Advanced system #5 (Trend Lines Breakout System)

[von]

I know exactly what you mean. Causes of day to day moves are more defined and in a sense easier to predict. My only issue is that I can't really monitor the news and trade the whole day and lately there has been a lot of uncertainty. A bit of bad news causes the prices to plummet drastically probably because a lot of investors are on edge. So even though I check my position everyday, there are times that the prices have plummeted a lot before I even get the chance to log on. I'm hoping that an intraday system will save me from this as I can close all positions by the end of the day.

[von]

Right. I still really want to know how this system works though. And I wonder if any modifications have been made to it. I mean the system works pretty well as it is. I'm just wondering if there are any improvements we can put in. And the only way I can even start thinking of improvements is after I find out what the logic is behind the system in the first place.

[von]

It's just that this system has been around for a long time and I feel the market may have changed somewhat since then thus reducing its effectiveness. I saw Edward mention some things about starting 3 candles early instead of on the midnight candle exactly. However, no tried and tested modifications to this system have been shared yet. I feel that if I were to really use this system and try to fit it to my trading style and to the market's behavior, I need to at least know why it works.

[von]

I agree that the SL in this system is quite tight and tends to be stopped out a lot more often. However, there is also an advantage to a tight SL when the market moves in the opposite direction. If you get stopped out and the market crosses the opposite trendline then you can open another trade and still recover your losses. Since the SL is so tight, losses are also minimized and easier to recover. While testing this system, I find that I often end up getting stopped out but making a profit on trading the opposite direction. It's specially so now with all the news (on Ireland and China and stuff) driving the market crazy and difficult to predict.

You're right though that psychologically it is taxing to hit streaks of losses. But I guess that's the trade off of intra-day trading as compared to swing trading.

I'm still just a newbie though so I may be completely wrong. This is just what I think.

[von]

I see your point. It makes sense to have wider SL and then get stopped out less often giving your trade more time to move back in your favor. But, I think this will only work for experienced traders like yourself who are very confident in your analysis of the market. For a newbie like me, it's scary to risk 10% of my account on a trade because there is a much higher chance that my analysis of the market will be wrong.

At least in this system, though I get stopped out more often in case the market suddenly turns in the opposite direction, my losses are minimal and I can recover it almost instantly (if not fully then at least partially).

I had pretty good performance from this system for the past 2 weeks on the GBP/USD and USD/JPY pairs. I think a lot of it had to do with the news making things more volatile and breakouts happened a lot more. I didn't use the system on the EUR/USD pair anymore since it seems to be highly correlated to the GBP/USD and trading on both the EUR/USD and GBP/USD seems like just doubling your position size to me (Do you think that's the right way to think?).

[whipcrack]

For a newbie like me, it's scary to risk 10% of my account on a trade.
I think this will only work for experienced traders like yourself who are very confident in your analysis of the market.

But he's not experienced.
By his own admission (in a post from earlier this year) he's not even a trader, he's a programmer – huge difference!!
Be very careful who you take notice of on these public forums.

I am not making a living on forex myself, i am a programmer by profession..........

Experienced traders do not treat their capital with such disrespect by risking insane percentages like that on individual positions.
Not only is it psychologically detrimental for most folks, but in the hands of inexperienced participants it's financially suicidal.

Use your common sense & intuition where advice is concerned. If it looks stupid & too good to be true, then it most probably is!

[whipcrack]

Here is a real signal from Evaldo Albuquerque (a professional at worldcurrencywatch.com)

Buy USD/HUF (Buy dollar, sell Hungarian forint)

Hungarian Forint???
Have you seen the tradeable liquidity on that heap of junk?
There's probably only him + 2 other whack jobs actually trading it.

Now I don't trust Evaldo Albuquerque any more than myself on that SL matter.
I neither trust Kathy Lien on the timeframe question.
Trading is a bonus income. Probably true for Evaldo Albuquerque and Sean Hyman as well.

Like I said, you need to be very careful who you take notice of on public forums.

