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Lessons Learned Thread

  • #681
  • Apr 26, 2012 12:19am Apr 26, 2012 12:19am
Quoting Chicky
Trade #79

Short for 80 pips
Trade 79 hit sl. Little more than 1% loss

Trade 80 placed. Short for 200 pips.
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The Thief of Wall Street
  • #682
  • Apr 26, 2012 2:20am Apr 26, 2012 2:20am
Dear Chicky,

on April 21st you said 'much can happen over a journey of 200 pips' yet you just initiated a 200 pip-trade. Does that mean you have a stronger signal today?

Looking at the charts I would say as well we've got a strong short signal, but I would maybe put s/l and t/p @150 pips?

Best regards,

LD
Fail better.
  • #683
  • Apr 26, 2012 8:03am Apr 26, 2012 8:03am
Quoting Chicky
KEEP YOUR POSITIONS SMALL.



completely agree.

ill add:

if your main goal in trading forex is "becoming better" which results in some kind of edge. your best bet is to trade small till that time comes.
  • #684
  • Apr 26, 2012 10:18am Apr 26, 2012 10:18am
Quoting burt
completely agree.

ill add:

if your main goal in trading forex is "becoming better" which results in some kind of edge. your best bet is to trade small till that time comes.
Yep no point sinking 20k into an account it will just go. Ive been doing it $100 at a time it used to last maybe hours these days im actually slightly positive last 2 years.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #685
  • Edited 11:10am Apr 26, 2012 10:46am | Edited 11:10am
^
ya especially with leverage its a problem, as I hope your implying its a zero sum game for beginners. lol

I tried $100 accounts, personally I prefer spreading out cash and having some extra capital. by all means whoever reads this try the $100 account but know that your limitations come from "capital restrictions"
  • #686
  • Apr 26, 2012 9:41pm Apr 26, 2012 9:41pm
Quoting LarryDarrell
Dear Chicky,

on April 21st you said 'much can happen over a journey of 200 pips' yet you just initiated a 200 pip-trade. Does that mean you have a stronger signal today?

Looking at the charts I would say as well we've got a strong short signal, but I would maybe put s/l and t/p @150 pips?

Best regards,

LD
LOL. I was expecting this question.

Few reasons for entering this trade:

1. 1.3250/1.3300 areas is a big level. A 200 pip move from this area would be very normal. Our previous trade mentioned 200 pip journey is long journey because pa was at the lips of this zone and anything could have happened at that point.

2. I am losing money. More than 2.5% down. Therefore have to use some advanced features of this method without compromising much on the basics. This 200 pip trade will keep my sl away from market noise at this strong level.

3. I intend to carry a position with more than one trade this time. However, any additional trade opened while this 200 pips trade is running, will be for a)less than 200 pip, b) less than 1% profit / loss. In fact I am cheating a little bit here. This way my total risk on all trades will be more than 1%.
The Thief of Wall Street
  • #687
  • Apr 27, 2012 2:11am Apr 27, 2012 2:11am
Thank you for the confirmation!
Fail better.
  • #688
  • Apr 27, 2012 11:13pm Apr 27, 2012 11:13pm
Quoting Chicky
I have decided to post practical application of this method using a demo account (as soon as I am able to log onto that - forgot the password since I have not recently used it).

Once again, all trades will be based on the following parameters:

1. Risk : Reward ratio = 1:1+spread

2. Risk = 1% of latest account balance

3. Reward = 1%+spread of latest account balance

4. No trade less than 60 pips

5. Number of trades = will depend on opportunity and/or time I could spare.

6. Starting account balance = $100

7. Target account balance =...
Its almost eight months we started this demonstration. So far we have entered 80 trades, that is, an average 10 trades per month.

Our account balance has gone down by more than 2.5%, and I have little hope that our trade # 80 will be a winner. If this trade turns out to be a loser, we will be down more than 3.5%.

