 2:28 am

IgazI wrote:
Jhx wrote:
Trade #2:
Entered when the price broke out of the previous candle's high. Exited the trade at +3.
Note: My stop was at the open, maybe I was lucky this time but I need to stick to my rules. Giving it an 11 pip~ wiggle room to grab 3 doesn't make much sense to me (especially if I'm only trading once per 1H bar). ...


Lines, pips, what's the diff? I think that we are all better off on larger charts.

sam_ting.png


Would you mind explaining that? I'm trying to understand but I don't think I'm getting it #-o

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Re: Jhx's Journey

Postby IgazI » Fri Jun 29, 2018 1:31 pm

Jhx wrote:
Would you mind explaining that? I'm trying to understand but I don't think I'm getting it #-o


Sure.

Maybe you have 1 pip set to $10, but 1 pip is not the only width that can equal $10 (eg 5 pips = $10, 20 pips = $10, etc).

The idea here is that you always want your risk to be $10 AND $10 to always equal x% of the [?] range (whatever formula you are using) of the largest chart that you would trade:

Let's say that the range is 60 pips and you set 1 pip to $10. What is your risk? Potentially hundreds of dollars if price gaps past your SL.
But what if we set 30 pips to $10? What is your risk now? $20? Even if it were multiples of that it would still line up with what you intended to risk in the first place.
If you want to make $50 then use the ranges to trade exactly to the goal instead of finding the pair with the lowest 'x' value and exposing yourself to the maximum amount of volatility.

Instead of risking 8 pips ($80) to make 5 ($50) why not risk 30 ($50) to make 30 ($50)?
What is the difference between making $50 in minutes and taking the rest of the day off and holding a trade for less than 24 hours and making $50? Risk.

To achieve greater ratios than 1:1 you can focus on exiting prior to -30 (reduce risk) and using 1/4 of your profit to increase your position size (maximize reward).

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Re: Jhx's Journey

Postby Jhx » Fri Jun 29, 2018 2:14 pm

Today's trades:

buyzone-usdcad-06-29.png
buyzone-usdcad-06-29.png (53.29 KiB) Viewed 462 times


Bar 1: Long
I entered long when price broke out of the previous candle's high. Placed my stop at the session open. Price went down, and triggered my SL at -5. Then it exited both sides of the zone and made a very big move to the downside, but I'm limiting to only 1 trade per bar.

Note: I'll analyze my past trades and charts and see if I should get rid of this rule or keep using it :lol: . My idea was to focus on the entry and avoid "overtrading" but I might just be missing entries that I actually should be taking. We'll see.

Bar 2: No trade
Candle opened outside my zone.

Bar 2: No trade
Candle opened outside my zone.

Weekly Total: +10

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Re: Jhx's Journey

Postby Jhx » Fri Jun 29, 2018 2:22 pm

IgazI wrote:
Jhx wrote:
Would you mind explaining that? I'm trying to understand but I don't think I'm getting it #-o


Sure.

Maybe you have 1 pip set to $10, but 1 pip is not the only width that can equal $10 (eg 5 pips = $10, 20 pips = $10, etc).

The idea here is that you always want your risk to be $10 AND $10 to always equal x% of the [?] range (whatever formula you are using) of the largest chart that you would trade:

Let's say that the range is 60 pips and you set 1 pip to $10. What is your risk? Potentially hundreds of dollars if price gaps past your SL.
But what if we set 30 pips to $10? What is your risk now? $20? Even if it were multiples of that it would still line up with what you intended to risk in the first place.
If you want to make $50 then use the ranges to trade exactly to the goal instead of finding the pair with the lowest 'x' value and exposing yourself to the maximum amount of volatility.

Instead of risking 8 pips ($80) to make 5 ($50) why not risk 30 ($50) to make 30 ($50)?
What is the difference between making $50 in minutes and taking the rest of the day off and holding a trade for less than 24 hours and making $50? Risk.

To achieve greater ratios than 1:1 you can focus on exiting prior to -30 (reduce risk) and using 1/4 of your profit to increase your position size (maximize reward).


I think I now understand what you're getting at.

Right now my R:R is less than 1:1, which I don't know if it's a bad thing or not, it's just the way it is. Then again, I'm learning and testing.

Regarding pips, ranges, risk and position sizes, my position size is built based on my risk, which is 1%, and this is the formula I'm using:
Position Size = Risk / Stop Loss
So I'm not having the same $ per pip in every trade (although it's similar because of the method I'm using).

Honestly, the reason I'm risking 5~8 to make 3~ instead of risking 30~ to make 30~ is because of the method I'm using. That's pretty much it.

Having a bigger stop loss (in pips, not risk) and goal also "softens" spreads and commissions. I didn't consider using part of the profit to increase my position size and maximize reward, that's interesting. But the thing is that I'm still a beginner, and I feel that if I start changing things now and try to get fancy by "micromanaging" my trade I'll *censored - swear word* up :lol: . But it's something that I could do later on when I get better.

I still need to grab the basics #-o .

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Re: Jhx's Journey

Postby Jhx » Fri Jun 29, 2018 3:16 pm

IgazI wrote:To achieve greater ratios than 1:1 you can focus on exiting prior to -30 (reduce risk) and using 1/4 of your profit to increase your position size (maximize reward).


