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The brutal truth of day trading

  • #1,901
  • Jul 15, 2021 8:50pm Jul 15, 2021 8:50pm
Quoting RickM
{quote} Hi riclater I think 2% is madness. In day trading, if I trade my $100,000 account (I have three $50K accounts but only trading one at present), I would only risk $250 and I am out. To be honest I hedge but never more than 0.25%. Seriously the trades wrong at more than that, you mad staying in and you will likely never make it as a day trader. edit. My point is once the trade heads in the wrong direction by more than a handful of pips, you are relying on LUCK. DAY TRADERS ARE NOT LUCKY But if you got 35% great trading. I am happy with 0.05%...
Hey RickM,

I did say 2% OR LESS. That 35% was an example. If you risk $250 like you say and collect $50 you just returned 20% on your risk. If you make $5 you just returned 2% on your risk. Get what i am saying? Also I am not a day trader. Have not been for awhile. I trade mostly Daily, H4 for some futures and weekly for stocks and ETFs.

Keep up the trading. If you can keep that pace for a few years you should be OK.

- Ric
Be humble or get humbled
  • #1,902
  • Jul 15, 2021 8:59pm Jul 15, 2021 8:59pm
Quoting BWilliam
{quote}
So what's forex trading for ? Since it's not for earning a living.
Downpayment for your prime CBD property.
Audi RS7 or AMG GT 63S. Platinum membership with The Star or Crown Sydney.
That's the brutal truth about forex trading.

Crown is in bother, too many laundry bills
CBD empty due to lockdowns,

So maybe just the Audi


AUDI R8 V10 vs bikers
(some R-rated language be warned)
what the 3 of them do at the 2:40 is sick


Inserted Video
  • #1,903
  • Jul 15, 2021 9:27pm Jul 15, 2021 9:27pm
The notion of risking 2% of your account on a trade is based on flawed thinking, IMHO. However, if your mission is to build a position, then risking up to 1-2% might be unavoidable. If I am building a position, then trade 1 is risking about .5% at a 25 pip stop. Trade 2 is risking either .5% if trade 1 is not up 25 pips, or is risking 1% is trade 1 is up 25 pips or more (the idea here is to keep your entered trades risking 0, while stacking risk on the last trade). By the time trade 3 goes in (again risking 1%), it's typical that the position is guaranteed to make .5 to 1%, while the position is stretching to targets for 3 to 5%, all over the course of a trading session.

Not every situation calls for building a position. If I only get one trade entered, then I'm risking .5% on a trade that must have a target that will deliver 1%. Without the 1% target, there is no trade. A position must have targets that will deliver 1.5% to 2% to trade 1 (a 25 pip stop means the target is 75 pips away).

Be selective and discriminating with your trades.
  • #1,904
  • Jul 15, 2021 10:32pm Jul 15, 2021 10:32pm
Quoting riclater211
{quote} Hey RickM, I did say 2% OR LESS. That 35% was an example. If you risk $250 like you say and collect $50 you just returned 20% on your risk. If you make $5 you just returned 2% on your risk. Get what i am saying? Also I am not a day trader. Have not been for awhile. I trade mostly Daily, H4 for some futures and weekly for stocks and ETFs. Keep up the trading. If you can keep that pace for a few years you should be OK. - Ric
Hi riclater

I may get just 20% of my risk but I earn it in normally 5 minutes.
So if I can do that 10 times a day for a year, thats 150% return in a year in increased equity.

Where else in the financial world can you ever hope to receive 150% return in a year.
Whats the bank offering now, 4% return a year?.

For the record, I don’t get anywhere near 150% return a year as I am human and stuff up a few days or too, stuff up the odd week or two.

But if we a honest about the difficulties of trading, we have to accept that a return a month of just 5% is enough to live off.
I can do that by scalping and I am sure many others can do it there own way.

BUT we still need more than $80K account ($150K preferred) to trade correctly.

