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Trading for a Living - Cliff Notes

  • #201
  • Jul 4, 2009 2:20pm Jul 4, 2009 2:20pm
Quoting doblece
Indeed it is possible but... a daily 2% is about 40% monthly (and only $400 on $1000). Independently of if that amount could be enough for a living where you live, how many sequential months could you guarantee a monthly 40% with stable consistency? It ain't that easy...
A daily 2% compound monthly yields about 48% a month. Trade a 1000$ account with 2% risk ( 20$ ) with a 10 pip stop loss using 2 minilots. Unless you are extremely unlucky and unskilled, you should be able to do this in one to three trades. Ease comes with practice.
  • #202
  • Jul 4, 2009 2:25pm Jul 4, 2009 2:25pm
Quoting TradeWell
It's not as hard, but even harder than you think. You have to be consistent at it. We cycle through ups and downs in our trading just like price does in the pairs we trade. That personal trading curve is something interesting to watch.
Sizing your position and stop comes first. How does one not be consistent? You say you forget? No excuse.

If you place your SL and TP as soon as you enter, that solves the exit consistency. No excuse.

The only thing left is hesitating or failing to enter a trade. Quit thinking, pay attention and trade. No excuse.
  • #203
  • Jul 4, 2009 3:26pm Jul 4, 2009 3:26pm
Quoting gbppip
A daily 2% compound monthly yields about 48% a month. Trade a 1000$ account with 2% risk ( 20$ ) with a 10 pip stop loss using 2 minilots. Unless you are extremely unlucky and unskilled, you should be able to do this in one to three trades. Ease comes with practice.
45,68% exactly. Assuming you never have a losing streak, are able to trade every day with the same discipline, never make any mistake and either are using a very big account or a nano-lot broker that allows you to micro-compound that 2%...

I didn't say it wasn't feasible, but it's not as easy or mechanical (unless you're using an EA, and even there you could have technical issues).
Unless also, if you have several years of steadiness in trading to sustain a fair amount of predictable continuation. If so, it's indeed another story...
  • #204
  • Jul 4, 2009 3:54pm Jul 4, 2009 3:54pm
Quoting gbppip
Sizing your position and stop comes first. How does one not be consistent? You say you forget? No excuse.

If you place your SL and TP as soon as you enter, that solves the exit consistency. No excuse.

The only thing left is hesitating or failing to enter a trade. Quit thinking, pay attention and trade. No excuse.



If you have a method, and are willing to share it, please do. I've never seen a method to produce the consistent wins you would require to reach those returns.

In theory your right, good luck spending a theory

If you can do it we'll see you on the front of Forbes, and I'll be a jealous bastard good luck in the jet set crowd.
  • #205
  • Jul 4, 2009 4:39pm Jul 4, 2009 4:39pm
Quoting gbppip
A daily 2% compound monthly yields about 48% a month. Trade a 1000$ account with 2% risk ( 20$ ) with a 10 pip stop loss using 2 minilots. Unless you are extremely unlucky and unskilled, you should be able to do this in one to three trades. Ease comes with practice.
gbppip

Looking at your advice it is clear that you are a scalper and for people who do not have a very good system it is dangerous to trade that way, it is far easier to look at a longer term strategy and reach your target in 2 or 3 trades, also a lot less stress.

You can also look at adding to a winning trade without extra risk, say you enter with the trend and you use a 50 pip stop, then as soon as you are 50 pips into profit you bring your stop to BE and enter a second trade with a 50 pip stop, now you have 2 trades running, one with no risk and one with a 50 pip stop, you can repeat the process 50 pips later, so when you enter your third trade you have lock 50 pips profit on your first trade, your 2nd trade is lock at BE and the 3rd is at SL 50.

This means if the trade now turns against you you loose nothing BUT you have 3 trades running at no risk at all

Regards

Silver
  • #206
  • Jul 4, 2009 4:44pm Jul 4, 2009 4:44pm
Quoting knuckledrag
If you have a method, and are willing to share it, please do. I've never seen a method to produce the consistent wins you would require to reach those returns.

In theory your right, good luck spending a theory

If you can do it we'll see you on the front of Forbes, and I'll be a jealous bastard good luck in the jet set crowd.
Method? You enter and you exit. You win or you lose. How unlucky are you? Price is either going to go up or down. How many hours in a row is price going to go down? Go up? No one knows. But sooner or later, there will be a reversal. Usually substantial enough to make up a loss or 2. You guys didn't get your vouches because you can't make 20 pips.

I recall a post of Ronald Raygun's saying if you can't make money trading random entries then you need more practice. Sorry, Ronald, if I didn't quote you quite right.

1000$ Start, 20$ Risk, 10 pip SL, 2 minilot size. Make 10 pips and you are up 2%. Quit and come back next session. Sometimes you get lucky and find yourself up more than 10 pips in just a minute or so. That's when your trading skills are really tested. How many pips can you get out of the trade? You exit part of the position and get a "free trade" like in the DIBS.

Walking away after you hit your goal is probably the hardest thing you'll ever have to do. I hope I am not off topic.
  • #207
  • Jul 4, 2009 4:58pm Jul 4, 2009 4:58pm
Quoting gbppip
Method?...


