95% wins, 5% losers wipe me out | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

Winners scale winners, losers scale losers 12 replies

Could Leverage Wipe Out My Account? 27 replies

If losers average losers, then I am a loser 10 replies

Metatrader 5 is going to wipe out your Metatrader 4 indicators / systems 13 replies

Can a Broker put on a FAKE trade & wipe out your account? 7 replies

95% wins, 5% losers wipe me out

  • #1
  • First Post: Nov 27, 2009 5:02pm Nov 27, 2009 5:02pm
Hi Guys,

I can take anyway from 500 - 1000 points (MT4 platform) out of GBP/USD on a daily basis quite consistently. My style consists of trading around London open, fading and scalping and looking at how the price moves or doesn't move in order to determine direction.

But here is the problem, Im so right nearly all the time that when Im wrong its hard for me to admit Im wrong when Im right so often! Sounds stupid but its true. I watch my loser get bigger and bigger and still refuse to cut it, HOPING for a reversal. And as the lose gets bigger then the idea thats its goes to reverse even sooner becomes more real in my mind.

This happened yesterday when I was long when the trend was down. I kept averaging in betting it was going to hit support and reverse soon and hence be in the money faster. What happened, just keep going down until my margin auto exited my positions and finally the GBP found support around the 1.62707 although the bounce doesn't look strong.

I don't know why I don't use stops, I guess I never had to before because I'm right so often. They say you know your wrong when the price tells you your wrong. I don't know what this means. How do you know your wrong? The obvious answer when the trade doesn't go in your favour. Its stands to reason that the real loss you incur when you cut a losing trade is at least 3x the amount of a winning trade. I don't like the idea of this because you start trading with scared money. I would like to hear other peoples thought on this.
  • #2
  • Nov 27, 2009 6:53pm Nov 27, 2009 6:53pm
Quoting Viper101

I can take anyway from 500 - 1000 points (MT4 platform) out of GBP/USD on a daily basis quite consistently.
I assume you mean 50 - 100 pips !

To be brutal, it sounds like you dont have an edge to me.
  • #3
  • Nov 27, 2009 7:02pm Nov 27, 2009 7:02pm
Your Money management skills sound like a recipe for disaster. Why would you hold a short position so far into the red on a a currency pair that is clearly Bearish right now?

This all sounds so melodramatic.
Don't Anticipate
  • #4
  • Edited 9:12pm Nov 27, 2009 9:11pm | Edited 9:12pm
Quoting Viper101

I don't know why I don't use stops, I guess I never had to before because I'm right so often.

Neither do I...

Your system is worthless without a sound moneymanagemnt. With calculated risk vs reward you should afford to lose frequently. I personally prefer 1:2 or preferably more. (risk:reward) Then one winner evens for 2 losses etc.... Way better. In my own system winners usually accounts for 3 -4 times the value of the average loser. That way I can afford to have 50-60 % losers and still make a good profit. It's all in the system you plan and play.
  • #5
  • Nov 28, 2009 3:20am Nov 28, 2009 3:20am
The actual figures are that 90% of traders lose their accounts, 5% stay even and 5% are actually winning traders.
  • #6
  • Nov 28, 2009 3:50am Nov 28, 2009 3:50am
Quoting Viper101
Hi Guys,

I can take anyway from 500 - 1000 points (MT4 platform) out of GBP/USD on a daily basis quite consistently. My style consists of trading around London open, fading and scalping and looking at how the price moves or doesn't move in order to determine direction.

But here is the problem, Im so right nearly all the time that when Im wrong its hard for me to admit Im wrong when Im right so often! Sounds stupid but its true. I watch my loser get bigger and bigger and still refuse to cut it, HOPING for a reversal. And as the lose gets bigger...

sounds like you trade like me... but with stops im about 75% cause i use stops and I trade inside the price action and a different system outside the price action. the problem with our style is stop placement.. some basic stats will help you about 95% of price turns after a break out happen from 101-250% stops at statistical levels help itll drop your wins abit but your losses wont margin call you .. also how much leverage are you using.. i use .8:1 abouts so margin is highly unlikely.
  • #7
  • Nov 28, 2009 4:50am Nov 28, 2009 4:50am
Quoting TraderColin
The actual figures are that 90% of traders lose their accounts, 5% stay even and 5% are actually winning traders.
How do you know that? You must have done a lot of research.....!
I've got my pips - go get yours!
  • #8
  • Nov 28, 2009 6:39am Nov 28, 2009 6:39am
Quoting Viper101
Hi Guys,

I can take anyway from 500 - 1000 points (MT4 platform) out of GBP/USD on a daily basis quite consistently. My style consists of trading around London open, fading and scalping and looking at how the price moves or doesn't move in order to determine direction.

But here is the problem, Im so right nearly all the time that when Im wrong its hard for me to admit Im wrong when Im right so often! Sounds stupid but its true. I watch my loser get bigger and bigger and still refuse to cut it, HOPING for a reversal. And as the lose gets bigger...
Its not difficult being right so often when you dont use stop losses, its just a matter of how long your account lasts before the ultimate wrong blows all those rights out the door. Classic example of why some high win models are short lived.

Razor
  • #9
  • Nov 28, 2009 8:12am Nov 28, 2009 8:12am
Quoting enterfx
Neither do I...

