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Everything posted by tjnoon

  1. Ha, Funny! I haven't been on this forum in too long a time, which isn't meant as a commentary of what I feel about this forum because I think it's great, but I have been a bit preoccupied with other projects. Nice to see Wout coming in here and reviving what could and should be an important thread. I'm sure many on this forum aren't too familir with Trend Jumper but just to respond to Wout's comment about needing a reversal setup, I would just suggest using the crossover trade and turning off the ema filter on that setup. Team it up with some sort of overbought/oversold indicator like the OSOB that comes with SST or some other histogram, like what Foxstamp suggested. His use of the MACD with the custom settings could work well, or a number of others. That would give you your reversal setups when the odds are at their best. Trend Jumper does have that ability but you have to move beyond the vanilla training which is meant to cater to a wide range of trader skill levels, as far as a training program goes. Also, you could use my idea where I just measure the distance between the EMAs in relation to the Jumpline and the price combined with good 'ole fashion chart pattern recognition; failed swinghighs/lows, the rolling over the EMAs a la Trend Jumper, etc.. Cheers!
  2. Those interested in learning about the SST can register for a free webinar that is being held this Thursday, Sep 8th. You will find the link to register at trading system | Seven Summits Trader.
  3. Since this forum has kind of taken on a life of its own and morphed into a UTA / SST theme, I thought I would take the time to write a brief description of what the SST is, for those who are curious or who would like more information. As you may or may not know, I am to co-developer of the UTA. It was that tool that led me to being able to come up with the SST. I am the author of the trade strategy that I co-developed with NetPicks and which then later became known as the SST. The Seven Summits Trader (SST) was named after what we believe to be the seven keys to successful trading. Moreover, each continent on Earth has its highest mountain range, or summit and only the best of the best has ever scaled all seven. So with that in mind, we gain an additional benefit -- inspiration. Succeeding as a trader is one of the hardest things to achieve as well, and only becoming the best of the best will suffice if one truly hopes to conquer trading. By incorporating the seven keys (summits) to successful trading, you can put yourself in the best position to succeed. At least, that is my opinion and is what the SST Trading System philosophy is all about. In brief, the seven summits are: 1. The ability to trade multiple markets and timeframes with one system. This eliminates the need to continually learn new trade strategies as markets change. One effective strategy to learn and use for a lifetime. Markets change all the time. Many of the markets we were prospering with back in 1999 and 2000 for example (dot.com stocks), no longer exist today. In those days, no one even knew what an eMini was! 2. Dynamic Trade Setups; market conditions change moment to moment. The SST constantly 'tunes' itself in real time, and presents trade setups that are tuned to the current market condition. It calculates a fixed target with the highest liklihood of being reached, while also placing the stop where it needs to be for the trade to have the space it needs to develop. Then it dynamically reduces risk and seeks to put us into a risk free position as quickly as deemed possible by its 'self tuning.' This lets us take what the market wants to give us rather than what we want from the market. The SST operates under the assumption that the market is king and that we need to be in tune with it. 3. The Ability to Scale and Trail; The SST lets us scale in and out of positions. It also incorporates very effective trailing stop techniques that are built right into the SST Toolset. Not only do we get the benefit of pretuned high percentage fixed targets to hit those steady singles and doubles, but we also have the chance to hit the big homerun trade with the trailing aspects of the strategy. 4. Precise Tradeplans; A system is only as good as the rules that are applied to it, and the ability to trade it with 'ownership' and 'discipline.' Markets are 24 hours per day but that doesn't mean we should be trading 24 hours. Trading should be a means to and end, not the end itself. We want to trade to make money, so that we can have freedom and a better life. SST Tradeplans are designed to have you trading during the best times, dynamic goal setting strategies that once again, allow us to take what the market wants to give us vs. what we want from the market, AND, a winning edge. You've heard the adage, plan the trade and then, trade the plan? We are strong believers of that but we not only plan the trade, we plan how we trade, when we trade it, when we quit, etc.. We try to allow for the 10% art part of trading by reducing much of the 'art maneuvers' down to mechanical rules as well. In essence, we want to remove the human element as much as possible so that we can be completely objective and NOT emotionally attached to our trading. 5. Full Immersion Training; The SST philosophy wants the trader to be fully immersed in high end training to not only learn how to properly trade the SST way, but how to trade in general. There is a very active owner's club which offers a live traderoom where one can really learn the strategy and be surrounded by other traders who are also learning or experts of the strategy. The SST Owner's Club also has a website where one can find numerous tradeplans, trainings, etc.. 6. Capital Preservation; The SST philosphy states that one should never over leverage. But on an individual trade basis, the SST has powerful tools that dynamically cut risk and then moves to put our trade into a risk free position. Moreover, the best defense is a good offense. The SST has its high percentage target and the ability to trail a second position for bigger profits. It also identifies when price momentum is increasing and signals a place to add to our positions. These are highly offensive moves but they are also very profitable. What better way to preserve your capital than to grow it steadily, with high percentage, profitable trading. 7. Consistent Profits; What more needs to be said about #7. Consistent profits means you have reached the highest peak and are succeeding as a trader. The SST has been available now for over a year and continues to ring the cash register. Moreover, it has developed into a 'family' of strategies and effective tradetools. There now is an SST Simple version, which is actually a distinct strategy unto itself. There is also a specialized SST FX Edition. What's more, a new and highly effective setup has been added to the SST called 'GetBob.' GetBob stands for 'Get Back on Board,' and tools have been developed to incorporate this highly profitable trade setup as a plug-in. It's a very unique trade setup, kind of a trade setup within a trade setup. It sounds complicated but it actually is very easy. There's more on the horizon for the SST as well. It has been so successful that rumor has it, that an SST Pro version might be in the cards. I can't divulge anything else about it because it is still in the planning stages but it will be above and beyond what the SST has already become. I hope this post satisfies those who were curious about the SST. You can find out more information on it by visiting the SST blog, www.SevenSummitsTrader.com, as well. There you will find an entire year of history and can learn a lot about it. You can also get on an invite list where you can attend a free webinar and/or get free demo time in the SST Live Traderoom where you can actually see it in action for yourself, ask questions as live trades are called out and traded by the active SST Membership, etc. Thanks UTA!! Without it, there never would have been an SST.
  4. Thanks for the post Jayman. What would really be useful is a plug-in that would allow us to use the SST with tick charts. Also, different time based charts beyond what the standard MT4 provides. That would open up a whole world of new SST opportunities.
  5. Sorry for the delay in responding to your question. I haven't visited TL in a while. The SST is so dynamic and one of the things that make it as effective as it is, is the ability to place the stops in locations that allow the trade the room necessary to develop the way it needs to. It then seeks to cut risk asap, and ultimately put you in a risk free position as soon as the price action permits. So.. with that in mind, I always look at the size of the avg losing trade to determine the correct position size, not the starting risk level. It is very rare that the SST will stop out with a full loss, although once in a while, it will happen. Remember though, the SST is quick to recover too. It really pays to use the UTA and do a good amount of manual backtesting, so that you can develop a good win/loss column and experience the trades that way, first. You will then see the avg losing trade and it will help you determine the proper risk level for you. That's what I always call, the 'ditch digging' of trading. Those that take the time to go through such an excercise, will lay a good strong foundation that will help you succeed when you begin trading for rea. Hope that helps.. Great question!
  6. I recently closed out of some puts for a nice triple digit percent gain on both SLV and GLD. Not sure if I'll be getting long or short at this point. Waiting for my system to give me a set up.
  7. A lot has happened since I posted the last time regarding Silver. I thought I would do a follow up and share with you today's blog post I put up in the Seven Summits Trader Blog. Notice where the price is today vs. the price on the trade examples above. This post also highlights a new setup that we are very keen on. It's worth taking a close look at because it is based on pure price action and continues to work across multiple markets and timeframes. You'll see the example in the post below. Got Bob? In yesterday's post, I showed you a GetB.o.B. trade that was forming on the iShares Silver Trust ETF, SLV. Did you get it? Today, we exited fixed positions at both the 2nd and 3rd targets and are now trailing the remainder of our position with guaranteed profits locked in. I personally Got B.o.B. (got back on board) using May 42 call options. The entry was at 42.67 so I bought slightly in the money calls. The price for each call option was 2.24 each. I exited my first position when SLV hit its middle target at 43.56. That's an .89 gain on the straight ETF (stock), which is a 2% gain. Not bad for a quick trade but if you bought 100 shares per position, you'd have to commit a bunch of your trade capital. Still though, if you could make 2% on every trade, you could conceivably trade yourself to riches. Check out the options result though. I exited my first position when the ETF hit its middle target. My options were now worth 2.75, which is a .51 gain. It's a smaller gain from a point total point of view but consider this. Each option only cost $224. When I exited with a $275 proceed, $51 profit per option, my percentage return on my invested capital was 23%! That's over 200% better and a 200% better use of my capital from a pure ROI (return on investment) basis. The story gets better though. I exited the 2nd third of my position at the 3rd target of 43.93. The option sold at 2.90 (I actually exited a few pennies below the full target when it stalled at 43.90. I'm a firm believer of 'trading for profit' and not fighting over a few ticks). The 2nd position gained 29%. I tightend my stop on the 3rd, trailing part of the trade to give this a chance to hit a homerun. I have profit locked in no matter what, and in spirit of the SST, I have a pure risk free trade that is live and still going. See SLV Chart with GetBob Trade Example; (You can see the setup from yesterday. Here is the current chart from today.)
