Mp -- Reality Based Manual Trading

[mp6140]

"I've been trading for 3 months and I'm constantly losing money. Do you have any advice for a newbie who is rapidly beginning to look like road kill ?!


WHERE TO BEGIN WITH THIS QUESTION ????

For a newb, the best trading system would fall into the realm of "swing" trader, a term from the world of equities and simply meaning one who holds a currency for a number of days (which can turn into years and then you are called an "investor") and based on the simple concept of moving average crossovers. Please note that there are MANY systems, using MA's or not, that do the same thing, but MA's are pretty visible things and one line crossing another is not brain surgery !

MA crossovers are best in a "trending" market, which is a market that is moving strongly in an upside or downside movement and are not very good in a "ranging" market, where the price is just fumbling around, showing no clear picture of moving up or down. This is often referred to as a "consolidating" market or a "congested" market and each has a different look and feel, but I do not have the time or space to go into that lesson here !

SO, for the best results, we work with a trend following system, where trend is determined by the DAILY charts (they going UP or they going DOWN -- that determines your trend. When I see the WEEKLY and DAILY chart both agree that the currency is going up, I feel secure in placing a longer term LONG trade. (yes, I know you dont yet know how to see if up is up or sideways or down or anything, but that shall come !)

Having placed our trade, you now sit back and witness a HORRIBLE situation --- your currency price is DROPPING like flies at a DDT party ! (AND THIS here situation IS WHAT SEPERATES THE TRADERS FROM THE WANNABEES !)

Understand that each day, every day, constantly ---- the price reverses at fairly uniform times on ANY currency UNLESS there is such strong momentum that this action is prevented, at least until 5pm, est in the US !

Using a variety of methods, a trader can usually pinpoint where the currency will drop to and has prepared for the drop which we call DRAWDOWNS !

WHAT WILL KILL YOUR ACCOUNT GRAVEYARD DEAD is if the price of the currency hits your stop loss point, which will then take all the money youve lost out of your account, hand it to the daughter of the owner of the brokerage and help her buy her new Maserati !

Of course, if you have never met this princess, you just might not want to buy her a new car without her giving you something bac (after all, we are speaking capitalism here !), but i leave that to your own desires and imaginations !

But, if you desire not to buy her a new car, you could have approached this situation in a manner UNHEARD OF by you at any time in your trading life ---- DONT USE A STOP LOSS !

How often have you been stopped out of a position, only to watch that position shoot up later in the day or tomorrow, pass your purchase price and provide a very decent profit (IF ONLY you had held on !!!!!!)

This technique requires TWO important considerations ---- FIRST is that you trade with the TREND and SECOND, that you rigorously watch your money management techniques, so as not to strain your margin on the most certain drawdowns.

NOW DO NOT RUSH OUT AND TRY THIS AT HOME, at least not until Ive finished teaching how it is done which should begin this weekend (maybe friday)

Ive been trading for 36 years and am still alive and well and wish to simply show a bit of what I refer to as "reality trading" which is nothing more than trading the REALITIES of the forex market, not what YOU WANT, but what REALLY EXISTS !!! I'm a MANUAL trader, so ive got no new EA's for you to glomm onto, but I can show you what the banks are doing and how they do it, which should give you one step up in the contest !

enjoy and trade well

mp

[fxperson]

Mp6140
This is my first post on this site and I just wanna say we sure will be watching this one closely.
So fire on mr MP , we're all ears.

[mtardif]

Originally Posted by mp6140

How often have you been stopped out of a position, only to watch that position shoot up later in the day or tomorrow, pass your purchase price and provide a very decent profit (IF ONLY you had held on !!!!!!)

When does price ever hit the take profit first?

Originally Posted by mp6140

This technique requires TWO important considerations ---- FIRST is that you trade with the TREND and SECOND, that you rigorously watch your money management techniques, so as not to strain your margin on the most certain drawdowns.

Well my friend, I certainly like your style and you seem to have a wisdom about you that draws me to your posts, and so I am willing to listen to what you have to say and learn from your experience. What I'm doing now isn't working, and what I have in mind to do is not quite there yet, I'm still missing some pieces.

