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[pipspicker]

Originally Posted by DrForex

Excellent - he must have read BWILC

Hi Dirk,

I read your book and I think it is pretty good, although I disagree with your views about [very] short term trading. I happen to believe it is much more predictable than long term moves.

I have two reasons for posting this:

1- You say the chat at fxstreet is 'excellent'. Is it really? Imagine you plan to go short eurusd at 1.1865, but don't want to be too exact about your entry. So you sell some at, say, 1.1840, some at 55 and the rest at 65. Now the guy at fxstreet talks about stops (while you don't). Say the stop for the above trade was set at 1.19, and you close for a loss. Now, in most cases, if your trade is going to be a winner (when stops are applied), the price is much more likely to hit your profit target the further away it is from the stop. In other words, most winning trades do not go so far from your entry point and the closer price is to the stop, the more likely you are to be stopped out.

So what is the problem? The problem is this: you will most of the time have your full size when you lose and only part of your size when you win. Given that the fxstreet guy employs stops, this is going to be a losing proposition. What do you think?

2- I read your book carefully and couldn't see at what point you decide to close a position for a loss. What exactly will make you say 'this is a losing trade and I am going out'? This is especially important because you say you take 30-40 pip profits. So, within the grid, if your position is 200 pips out of the money, do you wait for it to come back 230-240 pips (may be for weeks) rather than close it and look for another opportunity?

Thanks.

[DrForex]

Originally Posted by pipspicker

Hi Dirk,

I read your book and I think it is pretty good, although I disagree with your views about [very] short term trading. I happen to believe it is much more predictable than long term moves.

Thank you for the view on the book. In what respect did you find it personally the most valuable and what do you think will it mean for all those here who haven't read it yet?

Originally Posted by pipspicker

views about [very] short term trading

It is very predictable. It will either go up or down.

Originally Posted by pipspicker

1- You say the chat at fxstreet is 'excellent'. Is it really?

That was a long time ago, and probably said with a wink and a smile. I don't think I gave him a blanket endorsement on any or all detail. Considering that somebody referred to it and that this is an open forum I thought- well it may be useful for some after I scanned it quickly (by following the link).

Originally Posted by pipspicker

So what is the problem? The problem is this: you will most of the time have your full size when you lose and only part of your size when you win. Given that the fxstreet guy employs stops, this is going to be a losing proposition. What do you think?

I think a few of my paying customers may get itchy if I splash out stuff they paid for here on the forums. So I am deliberately vague.

You will not most of the time lose with full size. As you can scale in you can and should scale out. By the time you are fully invested, the market should have moved a lot already and you should still have tolerance for a further "wrong" move. You shouldn't be in a position that you can't handle a little further drawdown. And if you suddenly realize you are, you better start covering. This market has a way to single you out at such times and take you to the cleaners. (At least it feels like that sometimes.)

(Which remind me now that someone said on some forum I subscribe to huge drawdown. That is rubbish - as everyone that read the book properly know.)

Never ever over-leverage. Not to take a chance and not consistently.

Originally Posted by pipspicker

2- I read your book carefully and couldn't see at what point you decide to close a position for a loss. What exactly will make you say 'this is a losing trade and I am going out'?

Nothing exactly, like in 2 + 2 = 4. Personally I am as discretionary as you can get. It is a combination of factors, when I will start scaling out of a position. Mainly when a median grid seems likely to be broken on the "wrong" side. As you know from the book, my view is that if a correctly positioned grid is broken it will be broken properly. All the standard stuff. If a position bothers you get rid of it. If the reason why you entered isn't valid anymore (if it is some signal based within the grid) get rid of it. If you reach some predetermined drawdown level get rid of it. Etc.

Originally Posted by pipspicker

This is especially important because you say you take 30-40 pip profits.

Experience taught me this isn't a bad idea to take that type of profits if its on offer. They are more on offer than the big moves. You should have the comfort of the comfort zone to carry some positions for larger profits.

[firefly]

Dirk, I want to express my great satisfaction with your book.

I believe that Bird Watching is simply the best thing that could happen to ANY trader. I have been around for a few years, had my ups and had my downs, made some steps forward, some steps backward. I wish I had read your book first. It would have saved me a great deal of time and money. But now I have made a break-through.

