Trading Successfully | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Anyone using high leverage successfully? 72 replies

Trading aud/nzd successfully 2,011 replies

Trading the Waves successfully- where and how! 0 replies

Anybody here successfully trading news? 61 replies

Movie clips for trading successfully 18 replies

Trading Successfully

  • #1
  • First Post: Nov 19, 2009 11:34pm Nov 19, 2009 11:34pm
We all enter this business of trading for one reason and that is to be profitable. I started this journey about 4 years ago and have had my ups and downs but throughout all this have stayed positive and relentless in my pursuit of success. I did this by studying, reading, backtesting, forwardtesting, and many hours of watching charts. I can say that I have reached the point of being consistently profitable and that to those who are looking to get there you will with hard work and discipline. If there's one thing that I have learned by trading the markets is that there is no one way to reach your goal but many. The reason for this I feel is because there are so many entry points, ways to manage your trade, where you set your stoploss, where you take your profit, how much you risk, etc. You get the picture, there are so many variables to look at that its impossible to not have different outcomes. But even with all this chaos in trading there are solid practices that one can follow and they are the following. Most of these are cliches that you have heard through your learning process and one day as they start to make sense you will say "oh thats why they say that".

1. Trend is your friend. Staying with the trend will allow you to be on the side of the trade which has a higher probability to run in your direction.

2. Let your winners run. With the systems I trade this allows me to be profitable by making my winners larger than my losers.

3. Exercise proper money management. Never put your account in danger by allowing a few bad trades to bust your account or even damage it to a point where it will be difficult to bring it back.

4. Treat trading as a business. Keep a journal and document all your trades like a court reporter. Note your thoughts and reasons for doing what you did.

5. Demo trade. Demo trading will allow you to practice and apply your findings. Trust me if you can't demo trade profitably you won't trade live profitably.

6.Discipline. Practice consistantly on your discipline, remember we are not gambling we are taking trades based on probabilities. Yes sometimes we will lose but are goal is to either win more than we lose or when we win those winners are larger than our losers. Keep great discipline and only enter when your system and the market tell you to.

7. Multi Time Frame Analysis. Looking at multiple time frames allows you to better determine the trend and make decisions based on that trend.

These some of the most important facts to keep in mind when trading and building a system. Again, by no means is this the only way to be consistently profitable but I found this to work for me.
  • #2
  • Nov 20, 2009 2:12am Nov 20, 2009 2:12am
How is this working for you, are you paid to post useless texts?
  • #3
  • Nov 20, 2009 2:24am Nov 20, 2009 2:24am
Quoting nelson7
We all enter this business of trading for one reason and that is to be profitable. I started this journey about 4 years ago and have had my ups and downs but throughout all this have stayed positive and relentless in my pursuit of success. I did this by studying, reading, backtesting, forwardtesting, and many hours of watching charts. I can say that I have reached the point of being consistently profitable and that to those who are looking to get there you will with hard work and discipline. If there's one thing that I have learned by trading the...

Hi there,
I agree with what you wrote and I bet most people already knew that (including myself). So, if your trading method works for you how about sharing it with the rest of us?
Regards
  • #4
  • Nov 20, 2009 2:31am Nov 20, 2009 2:31am
Quoting Sauron
How is this working for you, are you paid to post useless texts?
this can actually be wise words to noobs.

Anyway Nelson7, I agree with all but point5 Demo Trading

Obviously I used Demo as well. I'm busy with my Third live account and even though I treated my Demo accounts as strict as possible wrt emotions etc. it is just not the same. I was pretty much on my way on blowing my third Live account after successfully Demo trading for quite a while. Luckily things seem to be turning in my favour now, after expanding my TF to 4hrs and decreasing my Lot size. Personally I do not think I will ever go back to Demo Trading. Micro lots is the only way IMO to deal with those emotions, greed/fear etc. And as the confidence and system evolve so does the account and can one start to use accumulation.

Best of pips to all
  • #5
  • Nov 20, 2009 4:14pm Nov 20, 2009 4:14pm
Sauron: This information was given for those who are new or have overlooked the importance of these topics. Most of them are cliches that people overlook and I feel these are the main points that have worked for me and taught me how to be a profitable trader.

