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TheRumpledOne

Never Lose Again!! TheRumpledOne

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2v8jrfb.gif

 

Proper position sizing and proper risk/reward is what you need to focus on.

 

The outcome of any particular trade is a random event... You win some, you lose some.

 

If you have an edge, the only way to exploit the edge is to take every trade. You will come out ahead in the long run.

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  TheRumpledOne said:
2v8jrfb.gif

 

Proper position sizing and proper risk/reward is what you need to focus on.

 

The outcome of any particular trade is a random event... You win some, you lose some.

 

If you have an edge, the only way to exploit the edge is to take every trade. You will come out ahead in the long run.

 

My Edge today will be to see your Chart on EUR/USD !!!

 

It now trades at 1.3639 Bid and if Dow goes down then EUR/USD should go down. Overnight it went up and as the day moves on it will move with the Dow !!!

 

What does your Chart look like ?

 

Price action but humans make price action and they like to go with the Momentum until all of a sudden that changes as information changes. The real EDGE is understanding the false PERCEPTION of the Masses who are always wrong longer term.

 

Have a Great Trading Day !!!:)

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I trade with MB Trading Direct Access Brokerage Firm

 

 

They are an ECN. THERE IS NO FIXED SPREAD IN FOREX.

 

You can google and find out what I really think about "FIXED SPREAD BANDITS".

 

I'll leave it at that so I don't get banned.

 

How do I avoid the spread?

 

I explained this to someone yesterday in an IM.

 

With MBT you pay a commission rather than having a "FIXED SPREAD".

 

It's "apples and oranges" so don't try to compare. "THE MATRIX HAS YOU" and you need to "FREE YOUR MIND" to understand what I am about to explain.

 

Let's say the current bid/ask is 1.5010 x 1.5015

 

The current spread is 5 pips.

 

You want to SHORT.

 

You SHORT at 1.5010.

 

You set a TP at 1.5005.

 

Bid/Ask becomes 1.5005 x 1.5009 and the current spread is 4 pips.

 

At MBT, you will get filled if the bid is 1.5005 and someone TAKES your offer.

 

Bid/Ask is now 1.5004 x 1.5009 and YOU HAVE YOUR PROFIT.

 

Note: the ASK never reached 1.5005. THIS IS IMPORTANT!

 

If you entered this order at a FIXED SPREAD BANDIT, whoops I mean broker, your order is STILL OPEN!!

 

The bid/ask must become 1.5000 x 1.5005 and your order HITS the Ask.

 

DO YOU GET IT?

 

If not, then read this over and over and over again until the LIGHT BULB goes off!!

 

The day I found out about MBT is the day I opened an account there and stopped trading with FIXED SPREAD BROKERS.

 

The simplest thing to do is to load up a demo account at MBT Group and see it with your own eyes.

 

When you place your TP Bid offer at 1.5005, your bid is displayed on Level II.

 

The point is with MBT your offer gets hit.

 

With FIXED SPREAD BROKERS you have to wait to hit their offer.

 

Maybe this might help:

 

First:

 

1.5010 x 1.5015

 

and price drops...

 

1.5009 x 1.5014

 

1.5008 x 1.5013

 

1.5007 x 1.5013

 

1.5006 x 1.5012

 

1.5006 x 1.5011

 

1.5005 x 1.5011 You may get hit

 

1.5005 x 1.5010 You may get hit

 

1.5004 x 1.5009 YOU COVERED 5 PIP GROSS PROFIT

 

AND LET'S CONTINUE

 

1.5003 x 1.5008

 

1.5002 x 1.5007

 

1.5001 x 1.5006

 

1.5000 x 1.5005 YOUR FIXED SPREAD BROKER FILLS YOUR ORDER.

 

Does that make it clearer??

 

What about the commission cost?

 

The commission varies depending on the pair trading.

 

It is $.50 per 10k minilot on USDJPY. So if I gross 2 pips, I am making money.

 

From the MBT site:

 

 

Commission Rates

 

Fixed spreads are a way for FCMs to markup or markdown the best bid or offer. FCMs do this to hide their fee into the price of the currency pair instead of displaying their best quote. Common sense tells you that no one works for free, so when you see an FCM claim they have “no commission”, that should be a red flag. So how are they getting paid? Its simple: they are making money with the built-in markup/markdown in the spread.

 

Our FCM, MB Trading Futures, has nothing to hide. They offer tighter spreads with no markups/markdowns and openly display a low commission rate.

 

Commissions are based on total dollar amount traded: $5 per $100,000 traded.

