50% in five months

The title doesn't reflect my goal, it reflects my performance.

Granted, it reflects my game account performance, but bear with me.

Back in August I had an Oanda game account with about $1000 in it and opened some trades on EUR/TRY and EUR/HUF. After September I stopped logging into the account for whatever reason, and it's just ran since then with $7000 on EUR/HUF and $2000 on EUR/TRY.

Today I opened the account and saw that it had $470 in profit, with $350 of that from interest. Drawdown must have been bad a few times, but I think this is something I'm going to go live with.

My current plan is to use a small amount of cash I've set aside as fun money to get started. Both pairs are sitting on a ledge near the middle of their 18 month range, so if the global economy improves then they will continue the escalator climb to profits, but if there are problems then the account will take an elevator ride to unrealized loss.

For this reason, I'll start out with low leverage and add to the account as price moves either with or against me.

Later on, I may be able to convince my accountant to let me part with a few dollars each month to add to the account. It will probably take six months of profit to convince her. If I'm able to earn 35%-50% during that time period, that will become my new "risk free rate of return" standard to judge other trading systems by.

If the results of my practice account aren't enough to convince me to give the exotic high interest plan a shot, then maybe my real money account will work. In December I made a 60% return after losing 30% to highly leverage scalps, so basically I was break even from November. January has proved to be a bust, with a 10% loss so far. I'm still using low leverage entries, but headfakes are killing me.

I just really don't care to spend hours and hours looking at charts. I'm bored with it, frustrated, and largely unsuccessful. Props to the folks who have managed to figure out a winning daily trading strat, but I'm the tails side of that coin flip more often than not.

So, I'm going to do a bit of fundamental analysis (HUF looks to be moving against any position I'll take for the next month or so) and plan some entries. My timeline is ground sloth slow, but that's OK because hyper caffeinated trading is a killer. If I can reach my goals in the first post, I'll be pleased as punch and able to budget a monthly deposit to the account.

I'm not totally giving up on other trading ideas, but my practice accounts at Oanda are now full of systems that I don't have to check more than once a week. I'll probably log in daily since I am a bit compulsive but I'll try to kick the habit of playing with my entries and exits and etc.

Here's another idea I'm working on. Working out OK so far. I've been trying these grids for a few months off and on. It's always worked out, but the drawdown can get big when the markets range. January was good for me.

Live is up 62% since mid December doing this sort of thing. More active than the exotic high interest trade, maybe riskier, idk.

You can't hedge with Oanda, so I go short CHFJPY, AUDJPY, CADJPY and long EURJPY, NZDJPY, USDJPY. Not perfect hedges, but pretty good with wide enough spacing between orders.

I wonder if I could just go long and short on the same pair with a hedging broker and get good results. hmm...

http://i47.tinypic.com/2u6em92.jpg

http://i49.tinypic.com/5xrdqu.jpg

Hmm.... interesting discussion.

If M1 or 10S are the only timeframes that lead to success, then how do you account for my results? I've been trading like this for months with a great deal of success and I think my results validate my "system."

Fact is, there are lots of systems on FF, and lots of timeframes to use. Cornflower Blue system, THV, MysticGenie's systems, Strat's Long Term.... etc. They all can work.

HOWEVER......

I have to say that using squiggly lines on a 1M or 10s TF doesn't sound like a good idea, since MA's and oscillators are so lagging, but if it works for you, best of luck. Personally, I've found that random noise accounts for about 10-20 pips of variation, especially during the heaviest trading periods, so this sort of scalping has never worked for me. To each his own.

As far as Turveyd's statement that he's in the 98% now but will be in the 2% in two months - unlikely. Buddy, you've got to settle down and trade instead of chatting everyone up. This is a business and needs to be treated that way. My forex business can only be tended to once or twice a day, and I believe that scalping is the way to bankruptcy, so that's why my stops are hundreds of pips away. That's also why I've been making 30%-60% or more per month.

So for the newbies who posted here, I've got some advice. Don't listen to the people who post a lot on here, especially those who get involved in spats. Just think about the difference between Don Corleone and a two bit street hustler - which one has time to argue? The Godfather doesn't care, he just makes money.

Second, and here's my real advice to you: no trade you take should exceed the equity in your account. Ever. If your broker has a minimum trade size of $1000, you need to deposit $1000. If you can't do that, find a nanolot broker that offers $100 sizing. In fact, I recommend depositing $10 at Oanda, and treating each penny as it if were a dollar. Once you've doubled your money by consisting winning, you might be ready to deposit real money.

I've almost doubled my $10 since I got serious last fall.

