NEVER LOSE AGAIN!! - TheRumpledOne

[TheRumpledOne]

NEVER LOSE AGAIN!!



My TREND INDICATOR - NEVER LOSE AGAIN!! thread was the most widely viewed thread in TradeStation history. I believe it still holds the record for the most number of views. My NEVER LOSE AGAIN!! thread was the most widely viewed thread at BabyPips. Those forums decided to REMOVE the thread.

The bottom line is you don't have to end the day, week, month, or year in the red. You can be profitable. You may not win every trade but you will be profitable.

I know most of you have read about money management, risk management, position sizing, stops, etc... So then what are the reason(s) you are still losing? Is the market beating you? Are your stops being hunting? Or are you simply giving your money away?

When you enter the TRADING JUNGLE, you are up against the best traders in the world. They are smarter, faster, have more money, have better equipment, better access to information... better everything than you do! What makes you believe you can win? What "edge" are you bringing to the table that will allow you to take their money? Don't you know the game is "rigged" against you just like in Vegas?

What's the reason you see some currency pairs move over a 100 pips a day yet you're happy barely breaking even? What makes trading so difficult for you? What are you doing?

I know you have read about having a trading plan, haven't you? Do you have one? Come on, be honest... DO YOU REALLY HAVE A TRADING PLAN?

If you do, DO YOU REALLY TRADE ACCORDING TO YOUR PLAN? Come on now, it's time to FESS UP.

What about all those trading books, tapes, videos, and seminars? Ever wonder why there are so many? I just ONE had the answer, then wouldn't it go "viral" and everybody would be trading that method? THINK ABOUT IT.

What about all those indicators, EAs, blackboxes, trading signals and systems for sale? If one of them worked wouldn't it go "viral", too?

I have posted hundreds of FREE INDICATORS for TradeStation, eSignal and MetaTrader. Why? Because I can! I don't like seeing people pay hundreds and thousands of dollars for code, most of which, doesn't work or is way overpriced, IMHO. If you check me out, you'll see I have been banned from many forums. My FREE indicators are a THREAT to their cashflow. My free education materials also threaten their cashflow. Just do the math.

I have been accused of "renaming" indicators. Yes, I rename them AFTER I enhance them because if I post a modified version with the exact same name as the original then it gets "stepped on" and any good programmer knows better than to step on code. But I post my revised/enhanced/fixed version FOR FREE on the same site I downloaded them from. So where's the crime? Some people let their egos get in the way.

I have been accused of SPAMMING because I am an IB for MB Trading. Before I was an IB, I didn't even know what an IB was. The reason I am an IB was because when I found out that there is NO FIXED SPREAD in Forex, I immediately opened an account with EFX Group and posted about it everywhere I could. That had the effect of bringing EFX more customers. As a THANK YOU, they made me an IB. And it got me banned from sites that had FIXED SPREAD BROKERS as advertisers.

Whenever MONEY is involved, it is a DOG EAT DOG, EAT CAT TOO jungle. The sooner you learn that fact the better.

The goal of this thread is to show you how to NEVER LOSE AGAIN. Trading is simple. People traded long before there were computers and indicators. So why do you have so many computers and indicators?

Do you really know how the FOREX market operates? Or do you just know how to place an order? What have you gotten yourself into? THINK ABOUT IT!

TO BE CONTINUED...
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"An ad hominem attack against an intellectual, not against an idea, is highly flattering. It indicates that the person does not have anything intelligent to say about your message."

- Nassim Nicholas Taleb "The Black Swan" P-297



"I am not forcing you to accept my concepts. I only request the traders to review the market from time to time keeping in mind my concepts and if found suitable use in the trades or just ignore. Thanks for your opinion."

- Dr. S. Sivaraman


I started this thread. If you do not like me, what I do or how I do it then leave and do not come back. NO ONE IS FORCING YOU TO READ THIS THREAD.

