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4% A Day Forever

  • #761
  • Dec 31, 2009 7:33pm Dec 31, 2009 7:33pm
Quoting The Fool
Cool....when I get smarter I am going to try to code an EA for breakout trading - seems like that might be pretty easy to do algoritmically. Then I could be scoring those 10-pip gimmes on 10 pairs - couple times a day - while I work on my tan - sweet....
I'm a programmer so I can possibly help you with that, tried with MT3 haven't really touched MT4 code though.

And if it was easy we'd all be using it sadly
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #762
  • Jan 1, 2010 1:15pm Jan 1, 2010 1:15pm
Quoting X.Oden
I ran fractal breakout trades on my back tester for over a 2 year period. DAMN! Such high probabilities! Almost every breakout was an instant hit for 10 pips......
Hi X.Oden,

Can you tell me how you defined breakouts in your backtest? What software do you use?

Turveyd, I am not going down the Metatrader road. Will use Ninjatrader instead. Less limitation on timestep settings & also I will need NT to trade futures anyway. Do you know anything about NT?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #763
  • Edited Jan 2, 2010 6:29am Jan 1, 2010 1:24pm | Edited Jan 2, 2010 6:29am
Quoting The Fool
Cool....when I get smarter I am going to try to code an EA for breakout trading - seems like that might be pretty easy to do algoritmically. Then I could be scoring those 10-pip gimmes on 10 pairs - couple times a day - while I work on my tan - sweet....
If it were that easy, seriously, don't you think that banks, and major brokers would already did it with somme kind of crazy leverage like 1G a pips?

The thrut is, you cant just let a EA run for you while you do something else. This kind of market just don't allow it.
  • #764
  • Jan 1, 2010 1:31pm Jan 1, 2010 1:31pm
Quoting Melisky
If it were that easy, seriously, don't you think that banks, and mojor brokers would already do it whit comme kind of crazy leverage like 1G a pips?

The thrut is, you cant just let a EA run for you while you do something else. This kind of market just don't allow it.
Automated high-frequency trading is the rule, not the exception, amongst large players in equities, futures, and forex, too. The leverage you are thinking of is an invention of brokers used to fleece you, the retail trader.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #765
  • Jan 1, 2010 1:45pm Jan 1, 2010 1:45pm
Quoting The Fool
Automated high-frequency trading is the rule, not the exception, amongst large players in equities, futures, and forex, too. The leverage you are thinking of is an invention of brokers used to fleece you, the retail trader.
It sure is the rule - CHEATERS!! - But they only do it because they know where the market is headed since the 'flash' traders get a 500 millisecond peek are bids/prices before its posted on the Stock Exchange. - They also buy server space right next to the exchange to they can execute quickly. If my EA's had a half second peek at the market I could scalp with impunity too. - http://www.forbes.com/2009/07/24/fla...eet-flash.html
  • #766
  • Jan 1, 2010 3:53pm Jan 1, 2010 3:53pm
Quoting Aja
It sure is the rule - CHEATERS!! - But they only do it because they know where the market is headed since the 'flash' traders get a 500 millisecond peek are bids/prices before its posted on the Stock Exchange. - They also buy server space right next to the exchange to they can execute quickly. If my EA's had a half second peek at the market I could scalp with impunity too. - http://www.forbes.com/2009/07/24/fla...eet-flash.html
hah, well if you can't beat 'em, join 'em. When they move, I move.

If you want to predict where price will be tomorrow or even a few hours from now, fine. I'm not that smart, though, and I only really believe what I can see in the here and now. So when I see price move, I'm a believer. The secret lies in not being greedy. You don't have to milk every move for all it may do - just take a little, come back, do it again - just like Big Dog...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #767
  • Jan 1, 2010 7:35pm Jan 1, 2010 7:35pm
Quoting The Fool
hah, well if you can't beat 'em, join 'em. When they move, I move.

If you want to predict where price will be tomorrow or even a few hours from now, fine. I'm not that smart, though, and I only really believe what I can see in the here and now. So when I see price move, I'm a believer. The secret lies in not being greedy. You don't have to milk every move for all it may do - just take a little, come back, do it again - just like Big Dog...

Predicting like that isn't possible at all, yes you can see there are loads of buyers and it's going up strongly and will likely hit any prediction within 200pips at times but thats about as good as it gets.

