10 pips a trade to success!

Quoting philmcgrew

Disliked

This train wreck is about to leave the station. Here are a few things I see that will get you in trouble:

1. Risking a lot to make a little. 5:1 in your example.
2. Trading someone else's system that you haven't tested.
3. Trading a moving average crossover system in a non-trending market.
4. Treating money, no matter how small, as if it doesn't matter.
5. Believing that you can't go broke by taking a profit.
6. Falling for the idea that you can consistently make 10 pips a day
7. Setting a wide stop so that it doesn't get hit.

All Aboard!

Ignored

Quoting g-dogg

Disliked

so After using up my beginners luck and being able to surpass my goal of 100% per month, came the bad times where now im at half what i started with. so definatley learned alot in those first 2 months of live trading. So now im starting fresh with my $54 and I have a plan this time, my plan is to be able to take consistant small profits like many say "no one ever gone broke taking a profit.". Im gonna use a K.I.S.S method where im only using the "mud buddah ema cross" basically when ema 5 crosses the 25 and 50. and i will try to only risk 10-15% of my account on one trade (i know alot but i only have $54). my tp will be 10 pips away from my price and my sl will be 50 pips, not such a good r:r but will keep me from getting stopped out frequently and like some say "the 1000 mile walk starts with a step". I welcome all feedback as long as it is constructive. Oh btw i will try to post all my trades as often as i can and will try to keep you guys updated on my account.

TIA
G-dogg

Ignored

Quoting g-dogg

Disliked

7-...because i see that most of the trades i take take a nice dive of 10-30 pips then come back up and hit my tp, thats all i had in mind.

i gtg to work i will post later

Ignored

Quoting g-dogg

Disliked

hi, first off thanks for your input,
1-well what kind of stop do i put, if i do a tight stop i can guarntee it will get hit with in seconds.
2-Actually i have been testing the system for quite a while on and off and it seems to work well
3-who said i would trade in a non treding market?, i look at all the time frames available and see where the overall trend is going then trade with that(ex, 4hr says go long, yet cross over says short on 15m, then i skip that trade).
4- money does matter, its a risk im willing to take 10% i believe is not too outlandish.
5- i have no clue what you mean please elaborate
6- no im not falling for the idea of 10 pips a day, its an idea of that the market has more of a probablity of making a 10 pip move on a trade with a trend, yes there will be losses.
7-its not that it wouldnt get hit, it probably would, but the probabilty would be less because i see that most of the trades i take take a nice dive of 10-30 pips then come back up and hit my tp, thats all i had in mind.

i gtg to work i will post later

Ignored

Quoting Nick_likes_pips

Disliked

Well..taking a small amount of pips consistently does sound good..on paper i suppose. however, if you look at the numbers, 10 pips tp and 50/sl. basically, for every 1 bad trade(50pips), you need 5 successful trades(5x10pip) JUST to break even! If my math is correct, thats basically saying that IF assuming your trading system is about 83% effective then you'll just break even. those aren't good odds!...

Ignored

Quoting mrmikal

Disliked

G-dogg,

Phil may be a bit on the blunt side, but knowing him like I do, it's best that you really try and understand what he's saying because it's the truth.

1) You are focusing on the wrong part of the statement - you immediately asked him about proper stop placement when the crux of his point was to say that your RR is screwed up. Depending on the size of your position, $54 should be able to handle a nice size swing IF you are trading micro-mini lots or less. In which case, you can actually afford to be more generous with both your TP and SL. You may get lucky and catch a string of winners using your method with a higher RR, but in the end, your luck could be wiped out. To put it mildly, you need to win 5 out of 6 times just to break even. That's more than 80% win ratio. Think about this really hard now, if it were this simple, don't you think someone would have done it already? 10 pips a day IS a goal, but it's one that could easily lead you to ruin no matter how simple you think it is...the execution and mechanics are simple, sure...but the probability over the long run just isn't realistic, especially once you factor the spread in there.

