Ingot54

The more things change ... New leader for China this week? New leader for USA this week? ... oops!

Regardless of the advent of a couple of perfect trades, if you like, these opportunities (great setups) are both rare and common. Rare ............ because the market never throws out the same clues like a cookie cutter. Common ..... because the market always throws out the same clues like a cookie cutter. Confused? Don't be. Regardless of whether you are trading the Euro, Gold, Lean Hogs or Beans, the kinds of clues I am alluding to will present themselves over and again. Some will be vague and ambiguous. Some will be "perfect." But the outcome, though more probable than "random" is still unpredictable. No one knows what will happen in 5 minutes (there goes your in-it-for-the-trend) No one knows how many pips will eventuate from a move ( there goes your reward:risk) Keep reading OptionTimer's thread, Kuokam - you are much closer to success than most traders. Keep questioning. Keep learning. Your job as a trader - MY job - is to locate the higher probability opportunities and trust the strategy we have practiced so many times.

No one makes the kind of profits I have made in those few trades EVERY time, and I can tell you that the risk was very real that they would not materialise. But in my judgement, and with confidence in my strategy, the probability was higher on the side of success. As such, I was compelled to take the trades - there was no better time than right at those moments, to make my entry. Like other mortals, I am subject to the ups-and-downs of the success moments, and what I call the "learning moments." Some time back, here on TL, I took time out, because I wanted to give it all away. It was all just too hard. But I hadn't (at that time) devoted 7 years to getting this to work, to just walk away. But I was hurting badly. OptionTimer knows very well what I am saying, because I even turned my back on him, when he was trying to "straighten me out." I had to learn a few hard lessons. He can tell the story if he wishes - I give him full permission to do it if he wishes to set the record straight. There are further lessons for me yet. "King of the world"? Maybe ... for this moment only ... so yes, enjoy doing what you came to do. Savour the moment, and let the success of the moment wipe out earlier pain, and remind you that trading success IS possible. Next week I may no longer be king, but I shall have the reminder, that with tight management of my head and best application of my strategy, I will be positioned to receive whatever the market chooses to put my way.

Don't be put off by what others are doing. Read as widely as you can on threads like the OptionTimers approach. You will pick up some good principles there. In fact, those are some of the very best principles available. The idea of trading DAILY charts might be novel to traders who are addicted to action. But action should be reserved for the Casino. This trading is very, very serious business. The brokers will separate you from your money slowly ... or quickly ... but that's their goal. Yours is to remain viable and profit. I don't know any traders who scalp who are making heaps of money. Do you? Don't forget that not trading is also regarded as having a position in the market. When the risks are too big, stand aside - there is always that next trade, and at the same time you reinforce excellent habits in yourself ... patience being chief amongst them. There is no right/wrong way to trade - there is only learning. Right now, for the contest, I have been trading like a cowboy, with disregard to the position size. I have done that because I believe we need to be focusing on the number of pips made each month, instead of the number of dollars. I hope it causes some discussion. But at the same time, I have been ultra careful. Yesterday my biggest draw-down was 3.7%, and with the dollars I had at risk, that was quite large. Yet I didn't worry about the dollar size. Instead, I remained focused on the PIP draw-down, and knew that I would be fine. Regarding Mr Fuller's approach and examples - you may be correct in your view; but still there is something to learn there. Remember he advocates trading nDaily candles, and also uses the 4H charts to fine tune. As a consequence, his draw-down is also very small. The thing is, your risk profile will change as you expose yourself to more and more trades (live ones that is). A couple of years ago, I sat up all night with a losing trade, sweating, praying and "taking the pledge" just to get a bad loss back to a respectable loss. The breakthrough came at about 3.30am, and I finally went to bed losing about $150. Today, in live trading, my starting margin is about that, with many trades, and I don't sweat unless I am losing about $2k! Consequently, I avoid getting into those spots! My risk profile has broadened. There is a little quirky thing I do that has made a very big difference to how I see my trades. I trade a lot on demo. But when a trade goes against me, instead of closing it out and starting elsewhere, I allow the trade to continue - sometimes for days... to see what happens to it. If I closed the trade at a "loss" and moved on, I would never learn anything more from the experience. It's just a habit I developed after trading daily bars, and it's how I learned the meanderings of price. To answer your question ... yes, absolutely ... you MUST limit your risk. But there are many ways of doing it. One is by using a Stop Loss Another is by nailing entries closely Another is by trading small lots and scaling in as it progresses Another is by position-sizing according to the 2% rule. There are probably others, and it would be good to hear the opinions of others - what I do is right for me ... today ... tomorrow I might move on a bit, and this may no longer be relevant. As you said, everybody must find their own way - and I believe you are on the right path Kuokam. Keep searching and asking.

