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#1 21-09-2010 16:27:25

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 3069

Trading conference in Paris on September 17-18 (Part II)

Trading conference in Paris on September 17-18

Here's part II of my notes from the conference. Although I attended 9 speeches, the 2 by Birger were the best ones in my opinion... I won't bother to recap the other ones I listened to as they had a hidden agenda (registering the audience in a certain brokerage or training programme, etc.).


Birger Schafermeier: This German fellow was very interesting (AND, he also placed 2nd in the trading competition, so that pretty much validates his approach).

He discussed breakouts. There are 4 main types of breakouts: BreakOuts from congestion areas, BOs to new daily, weekly, yearly highs/lows, BOs from opening (first 1/2-1 hour of the day) range, and news BOs. He avoids news BOs as they are too unpredicable. As for a day's/week's/year's highs, he avoids trading in their direction, he will short them instead (and vice versa). Describing the classic setup where you would trade a trend, he says you recognise an upward trend when you see 2 highs that are a higher and 2 lows that are higher.

In the classic setup, you would buy once price climbs up to the 2nd high price point (while placing a stop at the price of the last low), however, he likes to anticipate the rise by buying a bit before this point - this way he reduces the amount of risk that is involved (in terms of capital). To visualise this, look at the below chart, he would buy right after the first 4, after it rises but before it hits the price level it hit when it was at the first 3 (the stop would be at point 4).

Another approach he likes is to buy at the 2nd high price point (the first 3 in the chart), but only after it has retraced back DOWN to this point after hitting a 3rd high somewhere (in the below picture, this would mean buying at the first c point). Using this technique, he is right approximately 50% of the time. However, as his risk to reward ratio is 1:2, he ends up being profitable doing this! As for how to confirm that you have a trend, he'll usually look at the next highest timeframe on his platform.

One thing I didn't like, though, was his outright lying, as he told the crowd that trading is his "only source of revenue" - bullshit! - according to his website, he also has a book out, he sells DVDs on his website and he charges for the frequent seminars that he conducts.

One last thing he mentioned is his distrust of indicators, except for the Donchian channel indicator, which displays the high and low of the last 20 candles - he mentioned he will try to exit a position once the price hits one of the walls of the channel. Two more things: 1) he uses trailing stops a lot, and 2) he'll look at former highs to identify zones of support (in the below graphic, notice how point 3 on the left side becomes a support zone where the first c price point will bounce off of shortly thereafter)

"Anything worth having is worth going for - all the way." - J.R. Ewing



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