MidKnight

Yes, same here mate. I've been finding it a tad annoying as I do quite regularly mark forums the read to start with a clean slate upon next visit.

Hiya Thales, I wasn't sure if you read my first post fully just because it looks like you may be implying that I was talking down the importance of S/R....If that somehow came through, then it couldn't be further from the truth as S/R has been paramount in my trading for at least the last 3-4 years and continues to be today. Now my comments about R/R are maybe not so nice I guess why I bring it up is I know a guy that is basically position trading currencies on an EOD basis and he comes up with these 10:1 R/R scenarios for his trade ideas which to me has virtually no relevance. Most people seem to do this when talk about R/R. I can do the same with my trading here and say that trade XYZ is good because it has a 10:1 R/R. My point is I can make up a big reward value that has no reality behind it other than a divine projection about the future. It's hard enough to get it right with just long, short, or sidelines let alone getting it right how far it will go - hehe. It's meaningless to quote on its own - that is all I was getting at. I find it a useful stat based on past trade log data when used in conjunction with other stats, but on its own, as we often see it touted in books I see little value to it. I'm a huge fan of your every trade starts a scalp idea, but because of my timezone it makes it difficult to implement without going completely into a graveyard shift. I also lack the skills to execute this consistently, unfortunately -- but I continue to work on it With kind regards, MK

Ya know....if commissions are such a high percentage, you may be better off with a non commission FOREX broker than the futures. Typically AUD/USD spreads are in the 1-1.5 pip area. Regarding your spreadsheet. As you can see here, PF is maybe not the best way to assess a method juts because we can see that the 2 pip target has the best PF but doesn't make the best money. Trade frequency, average trade, and win % give a decent well rounded picture of how the method does. If we examine those based on the data you have shown; the slightly lower win % with the significantly higher average trade on the 3 pip target versus the 2 pip target looks like the best choice. Targets bigger than 3 pip sacrifice too much win % for a smaller gain in average trade. I don't know how you are choosing to enter, but if you are entering with momentum then slippage could be significantly more than is assumed and with such a small target it could really skew your test data. In part, than is why I like the idea of what that girl you mentioned was doing. Taking the slightly bigger bites reduce the effects of a couple pips slippage. I've started my own investigation with 'swing scalping' and if I find anything worth posting then I will do so. With kind regards, MK

Hi daedalus, This is a very heartfelt discussion for me - where do I begin in talking about your post as there is much I would like to talk about.... Let me start by saying I think the whole concept of risk and reward is total BS. I mean, it is something that can be analyzed and examined on PAST trade data but even then it means very little without some other stats to support it. So often you see people talking about their R/R before they put a trade on but we just don't know what will happen, so why bother. When we are entering trades, most of us wait and observe the market before we decide to jump in, the same should be done for exits rather than make up some big number to give a 10:1 reward so one can feel good about the trade prospect and put the trade on. I'm not meaning to insult anyone that does that. I just think that exits should be evaluated and assessed as meticulously as entries are - that is, as the market is unfolding we should be taking action and having a plan based on this new market information rather than a rigid exit set minutes ago if scalping or days ago if swing trading. Use the most current information available within ones timeframe. Expectancy or, even using average trade is the way to go. About 2-3 years ago I was actively scalping the Hang Seng Futures and really doing well because the volatility was high. My approach was highly discretionary and it sounds very similar to the sort of thing you are talking about here. I would use wide wide stops and I'd also scale-in up to 5 times. Maybe once or twice a month I would catch a huge winner, but for the most part the avg trade was 39 points. This was counter-momentum trading and sometimes I'd read it wrong and eat it on all 5 entries as that HSI can really rip sometimes! The win rate was high and I had a handful of losing days a month with the avg losing day canceling out the avg winning day. Life was good. And then the volatility collapsed and I started to struggle with this approach. Maybe in part because I was not adapting to smaller targets and also in part because my entry feel was largely based on high chart emotion that had seemed to disappear overnight As you say above, just take what the market offers - well that, my friend, is often not so easy for me to see in real-time But I understand what you are trying to convey I think. I also think an approach like this really excels with a scale-in approach (adding to losers some people call it) of which I like to scale-in with a fixed percent so that the size is growing on each successive entry and thus greatly pulling the average entry closer. I'll probably cop some flak for posting this, but this is how I like to use a scale-in approach. Perfection is not required and not possible in an imperfect market. I personally find it easier on my mentality to go for swings larger than a couple of pips just because all that type of trading is too fast for me. How you described that girls system (maybe call this 'swing scalping') is the sort of thing that appeals to me and warrants some more examination on my part. So after all my long-winded response, no sir, I do not think it's BS. Lets dig into it! With kind regards, MK

I'm keen to see this topic continue and look forward to participating as well. You won't be able to keep out the cranks unfortunately, after all, this is the Internet - haha. With kind regards, MK

I don't get what you are saying there - what is BS? Or what is possible/impossible - I cannot tell what you are referring to based on your post or the quote. With kind regards, MK

That is fantastic, thanks Thales. BTW, I hope you are managing through your heavily business workload and look forward to that ending so you can back to posting here With kind regards, MK

There was also an A50 future I thought. Oh wait, maybe the thing I am thinking of wasn't an A50 (I said earlier that I wasn't entirely sure....). I just looked in my data cache and it seems the symbol I am thinking of was HHI-HKFE which I believe was the H-shares index. Sorry for the extra noise to your question :-\ With kind regards, MK

last time I looked at this about a year ago there was just no liquidity for this on the SGX. From memory, the volume for the china A50 was on the HKFE. I may have it slightly wrong if it was the china A50, but there was a chinese index trading on the HKFE with pretty decent liquidity and for some reason the A50 sounds about right. Most of the products on the SGX just don't have enough volume, sadly.

