- Joined May 2005 | Status: Member | 1,494 Posts
In trading, there is no bullshit. You either make money or you don't.
Ronald Raygun's Generic MA crossover 4 replies
To Ronald Raygun EA Request 3 replies
Another Trading Journal - Yuhu's Journal 16 replies
My Personal journal up 18% in 2 months going to start a journal 8 replies
Ea request (Ronald Reagun) 5 replies
DislikedI trade daily charts for now.
Once I reach 50,000/week (Should reach that in 3 months assuming no major disasters), I'll spin off into a weekly strategy, 30 min, 1 hour, 4 hour, and maybe 15 min strategies. All with appropriate amounts of starting capital.Ignored
QuoteDislikedHi,
I think it is great that you are getting into the market at such a young age. You will have a lifetime to make money once you figure these markets out.
I have been trading for a living for over 15 years and I think I might have a couple of suggestions that will help you out.
As far as the GBP/JPY goes, there is no way you can trade this with a 40 pip stop, unless you are trying to scalp for 10-20 pips, which in itself is a time bomb for your account with this pair. I have traded this pair for years and the average 15 minute bar range is greater than 40 pips right now.
If you are using 500:1 leverage, you WILL blow out your account, and any subsequent accounts that you fund. That is simply a fact.
go read some material on proper MM and you will soon understand that the proper use of leverage is THE KEY to survival in this game.
If you are trading 5 mini lots with a 1K account, it will only have to move against you by about 250 points to blow your account. We have had an hour bar that big this week.
I wish you all the best and I hope you find yur way in this jungle of forex.
Disliked...
allow me to explain the theory behind this particular system. swingtrade, this applies to you too.
..Ignored
Dislikedmorse, it will work for whatever timeframe you use. However, allow me to explain the theory behind this particular system. swingtrade, this applies to you too.
I'm trading the markets with the understanding that the price will move SOMEWHERE over the course of a day. That's why I chose GBPJPY, it has the highest daily volatility that I know of, with a reasonable spread.
Those 40 pip stops are not really just stop losses, but stop-and-reverse orders. That means that if the market moves against me by 40 pips, to me that looks like it will be a down bar, so I adjust the position accordingly. For example, today, I opened a 0.1 lot BUY order at 00:00 GMT at 225.46, I got stopped out at 224.99 and reversed at 244.99 with a SELL order, that got stopped out at 224.99, and replaced with a BUY order at 224.99. Currently, that BUY order is 393 pips in profit.
The way this system works, is that at 40 pips profit, I move the stop loss from 40 pips to BREAKEVEN. That's how I'm able to survive longer. Now, this system, if left alone would probably blow up two days ago because of the incredible whipsawing on Monday. That's why the EA has a maximum of 4 trades per day that it can make. So, my maximum loss per day is 160 pips, or 172.72. I can expect this higher risk because I am trading a relatively small account. However, as the account grows, I'm going to reduce the maximum exposure from 17% to maybe 10% maximum account loss per day, so it'll take two completely awful weeks to wipe me out if I don't use dynamic lot sizing.
You are absolutely right about the stoploss. However, I think you are assuming that I expect the pair to go in a particular direction.
I don't.
All I expect from GBPJPY is that it moves and closes at least 100 pips in either direction (up or down) plus each 40 pip loss sustained that day. For example, today is about 400 pips gain for me. But I had one 40 pips stoploss for today with two stop outs, so I only expect 140 pips I'm nearing a 400 pip profit today so I think that's more than enough.
I did look into money management and here's what I came up with. Do tell me what's wrong and possible solutions to solve it:
- Size the trade so I can lose at least 20 times before I am wiped out.
- The above is the absolute minimum that I trade with (5% at risk MAXIMUM) I'm currently at 30 losses-to-wipeout (because I haven't moved up to the next tier yet.)
- I set a tight stoploss in order to let me determine the direction of the day faster. I move that tight stoploss once my profit pips equals my stoploss pips (in this case, 40). So the market can reverse against me, but I won't lose any account capital just potential profits, which is perfectly ok.