Anything beyond what direction is it going ? is gambling and gamblers LOSE!!

Looking at trading Gold via FXCM, the 50pip spread currently showing looks horrible hoping thats just a bad quote as the markets closed, it looks like it has less dead periods and better volume generally looks to trade the same to my system so all is good, maybe
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #768
  • Jan 1, 2010 10:11pm Jan 1, 2010 10:11pm
Quoting Turveyd
Looking at trading Gold via FXCM, the 50pip spread currently showing looks horrible hoping thats just a bad quote as the markets closed, it looks like it has less dead periods and better volume generally looks to trade the same to my system so all is good, maybe
Best spread I ever see on XAU on OandA is around 36 pips. Off-times it goes to 100 pips and then 200 pips worst

I have been doing some gold scalping but the largest I ever go is $0.50/pip and usually its more like $0.25/pip. 50-pip sl gets hit in seconds sometimes. But its loads of fun when you hit those 3,000-5,000 pip days....& of course it can do 500 pips in a few minutes sometimes...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #769
  • Jan 2, 2010 7:40am Jan 2, 2010 7:40am
Quoting The Fool
Best spread I ever see on XAU on OandA is around 36 pips. Off-times it goes to 100 pips and then 200 pips worst

I have been doing some gold scalping but the largest I ever go is $0.50/pip and usually its more like $0.25/pip. 50-pip sl gets hit in seconds sometimes. But its loads of fun when you hit those 3,000-5,000 pip days....& of course it can do 500 pips in a few minutes sometimes...

Going to have to Demo it for sure hey, looks like FXCM is $0.1 per pip maybe $0.01 and if 50pips moves as quick as 5 pips normally then 50pips at $0.1 works out tha same as 5 pips at $1.

Role on Market opening tomorrow for some Demo messing with!!

Thanks, chart reads the same to me / my system and it's move active more of the time so nice.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #770
  • Jan 2, 2010 9:07am Jan 2, 2010 9:07am
Quoting Turveyd
Yep thats all true, why they push the bad don't scalp H4 crap on everyone to take there money.
higher timeframes take far longer to come to the likely conclusion that the strategy traded is flawed and eventually unprofitable... coupled with their larger movements creating larger wins and then larger losses... seems like a good deal to me for the people who get the money in the end. think about all the suckers putting in a bit of their wages each week to speed up their account growth. what happens when their strategy turns to crap. months have gone by and suddenly they are broke, plus they are down the further money they added to their 'winning strategy'.

the slow death!
Congratulations ScalaFX for coming out of the closet!
  • #771
  • Jan 2, 2010 9:30am Jan 2, 2010 9:30am
Hey the Fool...

How is the 4% getting on? I cant be bothered trawling through the pages to find out.

Acedup
  • #772
  • Jan 2, 2010 9:34am Jan 2, 2010 9:34am
Quoting The Fool
hah, well if you can't beat 'em, join 'em. When they move, I move.

If you want to predict where price will be tomorrow or even a few hours from now, fine. I'm not that smart, though, and I only really believe what I can see in the here and now. So when I see price move, I'm a believer. The secret lies in not being greedy. You don't have to milk every move for all it may do - just take a little, come back, do it again - just like Big Dog...
Unfortunately my friend, I believe you will get killed with this sort of thinking.

The fact of the matter is, you can't scalp forex the way you are trying. Spread costs are too high compared to index futures, you have no access to the order book/market depth (primary scalping tool of successful scalpers everywhere), volatility as a % (rather than pip value - did you know the % range of GBPJPY is almost half that of the % range of EURUSD?) is maybe 1/3 of the index futs, etc.

All of this adds up to a big fat dent in expectancy. Just go back over your last profitable months trading and calculate the cumulative cost of spread over that month and tell me if it still works out good. Now go work out the cost of spread on your losing months. Post your results here. If you take 10 scalp trades a day, for the ~20 trading days a month, at a spread of 2, you need to make 400 pips per month JUST to break even, not even accounting your possible losing trades. Does that sound good to you? Of course not. Does that sound like an edge to you? HELL NO. 400 pips per month should be your monthly target, not your "cost of trading". Even if you are pulling in 1600 pips a month every month that is a rediculous price to pay for it.