I am open to debating trading issues. PERSONAL ATTACKS WILL NOT BE TOLERATED.
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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 low then it must be reversing from the low.
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"Look, for example, at this elegant little experiment. A rat was put in a T-shaped maze with a few morsels of food placed on either the far right or left side of the enclosure. The placement of the food is randomly determined, but the dice is rigged: over the long run, the food was placed on the left side sixty per cent of the time. How did the rat respond? It quickly realized that the left side was more rewarding. As a result, it always went to the left, which resulted in a sixty percent success rate. The rat didn't strive for perfection. It didn't search for a Unified Theory of the T-shaped maze, or try to decipher the disorder. Instead, it accepted the inherent uncertainty of the reward and learned to settle for the best possible alternative.

The experiment was then repeated with Yale undergraduates. Unlike the rat, their swollen brains stubbornly searched for the elusive pattern that determined the placement of the reward. They made predictions and then tried to learn from their prediction errors. The problem was that there was nothing to predict: the randomness was real. Because the students refused to settle for a 60 percent success rate, they ended up with a 52 percent success rate. Although most of the students were convinced they were making progress towards identifying the underlying algorithm, they were actually being outsmarted by a rat."

P64 HOW WE DECIDE
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"Think about the stock market, which is a classic example of a "random walk," since the past movement of any particular stock cannot be used to predict its future movement. The inherent randomness of the market was first proposed by the economist Eugene Fama, in the early 1960's. Fama looked at decades of stock market data in order to prove that no amount of knowledge or rational analysis could help you figure out what would happen next. All of the esoteric tools used by investors to make sense of the market were pure nonsense. Wall Street was like a slot machine."

Pg 67 - HOW WE DECIDE
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"Unless you experience the unpleasant symptoms of being wrong, your brain will never revise its models. Before your neurons can succeed, they must repeatedly fail. There are no shortcuts for this painstaking process." (Page 54) HOW WE DECIDE
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ALL YOU NEED TO KNOW ABOUT TRADING

* Price either goes up or down.
* No one knows what will happen next.
* Keep losses small and let winners run.
* POSITION SIZE = RISK / STOP LOSS
* The reason you entered has no bearing on the outcome of your trade.
* You can control the size of your loss (skill) but you can't control the size of your win (luck).
* You need to know when to pick up your chips and cash them in.

Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)
You can not control the probabilities of wining or losing.


You can not control your average win size.


The only part of the equation of the equation that you can control is your average loss size.
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Choose Your Advice Carefully


Since your mind is your most valuable asset and your most valuable lever, you need to be careful what you put in it. Sometimes it is even more difficult to get rid of thoughts and ideas that are already in your mind than it is to learn something new - Pg 119 WHY WE WANT YOU TO BE RICH


F - Follow
O - One
C - Course
U - Until
S - Successful

- Pg 110 WHY WE WANT YOU TO BE RICH

If the rat is beating you, you are the reason why.
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THE ILLUSION OF CONTROL

"Individuals appear hard-wired to overattribute success to skill, and to underestimate the role of chance, when both are in fact present."

[Langer, E. J., The Illusion of Control, Journal of Personality and
Social Psychology 32 (2), 311-328 (1975)]

FINANCIAL MANAGEMENT


"After a full cycle of rise and fall after which stocks were valued just where they were at the start, all his clients lost money (Don Guyon, 1909).

Many academic works suggest that most managers underperform "buy-and-hold" strategy; persistence of winners is very rare, etc.

Most funds consistently fail to overperform random strategies (dart throwing)."


OVER-OPTIMIZATION

Rats beat humans in simple games

People makes STORIES!

"Normal people have an "interpreter" in their left brain that takes all the random, contradictory details of whatever they are doing or remembering at the moment, and smoothes everything in one coherent story. If there are details that do not fit, they are edited out or revised!"

(T. Grandin and C. Johnson, Animals in translation (Scribner,
New York, 2005)

[TheRumpledOne]

http://www.tradingmarkets.com/.site/...tion-77799.cfm

Learn, Unlearn, and Relearn By: Marcia Conner

The secret to learning new things is to be willing to unlearn--even if your behaviors previously brought success.

http://www.fastcompany.com/resources...er/022706.html

http://www.fx360.com/commentary/brad...ency-bias.aspx

Rats beat Yalies: Doing better by getting less information?

