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(can) small accounts make a living ?!

  • #341
  • Mar 18, 2009 10:05am Mar 18, 2009 10:05am
Hello Rearden,

Thanks for the interesting thread / conversation.

Could you tell me your screen time given you trade from 1 M chart
Do you watch the majors during entire UK session or only between 6 and 9 AM GMT

Thanks
TradeStar
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #342
  • Mar 18, 2009 10:27am Mar 18, 2009 10:27am
Quoting H. Rearden
PJ,

Thank you very much for your very comprehensive post....
HR,

Thank you for making it very explicit. This is what I had hinted in the last para of my post:

"Each of us can be a profitable fx trader if only we operate with a checklist, patience and limited profit goal. Bonuses will be there once we have learned to pickup skills patiently."

In my view, flexibility can be exercised only by those who have practised and acquired the essential skills of having patience and be content with small profit goals initially.
  • #343
  • Mar 18, 2009 10:53am Mar 18, 2009 10:53am
Quoting TradeStar
Hello Rearden,

Thanks for the interesting thread / conversation.

Could you tell me your screen time given you trade from 1 M chart
Do you watch the majors during entire UK session or only between 6 and 9 AM GMT

Thanks
TradeStar
TradeStar,

It depends what the market offers. I start between 6am and 7am GMT with an open end in mind. If the market is generous, I could be finished before lunchtime having banked an average of 0.5% on the day.

Today, it was more difficult and I am currently at -2.7% for the day having traded 3 times. Since I am close to my daily limit, I won't do anything before the FOMC meeting tonight. If I see an opportunity, I might go for it with 1.3% risk on the trade.

The fact of the matter is, that the majors often behave similarly - based on how the participants position themselves according to dollar strength or weakness which means that the dollar will make hi's or lo's in most of them around the same time - for that I wait patiently - then position myself and hopefully take profits soon thereafter. The wait for the right moment (for the lowest possible risk) is what takes the longest.

H. Rearden
  • #344
  • Mar 18, 2009 10:54am Mar 18, 2009 10:54am
Quoting pj9100
HR,

Thank you for making it very explicit. This is what I had hinted in the last para of my post:

"Each of us can be a profitable fx trader if only we operate with a checklist, patience and limited profit goal. Bonuses will be there once we have learned to pickup skills patiently."

In my view, flexibility can be exercised only by those who have practised and acquired the essential skills of having patience and be content with small profit goals initially.
PJ,

I agree.

H. Rearden
  • #345
  • Mar 18, 2009 3:12pm Mar 18, 2009 3:12pm
Im a little late to the party but I just read through the whole post. I have 1 question. Say, for example, I have an account balance of $50,000. I make the 10% a month, so Im making $60,000 a year, which is enough to cover my living expenses in 2009. If you never increase your account balance, what are you going to do when in 20 years, thanks to inflation, your $60,000 a year is no longer enough money to meet your living expenses? If you never increase your account balance, then in the long run, inflation will eat you alive. Do you plan for this?
  • #346
  • Mar 18, 2009 3:42pm Mar 18, 2009 3:42pm
I have not brought the issue of inflation into the discussion but I am sure if you trade with $50K, you might want to put 2 month worth of gains toward the coming years balance and take it from there.

So, in the new year you start with $60K - that should cover even heavy inflation.

H. Rearden
  • #347
  • Mar 18, 2009 6:00pm Mar 18, 2009 6:00pm
Hi, I have read the entire thread.
Many thanks to H. Rearden and other discussion participants for the great posts here.
  • #348
  • Mar 19, 2009 10:53am Mar 19, 2009 10:53am
Skyline,

Could you please tell me which MTF stoch indicator you used?

Thanks,

Quoting skyline
Hi H. Rearden,
I'm studying your mtf stoch trading method trying to grasp the basic concept but looking at your report there's some trade that I don't understand why was opened.
For example this one :

60905259 2009.03.12 11:57 sell eurusd 1.2809

In below screenshot I put three stochs using an mtf stoch indicator just to have all of them on the same M1 charts. It seems that only M1 was overbought while M5,M15 were in the no-man land between 20 and 80.
Did you took that trade following some different rules ?

Thank you
Skyline
  • #349
  • Mar 19, 2009 11:59am Mar 19, 2009 11:59am
Quoting 4Xfactor
Skyline,

Could you please tell me which MTF stoch indicator you used?

Thanks,
Hi 4Xfactor,
it's #MTF_Stochastic indicator, you'll find it in attachment.

Have a nice day
Skyline
Attached File(s)
File Type: mq4 #MTF_Stochastic.mq4   4 KB | 525 downloads
  • #350
  • Mar 20, 2009 10:25am Mar 20, 2009 10:25am
Good afternoon everyone.

We are at the end of another week and time for the records.

