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  • #121
  • Dec 23, 2021 9:03pm Dec 23, 2021 9:03pm

Money Management



Money management determines the success or failure of any system.

Win rate has little to do with success. You don't know your win rate until you actually start trading any system so you must have bullet proof money management starting with the first trade. Actual trading will always be different than any exercise in backtesting.

Once you start trading a system you can track the win rate but more importantly you should track your return on investment (ROI) for each trade. Making more than you risk on each trade is a path to success. Such a path can be successful even with a low win rate. Consistently accepting trades that return less than what you risk is a path to failure.

Ask yourself the following questions:

How will you determine your profit target?
How much will you risk on each trade?
Will you be able to exit the trade according to your predetermined stop loss?
How much can you afford to risk on any given trade given your available funds?
Will your account survive if you lose 10 trades in a row based on what you think you can risk on each trade?
Do you have the mindset that it's ok to blow accounts searching for the right system? If you do...stop trading and pick your favorite casino gambling game.
  • #122
  • Dec 23, 2021 10:05pm Dec 23, 2021 10:05pm
AUDJPY 60 minute.

Potential trades that could have been taken in the last couple of days. Profit could have been taken at the next fast ma cross or one could have placed stops below the swings shown with the yellow markers and stayed in the trades.

There are different methods to maximize profit once in a trade. It isn't necessary to bail with the first ma cross after successfully entering a trade.

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  • #123
  • Dec 23, 2021 10:07pm Dec 23, 2021 10:07pm
Current MAs being used

200 simple MAs X2. One shifted -20 the other +20

10 simple MAs X2. One shifted -1 the other +1
  • #124
  • Dec 24, 2021 7:47am Dec 24, 2021 7:47am
I fully agree that money management is the key to success & not just win/loss percentage or ratio. But aren't you concerned that your All Time Return has slipped from 30.6 to 22.4? Or does your Return reflect other strategies you used before settling on the 4 MAs?
  • #125
  • Dec 24, 2021 8:04am Dec 24, 2021 8:04am
Quoting piprac83
I fully agree that money management is the key to success & not just win/loss percentage or ratio. But aren't you concerned that your All Time Return has slipped from 30.6 to 22.4? Or does your Return reflect other strategies you used before settling on the 4 MAs?
Not concerned at all. My equity curve is up trending overall. The S&P returned just shy of 20% this year so far so I'm beating that. I'm perfectly happy with moderate and consistent returns on investment while limiting risk of loss. Trading is inherently very risky and anyone able to maintain a positive equity curve in trading in my book is doing great.

While this TE is small it can be reproduced on any size account

A 100K account would have returned 22K
A 1.0 mil account would have returned 220K

I fail to see any problem.
  • #126
  • Dec 24, 2021 9:01am Dec 24, 2021 9:01am
Quoting Winston Reed
{quote} Not concerned at all. My equity curve is up trending overall. The S&P returned just shy of 20% this year so far so I'm beating that. I'm perfectly happy with moderate and consistent returns on investment while limiting risk of loss. Trading is inherently very risky and anyone able to maintain a positive equity curve in trading in my book is doing great. While this TE is small it can be reproduced on any size account A 100K account would have returned 22K A 1.0 mil account would have returned 220K I fail to see any problem.
Well done bro
  • #127
  • Dec 28, 2021 5:42pm Dec 28, 2021 5:42pm
Hello all. I've been enjoying the Christmas Holiday for all it's been meant to be enjoyed. Hope you all have also.

This thread for me has been a journey back into the realm of indicators but for now only moving averages.

During this wonderful Christmas season I've refrained from trading and devoted some thought to trading within the context of moving averages. Moving averages are often dismissed as a reliable means of trading. This probably has much to do with many dismissing their value due to their inherent lagging nature. But is their lagging nature necessarily unworthy? I've been experimenting with this thought and finding some interesting observations which I plan to share going forward.

Stay tuned.
  • #128
  • Dec 28, 2021 7:34pm Dec 28, 2021 7:34pm
Winston Reed.
Thank You, using you template, but with 10, -10 shifts on H1, showing good results (on demo), next year I will start live with this "system"....but I have a question for you.. how do you "choose" the Pair and Time frame to trade, Do you use a Scanner?.. or you keep multiple pair windows open? and wait and wait.., or?

Thank You and Happy New Year!
Attachment g
"Great Men are not born great, They Grow Great."
  • #129
  • Dec 29, 2021 5:48pm Dec 29, 2021 5:48pm
Quoting MyProfit
Winston Reed. Thank You, using you template, but with 10, -10 shifts on H1, showing good results (on demo), next year I will start live with this "system"....but I have a question for you.. how do you "choose" the Pair and Time frame to trade, Do you use a Scanner?.. or you keep multiple pair windows open? and wait and wait.., or? Thank You and Happy New Year! 4111517
I keep 8 pairs open but scan through about 20.

Time frame choice is a matter of personal preference. For now the 60 minute is working for me.

Even on 60 minute you'd be surprised how often trades come up and how many I miss. Waiting is not an issue for me. I haven't traded in a couple of weeks due to the Holidays.

I like the way AUDJPY is moving right now. Currently making nice HHs and HLs. No brainer trades really. But not me for now. Waiting for after New Years.

