Just some food for thought...

And you are absolutely right my friend. That's why my system is not based on winning streaks or losing streaks. Its based on short term (quick)trading and larger than normal lots.

Now if you are in a period of drawdowns the logical thing to do is reduce your lots and visa versa if this is working effectively for you. In the event of drawdown in any trading strategy the logical thing to do is to reevaluate things when something isn't working well. To keep beating a dead horse (so to speak) will get you no were.

You are also absolutely correct that the market doesn't care if your last 20 trades were winners, but if they were using this method you would be up considerably. Besides I don't look at it as each trade has the same probability of losing. I look at it as each trade has the same probability of winning.

Ok I think I have the upload of the word doc issue fixed.

Do you trade mostly the Asian session?

I would get a trade here and there during the Asia session in the past, but here lately it is just dead. So most of them are during the London and NY sessions.

I'm on mountain time. During NY session I'm at my J-O-B and during London I'm in the sack. My prime trading hours are smack in the middle of Asian. I know there are a lot of folks in a similar situation and we really have to maximize the trades we do take.

Your technique seems to click with me so I'll give it a whirl on demo. Thanks for posting.

No problem and best of luck!

Yep, same here, I pretty much only get to trade the Asian session. But I've found that rules still work pretty good, although my entry points are just a little different.

A point of interest is that I started learning the original version of this system months ago, and slowly evloved it to something that was pretty close to this one.

So I was really excited when I read FeeltheFX's experiance's and methods. I was able to learn alot about the charts I was reading and craft that into the way I trade. Thanks Man for taking the time to post

Something I forgot to mention. Although I am still only paper trading I have got to say that this system and it's variants so far has been the ones that have working best for me. It makes sense to me so to speak and I'm able to trade it.

Something that has really helped be trade is an EA called ManageTP
http://www.forexfactory.com/showthread.php?t=9553
It's very easy to use and help automatically set your TP in increment that you specify and well as moving your stops to BE automatically. Very nice EA and saves a lot of manuel effort and time. Also helps take the emotion out of the trade : )

Thanks for the posts outofajam. That will be helpful to have that software to preprogrammed to do your TP for you.

Hi,

I have just posted this message at feelthefx.com but I put it here as well since I had problems with the attachment at the other site.


I have spent the last few weeks looking for a broker that has a very good web and mobile platform.
I am very impressed by FXSol's platform and its charting package: FXAccucharts (http://www.fxaccucharts.com). Actually it is the same as TeleTrader (http://www.teletrader.com).

The desktop charting package has a lot of indicators but I couldn't find the Awesome Oscillator (AO) and Accelerator Oscillator (AC) by Bill Williams. These indicators are essential for the FeelTheFX system.
Fortunately users can develop their own indicators using Teletrader Language. I am not an experienced programmer but the language seems easy to learn and the formulas of AC and AO are very simple too so I decided to give it a try and write these indicators on my own. It seems to work but I am sure it is not the most efficient implementation.

Unfortunately users cannot add their own indicator to the web charting package. I hope one day FXSol (or TeleTrader) will include these popular indicators.

I attach my files of the indicators (both binary and the source code).

I post an image of the chart with the two indicators.

Please feel free to use them and change them. If somebody changes (hopefully improves) the code I'd appreciate posting the updated code here or at feelthefx.com.

Alvo

LOL at this thread. This guy is sending out trade signals from his website when he has actually never traded a single dollar in real money in his life. I mean what is this world coming to? Soon we might see nurses performing surgeries because they have been around the surgeons and they know how to do it.

Hi Good,

You make a very valid point here and of course people should make their own judgment instead of blindly following any signals.

However, somebody's short experience on its own is not a valid argument for completely disregarding what he is doing. It seem that "this guy" have a very good "instinct" (or call it whatever you want). Take a look at the forum here:
http://www.ozfx.com.au/forum/viewtopic.php?f=2&t=432

It is worth to read.

Good luck!

Alvo

I would hardly equate trading currency for a living to surgery, but hey if that is how you view life more power to you.

First off let me respond to your post by saying that people took notice of what I was doing and asked for me to get my trades to them in some manner so they could see the trades as I took them. Initially I said I didn't have the means to do that and that I would just continue to post my trades on the net as I took them. That was until I was approached by someone willing to set everything up so that my trades would go out live as I took them. I figured that if they were willing to go through that much effort than why not?