Rgontar: I currently am trading of the four hour and using the weekly chart to determine the trend using ema's. After determining the trend I will look for retracements to make my entry using price action and exit when either the market tells me its time to get out after observing candle patterns. Or I will exit at points of strong support/resistance. When I initially started I was trying to find the perfect entry that would always put me on the right side of the trade but through time I realized all you have to do is find trades that give you a high probability of going your way and let your winners be larger than your losers and you will be profitable. Trading like I'm sure you heard others say can be really that simple. Trying to find perfect entries by seeing if all four indicators line up and then entering seems logical but price does not move that way sometimes it runs straight to the target and other times it will retrace a million times before hitting the target. So you need to be ready and develop your strategies based on those assumptions.

fx 1618: I also am currently trading the 4 hour chart as I find it gives you time to make decisions and time for other things in life. I'm glad to here that you are profitable with your live account but I feel that if you go about your demo trading with great discipline and are successful the next step is to open a live account risking very little (micro account) lets say $5-$10 a trade. That way you can enter your trades and not let your emotions get the best of you, after all losing 10 trades in a row will only put you out of $50-$100. You yourself said that once you started decreasing your lot size you began to turn a profit. And I couldn't agree with you more with the fact that you should slowly as you build confidence start to increase the size of your account.
  • #6
  • Nov 21, 2009 3:19am Nov 21, 2009 3:19am
These are half-truths and often misleading.

Point #2 is not true at all. I can prove mathematically that cutting winnings short and let your losses run will bring more profit than the other praised statement. But hey, who am I not to believing the brokers, gurus, mentors, trading groups and the editors?

Keeping a jurnal is not a requirement of succes. You have to keep track of your trades but not more than that.

Multi-frame analysis is not mandatory as it often gives contradictory signals. Advising newbies to look at more TF's will simply confuse them.

I could go forever, as I know why the most traders fail and is has nothing to do with psychology, motivation, mental state and so on.
  • #7
  • Nov 21, 2009 5:24am Nov 21, 2009 5:24am
Quoting Sauron

Point #2 is not true at all. I can prove mathematically that cutting winnings short and let your losses run will bring more profit than the other praised statement. But hey, who am I not to believing the brokers, gurus, mentors, trading groups and the editors?

.
Hi Sauron

I would like to see that mathematical proof... can you show it to me??

I would be really interested in seeing that.

.
  • #8
  • Nov 21, 2009 5:32am Nov 21, 2009 5:32am
As I stated in the first post by no means am I saying that this is the only way to become a profitable trader. In trading there are many things that must be taken into consideration and then even if someone thinks they got it, you must still put it all together.

As far as cutting your winners short and letting your losses run if that works for you then great. But what I have found is the opposite and this has allowed me to be profitable.

As far as the journal, could there be someone out there that trades profitably and does not keep a journal, sure. But keeping my journal has allowed me to look back at my trades and see why I did what I did. Not keeping a journal is like having a business and not keeping the books in my opinion.

Yes multi time frame analysis is not mandatory and there may be someone out there who is successful without it, but using it has allowed me to be on the right side of the trade and be on the side of the trade that has a higher probability of running the farthest. And as far as confusing i'm not saying to make mtf complicated just simply use it to determine the trend.

Most traders fail because that have not yet been able to put all the right components together including psychology, motivation and mental state. Whether it be my components which I have stated or someone elses traders must put these together, understand them and then they will start to turn a profit.

In trading keeping an open mind will help you more than hurt you. You can never feel "Oh that won't work". Cause trust me someone out there is making it work, they just found the right components to make it work. Don't close your eyes and keep and open mind.
  • #9
  • Nov 21, 2009 9:20am Nov 21, 2009 9:20am
Quoting nelson7
If there's one thing that I have learned by trading the markets is that there is no one way to reach your goal but many.

Absolutely!

The trading mantra and conventional wisdoms you posted are quite well known, but what many people fail to realize is your comment above, "there is no one way to reach your goal".

Lots of supposed gurus are always banging on about things such as which time frames to trade, which ones not to trade, don't add to losing trades, never risk more than x% etc etc etc, but what they don't seem to understand is that no-one has the monopoly on profitable trading strategies, there's more than one way to skin this banana!

What would you say was your ah-ha eureka moment, was there any one thing you could pinpoint or was it a case of one day you just realized that somewhere along the way you had actually become a trader!
  • #10
  • Nov 21, 2009 9:54am Nov 21, 2009 9:54am
Your recent posts to this thread seem to suggest that you have a better way of trading. Would you care to share your system and especially your results?