Cheers
Trading thin liquidity at the boundary of the charts
  • #1,905
  • Jul 15, 2021 10:34pm Jul 15, 2021 10:34pm
Quoting GEfx
The notion of risking 2% of your account on a trade is based on flawed thinking, IMHO. However, if your mission is to build a position, then risking up to 1-2% might be unavoidable. If I am building a position, then trade 1 is risking about .5% at a 25 pip stop. Trade 2 is risking either .5% if trade 1 is not up 25 pips, or is risking 1% is trade 1 is up 25 pips or more (the idea here is to keep your entered trades risking 0, while stacking risk on the last trade). By the time trade 3 goes in (again risking 1%), it's typical that the position is...
That sounds interesting. I would like to see it on a live trade.
Learn from your mistakes and march on.
  • #1,906
  • Jul 15, 2021 11:29pm Jul 15, 2021 11:29pm
Quoting here2there
{quote} That sounds interesting. I would like to see it on a live trade.
You can see the results of contemporaneous trading in my journal on FF, among other trades. I'd be happy to do another contemporaneous position trade there, when the situation presents itself.
  • #1,907
  • Jul 15, 2021 11:38pm Jul 15, 2021 11:38pm
Quoting GEfx
{quote} You can see the results of contemporaneous trading in my journal on FF, among other trades. I'd be happy to do another contemporaneous position trade there, when the situation presents itself.
Yes, please do so. I am very interested in seeing how you implement this strategy.
Learn from your mistakes and march on.
  • #1,908
  • Jul 15, 2021 11:42pm Jul 15, 2021 11:42pm
Quoting here2there
{quote} Yes, please do so. I am very interested in seeing how you implement this strategy.
Will do...
  • #1,909
  • Jul 16, 2021 12:18am Jul 16, 2021 12:18am
Quoting bilal1947
i feel the edge is merging the price concepts and volume as further confirmations to it, once volume comes in yet price goes beyond that point to do the algo thing so merging both is a good idea to me. it doesn't matter if price attracts volume or volume moves the price. {image}
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"Exchange of hands"
  • #1,910
  • Jul 16, 2021 1:41am Jul 16, 2021 1:41am
Quoting RickM
BUT we still need more than $80K account ($150K preferred) to trade correctly
It is needed no more than 10$ and a cent account to trade and earn for living by attracting investors who copy your trades. Some 3-6 months needed to build trust - show real results. Seems that's the biggest problem here - almost nobody here in this thread can show trading results record for 3-6 months...

If cant do that with 10$ cent account... at least 3-6 months how you will go with 100k capital if would have that? Why someone with 100k would invest in any trader who can't show real trades and prove some skill?

I created a special thread for those who can prove with real results they know how to trade profitably for at least 3 months.

RickM - you said you have 150k capital trading - so you are not afraid to expose how wealthy you are. Please share your MT4 account here in FF trade explorer and post some good days setups in the special success thread to motivate others. Let's consolidate success in 1 special place so people can get inspiration to fight for their freedom. There are so many people with max capital 100 usd (India, Pakistan etc). Let's give hope that it is really possible to get out of slavery by trading in forex.
  • #1,911
  • Jul 16, 2021 2:30am Jul 16, 2021 2:30am
Hi people.

This is a trade I had to close. The red line is the original first TP level, the arrow shows the path.
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The problem here is that I use a tool, an assistant to help me determine the lot size. I used a new chart to place the order without noticing that, when loading the risk was set to 5%. I never use a risk higher than 1% and normally I start with 0.5% or so.

What I mean is that when you are wrong, I think it is better to close your trade as soon as possible.

If you thought there was a resistance, for instance, and price goes beyond it, then you are wrong, then you should close your trade immediately.

Or at least that is what I think.
  • #1,912
  • Edited 5:17am Jul 16, 2021 2:38am | Edited 5:17am
Quoting RickM
{quote} Hi riclater I may get just 20% of my risk but I earn it in normally 5 minutes. So if I can do that 10 times a day for a year, thats 150% return in a year in increased equity. Where else in the financial world can you ever hope to receive 150% return in a year. Whats the bank offering now, 4% return a year?. For the record, I don’t get anywhere near 150% return a year as I am human and stuff up a few days or too, stuff up the odd week or two. But if we a honest about the difficulties of trading, we have to accept that a return a month of...
I can share my experience on how I grew with tiny pockets.

I started trading with pips as my capital which means I can start with a $1,000 capital and have 0.10 contract value 10,000 pips.

I treat financial trading as another stock lot auction goods market I had taken part in 30 years ago as a flea market trader. In the auctions, bidding is made by voice and where groups (cartels) try to have prices in their favour by adopting mostly informal manipulative tactics.
.
Foremost being you have to go to the market, find out who is active and try to make friends with them so that you also become a member of a cartel.
This is observing the market in action.
I observe price action and time action on the chart using my eyes and informational indicators. I don't inflict injuries on my eyes by watching colorful indicators/oscillators, dynamic moving DOMs etc. and neglect the brain's power to register the changes of price action on the chart.

