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Professional forex traders

  • #21
  • Aug 28, 2010 9:53am Aug 28, 2010 9:53am
Quoting ab1
1) Money Management is the EDGE... rule number one !
HOW MANY TIMES DO PEOPLE NEED TO BE TOLD

MONEY MANAGEMENT IS NOT AN EDGE

In fact, inapropriate MM is more likely to lead to failue. You couldnt have made a worse start ! MM is the LAST step of the process.
  • #22
  • Aug 28, 2010 10:09am Aug 28, 2010 10:09am
  •  Czech
  • | Joined Feb 2010 | Status: You Don't Know What You Don't Know | 111 Posts
Quoting ab1
Hi Czech

Interesting points but this is a 4 Trillion a day + industry. Even if I found the Grail and was making $1M a day trading, my trades would have no effect on the market what so ever, the rest of the world wouldn't even no I existed.

So I have to respectfully disagree that I could affect anyones liquidity. There is definitely a suspicion by many that there is some hidden force scheming behind there backs, when I think its more a case that they simply don't know how to trade and therefore lose. Its much easier to blame others for ones failure...
Traders who rely on a true edge are the ones pulling consistent profits from the market. An edge is exploiting an inefficiency in the market. The more people buying into the inefficiency, the quicker price becomes efficient again.

quick example. a few years ago Oanda used to guarantee a fill at the price quoted, even around news time. A few smart traders were able to trade on the news and make lots of pips with very little risk.
One day a forum member decided to make this information public. 1,000's of people were now taking positions that oanda could not hedge against. As a result, to avoid going bankrupt, no trade could be placed around news time, with oanda, without being majorly slipped.


Since in that example the liquidity pool was the brokers pockets I'll give you one more!

I've found a glaring mis pricing between EURUSD USDJPY and EURJPY. This is an arbitration opportunity. The mis pricing will exist until enough volume is traded to close the gap. Therefor anyone else profiting from this situation is directly taking profits i would have otherwise had myself.

As you can see, despite the fact that there is 4 trillion traded daily, opportunities to be consistently profitable are slim. You can take a shot @ 4 trillion daily rolling the dice every time you trade (like in all the systems you mentioned). Or you could target limited but consistent pools of liquidity.


you've just ID'd your real problem though. Money management cannot be your edge. That's not to say it isn't important.


Quoting macdon
If I reveal my magical system to hundreds or thousands of people, won’t their following my signal push price the way I, ultimately we, want it to go? 10,000 people each buying 1 contract of the EURUSD at the same time will cause price to go up, will it not?

OK so here' the plan. 5pm on my signal we all go long EURUSD. Here's some inherent problems with my plan:

If price is rising before 5pm every trader on my system has incentive to buy early. As a result, traders who stuck to the plan get a worse average price.

If price is rising at 5, only as a result of my system, then, as a whole, we can net NO PROFITS. (if price is consistently rising for any other reason then this would be an edge in itself and everyone would be competing for your liquidity again)

we bough 100mio units and price went up 5 ticks. unfortunately when we sold 100 mio units price went back down 5 ticks! Some people may have profited but most probably didn't. Does that sound familiar at all??
  • #23
  • Aug 28, 2010 10:57am Aug 28, 2010 10:57am
Quoting ab1
Hi everyone

I just needed to ask the following questions........

1) Are you a professional Forex Trader (i.e. working for someone you have to attain results for to keep your job)
2) What systems, strategies, methods do you use
3) How does your average Forex trader become successful
4) What have you been taught, that enables you to succeed.

Ok I've been trading for about 2 years full time, I have traded literally hundreds of systems from all over the place. Forex Factory, TSD, Baby Pips, etc etc, to name but a few. I have used another 50...
All my questions in one place .

Subscribing to this thread .
  • #24
  • Aug 28, 2010 11:16am Aug 28, 2010 11:16am
Quoting Razzle
HOW MANY TIMES DO PEOPLE NEED TO BE TOLD

MONEY MANAGEMENT IS NOT AN EDGE

In fact, inapropriate MM is more likely to lead to failue. You couldnt have made a worse start ! MM is the LAST step of the process.
Hi Razzle

1st do you make a full time living trading Forex ? are you a professional ?