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Put simply the 'fixed spread brokers' are actually bookies. What is worse they are taking the other side of your bet and setting the price you bet at. Like the bucket shops of yesteryear. Another alternative on a real regulated exchange is the new currency futures mini contracts.

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I hope this thread hasn't gone dead, just yet?

 

I have just read it this afternoon 'cover to cover' like a very interesting book and was disappointed to get to the end.... hope to hear more on how you are trading soon TRO. :cool:

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Every post TRO makes is replicated about 20 times across all the forums, so it is very hard to avoid it, but doing so may be the right thing to do for most readers.

 

picture reduced on purpose to avoid unnecessary advertising.

TROreplication2009-05-26_194156.gif.d6f4dba7eee3d76eaf82199111c9cd1f.gif

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Indeed though there is a place that he calls 'home'. There is vastly more discussion there though there are other venues that have long long threads.

 

PM me artrading if you can not find more than you could possibly digest :)

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  ESTRDR said:
yep, bucket shop is how they should be called. even worse now than the times jesse was tapereading.

 

 

It seems as if complaining about so called bucket shops is a popular hobby among a large group of traders. Some even blame their brokers for their own inability to make money in the FX.

 

I've had accounts with several of these "bucket shops" for years and so far everything has been working well !

 

I've also trialed several platforms by ECN brokers and large banks just for fun and I must say to my surprise I wasn't very impressed at all by their spreads.

 

If my account were large enough, I'd probably turn to the CME contracts, but for now, I'm perfectly happy with my bucket shop, lol.

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Indeed. However I was not complaining just pointing out the facts of the matter. I also bet with bucket shops too, no axe to grind by me. Funnily enough I was invited for drinks and to watch the soccer last night by one of the 'bookies' I have an account with. Good fun and quite candid about there business models (in different divisions) :) You might be surprised.

 

I do wonder why one would trade (well bet) in an unregulated environment where your funds are not particularly secure when you can trade in a well regulated environment with better protection? (my reasons are pretty specific tax free and better flexibility with position sizing).

 

As to the spreads that is not the issue it is the fills that are important. Of course if the underlying market is trading at 76 x 81 (for example) how can your bookmaker give better prices without taking a loss right of the bat? The only way they can recoup their losses are if you loose. Actually unless they can hedge every position (which they can't) the only way they can make money on unhedged parts of there portfolio is through customers loosing.

 

Size and frequency of bets is also big factor too. Having said that it is possible to make money but if you are marginal then trading in a regulated market might be all you need to become profitable. Actually there is a thread here somewhere about just how that was the case for some guy. Again I have no complaints, these guys need to make money but you should understand how they make it.

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Hi Blowfish,

 

I perfectly understand your points. I know that trading with bookies is not an ideal situation, I'd definitely want to trade in a more regulated environment if my account size was bigger. I just wanted to point out that there are many people trading with fixed rate brokers everyday without experiencing any major problems.

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2009.06.17 DRAIN THE BANKS REV 8

 

2ah5ll4.gif

 

New additions include the BetterVolume 1.4_TRO_MODIFIED_VERSION, TRO_STOPPING_VOLUME and TRO_MM_STOPPING_VOLUME.

 

For those of you who where having problems with REVERSAL TRADES, these indicators should help you. When you see an "X" on top of or next to a semafor, that is an indication to look for a reversal trade. The TRO_MM_STOPPING_VOLUME shows the status of the TRO_STOPPING_VOLUME on all chart periods.

 

FREE MT4 version of DRAIN THE BANKS, including SOURCE CODE and TEMPLATE, have been posted.

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Why can't we see what price is doing?

 

34gq93k.gif

 

Price is either moving up, moving down or not moving at all.

 

What is wrong with our eyes that we can't see what price is doing?

 

295snyt.gif

 

It's so simple, price is either moving or standing still.

 

2z9acde.gif

 

Why do we need colors to know which way price is moving?

 

ru1gcx.gif

 

Does adding a line really make it easier to see what price is doing?

 

m7cas0.gif

 

Well, if adding one line makes it easier then adding more lines should make it even easier, right?

 

sp85dx.gif

 

Why can't our eyes see the "trend"?

 

n6mw0.gif

 

Maybe adding another chart will help us see...

 

25jegr9.gif

 

Naturally, if adding another chart makes it easier, we should add more.

 

2unwp08.gif

 

If only someone would tell us the "magic" numbers to use...

 

mcyfpf.gif

 

Price either climbs up or down a "stair".

 

xpwric.gif

 

You mean to tell me I can think of price going up and down stairs?