Louis Menand's review of Philip Tetlock’s book “Expert Political Judgment" makes the point that in "more than a hundred studies that have pitted experts against statistical or actuarial formulas, ... the people either do no better than the formulas or do worse". Menand suggests that the experts' downfall "is exactly the trouble that all human beings have: we fall in love with our hunches, and we really, really hate to be wrong". Tetlock puts it like this (p. 40): "the refusal to accept the inevitability of error -- to acknowledge that some phenomena are irreducibly probabilistic -- can be harmful. Political observers ... look for patterns in random concatenations of events. They would do better by thinking less."

Tetlock suggests that humans perform worse in this experiment because we have a higher-order, more abstract intelligence than rats do: "Human performance suffers [relative to the rat] because we are, deep down, deterministic thinkers with an aversion to probabilistic strategies... We insist on looking for order in random sequences." Menand, on the other hand, thinks it's just vanity:

The students looked for patterns of left-right placement, and ended up scoring only fifty-two per cent, an F. The rat, having no reputation to begin with, was not embarrassed about being wrong two out of every five tries. But Yale students, who do have reputations, searched for a hidden order in the sequence. They couldn’t deal with forty-per-cent error, so they ended up with almost fifty-per-cent error.

But why does more information make for worse performance? We're used to seeing evolution develop optimal solutions to such basic problems as choosing where to look for food. So what's gone wrong here? If animals have accurate estimates of how much food is likely to be where -- however those estimates are learned -- then the rule of "[proportioning] their choices in accord with the relative expected rates" is the students' solution, not the rat's solution. The rule says to allocate your foraging time among the alternative locations in proportion to your estimate of the likely pay-off. That's what the students did. But the maximum-likelihood solution is to put all your chips on the option with the highest expected return -- what the rat did.

Language Log: Rats beat Yalies: Doing better by getting less information?

================================================== =


The question is how many traders reading this are TOO STUBBORN to apply this new information? I would wager more traders will cling to their "squiggly lines" than admit the rat will beat them and trade like a rat.
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In at 58

Out at 78

[tiki]

why'd they delete your post? this is super usefuL!!!

[Maury]

wait a second, i thought there was a strategy here that never lost again... but in those steps it says "Keep losses small and let winners run."

[JaiHO]

where is strategy for making lots of pips?

[mybayceo]

what should i do for making lots of pips?

[Mike]

I think TheRUmpledOne is providing us a better methodology in trading mentality rather than an actual system to follow. Unless that's next for him to post here? I'm curious as well.

[SexyBeast]

I just don't see how this info is supposed to make me never lose again. Am I missing something here?

[tiki]

Originally Posted by SexyBeast

I just don't see how this info is supposed to make me never lose again. Am I missing something here?

Begging your pardon, I learned much from this!

[acidburn03]

Originally Posted by tiki

Begging your pardon, I learned much from this!

Except how to make pips

[mk3fx]

I'm actually about to print this out so I can read it over and over in the car. Thankyou RumpledOne

[TheRumpledOne]

Trading the Asian Box Breakout during the news if very profitable.

THE DRAINING CONTINUES...
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Originally Posted by Mike

I think TheRUmpledOne is providing us a better methodology in trading mentality rather than an actual system to follow. Unless that's next for him to post here? I'm curious as well.

DRAIN THE BANKS







Here's a simple method that if you apply it properly ( and don't load up the charts with SQUIGGLY'S ), will enable you to NEVER LOSE AGAIN!

1) Only trade if there is a 1, 2 or 3 semafor on the current or previous H1 candle. NO EXCEPTIONS.

2) After you see the semafor on the H1 chart, look at the M15 chart for the long(light blue) and short(pink) triggers based on TRO DYNAMIC FIBS SR TRAIL indicator.

3) When price touches the trigger you enter. DON'T THINK, JUST ACT!

