AUD tested the low a couple of times after trader went long, he took profit after a spike up, usual mindset of most traders, decent profit after the market went against him.
The USD weaken further against all currencies on Friday night after the figures came out and trader was caught short at almost a 100 ticks higher than the level he took profit the previous day. I would too have the same mindset to short since the AUD came up that much, but of course the force was too great for anyone who tried to stop the advance. The train just roll them over.
Trader stop loss was 60 ticks away, no doubt it was a bit far away. I had previously discussed the strategy with him over such far stop loss levels which I felt profit to stop loss ratio was out of line. He told me yes, he still need to polish up especially on taking profit, the need to really go for the home run. Saying is obviously easy, the difficult part is in the execution.
18 comments:
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Thank you Michael for your words of appreciation, it make my day.
i began to see myself trading when i just started. counter trend style with predetermind exit or stop loss.
it can work for a while but woun't last. trader will be "fighting" with the market all the time. its easy to lost control once the trader is exhusted.
So, what are your suggestions, Coconut?
continue to trade until the trader got exhustion, haha.
no kidding, that way he will learn. i will ask him to trade even more.
you just need to watch his back.
be mindful of the strategy he use, record down in which catogory he use to trade, long or short, counter trend or trend following, scarlping or positioning.
after a while you will see his pattern show up. then work from there to improve.
in my opinion, a good trader should be able to do all at ease, i'm not one of them.
after a few trades, i can roughly see his trading style. same as mine when i started.
fat, i think you know better then me.
the market has no pattern, thats my belief. pattern are just our immagination at work. sometimes it helps but other times it screw us up.
if i see a trader trades with certain consistent pattern, it automatically ring alarm bell in me (so as in my own case). i will use my term to call "one sided trader".
but to correct a "one sided trader", ofcos first we have to find out which "side" or pattern does this trader belongs to.
after we identify them, its easy to correct them in theory but many a times, the trader will not even want to think about it yet alone to do it.
if we nutrulised (balance) our pattern, we will be in tune with the market which has no pattern to begin with. we will be able to dance with the market.
that will be $1,000 for the course fee! very cheap!
ok i throw this one for free.
if a trader is consistent in his strategy or pattern or what ever, what he produce is a inconsistent results.
to achieve consistent results, er i mean profit, one has to, and i mean has to be consistently inconsistent in his strategy and approach!
sound unconventional?
i remember my brother who is my stock broker made a comment when i started trading stocks, that i will never forget after he sees my trades.
"wah lan! you anyhow trade?".
cos he couldn't see any pattern which i'm elited. try as i could to explain but he just can't get it.
same analogy as in gambling.
if i'm gambling with someone and they display the same pattern or using the same strategy, its easy to catch them.
markets knows everything about you and i, don't let him catch us off guard. the way to make money is to act like the market which is erational and unpredictable and patternless.
oh i forgot, and also opinionless, very important.
can someone correct my english? that will be much appreciated!
i got a better practical solution fat! quietly (ofcos no more quiet haha) did the exact opposite of your traders trades.
in this case, if he lost, you cover by your own winnings.
the purpose of it is to identify him as a trader, encourage him to trade and trade without letting him know that you had cover your backside.
do not paper trade!
hows that?
$1,000!
2 outcomes, one is that after a while he screw up your account, fire him.
the other is he is really a good trader or potential good trader, well your know what to do. the price you pay for his winning is a good form of investment.
it may sound illogical to pay him your winnings when he is right trying to make money for both. but we have to look into the probability game.
how often will one get to be lucky to have a good trader to joint him? if he is good enough, why would he want to joint you at first?
the probability is indeed very low but you never know!
so its better, while screening for potential traders, protect oneself first.
You are absolutely right, Coconut, if he's good why should he join me?
Though I have been played out many many times, I still believe in the goodness of people. I have given a lot of people help and chances to make it as a trader. If they succeed, we will be able to share the rewards together.
Of course, it's not easy to get good traders and some will demand for the sky once they show some success, some lose money at your expense and simply walk out on you once they learn the trade.
But, it's ok with me, I don't depend on them to survive.
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