Thanks heaps Mystic - have contributed already ... a small beginning. Thanks to Kuokam for getting the ball rolling ... I am sure there will be heaps of other stuff discussed when better traders than I am begin to contribute their ideas and observations. The current discussion is "the myth of the 2% rule" and no doubt I have startled the horses with that view. btw - no trading for me today - have to work and will be unable to monitor a trade.

The key words I needed to hear from you are: " I am presently having tough times recouping the losses from 4 trades in a row in the last contest, that didn't even total 2% of my account." To understand how I came around to this ("the 2% rule is flawed") point of view, and now trade the way I do, read the link below. There are other links no doubt if you look. Forex Trading Money Management - An EYE OPENING Article | Learn To Trade I do not believe in the Reward:Risk approach either - how can you hope to tell the market where it is likely to go? Sure there are some who claim to see the supply / demand levels, and can show lots of charts to prove it. I can assure you there are many charts that could show where price did NOT reach those levels too. What you trade is probability, and if your strategy has any legs at all, then you need to risk what you - personally are comfortable with. Using this approach, you also need to K-N-O-W exactly the point at which you can say the trade is NOT working. Doing it this way, you can throw the 2% risk myth right out the window. Look - I could tell you my strategy/approach, and there would be 100 traders instantly jump all over me calling for my confinement into a mental recovery group for insane traders. But statistically 95% of those who would castigate me for the approach, might be losing traders. I have been years working this out, and I have found that many of the sacred cows of trading are nothing better than bedtime stories. It keeps traders struggling in the muddy shallow water, instead of allowing them to swim out in the deeper, clearer streams. I would like to hear from traders who are doing ok, and get their views on the 2% rule. I think quite a few of them might agree that you risk on a trade what suits your risk profile. I know position sizing can be worked out on size of risk, or vice versa ... but while your Stop Loss might be placed at a level that satisfies the 2% risk rule ... who in their right mind allows a trade to run against them to that extent? Such a stop is placed as a disaster-recovery strategy for an unforeseen event ... not meant as a way to take you out of a failed trade. Hope that helps ... and gets you thinking about where to place stops, why, and where you should be closing trades ... and when. Your question was a very intelligent one, and I hope you can come around to trading with freedom and responsibility, that does not involve the rigidity of thinking that locks you in to certain losses. By all means, if you must, calculate risk based on the 2% rule. But please do not allow a trade to hit that stop after it is clear to you that the trade is not working. Trades that are not working do not suddenly turn around in your favour, simply because they are approaching your Stop Loss order. In this respect, the 2% rule is costing thousands of traders their accounts every week. I had a ... shall we say ... "brisk" or "robust" ... discussion with a broker marketer the other day. He could NOT tell me how many of his clients were profitable ... even a ball park figure. He cited 'confidentiality' issues. I told him I didn't want names or account numbers ... just whether he had even ONE successful client trading. He could NOT do it. So I said - "I give you permission to give my contact details to ONE trader who could contact me anonymously (if he wished), to tell me that he was doing "OK" with his trading. He could not do it. Such are the ways of conventional wisdom in trading. If all the rules, myths, sacred cows, and strategies in trading are NOT working (eg less than 5% of traders making money) why do we cling to them? It is time to start thinking for ourselves. Apologies for the long response ... but now you have insight into my thinking.

