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5% Growth a month?

  • #21
  • Edited 1:50am Mar 6, 2018 1:09am | Edited 1:50am
Quoting jacobrownoly
{quote} Hi Marcmarc, Many thanks for your in-depth reply, I really appreciate it. In regards to R:R I risk 100 pips to make around 60-70pips using price action on the 4hr/day chart when to get out or continue. I like to tried and take small but consistent profits. I have only been doing this for 3 months, logging every trade and each month I have been around the 5-6% growth. I know its still early days thought. I plan to demo trade for 6 months then open up a live one. Out of interest what time frames fo you like to use? I will keep you posted....
Hi Jack,
No worries, writing it all down is good revision for me, anyhow.
All my trading is strictly intraday and using only 5min candle charts. I trade off price action with a clean chart, nothing on it except the candles.
Your approach looks to be on the right track, though your R:R under 1:1 will put pressure on your required success rate. Keep practising, learning and gaining experience until you are really good. Best of luck!
  • #22
  • Mar 6, 2018 10:25pm Mar 6, 2018 10:25pm
Quoting marcmarc
{quote} Hi Jack, I've been daytrading for a few years now and achieve about 5% pcm on long term average but I'm not sure that one statistic has much validity on its own. How I get it is from a consistent small edge on a lot of trades: about 60 trades per month, average 55% success rate, risking 1% of the account per trade with an achieved average reward:risk of about 1:1. I very rarely get a drawdown in double digits. You do it in a somewhat different way, 2% risk and 70% success rate. I imagine you trade a lot less frequently than I do and I've...
With a 55% winrate on a 1:1 risk basis, I'm surprised you make a profit, doesn't the spread eat into your trades?
HMSR
  • #23
  • Mar 6, 2018 11:18pm Mar 6, 2018 11:18pm
I think that goal is achievable. Just work on honing your edge.

It's important that we as trader focus on working within the market to achieve our goals, as opposed to imposing our will on it. Either your trading achieves your equity growth goal or not.
  • #24
  • Edited 4:23am Mar 7, 2018 12:59am | Edited 4:23am
Quoting Hmsr
{quote} With a 55% winrate on a 1:1 risk basis, I'm surprised you make a profit, doesn't the spread eat into your trades?
Hi Hmsr,
Good question, apologies for not being clearer first time: the figures quoted are all net of spread and costs. And the spread on my trading is not that bad, my usual initial profit taking target is c.15-20x the spread.

A 55% win rate is more than enough as long as you get it consistently and don't let losers get away from you, the risk control is very important. Think of it over 100 trades: 55 winners, 45 losers, so 10 net winners. If my average R:R is 1:1 and I risk a flat 1% of the account per trade, then I make 10% return on the account every 100 trades. If I make several hundred trades in a year I can make a decent return on the account quite comfortably. And with so many trades, the law of large numbers gives me a reasonably smooth equity curve.
  • #25
  • Mar 7, 2018 1:43am Mar 7, 2018 1:43am
Quoting jacobrownoly
Hello, I have been trading off and on for a couple of years now (all while making a little profit). Recently I got into trading price action after reading Naked forex (a worth while read). I try and keep it really basic and only trade from daily / weekly S/R along side a couple of candle confirmations (engulfling/kangaroo tails) on a min of 4hr and Daily charts. I use no indicators. So far I have logged the last 3 months in demo and I have manged to grow my account just over 5% a month. I risk no more than 2% of my 5k account (£100) and average...
if youré consistent, even Goldman would hire u brother..
  • #26
  • Mar 7, 2018 4:33am Mar 7, 2018 4:33am
This man talks a lot of sense. Pay attention.