Most importantly, what to do when all your signals flash long and everything looks good and then you're long, but then the banks decide that it's time to turn this train around and go south for a few weeks? Oh, you'll eventually get the message that the trend has changed to down, but you're already long, and since we have no stop losses in effect, we're holding this position as the banks take the price further and further down. Sure, I have no problem holding that long position, assuming I'm not over-leveraged, assuming the banks will be reasonable and not keep sacking the market forever and that eventually it will turn back up in a month or so, and going short as indicated by the new trend, but then I have an ugly divergence happening as my balance increases but my equity decreases.

Maybe I have to learn to deal with that and accept the fact that no system can produce a balance/equity graph where both trend up in tandem without too much of a divergence between the two? Or maybe I'm not reading between the lines good enough to be able to tell that the train is going to be reversing soon? You could look at the MACD and when the difference between the two moving averages starts to shrink, you could elect to not engage new trades, but then it could also be a false shrinking and you could end up leaving money on the table.

I guess what I am trying to say is that every trade that ends up a winner most likely at some point in its life looked like a loser. The way I see it, if you ride the trend all the way up to its end point, you would end up getting stuck with one trade that looked like a loser at first and really ends up not being a winner because the banks decided to turn the train around. Can you avoid that trade, or can you determine that this losing trade is really is a loser and bail out?

[mp6140]

Originally Posted by mtardif

When does price ever hit the take profit first?


Most importantly, what to do when all your signals flash long and everything looks good and then you're long, but then the banks decide that it's time to turn this train around and go south for a few weeks? Oh, you'll eventually get the message that the trend has changed to down, but you're already long, and since we have no stop losses in effect, we're holding this position as the banks take the price further and further down. Sure, I have no problem holding that long position, assuming I'm not over-leveraged, assuming the banks will be reasonable and not keep sacking the market forever and that eventually it will turn back up in a month or so, and going short as indicated by the new trend, but then I have an ugly divergence happening as my balance increases but my equity decreases.

I spoke of the way I trade, not of making your monthly statement pretty --- THAT you have to do yourself (lol)

we are speaking hypothetically here, so i shall hypotheticate right back --- I CAN NEVER SAY NEVER, but that scenerio should be a rare thing to happen indeed, as there are chart overlays in place as distinct warnings and the whole method depends on "tops down" analysis of the trend direction with a knowledge of the support and resistance range of the currencies intraday moves ---- it it dont stay inside where the sucker should, then there be a problem by golly !

The banks dont just pluck a currency out of thin air and give it a kick in another direction, they will wait until the price either drops thru, or exceeds up, the channels the currency is working in !
They may well use news as a springboard towards a new trend, so "reality" trading has to take those days into consideration also !

IF you want a pretty statement to look at, NEVER take a counter trade once you got the main trend direction, no matter where our friends wander the currencies --- then you can make money the old fashioned way -- NEATLY !


Maybe I have to learn to deal with that and accept the fact that no system can produce a balance/equity graph where both trend up in tandem without too much of a divergence between the two? Or maybe I'm not reading between the lines good enough to be able to tell that the train is going to be reversing soon? You could look at the MACD and when the difference between the two moving averages starts to shrink, you could elect to not engage new trades, but then it could also be a false shrinking and you could end up leaving money on the table.

under ideal circumstances, where YOU TAKE NO TRADES COUNTER TO THE TREND that might be left "floating", and work with VERY few trades that are moving in the same direction as the trend, you can achieve your desired attractive equity statement ---- happened today with UJ and was very nice !

I guess what I am trying to say is that every trade that ends up a winner most likely at some point in its life looked like a loser. The way I see it, if you ride the trend all the way up to its end point, you would end up getting stuck with one trade that looked like a loser at first and really ends up not being a winner because the banks decided to turn the train around. Can you avoid that trade, or can you determine that this losing trade is really is a loser and bail out?

