Alrighty people... Here goes. I am writing my plans down for review by others, perhaps others with more experience than I, but anyone - Please feel free to provide feedback, thoughts, ideas... etc.
A bit of background on my trading experience:
I'll spare you my background etc, Just that I come from the day trading world where 100-400+ trades is the norm, playing for the bid/ask spread. So while this plan might seem psychotic to some, the amount of trades I plan on doing would possibly end up being quite boring for me. (which could be a problem in itself... see below).
I quit the stock day trading world because I always found myself watching currency charts and playing around on demo accounts, which created a lot of internal conflict because I was focussing more and more on currency trading. I'm now an FX specialist which is basically a sales job and has little do with speculating, and everything to do with trading one currency for another in the true sense of the word "trading"... I'm allowed to make currency trades on my own through a 3rd party platform but it can't take up too much time or take away from my core busines, as a rule.
So enough with all that, here's my plan. I've done my due diligence on several brokers and platforms and have decided on hotspot fxi FX Prime Broker Plus platform (for this plan), and hotspot fxr for another longer term plan. My Plan would include opening an account with at least 100k of my own money, and maybe bring in some partners to bring the opening to 500k which would allow for more position sizing flexibility.
With hotspot FX Prime broker plus platform... Min opening size is 100k USD balance and min position size requirements of 500k.
A ½% risk/trade would mean a stop of 10 pips ($500.00 risk) a full 1% would mean a stop of 20 pips. ($1000.00 Risk)
(That’s pretty friggen tight...)
Not much room for error…
Although I could bid/offer only and pay the .4/pip ($20.00) commission on 500k.
With hotspot fxi you get institutional pricing with the ability to bid/offer and be filled so you never have to pay the spread. (unless your dumping a trade gone wrong). (<--- This is not a commercial)
It would be like the stock trading days,… I could make money by capturing the spread several times a day, and have a worst case stop loss, or I could make money by going for multiples of my risk, or some other exit strategy configuration.
Probably the most important thing is:
I would have to be doing it full time with minimal distractions and no internal conflict. The method would be trend following intraday, buying at support, selling at resistance. On the 1, 3, 5 and 30 minute charts. NOT trading counter trend, and NOT trying to pick the highs/lows except when the market is chanelling sideways.
If I could have 70-80% accuracy with 1-1 Risk/reward. 1-5 trades a day… It could be the start of something huge... I’d be mostly trying to protect capital at first, so bringing SL to BE as soon as possible and taking minimal losses, letting the good trades ride. Tough game it would be, but it could work for sure.
Could I work though? I'm working on that. I'm studying the peak performance course by Van Tharp, going to counselling to work out any issues I have.
To make the position sizing more tolerable/flexible I would need more than 100k, Which would allow for wider stops, but ultimatly less trades, which could effect the opportunity factor in my plan...
If I could do 5 trades/day @ 1/2% risk with avg 75% winners, and the gains are same as the losses this is what it would look like in a perfect world:
For every 10 trades, 7.5 would be a gain of .5%, 2.5 would be a loss of .5%, so a theoretical return of 3.75% per 10 trades @ ½% Risk. if doign around 5 trades a day, thats 1.875 % a day. On 100k that's $1875/day which is alot but it depends who you talk to...
Once I was up like 10% I would set the risk at 1%/trade. If I lost 3 trades in a row, I’d take the risk back to ½% again, (or something like that). This way I'm protecting my initial capital by risking 1/2%, when I have profit, I'm allowing it to grow exponentially while cutting back risk to protect my profit.
I'm agressively reading Van Tharps Definitive Guide to Position sizing to determine what the best configuration would be for my plan in terms of position sizing.
I know there's probably a few out there who are already doing this, I'd like to network with them, please pm me. I also know there's many out there that don't understand risk and would think this to be an impossibility. I'm interested in hearing from them too.
It's an intensive trading style. I’d have to be at my peak performance level.
I'm eating very healthy, exercising most days, getting sleep at a good time, saying my prayers... you know
The reason Ive chosen hotspot is, this trading style is very unlikely to be successful by going through a market maker because of the immediate 3 pip+ loss. If your prime broker is just another middleman your going to pay higher comissions then getting it directly from hotspot.
My plan is to have a plan, review it every morning before the trading day, stick to it like a bee on spilled pop. And trade the plan.
What could go wrong? My objective is to determine that FIRST.
Oh good Harper is speaking... Maybe the Canadian dollar will get hammered again today...
Here's my list so far of what could go wrong:
Current trade must be a winner bias could kick in: I might be tempted to not honor my stop losses, and take even biggers losses which would mess up my distribution of profits/losses.
Starting with only 100k wouldn't provide much of a buffer. However, with 70-80% accuracy experiencing an initial drawdown of 10-20% is possible but I would be seeking to minimize this by being very careful about my trades, and exits, and taking 1/2% risk until I have a profit buffer.
(Ideally with some partners I could bring my min to a higher, more reasonable amount of around 500k.)
My need to trade because it's exciting might kick in leading me to make some retarded decisions.
Not thinking of what could go wrong and knowing my exits before each trade could cause me to focus on trades with low probabilities of long term success and high probabilities of quick profits.
Trading too many markets at once could lead to overtrading. Taking too many trades for quick profits (see above) could lead to overtrading.
I could get stuck in a loss trap and go ballz to the wall and lose everything.
I'd be risking over 50% of my net worth. Risky? Yes. But if done properly could be a wise move.... I can always go back to sales???
All comments and questions, constructive criticizm, is welcome. I know others will see what I cannot see and that's what I'm looking for by posting this thread, (also networking and idea exchange.) Thanks FF.