  8. In this post, I want to call your attention to two different equity curves. Actually, they're really the same curve. The first one is the curve of just this year's trades. The 2nd curve is the compilation of all the trades since going live a year ago. I think much can be learned by studying both. Current Russell eMini Equity Curve; 2011 Trades Only -- Notice how this curve looks remarkably similar to the beginning of last year's equity curve (see the very beginning left side of the other, longer curve) where it grinded along, up and down, somewhat sideways, before it broke out to the upside. Take a close look at last year's curve and see what happened for the rest of the year. Are we poised for another long run to the upside? History teaches us a lot. The biggest lessons to be learned however are how perseverence and staying disciplined with a tried and true tradeplan ultimately wins the day and delivers on why we are trading in the first place. To make money! This is a business and we need to expect various cycles to come around at times, including the need to just hang in there and grind it out. That's what the first few months have been for us this year. But if you were around last year, you should remember that we had to grind it out the first few months last year as well, (even prior to going live with the SST, the TF was a very difficult market to trade the first few months) before a +500 point explosion to the upside with the SST. Some trees fall but our forest grows bigger. And sometimes, a growth spurt cycles around too and we need to be in the business, trading our tradeplan, to benefit from that as well. Running Russell eMini Equity Curve Since April 5th, 2010 -- This is it everyone. I have hit the limit of how large I can run my spreadsheet. From now on, I'll need to manually combine ongoing Russell eMini trades with this running result. (see today's final entry in my running UTA sheet for grins). My system won't let me add any more lines of data. lol.. I was wondering why smoke was coming out of the back of my computer. Anway.. All new profit levels!! + 533 Russell eMini points and running. This year alone, we have added +70.4 points in a difficult gringing market. Imagine what will happen when the market opens up and the moves start taking off, like we saw last year. Patience, perseverence and staying with the tradeplan will carry us upwards and onwards again. Finally, I'll leave you with a last thought. The Russell has been the market I decided to meticulously track since it was one of the pioneering markets that led to the creation of the SST. It is just one example of how to use the SST, in conjunction with a well thought out and tested tradeplan, to gain an edge in the market. We are finding amazing success on many different markets as you know by now. The important thing is to learn from the Russell eMini experience and apply this model to your SST trading. It's all about a strong foundation and a broad enough vision to put your trading in the proper context. It's a business and you need to just operate it appropriately. These results don't even consider the other critical part to successful trading as a business, money management. The UTA gives us some tools to help us determine good money mgt practices. I ran the fixed fractional money mgt tool with the UTA on all the live Russell trades as of April 5th, just a few days ago. I haven't updated it with these last 4 positive sessions. But just to give you an idea of the results that might have been achieved by anyone really operating their trade business at the highest level, here's some food for thought. The exact trades found on this spread sheet, most being called live in our traderoom, if traded using a 2% risk profile per position, and beginning with a $20,000 account would have netted in 1 year, April 5 thru April 5, over $198,000 net (after subtracting out trade costs). This is provided that we capped each position at 10 contracts and never let it get above that size per position. It's just one way to look at it. There are others of course. But it tells the real story and suggests what every serious trader should really be thinking about at all times. Isn't this really, 'why' we are trading in the first place?
  9. It's been a few weeks since I last updated this thread. If you've been following along, you would know that there has been quite a history of TF trades with the SST. Just click back and look at some of the earlier posts and equity curves. I wanted to do an update now for two reasons. One, because a few weeks ago, we had the hardest -- NO -- let me rephrase, downright WORST, weekly result since going live last April 5th, 2010. Please review the long post a few above this one for a comprehensive review of where we came from, where we ended at the time of that post, and where I said we were going. Since the conclusion of that ugly week, the TF launched itself on a huge winning streak the following week, actually making back the entire loss of the week before, and even more. In fact, it has just strung together, a multi week winning streak and has broken out to all time new profit levels, on very week of my one year anniversary, calling live TF trades with what later became the SST (Seven Summits Trader). It has been a wild ride, but the Russell eMini just strung together 3 winning weeks in a row and a breakout to all new profit levels since calling the TF 377 tick live in a traderoom, beginning last April 5th. Today was the toughest of the sessions but it eeked out a winning session. We hit our power of quitting goals with a +.5 result. I did call one additional trade that gained another +2.3 points for a net on the day of +2.8, but I'm not including the final trade in my records preferring to stick to the consistently reliable 'Power of Quitting' results. We ended the week up, +17.2 points, breaking out of our recently sideways moving equity curve to hit all new profit levels. Here's a play by play of today's trades. Please see the first chart below to see the actual trades referred to here. I numbered the Russell (TF) trades, 1 - 6. It took 5 trades to hit our goals today. The first trade was the new setup, Get 'Bob,' that I've added to the tradeplan recently. It has performed very well but today, as the first trade of the day, it was an 11 tick loser for a -2.2 net. Trade number two was a reversal short trade and our tight trade management technique stopped us out at Break Even. The 3rd trade was the same setup as the first losing trade, allowing us to get back on board the short and it was a winner, going to the middle target of 848.6. The Trailer only picked up 4 ticks. The 4th trade was actually an add on position that got caught up in some noise and had to stop out for a 7 tick loss for a -1.4 net loss on the two positions. The 5th trade got us short again, allowing us to reenter the downtrend. It hit it's full target but we did make a small 3 tick adjustment on the entry, to make the price break the support level so we only got +1.6 on the fixed position. The trailing position got even less, stopping out with only a 1 point gain. Still though, we picked up +2.6 on that one. Finally, we reentered short again on trade number 6. We incorporated a nuanced rule which had us going for the 3rd target this time, picking up +1.4. Again, the trailer couldn't deliver the home run and we exited that one with only +.9. We gained +2.8 points on the session, excluding trade costs. That's what the market wanted to give us today, based on our consistent tradeplan. We ended with 5 winning sessions in a row and a breakout to all time profit levels, over 530 Russell points with this strategy so far. For anyone interested, I posted a screen shot of all the TF trades this week as posted in my UTA log. In order to not let this post get too long, I will follow up with a subsequent post to discuss the equity curve.
  10. Ok, well, I just finished my session today and final session of the week, and thought I would just add to this thread with a real life example of trades being called in a real trade room service. It was a rather slow market but patience and discipline, sticking with our daily tradeplan, won the day for us. I have posted two charts. Our Russell eMini trades and our Crude Oil Futures trades. Let me set it up by explaining that each trade is designed to be a two position approach. The first position exits at a predetermined fixed target and the 2nd position stays on with a trailing stop technique. I apologize that I can't show the charts exactly as I would in the traderoom. I'm just not at liberty to share everything in a public forum, unfortunately. I numbered the Russell (TF) trades, 1 - 6. It took 6 trades to hit our goals today. The first trade was a new setup that I've added to the tradeplan recently. It has performed very well but today, as the first trade of the day, it was an 11 tick loser for a -2.2 net. Trade number two was a reversal short trade and our tight trade management technique stopped us out at Break Even. The 3rd trade was the same setup as the first losing trade, allowing us to get back on board the short and it was a winner, going to the middle target of 848.6. The Trailer only picked up 4 ticks. The 4th trade was actually an add on position that got caught up in some noise and had to stop out for a 7 tick loss for a -1.4 net loss on the two positions. The 5th trade got us short again, allowing us to reenter the downtrend. It hit it's full target but we did make a small 3 tick adjustment on the entry, to make the price break the support level so we only got +1.6 on the fixed position. The trailing position got even less, stopping out with only a 1 point gain. Still though, we picked up +2.6 on that one. Finally, we reentered short again on trade number 6. We incorporated a nuanced rule which had us going for the 3rd target this time, picking up +1.4. Again, the trailer couldn't deliver the home run and we exited that one with only +.9. We gained +2.8 points on the session, excluding trade costs. That's what the market wanted to give us today, based on our consistent tradeplan. We ended with 5 winning sessions in a row and a breakout to all time profit levels, over 520 Russell points with this strategy so far. The 2nd chart is much easier to explain. Two Crude Oil trades. The chart tells the story so I'll let whoever is interested take a close look at it. I just thought since this thread asks about charging for trading courses and systems, it might be helpful to actually see a real traderoom, using a course and system that has been offered to the public for real. Perhaps it helps put the question into a more realistic context and gets one closer to thinking about a fair value for such a service. Real trades from a real course from a real trade system called live today in a real trade room. Winners, losers.. It is what it is. Not all sessions end positive. CL was a tough trade this week but ended on a positive note today. Had to 'grind it out.' What is it worth? dunno.. But now it's part of the conversation..
