thalestrader

I did not short the EURJPY, though in hindsight it would have allowed for at least a break even effort. Best Wishes, Thales

Hi Rustie, If you are asking whether I would have seen a short there, I would likely not have shorted due to the large quick impulse immediately prior to the choppy overlapping price action following. This does not mean that a decline would not develop there, but I would not be participating, at least not based upon what I see on your chart. If anything, I'd be inclined to buy a break to new highs (see chart below). Best Wishes, Thales

Hi Folks, EURJPY gave some nice lessons last night in the power of support and resistance, as well as another good example of why you should be careful and trade with a tight stop loss if you are trying to sell a break to new lows against a possible ending diagonal (obviously you also want to be careful when buying new highs against a possible ending diagonal in a rally). Last night's "break down" occurred just a short distance above an anticipated support level. There was enough day light to justify a short, so long as you moved to break even once price moved more than 5-7 ticks in your favor. Price fell to within a whisper of support, and then rallied strongly, "completing" (for lack of a better phrase) the ending diagonal. After that, it was the S&R show, one of my favorite bands. I never tire of their music. Best Wishes, Thales

I'm shutting down now Rustie. I'd like to have helped you, but I assume you are asking about current price action, and yet the chart you attached is from almost two weeks ago. Unless its just been a long day and I'm not seeing what I think I'm seeing. Maybe someone else can help you once you clarify what it is you are asking. Best Wishes, Thales

Hi Marko, Did you also trade the ending diagonal you show in your chart? Best Wishes, Thales

Hi there, marketwavez, I have a thread here at TL focused mostly on trading spot forex and currency futures. I do a little Elliot Wave myself, and you if you wish for a place to post your counts I'd welcome you in my thread. You can find it here: http://www.traderslaboratory.com/forums/f208/reading-charts-real-time-6151.html Best Wishes, Thales

Here is how the pattern has played out over the last few hours. A fairly reliable pattern, in most cases Best Wishes, Thales

EURJPY ... Best Wishes, Thales

Hi Folks, Here is the current look of the EURJPY. We took a short at 131.41, and were stopped out for +.8 (8 tenths) of a tick. Moved the stop to +1 quickly as price declined to within ticks of anticipated resistance, and the current action over the last few hours has produced a wedge-like structure, aka ending diagonal. Best Wishes, Thales

Hi TradeRunner, I made some notes concerning your trades from yesterday (1/04/2010). Let me know what questions you have. Best Wishes, Thales

So you are +15 ticks after the two days? 15 trades 5 wins @ +30 = +150 ticks 9 losses @ -15 = -135 ticks 1 BE I know it doesn't look like much, especially when you consider that close to half your profits (if not more) are eaten away by commissions/fees. But this really shows how powerful money management can be in determining profitability. Your winners are twice your losers. You have a 33% win rate yet you are net profitable, albeit only slightly once commissions/fees are considered, but net profitable nonetheless. That is the beginning of something very good for you. Now, two things to consider: 1) Your decision to to BE at +16 cost you a +30 winner while not preventing any of your -15 tick lossers. Also, you were stopped out to the tick on that trade. So, if you goal is to trim your losers, it would appear that the "move to BE" at 15 might not be as effective as you'd like. Of course, two days do not make a trend, or a mechanical system. But you want to keep your records, and this is one thing you should track: How often does your moving the stop prevent a ful -15 tick stop versus costing you a +30 tick winner? Over time, the rule must prevent 3 losses minimum for every one win it costs you or the rule will damage your results. 2) You are getting in on the right trades. Right now you are also seeing some situations as opportunities that I would consider marginal, and some I just do not see at all. As you practice this, you too will get better at identifying what I call the 80/20 trades where there is a high probability for profit from those that are more 20/80. So your rule of mechancially moving your stop to breakeven at +30 is intended to do for you what your lack of experience with this particular approach is preventing you from doing - reduce the number of losing trades and thus increase your winning percentage. Over time, this will take care of itself without using arbitrary rules. 3) Finally, there is no substitute for trading based upon the natural ebb and flow of price. I do think that a mechancial -15 tick stop/+30 tick profit will work on the more liquid currency pairs/futures. And I think you are in the process of proving just that. But, when I brought this up months ago, it was meant as an exercise, and hence its mechanical nature. I don't want to stop you from doing what you are doing, because I think it is working for you (in spite of yesterday's discouragement). But do consider support and resistance as well. You do want to take into consideration the location of S/R relative to where you are trading and where your profit targets are. For example, if you are going long and your buy stop is only 5 ticks below a prior high or worse, only 5 ticks or so below a prior break down level, then you might want to pass on that trade and wait for the next opportunity. Similarly, if your 30 tick take profit level is three ticks below yesterdays' low, do not assume that you will get there. Keep you 30 tick take profit order, but be prepared to exit if price gets close and starts to retrace, eespecially if it does so strongly. A +15 or +20 is better than watching price race all the way back to break even and beyond on you. So I think your mechanical approach is fine,and it should help a great deal in managing the emotional aspects of this. But you do need to learn to respect S/R levels as you trade. By the way, I think you did a wonderful thing by coming back today and keeping up the effort in the face of what I'm sure was a discouraging day for you yesterday. If I wore a hat, I'd take it off to you. Best WIshes, Thales