In Part 1 of Bird Watching you referred to the fact that every successful trader has some "AHA!" experience and then you express the hope that Bird Watching will contribute to the readers' AHA! experience. It certainly did for me and I am sure it will also do the same for many others.

"Bird Watching" opened my eyes to the importance of price action over a much broader timeframe than I had been viewing before. Suddenly I saw price in a context of time and a price range that gave me my first 'aha'. That was not all, price action immediately made more sense now that there was a "framework" built around it. I felt more in tune with the market because I could see the market in a context that I chose. Then came my next 'aha'. I realized that price was contained in the framework in such a way that I could look back and learn, and then look ahead with much more confidence in making my trades. I have become more confident in taking positions because I am focusing on the trend rather than an intra-day move.

I see my trades in a new, calming, light. When trades go my way, I can better see where they are headed and I know how to improve my position, and when and how to best take profits. When trades go against me I can see them in context of the larger picture which helps me decide what to do. I have also learned that a loss is only counted when I make it a loss. Patience and trust have turned negative pips into profits. I feel in control, that is the best part.

firefly

[leutzuro]

DrForex i see many people think your book is great and very helpful
I want to ask you somethink.
In your book is a strategy median line or 4 x 1 ?
In what timeframe works ?
Thanks

[DrForex]

Originally Posted by leutzuro

In your book is a strategy median line or 4 x 1 ?

I am not sure if you ask if I have a 4 X 1 strategy or a median line strategy.

In my own words i have a 4 X 1 strategy meaning focus onone currency, one directional bias, low leverage and small profits.

To implement this strategy most effectively I use a median trading / median grid methodology.

Originally Posted by leutzuro

In what timeframe works ?

It can be from intra day (as i said above talking small profits seems to work) to intra week to long term. Mostly I would say intra week and even a bit longer.

[comingback]

I had to read this book just to find out what all the talk was about?

It is a very interesting book indeed. I don't know whether this was the intention of the author or not, but it is basically a very good (even successful) attempt to sidestep a lot of the psychological pitfalls in trading. Traditional trading wisdom says that trading is emotionally demanding and you have to be able to handle that emotional challenge to succeed at the business. Mr Toit says, in effect, "look, just avoid all the emotional problems". How?

1- Don't buy lottery tickets (tight stop losses)

2- Trade small

3- Don't assume you can pinpoint entries because your entry is a 'comical' reason to expect the price to do anything

4- Given point 3, average your cost by scaling in at better and better prices

5- Take profits when you see them

There are some other good points in the book (e.g. about TA and FA), but the value of the book is almost entirely psychological. I say that because you can do the opposite of what he advices and make money. However, I think Mr Toit probably gives you the easiest way (psychologically) to trade forex. Books like TRADING IN THE ZONE, for example, tell you what the psychological pitfalls are and tell you how to think to improve your results. Mr Toit gives you a way of avoiding those pitfalls in the first place.

The book has some probelms as well. The author falls in the same trap all gurus tend to do: overstating the case. I am sure a lot of the faults in the book has to do with the fact that, the author doesn't realise that his book is about trading psychology.

One trading methodology the author lambasts is ultra short term trading and his argument is that prices at that level are highly unpredictable. That is just factually incorrect because prices in the next 10 minutes are highly predictable most of the time. If you watch the screen a lot, you can almost develop a sixth sense for the price movement, for example.

It is also not clear why one should sustain a 300 pip or more loss instead of closing the position much earlier on (say after 100 pips) and then reentering at a better price. the argument, presumably, is that we don't know where the price will turn.

I also personally found his disucission of Nassim Taleb's book interesting. there are various references to the book 'FOOLED BY RANDOMNESS'. It seems the authour missed the point of that book, which is that you really cannot tell by looking at performance statistics who is really good and who is lucky. Taleb believes that most 'pro' traders are just 'lucky idiots' who invariably blow up sooner or later. Somehow I think he is right. That is why I find it nauseating when people show their past performance. The question that comes to my mind is: what does that prove?

[leutzuro]

if i understand corectly in the book is not a trading strategy

[firefly]

A trading strategy?

it is a way to look at a market, look at prices, get an underestanding of what price action over the long term is doing. Then put a framework around that, which gives you a way to trade.

if you mean by strategy, something like " buy when x crosses y and the rsi is above 55" then no. Besides, to me that is a tactic.


firefly

[123qwerty]

Have to agree with firefly here. What Dirk tries to provide you with is the building blocks. You have to build your own system or strategy, taking into consideration your own personal situation, money management, risk aversion, and all those small factors that come into play when you are trading.