  11. I agree with some of your comments MM. Courageous Cat and Minute Mouse were great cartoons. I can't speak on a lot of guys who have rooms but I do believe that trading can be a grind if you let it become one. I run a very tight room, typically trading for about 2 hours and that's it. The tradeplans I use are also very tight and clearly defined. I focus mostly on futures since it gives us a chance to hit our goals on most sessions, often very quickly. We do follow some fx charts too, for those who are interested. The grind factor can and should be mitigated and it is something I remain mindful of. You can't always avoid it. Sometimes you got to slug it out. Other times, like today in Crude Oil Futures, we hit our goals quick and to the point. We were done within 51 minutes. Making money is never easy but if the tradeplans work, it becomes a matter of money management, patience and disciplined professionalism. God save the poor souls who find themselves emotionally attached to the outcome of any trade. No sugar coating allowed. It is what it is. You have to be able to take the good, the bad and the ugly and put it into the bigger context of your overall business of trading. I'm in the middle of my traderoom right now waiting to hit one more trade in the Russell eMini. It's a slow yawner of a session. We just hit a winner. We've had an earlier winner, a couple losses and a breakeven trade. One more winner will give us the positive result we are looking for and a nice end to a white knuckled week of trading. If we do pick up one more winner before our stop time, we would have strung together 5 winning sessions in a row and a breakout to new equity highs. But it has not been an easy road these past few months, that's for sure. Just got triggered into what could be our final trade. I'll post a follow up with some charts to illustrate what we did this morning.
  12. Very provocative thread. Like WorldTrader and Shakespeare, I too host a live trade room, develop trade systems and have taught many people how to trade. I can say a lot on the subject having put in a lot of market time over the three years that I have called live trades (and of course, way more than that trading since the early 90's). The main point that I would like to add though is that I feel a huge responsibility for every trade I call. I know that my clients are hanging on my every word. Like anyone else, I do not know the future nor the outcome of any trade. The fact is, no one does. If it were so easy, it would not be legal because we'd all be printing money. What I have learned (and I had to learn it quick when I first started) is that I have to have a method I can rely on, and then, trade it as intended. Price action, in my opinion, is infinitely challenging. From my point of view, all I can do is put the odds in my favor on every trade and then utilize smart money management techniques. I spent a lot of time doing the necessary work to take 'ownership' of the method I use. I need to be able to believe in it enough to have the confidence to trade it as intended. Getting to that level was hard work. The method I rely on would not work for any other random person who did not do the same work. They could see the results but would run for the exit at the first sign of trouble. Not doing the necessary 'taking ownership' work means you can't know if you are just going through a typical one step back before you launch yourself on the next two steps forward and new equity high. You'd head for the exit right when the winners were about to pile in. You wouldn't even know that you had a great system. Since I did that work, I just need to lean on my system and good things end up happening. And as to the point of this thread, How I Would Charge for a Trading Course/System, and I believe someone said this earlier, you need to make sure the student/buyer is trading your system/course as intended and that's a tall order to require. They too would need to do the necessary work to actually take ownership of the system so that they had the confidence to take the next trade according to the rules. That's not something anyone can just talk themselves into. Not sure how you'd charge for that but you need to factor that into the equation. (The trading group considering how they would run a trade room offering a mentor has some interesting ideas.) ps: To answer a couple of the other questions/statements found throughout this thread I offer the following: 1) I have learned a lot by hosting a live room and have become a much better trader as a result, responsibility for my trade decisions being one biggie but not the only biggie.. 2) A reason for offering an effective trade system to the general public vs. keeping it secret is simple. It is good business. Income diversification should be an obvious benefit. I too would insist it was a good one and not some pie in the sky 'sell me the dream not the substance' system. Integrity comes back around as does the alternative. 3) Not all bad traders turn to teaching (some are brokers.. lol..) and not all good traders shy away from teaching. Again, it can be a good business, amongst other things. But also, there's always something to learn, even from the beginner. Especially from the beginner, actually. No bad habits to unlearn and a fresh naive perspective can lead to a fresh new idea. It did for me -- more than once. Thanks for the great thread. Mighty Mouse was my childhood hero growing up, by the way. "Here I Come to Save the Dayyyy...."
  13. I received an email today, with some excellent questions regarding risk, the SST and using the UTA (Ultimate Trade Analyzer) tool. I thought it touched upon an important subject so I figured I would share the conversation here. Questions 1. Can you help me on what to input in the cell H1 if I'm using $800 capital with leverage of 50:1, and a .01 lot size? What value or point should I put using the EURGBP as the currency I'm trying to test? For those of you who don't use or know the UTA, cell H1 is where you would determine the pip value for the trade data you log into the UTA. 2. In the setup type column, what is the meaning of OSOB and RE? Answers In response to your questions, I would first advise you to never use 50:1 leverage. Just because your broker allows it, doesn't mean you should. In fact, in most cases, you should not. With that being said, try to always keep your position size around the 2% of your available capital range. So if you have $800, you would not want to put on a trade that risked more than $16. That might not sound like a lot, but it is all relative. As your account grows, so will the 2% risk level. Remember, Chris 'Jesus' Ferfuson turned $1 into $20,000 in two years, playing online poker tournaments. He did it by never risking more than 5% of his bankroll on any tournament. He did the math, and based on his skill level, and his estimate of how often he would make the money round on any given tournament, he decided that a 5% risk model would keep him in the game. And it did! His first tournament he entered had a 5 cent buy in price. He didn't raise that level until he doubled his bankroll to $2. Then he began entering 10 cent buy ins, etc, etc.. In two years he built his bankroll up to $20,000. This is the type of mindset you need if you want to succeed as a trader. The SST gives you a serious edge. In fact, it's better than 50% by a long shot. Still though, we are recommending a 2% risk profile based on the average size loss over a period of 100 trades or more. What that means is that once you have over 100 trades entered into the UTA, you will be able to determine the average size loss and from that detail, determine the proper risk (2%) that you should put on a trade. (I forgot to mention, that you would also need to convert the underlying currency of the forex pair into the currency of your trade account so that you could determine the proper pip value and thus, the proper lot size to stay within your 2% risk parameter.)[/i] If you want to get a .01 lot value for each trade's wins and losses, first you have to decide if you will be using the decimal point or not. When I enter a trade into the UTA for forex, like the EURUSD for example, I don't want to enter a price 1.3318 for example. I like to just enter 3318. It saves me 2 key strokes on every price entry, which adds up to a lot of saved manual work for me. In this case, if a pip is worth 10 cents, I would enter .10 into H1. That way, each digit would gain or lose .10. Don't worry about multiple quantities when backtested with the UTA. It is not designed for that. Backtest as if each trade is 1 lot per position. If you want two positions, you have to enter two trades, one on each line. They would get the same date, dame time, same entry price but different exits and different SetupType labels. As far as your 2nd question, OSOB (overbought/oversold) is what I used to label reversal trades and RE is what I used to label Reentry trades. You can edit those labels and use this powerful feature any way you like. With the SLV tradeplan I made available to the Live SST Workshop Attendees, I offered a variation where I used that labeling technique to label various targets instead of trade setup types. You can use it for anything you want, really. The benefit is that it will pull out specific sets of statistics which can really open up important insights and help you with your tradeplan. There is a fine line between not enough risk and too much risk. Trading does involve risk. Without risk, we could never make money as a trader. Risk is an important part of trading, right? But how do we determine the appropriate amount of risk? This is always a question that befuddles traders. It's a razor's edge that doesn't stand still. One's risk exposure is as dynamic as the price movement itself. The SST philosophy, which incidentally, was determined by extensive work with the UTA, is to cut risk as quickly as possible, while still giving a trade the space it needs to develop. In other words, it is handling risk in a dynamic way, constantly retuning its risk profile with the close of every new bar. Pretty cool, huh? Next, its goal is to eliminate risk altogether by getting our trade to a risk free position. In other words, at the strategic price level or strategic stage of the trade's development, it will move the stop to lock in a pip/tick or few. It is trying to mitigate risk by skirting the fickle razor's edge line between too much risk and not enough risk. It is not 100% perfect. Nothing is. But it definitely puts the statistical edge on our side and really, that's all we can ask for as traders. That IS, the holy grail, by the way.. Harnessing risk so that it works for you on most trades but also being able to control it, when it works against you. While doing that, it also calculates a fixed target, dynamically based on the current trade setup, that has a high likelihood of being reached. Sometimes that fixed target is too small and would cut short the overall potential of the trade. The SST answers that problem by allowing us to keep a seperate position on, incorporating its trailing stop techniques. That way, we are able to strike a great balance between not enough risk, too much risk, and a great chance of having just the right amount of risk from a trade profile perspective. It elegantly takes into account the 7 keys to successful trading, or as we call it, the 7 summits, tying together dynamic trade profiles, the dynamic ability to apply the strategy on multiple markets and timeframes, the ability to scale position size in and out of trades, the ability to trail while also being able to exit at high percentage fixed targets that have been dynamically tuned to the current market condition, capital preservation and consistent profits. As traders, the rest is up to us. It is the trader who shoots himself in the foot by putting on too much risk on any given trade. It is the trader who makes decisions that are outside the realm of the tradeplan or the methodology of the trade system. We have the tools. The UTA can be used to determine the 'soundness' of a tradeplan and to build your confidence to the point where your vision is broad enough to believe in the tradeplan and methodology. Once you have that belief, you can responsibly put on the proper risk, and trade the system as it is intended. Thus, you can achieve the statistical edge that the SST gives you and grow your account accordingly, as you facilitate the tradeplan with confidence and professionalism.
