The brutal truth of day trading | Page 67 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

The truth about trading 164 replies

Truth about trading 9 replies

Truth about online trading...Is this us also? 5 replies

Pulos Bill - The Truth About Fibonacci Trading (Attached) 4 replies

The Bonehead Trader..please be brutal!! 47 replies

Attachments: The brutal truth of day trading
Exit Attachments

The brutal truth of day trading

  • #1,321
  • Edited 11:36pm Jun 16, 2021 11:10pm | Edited 11:36pm
Quoting TraderTim125
{quote} Hi kk100, Yes, Interesting idea. I have just run a few additional tests mostly on EURUSD & GBPUSD and mostly for the times 10:00 to 17:00 New York Close chart time (UTC +3). It didn't seem to make a whole lot of difference. There was a difference of a few percentage points here and there but nothing that I would regard as significant. I am currently carrying out these tests for a 5 day period and there is more day to day variation than what is being observed by measuring just the "busy" periods of the trading day. Regards Tim
Thank you for checking that.

by the way all these time zones difficulties, Do you mean New York close 17.00 ~ when bell rings Nyse.
or server times (ICMarkets.)

Was your test from NY open - Close. (IC-Markets server) 15.00 - 00.00, which is actually east european standard time, or same as UTC+3

Some call new york fix 17.00 (ic server time), but new york 17.00 is around 00.00 server time and eest.
  • #1,322
  • Jun 16, 2021 11:39pm Jun 16, 2021 11:39pm
Quoting TraderTim125
Profit, Risk, and Edge {quote} The above comments are some of the most sobering thoughts I have come across on this forum. Most of us have probably heard stories about someone who opened a $100 FX trading account and turned it into a $million dollars over a year or two. Believe it or not, if you are a very good trader, such a thing is possible, at least theoretically. Of course it is also possible to win the grand lottery! If you’re a poor or mediocre trader, you’ll probably get better odds investing in lottery tickets. Whenever someone says they...
Hi Tim

Two words - get this right and your monthly profit target and is easily obtainable with draw down levels kept to under 2%.
As a scalper, I will never let it get over 0.30%

Trade Size
Trading thin liquidity at the boundary of the charts
  • #1,323
  • Jun 16, 2021 11:59pm Jun 16, 2021 11:59pm
Quoting kk100
{quote} Thank you for checking that. by the way all these time zones difficulties, Do you mean New York close 17.00 ~ when bell rings Nyse. or server times (ICMarkets.) Was your test from NY open - Close. (IC-Markets server) 15.00 - 00.00
A New York Close Chart is one that shows New York time 5pm (which is currently UTC + 3) as 23:59:59 on the chart. i.e, The end of the chart trading day corresponds with the nominal end of the business day in New York.

My main tests were from 8am London time until 4pm London time which includes the New York opening from 8am until 11am. In other words the main busy period of the day when the two markets are both open and active. I also tried a few other periods but it didn't seem to make much difference except for very short periods such as the first 2 hours of the London opening when correlations dropped off significantly. The highest correlations seem to be found in the opening couple of hours of the NY market when the London market is also open but as I said, these variations are overshadowed by daily variations. We have to be careful about trying to be too specific and reading into the data something that is not really there. Keep in mind here that we are dealing with two distinctly different markets. In many ways I find it surprising that they correlate as closely as they do.

If you want to discuss this further you can PM me and I will give you my Discord address.

Regards

Tim
Don't Guess Test
  • #1,324
  • Jun 17, 2021 12:02am Jun 17, 2021 12:02am
Quoting TraderTim125
Profit, Risk, and Edge {quote} The above comments are some of the most sobering thoughts I have come across on this forum. Most of us have probably heard stories about someone who opened a $100 FX trading account and turned it into a $million dollars over a year or two. Believe it or not, if you are a very good trader, such a thing is possible, at least theoretically. Of course it is also possible to win the grand lottery! If you’re a poor or mediocre trader, you’ll probably get better odds investing in lottery tickets. Whenever someone says they...
For 500% profit per month, what DD is OK?
  • #1,325
  • Jun 17, 2021 12:08am Jun 17, 2021 12:08am
Quoting RickM
{quote} Hi Tim Two words - get this right and your monthly profit target and is easily obtainable with draw down levels kept to under 2%. As a scalper, I will never let it get over 0.30% Trade Size
Trade Size