Kuokam, have a look at post #115 here: http://www.traderslaboratory.com/forums/trading-psychology/10158-optiontimers-project-4.html It makes very good sense, and is in line roughly with my approach to the position-sizing/risk-management issue. The most important thing with any trade, is to get out fast when the trade is not performing as planned. Your first loss will then be your smallest. I think we have all experienced the inability to take a loss - and paid dearly for the paralysis of it. You should know ... or have a good idea ... what you want from a trade the moment you go into it. Of course, you will adjust that view as the trade progresses depending on whether momentum is holding up well, or a million other things. Basically, if you want 40 pips ... or $400 ... then when you hit that target, you either close the trade, or consider whether the initial target might have been too conservative. There is always another trade, and I usually take a good profit while it is there. Under better conditions (eg if I had a week or two off work) I might look for position trades, as opposed to swing or day trades.

No ... I don't follow the "2% rule." When trading live, I usually trade either a full contract ($10/pip) or a half-contract. I don't concern myself with the maths of the account too much. I guess what you are wanting to know is whether I manage my live trading the same as I do contest trading. The answer is no, I am far more conservative in personal live trades. Probably a better contest would measure the number of pips made for the month, rather than the number of dollars, for this very reason. But trading the way I do is based on timing the trade to take advantage of high probability setups rather than going into a trade high expecting draw-down. It's a matter of personal risk profile. I want my trades to be moving into profit fairly early. I regard what I am doing with the contest as being far more risky than I would accept for my personal live account. If we were trading for a pip tally, rather than dollars, then the trade management wouldn't matter as much - ie you could trade a micro account or a 100-contract account, and still produce the same pips. Trade management is very important. My personal approach - to trade $5 - $10/pip - is safe (for me) but is possibly denying myself an opportunity to really grow my account faster and more safely. I haven't looked at it much, as I have been more focused on improving overall pips on a consistent basis. Hope that helps - it's honest. I don't like the 2% rule, as I think it is flawed.

Anyway - I did recover somewhat... back to -15% ... with a few other quick trades, before dropping a few more pips to end the contest at nearly 20% loss. From there I decided that attempting to swing/position trade while working was not a great mix (I work permanent nights) which does make me a grumpy-bum at times (with apologies to 4EverMaAT again). So I have reverted to an older strategy involving one or two indicators, and the WEEKLY - DAILY - 4H - 1H TF. It is simple, and robust. The problem is, it needs to be "minded" a bit, and so involves more screen time than I really need to spend. These past 2 nights I have not been working (Aussie time is GMT +10 where I live) and have been able to nail a decent trade or two. The point is, I have to stop trading between 4 and 6 hours before the USA session kicks in. But I can usually get in on London/Europe, if anything is happening, for a few hours. Does anyone else identify with this kind of issue? Night shifts leave my brain fuzzy (you will have noticed I'm sure ) and hardly inclined to focus well. So that's the excuse I am sticking with here! Would like to hear other trading stories ... and what is happening through the contest. Later I'll bring in a bit more about what went wrong with trade management, and how I avoid improving my performance in that area. Is it laziness? Or is it something to do with personality? We'll see I guess.

It's all good mate - I count by tens :rofl: OK - thanks to Mystic, we have an opportunity to discuss what is going right/wrong ... and what went right/wrong in previous trading. Like most of you, I try to manage my working life around my trading, and it is this issue that causes me the greatest frustration. It has also led me to focus on longer term trading ie the higher TF. I prefer to swing trade, but always watch for a trade to develop into a position trade lasting a few days. For the contest last month, I attempted to take positions that would be ok to hold for a day or two, and started very well - see post #313 here: http://www.traderslaboratory.com/forums/forex-trading-laboratory/9303-traders-laboratory-forex-trading-contest-10.html With an overnight reversal of the GBPNZD my initial 11% profit after a few days blew out to a -30%+ loss, and I closed the trade to avoid disqualification. Next day the trade came roaring back in the short direction I had traded it, which gave me a rash ... to put it nicely!