  14. Most people probably don't think of their 'point of view' being very important to their overall success or failure as a trader. When we talk about the 'edge' that our system gives a trader, we are talking from a larger point of view. But traders, while in a live trade, are usually most concerned with the live trade they are currently experiencing. Especially if the trade has moved against them or is the next trade in a sequence that hasn't gone very well for them. All of a sudden the instincts for survival assert themselves and we often find ourselves making split decisions that are not part of the tradeplan nor will serve our overall trade performance very well. We might exit the trade and avoid a further loss. We might even exit the trade only to watch the trade turn on its heels and move towards its target objective. If the trade moves towards its target objective, and we bailed out of the trade due to some emotional human response, we would feel pretty bad about our decision. "Why couldn't I just stay with the trade? I'm sooo stupid!" In fact, it would be hard to not think of even harder phrases to berate oneself for making such an error. "Why couldn't I just 'lean' on the system?" An even worse result would be if you made the 'right' decision on that trade by bailing out and avoiding a deeper loss. You would breathe a sigh of relief perhaps, and feel good in knowing you were able to make the 'right' decision and save some money. Unfortunately, while saving money on that one trade and feeling proud of yourself for being 'so smart,' you actually hurt yourself in a much more profound way than you probably realize. What are you going to do next time? How about the time after that? We're traders right? We have to take another trade. Bad habits are very hard to break, especially when you reinforce them with short term 'righteousness.' Before long, we're not even trading our proven trade method any more. We're trading something else and who knows what edge that gives you over time? Making an emotional or human decision that proves to be 'right' on a particular trade will most likely prove to be very 'wrong' for your trading in general. One of the things you'll hear me (and the rest of the NetPicks team) harp on all the time, is the importance of sticking to your tradeplan. If you are truly trading to make money, which in my opinion IS the only valid reason to trade in the first place, than you MUST practice your trade business in a manner that WILL make you money. The only way I know to achieve that objective, is to allow the edge that your trade 'method' or 'system' or 'tradeplan' (whatever you want to call it) gives you. It is NOT what happens on this particular trade or series of trades. Because guess what.. Now we have to take another trade. That's what we do. We trade. So much can be written (and has been) about this very subject. Rather than rewrite another 'book' on this critical subject, I want to tell the story in another way. Below are two examples of our Russell eMini trades. The first, is an equity curve showing our system trades (most being called live in our traderoom) with the SST for 2011. It follows the very same tradeplan that I began using back on April 5th of 2010. In fact, the second example is the equity curve that includes all the trades from April 5 up to the end of yesterday's trading. These two equity curves show you the same trades made this year, 2011, but from an entirely different point of view. Equity Curve (see below); 2011 Trades: The Russell eMini is always a challenging market and like this same period of time last year and the year before, these first few months of 2011 have been a real challenge. You can see by this equity curve that there have been some tough sessions and tough losses. The curve peaked near the beginning of February, and then has been up and down and up and down ever since. There have been some downright difficult sessions, for sure. In fact, last week (the week prior to this one) was the worst performing week since going public with the SST and the TF. Wow! If you were a trader who just began trading the TF with the SST, you might have finished the week quite shell shocked. You can see the drawdown that happened, following the 3rd peak on the equity curve. Anyone who did not follow our ongoing advice to create a strong foundation by digging your 'trader ditches,' that is, backtesting and practice trading prior to going live, would have been seriously damaged by the experience. Not because of a tough losing week, although that is the immediate, apparent damage. No! The real damage is the result of a very narrow point of view. Those that quit as a result of a tough week, without having the broader perspective and higher level 'vision' will throw a way an amazingly effective tradeplan, quit with their losses and will completely miss the next 'two steps forward' that lead us to all new record profit levels. This is the ongoing cycle for most traders. Always behind the curve, chasing the performance that already happened and reacting to the 'one step back' that again, already happened. What comes after one step back? Two steps forward! This current week that just ended, turned around rather dramatically and we went on a 14 out of 16 trade winning streak, completely erasing the prior week's losses. You can see that on the equity curve too. Notice how we are just a few trades shy of making a new equity curve high. What a roller coaster! Especially if you did not already experience the 1000 or so trades that happened prior to these two weeks. Take a look at the next equity curve. Equity Curve (see below); all trades since 4/5/10: Do you see the last part of the chart on the right? Notice the zig zagging up and down of the equity curve. It looks like a few bumps in the road when you put it in context to the overall curve that dates back to the beginning. In fact, it doesn't look like a roller coaster at all. You'll see other parts of the curve that also steps down. One step back leads to two steps forward. I don't care what market or timeframe or trade method you use, a healthy and profitable equity curve WILL contain tough sessions. There's no such thing as a straight line to ongoing profits. The road is always bumpy. If you keep chasing, you'll end up losing all your money even though you have a winning system. Yikes! Sadly, those that quit will continue to experience this exact pattern. They'll see something they like and will begin trading at the end of the two steps forward. They'll catch the beginning of the one step backwards and their account will take what should be, a momentary drawdown in equity. But as the cycle continues to unfold, the same trader will quit, right at the moment they have experienced too much pain, and unfortunately for them, right at the END of the one step back. They'll quit with their losses and run for the exit, just when the two steps forward is about to get underway. They keep jumping on board the equity curve at the wrong places and continue damaging themselves by hopping off, also at the wrong place. Is this YOU? Hopefully you can see and understand the theme of this article. Point of View is EVERYTHING! Are you the person lost in the forest, running around dodging a bunch of falling trees? Or are you the person taking the bigger birds eye view of your entire forest? The individual trades you take, the very trades that have you fretting at the right edge of the chart, making very human (and WRONG) decisions, are the trees in your forest. You are lost in the trees and can't comprehend your forest. Sure, you might successfully jump out of the way and avoid a falling tree, but you are lost in your forest. You can't find the edge. You can't benefit from the edge of your tradeplan, system, method.. whatever you call it. Your equity curve IS your forest. If you can't be at peace with sacrificing 1/3 of the trees in your forest in order to grow your forest 2/3rds larger, than you will experience complete deforestation! It's all about point of view. The longer term equity curve is sitting a mere 8 points below its all time profit levels, despite the last several weeks of difficult trading. At some point we will look back at this article and we'll be addressing these same issues again. Only next time we'll be on the verge to breaking our 800 point level, instead of skirting around our 500 point level. We will have grown our forest 2/3rds larger. Again. Where will you be? Note: It doesn't matter if you are a forex trader, or a gold trader. It doesn't matter if you trade stocks or options. This is a universal theme. Do what is necessary to achieve the higher level point of view and you will have taken the first and most important step towards ongoing success as a trader.
  15. I thought I would post a video walking through the 5 sessions referenced above. We had a 6th winning session Monday, putting the TF just 6 points below its all time equity highs since last April. Today is FOMC statement day and the TF is struggling as would be expected. It is advised to limit your trading to just a few trades, if any, on a day like today.