I've got another $350 set aside to trade with once I feel like my multiday breakout strategy is really working and not a fluke.

I've lost $640 in the two years that I've tested various squiggly line systems, so I think I've paid my dues.

your system is a carry trade system, correct?

I've really described two different systems. One is essentially a carry trade on exotics, the other is a bi directional breakout.

Here is a screen shot of the charts, of my EMA's working, yes I have to adapt them from time to time to suite different market conditions, but this chart wasn't back fitted thats just the same settings. I trade the Price crossing the EMA, not EMA Crosses which are too slow, yes there are a lot of head fakes which you need to get out of the way with and accept a small loss before they become a big loss cause even at -20pip the losses sure as hell add up.

Last night was a friday, the market was closed and FXCM was down anyway sadly, I multi task well though.

My advice is don't listen to anyone including me except for in this case maybe LOL


Scalping isn't for everyone, but it's the best way to destroy a account and also the best way to make it fly, depends on the trader more than any system.

Hi Turveyd.

Yeah, I've tried to do that sort of thing before. It looks sooooo good when you look at screenshots, and do a visual backtest. What could be easier? In practice I found it too stressful. For one thing, I work fulltime and can't trade from work. So I have a bit of time before work (8:30 central us time) and then after work I can do the japanese session.

What I've found is that I really really really don't like staring at a screen for several hours, waiting for that one big MA crossover with a good OB/OS signal and the right price action. If you can do that, good for you. Seriously. You'll be able to clean house. You might think about using the THV system with that, although you'll need MT4 for charting.

Truth is, I've made more with this little grid that I've done with anything else. And I don't have to stress out, or spend a lot of time. My biggest grief is when price headfakes up, and then drops back down and I miss a good exit opportunity because I'm at work or asleep.

Self employeed so being able to grab a trade inbetween work / late night Asian session works for me, a Job would make it a lot more restrictive ofcourse.

Ofcourse it looks good after the fact what doesn't, it's taken a long time and a lot of work with M1 ( Meta4 ) charts which I never had the full info I was after, only found the S10 charts 2 weeks back, S10 apears to be the key, easier to read and tighter exits on fakes, so far so good but early days!!

If your Grid is working and making any money at all for you then keep going, you've got to accept with your limited time it's not going to be perfect nothing ever is.

I'll go back and look at your Grid system in a bit don't think i've ran into that previously!!

OK, I've had a couple of emails about what I'm doing, and I realized that I've created some confusion since I'm talking about two different ideas. I don't feel guilty because this a trading journal after all. ;-)

Idea One: trade exotics for carry

This is what made 50% in five months, and it's my benchmark for analyzing the results of anything else. If I can make 50% in five months doing nothing, then why should I do something else and make less? I'd post a screenshot, but Oanda isn't displaying my entries anymore, just my exit.

My basic idea is simple. Enter a trade equal to account equity. You can not get a margin call if your leverage is 1:1. If price moves against you, just wait a while until it looks to reach a good S/R, and enter another 1:1 trade. You can do this several times without too much worry.

Even though price really spike against me, I eventually ended up at a really good profit. If you do a little fundy analysis and pay attention to S/R, you can pick some good entries. This is a good system for those who want to treat it like a 401k and make a monthly deposit.

Idea Two: the grid

There's lots of grid trading ideas out there, and most of them are broken. Either they're highly leveraged, or they have all TP and no SL, or they martingale, or they enter trades against the trend and hope it will retrace.

I have a few basic concepts that shape my views of FX:

1. I have no idea what price will do.
2. Price reacts to S/R lines.
3. Price has momentum and inertia.
4. Fibs aren't too bad.
5. I still don't know what price will do.

So price will do something when it reaches S/R, but I don't know what it will do. It might bounce, or it might push through. Or it might just sit there. If it sits there, it will sit a while. If it moves one way or the other, it will keep moving until it hits another S/R spots and has to make a decision.

Squiggly lines don't tell you any of this. They tell you what price has been doing, on average, over a period of time. This has its uses.

For me, I just assume that price will do SOMETHING, and I want to be on the train when it leaves, whichever way it goes. And I want to get off the train when it slows down enough for me to jump without breaking an arm. My grid lets me do this to a certain degree.

I'd much prefer trading Stocks in that manner, find a bullish sector and a bullish stock in that sector much better odds of getting a better return and max 2:1 Margin, but it's a lot of going through 100's of chart work which is tiring after awhile.

I'd dump the Fib's, although you'll never know what there going to do the odds of getting a reversal from 1 isn't worth them being there, 20% reverse rate from my testing ages ago.