None of the goods auction markets want you to forecast, read the analysis or draw trading plots. The participants only find tactics to manipulate the price by forming groups and pretend to be making bidding so that the threshold price fixed by the auctioneers is lowered. As a financial trader, my foremost priority is to have this information which is available only in the form of known news events happening every day in addition to unknown surprises) events.

If a symbol (for instance GBP) has four data release or talk events, you can expect on the same day consolidation, breakout, reversal, or range trading.

Auctioneers (market makers) use consolidation, breakouts, and reversals to time with the known as well as surprise news events as a manipulative bidding activity.
Regulators have already set up circuit breakers. Designated market makers have set up ADRs. Frequent and yearly sudden repricing or adjustments happen.

Market makers have all information of the exposure to spot and derivatives. In order to ensure nothing goes out of control, flash crashes are inflicted.
Only a manufactured so-called "major" currency like NZD that is controlled by a single Central Bank cowboy chief, is used to inflict flash crashes to reprice the markets. All-flash crashes have been triggered by NZD in the forex markets. LAST RESORT IS ENGINEERING MARKET CRASHES (ask Goldman Sachs and their appointees as Treasury secretary).

Nothing new for me. It is all happening in my day-to-day life anyway. Pain, gain, Ecstacy, turbulence, depression... happening all the time in anyone's life except for people like me who strongly believe in destiny. If money is part of my destiny, so be it. If it's not, so what?

I accept flash crashes as legitimate bidding tactics and never leave an unhedged short position hedged with a long position overnight.

I have grown my balance, slowly and steadily from pennies to pounds using Pips as my capital. I used Averaging, Ramping up, and always used hedging instead of stop-loss while keep looking for quick entry and quick exit points. Exhaustion points appear many a time on a daily basis, your eyeballs can detect them easily. I have done this but now I mostly trade with pending trades.

Location of exhaustion points (where the probability of a faster and substantial move happens) is a job my brain ( a massive hard disk fed with data) handles efficiently while working in coordination with my eyeballs. Obviously, it does guesswork only.

Thinking of counting Price Reward Ratio in a speculation market amuses me. I take any profit but quickly. I hedge positions with no procrastination.
I treat Profit like a fresh vegetable that has a limited life span. Can R/R extend the life span? I don't think so.

Name of the game is Less working hours, using 80/20 Pareto principle, patience, persistence, open mind to learning, humbleness, avoiding bragging (bragging for what, money earned is for your benefit and not social benefit) as I have practiced. I believe in God and Destiny. I was destined to grow from pennies to pounds.
Practice makes a person perfect
  • #1,913
  • Jul 16, 2021 3:07am Jul 16, 2021 3:07am
Quoting GEfx
The notion of risking 2% of your account on a trade is based on flawed thinking, IMHO. However, if your mission is to build a position, then risking up to 1-2% might be unavoidable. If I am building a position, then trade 1 is risking about .5% at a 25 pip stop. Trade 2 is risking either .5% if trade 1 is not up 25 pips, or is risking 1% is trade 1 is up 25 pips or more (the idea here is to keep your entered trades risking 0, while stacking risk on the last trade). By the time trade 3 goes in (again risking 1%), it's typical that the position is...
I agree with this 1000%. Two percent per trade is enormous, that means you need a win of 6-8% per trade to keep the consecutive loss dragon at bay. I tell people all the time when they ask, here in the real world, that I risk 0.25% per trade, they laugh usually and say they will not make enough money to matter risking that. I tell them that if they are serious, a 5 minute chart makes 288 bars over 24 hours. Are you seriously telling me that you cannot get 10 positions on in a day? Of course, we know that most traders are not serious. Educational purposes only from a losing trader, and all that.
If you are good at something, never do it for free--Joker
  • #1,914
  • Jul 16, 2021 3:11am Jul 16, 2021 3:11am
You guys should watch Trader Tom's (Tom Hougaard) videos. You'll learn a lot
  • #1,915
  • Jul 16, 2021 3:15am Jul 16, 2021 3:15am
Quoting jmn5611
{quote} I agree with this 1000%. Two percent per trade is enormous, that means you need a win of 6-8% per trade to keep the consecutive loss dragon at bay. I tell people all the time when they ask, here in the real world, that I risk 0.25% per trade, they laugh usually and say they will not make enough money to matter risking that. I tell them that if they are serious, a 5 minute chart makes 288 bars over 24 hours. Are you seriously telling me that you cannot get 10 positions on in a day? Of course, we know that most traders are not serious. Educational...
I completely agree. More than 1% is really dangerous.