  16. Many forex brokers have begun using a tick, or 10th of a pip, extra digit in their quotes. At first, this really bugged me. After creating a bunch of tradeplans and working with it for a while, I have decided to just think of it as an extra 'confirmation tool.' Let me explain what I mean. We'll use the GBPUSD as an example but the concept would apply to a USDJPY and its 3rd digit too. We'll look at a long trade and you would just reverse everything for shorts. Let's say I have an entry at 1.60358. That is easy because if you have learned about key level adjustments, you know that I would move my entry to .6036, 5th digit or no. I want to get above the '5,' right? But what if the entry was 1.60362 instead? In this case, I would not round it down to .6036. I would ask for a little more confirmation and look to get in at .6037. Add two pips of spread and my fill is at .6039. Shorts would be the opposite. If my short was at .60358, I would first look to get down to .6035, and then adjust one more pip below the '5.' So my entry would be at .6034. Perhaps many of you are thinking that I'm giving up unnecessary pips in the process and in some cases, as it would turn out, you would be right. But in many other cases, using that extra digit to force the price to stretch out a little bit more prior to letting you into the trade, will save you a lot. What about stops? I use the same concept. I let the extra digit be an excuse to push the stop out, a little further away, to the next pip and then will adjust even further to get around 5's and 0's. Again, I'm willing to pay a little bit extra to help stay in a trade that could knock the runners home. Let's look at a recent trade. In fact, since I just published a 9 pip momentum range bar tradeplan the other day, let's look at a long trade from yesterday's session. See the Image Below for the GBPUSD 9 pip Range Example; 3/11/11 The first trade was a basic long trade that set up earlier than our 9:30 start time, but then allowed us to get in synch and take the trade. That trade was unable to go the distance and stopped out with a small profit. That led us to the 2nd trade, a yellow reentry trade. Look on the data window and notice how the entry was our example above, 1.60358. The next bar stabbed up through .6036 and the trade was triggered in at our adjusted entry. At the time the trade hit the entry and went live, the stop moved up, cutting risk. It moved to 1.60139. I put a yellow dotted line so that you could see the stop and its price level. Going with what I described above, we would use the 5th digit, the '9' as an excuse to push the stop a little bit further away, down to the next pip. So the stop gets adjusted to .6013. I do not move it up to the closest pip of .6014. I want the extra space on the trade and I'm willing to sacrifice a pip or two (or in this case 9/10 of a pip) to give the trade a little more room to breath. The price came down actually to .60137 and in fact two bars later, touched down to .60135. However, .6013 even, was NOT touched and the trade was able to hang in there, and stay alive, even if it was just with a tiny part of one nostril gasping for air. I put a yellow dotted line to show you the actual unadjusted stop level. The tiny 9/10 of a pip adjustment allowed the trade to survive by 1/2 a pip. That counts! Targets are easy. I just move it down, to one pip closer on longs, and up to one pip closer on shorts. I want to give the trade every chance for success and I'm willing to shave a fraction of a pip up to 2 pips off, in order to exit at a full fixed target. See on the data window how this target's exit (Target3) was .60754. I would be out at .6075. Some traders like to even adjust down off of the 5 to .6074. That's fine. Often the price will get up to .60748 for example, and just miss the 5. If you didn't make that adjustment, you wouldn't get filled at the full target. I usually don't adjust my target off of the 5's and 0's like I do with entries and stops, if I am present when the trade is in progress. Instead, I'll let the trade try to get to its full target but also, I'll be aggressive to exit if it struggles. If I do have to step away from my computer for a bit, I'll make the adjustment down, off of the 5 so I don't miss my opportunity to take action if necessary. Make sense? This type of thing serves you very well IF you actually take the time and effort to put it in your tradeplan as a rule. Then you never need to think about it again. It is a way to reduce what might be considered the 10% art part of trading, to a hard and fast mechanical rule, which is great for trade psychology and remaining consistent with your trade approach. What about the trailing stop? Here's where you can really do some cool stuff, once you get a feel for the SST and its trigger line. The trailing stop printed at 1.60717 but it was on a bar that closed below the Trailing Indicator (pink line) so I stayed with the one prior, .60701. I always trail the trigger line or the other Trailing Indicators (the pink line) by two pips below the last bar's line reading that closed above that line (for longs). If a bar closes below the trigger line for example, I keep my stop where the last bar that closed above the line was. Using the same technique, I would move the stop down to .6070. But I never want my stop on a '1' or '0.' So then I adjust it down to .6069 to try to hide it behind the '0.' I put a yellow line to show you where the adjusted stop level ended up. Again, you might think that I'm sacrificing a couple pips, needlessly, but you will find that sometimes, that one small insurance premium will keep you in for an extended move, and more pips. For a Closer Look at the Trailing Stop, See the Image Below. Here's a twist to the theme that some of you will really like. With forex, we can easily tune our position size, with the creative use of minis and even micros. Make sure you choose a broker that gives you this flexibility! When your adjusted stop is so close to the trigger line, like in this trailing stop example, you can also leave a portion of your trailing position ON, and adjust the stop a little further, around the trigger line for the remaining position. This technique can keep you in the trade for an even bigger move. The trigger line, when it is close to the price action, is a great trailing stop tool. If you learn to use it during opportune moments, you can increase your performance on some trades. The risk:reward ratio can be huge, too. You only risk a few pips but can stay in a trade that might go for a long time. In this example, the last price on the chart, the closing bar, had a trigger line at .60768 (the yellow dotted line is the trigger line). I would adjust that number down to .6076. Then I would place my stop 2 pips below that at .6074. That final bar actually stabbed down to .60747 and didn't stop out. So, the remaining portion could either be exited at the close, OR, kept on as a swing trade for the hopes of a larger move up once the market opens. Of course, this is a risky play but I wanted to illustrate the example so that you can think about it and incorporate it into you every day trade tactics. Many times this will happen in the middle of the session and you don't need to worry about the close, for example. I like the extra confirmation. I would rather give up a pip or two of insurance if it helps me avoid SOME much larger losses or if it gives me a chance for a larger gain -- somtimes, MUCH larger. Remember, nothing is ever perfect in 'rock n roll' or 'trading.' As an old rock n roll drummer, I learned at an early age to accept and be at peace with the realities of imperfection. We don't need perfection to profit from trading. Only an edge that puts the odds in our favor. Using the extra digit found in forex quotes as a 'confirmation tool' will help give you a sharper edge and a way to handle tough trade decisions without any sweating for fretting. That's what we want!
  17. Key level adjustments fall into, what I would call, the 10% art to trading. They are often misunderstood, and if not thought through and put into context, they can become too subjective. Yet, they remain very important and can make a big difference to one's overall trade results. One of the problems that arise is that they can often lead you to second guess the trade entry that your tradeplan, system, method, etc. says you should take. How do you know when to make an adjustment and when not to? The easy answer would be to simply say that it comes with experience. But, a lot of good that would do, right? How can you benefit from this idea NOW? I have a simple way of doing it, that I've pretty much written into all my tradeplans. I have reduced it down to a very simple part of my every day trade decisions and have reduced my key level adjustments to hard and fast rules. If you think about it, I've actually taken what is part of the 'art' of trading, and have reduced it to a mechanical rule. One of the concepts I try to be mindful of is to NOT let 10% art become 20%, or 30%. I want to keep it right at 10%. In other words, minimal. If I have a trade system that gives me a real good winning edge over a lot of trades, I have to 'listen' to what those results are telling me. If I can go back and improve that edge a little bit more, by making very 'minor' key level adjustments, then that is exactly what I'm looking for. Major adjustments 'change the actual system' and you wind up trading something else. I don't want that. These are my typical key level adjustment guidelines that I have baked into my hard and fast tradeplan rules. 1. I always like to adjust around 0's and 5's. Let's use the Russell eMini as an example. If I have a long trade at either xxx.4 or xxx.5, I move my entry to xxx.6. Often I'll just give up a couple ticks and get triggered in anyway. Sometimes I might even get triggered in and it still loses. That's trading. Other times though I will avoid a losing trade and then catch the next winning trade and meet my quitting goals for the session. Sometimes I'll avoid a loss and stay in the winning trade I'm in. I do the same thing with xxx.9 or xxx.0. I get long at xxx.1. For shorts of course, I do the opposite. I get short at .4 and .9. I do the same thing with forex. 2. For stops, I pretty much do the same thing. If my stop is at xxx.1, I'll move it down to xxx.9. If I have a stop at xxx.6, say a trailing stop even -- doesn't matter -- I'll adjust that stop to xxx.4. I don't even give it a 2nd thought. I've taken an 'art' thing and made it a mechanical, no thinking, rule. 3. I also am looking to make very small adjustments to get around obvious swing levels. I'm a big believer that you can't be intimidated by swing levels. They are obviously broken all the time. But if you have an entry to short at xxx.2, and there's a swing level at xxx.1, doesn't it make sense to ask for a little bit more confirmation, and make the price get to xxx.9? That's how I do it. I realize that nothing is perfect but I don't need it to be. I'm just looking to avoid 'some' losses. Check out the EURUSD trade we took today with our 5 minute chart tradeplan. I put pink arrows to point out where we would have had to stop out of our long, prematurely, and reverse to short. We were in our 2nd long trade (yellow arrow) and had not quite hit our target objective, the 3rd dot. We got a short set up and the price actually came down and touched that entry price which would have ended the long trade and put us short. That entry level was 1.38726. Also, a few bars to the left, you can see a clear support level at 38714. First of all, I use the 5th digit on the EURUSD as another confirmation tool. I always round it down for long stops. I look at 1.38726, and I instantly think 1.3872. That's just how I do it. For targets, I like to move it closer so it is easier to achieve, but for stops, I like to move it further so it gives the trade a tiny bit more room. For entries, I also usually move it further to the next 4th digit. Understand? So when I saw the stop and reverse at 1.38726, I'm thinking 38720. Then I had to pay attention to the swing level at .38714. To me, that's 38710, right? I'm rounding it down to the 4th digit that pushed the entry a bit further. The only problem is that I won't get short at the .xxx1, .3871. I naturally adjust the entry down to .3869, as I described above. Notice that when the price came down to touch the printed reversal short trade entry, it reached down to .3871 and that was as far as it would go. My adjusted 'stop AND reverse to short entry' was at .3869. The adjustment was enough to prevent the losing short AND stay in the winning long trade, which went on to gain quite a bit more pips with our standard two position approach. A few more simple things. First, I'm looking to make very minor adjustments, like 1 or 2 ticks or pips. Sometimes 3 and rarely 4. Any more than that though, and I feel like it's time to just trust your trade system and don't adjust at all. Go with the next trade according to the tradeplan. If you doubt your system too much, by always over adjusting and being afraid of your trade set ups because of swing levels, than you probably are trading with scared money and you'll wind up losing anyway. You just can not be intimidated by swing levels if you hope to win in the end. Look to make small, minor adjustments. An exception might be extreme swing levels on the much higher time frame. Those you have to be very careful of. But even they break. Especially when they are being approached and tested for the 4th time or more. Also, sometimes your minor adjustment puts you up against another would-be key level, and then a few ticks after that, yet another, etc. I call those 'layered key levels.' The problem with adjusting is that you don't really know where to adjust to. After your initial adjustment, you're still faced with another key level. When I see that, I just go with the unadjusted entry set up OR I limit it to just one small 1 or 2 tick adjustment. That's it. A good example would be a short set up that comes up at 92.06 on crude oil futures. If I adjust down to .04, I've got the 92.00 just 4 ticks below that. If my trade profile only has me going for 24 ticks anyway, do I really want to adjust 25% out of my profit potential? My risk becomes that much larger too, right? That's an example where I would just take the short at .06. I'm looking to make 'small' adjustments only. With swing trades and longer term, bigger trades, you kind of have to give a little bit more leeway. Keep it in perspective. Bigger trades might need bigger adjustments. Use common sense. That's all I got. Hope it helps.
