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Author Topic: Naked Chart Trading  (Read 14292 times)

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HC

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Re: Naked Chart Trading
« Reply #75 on: March 27, 2009, 08:56:58 AM »

More directionless swinging.
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jjs

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Re: Naked Chart Trading
« Reply #76 on: March 27, 2009, 10:00:12 AM »

Yeah...I was caught as well...was fortunate enough to be able to re-align and close flat.  Market seems to be waiting for something...can feel it in my bones.
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jjs

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Re: Naked Chart Trading
« Reply #77 on: April 02, 2009, 07:57:52 PM »

ECB Repo Rate...

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HC

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Re: Naked Chart Trading
« Reply #78 on: April 29, 2009, 09:55:20 AM »

Here is the quote from Art of War that I can relate to this trading method:

Quote

The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy. To secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself. Thus the good fighter is able to secure himself against defeat, but cannot make certain of defeating the enemy.

To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy's resistance without fighting

Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical. If it is to your advantage, make a forward move; if not, stay where you are. Anger may in time change to gladness; vexation may be succeeded by content.

-Sun Tzu




My money management thought on how a trader can secure himself against defeat when trading this method:

http://chartistsunited.com/forum/index.php/topic,547.msg3026.html#msg3026
http://chartistsunited.com/forum/index.php/topic,547.msg3049.html#msg3049
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jjs

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Re: Naked Chart Trading
« Reply #79 on: April 29, 2009, 11:40:52 AM »

Quote
Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical. If it is to your advantage, make a forward move; if not, stay where you are.

For me, this sums up almost everything about initiating a position.

On another note, a friend who didnt believe in stop-sweeping or babysitting...lost 100+ pips last night...about 15% of book... :(
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HC

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Re: Naked Chart Trading
« Reply #80 on: April 29, 2009, 12:45:08 PM »

Quote
Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical. If it is to your advantage, make a forward move; if not, stay where you are.


For me, this sums up almost everything about initiating a position.


Yes, these words are priceless.  In fact it does not only apply to this trading method, but also trading other methods and doing business in general term.



On another note, a friend who didnt believe in stop-sweeping or babysitting...lost 100+ pips last night...about 15% of book... :(



It is sad to hear this.  You may wish to highlight this thread to him.  Or the collection of this kind of sweeping over here: http://chartistsunited.com/forum/index.php/topic,387.msg2492.html#msg2492, so that him can be aware of how bad it can be.

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jjs

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Re: Naked Chart Trading
« Reply #81 on: April 29, 2009, 03:37:59 PM »

I did what I could and referred him to this site before…the rest is up to him.  He is a firm believer now anyway.  The fact that they took that 1 pip to trigger his stop make it even more real and personal although I don’t believe that it was targeted at him specifically.
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jjs

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Re: Naked Chart Trading
« Reply #82 on: May 14, 2009, 03:36:43 PM »

Just finished a nearly 15-hour rescue on the E/U...from  12mn to about 3pm.

The fault is mine (LOL you cant actually blame anyone else, can you? :)).  Logged in late and did not bother to  do a proper analysis.

Long sessions like these are definitely do-able but I am not sure that I wanna do it again.  No food, no sleep.  Stared so hard at the candlesticks until they seem like little kindergarten boys.  Dont ask me why kindergarten and not some other boys.  I was properly in my alpha state due to the lack of sleep.  The exposure to book was about 25% and I managed to do slightly better than breaking even.  Whether the returns can justify the risks or not is another  issue.  Although I was trying to avoid a loss I was quite prepared to lose the 25%.  A bit of an irony there but the mindset helped.

Very sleepy liao...
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HC

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Re: Naked Chart Trading
« Reply #83 on: May 14, 2009, 03:49:01 PM »

jjs:

Been there before once myself:  9 hrs fight, max DD 18%, finally fully recovered & ended slightly more than BE.

Rest well my friend.  And you may wish stop trading for a few days to cool down.
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jjs

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Re: Naked Chart Trading
« Reply #84 on: May 14, 2009, 07:51:48 PM »

Thanks HC.  Yeah...no more trading for this week :)
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HC

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Re: Naked Chart Trading
« Reply #85 on: July 02, 2009, 09:02:46 AM »

This is not a Martingale Strategy

I posted a similar posting in forexfactory previously and recently I have another similar discussion, I thought it would be good to share it here:

Someone has thought that this trading method is just a martingale strategy, and when you have sufficient fund in your account, it is a "sure win" strategy.

This is the dangerous thought; the danger is much closer then this trader is able to realised.

Think about the story that the smart guy who is asking for grains that fill just one chess board, starting just 1 grain on first chess board square, but doubling each time when filling the next square. The total of 64 squares is too big for the king to handle.

Of course we as trader "know" that we don't have "all" the capital to implement a "sure win" martingale, but many failed to realised that even the "enough" capital to withstand market swing may not be that enough.

Let me quiz you on this:

Water lily double its leaves every day. I have a pond and initially have 1 water lily in there. It takes 30 days to cover the whole pond with water lily's leaves.

Question: how many days does it take, from the beginning when I have only 1 water lily leave, for the pond to be 1/4 covered?
























Ans: 28 days

Yes, it took 28 days for the pond to be 1/4 covered, on the 29th day, the pond will be 1/2 covered, while on the 30th day, the pond will be fully covered.