4) Only ONE TRADE PER M15 CANDLE. If price goes against you, just wait.

5) If price went against you and makes a new dynamic sup/res level, get ready to enter at the trigger. If you can't see how this work, then DO NOT TRADE IT. I have entered up to 3 times.

6) What's the STOP LOSS? The stop loss is your maximum allowed loss per trade based on your money management.

7) What's the TAKE PROFIT? You take what you can. I usually take 5+ pips and leave more on the table.

Try this method using a micro lot or 0.1 mini lot. Trade it this way until you feel comfortable and are profitable on a consistent basis. Just trade it, AS IS, and don't add anything to it to improve it. You'll be amazed at how profitable a simple method can be.

[TheRumpledOne]

"The technique is so simple that just several lessons (or a few pages of explanations) cover it all. Now what? Now the student has to practice, practice and practice again to understand what he had been taught. The teacher DOES know much more than the student, but his understanding can't be "passed", "transferred" or taught in any way -- not even by reading books."

================================================

Although there are other 'regular' phenomena that can be observed on all time frames, I am using two of them in my personal approach - so I will incorporate their discussion in the thread - or better leave you with possible ideas behind constructing an edge for yourself.

If you find a specific repeating pattern in the market, you can assume that it will happen with higher frequency in lower time frames. Although you would gain more opportunities by looking at the lower time frame, each opportunity yields a smaller return on average compared to looking at the same pattern, one or more time frames up in the scale. That is a point worth considering in terms of your possible style of trading.

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)

They happen regardless of time frame (with the obvious limitations explained above)

They are phenomena that can be exploited without the fear if found out by others, that they might cease to exist.

H. Rearden

.................................................. ............

READING PRICE CHARTS BAR BY BAR

1) Price will either breakout of the high, low or both of the previous bar

or

2) Price will not breakout of the previous bar.

That is all there is to know. You can not reduce it any further. Anything else complicates the issue.

You either decide to:

1) Wait and do not enter a trade

2) Trade a breakout

3) Trade a reversal.

Those are your ONLY 3 options.

TRADING IS SIMPLE. DO NOT COMPLICATE IT. DO NOT BE FOOLED.
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Originally Posted by Maury

wait a second, i thought there was a strategy here that never lost again... but in those steps it says "Keep losses small and let winners run."

Have you ever played tennis?

You can lose some games...

And you can lose some sets...

And you can still WIN THE MATCH!!

I am talking about NEVER LOSING THE MATCH.
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Originally Posted by Mike

I think TheRUmpledOne is providing us a better methodology in trading mentality rather than an actual system to follow. Unless that's next for him to post here? I'm curious as well.

Each trader must follow their own path and do what works for them.
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If PRICE makes a new DAILY LOW:

I know from statistics that if I go long within 20 pips of the low, that there's another 20+ pips profit.

I know from statistics, that if the previous candle is green and I go long at the previous candle's high, then I should win 2 out of 3 times.
<-------------------------------------------------------------------->

Originally Posted by SexyBeast

I just don't see how this info is supposed to make me never lose again. Am I missing something here?

ALL YOU NEED TO KNOW ABOUT TRADING

* Price either goes up or down.
* No one knows what will happen next.
* Keep losses small and let winners run.
* POSITION SIZE = RISK / STOP LOSS
* The reason you entered has no bearing on the outcome of your trade.
* You can control the size of your loss (skill) but you can't control the size of your win (luck).
* You need to know when to pick up your chips and cash them in.

Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)

You can not control the probabilities of wining or losing.


You can not control your average win size.


The only part of the equation of the equation that you can control is your average loss size.

===============================================

Do you have a specific question about any of the above?
<-------------------------------------------------------------------->

Originally Posted by JaiHO

where is strategy for making lots of pips?

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 low then it must be reversing from the low.



