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How do you trade in a bear market

skyjack777
Jun 30 2012 at 03:40
55帖子
Hi All,
       I read last week that on average you trade up and down, 50/50.
I'm wondering how you set that up. I have tried putting the S/L and the T/P in reverse after the market trended down, but that did not work. It was refused as wrong. Thinking back it may of been wrong because the S/L and T/P were simply not far enough away from the current price?? Thanks for your comments. Bruce
LK Wong
lkwong
Jul 02 2012 at 07:08
71帖子
Hi,

Not too sure how others see this, but heres just my $0.02.

There isn't really a 'bull' or a 'bear' market in forex. The values you see on the chart are just ratios between the values of currencies. What we actually are trading is just the fluctuations in values.

eg : if we are long or 'bullish' on the EUR/USD, this would be the same as being short or 'bearish' on the USD/EUR.

Maybe its because of the way I trade or the system that I run, but the 2 market conditions for me are just 'trending' or 'ranging'. Trending can mean either up or down, doesn't quite matter to me as my system takes into account both scenarios.

I'm not sure what you're using as indicators, or price action setups, but you would probably wait for a reverse signal the place the trade with the same S/L and T/P distance, but on the opposite side.

eg : MA cross up = buy with (price + 100pip) T/P and (price - 50pip) S/L
   
           so a reverse would be

      MA cross down = sell with (price - 100pip) T/P and (price + 50pip) S/L

Bare in mind that some systems / indicators can't be reversed as easily.


-LK
skyjack777
Jul 03 2012 at 01:10
55帖子
Thanks LK, Yes reversal was the word I should of used. After the market reverse signal I have tried putting the S/L and T/P in reverse but still lose money.
I simply need to understand what I'm doing a little better. More vids on you tube. lol. Thanks Bruce.
BTW Forex 50pips I'm using earnt $65.58 yesterday. While the Fish Forex placed two orders but cancelled.
On trades I tried myself I lost $24. Bruce
LK Wong
lkwong
Jul 05 2012 at 03:55
71帖子
Assuming that you've 'reversed' the process correctly, I don't think you should be judging the effectiveness of your system over one trade. To me trading means working with the numbers, studying the statistics. If you take the same trade setup over 100s of trades and it works, that probably means it does, and vice versa. Taking a trade, or even 5 trades, and not seeing it work, doesn't mean its faulted.

Have you found a trading method that suits you yet ? I mean apart from the EAs and signal services ...
TheLastBear
Jul 05 2012 at 10:04
186帖子
I agree with LK, you should not judge your trading based on isolated trades, but rather give it an overall look. I think the most obvious sign of success or failure is if you are making a profit at the end of the day. I have met plenty of traders who claim to get 80% of their trades and more right. At first that sounds like a great accomplishment, but unless you keep your losses in the same range as our profits it is not relevant.

For example:

You place 10 trades, close 9 at a profit of $20 but have one trade that causes a $250 loss. I think you get my point here.

I do hope that youtube videos are not your prime source of strategies...
Pax puts the X in Forex.
LK Wong
lkwong
Jul 05 2012 at 19:19
71帖子

TheLastBear posted:

...

For example:

You place 10 trades, close 9 at a profit of $20 but have one trade that causes a $250 loss. I think you get my point here.

Wow, I've finally found someone here at myfxbook thats actually on the same train of thought as I am. What you've just illustrated is a classic example of a system thats got an inverse risk-reward. If you pick a random system on this site, chances are the system would have this issue (average win < average loss), and possibly even a very high win ratio. The other traders however, think that they've found the holy grail, and are asking how much the EA/system cost, or if they could invest.

These, along with the over leveraged and high frequency systems are the biggest contributor to dead links here on myfxbook. There are some exceptions, but the statistics don't really tickle my fancy.

I'm sure many wouldn't agree with me, but well, thats just my opinion, right ?
skyjack777
Jul 06 2012 at 01:01
55帖子
Hi LK Wong, No still starting out, looks like I'll be looking for a while yet. I find Ea's interesting for a beginner.

Hi The Last Bear, You tube vids. have been a starting point. This week I had an offer to be in the trading room of a Broker in Sydney online. I found it very interesting and the level of their training package was through the roof. Their offer was $4500 to get in the door and $100 a month to have access to the Trading room and $40 a month for emails with leads.

Currently all their information was over the top. I need to relax into Baby Pips and take it slow. Any money at the spent at the Brokers would of been wasted.

TheLastBear
Jul 06 2012 at 19:00
186帖子
Hey LK, I know what you mean :).