A bit of background on my trading experience:
I'll spare you my background etc, Just that I come from the day trading world where 100-400+ trades is the norm, playing for the bid/ask spread. So while this plan might seem psychotic to some, the amount of trades I plan on doing would possibly end up being quite boring for me. (which could be a problem in itself... see below).
I quit the stock day trading world because I always found myself watching currency charts and playing around on demo accounts, which created a lot of internal conflict because I was focussing more and more on currency trading. I'm now an FX specialist which is basically a sales job and has little do with speculating, and everything to do with trading one currency for another in the true sense of the word "trading"... I'm allowed to make currency trades on my own through a 3rd party platform but it can't take up too much time or take away from my core busines, as a rule.
So enough with all that, here's my plan. I've done my due diligence on several brokers and platforms and have decided on hotspot fxi FX Prime Broker Plus platform (for this plan), and hotspot fxr for another longer term plan. My Plan would include opening an account with at least 100k of my own money, and maybe bring in some partners to bring the opening to 500k which would allow for more position sizing flexibility.
With hotspot FX Prime broker plus platform... Min opening size is 100k USD balance and min position size requirements of 500k.
A ½% risk/trade would mean a stop of 10 pips ($500.00 risk) a full 1% would mean a stop of 20 pips. ($1000.00 Risk)
(That’s pretty friggen tight...)
Not much room for error…
Although I could bid/offer only and pay the .4/pip ($20.00) commission on 500k.
With hotspot fxi you get institutional pricing with the ability to bid/offer and be filled so you never have to pay the spread. (unless your dumping a trade gone wrong). (<--- This is not a commercial)
It would be like the stock trading days,… I could make money by capturing the spread several times a day, and have a worst case stop loss, or I could make money by going for multiples of my risk, or some other exit strategy configuration.
Probably the most important thing is:
I would have to be doing it full time with minimal distractions and no internal conflict. The method would be trend following intraday, buying at support, selling at resistance. On the 1, 3, 5 and 30 minute charts. NOT trading counter trend, and NOT trying to pick the highs/lows except when the market is chanelling sideways.
If I could have 70-80% accuracy with 1-1 Risk/reward. 1-5 trades a day… It could be the start of something huge... I’d be mostly trying to protect capital at first, so bringing SL to BE as soon as possible and taking minimal losses, letting the good trades ride. Tough game it would be, but it could work for sure.
Could I work though? I'm working on that. I'm studying the peak performance course by Van Tharp, going to counselling to work out any issues I have.
To make the position sizing more tolerable/flexible I would need more than 100k, Which would allow for wider stops, but ultimatly less trades, which could effect the opportunity factor in my plan...
If I could do 5 trades/day @ 1/2% risk with avg 75% winners, and the gains are same as the losses this is what it would look like in a perfect world:
For every 10 trades, 7.5 would be a gain of .5%, 2.5 would be a loss of .5%, so a theoretical return of 3.75% per 10 trades @ ½% Risk. if doign around 5 trades a day, thats 1.875 % a day. On 100k that's $1875/day which is alot but it depends who you talk to...
Once I was up like 10% I would set the risk at 1%/trade. If I lost 3 trades in a row, I’d take the risk back to ½% again, (or something like that). This way I'm protecting my initial capital by risking 1/2%, when I have profit, I'm allowing it to grow exponentially while cutting back risk to protect my profit.
I'm agressively reading Van Tharps Definitive Guide to Position sizing to determine what the best configuration would be for my plan in terms of position sizing.
I know there's probably a few out there who are already doing this, I'd like to network with them, please pm me. I also know there's many out there that don't understand risk and would think this to be an impossibility. I'm interested in hearing from them too.
It's an intensive trading style. I’d have to be at my peak performance level.
I'm eating very healthy, exercising most days, getting sleep at a good time, saying my prayers... you know
The reason Ive chosen hotspot is, this trading style is very unlikely to be successful by going through a market maker because of the immediate 3 pip+ loss. If your prime broker is just another middleman your going to pay higher comissions then getting it directly from hotspot.
My plan is to have a plan, review it every morning before the trading day, stick to it like a bee on spilled pop. And trade the plan.
What could go wrong? My objective is to determine that FIRST.
Oh good Harper is speaking... Maybe the Canadian dollar will get hammered again today...
Here's my list so far of what could go wrong:
Current trade must be a winner bias could kick in: I might be tempted to not honor my stop losses, and take even biggers losses which would mess up my distribution of profits/losses.
Starting with only 100k wouldn't provide much of a buffer. However, with 70-80% accuracy experiencing an initial drawdown of 10-20% is possible but I would be seeking to minimize this by being very careful about my trades, and exits, and taking 1/2% risk until I have a profit buffer.
(Ideally with some partners I could bring my min to a higher, more reasonable amount of around 500k.)
My need to trade because it's exciting might kick in leading me to make some retarded decisions.
Not thinking of what could go wrong and knowing my exits before each trade could cause me to focus on trades with low probabilities of long term success and high probabilities of quick profits.
Trading too many markets at once could lead to overtrading. Taking too many trades for quick profits (see above) could lead to overtrading.
I could get stuck in a loss trap and go ballz to the wall and lose everything.
I'd be risking over 50% of my net worth. Risky? Yes. But if done properly could be a wise move.... I can always go back to sales???
All comments and questions, constructive criticizm, is welcome. I know others will see what I cannot see and that's what I'm looking for by posting this thread, (also networking and idea exchange.) Thanks FF.
FX Specialist