2) If you have tested out this system according to your parameters using historical data, and then forward tested this for a few weeks to ensure a similar product, then you have done your due diligence. The question is...are you more than 5 out of 6 times accurate? We're not talking consecutive winners...we're talking how many wins and losses does the system make over 100 trades, over 200 trades, over 500 trades...do you have those stats? If you don't...we suggest you do. If you don't want to, then you're really gambling your money way.

3) You mentioned not trading the system in a ranging market...how do you identify that BEFORE your system gives you a signal? Honestly, I could win 100% of the time if I could give you this answer...when is a market ranging, when is a market trending? It's easy to "see" on a chart, but how often are you going to pick near the top or bottom of a trend only to see the market go into a range the next day or week. Your time frame will have a lot to do with this, and based on your trade size, you can't be looking at anything more than let's say the 15 minute charts, probably the 5 minute charts...this only gives you more opportunity to get stuck into a range that will take your stop out.

4) This was Phil's more blunt points. If you're risking 10% meaning you'd take a 10% capital loss on a trade, which it would seem as though you'd have to with a 50 pip stop, that's fine...but the combination of your tight TP and wide SL gives off the impression that your focusing more on the fact that you have $50 rather than improving your ability to spot trades that will run for dozens if not hundreds of pips at a time.

5) I've suggested this a dozen times, but no one has taken me up on this...why 10 pips? why not just 1 pip? How difficult do you think it would be for you to make 1 pip a trade? at that rate you could probably turn $50 into $50,000 in about 4000 trades...but why is 1 pip so undoable as opposed to 10 pips? After all, you would only have to achieve about a 15% higher win ratio...and besides, it has to hit 1 pip before it hits 10 pips. If you can't get excited about that idea, but can get all excited about making 10 pips, I don't see how you're going to survive on your plan.

6) I think this point is closely tied to 5...if you can't get excited about making 1 pip a trade, then I don't see how you'll be any more successful at trying to make 10 pips.

7) Setting a wide stop isn't the problem, it's setting a tight TP because you don't believe your method can net you the RR necessary to be profitable. Here's the thing, isn't it...if your so confident that your trade will net you 10 pips 5 times out of 6, then why isn't your stop loss 10 pips? it's because you're not confident that the trade can work out with the same velocity on one side than it can on the other...which leads us to believe that your system won't survive the RR. Here's another take on it...if you're sure that your system will make 10 pips before losing 10 pips 1 out of 2 times, then why not place a tighter stop and even out the RR? Well, if you DON'T think it can gain 10 pips before it loses 10 pips half the time, then why not do the opposite of your system because the contrarian strategy would then have a 1:1 ratio with a better than 50% chance of occurring right??? That would be a profitable system. So, it would seem that your logic to follow the system without thinking through your RR makes almost no sense because it's the same as saying that you'd believe that more than half the time your system will be wrong for the SAME risk as doing the opposite of your system...you'd be throwing away money. We just came to the conclusion that you haven't really invested the thought OR you don't have faith in your trades...both are recipies for disaster.

I certainly hope this has helped you.

Ignored

Quoting g-dogg

Disliked

so After using up my beginners luck and being able to surpass my goal of 100% per month, came the bad times where now im at half what i started with. so definatley learned alot in those first 2 months of live trading. So now im starting fresh with my $54 and I have a plan this time, my plan is to be able to take consistant small profits like many say "no one ever gone broke taking a profit.". Im gonna use a K.I.S.S method where im only using the "mud buddah ema cross" basically when ema 5 crosses the 25 and 50. and i will try to only risk 10-15% of my account on one trade (i know alot but i only have $54). my tp will be 10 pips away from my price and my sl will be 50 pips, not such a good r:r but will keep me from getting stopped out frequently and like some say "the 1000 mile walk starts with a step". I welcome all feedback as long as it is constructive. Oh btw i will try to post all my trades as often as i can and will try to keep you guys updated on my account.

TIA
G-dogg

Ignored

Quoting rav700

Disliked

I have my second order in which is
Long @ 1.9072
Stop @ 1.9052
Limit order @ 1.9082

At this point if anyone has trade my advice you can move your stop to b\e
Our target should be met in 15 mins max
My Personal Advice is when you move your stop to b\e go to sleep and wake up to your profit.....
Best of Luck
Happy Trading
Rav


TIA
G-dogg

Ignored

Quoting mrmikal

Disliked

G-dogg,

Phil may be a bit on the blunt side, but knowing him like I do, it's best that you really try and understand what he's saying because it's the truth.