 

IT CAN'T BE THAT SIMPLE!!

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  TheRumpledOne said:
Why can't we see what price is doing?

 

Price is either moving up, moving down or not moving at all.

 

What is wrong with our eyes that we can't see what price is doing?

 

It's so simple, price is either moving or standing still.

 

Why do we need colors to know which way price is moving?

 

Does adding a line really make it easier to see what price is doing?

 

Well, if adding one line makes it easier then adding more lines should make it even easier, right?

 

Why can't our eyes see the "trend"?

 

Maybe adding another chart will help us see...

 

Naturally, if adding another chart makes it easier, we should add more.

 

If only someone would tell us the "magic" numbers to use...

 

Price either climbs up or down a "stair".

 

You mean to tell me I can think of price going up and down stairs?

 

IT CAN'T BE THAT SIMPLE!!

 

Rumpled One,

 

I never read your thread before this weekend. Why now? And why go even further and reply to it?

 

Well, you see (and forgive my presupposition that you may actually care as to why I decided not only to read your thread but to reply as well), I am conducting a summer project with my nine year old daughter, teaching her to trade a very small forex microlot account. I came across you elsewhere today on our internet travels this rainy Saturday afternoon, and I recognized your name from here at TL. So when I checked in this evening and saw your thread on the home page, I decided to drop by.

 

Your post above is excellent. I could not agree more.

 

It took more years and more dollars than I care to admit, but one day I realized that all I really needed was chart of price.

 

I prefer a High/Low bar chart. I do not care where a bar opened or where it closed.

 

I prefer black bars on a white background, but depending upon the software's options, I'll use white bars on a black background. I do not care whether a particular bar was an up or "green" candle or a down or "red" candle.

 

A confession: I do keep a 20 ema on my 5 minute chart when I day trade stocks, but as far as indicators go, that it the only concession I make. I do not use the 20 ema for any other instrument I trade. As you suggest, when you focus upon price, it will tell you where it is likely going. When you focus upon indicators, you are no longer listening to the one thing that will tell you where price is going, i.e. price itself.

 

The last thought in you post struck me most, given my daughter's recent interest in trading.

 

  TheRumpledOne said:
You mean to tell me I can think of price going up and down stairs?

 

IT CAN'T BE THAT SIMPLE!!

 

The other day, after showing her how to draw trendlines, teaching her about what support and resistance, what they mean and how to determine which is what, etc., she ended our session with this summary of what she learned:

 

"So basically if the bars are going up I should buy it and if the bars are going down I should sell it."

 

I was trading longer than she's been on earth before I accepted the simple truth and power of that most basic observation.

 

Best Wishes,

 

Thales

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  thalestrader said:
Rumpled One,

 

I never read your thread before this weekend. Why now? And why go even further and reply to it?

 

Well, you see (and forgive my presupposition that you may actually care as to why I decided not only to read your thread but to reply as well), I am conducting a summer project with my nine year old daughter, teaching her to trade a very small forex microlot account. I came across you elsewhere today on our internet travels this rainy Saturday afternoon, and I recognized your name from here at TL. So when I checked in this evening and saw your thread on the home page, I decided to drop by.

 

Your post above is excellent. I could not agree more.

 

It took more years and more dollars than I care to admit, but one day I realized that all I really needed was chart of price.

 

I prefer a High/Low bar chart. I do not care where a bar opened or where it closed.

 

I prefer black bars on a white background, but depending upon the software's options, I'll use white bars on a black background. I do not care whether a particular bar was an up or "green" candle or a down or "red" candle.

 

A confession: I do keep a 20 ema on my 5 minute chart when I day trade stocks, but as far as indicators go, that it the only concession I make. I do not use the 20 ema for any other instrument I trade. As you suggest, when you focus upon price, it will tell you where it is likely going. When you focus upon indicators, you are no longer listening to the one thing that will tell you where price is going, i.e. price itself.

 

The last thought in you post struck me most, given my daughter's recent interest in trading.

 

 

 

The other day, after showing her how to draw trendlines, teaching her about what support and resistance, what they mean and how to determine which is what, etc., she ended our session with this summary of what she learned:

 

"So basically if the bars are going up I should buy it and if the bars are going down I should sell it."

 

I was trading longer than she's been on earth before I accepted the simple truth and power of that most basic observation.

 

Best Wishes,

 

Thales

 

So true, so true. Yet even in traders who have accepted importance of learning price action over just watching an arbitrary indicator we see pages of analysis based on a few hours of trading. My motto is ask myself this, is this going to make me money? and also KISS.

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