Ok folks, This day has lasted 90 minutes longer than I wished. My stock trades are all closed, and I am short the ES and the GBPUSD (using the 6B - I should have done this is the micro account also, but i didn't). Stop loss is break even on both. My son and I are going out to race our r/c cars. I think it is too cold, but he is only four, and he thinks I'm just being funny. For today thus far closed trades are ES -7 ticks, 6B +40 on 1/2 position, so a +20 worst case with a break even stop on the second half. For the day the worst case is a +13 tick day overall. Next profit target on the remaining 6B is 1.5912 (1.5922 if I were trading the spot). ES profit targets are 25.50 and 22.50. I'll check back in later. Best Wishes, Thales

Nothing wrong with that, so long as that is part of your plan, i.e. so long as it is one of your defined trade opportunities. Is it? Yes. And if you have the mechanics down and you know what your defined trading opportunities are, then all the demo trading in the world will not prepare you for the winning and losing of real money and the seductive pull of the draw (the desire not to lose). Be patient. Trade only when price presents a defined opportunity. Trade according to plan. Best Wishes, Thales

Profit target 1 ... Best Wishes, Thales

New stop loss in red ... Best Wishes, Thales

Hi india quant, Mind letting us in on how you are trading this or planning to trade this? Did you buy on a limit, are you waiting for a break above a certain level, etc.? Thank you for sharing with us. Best Wishes, Thales

Hi Cory, Take heart that you were able to stop and reverse out of a dead trade into a fresh trade. That alone is an ability that I see lacking in many long timers. But discipline, discipline, discipline! Trade your plan. As you yourself see now, it is ok to have a losing trade (or two or three or four or however many). If you have a sound plan, which you do, and a sound approach, which you do, then apply both with discipline and the profits will take care of themselves. I promise you that they will. Control the desire to seek revenge (I'll get it all back on this one trade) and greed (wouldn't it be nice to finish today with $X.00 in my account). Trade your plan, and a year from now your account will have a balance that will make you laugh that you risked letting a good trade go bad for the sake of a $300 balance. Best Wishes, Thales

Hi EmNQ, First off, nice trading. You respected your stop losses, and you are respecting your loss limit. You can fix minor mistakes such as you made today, but you cannot fix broken discipline without some pain. This is just a day at work. Each day will have a different result, but through discipline, the aggregate of days should have a positive outcome. I have a few questions and coments, if you don't mind. Can I ask you how many pairs you are trying to trade? I would suggest you keep it to two or three, certainly no more than four, while you are learning. Until some of the mechanics of trading and identifying the opportunities according to this approach becomes more habitual, spreading your attention too thin can only lead to mistakes and missed opportunities (and you will trade all the mistakes and miss all the profitable opportunities - trust me, I did it for years; but you don't have to do so). Right now, you have to "think" about everything. After a while, you will find yourself entering trade ordes and almost being surprised when the audible alerts you that you've been filled because you almost don't remember having set the entry order. Can I ask you how you prepare for the trading day? At the very least, you should keep and study what I call an S/R chart where you place horizontal lines at important pivot points (price pivots, not artificial floor pivots). It is not a bad idea to write a cheat sheet in the beginning. For example: if price trades back to 1.606x level, I will look for a 123 short. Any longs need to be initiated at least 15 ticks below 1.606x so as to allow a "rip cord cushion". I do it myself. Some days my trades look nothing like my scenarios; but many other days, these little scripts play out as though price action were a movie and I was the screenwriter and the director. At the very least, it will make you aware of the significant levels that occurred the day before, the week before, etc. I would also suggest that you also consider employing Kiwi's suggestion: If you are coming up with a bunch of long scenarios, ask yourself to argue for the short side. It is very easy to become so convinced of our analysis that we "see" only opportunities that support our analysis (even those that are not there) and we fail to see those oppotunities that conflict with our analysis, yet would be clear as day if viewed without the bias of prior interpretation. My good friend the currency trader has a fistful of post-it notes that he has stuck around his monitor like a Lion's Mane. When he makes a mistake, he writes out a reminder, and sticks it there, e.g. Stop! Am I buying resistance or selling support? Mistakes happen. I still make my share, that's for sure. Keep smiling, and come back tomorrow. Best Wishes, Thales

"it's deja vu all over again" Best Wishes, Thales

Sometimes you have to get out of the trees (bars) in order to see the forest (not The Forrest). Best Wishes, Thales

Short GBPUSD Best Wishes, Thales

Close enough ... if you get the resistance levels right, why not sell when price responds as anticipated? Sorry for the late screen shot, but it took me a bit of time to figure where I wanted my TP's, and then to annotate the chart, etc. Best Wishes, Thales

Again, I am very unoriginal, and all the best ideas in this thread have usually come from someone else: Best Wishes, Thales

I have no idea what is going to happen or how this is going to play out, Cory. But one thing I would keep in mind is always be aware, i.e. beware of becoming so wed to your long trade that you miss a short, and vice versa. I'm not saying this is going to go short. But now that you are in the trade, pull up a naked chart of the GU, and see what you see when you do nt have your entry, stop loss, and profit targets staring back at you. Best Wishes, Thales

I just added a wee little forex micro account of $300 to my stable to explore just this topic: The Risk of Ruin. I love that phrase. Best Wishes, Thales