Forex Tradingwithrayner

[tradingwithrayner]

 

[tradingwithrayner]

Trade Review on USDJPY

 

[tradingwithrayner]

*tradingwithrayner - What you are doing is cool!

Thank you hope you liked it

 

[SpinTop]

nice run and nice trade lah !

Thank you hope you liked it

 

[tradingwithrayner]

The last 2 weeks of December tends to be quiet in the markets.

Thus it's a good time to take a break and spend time with your loved ones.

Some time away from the markets ain't such a bad thing

Cheers!

 

[Shalomp]

Hi Rayner,

first of all, thank you for sharing your experience and knowledge here!

would like to ask typically how many trades do u enter per week / per day?

and in all this trades, how many unique currency pairs in total do u trade?

 

[prudent76]

After so many years, my trading becomes more mechanical. Only open trade is done manually (can be fully automated but just wanna have some human involvement). One adv of this kind of trading method, it eliminates emotion involvement. I find it pretty helpful if you are in a losing streak. My backtest results also show better performance for fixed TP & SL. However, its only for me. Its like between small wins large loss or large win small losses, which is better? Both can be profitable ...

Same here. My position trades are done manually and almost mechanical in nature. I use Expert Advisor's to scalp because it can execute trades faster than me(I scalp for entertainment with small lots! IMHO There's little meat to be had with this type of trading).

Trailing stops work better with instruments with lower volatility such as stocks. Trailing stops perform poorly in forex due volatility.It's the same volatility that makes fixed TP work better for forex. A volatility spike can take you into profit extremely quickly. If you've predicted the trend correctly and placed your SL intelligently, it should not stop out as the spikes should be going in your favour.

I find that large wins with small losses work best. Small wins with large losses can decimate your account if you have 2-3 in a row. My scalping has a 95% win rate, but those 5% of losers are dangerous (yes I use no stops when scalping).

I wonder why no one asks why Rayner doesn't plot all his his historical trades? I suspect the truth could be ugly.

P/S : I did previously follow a blog of a successful scalper named Trader 32. His blog is now deactivated. He had been scalping successfully for a number of years. I know this to be true as he was plotting all his trades on the Oanda platform. It was a discretionary system using a Rainbow indicator as reference. So I guess it is possible to scalp successfully, but I've never seen another verified record for someone who scalped successfully.

 

[Shalomp]

Same here. My position trades are done manually and almost mechanical in nature.

If you've predicted the trend correctly and placed your SL intelligently, it should not stop out as the spikes should be going in your favour.

P/S : I did previously follow a blog of a successful scalper named Trader 32. His blog is now deactivated.

Hi prudent76,

fx trading noob here. just a few questions, hope u can explain!

what do u mean exactly by "mechanical"? im guessing its your style of trading cos i understand everyone will eventually adopt their own unique "DNA" in trading.

When u set your SL, do u worry about stop loss hunting? And lets say for a buy position based on a risk reward ratio of 1:2, If your TP intrudes into an area of resistance which will violate that RR of 1:2, what would u do?

lastly, what other blogs/websites/forums would u recommend apart from here, babypips, forex factory etc..

thank u big bro for your wisdom!

 

[tradingwithrayner]

Hi Rayner,

first of all, thank you for sharing your experience and knowledge here!

would like to ask typically how many trades do u enter per week / per day?

and in all this trades, how many unique currency pairs in total do u trade?

I average about 5-10 trades a week, it really depends on the market conditions.

I monitor all markets thus and if you really want a number it's about 40+
fx, bonds, indices, energy etc.

Rayner

 

[prudent76]

Hi prudent76,

fx trading noob here. just a few questions, hope u can explain!

what do u mean exactly by "mechanical"? im guessing its your style of trading cos i understand everyone will eventually adopt their own unique "DNA" in trading.

When u set your SL, do u worry about stop loss hunting? And lets say for a buy position based on a risk reward ratio of 1:2, If your TP intrudes into an area of resistance which will violate that RR of 1:2, what would u do?

lastly, what other blogs/websites/forums would u recommend apart from here, babypips, forex factory etc..

thank u big bro for your wisdom!

Hi Shalomp! Thank you for your questions.
Mechanical simply means as defined by trade2win.com "Mechanical trading is based on parameters that have usually been historically validated by backtesting quantifiable market data. Once the entry and exit criteria have been defined, the trader should follow the signals exactly. "
I also throw in a healthy dose of discretionary trading based on Fundamental Analysis into the mix.
Why? Mechanical systems are useless at determining a change of trend and when the market goes into a range.

In my context mechanical rules are based partially on the Larry Conners RSI-2 System.

With regards to Stop-Hunting, whether this actually happens is up for debate. I personally view it as normal market volatility and account for it accordingly.