Trade size is simply a function of risk and capital. It is not a determinant entity in itself.
Don't Guess Test
  • #1,326
  • Jun 17, 2021 12:08am Jun 17, 2021 12:08am
Quoting TraderTim125
{quote} A New York Close Chart is one that shows New York time 5pm (which is currently UTC + 3) as 23:59:59 on the chart. i.e, The end of the chart trading day corresponds with the nominal end of the business day in New York. My main tests were from 8am London time until 4pm London time which includes the New York opening from 8am until 11am. In other words the main busy period of the day when the two markets are both open and active. I also tried a few other periods but it didn't seem to make much difference except for very short periods such as...
Couple hours after NY open sounds logical, because of lot of futures trades happens that period, at least index, don't know about fx futures.
I am interested about this, because if there are some small window which is significant.
Anyhow its good research if can say yes or no.
  • #1,327
  • Jun 17, 2021 12:24am Jun 17, 2021 12:24am
Quoting Tim_isoara
{quote} For 500% profit per month, what DD is OK?
200% DD but your already out of the game so your profit is 0 ( or worse)
Don't Guess Test
  • #1,328
  • Jun 17, 2021 1:04am Jun 17, 2021 1:04am
Quoting TraderTim125
{quote} 200% DD but your already out of the game so your profit is 0 ( or worse)
For 50% profit per week, a normal DD? 50-70 DD it's ok?
  • #1,329
  • Jun 17, 2021 1:47am Jun 17, 2021 1:47am
Quoting TraderTim125
{quote} Trade Size Trade size is simply a function of risk and capital. It is not a determinant entity in itself.
Yes

But 90% of traders reading this would be trading with a trade size far too big for their account.
Trading thin liquidity at the boundary of the charts
  • #1,330
  • Edited 4:41am Jun 17, 2021 1:51am | Edited 4:41am
Quoting RickM
{quote} Hi Skyf Unfortunately no software can foreseen a strong move like last night. The software can show what has just happen a few seconds later only but the DOM can on a few occasions show what may happen within the next 30 seconds. An example is an continuous order that restricts movement in one direction, therefore with the intent to change market direction.<b> I was trading one on Tuesday night where they blocked a bullish EURUSD move and created a short term bearish move. Its performed by a EA and tops up the lot order size every time it...
Thanks.
Its only a bit surprising how you know all these "out of the box" stuff and the conviction with which you call the proficiency of it. Makes one really want to delve into it to see what you see.

Where does one begin?
I'm about to fund account on TradeEvolution via Global Prime. Will the TradeEvolution platform suffix or help as i heard it shows DOM info or wiill it be DeltaRiver software thät will reveal this.?
Without despair &amp; distraught, focus on Patience to FRESH MOTiVES.
  • #1,331
  • Edited 3:32am Jun 17, 2021 3:07am | Edited 3:32am
Quoting skyf
{quote} How did this approach do with this FOMC? USD got soo strong suddenly. Could that be foreseen with this software?
This approach can't forecast anything on long term. May be it can but as I know we are not using it that way. There are fast trades that last few seconds to may be 5 minutes maximum. If there is a disbalance found then we jump-in. That's all.

Yesterday FOMC was pretty simple and a good place to show how it works. BTW I was not trading and I don't know people who were trading this because it was out of trading hours range (too late).