Quoting marcmarc
{quote} Hi Hmsr, Good question, apologies for not being clearer first time: the figures quoted are all net of spread and costs. And the spread on my trading is not that bad, my usual initial profit taking target is c.15-20x the spread. A 55% win rate is more than enough as long as you get it consistently and don't let losers get away from you, the risk control is very important. Think of it over 100 trades: 55 winners, 45 losers, so 10 net winners. If my average R:R is 1:1 and I risk a flat 1% of the account per trade, then I make 10% return on...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #27
  • Mar 7, 2018 4:33am Mar 7, 2018 4:33am
No, they really wouldn’t, seriously, no chance.

Quoting cuchuflito
{quote} if youré consistent, even Goldman would hire u brother..
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #28
  • Mar 8, 2018 1:46am Mar 8, 2018 1:46am
Quoting marcmarc
{quote} Hi Hmsr, Good question, apologies for not being clearer first time: the figures quoted are all net of spread and costs. And the spread on my trading is not that bad, my usual initial profit taking target is c.15-20x the spread. A 55% win rate is more than enough as long as you get it consistently and don't let losers get away from you, the risk control is very important. Think of it over 100 trades: 55 winners, 45 losers, so 10 net winners. If my average R:R is 1:1 and I risk a flat 1% of the account per trade, then I make 10% return on...

Great job on your very mechanical strategy. I in fact am delving into strats like yours, and I have found strategies with winrates above 60% and even 90% in one case with 1:1 RR, depending on the time period tested. Go far back enough, and things start to get bad, I assume the same applies going forward. So I ask you, how are you sure that you're 55% winrate will hold. Do you not fear that your strategies abilities will dissipate back down to 50%?
HMSR
  • #29
  • Last Post: Edited 3:10am Mar 8, 2018 2:53am | Edited 3:10am
Quoting Hmsr
{quote} Great job on your very mechanical strategy. I in fact am delving into strats like yours, and I have found strategies with winrates above 60% and even 90% in one case with 1:1 RR, depending on the time period tested. Go far back enough, and things start to get bad, I assume the same applies going forward. So I ask you, how are you sure that you're 55% winrate will hold. Do you not fear that your strategies abilities will dissipate back down to 50%?
Hi Hmsr,
Now you are asking some very penetrating questions! But they are fair so I’ll do my best to answer.

First, it is not a mechanical strategy, I am a purely discretionary trader. I just don’t have it in me, in terms of personal pscyhe, to mechanically follow a system. But don’t take that as a general negative on mechanical systems, it’s just me.

In terms of strategies holding up over the long haul, you are right, most don’t. In my early days I dreamed up and tested a large number of strategies and, sadly but predictably, none of them lasted a thorough test over many time periods and multiple markets. I can’t tell you how many times I thought I had found the holy grail only for the subsequent testing evidence to dash my hopes! This reality is what led me to accept a method that had a much more modest and marginal edge and instead work hard through experience and practice to make that edge consistent and durable.

Now, at long last, to answer your central question: I do not fear it will slip because I have been doing it for a long time now - several years, every day, thousands of trades - and I manage to consistently hold my trade success rate in the 55-60% range without compromising on either R:R or risk control. I also see that I am getting slowly better with time, my trading is smoother, more natural and less stressful than it was in the past.

Of course, I cannot guarantee it will last forever but should it happen the decline in results will give me warning enough to stop and think anew. I don’t actually worry about this too much because I took a great deal of trouble to choose a method that I believe is based on the fundamental nature of markets, the essence of how prices move. Unless markets stop being markets I believe my method is durable across all liquid, freely traded, active markets. Too many methods I have seen and researched have only been good in certain market conditions, not universally applicable. I agree once more with your statement on this and I resolved to pick something that could be used at all times in all conditions because I need consistent returns to earn a living at this.

One last point to make: I really don’t think the precise method is all that important, it just has to be not obviously flawed. I am continually surprised about how many I see on FF that are just dismal, guaranteed to fail eventually. Assuming you have something sensible, the edge comes from you, not the method. The harsh truth is that pretty much all methods are very marginal, you have to take something and squeeze a consistent edge out of it by hard work and accumulated practice. You make the difference, not the method, I am pretty convinced of that now.

Anyhow, hope that helps, good luck!
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