THV system, final edition

I am surely glad that you have found a way to adapt Cobra's THV system to fit your personality! and thanks for sharing your modified chart!

I am certain that, should he consider it opportune, Cobra himself will contact you so you can discuss privately about your points of view.

You raise an interesting point about the "no more than 7 optical items", indeed it is known that the iconic memory (which is a type of short term visual memory) allows about that number of elements to be processed simultaneously (most commonly 4 to 5 though in another study it is said that 9... I recall having read long ago that it was about 7 in average).

Thank you for the reminder, this is indeed important and that's why it is better to strive towards simpler chart setups so the focus can be better directed to PA.

And thanks for the new nickname, in fact I love CCI though Doblece is only the mention of the two initials of my name...
DoubleCCI...
Now I feel as a very powerful indicator! Cool!

I too like to play with the numbers...I think you will find that you need to find a happy trade max for yourself and your account, and then build from that...even stopping at a 50 lot max you can make a killing on just a few pips daily. If you can find the answer to the issue of being able to trade only certain quantities until you get to a point where the broker will set up a custom lot system for you. I.E. you will have gotten to the level of the very successful traders...and did you remember to account for the difference between a mini and standard account? That will also affect your rate of return. All in all...very interesting how you can build your account. (anxiously awaiting the newest version)

Your math is indeed correct. But the practical aspects of trading make your assumptions perhaps invalid.

First, with a 20 pip S/L and a 10 pip T/P target, that would give you a 2:1 risk reward ratio. That means you would have to "win" 3 out of 4 trades in order to make your 10 pips. Not so easy to do consistently.

Then there is the psychological aspect of trading. It is feasible to keep scaling your trades as the account grows, but at some point your tolerance for drawdowns will be very sensitive, and your objective trading may fall apart. Imagine that your have to trade 20 full lots to maintain your 2 percent risk, that's 200 per pip. For some, it would be unbearable to weather even slight moves against you. So even though the math works, the fact is that when your account grows, you would have to limit your position size to stay sane.

This is a time proven fact. Many people are capable of growing small accounts fast, but when things get scaled up, the psychological aspects come into play.

Hope this helps.

Because at a certain point it will be very difficult for a broker to find the correspondent liquidity for such a huge amount of lots.

Because there is also a normal fluctuation, profits and losses that even in the most successful of the cases, will bring back equilibrium into the picture.

See how big funds managers (like George Soros for example) label as very successful a return of about 25-40% yearly. And they sure have billions to make much more (we think). The fact is that no broker will allow you to trade 1000 lots (or you will have to go through a bank directly, with a totally different leverage, more like 1:1 on those big amounts. No way near 500:1 or 200:1 ).

Exponential growth has a curve, in which at a certain point and if everything keeps being steady, the curve converts to somewhat a flat line slightly ascending or descending from time to time.

Balance is in everything.

And you can grow an account to over $5M in three years, why not?
But before setting so distant goals on paper, start doubling that $2500 account.Then again, and again. Gradually.

If you are able to master your emotions in front of a $87400 drawdown (20 pips on 437 lots) good for you! But it will only come gradually and I can assure you that it is feasible but not easy at all.

As long as you are focused on keeping a perfect balance in all things in your life, any goal can be attained. I know of some traders that handle 100 lots per single trade, I have had nearly 200 lots total open together in different positions (the biggest of 25 lots though) at 200:1 so 437 is still in the numbers, IMO.

But focus primarily on the psychological aspects of trading, and money management. The rest will come by itself, if you really are meant to receive it.

Thanks for all the input, I understand the mental side of this issue, with the strict following of a system both trading and MM. I can't even imagine looking at an $87,000 DD but it is still mathmatically the same % as the $50 DD on your first trade. I am not one of those "I'm gonna be rich because of forex" guy's that we all have seen and heard, I just run numbers and I say what's wrong with this picture?

The system doesn't change trading 2.5 MINI's or 500 full lots, the stop loss never moves, the max risk per trade stays the same, I press the buy or sell button with the same force regardless of it being worth $50 or $100,000. I just couldn't see the technical problem when you take out the mental variables. But maybe the mental variables are the problem...

The mental variables are indeed the problem.

Imagine going from trading demo to immediately trading only 1 full lot. That's only a $200 risk per trade in your scenario.

I guarantee that your trading would change, system or no system.

And that is nothing compared to going from 1 full lot to 20 full lots per trade.

The mental games are not easy to master, no matter how good the system is.

