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If you haven't made it yet, what makes you think you will? 212 replies

Congrats! You just joined 5% or less

  • #21
  • Aug 20, 2009 5:16pm Aug 20, 2009 5:16pm
Chicky

I agree with your observations and with others posted. Just to add something:

You will be amazed at how few traders even know how to calculate the leverage used on a trade, they can only quote what leverage that is allowed by their broker which got nothing to do with the leverage you use.

Proper risk management is a combination of how much money you "plan" to loose if your SL is hit and proper use of leverage. Most newbies do not think about it but if they trade one standerd contract on a $10,000 account then they are using 10:1leverage (100,000 is a standard lot divided by 10,000 your account size). It gets even worse when a guy trades a standard lot on a $2,000 account, that is 50:1 leverage, pure suicide.

Any case as someone said we need the 95% otherwise we will not make any money in this market.

Regards
  • #22
  • Aug 22, 2009 12:32am Aug 22, 2009 12:32am
Quoting Silver
Chicky

I agree with your observations and with others posted. Just to add something:

You will be amazed at how few traders even know how to calculate the leverage used on a trade, they can only quote what leverage that is allowed by their broker which got nothing to do with the leverage you use.

Proper risk management is a combination of how much money you "plan" to loose if your SL is hit and proper use of leverage. Most newbies do not think about it but if they trade one standerd contract on a $10,000 account then...
RISK = STOP LOSS * POSITION SIZE.

If you follow the formula, Mate, leverage is of no concern.
  • #23
  • Aug 22, 2009 12:39am Aug 22, 2009 12:39am
Quoting Chicky
Why do more than 95% traders fail?

3. ... However, see many traders blindly following this phrase. Another is "cut your losses down and let your winners run". Blindly following such "universal truths" is probably the greatest hinderance in their learning.
Actually, Mate, that is part of the "secret" but most do not understand how it works.

Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)

Average Loss is the only part of the equation you can control. The market controls the rest. Let that sink in, Mate, and you'll be in the 5%.
  • #24
  • Aug 22, 2009 8:15am Aug 22, 2009 8:15am
Quoting hilmy83
so are you in the top 5%?
Yes I am in the top 5% of successful traders because for past 8 years average profit paid is +29% p.a. (without compounded interest) with 30+ years of experience for forex trading. Registered company in Switzerland.

Maximum risk is 5% per new trade (conservative risk structure)

July 2009 profit is +7%.

Minimum investment is $20,000 for managed forex account.
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  • #25
  • Aug 22, 2009 8:34am Aug 22, 2009 8:34am
Quoting wildfirepow
Yes I am in the top 5% of successful traders because for past 8 years average profit paid is +29% p.a. (without compounded interest) with 30+ years of experience for forex trading. Registered company in Switzerland.

Maximum risk is 5% per new trade (conservative risk structure)

July 2009 profit is +7%.

Minimum investment is $20,000 for managed forex account.
Are you soliciting clients on this forum?
  • #26
  • Aug 22, 2009 8:38am Aug 22, 2009 8:38am
Quoting wildfirepow
Yes I am in the top 5% of successful traders because for past 8 years average profit paid is +29% p.a. (without compounded interest) with 30+ years of experience for forex trading. Registered company in Switzerland.

Maximum risk is 5% per new trade (conservative risk structure)

July 2009 profit is +7%.

Minimum investment is $20,000 for managed forex account.
Sounds to me like Noah's ark sank and only you made it out alive. And because you survived you are the chosen one, fittest of them all, destiny's child etc...but it could be by chance that there was only one wooden vessel in the ship and by chance you found it while sinking to the bottom...

