Price Action Swing Trading - The PAST Strategy
- Thread starter Nigel Price
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For me the most difficult part is to see a healthy unrealized profit reduce. This week I experienced it on the NzdUsd. At one stage I was over 500 pips in profit and closed it out on Friday evening for 260 pips profit. Where my net profit on my forex account was 320 odd pips last Friday it reduced to a net -80 pips.
This experience motivated a thorough study of my forex account stats and what I noticed is that at least thus far my maximum profit run up exceeds my maximum profit drawdown by a significant factor. Over 53 closed trades my win, BE and loss stats are 11%, 51% and 38% respectively which at least on the limited data thus far seems better than a coin toss.
What helps is some self-talk reminding one self that sooner or later using the weekly anchor as reason to exit will result in preventing yourself from exiting prematurely
Another great post, I will put together something on this and Victors earlier post by Tuesday as I am out of the office all day tomorrow. Good luck with the trading this week everyone
nigel: Could you give us an example of a typical trade using dollars instead of pips...
Fictitious is fine..... Use 3 entry's on the same pair....... 1st entry gets stopped out/
2nd entry break even/ 3rd time how long past break even are you looking to hold onto trade? Thanks in advance
Fictitious is fine..... Use 3 entry's on the same pair....... 1st entry gets stopped out/
2nd entry break even/ 3rd time how long past break even are you looking to hold onto trade? Thanks in advance
Anyone have anything interesting today? Its kinda slow out there. I'm looking for a short position at USDJPY. Looking to trade the channel on the 4 hour chart downwards. The bears own the strength in the channel as shown by the steep drops from the channel high. The current up move has slowed down considerably. I am putting a sell order at 97.60 with a 10 pip stop loss. If I get stopped out I will watch for it to get closer to the upper channel line before re-entry. I am looking for a 75-100 pip gain in the next day or so.
Hi Guys,
I was in and out yesterday but managed to get on position in on AUD/CAD as per the attached chart. I missed the first blue trendline, but got in on a break of the green one, shown with the arrow.
Readers will have seen last week how I was chipping away at the market - shorting on breaks and retests, taking my small losses/breakevens as I went along.
Next thing you know the buyers just throw in the towel and it just rolls over and falls with great momentum. Had I been in front of my screen all day yesterday, the market gave loads of opportunities to get in, with trendlines breaking all over the show.
But one position is good enough for me now. Stop is at break-even, risk is nil.
It just occurred to me that I could use this trade to show how in real-time how I look at taking profits. It's always better to use real examples rather than just reading theory.
So if you bear with me for a while I will go through everything I am thinking as I go along.
I was in and out yesterday but managed to get on position in on AUD/CAD as per the attached chart. I missed the first blue trendline, but got in on a break of the green one, shown with the arrow.
Readers will have seen last week how I was chipping away at the market - shorting on breaks and retests, taking my small losses/breakevens as I went along.
Next thing you know the buyers just throw in the towel and it just rolls over and falls with great momentum. Had I been in front of my screen all day yesterday, the market gave loads of opportunities to get in, with trendlines breaking all over the show.
But one position is good enough for me now. Stop is at break-even, risk is nil.
It just occurred to me that I could use this trade to show how in real-time how I look at taking profits. It's always better to use real examples rather than just reading theory.
So if you bear with me for a while I will go through everything I am thinking as I go along.
Attachments
Hi GRS, great point. That's exactly what I do. But the key thing for me is to try to make sure that my winners are bigger than my losers. So while I might take an entry signal on a very short time frame (I was looking at the 15 minute last week, as you might see earlier on in the thread) I would want my exit signal to be on a larger timeframe.
Thanks for your post, you are very welcome to the discussion
Taking Profit - PAST Strategy
Before I get going, can I ask everyone to take a look at these three posts, particularly the first one by VictorFX, which is excellent.
VictorFX
Shiner452
pa-pips
Also, can everyone read the quote by me in Victor's post, which frames the questions we should be thinking about.
Before I get going, can I ask everyone to take a look at these three posts, particularly the first one by VictorFX, which is excellent.
VictorFX
Shiner452
pa-pips
Also, can everyone read the quote by me in Victor's post, which frames the questions we should be thinking about.
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Taking Profit - PAST Strategy
Let's just define where in the process we are starting from -
I think everyone has a good grasp of how we do entries. If you want to see a live description of how I approached this AUDCAD trade, read a few pages back where I posted all through last Thursday and Friday.
I wasn't in front of the screen to do so when the market broke down yesterday, but nothing I did then was different to what I was describing on Thursday or Friday. I do the same every time - the only difference is that the market decided to sell off yesterday, whereas it decided to pretty much stay still last week.