In actual trading, I would try only to seek better entries without changing any of the above mentioned parameters. However, this thread is not moving fast enough, therefore, I have decided to increase frequency of the trades. In order to increase number of trades per month, I have to make these changes to the parameters without changing the basics. Kindly remember that these changes will negatively affect our profitability because ratio of spread cost will become too high.

1. Risk : Reward ratio = 1:1+spread (Remains unchanged)

2. Risk = 1% of latest account balance (Revised: Risk = 1% or less of the latest account balance per trade)

3. Reward = 1%+spread of latest account balance (Revised: Risk = 1% or less of the latest account balance per trade)
4. No trade less than 60 pips (Revised to: No trade less than 20 pips)

5. Number of trades = will depend on opportunity and/or time I could spare.(Remains unchanged)

6. Starting account balance = $100(Remains unchanged)

7. Target account balance = $120 or $80 (Remains unchanged)

8. Once either of these target is achieved, will discontinue posting these trades (fair?)(Remains unchanged)
9. New: One or more trades at a time.

We have not seen any unusual results in these 80 trades because of the size of the trades (60 to 250 pips). However, reducing this to "20 to 250 pips" can result in many consecutive winners and several consecutive losing trades. In the past, I have experienced over 50 consecutive losing trades and over 30 consecutive winning trades. If we this time experience 18 consecutive losers, this thread will be instantly over. But if we see 23 consecutive winners, we will move to next step. In order to save us from losing 20% of the account balance on experiencing 18 consecutive losers, we will keep risk per trade lower than 1% on any position opened after the first one. For example if three trades are open, only first one will be for a risk/reward of 1% and other two will be for less than 1% risk/reward.
The Thief of Wall Street
  • #689
  • May 1, 2012 9:50am May 1, 2012 9:50am
Quoting Chicky
Trade 79 hit sl. Little more than 1% loss

Trade 80 placed. Short for 200 pips.
Trade 81 placed. Short for 60 pips. 0.75% r/r

Trade 80 and 81 running.
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The Thief of Wall Street
  • #690
  • May 1, 2012 12:30pm May 1, 2012 12:30pm
As a new member I cant post new thread but I wanna do forex business. Anybody can give me Idea How I will do good business?
  • #691
  • May 1, 2012 9:49pm May 1, 2012 9:49pm
Quoting shafiq
As a new member I cant post new thread but I wanna do forex business. Anybody can give me Idea How I will do good business?
Yes. just two things:

1. Keep your positions as small as possible, and

2. Stay away from threads.
The Thief of Wall Street
  • #692
  • May 2, 2012 12:26am May 2, 2012 12:26am
Quoting Chicky
For example if three trades are open, only first one will be for a risk/reward of 1% and other two will be for less than 1% risk/reward.
This is a game changer. It is now possible to achieve your 60% hit rate but still end up with an overall loss as some losses can be larger than some wins. Nothing worse than trading a winning system, getting 6 out 10 trades with 1:1 r/r per trade and still losing. This is on my "lessons learned" list. You are obviously well aware of this. Im just a little puzzled by this tactic. You appear to be decreasing risk but the opposite is actually true.

Very good thread btw. Reality trading, very rare round these parts with every second trader claiming 20%/month/week/day with their systems
BTC Return This Year: na
  • #693
  • May 2, 2012 12:31am May 2, 2012 12:31am
Have any good indicator which will help me to know the market movement? If have please help me.
  • #694
  • Edited 1:18am May 2, 2012 12:49am | Edited 1:18am
Quoting M.A.C.Doug
This is a game changer. It is now possible to achieve your 60% hit rate but still end up with an overall loss as some losses can be larger than some wins. Nothing worse than trading a winning system, getting 6 out 10 trades with 1:1 r/r per trade and still losing. This is on my "lessons learned" list. You are obviously well aware of this. Im just a little puzzled by this tactic. You appear to be decreasing risk but the opposite is actually true.

Very good thread btw. Reality trading, very rare round these parts with every second trader claiming...
Thanks MAC.

You are right.

I am facing two issues with this thread. 1) The arbitrary selection of minimum 60 pip trade. This seems to be too high, and 2) Not been able to logon as frequently as I want.