"Look, for example, at this elegant little experiment. A rat was put in a T-shaped maze with a few morsels of food placed on either the far right or left side of the enclosure. The placement of the food is randomly determined, but the dice is rigged: over the long run, the food was placed on the left side sixty per cent of the time. How did the rat respond? It quickly realized that the left side was more rewarding. As a result, it always went to the left, which resulted in a sixty percent success rate. The rat didn't strive for perfection. It didn't search for a Unified Theory of the T-shaped maze, or try to decipher the disorder. Instead, it accepted the inherent uncertainty of the reward and learned to settle for the best possible alternative.

The experiment was then repeated with Yale undergraduates. Unlike the rat, their swollen brains stubbornly searched for the elusive pattern that determined the placement of the reward. They made predictions and then tried to learn from their prediction errors. The problem was that there was nothing to predict: the randomness was real. Because the students refused to settle for a 60 percent success rate, they ended up with a 52 percent success rate. Although most of the students were convinced they were making progress towards identifying the underlying algorithm, they were actually being outsmarted by a rat."
<-------------------------------------------------------------------->

Originally Posted by mybayceo

what should i do for making lots of pips?

1) Pick ONE DIRECTION, SHORT or LONG and ALWAYS TRADE IN THAT DIRECTION, ALWAYS! Once you pick a direction, you are NOT ALLOWED TO SWITCH, EVER!

2) Pick ONE CURRENCY PAIR and ALWAYS TRADE THAT PAIR, ALWAYS.

3) Use any entry trigger you like and ALWAYS ENTER THE TRADE WHEN THE TRIGGER FIRES.

4) Use a 10 pip STOP LOSS and ALWAYS HONOR THE STOP LOSS.

5) Determine your risk based on a percentage of your account size.

6) Use proper position size. RISK = STOP LOSS * POSITION SIZE.

7) Do not over trade. One trade per candle is enough.

You should NEVER experience a loss greater than 10 pips.

You may experience a winner exceeding 100 pips.

Sooner or later you'll catch the big one!!

[TheRumpledOne]

"Who Took My Money?"


ask a gambler

rich dad said, a professional investor need to know three things, they are:

when to enter a market?
when to exit a market?
and how to get their money off the table?

as a investor, you need to looking for a market signal to enter, a plan to exit, and when to get out, amateur investors leave their money sitting on the table and eventually lose it all, why do they lose it all ? I asked, because eventually the market wins, the market gives and the market takes it all back if you just let your money sitting there.

between 2000 and 2003, many people broke the rules by leaving their money in their retirement on the table, many people bet their entire financial future on roll of the dice, even after losing, many those seeing millions of the people still have their money on the table, hoping the market will come back, and they can make up their losses. every professional gamblers know when you betting money to make up for your losses, it is time to stop, it is time to get away from the table, take a break and look for a new options. unfortunately, do the current rules of many retirement plan, millions of people can not step away from the table, many investor are no timer plan that penalize them step away from the table and put their money in different investments.


words of wisdom

don't counting your money while you sitting on the table, those the pricessless wisdom followed by profesional gamblers


three very important rules that professional gamblors and investors follow, they are:

1. as long as your money is on the table, it is your money, as long as the money in the game, the money belong to the game, not to you

2.the game is more important than counting money.

3.the object of the game is to get your money off the table, and still remain on the game, a professional gambler or a professional investor ultimately want to play the game with OPM, other people's money. that is the object of the game


the four kinds of money are

your money,
the bank's money,
the tax man's money, and the house's money,

a professional gambler want to be playing the house money as soon as possible, while in las vegas, if I put my money back in my pocket, and only played with my winning, that is a example of playing in a house money

as a professional investor, I want to

invest my money into my asset ,
get my money back,
keep control of the assets,
then move my money into a new asset,
get my money back again,
keep control of that asset,
then repeat the process, this process is called the philosophy of money, it is one reason that richer get richer and average investor risks losing at all.
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OPPORTUNITY...
<-------------------------------------------------------------------->


Note the move in USDCAD, USDCHF and USDJPY off the bottom.

Don't let the rat beat you!!
<-------------------------------------------------------------------->


More opportunity...
<-------------------------------------------------------------------->


More pips.

