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Trading for Retirement

  • Post #1
  • Quote
  • First Post: Edited Nov 13, 2018 5:51pm Nov 12, 2018 5:58pm | Edited Nov 13, 2018 5:51pm
I couldn't change the thread name for my old thread "EA portfolio for retirement", so start this thread to be more reflective and general topic, "Trading for Retirement" and no longer just specific to EA.

The old thread of "EA portfolio for retirement" can be found:
https://www.forexfactory.com/showthread.php?t=733567

This journal will record down from current to be the better trader and to where I want to go which is early retirement life. As mentioned in old thread, my original intention is to retire at 50 years old.

With recent job changing with additional amount and investment and trading and most importantly I found something simple trading strategy which suit my personality in terms of how I trade, it seems I could stretch my target to retire at age 45. If the market is good enough, I maybe can achieve early than age 45. For the time being, I will stick to age 45.

The thread will be contains not only trading, i will journal down the comments or reviews about the books, trading articles surrounding with psychology and good habit, motivation articles, good habit articles and etc. In addition, it will also have anything positive to motivate myself to keep on going.
The below is extracted from the old post, so I do not need to keep to refer to old trade since below I just updated 2 weeks ago which is still relevant to where am I today.

Have been growing a lot in terms of discipline, habit and systematic trading in the past 5 months.
All the EA developed and strategies have hit SL threshold I set, so have stop them all. Nothing to regret, it's part of the trading life.
Right now, have been focus on 2 strategies:
1. Daily breakout with trend following (1% trade based on 7k capital)
2. H4 trend following (1% trade based on 3.5k capital)

The H4 trend following is still relatively new and have been trading for almost 2 months. Surprisingly, the result is fantastic, however, I should control my greed and control and refrain myself of over trading and over expose my % per trade.

Besides the above forex trading, I also adding lower risk investments. Singapore Reits investments and SP500 ETF investments.

All 3 portfolios are helping me to achieve FIRE (Financial Independence Retirement Early).

In the past few months, also thinking about what activities will I be engaged during retirement beside the financial independence. After doing some research, will need to plan for the transition into retirement life with other activities to fill in and not sleep till any hour you want. I believe good habit and discipline is the main factor behind success
Just coming back from Perth for family vacation holiday, it's nice and beautiful city to visit and holiday. The scenary is good and the life is much slower pace and relax as compared to Singapore. Will visit again in future.
  • Post #4
  • Quote
  • Edited 5:46pm Nov 14, 2018 9:12am | Edited 5:46pm
Daily Routines

Full time trader out there, what's your good daily routines and do share some. As I still holding a full time job, and my main trading time frame is daily and H4.

Note: dst start as of now

6am: wake up; scan and manage daily setup (max is 10 minutes only once)
Scan all major and minor pairs for H4 to shortlist potential setup (max is 5 minutes)

6.30am: read news and listen to radio while enjoying hot nutrion drink

7.30am: send kid to school and go to work

10am: from shortlisted pairs check if hv setup(1minute)

2pm: from shortlisted pairs check if hv setup(1 minute)

6pm: from shortlisted pairs check if hv setup(1 minute)

6.15pm: Scan all major and minor pairs for H4 to shortlist potential setup (max is 5 minutes)

6.30pm: leave office

7.30pm: having lunch and teach kid for homework

10pm: from shortlisted pairs check if hv setup(1minute)

10pm: book reading for 15minutes or writing

10.15pm: sleeping
H4 strategy performance update

First time after 2 months of trading this strategy, suffering consecutive of 6 streak losses. However, it has gain 36 R this 2 months, which exceed my yearly target of 24%. Anything more given by the market consider as bonus.
Quoting happytrade38
H4 strategy performance update First time after 2 months of trading this strategy, suffering consecutive of 6 streak losses. However, it has gain 36 R this 2 months, which exceed my yearly target of 24%. Anything more given by the market consider as bonus.
Slight modification. It should be 28R instead.
Investment Portfolios (Reits ETF and S&P500 ETF)

Reits ETF and S&P 500 ETF will be 2 other components to bring me to FIRE (Financial Independence and Retirement Early) at age 50 (45 stretch target).
Reason of selecting ETF instead of focusing on the individual stock selection is to simplify and automate the investment process. Some argued that stock selection/picking may have higher return/dividend, I do agree in terms of return perspective, but I do not agree in terms of other aspects (e.g. I do not have systematic approach of when and how to change/switch the stocks and will incur higher transaction fee due to limited budget set aside annually for this 2 ETF). By investing into these 2 ETF, I do already covered the diversification per se.