The "adding" thing got me thinking.

Let's say I risk $100 to make $100 (with a 100 pip SL, wich is at $1 per pip). I'll call this trade #1.

Worst case scenario, I lose $100 when my stop gets hit.

But, let's say I'm at +20 pips (+$20) in trade #1. I can use 1/4 of the profit (+5) to increase my position size, so I enter trade #2 (while #1 is still going).

So, if the trades go against me I can:
1) Let both trades run, and close everything when I see that the whole thing is at -$100.
2) Close trade #2, and move up the SL from trade #1. Because if I don't adjust the SL of trade #1 that means I've only added to my risk ($105 instead of $100).

So trade #2 looks like this:
Risk: $5
SL: 20
That's $0.25 per pip.

If they both keep going in profit, and my goal is $100:
Had I opened only trade #1, I would need the trade to go to $100, but since I have 2 trades going in the same direction, that means I can exit sooner because it doesn't need to get to +100.
Trade #1 would need to be at +85~ (which means that by then trade #2 would be at +65 or $16 because I opened it when trade #1 was at 20).

But isn't that essentially the same as opening a trade with a larger position size and smaller SL and TP? Am I missing something?

Or is this giving me more chances to be wrong until I'm right and I'm having a hard time grasping that?

Edit: I think that's the case. If I had a larger position size initially my SL would have to be tighter in the first place. If the position size is smaller, that means the SL can be larger. Maybe a bigger move would've taken me out on a trade with a larger position size, but the latter would've "survived".

Am I getting it or did I completely miss the point? :lol:

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Re: Jhx's Journey

Postby IgazI » Sun Jul 01, 2018 2:53 am

There is risk and there is reward and between that is pips (+/-) and position size (+/-).

Pips and position size are two sides of the same coin: if you start with $20 risk and make $10 then you can either have say 30 pips until your stop is hit or you can revert back to 20 pips with *(30/20) size or even set a smaller stop (30/15) and enter for double size with a 15 pip stop.

You are right, you cannot just use larger stops on smaller charts: you have to use the ranges of whatever chart that you are trading.

I would exit and consider my options rather than 'add' to a live trade.

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Re: Jhx's Journey

Postby IgazI » Sun Jul 01, 2018 2:13 pm

What does it mean to "trade a chart"? To me it means that a person is sizing trades to survive the range expansions of one or more candles.

If you carried over 8 pip lines onto the 12 hour chart then the lines would be ~4x closer together and your risk would be ~4x greater: if you were "trading price" then it wouldn't matter, but since you are "trading a chart" (trying to survive 1+ candles) it does indeed matter.

People who find it more difficult to trade large charts simply do not use the right position sizing for the chart that they are trading:

with the right position sizing you can trade any chart as if it were a small chart.
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Re: Jhx's Journey

Postby Jhx » Sun Jul 01, 2018 7:55 pm

Weekly Results:
Trades: 6
Winners: 5 (+3 pips each)
Losers: 1 (-5 pips)
Total: +10

Observations / Analysis / Things I noticed:
1) I made trades every day, except on Wednesday, because there were inside bars and candles kept opening outside my buyzone.
2) Price movement was there, even within the 3 hours I'm trading. In 3 out of 5 days, price exited the zone within my session for at least 16 pips (!).
3) Out of the 5 winners, 4 ended up making more than 3 pips (only 1 of those winners retraced after +3). < I'd like to get better at catching these, I'm just not sure how. Grabbing the first 3 is simpler because it's a "fixed" amount. But when trying to catch a larger run, I'm not sure what I should be looking at. I'd like for this to be what I focus on next week, but I'm lost :lol: . It's not about being greedy, it's about making an honest effort to get better at trading.

Adding / Filling the blanks in my plan:
I missed a few things which I realized while trading this week.
1) Don't trade during news. Close the trade 5 minutes prior to the pair-related news, and don't take the trade if the trigger gets hit within those 5 minutes.
2) If the wick is very small don't take that wickzone trade and instead, wait for the price to break out of the buyzone to enter the trade.

Note to self: Still sticking to the 1 trade per bar rule, but I'll pay attention to how price behaves (pay close attention to the current hourly range and the average hourly range). Maybe re-entries aren't a bad thing at all.

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Re: Jhx's Journey

Postby IgazI » Mon Jul 02, 2018 4:04 am

1% daily compounded returns is worth more than a thousand pips :)

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Re: Jhx's Journey

Postby Jhx » Mon Jul 02, 2018 4:41 pm

Today's Trades:

buyzone-usdcad-07-02.png
buyzone-usdcad-07-02.png (51.82 KiB) Viewed 221 times


Bar 1: Long
Entered long at the long trigger. Didn't enter when price broke out of the previous candle's high because it was too close to the session open. Stop was placed at the previous candle's high (this is my way of trying to "cut my losses short" by using wick zones).
Exit at +3.

Bar 2: No Trade
Candle opened outside my buyzone.

Bar 3: No Trade
Candle opened outside my buyzone.

Today's Total: +3

---

Observations:
Price broke out of the zone by +20 pips within the first 2 hours and H1 candles never opened again within the zone (5 hours in now, price has left for 40+ pips from my session open!).

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