Someone needs to post an mp3 with the correct pronunciation. I am fascinated now.

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When you have to shoot, shoot. Dont talk.

If you really attained the 20% per month that the guy earlier claimed, in slightly less than 14 years, you would have compounded your $500 starter account into enough money to build a 50cm wide, 10cm thick walkway to the moon.

A walkway made of solid, 24kt gold.

-------------
l(km) 384,403 = 38,440,300,000cm
w(cm) = 50
d(cm) = 10
:. tv(cc) = 19,220,150,000,000


density=19.3g/cc
:. tot(g) needed = 370,948,895,000,000

g/oz= 31.1
:. tot(oz) = 11,927,617,202,572


5yr_av($/oz) = $ 705
:. cost = $ 8,408,970,127,813,500


P-$ 500
i 20%
n167.0316327mo = 13.9yrs

:. FV= 500(1+0.2)^(167.0316) = $8,408,970,151,136,560

It's a slow work day today

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When you have to shoot, shoot. Dont talk.

I'm a big fan on basing your stops on PA. Makes sense to me that if you are going to enter on PA, you can use it to give you an idea of what price might do after you enter. If there is a big PPZ sitting on a BRN, my short entry is always
going to be under it, so I see no reason not to put my stop behind it too - usually around ten pips. Be interested to hear J's thoughts.

Then again, I'm also a big fan of Cherry Coke Zero and McDonalds animal cookies, so feel free to disregard

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When you have to shoot, shoot. Dont talk.

This is a very nice way of saying dont tap on the glass

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When you have to shoot, shoot. Dont talk.

Sorry, my fault - poor phrasing.

Where I'm putting the stop behind a PPZ and/or BRN, I usually put it 10-15ish pips behind that...so your stop will actually be (distance_to_PPZ + 10) pips, if that makes sense?

Have just found that where price does try to penetrate a BRN and fails, a stop at 10-15 will usually be untouched. I think I found the mean was about 6 pips, and 80% failed to go to 10 pips. Its scribbled in a notebook somewhere

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I'm using a 5yr average rather than spot, but yeah - I imagine that kind of demand could drive prices up, Hunt Brothers style.

Then again, I guess at some point you would just buy Australia and South Africa, so that's gotta lower your average cost

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Perhaps I generalised a little and conflated this particular one with all 'trading' contests. I added that this one seems relatively tightly controlled (live server data, rather than 'contest data'), but it also wouldnt be the first time that someone found their broker lagging a particular market maker and set up a system to scalp the difference (which is completely legit, imo... but leads to bad things when the relationship breaks down). Or discovered a correlation that hasnt been arbitraged into the ground.

The 'meaningless' aspect more comes from the short term nature of it, rather than the guys skills or system - which is why, if he repeated his performance a couple of times, then I would be sitting up to take notice (and e-stalk him for tidbits/offer him wine, women and sportscars for info/etc).

As I said, there is every chance that he is a decent trader and just caught a good run that month which pushed him up front. It's certainly impressive (moreso than the guy who took 10 trades and won in the other month i looked at).

Realistically, I should give Jim and Mike half the credit, so i probably only technically know 1 1/2 things... but that doesnt give me the right to be a jerk about it

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absolutely - patterns within patterns within patterns A really tight stop setup can be to enter with your stop just behind the last swing high or the one before (penultimate swing high?) on a lower timeframe, or to enter/reenter on retrace to a fib level (dicey in my experience, but people definitely use it here), or just behind a BRN/PPZ that the pin pierced.

Your theory sounds pretty solid

Though those are all pretty advanced entries, and are going to lower your 'win' rate. Whether that balances out with an increased position size... Then again, that's why God (or Jim?) invented demo accounts.

*edit* obviously, left/right eyes on pins are pretty common too. But does that make them a good idea or a bad one?

That's nothing like I thought! I was more thinking 'hoss' with a bit of spitting in the 'h' part.

I feel like one of the great j16 mysteries has been solved tonight. Next week: where is Rac's cave?

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When you have to shoot, shoot. Dont talk.

one of the benefits of working from home. and drawbacks of working til midnight

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When you have to shoot, shoot. Dont talk.

awesome stuff Ben.

lol, not from me. If it dont have numbers, I aint interested.