Reits ETF that I am investing is Lion Philip S reits, which made up of more than 10 Reits listed in SGX; while S&P 500 ETF made up of the US top 500 highest market capitalization. Purpose of invest in Reits ETF is to get the dividend, which is about 5% annual; while S&P is for growth rate with average 9% growth over last 20 years. However, for the retirement simulation I did, I use 4% dividend rate for Reits ETF and 7% for S&P 500 for conservative calculation.
Important Day

Today marks the one of the important on the journey to success. The stress from the full time job which yet experience after few years, I believe this was due to the different environment in banking compare to non-banking. At the same time, the H4 strategies is experiencing about 9 losses and 2 small win in the past 2 weeks. Some of the losses partly due to the greed of winning and not selecting the ideal setup. Lesson learnt, should always stick to the quality setup.

Recently, the mind also trying to hope to another strategy. Trying to refrain it from doing so, otherwise, will continue back to system hoping stage. I do know this kind of day will coming back in near future, as my win rate is about 32% - 35%. Chances of experiencing large consecutive losses is high. I do hope I could deal better with the same situation.

Time to sleep....
Recently have been busy with the new work. Workloads cum stress are coming on the way, expected the workload and will be more busy ahead.
Nevertheless, I always remind myself on the big picture on how and why I am doing today will contribute to the 15 years after, the life that I wish and the life that I want, I could then have more time to travel with my wife. Few days or few weeks ago, I suddenly have a AHA moment that I thought of what I could do after 50 years, which is the year I wish I could working not just for money, the financial independent, where my passive income or side income could cover my monthly expenses. I would then switch to maybe do the contact job of 1 year, then I plan to take 6 months off and can go travelling on full 6 months with my wife, to the places where we wish and dream to go such as Turkey, Europe, Iceland and many more places and we wish to stay longer there to enjoy the local culture as well as the weather and environment.

Back to my trading status, I still maintain 3 main trading strategies:
1. Daily Strategy of trend following: So far is still hovering around my capital level
2. SP500 etf: I have allocated my available cash into few buckets, going to use dollar average method, will buy in when the price drop every 5% down from the highest point. So far, the price is already down by more than 10%. I already put in my first bucket. And recently, my colleague introduce me to the "Dual Momentum" strategy book, the book is very good, it gives very clear direction and instruction on how to move around SP500 etf, MSCI world etf ex US and Bond etf. The strategy is simple, buy when the stock market is bull compare to 12 months ago (either SP500 (US market) or MSCI world etf ex US (emerging market and other develop market), and hold bond etf when market is dropping. Since the market is in the bear side and I have spare cash, I will use the dollar averaging method and then following the "dual moment" strategy closely after that.
3. H4 trend following strategy: Currently experience very great drawdown, it purely due to my overconfidence and tweak the strategy, and I am not selecting the best setup. Will need to give more thinking and consideration on this strategy. It definitely has an edge and all I have to do is patiently wait the best setup appear. This strategy is one of the hardest and challenging. Often, my mind always ask me to switch to other strategy and tell me that there is better strategy outside. I try to hold that thought and walk away to do something else, I keep remind myself that I couldn't keep switching and this method defintely is working and all I have to do is choose the right setup with patience. And this H4 so far can best fit into my daily schedule, I just to shortlisted the potential pairs every day morning and evening time, which is out of my normal working hour. During working hour, I just need to spare less than 1 minute to scan if the setup is appear. Stick to a strategy and keep practicing it is key to success.