% volatility (the only one that matters - pips are not counted as they are only a function of leverage) is just not high enough for forex to give the edge you are trying to exploit a chance to play out. I hope you don't take this as a put down (I'm sure Turveyed will -- but I challenge him to post any profitable monthly statement), it is just a simple fact. Even down here in Oz the top 20 stocks have triple the % volatility of EURUSD which is one of the most % volatile pairs on the forex.

As a well known trader from my neck of the woods recently mentioned "forex scalpers trading risk adjusted would get slaughtered". I am having trouble faulting his well thought out argument, even though I have been known to take the odd scalp myself.

As for the comments about "predict in 2 hours or 20 hours" whatever man this doesn't make sense. When I place a trade on the daily it is NO different to when you place a trade on the M1, neither of us knows the outcome of the future on the market. There is never any point where any other trader can't negate your effect on supply/demand. You can only be successful by accepting that fact ahead of time. To think any other way is to ignore the reality of the market. The market is completely objective information it does not know your desires nor fears (or mine or anybody but the bigdogs) be they in 5 minutes or 50 hours. You have to define an edge, then consistently grind it to produce profits. On forex this means using higher timeframes, simply because that is where the % moves happen.

There is no consistency to your trading, no chance for an edge to play out. Trading like a robot is the first step, can you show me your robot moves over the duration of this thread? I think not, otherwise you would not be posting as a failure today. Can you even explain to me why any profitable month you had was profitable over any non profitable month?

Scalping anything with a spread over 1 tick is pretty rediculous when you think about it just in terms of spread costs (not including volatility, etc). Scalping gold and other commods with a 50-100 tick spread is just plain retarded. To trade commods you need an immensely small position size, an immensely large stoploss and a good system (i.e. not a 1min TF scalper). I find it extremely amusing that the "pro scalper" Turveyed is sitting here talking up forex scalping when of all the trading instruments (including spot gold in this definition) it is the least volatile by % with the highest spreads (compared to futs). "Pro" scalpers who are so called scalping without use of the order book produce your monthly profit statements to prove me wrong. I want to see % gains over the year better than the SP500 which is less leveraged. It doesn't take a good trader to place a winning trade, or even a 20 trade winning streak. It takes a good trader to place a winning trade and then keep 80% of his profits in time for the next profit.
  • #773
  • Jan 2, 2010 10:07am Jan 2, 2010 10:07am
Quoting The Fool
So for all this investment of time & effort how come I ain't rich yet? This is a question that is starting to weigh on my conscience. I am going to have to start getting serious about making this endeavor pay.
You need to read "Trading in the Zone" by Mark Douglas. He addresses this very issue.
  • #774
  • Jan 2, 2010 4:05pm Jan 2, 2010 4:05pm
Quoting Acedup
Hey the Fool...

How is the 4% getting on? I cant be bothered trawling through the pages to find out.

Acedup
lolol short answer: I still believe 4% per day is possible, but I have not gotten there yet.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #775
  • Jan 2, 2010 4:28pm Jan 2, 2010 4:28pm
Quoting The Fool
lolol short answer: I still believe 4% per day is possible, but I have not gotten there yet.
You can do it. I have kept up with your journal and the mistakes you made were just rookie mistakes. It is all a part of learning how to trade.

I believe we will see great things from this thread in 2010.
  • #776
  • Jan 2, 2010 5:16pm Jan 2, 2010 5:16pm
Quoting sinner-
You need to read "Trading in the Zone" by Mark Douglas. He addresses this very issue.
Hi sinner-,

I appreciate your comments. I don't agree with you that scalping can not be profitable, though. Scalping can be done profitably even in forex, but better, as you allude, in futures, which I also trade. I am looking forward to shifting most if not all of my trading to futures as I progress... I don't argue with you that the transaction costs for retail high-frequency trading are a disincentive - but they can be and are regularly overcome and I consider that the cost of doing business. I do know that such costs can be negotiated (especially in futures) as one trades larger... I can tell that you have some assumptions about scalping that are going to be difficult to shake & so I am not going to try as I have been down that road too many times here on FF already. However, I don't ascribe to scalping as the only worthwhile strategy and I have lately been demo trading longer tf high-yield strategies and I am going to trade those live as I become more proficient.