  18. After the tough few sessions (and long post ) last week, the Russell eMini put together quite a performance. This week, we had a 5 session winning streak. We took 16 trades, winning 10, breaking even on 3 and losing 3. That's more like it, no? In fact, we are a mere 10 points shy of our all time equity highs. This week we gained a respectable +14 points. Just to put things in perspective, sticking with the theme of the prior post (the long one), take a look at the equity curve I posted to start this thread, and then now look at the equity curve after today's session. The point being that the longer term persepective is where you need to be if you hope to be successful, in my opinion. As I said earlier, traders quit after last week's tough sessions. This week, those same traders missed the 14 point gain. The thing is, that any other market they decide to trade, with any other winning trade method, will ultimately go through the same thing and will hit a period of difficulty. The money is made by the edge we get by staying with the winning horse in the first place. Especially when the winning horse gets tired legs for a while. The legs will refresh and the horse will win again. The best trades follow the worst trades. Don't quit at the end of the one step back. Don't jump back in at the end of the two steps forward. We call that, 'chasing performance' and you will always be on the wrong side of the equation. It has been a tough early part of the year for the TF. It was tough this time last year too. We only have +46 points so far this year. As long as we stay with our winning horse, we'll continue to get our upward angle of the equity curve as shown.
  19. Is anyone out there using a different SST tradeplan for daytrading the EURUSD 5 minute chart, other than the one posted on the SST Owner's Club Website? I'm just curious. There's so many ways to skin this cat. The published tradeplan is doing great and has been very consistent, both during the Euro Session and US Session. Here is a look at today's trades. I am using tradestation but MT4, Ninja or eSignal traders would have had similar results. Since forex is decentralized, no two brokers will have the exact quotes so the results will vary from broker to broker. The SST will work on whatever chart it is put on and if the new Oanda MT4 chart of the EURUSD 5 minute outperforms the same chart on Tradestation today, then tomorrow it might be Tradestation that outperforms the Oanda MT4 charts (or FXDD, FXCM, etc..). Over time, it all smooths out as the strategy and tradeplan will work on whatever chart it is applied to (MT4, TS, NT or eSignal). It all comes out in the wash over time, in other words. I did look at the Oanda MT4 chart and the net result was slightly different. It was really a moot point however, in that it was a winning session regardless; both Euro and US. Check it out.
  20. When I'm trading on a 'non-indicator' chart, I like to look for the 2nd leg of a move. Taking a 2 minute chart for example, on the TF maybe, if a down swing fails to make a new low, and then the price moves higher, breaking what could be considered the 2 point, on your typical, 1,2,3 bottom I'll look for a 1/3 to 2/3 pullback (approximately) after that move, and then look to take a long trade from there. The idea is to catch a 2nd move that approximates the first move. You see this in your typical stair stepping trend but sometimes you don't get a trend but you do get a couple good legs where the 2nd one becomes a reliable a predictable price move. These are some of my favorite trades. The trick is knowing when the in between pullback move ends. I do use an indicator for this idea, but only as a 'marker' for where I want to see this reaction pull back to, and then bounce off of. Of course it's the bounce that I'm interested in. I then use one of 2 measurement techniques to project my target where I exit part of my position and trail the rest. I do this in the opposite direction too. It doesn't have to be a 2 minute chart either. That's just an example. You can find a few good trades like this on most sessions using a 15 minute ES chart, for example. YM and NQ also work well with this technique. Like what was stated above, you have to put it in context to the bigger view of what's happening in the market and look for your best setups. In fact, on some markets this same technique works well breaking out of sideways choppy action. Look for the second leg. I like the reversals that give that good first leg because the 2nd leg becomes very clear and the risk:reward ratio is very favorable. The stop goes right beyond what I identify as the end of the so-called reaction move. And since the reaction is only 1/3 to 2/3, and I'm looking for the 2nd leg to approximate the first, the r to r is good. I view these types of trades as 'trades of opportunity' and fit them into my trade session outside of my regular trade system or tradeplan. My tradeplan allows for these types of trades, in other words, and I'm always on the lookout for them. It takes a little practice and it makes sense to learn how to get good at identifying these setups and trying it on paper for a while before trying it with real money.
  21. This is a long post. I have received a lot of questions mixed and so I took the time to write up something comprehensive. Hopefully I answered everyone's questions and concerns adequately. This is actually a post in our private SST Membership Owner's Club blog but I thought there might be some useful and hopefully helpful information in here for the general TL membership. The TF is a challanging market and if someone gets one useful piece of information or one idea that makes a difference, than that would make me very happy. ******************************************************************* Russell eMini; Tough Week but Still Going Strong.. Russell eMini traders were put to the test this week. It's been a long time since we had three tough sessions in a row. What's important when dealing with markets like we've seen these last few days is to take a step back and actually put things in perspective. First of all, a good argument can be made, and should be seriously considered to either stand down, or limit your trading sessions when Bernanke is testifying before congress. It's true that some days will work out fine, but others will be very difficult. Also, the day before the grand daddy of economic reports, Non-Farm Payroll is another day to either sit on your hands, or, limit your trading. If you can't get it done in a few trades, you could be asking for bigger problems if you keep on trading. If you don't do your own backtesting, you're not going to have this perspective and you won't be in a position to make the best trade decisions. When creating a tradeplan, it is important to consider these things. Using the UTA helps a lot. You can label your trades with one of the filter columns with something that indicates these types of sessions. You can backtest for them or just track the results in a second UTA file. Deciding to trade or not to trade on these tough sessions can make a big difference. No matter what approach you decide to take, don't expect perfection. It doesn't exist and you'll find that every decision is a tradeoff and has consequences. Let's say you took all the trades through thick or thin, Bernanke or no. My UTA results showed that we took a tough step back this week, with - 22.8 points, possibly our worst week since going live with the SST last April. Some traders ended quite differently. Maybe you took the setup that happened one minute before our start time and was a big winner. Maybe you're using Ninja Trader and had slightly different data and consequently, slightly different trade setups that might have made a big difference. We missed money mgt and a risk free position on more than one losing trade this week. Tough break, but if it's at all possible, it WILL happen at some point. missing risk free stop moves by one tick IS possible and DOES happen. How are you going to avoid it? Don't even try! Also, as discussed on the TF tradeplan page, trading the pm session also would have improved those results. But let's just go with the -22.8 point drawdown, for now. In the grand scheme of things, the forest from the trees perspective, let's look at where we came from and where we are going. In TradersLab, I started a thread on the TF eMini in our sponsored forum where I posted the equity curve up to that point in time. Here's the curve as shown on TL. One of the things you'll notice is that at that point in time (10/14/10), we were hitting all time equity highs, a tad over +330 net points, or $33,000 (gross). We were winning a solid 67% and had taken about 720 trades since going live with the what at that time was called, "Nooner," later to become known as the Seven Summits Trader, "SST." The year ended even better. We maintained our 67% winning percentage and ended the year with + 462.6 points; $46,260. Not bad, huh? The equity curve looks the same as the TL curve above only this time ending at a substantially higher water mark. TF Equity Curve 2010 Total It's easy to look at and marvel at such a result. In fact, it's easy to downright daydream about it and wish that you took all those trades. What's lost in such a snapshot though is the actual human element of experiencing all those trades, in time, month after month, week after week, day after day, trade after trade... When we look at such a snapshot, what is lost on most people, is the actual time and effort that went into creating such a result. It didn't come easy! It escaped a lot of people who, for reasons that haunt most traders, along the way dropped off the winning track that led to the +462.6 net points by year's end. Perhaps they joined and began trading at the beginning of a tough session or two. If they didn't do any preliminary foundational work -- I call it, the 'ditch digging of trading,' then most likely they have no vision of the overall forest, and infact, are lost amongst the trees. Falling trees! Think of each tree as a trade. The forest is the equity curve. With a 67% winning percentage, you have to be willing and able to sacrifice 1/3 of the trees in your forest so that your forest can grow 2/3 larger as a result. It's the two steps forward, one step back, stairstepping equity curve that climbs upwards and to the right. We look at it. We marvel at it. We want it. But can we endure the stairstepping? That does include the steps backwards, by the way. In real time. You can't divorce the step backwards from the equation or it would not be possible to get the two steps forward. That's just the way it works. The one step backwards is part of the winning formula. Why is it that so many traders trip and fall over this critical concept? But what if you DID start at the beginning of some tough sessions AND you didn't have the overall broader vision. You'd probably quit. That's what people do. I can't blame them. Murphy's Law is alive and well and the newbie always lets Murphy in the door, the moment they begin taking live, real money trades. It happend to me, on the first day I ever called a live trade in a trade room, April 21st, 2008. I lost -1.7 points. I had over 60 'would-be' members in the room that day. I remember like it was yesterday. The 2nd day, however, only 25 or so, showed up. We then launched a run that gained nearly +170 points by the end of the year. Ironically, on my anniversay, April 21st, 2009, we gained + 1.7 points. Go figure.. I look back on my history of calling Russell eMini trades in a live trade room. I'm approaching my 