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(can) small accounts make a living ?!

  • #401
  • Mar 28, 2009 8:52pm Mar 28, 2009 8:52pm
Letting the profits run for more than a few pips, is my main issue currently in the way or retiring well not working atleast.

I've got the hang of my entrys, 18wins 0 loses recently, and I agree totally with the Exit first sign of trouble with a small a loss as possible, or some profit intact if possible, but not had any of my last 18trades ( 3 weeks ) go negative, I might get stuck hoping for it to work out and put a huge dent in my account and wipe out 10 profits in 1 swoop. ( I call this normal )

This fear is meaning I'm trading less and less losing the balls, need to lose and handle it to gain confidence in that area, typically it's not happening, strange world.

Without letting my profits run ( and my system does support this ), I'm going no where fast.

It's when you forget it's real money and in 1 dumb trade give 2 days wages away but don't realise to after that sucks.

Not easy, but when beat keep scaling up the LOT sizes and retire, it's the only place where $500 can get you to millionaire status in a few years.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #402
  • Mar 28, 2009 10:52pm Mar 28, 2009 10:52pm
H. Rearden

This thread was a very interesting read. Thanks for sharing.

Tyler
skype: ststroud. let's talk trading.
  • #403
  • Mar 31, 2009 6:54am Mar 31, 2009 6:54am
Good afternoon all,

Day 22 out of 22 trading days in March and the test-account closes for the month at +13.8%.

I hope that some readers will have found the illustrations helpful. When looking at the statistical facts from the past 2 month of statements, conclusions can be drawn that with clear money management rules and the knowledge of one's methods expectancy, confidence can be built - to keep on trading even when losses occur with relative frequency.

The application (for no better word here) of such confidence on what we have tested on a relatively small scale, can be projeted to bigger acounts in time of course - the percentages matter, rather than the size, when striving to understand the works of a profitable trading approach.

Good luck everyone.

H. Rearden
Attached File(s)
File Type: doc Interbank FX Mar09.doc   275 KB | 659 downloads
  • #404
  • Apr 1, 2009 12:13am Apr 1, 2009 12:13am
Quoting Turveyd
Letting the profits run for more than a few pips, is my main issue currently in the way or retiring well not working atleast.

I've got the hang of my entrys, 18wins...
It is great to see you have a bunch of winning trades, however im not too sure on what Risk to Reward you are using.

Ill outline with a case that a gentleman put forth a couple of years back. He was also highly successful, with a win rate of 92%. However he made very little money, was always stressed biting his nails and never left his computer screen.

The situation was the same as yours (or so it sounds). He would trade, take small profits and be out quickly. However (and this is where im not sure if it differs for you) his risk on a trade may have been around 30 and the 8% of the time he got stopped out he lost the majority of what he had earned pulling small positions out of the market.

Now when the odd occurance happened where he lost 2 or 3 trades in a row (i say odd because if you where winning 92% of the time loosing seems odd if it happens twice or more in succession) his account was hit brutally. He traded with the same capital % however as his account grew slightly, his lots grew slightly and when the losses hit, they hit at the higher lots meaning that for 2 or 3 trades of winners at smaller lots he coped a big stop at higher lots than his previous trades.

He didnt understand why he couldnt just trade like normal, but it was outlined to him that he wasnt mentally prepared to accept the risk. Sure he place trade after trade, but once a trade was in green he couldnt accept it turning red, even if the red was short lived before going green big time.

If you see a signal that you trade on a consistant basis, and it works for you then there should be no need to exit out of trades just because something looks wrong. When you enter a trade there is a point where you say to yourself, risk is this "ok" execute. So what changes after you hit the button. If the trade moves against you do you panic, do you exit prematurely. If so then you have not accepted the risk. People need to learn that loosing is part of trading. If you dont believe that then you are kidding yourself.

Drawdown is fact, risk is fact and letting your emotions try to tell you otherwise is not going to help you in the long run to achieve your financial dreams
  • #405
  • Apr 1, 2009 12:55am Apr 1, 2009 12:55am
Quoting H. Rearden
Good afternoon all,

Day 22 out of 22 trading days in March and the test-account closes for the month at +13.8%.

I hope that some readers will have found the illustrations helpful. When looking at the statistical facts from the past 2 month of statements, conclusions can be drawn that with clear money management rules and the knowledge of one's methods expectancy, confidence can be built - to keep on trading even when losses occur with relative frequency.

The application (for no better word here) of such confidence on what we have tested on...
You can shoot me if you like but I was wondering. I have not read the complete thread but looking at your results you appear to be a scalper who is running risk. Most of your trades you are in and out for small gains however your losses at times encompass your wins significantly.