Last but not least, we need to always thanks to god regardless of our religious. It has given us a lot of good things and we need to appreciate it very much.
Looks good to me ht. Interesting journal.

I trade for the satisfaction of seeing the results of my hard work, and I'm also using a 100% systematic approach.So far so good... been doing it since july.

longer term is tough for everyone with this low volatiity.. I expreienced not 5 but 20 consecutive losses, however few winning positions almost recovered the drawdown. Shorter term / lower frequency performed so well, so go for diversification if you can
Hi Happy

Seriously there is only a 5% chance you could manually trade a strategy that provides a income into retirement. However there is a 95% you could create a Retirement income if you trade a portfolio of EA's if you do it CORRECTLY.

You should go back to the idea of sourcing EA's that fit inside a balanced portfolio. But do it right this time by designing one yourself before approaching a EA builder to construct the model for you. I suggesting you start with a spread sheet which is how the pro's do it. Take a idea, plot it on a chart under your strategy idea and transfer that data onto a spread sheet for analysis. It must be robust to be able to be traded on at least 12 charts, hopefully more. Forget about profit factors, just ensure its a small bit profitable and stays under 10% drawn down.
Testing would take three months followed by Beta testing on a small scale on a live chart. All up about 12 months work per EA.

Look out for my thread next year on this topic
Trading thin liquidity at the boundary of the charts
Quoting HeyYou
Looks good to me ht. Interesting journal. I trade for the satisfaction of seeing the results of my hard work, and I'm also using a 100% systematic approach.So far so good... been doing it since july. longer term is tough for everyone with this low volatiity.. I expreienced not 5 but 20 consecutive losses, however few winning positions almost recovered the drawdown. Shorter term / lower frequency performed so well, so go for diversification if you can

100% systematic approach is great. It helps to remove the psychological part of the trading or at least keep it to minimum, which is important. Mind to share or you would start the trading journal to share the 100% systematic approach.
Quoting RickM
Hi Happy Seriously there is only a 5% chance you could manually trade a strategy that provides a income into retirement. However there is a 95% you could create a Retirement income if you trade a portfolio of EA's if you do it CORRECTLY. You should go back to the idea of sourcing EA's that fit inside a balanced portfolio. But do it right this time by designing one yourself before approaching a EA builder to construct the model for you. I suggesting you start with a spread sheet which is how the pro's do it. Take a idea, plot it on a chart under...

Yes, automated EA trading is more hassle free and easier compare to manual trade. Nevertheless, I try make my manual trading as automated and systematic as I can, such as daily trend following is basically following doncian breakout of 200 days with 6 atr SL across markets of fx, bonds, indices, agricultural and metals products. So far, this is can't automated due to the broker that I choose. Daily, I spend about 10 minutes on this piece. Put in another way, it directly enforce me to wake up on time and shape my character and habit bit by bit daily.

Yes, I totally agree with you that building EA portfolios is one of the ways for long term as long as the EA portfolio covers different market conditions such as breakout, pullback, consolidation. You definitely have right mindset which focus on risk of minimize the drawdown instead of return. Indeed, this is very important that the longer you survive in the market or game, the longer you likely to success one day.

Back to the point of manual trade is only 5% chance. I have different view on this. Guess I forgot to mention the expected return from trading from 3 different strategies I lay out. All I need is only 9% return per year, which means I need to have substantial capital to generate the absolute money to fund my monthly expenses during retirement. I do not come from rich family, so I need to force saving large part of my monthly salary to fund the trading capital each year.
  • Post #14
  • Quote
  • Edited 10:15pm Dec 15, 2018 9:42pm | Edited 10:15pm
Quoting happytrade38
{quote} Yes, automated EA trading is more hassle free and easier compare to manual trade. Nevertheless, I try make my manual trading as automated and systematic as I can, such as daily trend following is basically following doncian breakout of 200 days with 6 atr SL across markets of fx, bonds, indices, agricultural and metals products. So far, this is can't automated due to the broker that I choose. Daily, I spend about 10 minutes on this piece. Put in another way, it directly enforce me to wake up on time and shape my character and habit bit by...
I understand your view and we have to trade as per our risk profile. The day chart setups would work because they require little time to operate.
But all strategy's fail for a period so you could't hope to trade only one strategy. You would need one trending, one reversal and one ranging strategy to cover these periods. Trending strategy's are often the hardness to profit from because any pair is only in trend for around 20% of the time, that's a lot of time you can't trade one pair at all. I get my highest profits profit from reversal EA's.
Another example is results from a couple of my trading buddies this month. A normal return for them is between 5 - 8% of total equity per month. This month two of them have only managed to profit around 1.5 -2% trading manually and next week Forex trading dies.
If they needed to win a reasonable amount of money this month, they would be in trouble.