Personally, I think many people use 'psychology' as an excuse because their methodology is failing to make money. It's much easier to talk about (and write books about) 'the mental game' than it is to find a way to trade profitably, because it is all subjective and unquantifiable.

Transaction costs are one factor, definitely (although people do like to ignore them, for some reason), but a more pressing one is 'noise'. Or, more correctly, the information content of bars.

Price doesnt move from A to B in a straight line, which we all know - it moves through a stochastic process. Price moves because hundreds of thousands of transactions with different motivations and based on different 'news' move it. Is it moving in a path? Generally, yes - one determined by fundamental forces. But within this, each step along the path is going to be comprised of an expected value component (ie, the signal) and a variance component (the noise). Which is good for us, because the movement around this 'true' path is what gives rise to our PA.

Since the price bars we look at are aggregates of these orders, the longer the timeframe, the more of these orders are contained in a bar. So while the variance component remains a constant factor (well, more or less, when we model the noise as a normal distribution), the information component increases as a proportion.

I think the best way to look at it is to substitute $ for orders. How many dollars does it take to reverse a 1 minute bar, compared to a weekly bar? If I drunkenly order up a couple of full lots clearly against the trend, is it going to be 'seen' in the weekly? Unlikely. But in a low volume session on the M1 chart? Definitely. Then expand it out. A trader scalping, a couple of people trying to play an IB breakout, a hedge fund trapping breakout players, a bank ordering $10m aussie dollars for a client....

The lower the timeframe, the less information the bar contains. That's about the gist of it. A 1m bar could only represent a single order. A weekly bar will represent millions of orders, giving us a 'truer' picture. How does that fit into trading? It just means that the signals we use to enter are more reliable, because they are less likely to be made by my sister's cat jumping on my keyboard.

This doesnt mean that people cant trade it. They can and do. Personally, I cant really be bothered with it. I'd rather set some trades, close my laptop and go watch Lost. If trading is a 'second job' for you, then you probably do the opposite.

That's actually a really subtle point, but a very good one that people overlook. When you zoom right out on a 4hr chart, are you only seeing a 4hr chart?

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lol, I didnt think it was a question, I thought he was making a point about the chart. Oops.

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When you have to shoot, shoot. Dont talk.

Wanna go halves in setting up a brokerage?

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When you have to shoot, shoot. Dont talk.

I'd probably argue that we werent trading the same system/method, in that case If we were, we would have the same entry and same exit.

What you call psychology, I just call a trading approach. You take the trade with the aim of letting it play out or stop out, I take it with the aim of getting to x.xxxx and closing out. Hard break vs full bar drawdown entry to a trend.

I dont see a big mental aspect to that scenario, unless you take your trade and start panicking and burst into tears because the forex is going to take your house and so you abandon your plan. In which case, maybe trading (or life in general) isnt for you


Making an objective decision on some information in front of you? I think you are stretching the definition there a little. If you want to define 'psychology' as encompassing every concious decision we make, then sure.

I take marginal bars when there is a a +EV situation. SCPBs, for instance. Anyone following this thread (or quite possibly any trading thread) will see some marginal trades floated or traded. BUt is it really wishful thinking, or is it just a fundamental misunderstanding of what you are doing? To a newbie, a pin in traffic is a pin. And a pin is a trade, right? I sure as hell made that mistake a few times.

I dont think so, at all. I think the people using that method have just defined a target where price should hit, and so they sell when it gets hit. I dont see any fear there. Just a different approach to people who aim for a longer move.

I'd say that one is less about fear and more about simple math. If 'making it' entails trading for your living, then undercapitalisation is only going to necessitate overtrading to meet your fixed expenses, which inevitably entails taking suboptimal trades.


Alot more than most - me included. You know I respect you and you are one of the few people I talk to about trading outside of the threads. So I am not saying you are wrong and I am right. I think we just look at it a little differently.

I was talking about a specific range of scenarios - people spending their time on Mark Douglass-esque feelgood cliches like 'it is your state of mind that determines your results' and 'you get the return you think you deserve'.

I call bullshit on that argument. You can have the best state of mind in the world. You can be the god damn Dalai Lama. But if you are trying to swing trade long EURAUD positions or trade some retarded astrology system, you are going to lose. Cart before horse, golf shoes before swing and all that.