My point is how sure are you of making money next year completely based on your track record....to stay in the so called "5% of them all"
The only way to get smarter is by playing a smarter opponent.
  • #27
  • Aug 22, 2009 9:21am Aug 22, 2009 9:21am
Quoting NewFX
My point is how sure are you of making money next year completely based on your track record....to stay in the so called "5% of them all"
Why does he have to be sure about next year? I mean, really, think about your question.
  • #28
  • Aug 22, 2009 9:39am Aug 22, 2009 9:39am
Quoting Dopey
Why does he have to be sure about next year? I mean, really, think about your question.
Because he is in this business to make money & to be in the "5% of them all"....of course if he is not retiring after this year. He is a winner based on his track record of average returns.
Maybe my question was a bit short minded, I will rephrase.....how sure are you to make money over next 8 years or 10 years completely based on your track records.
The only way to get smarter is by playing a smarter opponent.
  • #29
  • Aug 22, 2009 11:55am Aug 22, 2009 11:55am
Quoting NewFX
Because he is in this business to make money & to be in the "5% of them all"....of course if he is not retiring after this year. He is a winner based on his track record of average returns.
Maybe my question was a bit short minded, I will rephrase.....how sure are you to make money over next 8 years or 10 years completely based on your track records.
To be sure, Mate, wouldn't you have to be in bonds?
  • #30
  • Edited 4:09pm Aug 22, 2009 3:36pm | Edited 4:09pm
Quoting gbppip
Actually, Mate, that is part of the "secret" but most do not understand how it works.

Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)

Average Loss is the only part of the equation you can control. The market controls the rest. Let that sink in, Mate, and you'll be in the 5%.
I take a slightly different approach here. though agree with basics. No one controls nothing in forex business. This is only a game of probability. Probability of number of favorable or unfavorable outcomes and probability of the size of each favorable and unfavorable outcome.

Therefore I use constant win or loss figure i.e. 1% of my account.

Expectancy = (Probability of Win * 1% of my account) - (Probability of Loss * 1% of my account).

This makes my life easier. How? consider the following:

If oil is at $50,
can it go to zero?
can it go to $100?
Can I ever lose on this bet?

I am a sure winner if have bought oil at $50, with sl at $0 and TP at $100. I can risk 100% of my equity on this one trade..... and still keep my smile.

The only thing needs taken care of is that my targets are realistic. The above TP target is very much realistic for those who entered into oil trade in January 2009, when it was below $40.

ps. Seven trades in a row like this one in my lifetime risking a capital of $10,000 and I am a millionaire when retire.
The Thief of Wall Street
  • #31
  • Aug 22, 2009 6:59pm Aug 22, 2009 6:59pm
Quoting Chicky
I can risk 100% of my equity on this one trade..... and still keep my smile.
Yes you can, Mate, so long as you are not leveraged to the point where your bust point is within target range.

Would like to see how you would apply your method to trading the GBPUSD.

Current price: $1.6507

Can it go to $2.0000? Yes.

Can it go to $1.5000? Yes.
  • #32
  • Edited 8:35pm Aug 22, 2009 8:22pm | Edited 8:35pm
Quoting gbppip
Yes you can, Mate, so long as you are not leveraged to the point where your bust point is within target range.

Would like to see how you would apply your method to trading the GBPUSD.

Current price: $1.6507

Can it go to $2.0000? Yes.

Can it go to $1.5000? Yes.
I hate trading with high leverage, because I go for equal dollar amount of gain or loss and my TP and SL are equal number of pips away from my entry (exclude spread).

No. Currencies are not very good instruements for this kind of risk, however, commodities are. I could bet 50%of my equity on Gold

Can it to go to $500 - (Most probably) No
Can it go to $1,500 - Yes.
Can I lose this bet? - (Most probably) No

I would not bet more than 5% of my equity on GBP/USD because:
Can it go to 1.9700 in a year's time - Yes
Can it go to 1.3300 in a year's time- Maybe
Can I lose this bet - Yes

(Note: Your GBP/USD range does not coincide with mine for his play, therefore revised it to the above)
The Thief of Wall Street
  • #33
  • Edited 10:30pm Aug 22, 2009 9:53pm | Edited 10:30pm
Quoting NewFX
"Congrats! You just joined 5% or less"

I am wondering how big is your sample space i.e. over how many trading sessions are you claiming this achievement. Whether you are sure if this achievement is just not because of random events that by chance happened in your favor i.e. how good are your risk management capabilities.
Hey NewFx,

Sorry I missed your this post earlier. Found it while going through the posts over the weekend.