Nico ... according to Mystic's stats ... you are still under the DD limit. Trade on, my son ... trade on!

Hope you're invested voir ci-dessous kyk uit onder паглядзіце ніжэй погледнете по-долу 看下面 pogledajte u nastavku se nedenfor kijk hieronder elsercxu sube tumingin sa ibaba katso jäljempänä გამოიყურება ქვემოთ schauen unten εξετάσουμε παρακάτω נראה להלן નીચે બહાર નજર नीचे बाहर देखो nézd meg az alábbi líta hér lihat di bawah ini breathnú amach thíos guardare qui di seguito 下記の外を見る 아래 밖을 내다보다 ເບິ່ງອອກຂ້າງລຸ່ມນີ້ prospice infra izskatās zemāk atkreipti dėmesį, žemiau melihat keluar bawah tfittex hawn taħt نگاه زیر ser ut under spojrzeć poniżej veja a seguir uite mai jos посмотрите ниже mirar por debajo de titta nedan nhìn dưới đây קוקן אויס ווייטער edrych allan isod shikoni më poshtë Whatever way you choose to say it ... it still means: Look out below! Can it get to $1.2000? YES! It Can! (WITH THANKS TO GOOGLE TRANSLATE)

and ... then ... tomorrow ...

Thanks for the nice words all. I began last month in a similar vein, but lacked the courage to follow through. And I lack(ed) trade management skill. I am not in this for the first prize but to become a better trader. I do not expect to win the contest, but I do expect to find why I didn't! There are far better traders here. Good luck all. Can we start another thread to discuss what happened to us in previous (contest) trades? While a contest is underway, we make decisions that "should" benefit our development as traders. It would be a shame to lose/waste these experiences, and discussion certainly encourages us to dig more deeply into our actions.

Is this a good time to buy Gold? If you take Jack Bogle's advice, and apply it to gold as a commodity, the answer is a clear "yes." But you must be prepared to buy it and hold it ... knowing that the only return it will give you is capital gains. The FOMC statements have been a key, in the past, to market moves. The October 24th/25th FOMC statement was no exception, but instead of pushing gold higher as it had done in the past, it has had the opposite effect. Bernanke made an adjustment to QE3 - he added this month, that all future bond purchases would NOT form part of Operation Twist, but would be allowed to be MONETISED! For some reason the market allowed that to pass by - overshadowed by the positive employment numbers no doubt ... for now. Could it be that the gold bears, who suppress the price by shorting gold using paper derivatives, but not having the physical gold to actually sell, have been hard at work printing more paper gold to sell? Yes, I think so. If you buy-and-hold as Bogle advises to do with "good" stocks (World.com .... Enron anyone) there is a time coming, in my view, that these bears will have to cover their paper. When they can NOT provide the physical gold they need to satisfy clients who insist on physical delivery, there will be an avalanche of short covering ... or so many of of think. This "should" force the true price of gold to emerge. But don't count on it - the banks who are short (JP Morgan et al) only have to go belly-up and the world will get on with business as usual, while the bulls cry "foul" and the regulators go back to sleep. The regulators are more corrupt than the perps. Big statement? Look at the MFGlobal collapse - Jon S. Corzine managed to get USD$1.6billion of client funds to "disappear" while the regulators with no gonads are unable to find one-single-crime to charge him with! No Criminal Case Is Likely in Loss at MF Global - NYTimes.com Good one! Of course nothing will come out of the missing USD$200million PFGBest collpase either - more will be spent on liquidators and lawyers than could ever be possibly located and returned to the owners who traded with the company in good faith. PFGBest Collapse Leads to CFTC, FBI Inquiries Now - does anyone still expect the price of gold to spike when those with short paper are unable to cover ... or like me, do you expect the CFTC (who already know that there is more paper written over gold, than there is physical stuff to back it) to do nothing, like they have with other trading scandals? Be aware of the "f" factor ... and for those who still have not cottoned-on: F-R-A-U-D ... BY ... A-D-M-I-N-I-S-T-R-A-T-O-R-S When the money is gone ... just call for your good friend Chapter 11 ... he'll save you ... he always has in the past. Trade gold ... take profits frequently ... keep your spare cash at home - not with your broker ... and have your TP and SL in place at all times - especially Fridays and over weekends. A little paranoia is essential in order to be a successful trader :rofl:

To do this would require an investor to have formed the view that "Corporate America" is a good investment. Further, the investor would need to time the market to a degree, or risk losing more than 50% of his capital, as we saw in the 2007-2008 bear market dip. To be able to withstand a 50% drawdown, one would need a fairly experienced approach, deep pockets, and a lot of cash that you don't need for anything else. The only people who fit this description don't need to be investors, but insiders. Last time I looked I didn't have enough money to take out a position in bonds, so I guess Jack's excellent book is not addressing people like myself. Actually, I wonder who it IS addressing ... and what is the motivation for writing it? Very few traders make enough money from their trading to the exclusion of all other income requirements - at least that is a broad generalisation I have formed through my association with trading and people over the past 8 years. Had I taken Jack's advice in 2004, I would have about the same amount of money I have today :rofl: Had I taken Bill Bonner/Dan Denning's advice - "buy gold, sell the Dow" - when he gave it in 1999: (The Daily Reckoning 3rd September 2009) World Economy: Negative Growth - Or Positive Collapse? * Given that gold has taken a breather like this in the past ... can a case be made for it to rally once again? * Is the printing of money in Europe (Mario Draghi: "Whatever it takes.") enough to fuel another rally in gold? * Is the printing of money in the USA (Ben Bernanke: "(we)will spend $40 billion a month purchasing mortgage debt (and) continue bond purchases)" enough to continue to pressure under the gold price?

Remember that Gold is also a commodity, as well as being a store of wealth. When traders get on the wrong side of a trade, they need to raise cash fast. The quickest way is sell the most liquid asset in existence ... GOLD! The other interesting theory is the "risk-on-risk-off" idea. When things are "bad" (according to whom you may ask?) it's risk-off behaviour for the markets - ie, "take-no-risks." That's the cue to purchase "safe" assets like the USD, gold, CHF or the AUD as examples. Monet needs a "safe-haven" in such times. But the market does not always act predictably - sometimes they will sell gold in order to park money in the currencies. Sometimes not. When things are "rosy" (according to whom you may ask again?) and returning to fun-fun-fun ... then it's risk-on behaviour for the markets - or "take-risks-again time." Again - with markets being unpredictable, who knows whether gold will be bought or sold? If you are going to trade gold, you will need very deep pockets, and a quick trigger finger on the buy/sell button. I discovered that you can not afford to take a bias on anything - gold does NOT always go up in uncertain times. I let a very nice profit turn into a small loss, thinking that the turn-around was just an hour away ... for over 72 hours! Nope! That dog did not hunt! :crap:

I'm in ... let's see how we go this time

You might not be the only one who acted a little hastily ... looking back, my own post was less than hospitable towards you. I take back my words and apologise for the outburst - I have my own irritations which are more to do with being tired than you personally, 4EverMaAT. Glad you were able to sort it through.

OK - last one for the day ... but something a bit more practical. And it may save your life, if you get a bit of practice doing it and get to know how to do it well. If anyone has any innovative survival goodies, feel free to post ... as the topic says ... " ... something * "

Could this power your home ... car ... locomotive ... aeroplane ..?

The accidental zillionaire ... maybe!

Warning - this might be boring to most viewers. It is electrical theory and there are two videos ... total around 27 minutes. Intriguing to me ... and maybe some energy buffs might "get it" Is he on to something ... or is he just a theorist? This probably needs someone to actually interview him and put the ideas in simpler terms. Clearly he is not gifted at teaching - he needs assistance to organise his ideas more succinctly.

What next ...

Kids ... do NOT try this at home ... really ... they said that! Each year in the USA about 30,000 fingers and thumbs get severed by table saws. That's 10-a-day according to the story! Now, that could be a thing of the past ... ... wanna bet?