3rd year anniversary and I can tell you, I have logged some serious screen time. I have literally called live, with my members hanging on my every word, I would estimate, over 3500 Russell trades. That's a lot, right? (And that doesn't even include the many other markets I called live.) While that screen time and live market experience has paid off in many ways for me and my trading in general, and while I have a good sense of what's happening in the market on any given session, I still have to live at the right edge of the chart, not really knowing what will happen next. Like everybody else! The market continues to perplex, befuddle, bemuse, fascinate, exilerate, frustrate and all the other '...ates' you can think of, and tomorrow's session will be no different. That's the world we live in as traders. And yet, when it happens -- or rather, as it continually happens, over and over again, most traders continue to be emotionally attached to the outcome of the trade they're in, without the greater understanding of how their method of trading is producing over the big picture; the 921 trades from "April 5th thru Dec 30th" picture. Do the few tough sessions or 4 trade losing streaks really mean that much when put into the context of what a trading business should really look and feel like? I guess if you are just starting, and your first few trades take you backwards, it would matter. Especially if you're under capitalized, unpracticed, don't really understand the system, don't have the bigger vision to know what to expect, have't experienced the losses and then the charging equity breakouts to new profit levels despite the losses, etc.. If you haven't dug your trading ditches, you have know way to create your trade business foundation. So what are you building on? Can you stay with the program in the face of some preliminary tough sessions? Without a foundation? no way! Or at least, I seriously doubt it. Whether it be this system or some other, no one can stay with something that they have no real understanding of.. No foundation for.. No higher level vision.. What happens is that they wind up fretting the trade they're in. They begin chasing performance, always behind the curve, missing the winners and catching the losses, and ultimately unable to take the next trade that launches the big two steps forward and new equity highs. They begin to cherry pick, and picking wrong. Often, the most uncomfortable counter-intuitive trades are the best trades. They wind up NOT trading the system that has given the winning edge and growing equity curve. They wind up trading something other than that, with no measurable history and guess what.. They wind up blaming the system they are incorrectly trading, refusing to take responsibility for their own decisions and the likelihood that they probably made a big mistake, to begin trading a system without building the necessary foundation; without going through the necessary steps to actually take 'ownership' of the system, so they can believe in it, and trade it with 'confidence' and then, benefit from the edge it gives, over time. It's a story that plays out over and over again. Let's take a closer look at some of the sessions that made up the 2010 stellar results. 1. April really struggled but managed to pull it together in the end, finishing with +15.6 points. But after the 2nd week, we were only up by 9 ticks. April dished up some hard single sessions too, the three worst being -7.6, - 11.2 and -7.9 points. Some people said "ouch" when that occurred. Getting kicked in the shins does hurt, for sure. But if you were not over trading your means, that's all it was. A hard kick to the shins. We still had our legs though, and the SST was about to put plenty of spring in our step. At least if you were still around. If you had the vision to stay with it. If not, you quit. Maybe starting out, working hard, and struggling to trade your way to a meager 9 tick gain that 2nd week, was all the pain you could take. Tragic.. 2. May was like the rocket ship finally pulling away from Earth's gravity. That's what it seemed like and the equity curve shows it. We netted +48.7 points the first week of May! (It should be noted that for the first few months, I was tracking and posting the pm session with the One and Done Power of Quitting approach and those results did end up in these totals. I stopped tracking them after seeing its consistency, for time expediency and because I wanted to turn my attention to other markets. The pm session did improve the results most of the time, but not always. I say this now because it is worth considering if you are currently trading the TF.) May ended with +113.4 net points! But included in that total were sessions that lost in the double digits, much like in April. Some downright ugly sessions, the worst being -10.8 points on a day with far too many trades taken. "Ditch Diggers" should take note and make appropriate trade decisions based on this knowledge. Also it should be noted that the occasional session will pop up where we are hitting winners, but we are getting stopped out prematurely, with only 1 tick gainers, while hitting regular losses. These sessions do exist, pop up from time to time, and do go with the territory. Still, +113.4 net points should have you raising your eyebrows, no? And the risk free stop moves work the other way too, preventing some losses. It's a trade-off. 3. How 'bout June? Huge month! Weekly totals were +16.4, +27.2, +15.8 and +6 for a net result of + 65.4 points! The members of our live trade room were loving it! Who wouldn't? 4. July was hard. We took a step back in July, actually ending the month down, - 14.2 points. It was a hard month. We actually had a session where we lost -17.6 points and that was after taking a -6.8 haircut the day before. I had stopped tracking the pm session trades at this point. I can tell you -- members were quitting.. Especially those who were just beginning, who let Murphy in the door, who had no vision, no foundation, didn't do any work to actually take real ownership, had no way to put what they were experiencing into the overall, broader context, etc.. (big mistake!) 5. August: oof! The best trades (and sessions) follow the worst. Our rocket boosters kicked in and the 'one step back' launched us into a big two steps forward (more even, way more..) as we proceeded to gain +40.9 points the first week. The trailing stop was beginning to wake up and show its prowess. We managed to fight and claw our way to another +16 or so points, ending the month with a respectable +56.7. Moreover, the SST went public, on the 23rd and was officially on its way to being independantly traded by other traders. iWhat a concept that was for me, to actually wrap my mind around. People were actually trading live, independent of my tradecalls, the system that I had created. I can't tell you how insecure I was. What if they didn't take the time to really learn it? What if they didn't take my advice to take it slow and actually do some 'ditch digging' of their own? How could they actually understand what it will do if given the proper chance? All these things were going through my mind. I really felt, and continue to feel to this day, the overwhelming responsibility presenting a trade system that would help people, but could possibly hurt them too, if they didn't approach it properly. But, like any powerful tool, you better take the time to learn it well. Give me a hydraulic nail gun and I'd probably shoot myself in the forehead if I tried to use it without learning it well first. Make sense? 6. September started with a rare losing week. When I say rare, I mean it was like, only the 4th losing week since beginning in April and we only lost -3.5 points. We came back with a double digit, holiday shortened winning week after that, winning 11 out of 12 trades (many were just 1 tick gainers that kept us out of trouble) for + 10.6 points. We finished the month with +45.9 points. 7. October was hot and cold but we had positive totals each week and wound up with a net of +59.3 points. 8. November continued our weekly total winning streak with all winning weeks and a net total of +66.5 points. 9. December; who woulda thunk it, but December was quite good, thin volume, holiday trading and all. Here's what makes it even more interesting. We started with a big step back and a break to our weekly result winning streak, taking a -9.6 point loss for our 5th losing week of the year (since April). We even started the Monday following that hard week, with another -6.8 point loss. Members were quitting! Sound familiar? Of course they were. They always quit after a few losses. We charged back though and ended December with +31.4 points, and of course, the year ended with our +462.6 net points (including the couple months of pm trades). Did those that quit, make a mistake? I guess it depends on what they were after. If they were after easy money, than they didn't make a mistake. Trading is NOT easy. It is HARD. But, it is doable and obtainable, to those who want it bad enough. +462.6 points! Tough, hard, painful sessions included.. I've been harping alot on those and not even mentioning the joy and pleasure that we also experienced all along the way, with the big winning sessions. And there were a lot of those! Look at the monthly totals. It didn't happen by accident. But also, lots of 'grind it out' sessions that produced marginal gains and losses. It's all in there. That's trading! All we can do is put the odds in our favor on every trade and let the odds work for us, over time. The winning edge. That's what makes us our money. 2011 so far, has been much of the same. Tough sessions and hard, right edge of the chart trade decisions to make, that are counter intuitive, uncomfortable and never easy. Yet the first two months have given us another +55.3 points. Trading has been harder, for sure. It seems the trailer has gone back to sleep. The new and effective GetBob trade has helped a bunch and we ended the first two months with our steady winning percentage of 67.35%. This year, like any year, the world seems to always be teetering on the brink of some disaster and the price action in the markets refect this. Fast markets are always a challange. Slow, boring, yawners are also a challange in a different way. When is the market perfect? Well, it's in the results. We do have some great winning streaks. But they were sometimes hard fought as well. You want easy? Not sure what direction to point you in. Speed forward to today. What more can I say? We just ended with the worst 3 sessions in a row since the SST began. We really took a step or two backwards. I guarantee that members are quitting. They always do. Only time will tell whether or not they are making the right decision, or not. I don't blame human beings for running for cover when the bullets start flying. But good traders can not affort to be human! The market isn't. That's why we rely on a trade system like the SST or some method that keeps us objective. Unemotional. Detached. That's how we are able to know what to do, at the right edge of the chart, when the next perplexing trade setup presents itself, in real time. I hope the quitters find what they're looking for. The sad thing is that they found it already. If they would have just taken the time to learn it well, before committing real money, they wouldn't keep quitting right before the two steps forward to new and higher profit levels begin. There is a step by step process that puts a trader on the right pathway, with the greatest likelihood to achieving success. It's not as pretty as