What are you talking about, MM is extremely important. Its the main reason why so many fail. Trust me Ive blown several accounts by not using it correctly. I do trade as a full time professional.

You can have a rubbish strategy that has less than a 50% win rate and still come out on top if your Risk Reward Ratio and Money Management is sound.

So what do you consider to be the priority then ?

many thanks


ab1
  • #25
  • Aug 28, 2010 11:19am Aug 28, 2010 11:19am
Quoting TheArcher
All my questions in one place .

Subscribing to this thread .
Look forward to finding the solution with you Archer

cheers
  • #26
  • Aug 28, 2010 11:37am Aug 28, 2010 11:37am
Quoting Czech
Traders who rely on a true edge are the ones pulling consistent profits from the market. An edge is exploiting an inefficiency in the market. The more people buying into the inefficiency, the quicker price becomes efficient again....
Its all really interesting analysis to be honest, but totally negative and over complex. You sound like you don't want to be doing it and so far have come up with all the reasons why we will fail trading. Sounds like you don't think no matter what you do you will win.

If you combine good fundamentals, have a sound knowledge of technical indicators and use appropriate money management, so you do not risk your equity when the market goes against you, which it does many times, then it is possible to trade successfully.

Most traders give in when they lose once or twice, they don't expect to, they don't like it, there heads cant take it and all of the systems they use are rubbish, there's nothing wrong with a lot of the systems, its generally peoples lack of ability to execute the strategy in the correct manner, which means even when you are losing. Money Management saves you if done correctly as you can live to face another day.

How many traders could take say a losing streak of say 5 losers in a row ? If your money Mangement will not allow that, then it may be worth revising it.

All the strategies I mention in post #1 can be successful, but only if used at the appropriate time, not all strategies are going to work all of the time, a trader needs to adapt to market conditions

Many Thanks
  • #27
  • Aug 28, 2010 11:38am Aug 28, 2010 11:38am
Alright ab1.

Now what is the most simple system. Okay place a 10/21/50 ema on the daily chart on usd pairs eurusd/gbpusd/usdchf and audusd. Tell me what you observe.
Alright what do you observe when price pull back between the 10 and 21ema.

Watch what happens when price clearly breaks the 21ema.

Alright another experiment place a gann 7 with sma 7 on a daily chart(if you do not have the gann, get it from my thread GU Intraday system) on the same usd pairs buy when you have a daily close above gann and do the same if vice versa.

That takes care of trending strat.

Alright put the Murrey Maths Line on a chart. Look at the daillies with the yen pair particularly eur jpy. What do you observe. Good for trading the ranges.

So what have I shown. You just need 1 trend system and 1 ranging system.

Now speaking about fundies.

Fundies determine price direction while technicals determines how far price would move. Look at a weekly chart there you see that the long term trend does not change overnight, they remain intact. All you have our retracements or pause in trends to technical levels.

Now if you are trading intraday you must have a feel of current market sentiment whether they be risk averse or favour risk and please trade in that direction because that is what is called current momentum.

Our duty as traders is not to prempt price action but to understand basically what is currently driving price action and swim with it.



Quoting ab1
Good answers, but I have to disagree about jumping from one system to another, I think an open mind initially is required and the willingness to learn all aspects of an industry/ profession. Otherwise its impossible to make judgements in the future, you have nothing to compare anything too or experience to draw on.

But if you would be kind enough to give an example of how you would use what your saying above on a day to day basis when trading, then Id be more than happy to listen.
LISTEN TO MR FUNDAMENTAL AND MR TECHNICAL
  • #28
  • Aug 28, 2010 11:56am Aug 28, 2010 11:56am
  •  Czech
  • | Joined Feb 2010 | Status: You Don't Know What You Don't Know | 111 Posts
Quoting ab1
Its all really interesting analysis to be honest, but totally negative and over complex. You sound like you don't want to be doing it and so far have come up with all the reasons why we will fail trading. Sounds like you don't think no matter what you do you will win.
I'm a little confused because i just went over my opinions on what you need to win, why it isn't apparent on the forums, and why most people are losers. For your information I'm also pretty confident i will be consistently profitable.