Thanks DOC, I really wasn't looking at the RR ratio because that was more of a system issue. I was using the 20 SL to set a max risk (2%), and use that to set how fast to increase position size. I was using the 10 pips per day as an average, the system could have all sorts of RR % and average $ win vs average $ loss percentages, I just have to generalize and say 10 pips per day.

Is is unrealistic to average 50 pips per week, each and every week?

No, definitely achievable.

Most of the folks I have talked to who scalp using systems like this go for 20 to 50 pips per day, and just scale their positions as their confidence grows, not as their account grows.

I think at some point it is based on an individuals circumstance, just like playing blackjack the $5 table scares people because $5 means a lot to them, the $25,000 table doesn't scare some because they are to the point where $25,000 doesn't really mean that much. When you have $5M in your trading account 2% is still just 2%, it just means $116,000 in this case. I don't think I could ever get to the point $116,000 wouldn't scare me...

Thanks for all the input.

I would like some others ideas on MM, it's not discussed very much but we all know it is what seperates the winners from the losers. Bad MM WILL ruin any system even the amazing THV.

Exactly.
And outer, non predicted nor covered, circumstances.
Are you prepared to lose it all? And that even then this won't affect your thinking or capabilities and you'll be able to start again anew and keep on working hard toward your goals?

Something I didn't mention but is very important, IMO: you've got to have a real goal (not only vague dreams on numbers, like reaching $xxx... ok, but: what for? You have to work towards something clear in your mind and with a purpose. Only then will you be able to commit to your goal and fight the self-sabotaging bursts that every now and then can surface. Alike the market, we "move" in cycles, we are not always the same, we can even be contradictory at times, as seeing a bull market and selling the pair, for no known logical reason. We can be distraught, we can face personal issues that cloud our mind. I don't think that anybody can be following 100% perfectly and always in the same way, a given set of rules. We're human, not machines. And that's great! But the 10% or 20% of times when we react as humans and fail, are to be predicted and prepared BEFORE that times arrive. All the more slightest details have to be included and have their own backup plan, because the most unpredictable thing is the one that will occur unexpectedly and usually precisely when we are thinking that everything is going soooo smoothly.

Good emotions can be even worse than bad, because they will cloud the picture through a rosy pair of lens...

There is no technical problem (except for a brokerage server failure or accounting error, connection problem - sigh - or electricity issues) and even those can be taken care of properly (this means, having the more ample set of tools possible according to the level of responsibility involved).

The mental variables can be a problem if you don't master the techniques or don't keep learning every day so you can notice when the market changes its behaviour and change your systems accordingly. But those also can be taken care of in an easy way.

The most difficult part, is the emotional part.
The "little egos" that suddenly come from nowhere to sabotage all your dedicated efforts. A sudden drop in self-esteem, a sudden RISE in self esteem more particularly, a bad day, or a slight breach of the rules.
Beware especially when you've been having a particularly great winning streak. Make a graph of your daily performance and treat it and read it as it was a forex chart. It behaves in the same way. After a huge spike, most probably comes a fall. Be prepared and keep on going. Flow with life and life will flow with you. Be in sync, with the markets and with all the aspects of your life. And at least, when you're not in sync (because that will happen more than we would like to) be aware that you aren't and be quiet then.

And finally, be prepared to give twice as much as you receive. Be generous with your time, your mind, your friendship and your love to others. And your money too, when everything else is covered You can also give first, so to assure your credit with the universe...

Indeed, 10 pips a day is a feasible goal. And if your MM is conservative and you feel confident and safe with your trading system, are free of stressful situations, or don't trade when there are such, you will reach it easily. If you can keep discipline day after day and your own "real life" in a good balance, you will have great odds in your favour.

MM is indeed a valid topic for everyone, but it is not the topic of this thread. We should probably end this discussion now before someone gets irritated with the off topic stuff.

I'm sure it can be done, but at that point the hedge funds will be contacting you.

I think this tool is included with the THV manual in the system folder, but in any case, there is a recommended rule not to risk more than 2% (and better 1%) of the account on a single trade.

Here's a handy calculator that Cobra contributed to help in making those decisions more accurately. You just have to change the values in the aqua cells accordingly, and it will give you the exact price to set stops and targets as well as position sizes. Trade size is expressed in units: 100.000 units = 1 lot, 1000 units = 1 micro lot, etc.

No problem, Doc, MM should be a part of every system and... it's the week-end (and I don't think anyone could become irritated to learn about how he/she can manage their account more properly...).

I have read the last 2 pages of the thread, and Doblece and Cobra have answered questions with clarity. Yet the conversation continues down the road of a pipe dream of how much you can make.
How much do you need to make?
Is this your only job?
What is your purpose and goals in trading currency?