While I am not dr dolittle and i DO NOT speak to the animals, I do maintain a close relationship with a few of my fav currencies --- in return for flowers, perfume and seamed nylons, these little minxes forward "clandestine" information that they share with only a few ! This site, being family associated, precludes me from going into detail as to WHAT and HOW they receive this information, but I do know that when there is a large party for the elite in the governments and the financial world, their multi-lingual abilities, along with "mata hari" training techniques, allows them to receive a tremendous amount of information that they should not have had access to !

but returning to reality, it sure is hard to grab that "last" trade, isnt it ?

usually I try to err on the side of safety, and leave a little for the banks as an "offering" to whatever god was in charge of greed in the Pantheon of financial warfare !

But something that does work fairly well (so you have that "neato" balance sheet) is to work the intermediate timeframes with ONE trade, working off of support and resistance ------ when it works, you will be tossing laurels and gold coins and if it dont, then im tarred and feathered and run out of town on a rail !

BUT NOW FOR THE STRAIGHT STUFF --- while I can normally hit a top tp point before reversal a few days before it happens, once the TREND starts to get "flakey" up near the top of its LINEAR REGRESSION CHANNEL and its bols, you STOP trading and wait. You MAY lose a few pips to those Pantheonic gods, but you dont get caught either ! Hopefully, I can show you how to recognize a reversal point and the trading that goes along with it, but more importantly perhaps a few traders may start producing profits instead of leaving losses !


enjoy and trade well

mp

[mtardif]

Mr. MP,

in return for flowers, perfume and seamed nylons, these little minxes forward "clandestine" information that they share with only a few !

Reminds me of that scene in "Wall Street" where GG tells Bud Fox that information is the most precious commodity he knows of and that if you're not on the inside, you're on the outside. Women have the ways to become privy to the major secrets held by the few men. Sometimes I think women are more efficient than torture at getting "secret" information out of men (and more pleasant too!)

But back to the business of research, I have picked a random time period in the past and have taken note of the reversals. I allocated them to hourly buckets, like 0:00-1:00, 1:01-200:, etc, all the way to 23:01-00:00. I have noticed, confirming what you have been saying on your posts, that the overwhelming distribution of these reversals is distributed in the 7:01-8:00, 8:01-9:00 and 9:01-10:00 buckets fairly evenly, and then the 15:01-16:00 gets the most distribution, tripling the values in any of the individual morning hour buckets. These times are from my charts via Interbank FX, and I believe those times are GMT.

Even this morning, on the GBPUSD, the price direction reversed (from down to up) at 7:00 GMT, which would have been 2:00 EST my time. It just reversed again at 12:00 GMT (from up to down), which was 7:00 EST.

I had never noticed this pattern before, and I would not have had it not been for you mentioning it. It's funny how for me it's easier to notice was is hidden but what's right in front of my eyes I cannot see. I guess we are trained to look for some "hidden" pattern because we think there is no way it could be that obvious.

I will implement the result of this research into my trade conditions and test this out to see what the performance results are. If I see an overbought/oversold reading and the momentum changes between 7:00 and 10:00 or between 15:00 and 16:00, take the trade (short if overbought, long if oversold) if it agrees to the long-term trend. If the momentum change occurs at any other time, ignore it.

[mp6140]

when i speak of "reality" trading, its meant to be "trading in the real world" and not the world of "theoryolligy", cause forex has nothing to do with any theories I know of, ONLY the reality of making money !

Ill try, starting friday, to show how i track the market and trends, but im sure not getting WILD responses here from people who want that information !

btw, if you or ANYONE likes what i say, CLICK the danged "thank you" button --- id like to earn my "wings" !!

What I will show is how I track "trends" so my trades are in the direction of that trend and therefore "safe", albeit there will be DRAWDOWNS, that will scare some badly, how i use some "sneered at" indicators can make gobs of profit, as long as one understands and follows what they say. I will show a fun hedging situation I do every nite that returns $1000 per week on one lot trades and I will show how I NEVER USE STOPLOSSES, which sounds like a horror, but will keep the money in your pocket, where it belongs !