how they imagined it and the attractive profitable results contain within it some serious ugliness at times. That's the business. Accept it and show up on Monday. New equity highs are on the way. Those that didn't quit will reap the benefits, as they always do. 1200 live trades, sitting a stones throw beneath their all time profit levels, 'probably' are not wrong. I'd say 'can't be wrong' but then that would be implying that I actually DO know what will happen next. I don't. No one does. Lean on the system. Let the edge work for you. Be the facilitator of your tradeplan. Be the operator of your trade business. Hopefully that plan and business does not include, fretting the next trade because that will never work, and for sure, it is NOT included in the results I have presented here. It belongs to someone else's trade system. If you are fretting, let that be an indicator that you're probably trading a market and time frame that you shouldn't be trading. Slow it down. Look for a market with less risk. Recapitalize. Dig some ditches. But don't trade beyond your means. The fretting trader is the scared trader is the losing trader. I should know. I had to learn that lesson right away the moment I started calling live trades in a traderoom with all the attendees hanging on my every word. A few tidbits before I move onto other things (for those still reading): • The above results are using the basic 2 position approach only, on each trade. If one were to apply a simple fixed fractional money management plan, as provided in the UTA, and put a 2% risk on each trade based on the avg losing trade, one would have earned nearly $200,000 net of trade costs (commission and slippage) taking the exact trades that produced our +463 points, by year's end, 2010. That would be if starting with a $20,000 trade account and capping each position at 10 contracts each, once the account grew large enough. It also includes the drawdowns that went with it. • In 2008, I started tracking my live UMT Russell eMini trade calls, May 12th. Quit the end of Nov, due to the ER2 migrating over from the CME to the ICE exchange. Also, the sub-prime mortgage was wreaking havoc and the Russell was untradable for a while. Up until that point, my ER2 tradecalls produced +167.3 points and a 60.7% winning percentage with the original UMT, Universal Market Trader. • In 2009, I called 701 live trades in the Russell eMini using the UMT. We managed a solid 61.6% winning percentage and gained 211.7 points. On the 650th trade, we began an 11 trade losing streak. Guess what. Many members quit. Who could blame them, right? Especially those who were newer and lacked the bigger, broader vision. Big mistake! Notice the theme? Trade #12 was the beginning of a 16 trade winning streak and a breakout to new all time profit levels. All the trades were documented on our blog. In fact, I kept a running tally, adding or subtracting position size with each $5000 swing in equity. I subtracted out trade costs each week. by the end of the year, (I began this tracking experiment in Feb, I believe) we were up 400% net of expenses! That's with a 61% winning trade system. See Results here • SST has produced a 67% win rate, steadily, for over 1200 Russell trades, two positions each. Our all time equity highs happened one month ago, where we were over +523 points (+$52,386 with no money mgt increase in position size. Just the two position approach on each trade). Today, counting the tough sessions this week, we are at +495.1points and there's no denying, we went one step back. Current Equity Curve What does that mean though? What does history show us, over and over again? Think about it before you throw in the towel. Here is some interesting information I discovered with the UTA • Trades from 9:30 to 10:00; 1051 trades; 65.1%; +226 points • Trades from 10:00 to 10:30; 495 trades; 65.3%; + 38 points (clearly the least profitable) • Trades from 10:30 to 12:00; 448 trades; 70%; + 158 points (don't read into this incorrectly. Keep in mind we were often finished with our power of quitting goals before we got to these later time slots in which case, many trades were not logged.) • pm trades; 12:40 to 15:50; 226 trades; 73.45%; +73.5 points (this only included the couple months I tested the pm) • It seems to me it would be worth the 'ditch digging' effort to further test a tradeplan that begins around 10:30 and allows for a pm session. The above numbers tell a compelling story but further work is advised. Here's a list of some of the worst sessions and the news events that were taking place: • 4/12/10; - 11.2, Fed Budget Balance • 4/15; -5.1, tax day and first losing week • 4/21; - 7.4, day prior to unemployment claims • 5/12; - 11.2 (again!), Fed Budget Balance (again!) • 5/20; -10.8; unemployment claims • 5/27; -6.4; unemployment claims • 7/8; -6.8; unemployment claims • 7/13; -8.9; fed budget balance, trade balance • 8/17; -12.8, Geitner speaks • 9/3; - 8; Non Farm Employment Change, (day prior only gained +.9) • 10/18; - 9, Geitner speaks • 11/23; -5.2; FOMC Minutes; Prelim GDP • 12/1; -5.4; ADP Non Farm Employment change • 12/3; -4.8; Non Farm Employment Change, (day prior only gained +.6) • 1/13/11; -5.3; FOMC Statement • 2/7/11; -15.5; Trichet Statement; Bernanke later in week and a world going crazy.. Don't know really.. • 2/11/11; -5.9; Trade Balance • 2/16/11; -7; FOMC, Geitner speaks • 3/2; -8.6; ADP Non Farm Payroll; Bernanke Testimony; Beige Book • 3/3; - 17.8; Unemployment Claims, day prior to very important Non Farm Payroll • 3/4; - .9; Non Farm Payroll (had to fight through very hard trading again to scratch our way back to a negative 9 tick result and our worst losing week since SST came out.) Hopefully that list will clue you into the sessions that you might want to approach cautiously or with a reduced expectation. If you read this far down, I truly hope it was worth your time. I will try to answer any and all questions if anyone has any.
  22. Patience is definitely critical because it cuts across so many aspects of trading. It doesn't just apply to the obvious things regarding the trade itself and the series of trades, staying with the plan, etc. But it also applies to some of the more mundane aspects to trading like, screen time. That's where experience comes from. Just being able to remain focused and undistracted requires patience. Discipline requires patience. Waiting for the setup.. Letting the trade develop.. Not being tempted to quit too soon.. or to jump the gun on a trade, or the rules of your trade.. practicing your physical executions require patience.. Patience is huge! I would also add to the list of mistakes, the whole concept of creating a strong foundation. Most traders don't do it. It is laborious, requires patience, commitment, time, and a certain level of skill unto itself. To me, a foundation is all about having a longer term vision and knowledge as to what your tradeplan has produced in the past so that you can have 'confidence' in what it might achieve in the future, if you can execute it the same way. This takes practice. I would venture to say again, most traders don't do this. I spend a lot of time with my win/loss column of my tradelog (spreadsheet) before I take a real money trade. I want to know how many times my plan had a 4 trade losing streak for example, over the last several hundred trades. What about 5 losses? Winning streaks? I want to see a growing equity curve based on the results of my practice trades despite the occasional losing streaks and tough sessions. This, to me, is foundational work that is critical to success. How can I not be emotionally attached to the trade? Can I take the next trade according to my plan? These questions I need to be able to have good answers to before I commit real money. If I did my foundational work, which includes a good amount of mistake free practice executions of my tradeplan, then I will be able to approach my trading with the confidence necessary to make hard, real time decisions at the right edge of the chart. A good foundation is all about prep work. Like a great meal. You gotta prep the ingredients before the recipe can come together. I think everything on the list so far is valuable and essential. But without confidence to stay with a well proven plan, it's all moot. You gotta be able to show up tomorrow to take the next trade, or what difference does any of it make? No foundation means no firm footing, which means mistakes, emotional human decisions that are bad for your trading, bad habits in general, and a circle back to square one, over and over again. You gotta have a well constructed foundation to build a successful anything, including and especially a successful trading business.
  23. I usually post the trades I am taking in the UTA sponsored link but I thought I would contribute to this thread. I did post to the gbpusd with an example as well. I think that for daytrading, if you have an effective strategy, the eurusd is a good choice, mainly because of the low spreads but also, because it usually has good movement. Also, for longer term position trades, I think one can do very well with this pair. Here are three charts showing the strategy that I use. The tradeplan is very strict in that for the Euro session, you only trade it from 2 to 5 am est. If still in a trade, you can continue to hold it until it finishes. The US session begins at 8:30 est (at least, for this tradeplan and strategy). Here's a look at the results from today. The third chart is of the same strategy, on a weekly chart for longer term holds, but with different indicator settings showing the last several trades. My backtesting shows a very strong 75% win rate over the last 10 years and so far, the ongoing trades are holding up, as you can see from the last several recent trades. This would be a great one to use in a tax free retirement account. Of course, responsible position sizing is a must and one should be very careful not to over leverage, as with any trade (again, imo). Even a strong winning strategy will throw a series of losses at any time and so smart money management is critical to stay in the game to take the next trade, right? I guess the main point I would like to make with these examples is the importance of a well researched tradeplan. This plan uses a 2 (can do more) position approach with very defined trade mgt maneuvers. One position comes off at a fixed target that the strategy has determined has a good chance of succeeding. The other position trails. The stop actively adjusts to cut rist, then get to risk free, and finally, if the trade gods are smiling upon us, will continue trailing for a bigger move. It also identifies increasing price momentum and allows to add to the existing position. You can see a variety of how this works in the examples I've posted. Plan your trade and then trade your plan, so the conventional wisdom says. I fully agree.. I realize this is just one style of trading but it shows a good example of a tradeplan at work, with well defined trade setups, entries, targets, stops, mgt rules, etc.. Same market, same strategy but on different timeframes.
  24. tjnoon

    USD/Gold Forex

    Thanks for your reply. I noticed the same thing. The longer term charts look interesting though. I'm going to try to come up with a swing trade approach and if I hit upon something worthwhile, I share it here.
  25. tjnoon

    USD/Gold Forex

    Is anyone trading Dollar/Gold or Dollar/Silver forex? If so, I'm wondering what timeframe and approach you're using and how it is going for you.
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