Good Luck and great trading,

[DrForex]

Just a notice that references made long ago in this thread about prices and fees and discount offers are not necessarily valid anymore.

The latest terms and conditions are available on the websites or documentation under my control.

The documentation is dated and the latest and applicable documentation should be used at all times.

[ajhardesty]

Originally Posted by leutzuro

if i understand corectly in the book is not a trading strategy

It appears to me that the very best books--those that get recommended by a wide range of traders--never include set strategies. They teach you to think like a trader and not just copy one who may or may not have been successful at some point in time.

I find this analogous to cook books versus recipe books. A recipe book will simply show you how to copy someone else's work. But given all the variables, the result may or may not be satisfying. A cook book teaches you how use food to make your own creations and even write your own recipes, then, with confidence, modify them as your taste and needs change.

I realize this goes against the grain of all the folks wanting to buy the holy grail system, or get rich with a signal service, but it seems the books that are really worth the money are not the ones that tell you how to trade, but the ones that teach you how to think about trading.

Just my opinion. I could be wrong.

[forex777]

Originally Posted by ajhardesty

It appears to me that the very best books--those that get recommended by a wide range of traders--never include set strategies. They teach you to think like a trader and not just copy one who may or may not have been successful at some point in time.

I find this analogous to cook books versus recipe books. A recipe book will simply show you how to copy someone else's work. But given all the variables, the result may or may not be satisfying. A cook book teaches you how use food to make your own creations and even write your own recipes, then, with confidence, modify them as your taste and needs change.

I realize this goes against the grain of all the folks wanting to buy the holy grail system, or get rich with a signal service, but it seems the books that are really worth the money are not the ones that tell you how to trade, but the ones that teach you how to think about trading.

Just my opinion. I could be wrong.

E X C E L L E N T P O S T.................

It takes a LONG time to just realize this. Not just hear it and understand it. But to REALIZE it....

I don't think this valuable understanding can be taught to a beginning trader. It has to be realized by the beginning trader.

And once it is, it changes a life, because you see the entire world around you in a different, more experienced, more aware, way.

Again, excellent post.

[Kronos362]

I found that Dirk du Toit was give out information that was fairly standard, just in a more user friendly format. Unfortunately, just like all other writings he failed to adress the impact of oil prices, politics and other inherent analysis that have a major impact on theworld markets. These factors are the ones to look at when you want to see where the major trend is going and in order to jump in for the big 1 to 2 week trades that give you the 150 pip + trades guaranteed.


If everyone can do themselves a favour, there is a free site called livecharts.co.uk, there you can see the brent crude chart trade live against currency charts and market charts. It is like looking at mirror graphs. The trick is to catch the currency when it deviates from the stock and commodity trends; then trade up to normalisation.

Been with FX Guru, Genius, etc... They all didn't adress these indicators unfortunately. If you got the time, have a look at fxstudies.com quite an informative service that addresses these issues.

Anyway, how do others ussually trade? I love my technical analysis, but most people fail to employ fundamental, technical and other market analysis together effectively. Hence; I can't fully endorse Dirk du Toit.

[firefly]

Kronos.

Thank you for the information on Fundamentals and especially listing where to find other important factors. It is something that I had been looking for.

Actually I thought your post was mostly in agreement since D makes a point of paying more attention to the fundamentals and letting go of the technicals, but unfortunately does not go into details about fundamentals in his book. I wish he had, but I am thinking that his mentorship program may do that, not sure though.

In my opinion one needs a large capitalized account or the ability with a broker to trade fractions of the dollar to do justice to his methods.

I think more understanding of 'when X happens in the world then expect a currency to do Y ' is great information to know. A Fundamental Signal, similar in some ways to a Technical Signal.

firefly

[Kronos362]

Firefly,

Have a look at the daily comparison between brent and The EUR/USD and USD/JPY, it is absolutely uncanny how they correspond to each other. Good luck, by the way, what's your strategy for the week? I'm going to trade EUR/USD up to 1.2020 and USD/JPY down to 117.50... I think it's a definate winner. Should come through some time next week or early the week after. Long wait, but should get me 200 pips (touch wood).