You mentioned you've only had moderate success to date yet you cite YOURSELF as a credible source regarding MM. If you're not going to have an open mind to where your problems are then I'm not sure what you expect to gain here.

"i only had moderate success till i started using the 134ema, then my career turned around!"

I get the impression that most people think if they really want it and just keep reading everything they can on the forums, and keep staring at those charts, eventually they will get enough good advise to trade successfully.

Either way I'm done trying to convince you otherwise.
  • #29
  • Aug 28, 2010 12:24pm Aug 28, 2010 12:24pm
Quoting ab1
Hi Razzle

1st do you make a full time living trading Forex ? are you a professional ?

What are you talking about, MM is extremely important. Its the main reason why so many fail. Trust me Ive blown several accounts by not using it correctly. I do trade as a full time professional.

You can have a rubbish strategy that has less than a 50% win rate and still come out on top if your Risk Reward Ratio and Money Management is sound.

So what do you consider to be the priority then ?

many thanks


ab1
Yes I make my living from trading foreign exchange, and have done since
2004.

My experience isnt transferrable, so what I think is completely irrelevant. Not surprisingly, there's a great deal of bad advice posted on this forum, all I can do is occassionally point out information that is incorrect.

MM will modify returns (for better or worse) but it cannot provide an edge. If your a full time profitble trader you'll know that to be the case. And for the record, I've never suffered a drawdown greater than 20% let alone blown an account.

As for priority, gaining an understanding of the game your trying to play, and the effect of random chance on outcomes.
  • #30
  • Aug 28, 2010 12:45pm Aug 28, 2010 12:45pm
how does one even define a "professional forex trader".
Enter Signature
  • #31
  • Aug 28, 2010 1:09pm Aug 28, 2010 1:09pm
Quoting vosterfxandy
how does one even define a "professional forex trader".

Discipline!
  • #32
  • Aug 28, 2010 1:09pm Aug 28, 2010 1:09pm
Quoting okehiedon
Alright ab1.

Now what is the most simple system. Okay place a 10/21/50 ema on the daily chart on usd pairs eurusd/gbpusd/usdchf and audusd. Tell me what you observe.
Alright what do you observe when price pull back between the 10 and 21ema.

Watch what happens when price clearly breaks the 21ema.

Alright another experiment place a gann 7 with sma 7 on a daily chart(if you do not have the gann, get it from my thread GU Intraday system) on the same usd pairs buy when you have a daily close above gann and do the same if vice versa.

That...
okehiedon

At last..... a really informative and very well illustrated post

Thanks..... two good trading systems that deal with Trending and Ranging markets, can you supply any pictures of those examples please, are these two systems that you use as a professional trader ? Are they something you have developed yourself from experience or are these the preferred methods of say an employer that you use to trade there accounts.

Sorry for all the probing questions, but the intention of this thread was to unearth all the best and most profitable systems that professional traders have and use. Im talking about those that need to earn from trading on a daily basis or they don't eat !!

Many Thanks again
  • #33
  • Aug 28, 2010 1:14pm Aug 28, 2010 1:14pm
Quoting Czech
I'm a little confused because i just went over my opinions on what you need to win, why it isn't apparent on the forums, and why most people are losers. For your information I'm also pretty confident i will be consistently profitable.

You mentioned you've only had moderate success to date yet you cite YOURSELF as a credible source regarding MM. If you're not going to have an open mind to where your problems are then I'm not sure what you expect to gain here.

"i only had moderate success till i started using the 134ema, then my career turned...
Sorry you feel that way, bye and good luck
  • #34
  • Aug 28, 2010 1:16pm Aug 28, 2010 1:16pm
Quoting vosterfxandy
how does one even define a "professional forex trader".
Easy.... you make your income from it
  • #35
  • Aug 28, 2010 1:40pm Aug 28, 2010 1:40pm
Quoting Razzle
Yes I make my living from trading foreign exchange, and have done since
2004.

My experience isnt transferrable, so what I think is completely irrelevant. Not surprisingly, there's a great deal of bad advice posted on this forum, all I can do is occassionally point out information that is incorrect.