I hit my trade limit (-2%) twice, which means I also hit my daily limit (-4%) once but overall still improved on the previous weeks results. I didn't trade yesterday at all since I used my risk limit up on a for me turbulent FOMC Wednesday. Today offered plenty more opportunities than actually taken but the sun is shining heavy and I prefer to enjoy outside living over trading when I am confident to reach my targets either way.

The test-account stays at +7.75% on day 15 out of 22 trading days in March.

I hope everyone had a good week and wish you a good and deserved weekend.

H. Rearden
Attached File(s)
File Type: doc Interbank FX Mar09.doc   193 KB | 450 downloads
  • #351
  • Mar 20, 2009 1:13pm Mar 20, 2009 1:13pm
H. Reardon,
Thank you very much for sharing your knowledge and experience, I find this thread to be quite enlightening and have started going through the Technical Analysis Fallacy thread you mentioned earler as well.
  • #352
  • Mar 20, 2009 4:10pm Mar 20, 2009 4:10pm
Well, getting back onto my small account to living off.

2 weeks ago £110 UK, today £210 most of that this week, 15 trades with no losers aswell, which is cool, my system is nice and easy and I'm actually using it rather than trading against it which has only took a few years

I'll trade at $2 per pip with >£300 and then increase $1 per pip on every double I think to reduce my risk, so £600 for $3, £1200 for $4, £2400 for $5.

Hopefully I can get to £300+ over the next week then with a larger account it should start racking up nicely!!!!

Target is 4 months before I need to take out my first £1200 ish wage, then that monthly, doesn't sound too un doable to me.


But time will tell tried and failed before, but trading better than ever, but still need to trade better!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #353
  • Mar 20, 2009 4:50pm Mar 20, 2009 4:50pm
* just thinking out loud *

Okay, so took 130pips this week trading very part time and wussing Most of the moves, but didn't catch 1 bad trade so having it easy.

So allowing for Work commitments, slow market times and being lazy, if I aim for @200pips per week, not saying I'll stop but call that a average then, using the above Lot's Risk rules, I get this.

1 210 1 143 2 353 2 286 3 639 3 429 4 1067 3 429 5 1496 4 571 6 2067 4 571 7 2639 5 714 8 3353 5 714 9 4067 5 714 10 4781 5 714 11 5496 6 857 12 6353 6 857 13 7210 6 857 14 8067 6 857 15 8924 6 857 16 9781 6 857
So within 16weeks, keeping it simple could have a £9781 account and be taking £857 per week, while trading at $6 per point, 10K account likely be trading at $10 per pip easy and safely so £1429 per week

So keep it consistent, pick my times to trade which best suite me and make a relatively small amount of points and pretty damn quick it adds upto a HUGE ( to me ) account and sorted for life.

Just got to get consistent at 200pips per week with very importantly no stupid huge gambly draw downs!!

EASY
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #354
  • Edited Mar 21, 2009 12:44pm Mar 20, 2009 10:23pm | Edited Mar 21, 2009 12:44pm
Quoting H. Rearden
...The test-account stays at +7.75% on day 15 out of 22 trading days in March.
H. Rearden
Hi, I have some doubt and will be glad if you may reply the following enquiry:
1) You mentioned you have a mechanical strategy running, by just running the mechanical system alone, will it be good enough for living?
2) Is there any difference between the real strategy and the demo strategy? Do they have identical trades? As the market is changing everytime, will the strategy be modified frequently to adapt the market?
3) Is here any weakness of the strategy that will cause huge drawdown in the future?
4) Do you think successful trader has better luck than the others?
5) Will you find a new career if you have many months of consecutive loss?
6) What are the top FIVE most important condition that will affect your trading decision? (eg, m1,m5 stoc? m5 candlestick patterns? volatility? wave patterns? resistance support breakout? market news? other top traders recommendation? Bernanke speech?... etc)
  • #355
  • Mar 20, 2009 11:33pm Mar 20, 2009 11:33pm
Rather than asking demanding questions, it would be much nicer to read the thread, use what you can and leave the rest. People are nice enough to share their ideas the least we can do is be kind. A "show me" attitude doesn't win friends.
TRO
  • #356
  • Edited Mar 21, 2009 12:06am Mar 20, 2009 11:53pm | Edited Mar 21, 2009 12:06am
Quoting Toddfx
Rather than asking demanding questions, it would be much nicer to read the thread, use what you can and leave the rest. People are nice enough to share their ideas the least we can do is be kind. A "show me" attitude doesn't win friends.
Yes, I have read the thread. To avoid any false interpretation, I like to voice out my questions directly, although I have no intention to let it sound "demanding". Perhaps it can be treated as "an interview" from a bad trader.
  • #357
  • Mar 21, 2009 9:27am Mar 21, 2009 9:27am
Quoting fxfei
Yes, I have read the thread. To avoid any false interpretation, I like to voice out my questions directly, although I have no intention to let it sound "demanding". Perhaps it can be treated as "an interview" from a bad trader.
6) What are the top FIVE most important condition that will affect your trading decision? (eg, m1,m5 stoc? m5 candlestick patterns? volatility? wave patterns? resistance support breakout? market news? other top traders recommendation? Bernanke speech?... etc)