I am not asking for your trading plan, strategy or anything. I trade 1 way and Im very happy with it, but I was wondering do you still go through the emotions when you loose a significant portion of your gains and does your system allow for greater gains or are you just now looking at getting green pips as often as possible until any kinks are worked out.
  • #406
  • Edited 1:54am Apr 1, 2009 1:09am | Edited 1:54am
Quoting H. Rearden
Good afternoon all,

Day 22 out of 22 trading days in March and the test-account closes for the month at +13.8%.
...
Good luck everyone.

H. Rearden
Just my feeling, although it may not be correct, I feel that most of the trades is base on "luck". Most of them do not have a stop loss as you manually closed them. A 500 pips spike against you in a minute (rare but happened before), your balance will be -25% immediately. A 2000 pips spike your account will be gone. We all know that during rapid market movement, the broker will fill the worst price for you. This is the risk that may happen in the future.
  • #407
  • Apr 1, 2009 5:32am Apr 1, 2009 5:32am
Quoting Razor_trader
You can shoot me if you like but I was wondering. I have not read the complete thread but looking at your results you appear to be a scalper who is running risk. Most of your trades you are in and out for small gains however your losses at times encompass your wins significantly.

I am not asking for your trading plan, strategy or anything. I trade 1 way and Im very happy with it, but I was wondering do you still go through the emotions when you loose a significant portion of your gains and does your system allow for greater gains or are you just...
Razor,

Thank you for your post.

I did explain in early posts in the thread (and as my avatar states) that everything is relative. While I am not suggesting to use any specific trading model, I have given an outline on why I trade the way I do with one of my accounts - the intraday account which I have simulated for in a 'small' amount to highlight certain possibilities in this thread.

If you look at the win/loss ratio,you can see why I can afford to apply my risk as I do - and knowing the factors of ones method makes all the difference - in your wallet as well as in your mind, to answer your question about my emotions.

I don't worry for a second when a trade doesn't produce profits immediately: there are two mechanical options to consider. One is to decide to kill it because I don't any longer believe it will produce a profit, which would make it rediculous for me to wait for my risk to be exhausted, and the other is to manage the trade within my risk parameters until it shows a profit.

As I have also metioned recently, I am trading this acc. in a very relaxed way and the potential for far greater gains is of course given - there are 2 reasons for not pushing it harder: a) it is not in line with the thread topic and b) I also run a fully mechanical system with the greater portion of my capital. Both are independent and both make profits - as you can see.

H. Rearden
  • #408
  • Apr 1, 2009 5:43am Apr 1, 2009 5:43am
Quoting fxfei
Just my feeling, although it may not be correct, I feel that most of the trades is base on "luck". Most of them do not have a stop loss as you manually closed them. A 500 pips spike against you in a minute (rare but happened before), your balance will be -25% immediately. A 2000 pips spike your account will be gone. We all know that during rapid market movement, the broker will fill the worst price for you. This is the risk that may happen in the future.
FXFEI,

I must be the luckiest person on the planet then - since I place my orders in the same way for years and years.

But seriously, it has nothing to do with luck and further to that, I don't need to set physical stops if I am in front of my monitors. Only if I step away will I place a hard stop. A 500 pip spike will most likely ignore hard stops in any system and by definition, a spike is a short lived occurrence which will most likely return back to previous levels. (except my luck of course of never having witnessed one of those, haha)

I wouldn't be too concerned about the possibility.

H. Rearden
  • #409
  • Apr 1, 2009 5:52am Apr 1, 2009 5:52am
Quoting H. Rearden
FXFEI,

I must be the luckiest person on the planet then - since I place my orders in the same way for years and years.

But seriously, it has nothing to do with luck and further to that, I don't need to set physical stops if I am in front of my monitors. Only if I step away will I place a hard stop. A 500 pip spike will most likely ignore hard stops in any system and by definition, a spike is a short lived occurrence which will most likely return back to previous levels. (except my luck of course of never having witnessed one of those, haha)...

Absolutely Agreed!!
  • #410
  • Apr 1, 2009 1:30pm Apr 1, 2009 1:30pm
Quoting fxfei
Just my feeling, although it may not be correct, I feel that most of the trades is base on "luck". Most of them do not have a stop loss as you manually closed them. A 500 pips spike against you in a minute (rare but happened before), your balance will be -25% immediately. A 2000 pips spike your account will be gone. We all know that during rapid market movement, the broker will fill the worst price for you. This is the risk that may happen in the future.
A 2000 pip spike and I can assure you, hard stop or not, your account will be gone. Thankfully for all intents and purposes these don't happen often enough to worry about.
  • #411
  • Apr 1, 2009 5:14pm Apr 1, 2009 5:14pm
Quoting smittens4212
A 2000 pip spike and I can assure you, hard stop or not, your account will be gone. Thankfully for all intents and purposes these don't happen often enough to worry about.