- I limit the maximum trades I can make per day to 4. This is to ensure that I avoid the heavy whipsaw days. With the minimum limit of 20 losses until blowup, I can last a week. Looking at the weekly chart of GBPJPY, I don't see too many low range weeks. The smallest I can see in the past 6 months is 196 pips. (Range of High to Low) and the days averaged 150 pips profit. That's still within my profit requirements.
Ignored
The whole point is to forward-test this strategy to death. If we all have google, we can collaborate using google spreadsheets to collect data, so I can use that to find a formula that will work to determine lot size, stoploss, max trades, etc.
I'm purely a quantitative trader, which simply means I look for mathematical relationships in the market. The news doesn't matter too much. (Unless the market for the pair is closed xD). This system is partially based off ATR and if I can derive a formula to easily determine the optimal stoploss for each pair, then it should be fairly easier to make money. Think of this more as an open source project. I'm sure we can use the collaborative efforts of the members of this forum to help optimize this strategy.
Swingtrade: I don't know how I compare to your trading ability, but I'm sure you've seen which days (holidays for example...) are thinly traded. I know thanksgiving is a big one which affects the Japanese Yen, are there others?
DislikedI have a test account running all pairs with a 21 day ATR of greater than 200 pips.
All of them are running the daily chart. That one seems to have the steadiest and most reasonable range, so I'll stick with it.
For now, it looks like GBPJPY is the best, so I'm trading that. I think that the 40 pip stop loss/move to breakeven is optimal for this currency, I'm still trying to find better values. If you'd like to help morse, here's what I need you to do, everyone else can pitch in too, the EA is attached somewhere on this thread, it should be working well.
- Open a 10 million dollar demo account.
- Pick whatever currency pair is your favorite pair.
- Open up as many daily charts as possible, and place the EA on each of them.
- Track the profit/loss of each EA (in pips) on each individual chart and optimize the stoploss/max trades/etc until you reach the highest profitability.
The whole point is to forward-test this strategy to death. If we all have google, we can collaborate using google spreadsheets to collect data, so I can use that to find a formula that will work to determine lot size, stoploss, max trades, etc.
I'm purely a quantitative trader, which simply means I look for mathematical relationships in the market. The news doesn't matter too much. (Unless the market for the pair is closed xD). This system is partially based off ATR and if I can derive a formula to easily determine the optimal stoploss for each pair, then it should be fairly easier to make money. Think of this more as an open source project. I'm sure we can use the collaborative efforts of the members of this forum to help optimize this strategy.
Swingtrade: I don't know how I compare to your trading ability, but I'm sure you've seen which days (holidays for example...) are thinly traded. I know thanksgiving is a big one which affects the Japanese Yen, are there others?Ignored
What I'm saying is: Was at least one currency pair more volatile when compared with the others in your 15+ years of trading? Volatility is pretty much the lifeblood of my system. Without that, I'd be better off investing my money elsewhere.
QuoteDisliked
- Size the trade so I can lose at least 20 times before I am wiped out.
- The above is the absolute minimum that I trade with (5% at risk MAXIMUM) I'm currently at 30 losses-to-wipeout (because I haven't moved up to the next tier yet.)
- I set a tight stoploss in order to let me determine the direction of the day faster. I move that tight stoploss once my profit pips equals my stoploss pips (in this case, 40). So the market can reverse against me, but I won't lose any account capital just potential profits, which is perfectly ok.
- I limit the maximum trades I can make per day to 4. This is to ensure that I avoid the heavy whipsaw days. With the minimum limit of 20 losses until blowup, I can last a week. Looking at the weekly chart of GBPJPY, I don't see too many low range weeks. The smallest I can see in the past 6 months is 196 pips. (Range of High to Low) and the days averaged 150 pips profit. That's still within my profit requirements.
Dislikedpair more volatile when compared with the others in your 15+ years of trading? Volatility is pretty much the lifeblood of my system. Without that, I'd be better off investing my money elsewhere.
As for my money management quoted above, what can be improved? You clearly know that the 20-30 losses in a row can happen which affects the first two points. What about the last two?Ignored