2 or -500, can we 'cheat' the market? | Forex Factory

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2 or -500, can we 'cheat' the market?

  • #1
  • First Post: Aug 29, 2018 9:26am Aug 29, 2018 9:26am
I have wondered for some time if it would be possible to trade around 10 times a day to get 2 pips, wih a SL of 500 - Account blow out.

haters will hate for the thread, but its a test, I DO NOT recommend trading this way nor do I trade this way - the theory is, how hard can it be to make 2 pips before you lose 500? if you think of it in reverse, it is simply having a 2 pip SL and 500 TP and getting it right.

I will try it with 2 accounts, both at £25 each, one with a 250p SL and one with a 500p SL. I will manually close the trades at 7pm UK time and start trading around 1pm UK time.

all criticism welcomed, I don't give a sh** - as previously mentioned, I do not trade this way and I do not promote trading this way.
  • #2
  • Aug 29, 2018 9:37am Aug 29, 2018 9:37am
Quoting Don96
I have wondered for some time if it would be possible to trade around 10 times a day to get 2 pips, wih a SL of 500 - Account blow out. haters will hate for the thread, but its a test, I DO NOT recommend trading this way nor do I trade this way - the theory is, how hard can it be to make 2 pips before you lose 500? if you think of it in reverse, it is simply having a 2 pip SL and 500 TP and getting it right. I will try it with 2 accounts, both at £25 each, one with a 250p SL and one with a 500p SL. I will manually close the trades at 7pm UK time...
statistically speaking, you need to win 250 trades a row to cover for one loss. so, yes you could win a lot of trades as you are closer to the 2 pips than the 500 pips. but one loss will wipe out 250 winnings.
  • #3
  • Aug 29, 2018 9:39am Aug 29, 2018 9:39am
Quoting michaelisaac
{quote} statistically speaking, you need to win 250 trades a row to cover for one loss. so, yes you could win a lot of trades as you are closer to the 2 pips than the 500 pips. but one loss will wipe out 250 winnings.
1 months worth...

that would also meant that it would need to move 250 pips against me in a couple of hours, I take it by closing out at 7pm will cut the losses.
  • #4
  • Aug 29, 2018 10:12am Aug 29, 2018 10:12am
I will try to post all a deal map at the end of the day...
  • #5
  • Aug 29, 2018 10:40am Aug 29, 2018 10:40am
Quoting Don96
I have wondered for some time if it would be possible to trade around 10 times a day to get 2 pips, wih a SL of 500 - Account blow out. haters will hate for the thread, but its a test, I DO NOT recommend trading this way nor do I trade this way - the theory is, how hard can it be to make 2 pips before you lose 500? if you think of it in reverse, it is simply having a 2 pip SL and 500 TP and getting it right. I will try it with 2 accounts, both at £25 each, one with a 250p SL and one with a 500p SL. I will manually close the trades at 7pm UK time...
"close trades at at 7pm UK time"

so tecnically this is not a 500pip sl strategy..you have a time limit
  • #6
  • Aug 29, 2018 12:23pm Aug 29, 2018 12:23pm
Quoting hilmy83
{quote} "close trades at at 7pm UK time" so tecnically this is not a 500pip sl strategy..you have a time limit
Yes, in theory the accounts should never get 500 pips down.
  • #7
  • Aug 30, 2018 2:25am Aug 30, 2018 2:25am
Dono about theory but out of interest set up a $100 demo with 30 leverage and trade explorer. Web trader only as at work so no AI to do the TP so might not always be exactly 2 pips.
Today and Friday for this demo, cant split my attention all over
  • #8
  • Edited 3:54am Aug 30, 2018 2:52am | Edited 3:54am
A lot of people think that Risk and Reward are the only metrics in successful trading. They forget the most important one: Probability.

Statistically the probability of your target getting hit before your stop is 250:1. If you took this trade over and over again over time you'd technically break even. You'd "Probabily" win 250 times for every loser, but then your loser would wipe out your winnings. This is the same for a random 1:1 trade, a random 1:2 or a random 1:10 risk reward. (spread and commission tips the scale against you).

Probability can be increased by going "with trend" - e.g. Stop order above a good signal bar & above the moving average. Or a market order when the market is moving fast. I do this all the time, sometimes repeatedly to grab a few pips/points.

Probability can be further increased, if you scale in when the trade goes against you. Add on more lower, and then get out at the average price of the original trade and the scale in trade; avoiding a loss on both)

Scalpers (including myself - when the market conditions merit it) do these things all the time, and it can be very successful.

2 pips risking 500 is pretty extreme though. I'd usually go for 4 and risk 10. But when you stack probability in your favour the math works.
  • #9
  • Aug 30, 2018 3:45am Aug 30, 2018 3:45am
I can't post deql map for a few days as I am in Croatia, I started both accounts with £50 rather than £25, one is currently at £57 and one at £54, I got a slight runner on one of the trades taking a fee more than 2 pips.

I could do with a spreadsheet really
  • #10
  • Aug 30, 2018 3:50am Aug 30, 2018 3:50am
I think it would need position size per pip which should be balance /500 and balance /250 for each account.