How long have you been doing this?
DIBS is far removed from your stile, unless you have a one minute inside bar scalping setup.
No disrespect, but this is Mike's thread and unless you are talking about pivot entries and psych exits, We should be talking on your thread.
Post a link to your thread and I would love to look at and learn anything you can share.
  • #208
  • Jul 4, 2009 5:01pm Jul 4, 2009 5:01pm
Quoting Silver
gbppip

Looking at your advice it is clear that you are a scalper and for people who do not have a very good system it is dangerous to trade that way, it is far easier to look at a longer term strategy and reach your target in 2 or 3 trades, also a lot less stress.

You can also look at adding to a winning trade without extra risk, say you enter with the trend and you use a 50 pip stop, then as soon as you are 50 pips into profit you bring your stop to BE and enter a second trade with a 50 pip stop, now you have 2 trades running, one with no risk...
Hi ho Silver:

Sorry, I couldn't resist. No disrespect.

System? Trading is entry and exit, right? We already have established risk at 2% per trade. You can play with the SL and size. Does it really matter why you entered the trade? What happens next is up to the market unless you have enough size to move the market. You can't make your trade win. All you can do is honor your stop loss. So you sit back and wait to see if the market presents an opportunity for you to take profit. Systems come and go, just like traders. Today's hero is tomorrow's goat.

Scalper? Doesn't matter what you call what I do, all that matters to me are the results. Do I hit my daily, weekly, monthly goal and quit? What feels worse leaving the table a winner or staying at the table because you didn't walk away when you had the chance?

1000$ start, 2% risk, 50 pip stop loss means 0.4 mini lot position size. How much better are you at making 10 pips than 50 pips? Maybe you are privy to information that I am not. Each trader needs to do what allows them to reach their goal.
  • #209
  • Jul 4, 2009 5:04pm Jul 4, 2009 5:04pm
Quoting knuckledrag
How long have you been doing this?
DIBS is far removed from your stile, unless you have a one minute inside bar scalping setup.
No disrespect, but this is Mike's thread and unless you are talking about pivot entries and psych exits, We should be talking on your thread.
Post a link to your thread and I would love to look at and learn anything you can share.
If a DIBS entry can make me 10 pips, I'll take it.

I am so sorry. I misunderstood. I thought this thread was about "trading for a living". I didn't see anything about pivots and psychs in post #1. I sincerely apologize.

Sorry, I don't have a thread.
  • #210
  • Jul 4, 2009 5:19pm Jul 4, 2009 5:19pm
Quoting gbppip
I am so sorry. I misunderstood. I thought this thread was about trading for a living. I didn't see anything about pivots and psychs in post #1. I sincerely apologize.

I'm not the site moderator, M can decide what he will or won't allow. If you have a trading method you wish to share please post a link to your method.

Believe it or not I would be glad to see what your talking about. Any new real trading stile that can be reproduced time and time again is of the utmost interest.
  • #211
  • Jul 4, 2009 5:30pm Jul 4, 2009 5:30pm
Just some humble insights fwiw,

The premise that one can trade 1 lot the same as 20 lots or bigger is in err, everyone has a risk level that they are comfortable with. While this can be increased over time by risk exposure, ( think toad in boiling water) jumping outside your comfort zone will cause irrational thinking, and when emotions rule in trading – tis’ best to turn off the screen.

That level is different for everyone, so this needs to be incorporated into one’s trading plan…. Hopefully everyone has one, a trading plan…. Written.

Risk size as a % of account, this will give you the minimum you will need to maintain. And this needs to be in a relationship to expected earnings. Along this subject, you can only take what the market will give, and only then if you are in a position to receive ( so don’t cut yourself short on good months but expect and be prepared both financially and mentally bad one's ) for some months will be diamond; some will be coal… the main objective to make money, but more importantly to always stay in the game… unlike texas hold’em - don’t go all in or put yourself in a position for devastating losses.

If you take a 50% hit on your account it will take a 100% effort to make it back to even, drop below that and you’re looking at tripling, quadrupling or more to make it back to break even. You need to identify your risk of ruin threshold. Trade size should vary in relation to profit and loss, below your max.

Trading is like any retail business, you buy your product and sell it for a profit, or you can presale your market and fill your orders buying it when it’s cheap, out of those profits you will have personal as well as business cost…. Identify those and figure them into your business plan… as well as how you will be paid and how taxes will be paid…. Best to see a local CPA on this one.

Time for some fireworks,

Happy 4th everyone.
  • #212
  • Jul 4, 2009 5:41pm Jul 4, 2009 5:41pm
Quoting knuckledrag
I'm not the site moderator, M can decide what he will or won't allow. If you have a trading method you wish to share please post a link to your method.