Then we head down the road of money management not being discussed enough.Maybe it's not asked enough.

Let me assure you that every team member is very aware and schooled in money management, it is an individual's level of risk appetite that undermines money management.

Percentage gained is the only true measure of progression in this market. I say progression as the sign of success in this market is as Doblece moniker says " I'm still here" If you can stay on this thread for 1 year and increase your account, then you know the measure of success.

We all trade different sized accounts, different leverages, and different lot sizes. This is an individual choice. Do not measure yourself by what others do, measure yourself based on attaining goals you have set forward for yourself.

A little story to share: I traded several demo accounts before going live. I would double or triple the account and would get bored with trading.
I then opened a mini account with $1000 and traded real money, I wanted to acclimate myself to real money, I tripled the account in one month, then the account got to its present status, there is $59 in the account to date.
I decided boredom was the cause so....

I opened a $100,000 account in June 2008 and proceeded to increase the account by $13000 in 2 days, boy I was on my way. I was going to double that sucker every 2 weeks. Guess what, circumstances occurred that I lost internet connection while traveling with 10 lots open, and before I got back on, I found myself in a pickle with $10,000 in loss, no problem, I'll hedge it and get it all back. then ECB interest rate and ADP non-farm payroll came out the same week, and through my limited education and volatilty in the market, ended up with $53000 left over. Now what do you do? Quit?

I decided the only way to success was to educate myself as much as possible. I traded everybody and their brother's system and found that it is not just the system, but the discipline and patience needed to become successful.
After trading through Aug, Sept, and Oct sometimes winning and sometimes losing, I ran across a trader named Cobra whose only motivation was to help other traders not have to suffer through the fates I experienced and probably he did too( he's smarter than me, he wouldn't lose as much as I did)
I studied his system, and traded it after trying scalping, swing, and long term trading. Then THV came around, and I was sold!
A trader who filled his order book everyday, yet was so selfless as to create a system to share with others to make them more successful, and then constantly test and improve on the system. A rare feat in today's world for mankind.
I remember Cobra, pre THV would take as many as 100-200 trades a day, that is working!
So I ground it out, and in the last 2 months( since people want to here $) I have brought my account back to over $86000.
Why would I share this, many wouldn't because it is difficult to admit inadequacy. I now understand support and resistance, price action, candlestick patterns, Fib retracements, but I am married to the THV.
This is not a sales pitch, this is my experience, it may not be for everyone, but I do not half-hearted attack anything, not my nature, and the simplicity and efficiency I have not seen in my 1 and 1/2 years of experience of trading.
I will through my hard work and dedication be succesfsul monetarily through my trading, as well as have a sense of fulfillment through my commitment to sharing my knowledge,successes and failures with any trader who so desires to engage me, and is commited to many of the same goals.

My motto in life to anyone I have the priveledge of helping:" You owe me nothing, just pay it forward!"

I apologize for the length of this to all who suffer through the whole post, and to Cobra for taking up a whole page of this thread.
Good luck to all, and may the bird of financial freedom poop many pips in your pip basket!

Excellent post!!!

Yah...correct...even we got the BEST system...but without good Money management....ulitmately...we still lost alot of money...

and most of us are GREEDY...

CC my broker closes at 4:00PM EST. Did my .2765 ever get tested?
Important to know for analysis, and my chart closed at 3:58 time.

Thanks ahead of time!

Money Management is the single most important aspect to staying in this game long term.

Every system... every one ever created will have a draw down. If you are applying simple MM rules to mediocre system you are going to win in the end.

I like 1% per trade. There are times when I load up and risk 2% but usually only a quick scalps.

I have several managed accounts and when we talk shop there is no such thing as a PIP. It's based on percentages.

Last month I was up 14%... not 530 PIPS.

Here to end the numbers discussion (as it seems we are straying on the sidelines, lol) but I had to write it down

With a 20 pips stop loss, you have to make 800 pips and lose 600 average so to have a net 200 pips (daily 10 pips per 20 trading days), based on a 70/30 win/loss average. This would give around 20% a month with a 2% risk.

Starting with $2500, you would need 55-56 months (nearly 5 years) to reach the 5M goal, provided you don't take anything out. As this doesn't seem fair for the trader not to pay him/herself, let's say that you start taking half of your profits after you reach the first $100.000 (nearly the first two years). You would need 6 additional months to reach the goal. And would have banked about the same 5M with half taken out profits.

Voilà!