Quoting Sauron
These are half-truths and often misleading.

Point #2 is not true at all. I can prove mathematically that cutting winnings short and let your losses run will bring more profit than the other praised statement. But hey, who am I not to believing the brokers, gurus, mentors, trading groups and the editors?

Keeping a jurnal is not a requirement of succes. You have to keep track of your trades but not more than that.

Multi-frame analysis is not mandatory as it often gives contradictory signals. Advising newbies to look at more TF's will...
  • #11
  • Nov 21, 2009 1:27pm Nov 21, 2009 1:27pm
Quoting jacko
Hi Sauron

I would like to see that mathematical proof... can you show it to me??

I would be really interested in seeing that.

.
Trader A has a system which wins 30% of the time and loses 70% of the time.
Trader B has a system which wins 70% of the time and loses 30% of the time.

We consider both to be succesfull traders. And after 100 trades they have the same profit in pips. And they also risk only 1% per trade, compounded.

This is the input.

To see their evolution in time you have to simulate 5000 trades or more and pay attention to the following variables:
- profit in percent
- maximum drawdown in percent

This is not enough. Run the simulation 100 times and then look again at the following averages:
- average profit
- average drawdown

Expect surprises.
  • #12
  • Nov 21, 2009 1:36pm Nov 21, 2009 1:36pm
I think what Sauron is trying to say is higher win rate systems have smoother equity curves, and that this can even be achieved with the average win smaller that the average loss. One can play with the numbers here...
http://www.hquotes.com/tradehard/simulator.html
The breaking of a wave cannot explain the whole sea.
  • #13
  • Nov 21, 2009 1:46pm Nov 21, 2009 1:46pm
Quoting DonJoe
Your recent posts to this thread seem to suggest that you have a better way of trading. Would you care to share your system and especially your results?
No, I will not share the system. I consider that I have ab edge which can be traded profitably and that's my little secret.
I don't know if it will work in the future so I'm always searching for improvements. I use this forum to find ideas and to expose some fallacies.
  • #14
  • Nov 21, 2009 6:25pm Nov 21, 2009 6:25pm
1. Trend is your friend. Staying with the trend will allow you to be on the side of the trade which has a higher probability to run in your direction.

MYTH.


2. Let your winners run. With the systems I trade this allows me to be profitable by making my winners larger than my losers.

AGREE.


3. Exercise proper money management. Never put your account in danger by allowing a few bad trades to bust your account or even damage it to a point where it will be difficult to bring it back.

AGREE.

4. Treat trading as a business. Keep a journal and document all your trades like a court reporter. Note your thoughts and reasons for doing what you did.

AGREE, IT IS A BUSINESS.


5. Demo trade. Demo trading will allow you to practice and apply your findings. Trust me if you can't demo trade profitably you won't trade live profitably.

MYTH.

6.Discipline. Practice consistantly on your discipline, remember we are not gambling we are taking trades based on probabilities. Yes sometimes we will lose but are goal is to either win more than we lose or when we win those winners are larger than our losers. Keep great discipline and only enter when your system and the market tell you to.

YOU ARE EITHER DISCIPLINED OR YOU ARE NOT. THERE IS NO IN BETWEEN.

7. Multi Time Frame Analysis. Looking at multiple time frames allows you to better determine the trend and make decisions based on that trend.

ILLUSION.
  • #15
  • Nov 21, 2009 7:48pm Nov 21, 2009 7:48pm
Quoting Sauron
No, I will not share the system. I consider that I have ab edge which can be traded profitably and that's my little secret.
I don't know if it will work in the future so I'm always searching for improvements. I use this forum to find ideas and to expose some fallacies.
Ah yes Sauron is only capable of telling everyone else how they are so wrong whilst spinning tales of his supposed edge.
  • #16
  • Nov 21, 2009 8:02pm Nov 21, 2009 8:02pm
Quoting xtraction
1. Trend is your friend. Staying with the trend will allow you to be on the side of the trade which has a higher probability to run in your direction.