Good luck
Trading thin liquidity at the boundary of the charts
Quoting RickM
{quote} I understand your view and we have to trade as per our risk profile. The day chart setups would work because they require little time to operate. But all strategy's fail for a period so you could't hope to trade only one strategy. You would need one trending, one reversal and one ranging strategy to cover these periods. Trending strategy's are often the hardness to profit from because any pair is only in trend for around 20% of the time, that's a lot of time you can't trade one pair at all. I get my highest profits profit from reversal EA's....

Yes, I agree with you that one cannot trade only 1 pair and 1 market for daily trend following. Based on few backtested by research, the expected return for daily trend following based on doncian breakout is about 14%, I trying to be conservative and further discount it to 9% when I do projection all the way to age 85.

Yes, I want to learn also range and reversal strategies, but I need to first fully confident like second nature to execute the trend following for H4 TF, this one is based on trend following with pull back strategy.

Hopefully you could start the thread soon, so I can learn more from you. Would you open PAMM for the EA that you build? In this case, it would be the win-win situation for bot you as the provider and potential traders who interested in your strategy.
Quoting happytrade38
{quote} 100% systematic approach is great. It helps to remove the psychological part of the trading or at least keep it to minimum, which is important. Mind to share or you would start the trading journal to share the 100% systematic approach.
Thanks for your interest but I gave up with trading journals. nobody is interested in big losing streaks lol, they like straight lines but that would be a gambling journal.

Not much to say... I trade breakouts, only one instrument... the most volatile one. the only hard part is the coding part, but some EAs are easy to code.

As for the psychological part, I believe that if you're not faithful in your system/plan, no EA will save you... sorry about that.
Quoting HeyYou
{quote} Thanks for your interest but I gave up with trading journals. nobody is interested in big losing streaks lol, they like straight lines but that would be a gambling journal. Not much to say... I trade breakouts, only one instrument... the most volatile one. the only hard part is the coding part, but some EAs are easy to code. As for the psychological part, I believe that if you're not faithful in your system/plan, no EA will save you... sorry about that.

Yeah, most people believe and interested only straight line equity and balance which we know it's unsustainable unless someone is genius, which I doubt so. Yes, the most difficult part in trading is the psychologic part.
Quoting happytrade38
{quote} Yeah, most people believe and interested only straight line equity and balance which we know it's unsustainable unless someone is genius, which I doubt so. Yes, the most difficult part in trading is the psychologic part.
I solved by practicing mindfulness while trading live (with small acconts). I should not forget how hard it was.

but it doesn't take long if you do it seriously IMO.
Quoting happytrade38
This journal will record down from current to be the better trader and to where I want to go which is early retirement life. As mentioned in old thread, my original intention is to retire at 50 years old. With recent job changing with additional amount and investment and trading and most importantly I found something simple trading strategy which suit my personality in terms of how I trade, it seems I could stretch my target to retire at age 45. If the market is good enough, I maybe can achieve early than age 45. For the time being, I will stick...
I have retired already lol, because the employment market failed me.
Risk Management is of utmost importance!
Quoting RCtrader
{quote} I have retired already lol, because the employment market failed me.
Well done, you have done 15 years ahead of me.
Can tell me more about your retirement life now?
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