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  • #130
  • Jan 5, 2022 7:25am Jan 5, 2022 7:25am
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Hi, im new here.
Should I take every cross 10 SMA? or wait until it sync with 200SMA?
  • #131
  • Edited 8:51am Jan 5, 2022 8:38am | Edited 8:51am
Quoting Setiyaka
{image}Hi, im new here. Should I take every cross 10 SMA? or wait until it sync with 200SMA?
Welcome!

No one shouldn’t take every cross.

Currently I’m using two 200 SMAs. One is shifted 20 and the other -20. Also using two 10 SMAs shifted 1 and -1.

Buy: 200 SMA (-20) is above the 200 SMA (+20) AND the 10 SMA (-1) is above the (+1).

Sell: opposite.

It’s always helpful to include the forex pair your showing on your chart posts so I or others can review.
  • #132
  • Jan 5, 2022 8:58am Jan 5, 2022 8:58am
USDCHF 60 min current sell

Pink 200 SMA (-20) below Purple 200 SMA (20)
Red 10 SMA (-1) below Green 10 SMA (1)

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  • #133
  • Jan 5, 2022 10:47am Jan 5, 2022 10:47am
Quoting Winston Reed
{quote} Welcome! No one shouldn’t take every cross. Currently I’m using two 200 SMAs. One is shifted 20 and the other -20. Also using two 10 SMAs shifted 1 and -1. Buy: 200 SMA (-20) is above the 200 SMA (+20) AND the 10 SMA (-1) is above the (+1). Sell: opposite. It’s always helpful to include the forex pair your showing on your chart posts so I or others can review.
Thanks for the answer, that's AUDUSD
Now This is CADJPY, Seem like match the rule. I'll wait for clearly SMA 10(-1) above (+1)
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  • #134
  • Edited 7:40pm Jan 5, 2022 4:10pm | Edited 7:40pm

A quick review of my application of moving averages in a trading strategy



Introduction:

Moving averages don't lie. Actually this is true of any indicator. They don't lie. They tell you exactly what has happened in the past.

Moving averages don't predict the future and neither does any other indicator. One can reasonably "project" based on what has happened.


Trends:

Trading is most basically desired because one expects price price to move either up or down and thus to profit from such moves.

Trends tend to continue and thus offer opportunities to advantage from such continuation.

Moving averages are very good at illuminating trends and all one need to do is place a couple of them on a chart and make some observations.

Below is a 9MA and a 26 MA. One can quickly see the potential.
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Price in relation to moving averages and trends:

Price tends to rise above the selected moving average in a trend and so most recommend entering a trade when this occurs. Moving average crosses provide a visual indication that price may be initiating a trend but this is not assured as most are well aware. Price can immediately turn opposite and produce a "cross" signal in the opposite direction. Not only can this occur it can continue to do so in a ranging pattern and lead to multiple stop outs during such a range. Money management is key here as it is in any trading strategy. Below is an example of a ranging market many refer to when bashing moving averages as being irrelevant.

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Moving average combinations and trends:

As most know trends are identifiable in various ways. One way is via different time frames. So one may look at a daily time frame to see the trends
  • #135
  • Jan 6, 2022 2:09am Jan 6, 2022 2:09am
I try counter trend with 200SMA (-20) stil above (+20), i took an entry sell with 0,01 lot because Bearish Engulfing candle and 10 SMA (-1) below (+1). I hold it and will wait until 10 SMA (-1) cross above (+1) for buy entry.
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This one based on rule of this system, a little bit late

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  • #136
  • Jan 6, 2022 8:01pm Jan 6, 2022 8:01pm
Set up buy AUDJPY
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  • #137
  • Jan 6, 2022 8:05pm Jan 6, 2022 8:05pm
Still in demo, need to learn alot from members here
buy set up GBPUSD
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  • #138
  • Jan 7, 2022 10:49am Jan 7, 2022 10:49am
Winston, please delete this is you feel it is a distraction or seems to be in competition with your ideas - this post is just to provide an interesting take on using MAs for trading. Google GMMA or Guppy and there's plenty of material available. The main value of this is that it forces us to be patient until the right conditions have become clear. It then enables us to get into trend trades fairly early and at the least get to breakeven. And if it goes on for a while we can ride the whole trend.

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  • #139
  • Jan 7, 2022 7:46pm Jan 7, 2022 7:46pm
Quoting Setiyaka
I try counter trend with 200SMA (-20) stil above (+20), i took an entry sell with 0,01 lot because Bearish Engulfing candle and 10 SMA (-1) below (+1). I hold it and will wait until 10 SMA (-1) cross above (+1) for buy entry. {image} This one based on rule of this system, a little bit late {image}
I think your entry is very good as your Sell was below the low of the wide range bar at the cross of the 2 MAs. A bit choppy between the cross and where you entered. A good one imo.
  • #140
  • Jan 7, 2022 9:56pm Jan 7, 2022 9:56pm
Quoting piprac83
{quote} I think your entry is very good as your Sell was below the low of the wide range bar at the cross of the 2 MAs. A bit choppy between the cross and where you entered. A good one imo.
Thanks, i'm still learning.

I'm in demo account, need to learn a lot before jump into real
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