Think about it for a moment, when you are looking at the pond of 1/4 covered (taking 28 days), you are just 2 days away from having the whole pond covered.

The pond is our account balance, if we keep doubling even 10 pips, it took 280 pips to incur a open drawdown of 25% (total 28 levels yet only 25% drawdown, account size big right?), how many more 10 pips move before we fully exhausted our account balance?

The even worse news: martingale trading in leverage instrument like FX is going to exhaust the account balance even faster than I explained above - because there is this thing called margin requirement. Whenever we double our position and the position move against us, not only we are facing the ever growing losses, we are also facing ever growing margin requirement, pushing us even faster and closer to margin call.

Not to mention if we are facing a 280 pips move against us, we are likely against the trend, and there is this thing called momentum, and "trend will continues until it proves otherwise".

Naked chart trading involves trader's judgement, and one should stop averaging down if he is against the trend.  If he is facing a sudden move against his position, the very least he could do is NOT to initiate yet another rescue position.  Depending on the chart terrain and how fast that adverse price move, he got to decide if he is against the trend; if so, consider getting out and take the loss or flip side and trade with the newly developed trend.  If he is not against the trend, wait for a better location to deploy another rescue.

Not just keep averaging and start praying.
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HC

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Re: Naked Chart Trading
« Reply #86 on: July 09, 2009, 05:08:25 PM »

There are times that we find ourselves at the wrong side of the trend, we have a choice of cutting the scout out fast, or do quick rescue, or flip side.  This is what fti have to said:

Quote

小艇怕風浪 , 大船難轉彎

( Small Boats are afraid of wind and waves turbulence, Big Ships have difficulty to to turn.)

When you are scout mode, turning is easy ,
when you are in rescue , turning leaves too much resources behind.
Turning is an option for sudden change of impulse,
and only when in scout mode or early level rescue.

when you are in rescue or attack mode , then you are committed,
for good or bad, in sickness or health, till d do you part.
therefore turning is no-longer an option.

Note that when you decide to turn.
you have to move to the next spiral within the spiral,
therefore you move to stage 2 of the preceeding stage.
This is very cap intensive protocol.

When in congested band , stay with the scout ,
either in bull or bear mode never both. Never be a pig.

When in trend mode, stay with trend, if scout mode turn on wind.
If committed, first rescue then after successful rescue, try to turn on wind.
(remember that by now it should mid trend levels [probably wave 2 or 3 ]therefore skew down the risk, to accommodate attack.) . Similarly Again never be a pig.


I wish to add that rescue in the case of against trend has to be extremely careful, and fast.  Usually when the trend just develops, it still whipsaw a bit.  But as it persists and gains momentum, the retracement of this new trend is getting smaller and smaller while my position may get deeper and deeper underwater, I would just cut the scout if I am late and trade in the direction of the new trend.
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HC

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Re: Naked Chart Trading
« Reply #87 on: July 22, 2009, 08:58:22 AM »

Here is a comment shared by one of fti's student maheswara on his experience on attack and rescue that is worth quoting:

Quote

to me attack is more important than rescue ... but when learning , its natural to learn to rescue and then later to attack,

if u cant attack well , profit comes really hard for u , which will make it harder for u to let go a losing situation ,

and there will come day wer losing situation is really bad , when u r completely against the flow , but since profit comes really hard to u , u will be reluctant to let all those profits go and will attempt to rescue such situation , u will eventually end up gambling a lot of money ,
the outcome of this situation is bad whether u lose or win in gambling,
u win , n gambling creeps into ur habit ,
u lose , recovery will take enermous time n power ...

I think its a phase we all have to go thru once or twice ,
but my point is that u've to make effort to attack nicely and that takes a lot of courage ...



See http://www.forexfactory.com/showpost.php?p=2889580&postcount=8964

My experience is that:  rescue will not make much money for me.  Even it does, the risk involved is not proportioned, so I will tried not to get into this situation as far as I could.   Attack, on the other hand, when successfully implemented will stretch the range into more pip gains than just what price has printed, and is less stressful on the bottom line.
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HC

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Re: Naked Chart Trading
« Reply #88 on: November 01, 2009, 10:24:32 AM »

Here is another trade example from auxesis (see http://www.forexfactory.com/showpost.php?p=3196373&postcount=1)

Please note that auxesis own comment: "this weeks most profitable bad trade"
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HC

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Re: Naked Chart Trading
« Reply #89 on: January 14, 2010, 10:24:27 AM »

This is the live trades done this morning:

Pair: EURUSD, M5 Chart:

Session 1:
B 1x1.4514 scout deployed
B 2x1.4518 attack
S 2x1.4527 remove attack
S 1x1.4523 Squared
Session Profit: 15 Pips
Open drawdown: 6+- pips max.


Session 2:
B 1x1.4531 scout deployed
S 1x1.4432 price action don't look right, scout removed
Session Profit: 1 Pips
Open drawdown: 0 pips


Session 3
B 1x1.4530 scout
B 2x1.4535 attack
B 5x1.4528 rescue
S 5x1.4532 rescue army extracted after total position +ve and price stalled
S 3x1.4535 Price action don't look right, remove all
Session Profit: 25 Pips
Open drawdown: 30+- pips max.
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