But anyway if we were trading this (EURUSD):

Attached Image (click to enlarge)
Click to Enlarge Name: b2b5b038cdc09279cffb5521a629f4a8.png Size: 53 KB


These were the entries. I'm using few more signals, because my platform has no DOM, so

First entry & Second entry:
- Reverse Candle
- Engulfing Candle
- Stochastic
- HUGE Delta
- Out of the channel (which is dynamically calculated depending on the pair and master pair)

Exit Rules:
+0.03% then TS
Nearest level (blue line)
Any Stoch/Reverse Candle, Eng Candle, Any signal in profit

So First Entry exit was or at blue line (but if big lot size may be not), or usign TS (I think since it was a wick let's think TS is more like)
Second Entry exit was at the second dashed line (because there was no room between entry and first dashed)
Both was about +0.05% approx. So if deduct fees I think 0.08% in total in 2 trades.

There are more entries from another symbols as example. But I think they are not a good example because everything worked out 100% good. In real life sometimes it fail.

I think if I can use DOM I can find more interesting entries but as I said before mt5 don't have dom. Sonner or later I'll move from mt5 to another software.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 496d61ae7a6b4944cf3bcf2233c61659.png Size: 79 KB
Click to Enlarge Name: e95688cb7d205b79f28509ba0adc1613.png Size: 76 KB
Observer effect
  • #1,332
  • Jun 17, 2021 3:34am Jun 17, 2021 3:34am
Quoting DojiSan
What about daytraders like Ross (warrior trader)? Ross made over $4,000,000 in 2020 daytrading about 4 hours a day. Check his youtube channel. https://www.youtube.com/user/DaytradeWarrior
He knows exactly what he is doing, clearly.
  • #1,333
  • Jun 17, 2021 5:28am Jun 17, 2021 5:28am
Quoting rmrf
sweet! but its just like Bill (Williams) says, you can only trade your own personal belief systems, here is what 30+ years of trading yields. 45 days live https://cdn.discordapp.com/attachmen...95206/8501.jpg its not so hard to master trading, if you dispel the lies you believe to be true about trading. {quote}
if only I was selling something, but I am not, many thanks to the feeble feds for firming up my live position

https://cdn.discordapp.com/attachmen...09227/7175.jpg

  • #1,334
  • Jun 17, 2021 5:34am Jun 17, 2021 5:34am
Quoting Tim_isoara
{quote} For 500% profit per month, what DD is OK?
easy one.... doesn't matter the profit percentage per month, the max risk should properly be a percentage of banked pips, I prefer anywhere from 25% to 100% DD, but this is only on BANKED PIPS, I dont risk my deposit, after the first month or so....
  • #1,335
  • Jun 17, 2021 12:03pm Jun 17, 2021 12:03pm
Quoting RickM
{quote} Yes But 90% of traders reading this would be trading with a trade size far too big for their account.
Retail Traders, as a rule regularly overleverage right out of the gate, and their B book bozo broker helps them with huge leverage.
and they use one order
  • #1,336
  • Jun 17, 2021 12:11pm Jun 17, 2021 12:11pm
Quoting skyf
{quote} Thanks. Its only a bit surprising how you know all these "out of the box" stuff and the conviction with which you call the proficiency of it. Makes one really want to delve into it to see what you see. Where does one begin? I'm about to fund account on TradeEvolution via Global Prime. Will the TradeEvolution platform suffix or help as i heard it shows DOM info or wiill it be DeltaRiver software thät will reveal this.?
I used TE at GP for a year at least, and it is sure killer to see the LP's orders, but be sure to contact them(GlobalPrime) and ask them to enable your scalper in TE
its 210PM local time in Chicago, so not much action, but the book looks like this now...
Attached Image (click to enlarge)
Click to Enlarge Name: tes22.png Size: 30 KB
  • #1,337
  • Jun 17, 2021 7:18pm Jun 17, 2021 7:18pm
A good example of something people think is impossible, implausibe and a lie...... creating your own liquidity and "filling your own orders". It works, it's always worked and makes complete sense when you are doing real things for real outcomes.

Today's market is venturing north for a while and offers a nice chunk to jump on. The Buy - Sell mode like this offers order fill and then a simple move up. There ARE other factors I look at but seeing as so many people have difficulty recognizing the simplest things, there's really little gained by overwhelming people.

Of course if you brain is worried about trade costs etc, then pick a more appropriate situation to trade that offers a greater return with low costs.