If you are a profitable trader, can it be a leak? Sure. And if that is hindering your progress or account balance, then there is a benefit to working on it. Same as tax minimisation, platform latency and whether you need another monitor. But the guy who just started reading the thread and is on his demo account? Focus on the fundamentals and make sure you have a working methodology before you start thinking that its your 'mental game' that is stopping you from buying that yacht.

All I was really saying (or, as it seems, trying to say and missing the mark?) is that alot of people focus on 'psychology' because it is an easier, non-measurable thing that they can 'work on', rather than taking an objective look at their methodology and whether or not it is profitable.

Then again, maybe there is some psychology in that

Either way, its definitely thought provoking.

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They study psychology because their psychology means they are too scared to examine anything other than psychology! I think my brain just exploded.


Stick around and help me justify my NBG speculative play, lol

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When you have to shoot, shoot. Dont talk.

Consider me called out and taken to task


Agreed. Anyone who thinks that they can distill a complex and critical topic like trading/exits/psych/MM/etc with a single, pithy quote is fooling themselves. Myself included.

So, instead of being a zealot on one side of the fence, people should try and take a balanced view, incorporating all important elements? That seems kind of like...level headed, sensible advice. Get outta here, commie!

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I'll buy them on a dip

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There isnt really divergence there, unless you ignore all of the nearest points. Given your MACD is set to 12/26/9, taking divergence from like a hundred bars back is pretty meaningless. Look at the nearest end - price moved up steeply, MACD moved up steeply. No div.

Channel line is pretty arbitary as well, it hasnt been touched in a long time.

Still, I dont think your trade was terrible. Nice big bar, swing high, decent amount of room before the FTA, and then plenty after that. If there was some divergence there, I would have taken it. As is, I passed (a strong move up like that makes me turn into a big girl), but I can see why people like it. Have to remember that these things arent 100%, and sometimes the market just goes against you. Take some notes, reload and move on

very nice.

It isnt even that much, more like half that. Depending on market studied, definition of 'winner' and 'loser', etc. But yeah, most find that only 60-80%ish 'fail'. Just another of those trading platitudes thrown around.

Also, I suspect 70% of FF has trouble tying their shoelaces, so your second estimate could be a bit high

Oh, I bet you are

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Seriously? I see 4.4 on Oanda, and even tighter elsewhere.

*edit* remoted into my home account, and I see 4.4 on MTB and around 2 pips on IB. I used IBFX for ages and they always seemed competetive. Have they gone downhill, or was I just getting suckered? >:/

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Well played, sir. Well played.

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the more important question is what do YOU think?

And why?

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When you have to shoot, shoot. Dont talk.

The only concerns I have is that it is a strong move down, but the size of the pin balances with that pretty well. You are trading into a round number and a fair amount of traffic too, but you seem to have the potential trouble areas mapped out already.

nicely done

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That's because all the volume is either superfunds rebalancing their index portfolios, or babyboomer retirees with a commsec account (paying $29.95 a side commission!) who 'day trade' the tips they got from aussiestockreport.

NYSE, NASD and LSE are where its at

It's a hell of alot easier to value a truckload of pork bellies than a currency. Which gives a more consistent market consensus on fundamental value, and oversold/undersold. So you get more clearly defined regions of s/r. Even more effective in stocks, since you get all those plus dumbass punters (sorry, 'uninformed participants') as described above buying BHP everytime it dips below 40..

Also, volume data and t&s rocks. Stupid forex.

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If by 'live', you mean wade into the pit with a bunch of slips... then no.

If you mean trading futures with actual money, then yes I trade futures, rather than cfds over futures, so slightly different. Higher margin, but less getting shafted on execution, position financing, spreads and roundtrip fees. But pretty sure CFDs/spreadbetting is illegal in the US anyways. Interactive Brokers all the way.

*edit* stupid forexfactory, overwriting my link with their br0kerspam. http://www.interactivebrokers.com/en/p.php?f=products then futures. Most of what you want is (listed, cme/cbot/nymex are amalgamated now) on CME or NYMEX, maybe LIFFE or CBOT or NYBOT.

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Your main problem there is that you are very rarely going to know why the setup failed, if ever. What you are describing isnt even a mistake in my book, you played it perfectly by not taking a trade that didnt meet your criteria

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If I had that many lines on my chart, I bet price would hit a couple of them too

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When you have to shoot, shoot. Dont talk.