Lets face it, you're a "signals & robot junkie"....you flit from one thread & service provider to another in the vain hope you'll trip over someone or something that will offer you the key to the pot of gold at the end of the rainbow – I got news for you son, it doesn't exist.

It has been strongly recommended to you before that if you spent more of your valuable time researching & learning how financial markets actually function instead of chasing pipe dreams & posting naïve, inexperienced bullshit all over the forum, you might do yourself a few favors going forward.

You obviously have no flair for this endeavor, neither do you appear to possess any type of analytical structure or disciplined approach - which is why you constantly bitch, moan & generally complain about anything & everything trading related.

If you're so dissatisfied with the trading business & you can't make any kind of headway due to your total lack of compatibility to this type of endeavor, then why don't you simply find another hobby to waste your time on? & leave the information distribution to those who actually know what they're doing.

[whipcrack]

The idiot who falls for all that low level marketing garbage deserves to be parted from their money. How many times have you & others been told that there is no short cut in this business.

Professionals earn the right to call themselves that. It's no different to any other pursuit in that it takes time, application & tuition from those who have made the mistakes & earned their stripes through experience.

Amateurs & part-timers with no previous industry training or experience are, & always will be, operating several levels below the successful professional operators.

It will take them 2 & 3 times longer to arrive at a similar level & in most instances the majority of them won't make it.

As in any other pursuit, there will be a very small minority who buck that well established trend, but they will be incredibly focused driven individuals who in most cases will seek out specialized training & tuition.

In other words, they'll use their initiative & common sense to identify those players who obviously offer something worth observing & ignore all the bullshit merchants & trading forum time wasters.

And your man Du Toit who you're so fond of quoting, is simply another in the long line of marketers peddling his own line in product. He simply dishes it out slightly differently to most of the other pond life out there.

[spotfx]

We amateurs must be glad if we can manage 5% per month on our own, even breakeven.
But because 5% is not what we are looking for, but 50%, we don't take profit at 5%, that is too crappy.

You've just described 99% of the morons who take the bait so easily & get well & truly suckered into handing their trading accounts across to those who actually know what they're doing out there in the markets.

Surely no-one with half a brain would seriously expect to waltz into this business & within 12-24 months be regularly harvesting returns in excess of 20, 30 & 40% do you?
If it was that easy everyone would be bumping heads on the Californian beaches 7 days a week.
Wake up & smell the coffee.

The primary reason retailers fail is down to lack of knowledge of their environment & how best to navigate around their chosen instrument class, under capitalization & lack of discipline (both regards risk & money management + the required discipline to stay focused on the important tasks at hand).

I fully agree with whipcrack however, that you appear to spend far too much time dredging up useless crap that doesn't matter & not enough spent learning the types of information you'll need to progress in this business.

[whipcrack]

I am enjoying reading about Bernanke, Fraudclosure, China and commodities, EURO-zone debt, Merkel, bank bonuses, gold, the coming dollar crash, the financial nuke that will devastate both Wall St and City, and make us all running for the hills, the real dip, hyperinflation, oil prices at $200?

And the real value then comes when attempting to filter out the wheat from that macro chaff & factor in that which the market players deem relevant to the current price drivers & influences.

Unfortunately, it's not all about the macro stuff.

That will obviously get dealt into the mix when necessary & referenced by the larger funds when the micro influences are done being worked back & forth. But you'll find the market pays a whole lot more attention to the micro stuff on a day-day basis than it does to the macro stuff. That's what traders refer to as "back burner fuel"

You can navigate the intra-day charts very efficiently & successfully if you understand how market participants react, plan & position themselves in line with current bias & influences.

The only people who dismiss the relevance of intra-day market activity so casually are usually those who don't understand or appreciate how markets function in the first place.

Nobody said an intra-day trader has to trade every day!
It's all about spotting value when opportunity comes knocking & that doesn't materialize every day. But when it does, the competent trader recognizes & identifies it & as long as the risk matches the value, he gets to work – regardless of the timeframe.