Secondly I have traded with live money I have friends who trade forex and have given me access to their accounts to place trades for them when they weren't able to. You want to talk about nothing is like trading live. Well let me tell you something you want pressure try trading someone else's live money. Also just because I chose the road of learning to trade through demo rather then throwing money at it to see if it would stick doesn't make it a fatal error. I think the fatal error in forex is thinking you know everything in 3mos of trading demo then jumping in with X amount of $$ just to lose it all.

Now back to the signals service that you so easily laughed off. Well my friend laugh if you must crack jokes if you will, but you want real pressure in trading try taking trades knowing that when you do 100 people will receive an email telling them you just took a trade. Also to top it all off you don't know if they are trading live with you or not. So don't try to sit here and tell me that I don't know what it is like to trade live.

Lastly I checked all your posts here at FF just out of curiosity. I found that 80% of your posts are just criticisms of what other people are trying to do. You don't have to agree with one single letter that I type here in my posts, but if you don't like it don't read it. I kind of look at it like watching a show on t.v. if you don't like it turn the channel. Besides like I said most of your posts are just criticizing people so if that is your only skill then sorry don't blame me for your short commings and the fact noone has ever taken notice of anything you have done in forex.

So long story short. I developed a trading style that people took notice of and are interested in. So much so I didn't even develop my website someone else did and I didn't even pay them to do it. The only thing I do is post my trades there. So keep laughing that is all well in good. It just feeds my desire to prove people wrong and I can just add you to the list of nay sayers. Some of those now get my trades via email.......go figure.

Traded gbpusd long today June 23,2008. You can see in the pic here that the initial setup looks good and everything was lining up giving a good entry signal. The market was moving painfully slow today as it has been the past few weeks. As always I am shooting for 30 pips or more depending upon price movement, but looking to TP at 10 if lower TF indicate the slowing price movement may reverse. I was trading 6 std lots here, and ended up getting out with 10 pips. Market ended up hitting 1.9655 before the market looked like it was going to go short again. So I left some pips on the table, but I try not to dwell on that. Once the range comes back to the market it will be easier to get those pips and not worry about the choppy market conditions.
This trade took a little over 30m
Profit: $600 after spread
June profits so far: $5300
Currently 84% correct trades for the month
Here is the email notification that went out:
(Orders Open: 1.) BUY GBPUSD at 1.9625 as of 2008.06.23 16:30 GMT. Spread: 3 pips.
Order closed! Orders Open: 0. BUY GBPUSD closed at 1.9635 as of 2008.06.23 17:08 GMT. Profit: 10 pips.

Hello everyone,
Well I know some people have wondered why I haven't gone live yet or they were wanting to know when I was going to. Well I am pleased to announce that today I sent off my funds to my broker. It may be another week before they get it, process it, and put it on my acct ( I was too cheap to do a wire transfer). I decided to go live with $500 which is only a portion of what I have to fund my live acct. The reason I decided to do this is to see how far trading my system someone with a small account can go. I think most average and new traders start off small so I decided to do this to see how far we could get $500 using this system. As soon as I take my first live trade it will be posted and all my updates will change from my demo acct update to my live acct update. The charts will still appear to be the same, but I will be trading on a different platform. I will also be live trading every single trade that you receive in the emails as signals. So let's see where this takes us and I am excited to see how far we can push $500 using this method.
Regards,
FeelTheFX

Well I would say that it is a wise decision that you are starting with a small account.
Good Luck.

Thank you I appreciate that.

FeelTheFX,

I can't comment about your entries and exits, but check out the attachment below. It's the equity curve of a highly positive expectancy system.

There are three curves plotted, each using the same entries/exits, and hence the same wins and losses.
The blue curve shows the equity increase while risking 2% of the account per trade.
The magenta curve shows the equity increase while risking 4% of the account per trade.
The yellow curve shows the equity increase while risking 10% of the account per trade.

Hopefully the graph illustrates the proportional relationship that exists between return and risk. The higher the amount risked, the higher the return, but also the higher the maximal drawdown. The key point is that the yellow curve hit zero at one point, which means that the drawdown was irretrievable. That is despite expectancy being the same in all three cases.