MY trading is manual, and while I used to trade the Japanese/Euro market into the US market, ending at noon (EST), now I place overnite trades and get a bit more sleep !

"In the world of theory, theory and reality are the same --- in the world of reality, theory usually blows up !"

mp

[mtardif]

Originally Posted by mp6140

Ill try, starting friday, to show how i track the market and trends, but im sure not getting WILD responses here from people who want that information !

MY trading is manual, and while I used to trade the Japanese/Euro market into the US market, ending at noon (EST), now I place overnite trades and get a bit more sleep !

Well I can't speak for other people, but methinks that a lot of people just want to be handed an expert advisor that has been fully back-tested and produces an obscene amount of profit, and they want this EA for free. From other forums I've visited, I get the feeling you have newbies out there who really haven't taken the time to learn what he forex market is about and gone through the experience of manual trading. All they know is that they can get an EA and let the computer trade for them and watch the dollars roll in. They don't want to know what is going on. Just click button and collect profits. The computer will make money for them. IMO, that is dangerous. I have been working with computers for 20+ years, programming these dumb machines to do the bidding I've been told to make them do, and I just haven't gotten around to trusting them yet. I never want to be in a position where the computer knows more than I do.

As I have said before, I'm open to everything. I'll do manual, I'll do automatic, I'll do both, whatever, just as long as the method produces consistent profits in the long run.

I can understand where an automated program would be better than manual because the computer never sleeps and never feels emotion. If it sees a currency drop like a rock after going long, it doesn't second guess itself and go through the emotional roller-coaster ride of anger, fear, depression, etc. It will wait for the criteria to close the position materializes. But then again, a computer will execute the same program all the time, it is unable to have a "gut feeling" that although the criteria to engage a new position are met, things don't "feel right". That is where manual trading, coupled with years of experience and having that "gut feeling" that it might be better to stay out because "you've seen something like this before" can pay off.

My position, as with everything else, is balanced. I believe both have a place as part of a trading strategy. Take the best of both worlds and run with it. I will not use one to the exclusion of another. The machine can be used to automate mundane tasks such as calculating numbers and giving you "data". Then the human can use that data given by the computer to derive information from it and then, combined with experience and "gut feeling", make the decision to pull the trigger, or make the decision to let the computer pull the trigger with the ability to let the human override the computer once in a while if an expected news event might "screw up the usual pattern."

[mrgreen]

Hi MP - I originally hijacked some other thread and posted this - am reposting as I found this thread....
You don't know me - and I found some of your posts after you had left another forum. My question concerns a chart you posted. It's not mine to repost w.o your permission so I will not. It was called UJ 240 10 day.bmp. Just two questions if I may.
1: You are using 2 labels DMH and DML - Is this Day Medium High/Low and are u drawing them by hand. - is the Yellow line the Daly High/Low
2: Why the 240 Min for what appears to be a means of tracking 3 day swings?
Turned into 4 questions.
Appreciate your time.

Originally Posted by mp6140

MY trading is manual, and while I used to trade the Japanese/Euro market into the US market, ending at noon (EST), now I place overnite trades and get a bit more sleep !
mp

[mrgreen]

MP - just some clarification. It is not the chart so much I am interested in - but your thought process in the determination of these levels. I have read some of your other posts here and elsewhere and we pretty much are in agreement on many points.
I have been working on a methodology that would for the most part resemble a point and figure chart - but w/o the chart. Charts are nice for review - but I have found they are woefully lacking in statistical analyses capabilities. I am using another package for that. As you know a point and figure removes the time element and reflects only the price changes. My thoughts are to use the price swings as a floating time determinant rather than the normal - price changes over time element - standard. Not sure where this wil lead me though, if it doesn't work - to paraphrase Edison - I am successfull at figuring out one more thing that doesn't work.
As you can tell from my explanation I am still in the incubation stage of the strategy - which is why I am asking your input. Appreciate your time.
PS: I won't ask you if I should code it as an EA LOL

[bros]

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