2009.09.10 DRAIN THE BANKS - LIKE A RAT

[TheRumpledOne]

Price is making NEW HIGHS.

[TheRumpledOne]

Remember what H. Rearden said:

Now, 2 patterns of market behaviour happen on a regular basis:

1) the price breaks to new high's (or low's)

2) the price reverses from new high's (or low's)


If price is NOT making a new high then it must be reversing from the high.

[TheRumpledOne]

GREEN RAT GETTING FAT...

[TheRumpledOne]

I have explained the RAT REVERSAL before but I'll do it again:

1) price within 20 pips of the daily low - that is OPPORTUNITY

2) red candle closes

3) green candle closes - note the high price of the green candle.

4) enter long at the green candle's high price

5) STOP LOSS IS 10 PIPS

6) Take whatever profit you can.

THE DRAINING CONTINUES...

[TheRumpledOne]

THIS IS HOW I TRACK MULTIPLE PAIRS FOR RAT REVERSALS.

[johnsund]

Took 10 pips long off the trigger at 85. It is wonderful to be a green rat!!! lol

[snscott]

TRO, it is step #6 that gives me the most hell.

(And I bet I'm not the only one)

Seems like I either get out waaay too soon on a long break, which makes me feel noob-stoopid, OR, I hang on too long and let a positive 4-5 pips turn around and hit my -10 SL.

When I was a very small child, my Uncle asked me to bring him a drink and he said he'd pay me whichever I wanted, one-tenth of a Dollar, or one-fourth of a Dollar. Well, obviously, to a little kid, a 10th of something HAS to be more than a 4th of the same thing, right? So I took the 10 cents and only later realized how stupid I had been.

This is the exact same emotion that gets triggered in me whenever I pull the trigger to close out a trade and then watch that damn candle keep chugging along with all those "missed pips" pointing and laughing at me (I know they do, I can hear them - them and their smug little munchkin voices - bastards).

So, that is what I, personally, need to work on (well, ok, and the hearing pip voices thing too )

[RBurgess]

THIS IS HOW I TRACK MULTIPLE PAIRS FOR RAT REVERSALS.

What is this indicator called TRO?

[TheRumpledOne]

RED RAT REVERSAL TRADE.

1) price within 20 pips of the daily high - that is OPPORTUNITY

2) green candle closes

3) red candle closes - note the low price of the red candle.

4) enter short at the red candle's low price

5) STOP LOSS IS 10 PIPS

6) Take whatever profit you can.

[TheRumpledOne]

TRO, it is step #6 that gives me the most hell.

(And I bet I'm not the only one)

Seems like I either get out waaay too soon on a long break, which makes me feel noob-stoopid, OR, I hang on too long and let a positive 4-5 pips turn around and hit my -10 SL.

When I was a very small child, my Uncle asked me to bring him a drink and he said he'd pay me whichever I wanted, one-tenth of a Dollar, or one-fourth of a Dollar. Well, obviously, to a little kid, a 10th of something HAS to be more than a 4th of the same thing, right? So I took the 10 cents and only later realized how stupid I had been.

This is the exact same emotion that gets triggered in me whenever I pull the trigger to close out a trade and then watch that damn candle keep chugging along with all those "missed pips" pointing and laughing at me (I know they do, I can hear them - them and their smug little munchkin voices - bastards).

So, that is what I, personally, need to work on (well, ok, and the hearing pip voices thing too )

I know the feeling.

What I do is protect ME from ME.

AT +5 pips, I will be ready to bail at +3 if price pulls back.

At +10 pips, I will enter a trailing stop of 4 or 5 pips.

At +15, I will cancel the trailing stop and enter a hard stop at +10.

Then I will move the hard stop up if price moves up.

At +25, I may move the hard stop up to +25 or to a price ending in 0 or 9.

Sometimes, I may exit 1/2 of my position at +20 to lock in a 1% gain.

The idea is to be CONSISTENT. You'll miss out sometimes, but you only need ONE big run and you are done for the day.

Remember, the daily goal is 2% or more and DO NOT OVER TRADE.