So basically you are just trading the cross rate (EUR/GBP) long or short....I'm still at a loss on exactly what you are doing because you make it sound more complicated then that.... With kind regards, MK

Maybe you would like to post some examples and add some meat to 'the correlation trade' such as finding candidates, trade management, risk control and position sizing. As your post reads right now it is nothing more than an advertisement for the managed accounts you mention. Especially given that you have been a member of TL for 18 months and this post of zero information is the first post you make.....Get the discussion rolling by adding some meat. With kind regards, MK

Attila, Did I read that right in your last statement that 1 unit is still being traded? No big deal if that's the case and you don't need to justify it to anyone on the board either. I was just curious if I was reading the statement right because you had mentioned 2 units was going to begin. I always find broker statement sort of tricky to read, especially if folks scale in/out. With thanks, MK

Good post and I agree totally. I also have this as a problem. Especially strong when the trade takes off immediately putting me up 40-50 pips with no heat and now comes back to test my entry area. I virtually always take the BE result and swear a little as I continue to track how the trade would have done had I just left the stop at a structural location. Then I swear some more as the structure prevails Just like you, I will get there. With kind regards, MK

Instead of hoping, surely you can test if 1:1 is indeed better than trying to let it run by examining your statements.....no need to hope, it either is or it isn't better and you have the data to know. With kind regards, MK

what broker are you using that has GJ at 8 ticks wide in the high liquidity USA morning time of day? Oanda is normally at 2.7 and IB is normally in the 1.5 - 2.5 area.....

Hey gladiator, I'm a little bit confused by your statements.....Your prior update showed an ending balance of 135.68 from trading up till June 2nd. This last statement shows a starting balance of 84.57 on June 3rd - what happened with the ~ $50 in between that? Unless I'm missing things, your broker just stole it! :-O (just kidding) With kind regards, MK

LOL - I had to laugh at the title "...Actually Work". Man, I been down that road too - so my laughter was also a reminder of the pain. Thanks for the early morning chuckle Apologies for the OT post.... With kind regards, MK

50% gain in 2 days - very nice! Also likes like you are using a fixed % of risk per trade. Should you catch nice winning streaks and short losing streaks this will snowball up quickly. All the best in the race, have some fun With kind regards, MK

Check out a thread started by Cory on this topic of spot FX and brokers. The only other tips I can comment on are that price movement is not a reflection of the last trade as it is in the futures market. Because spot FX is decentralized, it is impossible to ever know the last trade. What you see updating on the charts is strictly a bid/ask change and most charting packages will represent price as (bid + ask) / 2. Also, because you use volume in your attempt to asses breakouts, you will not have this available on the spot FX world. Welcome to the dark side :haha: With kind regards, MK

in terms of points it moves - sure it trumps it. But in the low volatility, just like all markets that get low volatility - it will chop a heck of a lot more and your signal vs noise goes way up. Furthermore, it is not a 24 hour market and every day will gap, usually quite large and that in itself often seems to suck the volatility out of the day quite often. Take a good look at the data that was shared with you in another thread, you'll see what I mean. I know that at least part of that period in the data set (the last 5 months) will have at least some sections of low volatility. Back in the whole subprime thing HSI was having daily trading ranges in excess of 1000 points. Trading was easy then.....sadly it didn't last forever With kind regards, MK

The HSI volatility is not consistent IMHO....like most markets it can go through long periods of lower volatility. The only other semi-consistent markets I can think of would be currency crosses, especially anything crossed with GBP. With kind regards, MK

Huge day for you FX_Cowboy - congratulations!

Hiya, The reason I never responded to this thread is in part due to volatility changes. Like MMS mentioned above, GBP/USD is probably the most consistently volatile major and that is where I like to put most of my effort. But having said that, I also do look at some of the GBP crosses and trade from them when the vola gets a bit lower or I find the context to be somewhat choppy/messy. If I had to pick just one, I'd pick GBP/USD With kind regards, MK

FX_Cowboy, I've been extremely impressed that you are able to scalp so actively through Oanda. Your results look very consistent overall. Over the years, I have tried to trade like this on several occasions but my results become hugely determined by the market conditions - high vola this works well, but its the medium / low vola that hurts me as I overtrade in those conditions. Kudos for being able to make it work, and through a bucket shop too! I'm enjoying the thread thus far, thanks for maintaining it Thales. With kind regards, MK

Hi Attila, A highly personal and non-rhetorical question for you, but have you considered that the 30m hold approach you are trying to instill just does not suit your personality? It may be easier and less painful to trade in a manner that suits your personality - regardless if it is less profitable than another approach you would like to trade. Some food for thought With kind regards, MK