The rest of what you need to know and apply is related to the why. Point to Point Data trading is not enough. This is why many of the basic principles of trading are absent from people's thoughts. Previous lows for extraction with the pink highlighted area open season and a full half hour of back-n-forth before it did what it was feasibly always going to do.

Now for the rest of the day ...... Enjoy. Maybe you'll learn something new today.

Peter

Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSD M5 18 June 2021.png Size: 31 KB
Real Trading is not gambling.
  • #1,338
  • Jun 17, 2021 10:26pm Jun 17, 2021 10:26pm
"The Risk Is Right When You Sleep at Night"

Hi Rick,

Quoting RickM
{quote} Yes But 90% of traders reading this would be trading with a trade size far too big for their account.
This is quite possibly true. Without seeing their accounts (or their drawdown) it is hard to know.

What I said in an earlier post is that Profit is proportional to Capital x Risk x Edge

From what I have seen, many inexperienced retail traders try to compensate for a weak edge with excessive risk because they focus too much on profit instead of good trading practice. The obsession that I observe time and again on this forum seems to be "Look at how much money I am making" instead of "This is how I go about trading". Many seem to regard 20-30% routine drawdown as OK. If you have a $100 account that you use like a stop loss I suppose that is one way of doing things but it is certainly not my approach. Normally one would determine trade size after taking into account the amount of trading capital available and the amount of that capital one wishes to risk on a trade or sequence of trades. This is often but not necessarily determined as a percentage of capital.

Once you have an established strategy or system set up, then you can legitimately shortcut to trade size or position size, assuming capital, risk and strategy remain more or less constant.

Most of the institutional trading/investment organisations that I have been involved with over the years don't like to see account or portfolio drawdown go beyond about 5% and that is a worst case scenario. The reason for this is that many investors tend to get very nervous when portfolios reach drawdown beyond this level. They then start making a nuisance of themselves by hassling the fund manager and/or wanting to withdraw their funds. It is a big problem for fund managers who want to run higher risk, higher return portfolios.

A simple way to define edge is $wins/$losses over a significant number of trades. This metric is commonly known as Profit Factor (PF). In my opinion a good trader should be able to achieve a consistent PF of 2 or more over time. A PF of 2 equates to an edge of 67%. Again a consistent edge of 70% or more seems to generally be regarded as an acceptable bench mark for a pro trader. When retail FX traders talk about trading for a living, they probably shouldn't even think about it until they can sustain an edge of this order or better over say a 12 month period.

I guess as individual traders we are free to chose whatever level of risk and % return we feel comfortable with but substituting risk for edge is in my view a recipe for potential disaster. From bits and pieces I have read on this forum, I wonder how many people even realise the need to properly manage these three key elements of Capital, Risk and Edge.

I like the old saying. "The Risk Is Right When You Sleep at Night".

Regards
Tim
Attached Image
Don't Guess Test
  • #1,339
  • Jun 17, 2021 11:23pm Jun 17, 2021 11:23pm
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot_2021-06-18-13-53-34-596_com.wattforex.jpg Size: 467 KB
Let us see if gold can be invested.I think maybe the key point of trading is follow your heart.If you aim to a trading stategy,then you should follow it.
  • #1,340
  • Edited 1:41am Jun 18, 2021 1:29am | Edited 1:41am
Quoting PocketForex
the key point of trading is follow your heart.
Also:

- Draw random lines on the charts or add as many indicators as you can
- Say that you are making 5-6% daily 3-4 times a week
- Always use word "Learn" in every post

Why? Because if you draw a lot of lines the price will hit some in any case. And you can explain later everything.
Adding a lot of colored indicators on charts with black background let people think you are very smart.
Saying "Learn" makes people think you have some knowledge and will share it since if they must learn you are teaching.

Since trading attracts scammers, liars, gamblers more that any other industry and these simple rules will let you become a guru and then you can sell indicators, courses, signals, EAs and even take people's money to trade.
Observer effect
1 trader viewing now