I amended the 60 pip parameter and added an option of keeping more than one position open at a time, just to have some flexibility, but do not intend to use this flexibility very often. (Like I enterd Trade 81 only after a clear rejection of 1.3300 and 1.3250 strongly broken in one single solid bar with a stoploss well above 1.3250)

These all parameters will change anyway, and in the end this will be a totally different game. (As I mentioned earlier we have still much to come)But, I think it is important to unfold features of this method in steps. There will be very few people who would follow this thread from start to finish, but once its complete, may provide some food for thought to many people.
The Thief of Wall Street
  • #695
  • May 2, 2012 1:05am May 2, 2012 1:05am
Quoting Chicky
Thanks MAC.

............ (Like I enterd Trade 81 only after a clear rejection of 1.3300 and 1.3250 strongly broken in one single solid bar with a stoploss well above 1.3250)......
Here is the chart. Our entry is circled red.
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The Thief of Wall Street
  • #696
  • Edited 2:00am May 2, 2012 1:42am | Edited 2:00am
Quoting shafiq
Have any good indicator which will help me to know the market movement? If have please help me.
Bhalo Bashi,


1. Learn basic Macro Economics (Google and study 30 minutes everyday whatever you can get hold of)

2. Every morning and evening visit business news and analysis sites or subscribe Wall Street Journal.

3. Try to learn how market behaves during:

a. Tokyo open
b. Franky Session
c. London Open
d. Tokyo Close
e. NY open
f. London Close
g. Last two hours of NY session

4. Learn how to identify Supports / Resistances from a chart. Study Daily Chart

Once you have done that for three months, use these two indicators:

i. Feel Good Indicator
ii. Feel Not So Good Indicator

How to apply these indicators:

When you feel good in longing or shorting a pair, do it.
When you feel not so good in carrying or opening a position, respectively close the positions or do not open a position.

This post not only gives you an indicator, but also steering, brakes and gas pedal.
The Thief of Wall Street
  • #697
  • May 2, 2012 9:17am May 2, 2012 9:17am
Quoting Chicky
Trade 81 placed. Short for 60 pips. 0.75% r/r

Trade 80 and 81 running.
Trade #81 hit tp. 0.75%

Trade #80 (short for 200 pips, 1% ) running
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The Thief of Wall Street
  • #698
  • Edited 9:34am May 2, 2012 9:20am | Edited 9:34am
Information

This thread is not a trading journal but sumarizes lessons learned from applying several trading methods, also gives details of one of the best money management methods developed. All trades you see here are posted with the objective of showing how this method works.

Links to some key posts on this thread

A. Four Lessons Learned
1. http://www.forexfactory.com/showthre...78#post4601578
2. http://www.forexfactory.com/showthre...84#post4618384
3. http://www.forexfactory.com/showthre...34#post4634234
4. http://www.forexfactory.com/showthre...85#post4651785

B. The research Journey
http://www.forexfactory.com/showthre...21#post4662921
http://www.forexfactory.com/showthre...66#post4665566
http://www.forexfactory.com/showthre...94#post4665594
http://www.forexfactory.com/showthre...12#post4665612
http://www.forexfactory.com/showthre...46#post4666046
http://www.forexfactory.com/showthre...13#post4666113
http://www.forexfactory.com/showthre...48#post4666148
http://www.forexfactory.com/showthre...05#post4666205
http://www.forexfactory.com/showthre...23#post4666523
http://www.forexfactory.com/showthre...65#post4666565

C. Demonstration how it works
http://www.forexfactory.com/showthre...05#post4984505
http://www.forexfactory.com/showthre...46#post5618146
The Thief of Wall Street
  • #699
  • May 2, 2012 1:05pm May 2, 2012 1:05pm
As a new trader these lessons will come in very handy!!!

Thanks for posting!
  • #700
  • May 4, 2012 2:30am May 4, 2012 2:30am
Chicky

Can we chat through messenger like - yahoo, google or skype.

Regards
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