If my TP intrudes into an area of resistance, the decision whether to take the trade will depend on the following :
1) Is it early or late into the session for that particular currency. If it's early in the session, I may take the trade.
2)Is there fundamental news that is likely to cause price to break that resistance? If there is recent news (in the last 24 hrs) that may propel the price through the resistance, I may take the trade.
3)How long ago was the level of resistance formed? I only pay attention to resistance levels formed in the last 48 hr or there about.

I mainly follow these 2 blogs for entertainment forexintradaytrading and julesinjumbles (cos I think she's a hot trading chick!). The common thing between these blogs is that they both post actual trading results which keeps things real.

Hope I have answered your questions!
Have a Merry Christmas.

 

[prudent76]

There are 3 trades in this chart. 2 are closed and 1 is open. The open trade is an example of a TP going into multiple levels of resistance.

 

[Shalomp]

There are 3 trades in this chart. 2 are closed and 1 is open. The open trade is an example of a TP going into multiple levels of resistance.

Hi Shalomp! Thank you for your questions.
Mechanical simply means as defined by trade2win.com "Mechanical trading is based on parameters that have usually been historically validated by backtesting quantifiable market data. Once the entry and exit criteria have been defined, the trader should follow the signals exactly. "
I also throw in a healthy dose of discretionary trading based on Fundamental Analysis into the mix.
Why? Mechanical systems are useless at determining a change of trend and when the market goes into a range.

In my context mechanical rules are based partially on the Larry Conners RSI-2 System.

With regards to Stop-Hunting, whether this actually happens is up for debate. I personally view it as normal market volatility and account for it accordingly.

If my TP intrudes into an area of resistance, the decision whether to take the trade will depend on the following :
1) Is it early or late into the session for that particular currency. If it's early in the session, I may take the trade.
2)Is there fundamental news that is likely to cause price to break that resistance? If there is recent news (in the last 24 hrs) that may propel the price through the resistance, I may take the trade.
3)How long ago was the level of resistance formed? I only pay attention to resistance levels formed in the last 48 hr or there about.

I mainly follow these 2 blogs for entertainment forexintradaytrading and julesinjumbles (cos I think she's a hot trading chick!). The common thing between these blogs is that they both post actual trading results which keeps things real.

Hope I have answered your questions!
Have a Merry Christmas.

thanks for the reply and merry xmas! i sent u a private message

 

[tradingwithrayner]

Dennis Gartman’s 22 “Rules of Trading

1. Never, under any circumstance add to a losing position.... ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!

2. Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand.

3. Capital comes in two varieties: Mental and that which is in your pocket or account.Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.

4. The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is "low." Nor can we know what price is "high." Always remember that sugar once fell from $1.25/lb to 2 cent/lb and seemed "cheap" many times along the way.

5. In bull markets we can only be long or neutral, and in bear markets we can only beshort or neutral. That may seem self-evident; it is not, and it is a lesson learned toolate by far too many.

6. "Markets can remain illogical longer than you or I can remain solvent," according to our good friend, Dr. A. Gary Shilling. Illogic often reigns and markets are enormously inefficient despite what the academics believe.

7. Sell markets that show the greatest weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper sack, for they break most readily. In bull markets, we need to ride upon the strongest winds... they shall carry us higher than shall lesser ones.

8. Try to trade the first day of a gap, for gaps usually indicate violent new action. We have come to respect "gaps" in our nearly thirty years of watching markets; when they happen (especially in stocks) they are usually very important.

9. Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly. In "good times," even errors are profitable; in "bad times" even the most well researched trades go awry.This is the nature of trading; accept it.

10. To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that we understand the fundamentals driving a trade, but also that we understand the market's technicals. When we do, then, and only then, can we or should we, trade.

11. Respect "outside reversals" after extended bull or bear runs. Reversal days on the charts signal the final exhaustion of the bullish or bearish forces that drove the market previously. Respect them, and respect even more "weekly" and "monthly,"reversals.

12. Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.

13. Respect and embrace the very normal 50-62% retracements that take prices backto major trends. If a trade is missed, wait patiently for the market to retrace. Farmore often than not, retracements happen... just as we are about to give up hope that they shall not.

14. An understanding of mass psychology is often more important than an
understanding of economics. Markets are driven by human beings making human errors and also making super-human insights.

15. Establish initial positions on strength in bull markets and on weakness in bear markets. The first "addition" should also be added on strength as the market shows the trend to be working. Henceforth, subsequent additions are to be added on retracements.
16. Bear markets are more violent than are bull markets and so also are their retracements.

17. Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are "right" only 30% of the time, as long as our losses are small and our profits are large.

18. The market is the sum total of the wisdom ... and the ignorance...of all of those who deal in it; and we dare not argue with the market's wisdom. If we learn nothing more than this we've learned much indeed.

19. Do more of that which is working and less of that which is not: If a market is strong, buy more; if a market is weak, sell more. New highs are to be bought; new lows sold.