1) You are focusing on the wrong part of the statement - you immediately asked him about proper stop placement when the crux of his point was to say that your RR is screwed up. Depending on the size of your position, $54 should be able to handle a nice size swing IF you are trading micro-mini lots or less. In which case, you can actually afford to be more generous with both your TP and SL. You may get lucky and catch a string of winners using your method with a higher RR, but in the end, your luck could be wiped out. To put it mildly, you need to win 5 out of 6 times just to break even. That's more than 80% win ratio. Think about this really hard now, if it were this simple, don't you think someone would have done it already? 10 pips a day IS a goal, but it's one that could easily lead you to ruin no matter how simple you think it is...the execution and mechanics are simple, sure...but the probability over the long run just isn't realistic, especially once you factor the spread in there.

2) If you have tested out this system according to your parameters using historical data, and then forward tested this for a few weeks to ensure a similar product, then you have done your due diligence. The question is...are you more than 5 out of 6 times accurate? We're not talking consecutive winners...we're talking how many wins and losses does the system make over 100 trades, over 200 trades, over 500 trades...do you have those stats? If you don't...we suggest you do. If you don't want to, then you're really gambling your money way.

3) You mentioned not trading the system in a ranging market...how do you identify that BEFORE your system gives you a signal? Honestly, I could win 100% of the time if I could give you this answer...when is a market ranging, when is a market trending? It's easy to "see" on a chart, but how often are you going to pick near the top or bottom of a trend only to see the market go into a range the next day or week. Your time frame will have a lot to do with this, and based on your trade size, you can't be looking at anything more than let's say the 15 minute charts, probably the 5 minute charts...this only gives you more opportunity to get stuck into a range that will take your stop out.

4) This was Phil's more blunt points. If you're risking 10% meaning you'd take a 10% capital loss on a trade, which it would seem as though you'd have to with a 50 pip stop, that's fine...but the combination of your tight TP and wide SL gives off the impression that your focusing more on the fact that you have $50 rather than improving your ability to spot trades that will run for dozens if not hundreds of pips at a time.

5) I've suggested this a dozen times, but no one has taken me up on this...why 10 pips? why not just 1 pip? How difficult do you think it would be for you to make 1 pip a trade? at that rate you could probably turn $50 into $50,000 in about 4000 trades...but why is 1 pip so undoable as opposed to 10 pips? After all, you would only have to achieve about a 15% higher win ratio...and besides, it has to hit 1 pip before it hits 10 pips. If you can't get excited about that idea, but can get all excited about making 10 pips, I don't see how you're going to survive on your plan.

6) I think this point is closely tied to 5...if you can't get excited about making 1 pip a trade, then I don't see how you'll be any more successful at trying to make 10 pips.

7) Setting a wide stop isn't the problem, it's setting a tight TP because you don't believe your method can net you the RR necessary to be profitable. Here's the thing, isn't it...if your so confident that your trade will net you 10 pips 5 times out of 6, then why isn't your stop loss 10 pips? it's because you're not confident that the trade can work out with the same velocity on one side than it can on the other...which leads us to believe that your system won't survive the RR. Here's another take on it...if you're sure that your system will make 10 pips before losing 10 pips 1 out of 2 times, then why not place a tighter stop and even out the RR? Well, if you DON'T think it can gain 10 pips before it loses 10 pips half the time, then why not do the opposite of your system because the contrarian strategy would then have a 1:1 ratio with a better than 50% chance of occurring right??? That would be a profitable system. So, it would seem that your logic to follow the system without thinking through your RR makes almost no sense because it's the same as saying that you'd believe that more than half the time your system will be wrong for the SAME risk as doing the opposite of your system...you'd be throwing away money. We just came to the conclusion that you haven't really invested the thought OR you don't have faith in your trades...both are recipies for disaster.

I certainly hope this has helped you.

Ignored