This was the only question of the bunch that didn't sound demanding or have a "you have to prove it to me" tone. That's just my opinion. There just seems to be a lot of nastiness aimed at people who's only intention is to be nice and share.
TRO
  • #358
  • Edited Mar 23, 2009 3:52am Mar 22, 2009 1:11pm | Edited Mar 23, 2009 3:52am
Quoting fxfei
Hi, I have some doubt and will be glad if you may reply the following enquiry:
1) You mentioned you have a mechanical strategy running, by just running the mechanical system alone, will it be good enough for living?
2) Is there any difference between the real strategy and the demo strategy? Do they have identical trades? As the market is changing everytime, will the strategy be modified frequently to adapt the market?
3) Is here any weakness of the strategy that will cause huge drawdown in the future?
4) Do you think successful trader has better...
FXFEI,

Let me attempt to answer all of your questions individually and as good as I can.

1) Although the thread is not essentially about any particular strategy and more about how to handle/approach the market (with any chosen startegy for that matter), the answer to your first question is this: any of my methods/models employed make enough money on their own to make a living with the difference that one strategy (the mechanical one) is an 'investment-strategy' while the other (the one I am using for this thread), is a 'discretionary trading-strategy'.

2) The only difference is the size between the test-account for the thread and my real account -- the trades are the same within a pip or two. Because it is a discretionary model, it has the trader himself as the best adaptation/modification tool in terms of choosing the best possible entry/exit according to current risk without having to change anything else (e.g. MM, pos. size, etc.)

3) No.

4) No.

5) No, I will re-evaluate my approach for its sustainability/validity.

6) Where the price is: new high's and low's, where are previous hi's and lo's and are those now support or resistance. What indicators are telling is secondary. With regard to news/speeches, I let them finish/pass and then take a look.

I hope this is comprehensive enough.

H. Rearden
  • #359
  • Mar 23, 2009 12:43pm Mar 23, 2009 12:43pm
Good afternoon all.

I hope everyone had a good and relaxed weekend.

A little note on the side regarding 'pips'.

Some members who kindly contributed to the discussion have mentioned their concept of 'making so many pips per week'.

I personally refrain from the whole pip-counting approach for the simple reason that I am here to make money - not pips. I know, some might say that a pip represents a specific amount of money. I believe that counting in real dollars or pound-sterling (or in whatever denomination your account is managed) is the way forward on a psychological basis. Otherwise, it is an easy way to fool yourself out of profits, especially when attempting to change your bet size.

Even when you enter a casino - and I am not bringing up the discussion about who's got the edge here - the chips you receive for the tables have a $-value printed on them for you not to 'forget' how much you are about to bet.

Further to this, your base capital is a specific amount of MONEY and not pips; therefore it makes more sense to calculate before (and evaluate while) trading the percentages based on money. In the thread's test-account it is relatively simple because we have a base capital of $10K. The risk per trade is 2% (or $200), but when operating with 0.5 standard lots fixed size, there are still variances in the pip-value based on the pair you are trading - not very big variances in our case, but still enough to rather look at your open P&L in dollars instead of pips.

E.g.: on eur/usd 0.5 st. lots equals a pip-value of $5 equals a 2% max. stop of 40 pips.

On the other hand, today's pip value for $/Y is $5.14 and that times 40 equals $205.60.

So if you take a 40 pip stop often enough on a pair that yields a higher pip-value than our 0.05% of base capital, you could end up losing more than your trading plan allows to happen.

Monitoring your P&L (of your open position[s]) on the basis of real monetary value is important. Care about how much you win and lose in money - nobody in this business I have met, ever cared about how many pips they or anyone else has made (or lost for that matter), only real cash counts.

H. Rearden
  • #360
  • Mar 23, 2009 1:04pm Mar 23, 2009 1:04pm
I understand what you are saying about dollars and pips but do not agree 100%.

When trading, if one focuses on the pips rather than the dollars then they are less likely to "freeze" when the lot size rises. Pips is pips but a $1 trade is easier for some to trade than a $100 trade. If you think in pips you stay focused on your plan but if you think in dollars your personal thoughts and feelings about money rear their ugly head.

http://i43.tinypic.com/6rkb9g.gif

http://i40.tinypic.com/315c3lv.gif

Do you really want to think in dollars or pips?

I do agree that one must monitor their P/L on a daily basis and adjust accordingly. Thank you for posting.
TRO
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