It is interesting. I never started this thread to announce that I am one of the "5%'s", but Just to let new traders know what mistakes to avoid to be successful. However, tried to pick an attractive title for this thread. I never expected that someone would take it as if I am trying to tell people to follow me for success. However, since this question was asked, replied it what I believe is true. Only time tells who is successful and to what extent. Everyone, including me, will have to wait for years to know if I am right. However, I do not see any theoretical flaw in this concept (both technically and operationally).

My success or failure will only depend on two factors 1) How disciplined and patient I am, and 2) If nature has some very cruel plans for me. Under normal and situations known to me, this concept should work.

This concept is right in my signature (the link, not the statement). I think it won't be out of context to mention here that I started my this journey in early 70's just as a kid. I feel no fear in admitting that I could not find a way in decades but until recently. Initially I tried to keep my "discoveries" to myself and my one very good friend who's job was to show me the other side (flaws). It is very interesting that when I now try to share results of all these years of research and development, no one seems to be interested . Probably because it is pro bono, described in fewer words and presented in its simplest form not in a fancy sexy way with a commercial agenda behind it. I don't know why I still try to share, probably this is my nature and I cannot help it. Though I am not from that particular belief but I do believe in Karma.

Read what is stated in the below link, toss it outside the window if you see no logic in it - I am just one out of billions of "nobodies" in this world.

ps. Regarding risk management capabilities, I am a Fellow Chartered Accountant, worked 12 years with one of the Big-four, advised entities in over 30 countries on risk management in preceding seven years, ....................(I think this should be enough for this purposes)
The Thief of Wall Street
  • #34
  • Aug 22, 2009 10:31pm Aug 22, 2009 10:31pm
Quoting Chicky
It is very interesting that when I now try to share results of all these years of research and development, no one seems to be interested . Probably because it is pro bono, described in fewer words and presented in its simplest form not in a fancy sexy way with a commercial agenda behind it. I don't know why I still try to share, probably this is my nature and I cannot help it. Though I am not from that particular belief but I do believe in Karma.
Do what you are doing and don't be concerned that others are not interested, Mate.
  • #35
  • Aug 22, 2009 10:49pm Aug 22, 2009 10:49pm
Quoting Silver
Chicky

I agree with your observations and with others posted. Just to add something:

You will be amazed at how few traders even know how to calculate the leverage used on a trade, they can only quote what leverage that is allowed by their broker which got nothing to do with the leverage you use.

Proper risk management is a combination of how much money you "plan" to loose if your SL is hit and proper use of leverage. Most newbies do not think about it but if they trade one standerd contract on a $10,000 account then they are using 10:1leverage...
To be very honest, I do not even look at my "exposure" i.e. total value of the contracts I have to pay in case the currency I am holding fails. Because it is very remote possibility.

I mainly look at how much I will lose or gain if a trade is success or a failure. This amount is 1% of my last account balance. I do not hold more than one position at a given time and therefore my maximum risk is never above 1%. Since I (normally) do not move my sls and tps my min/max risk and reward value is the same. Kindly note that people who trade with high leverage and hold several positions at a time also need to consider spread-pips during normal and low liquidity period. If one is going for 10 pip gain on a very heavy position, sudden increase in spread from 1 to 10 can be a disaster. One reason why I do not go for few pip trades.

My biggest safety (or risk management technique) is keeping my profit and loss targets at equal amount i.e. 1% gain or 1% loss - PERIOD. You may like to do some research into this, more you go deeper into its effects, more you would appreciate this. You may find a whole world of risk management in this simple technique.
The Thief of Wall Street
  • #36
  • Aug 22, 2009 10:57pm Aug 22, 2009 10:57pm
Quoting gbppip
Do what you are doing and don't be concerned that others are not interested, Mate.
Mate, my days are counted. The day you stop seeing my posts, just pray for my soul
The Thief of Wall Street
  • #37
  • Aug 23, 2009 3:14am Aug 23, 2009 3:14am
Quoting Chicky
Hey NewFx,

Sorry I missed your this post earlier. Found it while going through the posts over the weekend.

