Diary of a Trader - "18 years and counting"

LOL, well refer to the posting of the 3 traders earlier and that was 12 years ago with that purpose, it has grown by a little bit since and help support a few organizations these days .

Thanks for the compliment, however I do not view myself as a great trader just someone that is persistence, accepted my weakness and developed processes to overcome them. I do not use EA's. I look at momo, patterns, fibs, laws of nature, etc.

This works best (on the majors) when news, sentiment and TA are all in sync such as rate days. Have found looking at the hrly charts helps to filter out enough noise (nothing is perfect). If the body of the candles following the news break has a similar structure helps adds to the confirmation Reviewing the index charts and also have as many similar based currency charts to view and see if all of them are moving the same direction also helps. Is there any other news that could get in the way?
This technique can also work on a very little news worthy days that major event takes place and catches the market off guard.

If I am swing trading on the daily charts I am looking for a similar dynamic with the hourly charts first and may add to the position, (if news, sentiment and TA are in sync).

This is not an exact science as no 2 setups are ever the same. However once you understand the concept and can tap into the power of this its like a licence to print money some days. The key is having that pulse on the market and takes a lot of practice, screen time and if you are not careful this can bite pretty hard if your not careful.

Great insight

Over the years of visiting FF the following members are ones I have found most helpful in their tools they have provided to traders:

Hanover
Poruchik
FerruFx

Let me try to answer your questions:

1. how do you measure MaxDD? Since my clients look at the bottom at first, I go by their view, anything above 10% they start to ask questions. The float is the other portion they are concerned with. I take steps to avoid MaxDD because I have been there (why I always start with a small positions in case I am wrong). I have a number of trading models I utilize much like a coach uses in his team. He knows all of their strengths and weaknesses, when it is time to bench them or even make that call to retire them. Trading models are much the same way. Once you get up a handful of successful models and develop processes that stress test them constantly, you avoid MaxDD and even adjust as needed to keep your EGO in check.

2. what steps you take to prevent MaxDD? I have a number of trading models that I utilize with each one being monitored daily, weekly and monthly. I have some systems that go back into a "Cooling Off" phase if it is not consistent or market dynamics have changed. (case in point with Trump taking office, the first quarter of 2017, the USD saw a lot of chop based on his tweets he was sending out during the London session) had one system that had to be shelved for 4 months. With that system saw a 6% DD. It was during this time during the DD took less risk based on the statistical analysis it producing, it also allows one to think more objectively based on less money being put on the line and emotions are further reduced.

3. and what actions you take when Max DD is reached? With regards to a an individual system it is reviewed tested in Demo than put into a small account with $1000. If this system cannot make a $1.00 it cannot make $1000, based on there is no room for error when trying to make a buck. I have really worked on this facet of money management based on the series of process developed to avoid MaxDD, by utlizing several different models.

4. and only if you want to share, what's your Annual %Profit / %MaxDD Ratio ? Based on clients confidentiality of specific details can say in gerenal to double accounts each year for the past 3 years with a MaxDD of 9%.

Hope that helps.

To address your questions:

1. You trade multiple pairs? Yes, depends on the trading model, if it is a rate decision I may open several similar based currency pairs and those that show promise of better follow through will add to those positions vs. ones that price is stalling will cut bait on those. (referencing the index charts is helpful).
2. How many average open positions do you have at any given time? Open average positions will vary, however try to keep it below 3. however on a rate decision day that can go up (But many things have to be in sync. Keep in mind I do not using leverage. In my early days would loose sleep and those traders that do use leverage many times will blow up their accounts based on being reckless.
3. Do you carry positions over the weekend? Very rarely, all it takes it one event to change sentiment.
4. Average Pips in profit? Depends on the trading model. Usually at least 1R but sometimes the markets says otherwise.
5. Average pips in loss? Try to keep it at under .5R. The key is starting small so if things go against you, just exit and wait for the next bus.

All these areas you are addressing are ones that I have created processes based on these were areas of weakness for me. "Hope" will kill a trader and DD is something all traders must deal with. I know when I first started I had DD of over 50% (Ouch, talk about lose of sleep, view on life, relationship with wife, family, etc.). DD has many elements to it. I noticed when I started taking smaller positions in the beginning the DD became less of a factor and the confidence of entering trades increased.

There are many elements that go into MaxDD, it is picking apart those areas that are causing it. I know it is easier said than done. One suggestion is to open a Myfxbook account as this will help from a statistical analysis point of view on your behavior on how you trade.

Do you think stacking of trades give you an edge and can a trader's have an edge only with money Management?


Thanks

Yes and Yes. The key to stacking trades as I have said this several times throughout this thread is starting small. I know from my own statistical analysis (Myfxbook and spreadsheets that I have created) shows I run between 50 - 60% a W/L ratio and has been like this for years. I like most traders starting out deal with the size of the loses were larger than of the winners pip wise. There is also dealing the string of losses in a row that can affect a traders psyche. We all have had bad days, no matter what we do the market seems to do the exact opposite as soon as we enter a trade on every trade it seems. In many schools of thoughts risking 1-2% on each trade, however what do you do if you have 6 losses in a row? That can turn into quite a drawdown. Everyone experiences this MUST learn how to deal with. Knowing these dynamics, I needed to create processes to address all these issues and more. Overall it does give me an edge knowing my limitations and keeping things in check, however these processes also allows once a trend unfolds, take those 6 losses in a row and turn them into a very distant memory. It also gives me an edge over most other traders mental wise knowing everyone looses that most traders are not good at loosing. It's how well you become good at losing is key.

