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Profitable traders - How consistent is your profit taking?

  • Post #1
  • Quote
  • First Post: Mar 27, 2016 8:45am Mar 27, 2016 8:45am
Hope this is the right section.

I've been trading for a couple of years now and feel I am just starting to turn profitable.
I have a question around taking profits. I use a trend following system, enter and exit on 4HR timeframe.

I often find my profits can swing around a lot. Sometimes I will be up 30-40% in unrealised profits, then they can pull back to 10%, then I might get to keep 20% when they close out.
Sometimes I can cash out a big chunk and be up 20-30% at the start of a month, then over the month end up losing a bit, finishing the month around 10% up, sometimes more, sometimes less. Generally positive though.

It can feel like in a week doing a lot of work, sometimes being down and making loads up and finishing positive. Sometimes being massively up at the start, then losing it all and closing for 0% or a loss.

Do you often find that your income stream is like this? Like 10 steps forward, 9 steps back? Make a million, lose 900k and be left with 100k for the month/year?

Just trying to get a hold as to what to expect really, or figure out if I can be doing something better.
Replies are greatly appreciated. Thanks
I think that you should reconsider your trading plan. After all, usually, a trader burns his account when closing several large unprofitable deals. If you destroy the minuses until they become catastrophic (for me, a catastrophic loss is 15% of the balance), then you will lose less. You just need to get yourself close minus while it is small.
It is better to lose a part of the deposit now than to lose all deposit tomorrow.
If you have a working strategy that makes a profit, it will help you.

Good trade to you!
Quoting DenForex
I think that you should reconsider your trading plan. After all, usually, a trader burns his account when closing several large unprofitable deals. If you destroy the minuses until they become catastrophic (for me, a catastrophic loss is 15% of the balance), then you will lose less. You just need to get yourself close minus while it is small. It is better to lose a part of the deposit now than to lose all deposit tomorrow. If you have a working strategy that makes a profit, it will help you. Good trade to you!
Thanks for your reply.

I'm not losing money from large trades, I risk 2% max per trade and usually lock in profits when I can by moving SL into profit. The losses usually come from new positions getting stopped out, but arent always in one chunk.

I just meant over the course of a month, you may be up quite a lot in unrealised profit at some points, or have moments when your capital peaks a lot higher, but by the end of the month its generally not at the peak.

That's why I said 10 steps forward, 9 steps back. I can make quite a lot from winning trades, but lose quite a bit of it from the losers, finishing most months only up 5-10%, sometimes more, sometimes less. Just wanted to know how other peoples experiences are with monthly profits from trading.
You may want to take a break, if you see that things are going from bad to worse. For example, you have 10 winning trades. Take a possible drawdown coefficient N = 3. This means that if the transaction # 11, 12 and 13 will be loss-making, it is necessary to pause a few days (depending on the strategy). If the transaction is # 13, will be profitable, then N is reduced by 1 (now N = 2). This means that if the deal # 14 and 15 will be loss-making, it is necessary to take a break, and if the transaction is 15 - the profitable N - 1 = 1 and you will see only 16 deal.
Quoting Revorocks
Do you often find that your income stream is like this? Like 10 steps forward, 9 steps back? Make a million, lose 900k and be left with 100k for the month/year?
No, not really. But that actually depends a lot on the type of trades you're looking for. Don't get me wrong, I'm not trying to convince anyone here to change their (profitable) trading but consistency on a weekly/monthly/annual period is much easier achieved on a lower time frame with more trades per day and typically less variation in loss/win between these trades.
Quoting JensG
{quote} No, not really. But that actually depends a lot on the type of trades you're looking for. Don't get me wrong, I'm not trying to convince anyone here to change their (profitable) trading but consistency on a weekly/monthly/annual period is much easier achieved on a lower time frame with more trades per day and typically less variation in loss/win between these trades.
I definitely appreciate that fact. With a higher sample size of trades its more likely to be profitable within a smaller period. Numbers game after all...

I typically take 30-50 trades a month. I just found while although being profitable by the end of the month, a lot of the time I was up a lot more during said month than I was by the end of it. Just wanted to know if anyone else found this...

Thanks for your reply though.
Quoting DenForex
You may want to take a break, if you see that things are going from bad to worse. For example, you have 10 winning trades. Take a possible drawdown coefficient N = 3. This means that if the transaction # 11, 12 and 13 will be loss-making, it is necessary to pause a few days (depending on the strategy). If the transaction is # 13, will be profitable, then N is reduced by 1 (now N = 2). This means that if the deal # 14 and 15 will be loss-making, it is necessary to take a break, and if the transaction is 15 - the profitable N - 1 = 1 and you will...
Sorry not sure I really understand you here mate. Things are not going from bad to worse, I'm just not always taking my peak profits so wanted some other opinions.
Quoting Revorocks
{quote} Sorry not sure I really understand you here mate. Things are not going from bad to worse, I'm just not always taking my peak profits so wanted some other opinions.
I mean, when you get your 20 - 30% (if it is a peak), worth giving yourself to relax, take a break.
Quoting DenForex
{quote} I mean, when you get your 20 - 30% (if it is a peak), worth giving yourself to relax, take a break.
What do you mean, close my positions and walk away?

If I do that I often cut myself short. Was up nearly 50% at one point so would be mad at myself for closing at 20-30%. Those positions could go on a lot further too so I generally don't just close them at arbitrary amounts of % profit.
  • Post #10
  • Quote
  • Last Post: Jun 26, 2016 12:47am Jun 26, 2016 12:47am
Quoting Revorocks
{quote} What do you mean, close my positions and walk away? If I do that I often cut myself short. Was up nearly 50% at one point so would be mad at myself for closing at 20-30%. Those positions could go on a lot further too so I generally don't just close them at arbitrary amounts of % profit.
Adjust your SL daily & let the SL be your TP.
Without having an understanding of down, you can never appreciate up.
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