Steve,
There is no need to fix what is not broke! Why tweak what is delivering as scheduled? Pips have to be made and sustained.
Lets go as is untill proved otherwise. Your one year testing is great fun for me. I am an adent disciplinarian - do what is expected of you! Period.
I visited one other thread that mimics this trading strategy and was a little taken aback by some modicum of fear and greed on display - so, the original trading plan was not followed 100%. Distraction here and will not make it realise the potential win or failure in the system.
More pips....10pm will soon be here...on standby to see Steve in action again...ride on men....
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That kind of thinking it what cause most trader to loose. The risk never changes no matter how good a system performs.. I think he already has it built into the system to increase lots as the accounts grow if you want to trade larger than that you should only do so by adding new funds.
turbo
. Currently GU is carrying the other 4 trades but that's fine - that's why I like trading this way. Steve
Will your cad position close out at 1.1711?
Dave
I don't agree with the above.
Actually, I find it pretty dumb to risk the same amount of capital for each trade. That would mean that you assign the same probability of success to each setup, which is absolutely wrong as there setups that work better than others.
Of course, if you are just starting off and don't have much of a clue about trading, about your system, and about your setups, then YOU MUST BET A FIXED UNIT FOR EACH TRADE.
However, once you find a trading style that gets you profitable consistently, you must research into your trades and find which setups give you a higher probability of success or profit.
Since Steviet is using candlestick patterns, let's throw an example in here.
An engulfing pattern in a ranging market cannot be treated the same as an engulfing pattern at important highs or lows. The same pattern cannot be treated the same in two completely different contexts.
Since a ranging market is more nervous and implies a higher risk, I would either discard or trade lightly any pattern occuring in a chop. On the other hand, I would definetely press more my setups in contexts where the market can pick up volatility.
I believe position sizing is one of the most important things in trading. Using a fixed unit amount per each trade sounds safe but won't make the big money in the long run.
Pay attention here: I am not recommending to risk 20% of capital on a single trade.
If your regular unit is 2%, I would vary between 1% and 3-4% according to the different setups.
Of course, you must know your system very well to do so. And I invite each of you traders to dig deep into your systems, do some research, and try to focus on why certain trades seem to go well right off the start while certain others seem to struggle by the minute you get in. If you have no answers to this other than DESTINY, it's the market, or I can't find out because you just NEVER KNOW, well trading would be the same as buying lottery tickets.
. As you say, with my capital I have to trade with a fixed lot but I intend at this juncture to continue doing so. In my method, I often start a trade in a choppy period and the trend then begins and I stick with it. Simple fact is I don't know whether it will run for 50, 100 or 500 pips - thats why I set no target but use the stop loss to exit. Sure, there are more promising set-ups than others but that promise doesn't always get fulfilled. Hi IS,
Again, thanks for your comments - I'm keeping with what I have tested for the whole duration. If I meet my targets, as far as I'm concerned the forward test has worked and worked well.
When turbo is back online I invite him to respond if he wishes. I know for a fact that he has successfully traded for a number of years with lot sizes I can only dream about at this point in time. I certainly wouldn't dismiss his comments as 'dumb'.
From what I have read I understand you are very successful too
Once again, I appreciate your thoughts.
Kind Regards
Steve
) although no pips gauranteed yet & GBPUSD currently up just over 300 pips at the 9750 level. Hi Steviet
By no means did I intend to sound disrespectful using the word "dumb". I actually take it back, it was used unproperly. Apologies for those who may have gotten offended.
No doubt there are traders who are tremendously successful using a fixed unit per trade. I too used to think that by varying risk size continuosly, well...it might be dangerous...what if I lose those trades where I risk 3-4% and only win those where I risk 1% ???
This is why I invited each trader to do some deep research into his setups and try to find an edge or a particular context where you hit 7-8 out of 10. And this is how the very big pro traders make tons of money everyday in the markets. My "mentor" is amazing at this. I've seen him pull out winning days by just hitting the biggest trade of the day many times.
Keep in mind I am a daytrader and perhaps it's easier for me to apply position sizing when I do 3-10 trades per day. I just know when my chances are higher and that deserves a different size IMO. I'd be stupid to invest the same amount of money for a 55% probability-setup as opposed to a 75% probability setup.
This is why I figure that if you use the same amount for each of your setups, you probably assign the same probability of success to each of them. And my question is: are you sure you always have teh same probability of success? Have you researched into it?
My statement was just a provocation to invite each trader to give this some thought. I am not biased against any trading style at all.
. Hallo Steviet, have you considered adding gj to your trading? Your system would work great as well and produce more pips than in any other pair
Steve,
You should stick to your method to a tee I would say. However, my prior post about setting a target was meant to be taken as creating another strategy - ie another journal.
If every single time you get stopped out using this strategy and start a new trade, and in all your backtesting it seems the trade always goes 20 pips in your favor before turning, etc, or even continuing, then maybe you could make extra pips by doing another lot for a 20 target. Of course it may be that you get stopped out more often than that and it not be worth it. Just an idea and you can keep this in the back of your head for the future. But you should keep on with this strategy here in my opinion.
Continue on......
IS,
I have just re-read my post to you after a good nights sleep and I apologise for jumping on you. As always you have some very valid and interesting suggestions
I do need to do some further research here on these set-ups but at the same time I musn't get drawn into altering my plan. From my experience (limited), it's easy to say 'hmm, i'll just tweak this' a few times & before you know it a few months later the system bears little or no resemblance to the original successful method.
I'm determined to stick rigidly to the method I have set but as you say, others may wish to take the basic idea and personalise it to their trading style.
Kind Regards
Steve
Hi Steviet
Please don't stop what you've been doing successfully! You are in the middle of a master plan and you must carry on until phase 1 is over.
Keep in mind, you and other readers who might have misinterpreted my writing, that POSITION SIZING has nothing to do with your trading style or with your setups, entries or exits.
Position sizing is part of money management, it's pure mathematics. It's not a technical tool.
Once you have completed your journey in 2007, you'll have accumulated valuable info to add up to the manual research you did before starting off.
Once you have 500-1,000 accumulated trades, well...that's a great amount of statistical wealth! And you must do something with it other than say: GREAT, IT WORKS!
You must get your nose into those stats and try to figure out if there are common factots between small winners, big winners, losers, breakeven trades, etc...and if you find filters or edges or angles that dramatically increase the probability of a good trade happening for you, you must take note of that and exploit that info. And when those conditions verify, you must press on that trade a little heavier than a regular trade.
For instance, when I play reversal trades after a steep price decline/rise, I tend to invest only 50% of my regular unit size. Why do I do that? Simply because I know that V reversals are very unlikely to take place, whereas it's very likely that I might get stopped out. Hence, regardless of how much I like my setup, it'd be unwise for me to have the same risk size as other trades. Even my profit target is smaller compared to other setups...why? Because after a sharp rise you'll have bulls trying to buy every pullback in the hope to make a new high. And it's really tough to change the psychology of all those bulls!
Anyway, this is something you may want to get into once you are consistently profitable and once you are 100% confident in what you are doing.
I'll say this again: position sizing has nothing to do with the technical factors of a trading system, hence no tweaking is required.