18 years and still involved with forex? Why?

Not more than futures market with real pricing and real brokers. I figured it out after 11 years

Here is an example of Index of the GBP and the how institutions have been driving up prices since 2 days ago.



Not much of a pullback as they have been, adding and adding and adding, which is fine, I just want to ride with the whales

Here is an example of GBP/AUD along side of the index chart posted above.

Chart showing ok here's my 30 minutes of trading the emini nasdaq

showing charts are fine not showing daily p and L does not actually show you were in those trades though you don't have to it's not required

It's an illusion there's no exchange and your at the mercy of fx brokers with made up pricing but it's your money carry on

Ok i get it recruiting people for paid service good luck. You know your past posts show you as a hopper from method to method i will now leave this conversation

xx, here is my question.
Do you have a trading plan that you follow religiously?
does your trading plan have everything from mechanical entry points to risk management?
honestly the only trader i have ever found on forexfactory to know what they're talking about is CrucialPoint

if you trade without a trading plan that can be followed religiously with a blindfold, then your not really a professional. you just have something. real professionals can multiply their account much more than once a year. what I also find very odd is you don't support starting with a small account of 1,000 and result that account into over 100,000 , 1,000,000 etc.
these are the signs i look for to see who actually knows what they're doing and who is still floating around. 60% win rate is very true but it seems like your still confined in other ways.

i'm gonna post in this thread some highlights from cruicialpoint
18 years and your only floating and not swimming.

""95% of the time price will close above or below the open." Amateurs will never see the edge in this quote, unless a professional point it out where the edge lies within this quote. "

"Let me ask you for a moment, which one is the most important in trading?

 

1. Entry
2. Exit
3. Money management
4. Psychology (discipline)
5. Proven System

(answer this to yourself before you continue reading)

Okay, I want you to imagine these:

 

1. Brain - (Psychology)
2. Heart - (Proven System)
3. Lungs - (Money Management)
4. Liver - (Entry)
5. Blood - (Exit)

Let me ask you again, which one is the most important?
(answer this before you continue reading)

If your answer is the brain, or the heart, or the lungs, or the liver, or the blood... then you're wrong!

Each are vital for survival. And each are equally as important as the other. Each are working as a whole and not as independent. They are all interdependent of one another. If one fails... Everything fails as a whole.

My trading philosophy puts emphasis equally to every aspect because I know if one is weak, it will affect the whole. If one fails... Everything will fail.

Amateurs are too busy debating, arguing and emphasizing on the one. Professionals are far away on a different plateau with their thinking and philosophy. "


"What if today was the first day of trading and trading never existed before today? What would your signals rely upon? Hypothetically speaking, what if the president banned all price history and is deleted in an instant? Does that mean you will never have the opportunity to trade because you can't figure out a signal to buy or sell?... because your signal/system to enter the market is reliant on historical data. - CrucialPoint"

"
Explanation: :nerd:
I've tested so many trading system that I can spot a failed trading system a mile away! It takes me 1-minute to figure out whether a system is successful or not. I don't even have to back-test it. And with a 98% accuracy that I am right with my assessment.

Every failed trading system has a pattern and if you have that within your system, it will fail. You don't need to waste your time to back-test a failed system.

Here are the pattern and signs of a failed trading system (excluding money management and trading discipline):

 

1. A system that doesn't clearly define the market condition
2. A system that takes every signal of buy and sell
3. A system that has more than 3 indicators

A system that doesn't clearly define the market condition is a failed system. Is it in an uptrend or a downtrend? Is it ranging or trending? If a system fails to address this issue it is a failed system in the long run. At best, it will be a break even outcome.

The best example of this are breakout systems; place orders at high/low here and here, set and forget, place stop or trail it.... Hold your horsie for a minute! Is the breakout with or against the trend? Is the anticipated breakout within a ranging market or not? Can you see the difference by simply finding out the market condition before entering can affect the outcome?

A system that takes every signal of buy and sell is a failed system. Whether you are using indicators or pure price action with naked charts, a buy within a downtrend market will quickly reverse. And a sell within an uptrend market will quickly reverse at a blink of an eye. Even trading within a trend, a false signal will occur during the exhaustion phase.

A system that has more than 3 indicators is a failed system. It is like having a motorbike that has air-conditioning . Traders who love stacking indicators don't know how indicators work. Indicators don't work that way.

Any system that possess any of these 3 points is a failed system. When you understand that there are different market conditions, you will understand why these 3 points will create or break a trading system (excluding money management and discipline). Vice versa, a profitable trading system possess the opposite of these 3 points."

Yes, I create a gameplan at the start of the day all traders need one based on you are going up against the very best in the world, let not make it any more easier that it has to be for them.

Never said I did not support a small account, what I said it is meant to develop processes, please review my postings.

This is a great thread. I trade sentiment- trading into events- I like the way you wait for an engulfing candlestick-safe way of trading.