It is all about momentum though, if price comes to a S/R line, it'll either break it or bounce, if you wait for the price to start going up then jump on it, you've got better odds of it following through ( in good PA, Monday - Thursday the last week forget it )

The same goes with Squiggly lines, but they automatically track the market so a lazy mans tool

I treat Fibs like S/R. Price will either bounce or push through. You're right, you don't know what price will do with either one. That's why I'm using short and long grids. When price starts moving, I'll be there.

The odds are it'll push through, the problem with Fib's is a lot of people go Long on a down move near, there buying into a down trend and will likely get burnt and if you look back at the chart you can see easily the 1's that worked, it's too easy after ofcourse which makes them keep plugging at it.


I had the same issue with my method, A line with a 70% reversal rate say, that 30% is a killer, not enough info on M1 to clearly see the reversal off the EMA line ( M1 200ema for instance, super strong ), so fingers cross think I've got that fixed!!

Shame they don't do orders where say you can :-


Activate the order to go Long on GU hitting 1.5980
Cancel the order if 1.5960 is hit.
And don't Go long until 1.6010 is hit.
SL Predefined aswell.


You can setup your own numbers ofcourse, that was you can say on a move down if we get to this area, but not too low and we get a move up good odds it'll continue up.

you could likely write a EA to follow those instructions while your away and trail the SL maybe ??

Not much activity in live account or demo accounts so far this week. I did re enter short trades on my exotic carry demo, so I'll check in with that account later.

I've got a couple of long/short games running. I opened two new subaccounts at Oanda last week and shorted every pair on one, and longed every pair on the other. Trade size is 1/10 of account size. I just wanted to see which pairs are paying the best carry per dollar invested, and it turns out to be what I expected.

So today when I looked at these accounts, I noticed that once again, one was at a loss and the other at a profit. Together they are still a loss. So I'm trying something a little bit different, I looked at the all of the winning trades and entered another trade on those pairs. So I'm adding to my winners, once again, but this is time based instead of pip based.



I have another two accounts where I've placed orders at 25 pip spacing, one is all shorts below the current price and the other is all longs above the current price. This is a bit different because I'm only taking trades if price moves my way, so theoretically both accounts should get some profit.

Trade size is 1/4 of account size, and I'm trading all of the majors (23 pairs). Trade size may be too high. Also my biggest winners in the other two accounts are exotics, but I'm not sure how to evaluate the risk of those pairs since they can jump around alot. And I might get rid of the ranging pairs like EURCHF and AUDNZD. I'll see how performance is.

With both concepts, the idea is to close once the sum of the two accounts is positive. I'm not sure how much positive. I'll post screenshots later in the week if it looks promising.

I've attached a couple of images, I hope they turn out alright. The two accounts with short orders in one account and long orders in the other have turned slightly positive, as shown. Not sure where it will end up.

As of right now, positive profit is about $3. I'm happy to see that. It took about 30 minutes to set up these orders, so we'll see if it's a good return on my invested time.

The other accounts with the trades entered a week apart for any pairs in positive territory isn't doing as hot. However, those baskets were not set up as orders. I just took a bunch of trades at whatever the market was showing at the time, so obviously it's going to be harder to see a profit there. I might go back and change that up a bit.

Update:

So I'm in a bit of drawdown right now. I see one of my biggest problems: GBP pairs. I either need to use a smaller position on these, or more spacing in the grid. I ran into this issue before and forgot about it. Probably I'll use more spacing.

This is my short grid / long grid system. I think this would be easier with a hedging broker, so I might try that at some point. At the very least I would use less margin.

Here's my other short / long system using two Oanda subaccounts. As you can see, it has a healthy profit, and validates my idea. The difference between the two systems is that the previous one is a preset grid, with 25 pip spacing. For system two, I just took trades on all of available pairs. I opened the trades last Tuesday, and then yesterday I entered trades on the all of the winners. So now the winners have $200,000 riding on them, and the losers have $100,000.

I should have taken some pics from yesterday when I was running about a $20,000 combined drawdown. Total margin used was $200,000 per subaccount.

Since this is a time dependent system instead of price dependent, it should theoretical catch the long term secular trends and let you use weekly candles to direct your trading.

It might be useful to start this account out by placing orders away from price so that it has to move in my direction before getting started. This would hopefully reduce some of the drawdown, since at least a few losing trades wouldn't be taken.

I don't know about the exotics. Some of them have been huge winners, but I'm not sure how much I can count on that. SAR and CNY should be dropped since they are pegged.