You are quite right that I have not been consistently profitable in my spot trading as it has been represented here. But that has been a result of some very poor risk/money management habits and not a result of scalping per se. In fact, had I managed to stick to scalping as it is well defined in my Trading Plan I would be doing very well. Most of my loss can still be traced back to a single instance in mid-September, when I took a 60% account loss on a single position.

But I have discussed my disastrous trades & bad habits in the thread & won't rehash them in detail & I am chalking up the loss incurred so far as tuition in the school of hard knocks and I assure you I have learned & continue to learn from my mistakes. People fail at trading for a variety of reasons. My particular Achilles Heel has been risk management. Well, I guarantee you I am on that issue like white on rice on every single trade I make now. Many people, I suspect, fail simply because they don't or can't stick around long enough to learn from & grow past their mistakes. That will not be me.

I see your challenge to post consistent results here and I may take you up on that. But I may not either. I am getting to a point where I don't really feel the need to impress anybody and I don't really feel like I need any affirmations other than what can be provided by the bottom line of my trading account. I can tell you that I am gaining consistency in my approach to risk management and I am getting better about money management, as well. I am pretty competitive by nature & I have thought about making a regular weekly or monthly competition thread here on FF & I think that would be fun. But in the last couple months also I feel like I have come up to a new level in trading and I am in an introspective stretch as I think about what I have been doing and where I am going. Obviously, if I am going to continue, I need to prove that I can be profitable month-on-month and beyond. So I may just be content to shut up & prove that.

This thread has been a positive experience for me overall, and I especially appreciate the posts from folks, like yourself, who have offered the most serious criticism of what I am doing. But, in general, I have started to get bored with posting on FF and I am quite sure it has been a distraction that has gotten in the way of me developing solid trading habits. I don't tune in as often as I used to and that trend is probably going to continue.

Over the last couple months I have been more devout about keeping an actual trading journal (this ain't it) and that is a great habit for any trader to cultivate. I have found that my time spent there has left me less interested in devoting time here.

Anyway, sinner-, I know you are a smart guy and I hope you are making trading pay & that you are happy with it. I am sure you know that success at trading can not be reduced to something as cut-and-dry as positive expecatancy, that the psychological aspect of trading is at least as important. And that can not be easily reduced to formulae. If you have a consistently winning strategy I am glad but in the hands of different traders that strategy might utterly fail. Same with scalping - if you think its bunk thats ok, but keep enough of an open mind to be able to admit that there are many successful and very wealthy scalpers - even in the retail markets - because that is a simple fact.

Best Regards,

Rich
"If The Fool persists in his Folly he will become wise." - William Blake
  • #777
  • Jan 2, 2010 5:19pm Jan 2, 2010 5:19pm
Quoting The Fool
lolol short answer: I still believe 4% per day is possible, but I have not gotten there yet.
Naysayers will always be lurking on your rise to the top waiting to drag you down. Caution, perserverance and balance are the keys to victory.
Balance in Everything
  • #778
  • Jan 2, 2010 5:19pm Jan 2, 2010 5:19pm
Quoting magnumfreak
You can do it. I have kept up with your journal and the mistakes you made were just rookie mistakes. It is all a part of learning how to trade.

I believe we will see great things from this thread in 2010.
Thanks, buddy! I had you in mind just above when I mentioned wealthy scalpers - I hope I was right!

I know I see some dumb shit getting smaller & smaller in the rearview & I am hopeful. Meanwhile, I ain't lettin my hand sign any checks my ass can't cash.

Have a great 2010!
"If The Fool persists in his Folly he will become wise." - William Blake
  • #779
  • Jan 2, 2010 5:37pm Jan 2, 2010 5:37pm
Quoting jtdt777
Naysayers will always be lurking on your rise to the top waiting to drag you down. Caution, perserverance and balance are the keys to victory.
Thanks, amigo - best of luck to you in 2010.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #780
  • Jan 2, 2010 6:09pm Jan 2, 2010 6:09pm
Howdy The Fool

I was just reading on your profile page. "Scalping Naked" I got a good laugh out of it. I know what you mean. I have just never read those two words together. But then again I don't know how you sit at your computer. Maybe I don't want to know....... Maybe your'e Heidi Klum. Then I might want to watch you trade.

I see you are from the west coast. I live in Puget Sound area. Looks like we will be trading the same time frames.

Looking forward to many pips in 2010 with you.

Rufus
Illegitimi non carborundum - Noli pati a scelestis opprimi.
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