Believe it or not I would be glad to see what your talking about. Any new real trading stile that can be reproduced time and time again is of the utmost interest.
I am not talking about a "method" nor do I have one. It's not even a "style". All I know is that why I enter has no bearing on the result. After I enter, if I am "lucky", I get a chance to make a few pips. Otherwise, I take my loss with a smile. All I have (shared) is a "mindset" that keeps me from being fooled.
  • #213
  • Edited 6:09pm Jul 4, 2009 5:58pm | Edited 6:09pm
Quoting gbppip
I am not talking about a "method" nor do I have one. It's not even a "style". All I know is that why I enter has no bearing on the result. After I enter, if I am "lucky", I get a chance to make a few pips. Otherwise, I take my loss with a smile. All I have (shared) is a "mindset" that keeps me from being fooled.

Trade management is one of the key things (and one of the least discussed) in trading. Good luck but when I bet on a move I like to have a reason---- then manage the trade I know silly.

I think just for fun I'll stick with trends--fibs--pivots
  • #214
  • Jul 4, 2009 6:20pm Jul 4, 2009 6:20pm
Quoting knuckledrag
Trade management is one of the key things (and one of the least discussed) in trading. Good luck but when I bet on a move I like to have a reason---- then manage the trade I know silly.

I think just for fun I'll stick with trends--fibs--pivots
So long as you truly understand that the reason you "bet on a move" has nothing to do with the outcome, trends, fibs and pivots will work fine. I am sure you can find an instance where you entry worked and one where the exact same entry didn't. Sometimes the first test of a trend line, pivot or fib works and sometimes it fails. Ditto for second and third. No one knows beforehand.

Let's be clear, I am not arguing against anyone.
  • #215
  • Jul 4, 2009 7:37pm Jul 4, 2009 7:37pm
Quoting gbppip
So long as you truly understand that the reason you "bet on a move" has nothing to do with the outcome, trends, fibs and pivots will work fine. I am sure you can find an instance where you entry worked and one where the exact same entry didn't. Sometimes the first test of a trend line, pivot or fib works and sometimes it fails. Ditto for second and third. No one knows beforehand.

Let's be clear, I am not arguing against anyone.
No arguing here either (sorry for the delay, I was out watching fireworks), however I find it much easier to trade if I have an idea of where the big boys are placing there bets. Support and resistance are key to understanding the market's mood. If you can find a nice fib correlation you have found the mood. If you then only trade in the direction of the trend--or play the consolidation, you have a plan.

I really think managing your trade is the most important step, but using small percentages and scaling out of a winner is hard to learn.

Good luck, as long as your on the same side I'm on


SORRY M. I REALLY WILL TRY TO KEEP MY MOUTH SHUT.
I look forward to your next post
  • #216
  • Jul 4, 2009 8:39pm Jul 4, 2009 8:39pm
Quoting gbppip
The answer is not "NO". The answer is find a system that has a stop loss that is less than 20 pips or just stop out at 20 or less. Then you can trade at least 1 mini lot. If you can increase your account by 2 percent or more per trading session, you are on your way. It's not as hard as you may think. Once you are 20 pip ahead you are done. The GBPUSD has an hourly range exceeding 20 pips most hours of the day.
But... I've said this hundreds of times.

Most of you will fail and you are on your way.

2% a trading session is 6%/day.

It's never been done... ever... with any longevity.

Good luck.
  • #217
  • Jul 4, 2009 8:44pm Jul 4, 2009 8:44pm
Quoting gbppip
A daily 2% compound monthly yields about 48% a month. Trade a 1000$ account with 2% risk ( 20$ ) with a 10 pip stop loss using 2 minilots. Unless you are extremely unlucky and unskilled, you should be able to do this in one to three trades. Ease comes with practice.
I'll say it again.

Never been done.

There's only one trader... in History... with a proven track record over several years that beat the market and his average was right at 38% and I've heard 45% but those number didn't pan out.

By the way... he's on the Forbes list and he's not a currency trader.

m
  • #218
  • Jul 4, 2009 8:50pm Jul 4, 2009 8:50pm
Everything that has ever been done had never been done before the first time it was done.

Just because you never saw a BLACK SWAN does not mean BLACK SWANS do not exist.

With Respect.
  • #219
  • Jul 4, 2009 8:56pm Jul 4, 2009 8:56pm
Quoting gbppip
I am not talking about a "method" nor do I have one. It's not even a "style". All I know is that why I enter has no bearing on the result. After I enter, if I am "lucky", I get a chance to make a few pips. Otherwise, I take my loss with a smile. All I have (shared) is a "mindset" that keeps me from being fooled.
I'm trying to keep this thread geared toward real traders who trade for a living... not gamblers.

I don't know one "Millionaire Trader" that doesn't employ some kind of 'system.'

Want to make a professional trader laugh... ask him/her how is luck is holding out.

Luck isn't part of this game... money management, mechanical systems, stops and profit targets... small wins and even smaller losses... simple probability theory... etc.

At 48%/month you should up there with Johnny in the very near future.

m
  • #220
  • Jul 4, 2009 9:00pm Jul 4, 2009 9:00pm
Quoting gbppip
Everything that has ever been done had never been done before the first time it was done.

Just because you never saw a BLACK SWAN does not mean BLACK SWANS do not exist.

With Respect.
I never slept with Gisele either but I know for a fact that opportunity doesn't exist.

Again... let me know when you've done and it's been verified.

m
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