Your system is worthless without a sound moneymanagemnt. With calculated risk vs reward you should afford to lose frequently. I personally prefer 1:2 or preferably more. (risk:reward) Then one winner evens for 2 losses etc.... Way better. In my own system winners usually accounts for 3 -4 times the value of the average loser. That way I can afford to have 50-60 % losers and still make a good profit. It's all in the system you plan and play.
You have a system with a risk:reward of 1:4 and with a success rate of 40-50%? Wow! Dude, that's a gold mine! I've never seen something like this before, no kidding! Any hints, how you do that?
  • #10
  • Nov 28, 2009 8:35am Nov 28, 2009 8:35am
Quoting Viper101
Hi Guys,

I can take anyway from 500 - 1000 points (MT4 platform) out of GBP/USD on a daily basis quite consistently. My style consists of trading around London open, fading and scalping and looking at how the price moves or doesn't move in order to determine direction.

But here is the problem, Im so right nearly all the time that when Im wrong its hard for me to admit Im wrong when Im right so often! Sounds stupid but its true. I watch my loser get bigger and bigger and still refuse to cut it, HOPING for a reversal. And as the lose gets bigger...
I have the same problem, failing to pull the trigger when I have no good reason to keep the trade going.
Consistency in anyone's indicators is rare. I think my indicators are great, and then either I don't trust them because of some unconscious recognition of their failure, or I do trust them and they are inexact on purpose or right only with a lot of interpretation heaped on. Plus, bring in any reactions to nontrading issues and a hornet's nest of misdirection is waiting for you to step near.

Here's an article you may want to read.
  • #11
  • Nov 28, 2009 9:49am Nov 28, 2009 9:49am
Quoting Xaron
You have a system with a risk:reward of 1:4 and with a success rate of 40-50%? Wow! Dude, that's a gold mine! I've never seen something like this before, no kidding! Any hints, how you do that?
me neither... i'd pay the guy's weight in gold for something like that a 40% with a 4 to 1 reward
  • #12
  • Nov 28, 2009 10:15am Nov 28, 2009 10:15am
i used to luv my trades-it feels so good to be up 200 pips on a trade that is "locked in profit". Now, after 4 years in Forex, I know better. I have tried EVERY edge-every indicator-every book-and,after 4 years, only use price action/sup&res/and 1 simple fast MA. Unless I have open trades in profit-I do not trade "news". I pull profit almost daily(to escape rollover charges) and almost never leave trades open over the weekend. I also remove profits ASAP out of the hands of my brokers(all thieves-eventually). And now that the CFTC & NFA have effectively destroyed American Forex(sounds like they may be trying to save the StockMarket at the expense of Forex?) where will I invest/trade now? The rest of the Forex world hates Americans and wont do business with us. Damm-I was just getting the hang of it too!
FF = Forex Faggots
  • #13
  • Nov 28, 2009 10:19am Nov 28, 2009 10:19am
Quoting Razzle
I assume you mean 50 - 100 pips !

To be brutal, it sounds like you dont have an edge to me.
I'm with razzle, it sounds like you don't have an edge. You have a high % win because .....you have a huge (non existent) stop. If you blowing stops thats a psychological problem ie.... step away from the markets and work on yourself.
Don't get me wrong....we have all blown stops before. I'm not coming down on you just saying until you can demo with Constance and work your psych problems you might be in deep doo. Read the "Disciplined Trader", then do what he says
May the fish in your stream of life always bite.
  • #14
  • Last Post: Nov 28, 2009 10:44am Nov 28, 2009 10:44am
Quoting Xaron
You have a system with a risk:reward of 1:4 and with a success rate of 40-50%? Wow! Dude, that's a gold mine! I've never seen something like this before, no kidding! Any hints, how you do that?
We all now that losses are part of trading, but if losses constantly is treathening your profit and long term strategy, it definitely involves more stress and pain in your trading and will utimately cause you to make even more mistakes.

Without going into details about my own system, here's a few clues.

Say you have an indicator that usually triggers trade setups that is correct 60 - 75 % of the times. I dont care what indicator or system you use, but here's what I look for: (Let me just add that I spend A LOT of time studying historical charts and trade setups.)

When judging trade setups, I look for average SL and possible TP levels. Usually you will see a pattern that is repeating itself again and again...(on average).

My first criteria is that, (again, on average), the TP level should be at least 2 - 3 times the SL level.

Currently, one of my systems (on the H1 chart), has a winning ratio of 54% versus 46% losses.

Usual TP is 80pips and SL is 22 - 25pips. With 3% risk, I lose 3% of my account balance with each loss while I gain 8 - 10% with each TP winners.

I also use a 2 step procedure to lock in profit. F.ex. when price reaches 40+pip profit, I move my SL to +20pip thus making my trade a no loser.

Out of all trades, 54% wins and TP appox 25%.

Lets sum it up:

On average, for every 20 trades:

LOSSES: 9 Trades x 3% = - 27%
TP Wins: 5 Trades x 9% = + 45%
Partial wins: 6 Trades x 2.7% = + 16%
-----------------------------------------
Total = + 34%

So there you basically have it. Even with only 25% of the trades reaching the full TP, I can make money because they account for such significant gains. Losses are important. How to deal with them is crucial. Recognize them as part of the game and integrate them in your system.
0 traders viewing now