I have no control over, or advance knowledge of, what the market is going to do. So I focus on what I do have control over - that is the size of my losing trades and the size of my winners.
I decide when to close my losers and when I close my winners. That responsibility is solely down to me.
So, as was described last week, once I got my trade open and it got into profit, I bring the stop to break-even.
After we bring the stop to break-even, we are finished with the risk side of the equation, which we have hopefully kept small and under control. From now on, our focus is on the reward side of the equation.
Let's just define where in the process we are starting from -
I think everyone has a good grasp of how we do entries. If you want to see a live description of how I approached this AUDCAD trade, read a few pages back where I posted all through last Thursday and Friday.
I wasn't in front of the screen to do so when the market broke down yesterday, but nothing I did then was different to what I was describing on Thursday or Friday. I do the same every time - the only difference is that the market decided to sell off yesterday, whereas it decided to pretty much stay still last week.
I have no control over, or advance knowledge of, what the market is going to do. So I focus on what I do have control over - that is the size of my losing trades and the size of my winners.
I decide when to close my losers and when I close my winners. That responsibility is solely down to me.
So, as was described last week, once I got my trade open and it got into profit, I bring the stop to break-even.
After we bring the stop to break-even, we are finished with the risk side of the equation, which we have hopefully kept small and under control. From now on, our focus is on the reward side of the equation.
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Still at break-even Shiner!
I'm aiming for a nice big winner here I am happy to take the risk of it getting stopped out at breakeven.
Worst case scenario? I get stopped out at breakeven.
Best case scenario? Price continues down for another few hundred pips.
I take that bet all day long, every day.
Off to bed now, will be back on tomorrow.
Do you trade with a target in mind or just wait until price action weakens? Also, what time zone are you trading in and what hours do you like to take best. I find noon till 11pm new York time is very slow so I usually trade early in the morning and late at night.
No target in mind, I watch the price action. I find it's better to let the market tell me when to get out.
I trade GMT, so London and New York sessions. But if a nice trendline broke during the Asian session and I happened to be at the screen, sure wouldn't it be rude not to take it
Thanks again for this post VictorFX. You know exactly what you are doing. The challenge now is simply to implement it.
As with everything in trading, how you cope with the above is a matter of personality.
I talk at length in the ebook about how leverage and position size is entirely a matter for personal preference.
Different degrees affect different people in different ways.
There is no one-size-fits-all.
The same comes for taking profits.
I would count myself as quite conservative when it comes to position size. But I would count myself as quite aggressive when it comes to targets. I like to aim big
This AUD/CAD trade I am in now was about 80 pips up and has retraced about half of that. That will make some people run around with their underpants on their heads screaming about the horrific losses. If this trade gets stopped out at breakeven I will hardly even notice, because I am aiming for much more.
However, if you are really struggling to let winners run, I would encourage you to at least allow part of the position really run far on the anchor-timeframe.
Say for instance you are really struggling, you have taken a few losses, and you are feeling the heat. Your account is in need of some equity.
Close out part of the winning position, enough to allow you not to be emotionally destroyed if the trade gets stopped out at breakeven, and then forget about the rest of it. You are going to manage it on your anchor timeframe, and if it gets stopped out at B/E, that's fine.
With PAST, I'm not trying here to prescribe a set of rules that if you follow you will see success. I am describing a set of tools, a framework, within which you control risk tightly and aim for healthy and sustainable returns. If that means you close out part of a winner so you can sleep, no sweat.
The only thing you have to be able to do is to be happy that you gave that trade every opportunity to fulfil its full profit potential, which is so often so much bigger than traders realise. If do that, and you keep your losers small, you will see your edge develop. It will become clear in your stats.
-10, -10, -20, 0, -15, 0, +150, -25, 0, 0, 0, -10, -5, -20, -20, 0, -10, 0, +250, -10, -20, 0 etc, etc
You then begin to naturally progress from wanting to close profitable trades all the time to wanting to keep them open. Then you're over the hump
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Hi foodaba
Hopefully if you follow this live analysis of the AUD/CAD trade I am currently in it will answer your questions. It starts a couple of pages back.
As for a dollar amount per pip, you can multiply the pip amount by whatever amount you like to get dollars. I think if we start talking about different position sizes now it will get very confusing!
As I have always said, the discussion about position sizes doesn't really help anyone, because everyone is so different in terms of account capital, risk tolerance, expected returns, leverage, etc. A pip is whatever you want it to be, for the purposes of this thread.
All the best
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