Hi skyjack, as a starting point it is ok, I just hope you will not only rely on those and that you put more effort into your finances then that. By no means do I want to suggest every youtube video is garbage but as with all in life make wise decisions. That offer you received is way off anything I would recommend acceptable, but then again we all differ in what we think is valuable.
Pax puts the X in Forex.
LK Wong
lkwong
Jul 07 2012 at 16:26
71帖子
Bruce : Don't take this the wrong way, but don't mistake interest/passion for the bottom line. The only reason we should be trading is to make a profit, anything else is just gambling.

skyjack777
Jul 07 2012 at 22:53
55帖子
Thanks LK, My passion is making work an interesting way to make money. If I go to work I'll get the most out of the day and be planning an improvement for tommorrow. Once you do the hard yards the profit flows, if the homework and research is done. The problem I have here is the steep learning curve and always a need to get involved, hence my intial interest in robots. I don't know if I'm smart enough to retain the ongoing knowledge required to have an ongoing improvement in fx trading. I don't gamble but I do find the robots a way to be involved. Any money I spend is towards making a profit at the end of the day. After 40 years into my working life I don't move unless I think I will be rewarded for my actions.
I don't take things the wrong way so be free to say whatever is on your mind. I'm over people who can't do that.
Thanks again Bruce.
TheLastBear
Jul 09 2012 at 10:31
186帖子
Hi Bruce, I agree with your first sentence. Unless you do not have fun, regardless of activity, you are wasting your life away chasing certain things but never truly enjoying it. I am not a fan of robots, but it all comes down to preference and what you are willing to accept as an overall successful trading strategy.

At least you are not one of those who thinks he is an overnight FX Pro and operate very reasonable. I have a question since you like robots and out of curiosity, no need to answer if you do not feel comfortable doing so:

Would you willing to hand over a portion of your funds to an investment manager or do you just prefer robots?
Pax puts the X in Forex.
skyjack777
Jul 09 2012 at 13:23
55帖子
Hi The Last Bear,
                       Handing over a portion of my funds to an investment manager both for the bear and bullish markets would be my best option, in the short term (1 year) would be interesting. I will NEVER be too much improved then where I will be in 3 months.
                        I love the robots because I can see things happening and think it's fine. To be involved at some level is great. I need to be hands on involved, as long as I accept where I'm at I'm fine. Bruce
TheLastBear
Jul 10 2012 at 09:51
186帖子
Sounds very reasonable Bruce. I think your last statement hit nail on the head. As long as you accept where you are and you are happy you are doing a good job.
Pax puts the X in Forex.
skyjack777
Jul 10 2012 at 12:52
55帖子
After big days working I enjoy trying hard in something different.
TheLastBear
Jul 11 2012 at 09:29
186帖子
Always expanding your horizon :)
Pax puts the X in Forex.
James_Bond
Jul 11 2012 at 10:21
556帖子
I prefer trading a bear market by re-entering on pullbacks and exiting once trend resumes. I avoid going against the trend (I decide on a trends direction by looking at my current and one level higher timeframe).

In the above way you don't really need to have any indicators nor be accurate with your entries/exists as there is quite much margin for error and you can still be profitable.
TheLastBear
Jul 12 2012 at 09:03
186帖子
Did you mean you re-enter on rallies? I may have misunderstood you, but you said you do not like to trade against the trend and since a bear market is a downtrend I thought you meant you enter on rallies and cash out once the downtrend resumes. I may be wrong...
Pax puts the X in Forex.
James_Bond
Jul 12 2012 at 11:54
556帖子

  TheLastBear posted:
  Did you mean you re-enter on rallies? I may have misunderstood you, but you said you do not like to trade against the trend and since a bear market is a downtrend I thought you meant you enter on rallies and cash out once the downtrend resumes. I may be wrong...

Does a pullback means going against the trend?

On Investopedia it says that a pullback is:
'A falling back of a price from its peak. This type of price movement might be seen as a brief reversal of the prevailing upward trend, signaling a slight pause in upward momentum.'

While a Rally is:
'A period of sustained increases in the prices of stocks, bonds or indexes. This type of price movement can happen during either a bull or a bear market, when it is known as either a bull market rally or a bear market rally, respectively'.

The way I see it, if you have a rally and a pullback and the trend continues, in a pullback you enter much earlier as a rally is already a continuation of the trend. Please correct me if I'm wrong 😄.

skyjack777
Jul 12 2012 at 19:30
55帖子
Thanks James-Bond. I workout what a pullback is then check out what your saying. Over the next week I,m looking at a few different angles. Today I gone to work leaving three pending orders. I'll try to spent some time on the 4 hour charts and start slowing down a little.
TheLastBear
Jul 13 2012 at 09:56
186帖子
Alright, so you do trade bear market rallies as far as I understand from your statement and therefore do trade against a trend. I mean as far as I understand what you are saying is that you enter during pullbacks in a bear market. Trading with the trend would have you wait for a bear-market rally, then enter your shorts and profit as the downtrend resumes. Please do correct me if we are still not on the same page. Either way we have a discussion :)
Pax puts the X in Forex.
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