Something starting by 0.25% and ending at 0.75%, back and forth, using continuous dynamic lot resizing is what I currently do in fact.
  • #1,916
  • Jul 16, 2021 3:19am Jul 16, 2021 3:19am
Quoting simnz
{quote} I can share my experience on how to grown with tiny pockets. I started trading with pips as my capital which means I can start with a $1,000 capital and have 0.10 contract value 10,000 pips. I treat financial trading as another stock lot auction goods market I had taken part in 30 years ago as a flee market trader. In the auctions, bidding is made by voice and where groups (cartels) try to have prices in their favour by adopting mostly informal manipulative tactics. . Foremost being you have to go to the market, find out who is active and...
I have been trying that approach of hedging but I feel it stressing.

Could you share a few tips about how to better using hedging iof stop-loss?

I am really interested because I prefer trading without stops, but I am not able to stay calm doing it with leveraged products.

For non-leveraged products, I do not use stop loss at all, for instance (nor shorting).
  • #1,917
  • Jul 16, 2021 3:26am Jul 16, 2021 3:26am
Quoting Mtinifx
You guys should watch Trader Tom's (Tom Hougaard) videos. You'll learn a lot
Which video would you recommend so that people can learn the esentials?
  • #1,918
  • Jul 16, 2021 3:54am Jul 16, 2021 3:54am
Quoting riclater211
{quote} Hey RickM & ryuyryu, Risk to reward ratios are under the same category as win loss/ratios. Junk. It means nothing. They only thing you can control with a good amount of certainty is risk. Sure you can risk 50 and want to get 100 for a 2 to 1 ratio, that does not mean you will get it. You can win 1 pip 100 times and lose 100 pips 1 time and the win loss is 99% but after fees, commissions and spread you are in the negative. I use return on risk. Risk $1000 and collect $350 after fees. I just made 35%. You do not risk the whole account per...
Hi Ric,

My trading style, money management and even hedge techniques are the same like RickM's, because he taught me. Especially about hedging. I knew and used imbalanced earlier on crypto and was very upset that there are so such a data on forex. When I met RickM he put me on the right track. BTW I was using Binance data to trade on Bitmex. The same approach like here (CME futures data -> forex spot).

We are trading imbalanced, the market insufficiency. There are 50+ trades each day, they are in most cases very fast (few seconds or max few minutes). We hedge if go wrong. In some cases I just close bad hedges at the end of the day is loss, because overall profit is ok.

My personal goal is 0.25% daily. For example yesterday is was only 0.06%, day before 1.1%. It depends on market conditions and so on. If we are talking about risk I'm trading 0.03 lot size at every 10k account. So at 100k it is 0.3 and so on. In fact it is better to trade 0.01 at every 10k, but then there will be imbalance with lot size if you are trading Gold (if 0.03 EU then 0.01 XAU). I agree with RickM that you need 6 digit account to live from trading.

The only difference that I'm trading mostly with bot. And I use different software that not allow me to use orderflow, cumulative delta and volume with full power. Only delta. But if check our entries with RickM are in most cases at the same time. But I'll move from MT5 soon to javascript/python so it will be possible to use all that wonderful instruments.

I believe in math and don't believe in magic. That's why I skip all that magic rectangles, fibos and random lines posts. I'm not interested in wasting time for that.

Cheers,
Observer effect
  • #1,919
  • Jul 16, 2021 4:08am Jul 16, 2021 4:08am
Quoting BWilliam
{quote} Imo taking all things into consideration, chances of success in forex is 0.1% and lower. So, in a way the naysayers are correct. People don't realise how hard it takes to make money from forex trading. Finding a real trading edge is very close to impossible. That's the honest brutal truth. I hate to say this, makes me a naysayer. Just my opinion, you may disagree. Earning a wage with forex trading is not the way to go. Day trading for a living is madness. Trading for a living is madness. It's a very difficult road. If you're struggling trying...

Sounds like I should trade something else, such as the indices. Commodities are really hard to trade as well.
  • #1,920
  • Jul 16, 2021 4:29am Jul 16, 2021 4:29am
What is the explanation of edge?
If we can't risk at least 10% or more of our account, either we don't have an edge or something else. It's same as great driver mindset as ryuryu explained in another thread. Either we have an edge (we're not afraid to risk huge) or we don't have.
Maybe this can be explained from account safety point. Yeah, tastes differ
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