20. The hard trade is the right trade: If it is easy to sell, don't; and if it is easy to buy, don't. Do the trade that is hard to do and that which the crowd finds objectionable. Peter Steidelmeyer taught us this twenty-five years ago and it holds truer now than then.

21. There is never one cockroach! This is the "winning" new rule submitted by our friend, Tom Powell.

22. All rules are meant to be broken: The trick is knowing when... and how
infrequently this rule may be invoked!

 

[Shalomp]

very insightful. perhaps can be added to my new year's resolution?

 

[tradingwithrayner]

very insightful. perhaps can be added to my new year's resolution?

Yes it is, i find it resonates a lot with the way i trade.

Glad you liked it

Rayner

 

[Shalomp]

Yes it is, i find it resonates a lot with the way i trade.

Glad you liked it

Rayner

thanks for sharing! i am very new to trading so a lot of it still does not make sense but i personally identify with 1, 7, 11 and 19 so far.

i find 4, 8 and 17 very intriguing. Hopefully can learn to apply them and get better!

 

[tradingwithrayner]

thanks for sharing! i am very new to trading so a lot of it still does not make sense but i personally identify with 1, 7, 11 and 19 so far.

i find 4, 8 and 17 very intriguing. Hopefully can learn to apply them and get better!

1) For 4 it's basically approaching from a trend following perspective.

Just because something has fall so much doesn't mean that it's cheap.

E.g. crude oil when it was trading at 90, traders thought it's cheap. Today it's doing 50+.

So the point being stay with the trend.

2) Can't really relate to 8 as i don't trade gaps.

3) For 17, it means cutting your losses as soon as possible and riding your profits as long as possible.

You can lose most of the time and still make money. Because the times that you do win, you win ALOT. And the times that you do lose, you lose abit.

That's how trend followers make their money.

Hope that helps!

Rayner

 

[Shalomp]

1) For 4 it's basically approaching from a trend following perspective.

Just because something has fall so much doesn't mean that it's cheap.

E.g. crude oil when it was trading at 90, traders thought it's cheap. Today it's doing 50+.

So the point being stay with the trend.

2) Can't really relate to 8 as i don't trade gaps.

3) For 17, it means cutting your losses as soon as possible and riding your profits as long as possible.

You can lose most of the time and still make money. Because the times that you do win, you win ALOT. And the times that you do lose, you lose abit.

That's how trend followers make their money.

Hope that helps!

Rayner

thanks for the explanation!

i got a question about losing small but winning big. How does that work when every trade is different with a different number of pips set as stop loss? Take this for example:

Based on the situation, a trader sometimes has his SL at 20 pips, sometimes can be 100 pips or more. But no matter what, his risk reward ratio is always at 1:2. Assuming he has gotten a string of losses lately and keeps hitting SL. Sometimes its a loss of 20 pips, sometimes 100 pips or more. Keeping to the objective of losing small and winning big, how is he able to surpass those losses when they are not consistent?

Hope my question makes sense

 

[tradingwithrayner]

thanks for the explanation!

i got a question about losing small but winning big. How does that work when every trade is different with a different number of pips set as stop loss? Take this for example:

Based on the situation, a trader sometimes has his SL at 20 pips, sometimes can be 100 pips or more. But no matter what, his risk reward ratio is always at 1:2. Assuming he has gotten a string of losses lately and keeps hitting SL. Sometimes its a loss of 20 pips, sometimes 100 pips or more. Keeping to the objective of losing small and winning big, how is he able to surpass those losses when they are not consistent?

Hope my question makes sense

Ok firstly, as a trend follower i do not have a fix target of 1 to 2 risk reward.

Second, for every trade i make, i will keep it to a loss of 1R. The stoploss for some trades could be 20 pips, 100 pips but the loss is still 1R.

Loss of 1R is equivalent to 1% of my account, for more info check out this post here.

So with each trade a maximum loss of 1R, and unlimited upside (i say that because i don't have a fix take profit level but i use a trailing stop instead)
as i ride my profits.

Does that help?

Rayner

 

[Shalomp]

Ok firstly, as a trend follower i do not have a fix target of 1 to 2 risk reward.

Second, for every trade i make, i will keep it to a loss of 1R. The stoploss for some trades could be 20 pips, 100 pips but the loss is still 1R.

Loss of 1R is equivalent to 1% of my account, for more info check out this post here.

So with each trade a maximum loss of 1R, and unlimited upside (i say that because i don't have a fix take profit level but i use a trailing stop instead)
as i ride my profits.

Does that help?

Rayner

Ok understood!

Couple of questions about ATR. depending on which time frame u apply the ATR indicator, it is always different. so my question is do u always use the ATR off the same time frame or it depends on a case by case basis? I have been following your videos and i notice u use the ATR on the H4?

Also, assuming u are in a long position and after u set your SL, u notice that the SL is lying just slightly above a major support level. Bearing in mind that there might be an opportunity for a bounce off from that support level, will u still set your SL in the original position so that u can maintain your objective of 1 R?