Never happened to me once, a year or 2 back at news times the market used to jump 70pips in either direction, but thats about worst case.

70pips would hurt, but equal odds of it being 70pips in my favour so in the end they'll balance each other out so why worry about it.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #412
  • Apr 1, 2009 6:21pm Apr 1, 2009 6:21pm
Quoting H. Rearden
Razor,

Thank you for your post.

I did explain in early posts in the thread (and as my avatar states) that everything is relative. While I am not suggesting to use any specific trading model, I have given an outline on why I trade the way I do with one of my accounts - the intraday account which I have simulated for in a 'small' amount to highlight certain possibilities in this thread.

If you look at the win/loss ratio,you can see why I can afford to apply my risk as I do - and knowing the factors of ones method makes all the difference...
Thanks for the reply there m8. I hope all goes well for you in the future. As you have said this is your system and you are completely at home with it and that makes alot of difference. Most will not trade this way because it defys basic trading which is to have the safety of a SL in place, however for you as an experience trader to your method this is what you feel comfortable with and that is all that matters.

Take care friend and best luck with you future
  • #413
  • Apr 2, 2009 7:40am Apr 2, 2009 7:40am
Quoting SmoothTrader
This is one reason why I like FX so much. In the beginning, while trading futures, I had to always worry about where I could get out of my positions quickly. Potential slippage was relatively high when compared to my equity base, so it was much more important to me to know where I could get out with a small loss than where I was going to get out if it was a profitable trade.

Once I mastered my trading style and began to make consistent money, I had to determine how I could scale up my trading. Unfortunately, the markets I was trading at the time...
Thanks SmoothTrader, you're posts are pure gold
I hope that you continue to post your experiences and insights on forex factory. It's awesome to hear real people to have been there and done that
  • #414
  • Apr 2, 2009 9:34am Apr 2, 2009 9:34am

To FXFEI


What currency do you trade or worse what is your broker?$

500 pips in a minute never happened. The worst was about 100 on eur/usd and 200 on gbp/usd and if i remember correctly it must have been in 2002 at the beginning of my "career" in trading and it took several minutes not one and no stops were honored, i was with an ECN and there were simply no prices to clause the opened trade. I may add the spike was clearly in the direction of the new trend which had just begun and I never made so much in such a short time (relatively to the account size).

  • #415
  • Apr 28, 2009 4:59am Apr 28, 2009 4:59am
Good morning,

There seems to be a certain obsession circulating in the trading community about the importance of the illusive percentages regarding winning and losing traders.

Like in any other profession, I believe the the level of pay rises with the level of professionality and all attributes that go alongside with it.

It seems that some traders use the numbers in a psychological manner as an excuse when they are failing, others might pat themselves on the back when they are winning for the same reason (although I think the second group's feeling of overwhelming happiness to belong to the winning group fades with time).

One could even go further and hypothetically speculate or statistically note the average loser’s loss and the average winners win - although that might in the current situation change the whole look of the pie. Thinking about the institutional losses from the sub-prime collapse and compare the amounts to the losing percentage of all retail traders and their combined monetary value of lost accounts.

My personal view is that all this should not matter too much for a trader - especially for the newer people in the trading community. Like a student of medicine or any other profession, one should keep a healthy passion for the chosen profession and strive to constantly learn and improve ones abilities. It is not the percentages of winners or losers that (should) determine(s) whether one succeeds in this job or not. The numbers are nothing but a distraction.

H. Rearden
  • #416
  • Apr 29, 2009 5:48am Apr 29, 2009 5:48am
Dear all. introducing first, my name ron. i live in indonesia .i'm newbie in forex world and i get virtual trading first before live trading. i want to be a full time trader and i expect about usd 400 gain for the beginning.
could you please give me advice how much i must deposit? how many lots i must trade for the save condition.{ because i don't have much money since i get fired from my job.. thx for the advice
  • #417
  • Apr 29, 2009 6:14am Apr 29, 2009 6:14am
Dear Ron,

have you read through this thread already?

H. Rearden
  • #418
  • Apr 29, 2009 6:29am Apr 29, 2009 6:29am
Hi Rearden,

Interesting thread...I guess I am not too late to join...going to read post by post for next 2 days....
-happyTrading-myFx.
  • #419
  • May 3, 2009 8:48pm May 3, 2009 8:48pm
answering the topic title, i guess it can. FXCM king of micro made USD$10,000 in 1 month with his starting $1000. if he can mantain it every month, then he's retired already.
  • #420
  • May 3, 2009 9:12pm May 3, 2009 9:12pm
No...Small accounts are only to test strategies ...once you wanna get big drop 10 grand or more in your account (preferably with micro lots) and set sail, sailor...
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