[ROMAN]

Wow this is alot for a noob to swallow, but I will be reading this throughout the day

[TheRumpledOne]

Feel free to ask questions.

[Mike]

Really good Stuff Rumpled One
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You may PM again RumpledOne... One little setting on my end prevented it

[TheRumpledOne]

Once again, waiting for price to be within 20 pips of the daily low and the "rat reversal" setup to appear pays off.

THE DRAINING CONTINUES...

[TheRumpledOne]

RAT REVERSAL entry at 130.91 paid off.

THE DRAINING CONTINUES...

[TheRumpledOne]

RAT REVERSAL entry at 1.5920 paid off.

THE DRAINING CONTINUES...

[TheRumpledOne]

RAT REVERSAL entry within 20 pips of the bottom can yield big pips.

THE DRAINING CONTINUES...

[JaiHO]

Originally Posted by TheRumpledOne

"Who Took My Money?"


ask a gambler

rich dad said, a professional investor need to know three things, they are:

when to enter a market?
when to exit a market?
and how to get their money off the table?

as a investor, you need to looking for a market signal to enter, a plan to exit, and when to get out, amateur investors leave their money sitting on the table and eventually lose it all, why do they lose it all ? I asked, because eventually the market wins, the market gives and the market takes it all back if you just let your money sitting there.

between 2000 and 2003, many people broke the rules by leaving their money in their retirement on the table, many people bet their entire financial future on roll of the dice, even after losing, many those seeing millions of the people still have their money on the table, hoping the market will come back, and they can make up their losses. every professional gamblers know when you betting money to make up for your losses, it is time to stop, it is time to get away from the table, take a break and look for a new options. unfortunately, do the current rules of many retirement plan, millions of people can not step away from the table, many investor are no timer plan that penalize them step away from the table and put their money in different investments.


words of wisdom

don't counting your money while you sitting on the table, those the pricessless wisdom followed by profesional gamblers


three very important rules that professional gamblors and investors follow, they are:

1. as long as your money is on the table, it is your money, as long as the money in the game, the money belong to the game, not to you

2.the game is more important than counting money.

3.the object of the game is to get your money off the table, and still remain on the game, a professional gambler or a professional investor ultimately want to play the game with OPM, other people's money. that is the object of the game


the four kinds of money are

your money,
the bank's money,
the tax man's money, and the house's money,

a professional gambler want to be playing the house money as soon as possible, while in las vegas, if I put my money back in my pocket, and only played with my winning, that is a example of playing in a house money

as a professional investor, I want to

invest my money into my asset ,
get my money back,
keep control of the assets,
then move my money into a new asset,
get my money back again,
keep control of that asset,
then repeat the process, this process is called the philosophy of money, it is one reason that richer get richer and average investor risks losing at all.
<-------------------------------------------------------------------->


OPPORTUNITY...
<-------------------------------------------------------------------->


Note the move in USDCAD, USDCHF and USDJPY off the bottom.

Don't let the rat beat you!!
<-------------------------------------------------------------------->


More opportunity...
<-------------------------------------------------------------------->


More pips.

how do you use these daily average moves to your advantage?

[TheRumpledOne]

NO MERCY!!

THE DRAINING CONTINUES...

[TheRumpledOne]

OPPORTUNITY
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THE DRAINING CONTINUES...
<-------------------------------------------------------------------->
From ANIMALS IN TRANSLATION:


“That’s the big difference between animals and people, and also between autistic people and nonautistic people. Animals and autistic people don’t see their ideas of things; they see the actual things themselves. We see the details that make up the world, while normal people blur all those details together into their general concept of the world. We abstractify, and these abstractifications become our reality." - pg 30



"Our brains are wired to see connections and correlations, not coincidences and happenstance. Moreover, our brains are wired to believe that a correlation is also a cause." - pg 100
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[TheRumpledOne]

OPPORTUNITY...
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RESULT
<-------------------------------------------------------------------->


THE DRAINING CONTINUES...
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OPPORTUNITY...