17 * the £/pip should give the daily profit, add this to the previous day and it should give a rough projection of how the accounts could increawe in size - all seems very easy really.... if it really gets going then I'll start to withdraw each week and reduce the risk
  • #11
  • Edited 5:49am Aug 30, 2018 4:23am | Edited 5:49am
10 in a row without much draw down until the news almost wiped me out the the UK Money Supply--- should actually be a micro account and no news trading
  • #12
  • Aug 30, 2018 10:48am Aug 30, 2018 10:48am
Quoting Kissa
10 in a row without much draw down until the news almost wiped me out the the UK Money Supply--- should actually be a micro account and no news trading
What happened? You met daily target in 10 trades and yhen continued with another 10, your just waiting for market to go against you if you don't have a daily limit

Quoting Don96
{quote} What happened? You met daily target in 10 trades and yhen continued with another 10, your just waiting for market to go against you if you don't have a daily limit
I finished the day on 58 and 55
  • #13
  • Aug 30, 2018 11:00am Aug 30, 2018 11:00am
Quoting Don96
{quote} What happened? You met daily target in 10 trades and yhen continued with another 10, your just waiting for market to go against you if you don't have a daily limit
I finished the day on 58 and 55

+ cut your losses now, you are 1 day down and on a demo account, you need to have that discipline to cut the trades at whatever the cost otherwise you will be forever leaving them until eventually your at 0
  • #14
  • Aug 30, 2018 11:01am Aug 30, 2018 11:01am
This is a fun idea, but why bother doing a deal map, just manually backtest a few weeks and see what happens. You will be done in a few hours rather than sitting through a month of this.

Anyway, 500 pips is not just a catastrophic loss, its an "end of days" loss. Imagine all the days and weeks you will be sitting on your hands waiting for that stoploss to hit. How would you ever recover 2 pips at a time from a 500 pip loss, its an untenable situation.

Make an anti direction rule and keep your stop at 12 pips, with anti direction of 5 you now have 17 pips...you're gonna collect tons of 2 pip profits every day.
  • #15
  • Aug 30, 2018 11:35am Aug 30, 2018 11:35am
Quoting Don96
{quote} What happened? You met daily target in 10 trades and yhen continued with another 10, your just waiting for market to go against you if you don't have a daily limit {quote} I finished the day on 58 and 55
That part of the "rule" I forgot about.
Actually just managed to lock myself in between a long and a short. Kind of a dead mans hedge as the difference between the trades is 70 pips

I was thinking (dangerous)
Apart from needing to be a better trader than me for entry's, well not being tired and limiting to 10 trades a day might help a bit.

If one was to automate this, easy enough
a, if in loss say 30 pips it might help to change the strategy to allowing a recovery trade with a take profit larger than the 2 pips say a trailing stop by %.
b, or a partial close at 2 pips and letting the rest run with a variable % trail (was it Ben Bickmans % trail ea.)
  • #16
  • Aug 30, 2018 12:42pm Aug 30, 2018 12:42pm
Quoting richyRich27
This is a fun idea, but why bother doing a deal map, just manually backtest a few weeks and see what happens. You will be done in a few hours rather than sitting through a month of this. Anyway, 500 pips is not just a catastrophic loss, its an "end of days" loss. Imagine all the days and weeks you will be sitting on your hands waiting for that stoploss to hit. How would you ever recover 2 pips at a time from a 500 pip loss, its an untenable situation. Make an anti direction rule and keep your stop at 12 pips, with anti direction of 5 you now have...
The point is you close at 7pm UK time, I trade the majors, when have you ever seen any of them move 500 pips in a day... if I'm 300 down then ill have to cut and fave the loss, it won't be the end of the world
  • #17
  • Aug 31, 2018 9:59am Aug 31, 2018 9:59am
Cant believe the account is still alive, no planing, basically random trades and 100 pip draw downs etc.

But i did open another demo and fired up a old AI, tightened from 2 pips to 1 pip as follows.
At 10 points aka one pip lock in 5 points and trail that at 50% for one minute at 2 minutes if trade still going real it in to 25% and at 3 minutes, if still in trade, let the trail settle to 100 points. only one in 25 of the trades get that far but the tighter start is a clear bonus,
No SL set until in profit, pretty much lets you fire long or short or both at the same time as i did for testing.
Difference in profit factor is big and draw downs a lot smaller, of course there is the odd runaway in the wrong direction but the 1 pip seems to limit them to about half of the amount I got wih 2 pips TP alone.
But this is on a demo with good spreads, no idea how it will work on live next Monday.
  • #18
  • Aug 31, 2018 10:36am Aug 31, 2018 10:36am
Quoting Don96
{quote} The point is you close at 7pm UK time, I trade the majors, when have you ever seen any of them move 500 pips in a day... if I'm 300 down then ill have to cut and fave the loss, it won't be the end of the world
taht makes no sense to manage risk at that amount.

point of this strateg i think is to not take a loss at all. 1-2 pips profit every day or every setup. don't even let time limit get into this. just execute.

1 loss and you're done. what's the point of recovering 300 pip loss with 1-2 pips.
  • #19
  • Edited 12:16pm Aug 31, 2018 12:03pm | Edited 12:16pm
Quoting hilmy83
{quote} taht makes no sense to manage risk at that amount. point of this strateg i think is to not take a loss at all. 1-2 pips profit every day or every setup. don't even let time limit get into this. just execute. 1 loss and you're done. what's the point of recovering 300 pip loss with 1-2 pips.
What are the chances of a 300 pip move on eu In 1 day?

The point of closing the position out at 7pm the 1) limits the loss 2) means you can trade the following day, if you leave the position on you can't take trades the following day as you are adding to your risk

Does that make sense ?

Anyway, I'll see how it goes, it's farfetched and fantasy but at the same time it doesn't seem too hard. If I get to a position of consistently doing 100 a day then I can withdraw it. It could help either discipline and management.

It also helps with entries, it's easy to fire away on this thinking you are guaranteed profit, if you think about your entries to gain 2 pips in time it gives more discipline, if you think about it for 2 pip profit then you will think about it when you target larger profit on a normal account.
  • #20
  • Aug 31, 2018 12:06pm Aug 31, 2018 12:06pm
#Day 3 -

Lot size now at £0.13 and £0.26 respectively.

Accounts are both at £60.78 and £61.18.
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