It is interesting. I never started this thread to announce that I am one of the "5%'s", but Just to let new traders know what mistakes to avoid to be successful. However, tried to pick an attractive title for this thread. I never expected that someone would take it as if I am trying to tell people to follow me for success. However, since this question was asked, replied it what I believe is true. Only time tells who is successful...
Chicky, there is nothing wrong in expressing that you are the best in what you do. If you could motivate people through your writings, I think you would be more than happy to do that. My point is simply that deduction of a successful career based on the fact that one has a good track record is misleading. You can have a lucky streak of several years and then in one year or in 6 months you can go bust...several examples in last year..big old banks.

I asked people here how sure (I change this word to 'confident' ) they are to make money in future years solely based on their track records they posted here. Didn't get a clear answer. Dopey even thought I do not what I am asking. If one can not deduce anything out of their track record then what is the point of stating it. The whole agenda of "I am in 5% of them all" is based on track record which in the end does not prove anything. There had been many instances of such activity like mortgage trading in salomon brothers which didn't started well before early 80's but then by chance became a phenomenal place to make money. Like bond trading which was a boring field to be in before introduction of variable interest rates in 80's, but then it took off and people made loads of money. And then they also lost loads of money in 90's bond trouble. So before 80's no one could have said they can make big money in mortgage and no one before 2007 could say they can loose big money in mortgage solely based on its track record.

If you have rules to manage the risk properly and avoid any kind of a blow up situation and within these conditions you still have a good track record then such a record should make you confident for future. of course you can have a good record without these qualities for a very long time but one bad period could just end the lucky streak once and for all. To put the impression that a person is successful just because he has a glorious record is misleading.
The only way to get smarter is by playing a smarter opponent.
  • #38
  • Aug 23, 2009 11:01am Aug 23, 2009 11:01am
Quoting NewFX
Chicky, there is nothing wrong in expressing that you are the best in what you do. ....
If you have rules to manage the risk properly and avoid any kind of a blow up situation and within these conditions you still have a good track record then such a record should make you confident for future. of course you can have a good record without these qualities for a very long time but one bad period could just end the lucky streak once and for all. To put the impression that a person is successful just because he has a glorious record is misleading.
Very Very true. That's is why investors try to diversify their portfolio to spread the risk.

An old friend of mine who was visiting stayed with me over this weekend. He mentioned that he has contributed a samll amount in a venture by some of his friends who bought a hedge fund few months back. The major factor they considered in this acquisition was the collective experience of traders this fund employs and total amount this fund manages for investors. He is of the opinion that there is nothing one can do if everything goes against you, however, exprience and prudence help minimize the damage. Since they know and accept "anything can happen", believe in themselves but never clearly express high confidence level in the expertise they posses.
The Thief of Wall Street
  • #39
  • Aug 23, 2009 12:21pm Aug 23, 2009 12:21pm
Quoting Chicky
He is of the opinion that there is nothing one can do if everything goes against you, however, exprience and prudence help minimize the damage. Since they know and accept "anything can happen", believe in themselves but never clearly express high confidence level in the expertise they posses.
I once asked someone how they got in the position to find themselves homeless. Their answer was simple:

"All it takes is for everything to go wrong at the same time."

Those words will always ring in my ears.

Call it a "perfect storm" or a "black swan" event.
  • #40
  • Aug 23, 2009 2:23pm Aug 23, 2009 2:23pm
Quoting gbppip
I once asked someone how they got in the position to find themselves homeless. Their answer was simple:

"All it takes is for everything to go wrong at the same time."

Those words will always ring in my ears.

Call it a "perfect storm" or a "black swan" event.
Very strange but true that everything (or almost everything) went wrong with me in 1979, 1989, 1999, and 2009. The only exception was 1969.

The effect is like this:

Bad+Bad+Bad+Bad = Not worse

Bad x Bad = You are in deep trouble

Bad x Bad x Bad x Bad = Expect more trouble, this is just the begining
The Thief of Wall Street
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