Expectancy is determined solely by the effectiveness of your entries and exits. All position size does is act as a magnifier of both return and risk. It doesn't matter how positive your expectancy is, ruin will occur at some point, if the position size is high enough. The only exception is a system that has a 100% win rate, which of course is a long-term impossibility.

You might also like to check out the post here:
http://www.forexfactory.com/showthread.php?p=188593
At the end of the post is a table showing the probability of an X trade losing streak within a sequence of 50 trades, given a certain win rate.

David

Hey I read the post under that link that you had in your reply here in this thread. Pretty interesting stuff! So what you are saying is inevitably this system is doomed to fail over time?

Not necessarily. As a general rule with any system, the lower the position size, the lower the risk of ruin. Also, the higher the expectancy, the lower the risk.

I don't have the exact formula, but (assuming the same expectancy) the risk of ruin is not a linear function. What I mean is that a system that risks 2% per trade consistently has a better than double probability of avoiding ruin than one that risks 4%. Or conversely, a system that risks 10% has a significantly greater than double chance of going broke than one that risks 5%. And so on.

Let's assume that we can draw a direct analogy between trading and gaming theory. A casino might have (for example) a $1 billion capital backing, and allow a max bet size of $500. That's analagous to risking 0.00005% per trade. With such small exposure, the probability of the casino experiencing a large enough climate of losses that would cause bankruptcy might be 0.0000000000000000000000000000001%, or something of that magnitude. But over an infinte period of time, that would theoretically happen. Probably something like once in 1,000,000,000,000,000,000,000 years. Of course I'm making the numbers up, but they would be something in that order of magnitude, and you get the idea.

Given an infinite number of trades, then, any system will go broke, but by keeping position size small (and hopefully having a significantly positive expectancy), it's not going to happen within your lifetime.

[This is somewhat akin to "Gambler's Ruin". To explain simply, if I start with (say) a bankroll of $10, and you start with $100, and a fair coin is tossed repeatedly on the basis that "heads I take $1 from you, and tails you take $1 from me", then you have a much greater chance of bankrupting me before I do it to you, largely because you're risking only 1% of your bankroll while I'm risking 10%. See http://en.wikipedia.org/wiki/Gambler%27s_ruin for more info].

Now, assuming that all of the above is applicable to trading, let's move on.

Position size has no bearing on expectancy. Put another way, we can't "money manage" a negative expectancy system into a winning one. Entries and exits must be (on balance) effective, otherwise, given enough trades, we will definitely face ruin, and the higher our position sizes are, the faster it will happen.

What justification is there for increasing position size? The answer is that if there's a higher-than-normal probability of the current trade being a winner (and that's assuming we have some way of measuring the probabilistic superiority of one setup over another). Again, a gambling analogy. If you're dealt four aces at Draw Poker, then you have a much higher probability of winning the pot than if you're dealt a pair of twos, so (ignoring the psychological elements, which has no mathematical basis) an increase in bet size is justified. The card counters who made a living out of Blackjack during the 1970s/80s did so by placing a high bet when the distribution of high cards remaining in the shoe (that's whne the player has an advantage over the house) was massively higher than normal.

Otherwise, there's no mathematical justification in risking a higher % of the account on any one trade, than another. If you do, you may get lucky, and have the winning trades coincide with your higher "bets". Equally likely, you may be unlucky and find that just one losing trade erases the profits made by several winning trades.

There have been numerous threads here on Martingale (or semi-Martingale) position sizing systems. The idea being that if one doubles up after each loss, that it only takes a single win to return to breakeven, and that one win must eventually happen. But the problem is that, if one risks (for example) 1%, 2%, 4%, 8%, 16%, etc on each trade, that unless one has infinite capital, a losing sequence will eventually come along that will cause ruin. And one reaches the point where one is risking something like 64% of the account just for a 1% gain.

Attached to this post http://www.forexfactory.com/showthread.php?p=1861870
is an XLS that hopefully illustrates that no matter how one varies bet size, and no matter what betting system one uses, the overall expectancy is always the same as if one uses "flat" (consistently sized) bets. Again, the point that MM doesn't alter expectancy.

If you're interested in expectancy, return, risk, etc, you might find my posts here interesting:
http://www.forexfactory.com/showthread.php?p=1786938
http://www.forexfactory.com/showthread.php?p=174809

I wish you enjoyment and success with your trading. It's a fascinating and challenging activity.

David