MYTH.
By stating that his is a myth you are stating that trading with the trend is bad. I would say this sounds like the case of a classic head injury and you should seek immediate medical attention.
  • #17
  • Nov 21, 2009 8:15pm Nov 21, 2009 8:15pm
Quoting Sauron
Trader A has a system which wins 30% of the time and loses 70% of the time.
Trader B has a system which wins 70% of the time and loses 30% of the time.

We consider both to be succesfull traders. And after 100 trades they have the same profit in pips. And they also risk only 1% per trade, compounded.

This is the input.

To see their evolution in time you have to simulate 5000 trades or more and pay attention to the following variables:
- profit in percent
- maximum drawdown in percent

This is not enough. Run the simulation 100 times and...
I see your point.

Just one question:

How many pips profit target AND loss target is set by trader who wins 30% of the time and loses 70% of the time?

How many pips profit target AND loss target is set by trader who wins 70% of the time and loses 30% of the time?

You have a very good answer and there is very good logic behind it, but I feel need of the above information.

Thanks.
The Thief of Wall Street
  • #18
  • Nov 21, 2009 10:54pm Nov 21, 2009 10:54pm
Pipmutt: Thats exactly the point i'm trying to make there are many ways to turn a profit in this market. I the feel moment I finally got it was the day I stop trying to time entries and find the holy grail and realized that the markets will move in one direction or the other and I just need to be on part of that ride to make some money. And as far as knowing I had become a trader, well I knew that when month after month I was up considerably rather than down.

Sauron: Whether a trader has a 30% or 70% win rate has nothing to do with the fact of whether a trader is cutting there losses short and letting there winners run or letting there winners run and cutting there losses short. You really aren't proving that cutting your winners and letting your losers run is more profitable in the long run. The first part just states what percentage of all your trades were winners and the part that jacko asked you to prove was that if you enter one trade how do you manage it. Do you jump out if you are ahead or do you let it run, if you start to lose on a trade do you close the trade or do you stay in. Two very different things.

xtraction:

1. Trend is your friend. This in my opinion is not a myth and has worked for me. When I started I tried many systems some profitable others not so profitable. And one thing I realized is that if you take those same systems and only count the trades that where with the trend the system returned a higher profit than if you would consider every trade. Try it.

5. Demo trade. We could debate this all day but I feel if you take demo trading seriously and slowly move to a micro and so on that you will be on the right path.

6. Discipline. I agree, you are either disciplined or not, but its something you can work on. And I feel a great way to gain better discipline is to start on higher time frames and slowly work your way down. The larger timeframes give a trader a little bit more time to think why they are entering and if they lose a trade I feel you don't get as anxious to get back at the markets and recover what you lost making you to lose even more.

7. Multi Time Frame. All I can say is it works for me.
  • #19
  • Edited 4:02am Nov 22, 2009 2:30am | Edited 4:02am
Quoting Chicky
I see your point.

Just one question:

How many pips profit target AND loss target is set by trader who wins 30% of the time and loses 70% of the time?

How many pips profit target AND loss target is set by trader who wins 70% of the time and loses 30% of the time?

You have a very good answer and there is very good logic behind it, but I feel need of the above information.

Thanks.
You can use any number of pips as long as the sum of them is constant.

One example would be:
They both win 1000 pips after 100 trades. They have the same stop loss, 30 pips.

Trader A has a system which wins 30% of the time and loses 70% of the time.
He wins 100 pips per trade and loses 30 pips per trade.

Trader B has a system which wins 70% of the time and loses 30% of the time.
He wins 1900/70 = 27 pips per trade and loses 30 pips per trade.

I casted everything to int.

You can play with other numbers as well, it will make no difference as long as you keep their profitability in pips constant.

nelson7: as long as you don't understand my experiment and you don't try to model it there's no way you could prove me wrong.

LE. I made a mistake so I had to update my post.
  • #20
  • Nov 22, 2009 7:48am Nov 22, 2009 7:48am
Sauron: Thanks for clearing up your previous post and i'm not saying that cutting your winners short and letting your losers ride won't work. But you still have not proved it. In your example on the previous post the Trader B is not cutting his winners short and letting his winners run his risk to reward is actually about 1:1. In my time i have been trading I have not found a system that you could use a risk to reward of 1:1 and still have a winning rate of 70%. If you have found it then yes this example would work. But remember you are not letting cutting your losers short and letting your winners run. You have a risk to reward of 1:1.
0 traders viewing now