MM will modify returns (for better or worse) but it cannot provide an edge. If your a full time profitble trader you'll know that to be the case. And for the record, I've never suffered a drawdown greater than 20% let alone blown an account.

As...
Hi Razzle

Why isn't your experience transferable ? what you have learnt, you can share surely if you wish ?

Yes I do trade full time, I didn't say I was the greatest trader, but Im not the worst and make profits. Its only been two years since I started forex trading so I dont profess to be an expert, but do know what Im generally talking about, its just I think it could be better.

I have a very open mind and wish to improve myself further, possibly from fellow traders like yourself. The idea behind this thread was to see if fellow full time traders wanted to share there ways. They can or they dont have too.

What I've generally found on this forum is either complete novices spending hours fishing through thread after thread for the "Holy Grail", I too have been guilty of that myself, like most of us on here, or you get so called guru's that flick in and out of different threads with a few wise words, but never really give advice, but just blow hot air about what is the right and wrong way to do things. Like its a case of Its my way or the highway, they get all upset when questioned and quizzed over what they say. So far on this thread thankfully that hasn't happened, all we seek here is the truth.

I dont want a debate or argument with anyone, Im here to listen and learn, teach, swap ideas, make money and have some fun along the way doing it.

If you have never blown an account and only ever experienced a maximum of a 20% draw down then you are some trader my friend....so ok now were impressed....so are you willing to show us and share what you do as a professional trader on a day to day basis that makes you that good ?

Many thanks


ab1
  • #36
  • Aug 28, 2010 1:54pm Aug 28, 2010 1:54pm
start buying when the price stops declining - start selling when the price stops rising.

(please don't ask 'when' the above happens - anyone can see higher lows and lower highs)

use your ammunition carefully

don't hit everything that moves (be patient)

choose a pair and observe, observe, observe........roasted chickens do not have the habit of flying directly in your mouth.

good luck

regards
daytrading
Enter Signature
  • #37
  • Aug 28, 2010 2:03pm Aug 28, 2010 2:03pm
Like TheArcher mentioned in a previous post:

All of my questions in one thread.

I am also subscribing to this thread.

I have tried several systems, most of them full EAs (they automatically buy, hold and sell on their own) to various degrees of success and only one my own ( although I have modified many of them ).

So here, is one possible approach to coming up with something... We can just share whatever methods and/or EAs we have used in the past and let's just all try them out and critique them, modify them, share our findings etc.

I sometimes believe that there is some good in most systems out there and maybe we just need to join forces here to come up with something that would work. That something may not necessarily be a new system but, a new tweak or, a new way of thinking about all of this.

I know that there is a high degree of probability that this will go down in flames and some people will just take without giving but, someone has to take the first step in fully sharing their methods if we are expecting someone else to share how they make their living.

If OK with the thread owner and/or members, I'll share whatever I have. Keep in mind that I am NOT a full time trader nor I claim to be profitable. At most, I break even.

Thanks,

Juan
  • #38
  • Aug 28, 2010 2:03pm Aug 28, 2010 2:03pm
Quoting daytrading
start buying when the price stops declining - start selling when the price stops rising.

(please don't ask 'when' the above happens - anyone can see higher lows and lower highs)

use your ammunition carefully

don't hit everything that moves (be patient)

choose a pair and observe, observe, observe........roasted chickens do not have the habit of flying directly in your mouth.

good luck

regards
daytrading
I admire the way you said 'start buying when price stops declining' rather than saying 'Start buying when price goes up'

Excellent.

regards,
TradeStar
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #39
  • Aug 28, 2010 2:08pm Aug 28, 2010 2:08pm
Quoting ab1
Yes I do trade full time, I didn't say I was the greatest trader, but Im not the worst and make profits. Its only been two years since I started forex trading so I dont profess to be an expert, but do know what Im generally talking about, its just I think it could be better.
ab1, it is very good of you and you are very brave to ask those questions to traders which others won't ask directly. I'm going to be brave here and ask you a question others haven't asked you.

From your quote above I understand that you trade full-time and make profit. Not big profits but still profit. There are lots of traders out there who keep losing their money. Maybe their first step could be your method which turns them from losers to BE or marginal profit.

So could you share your trading methods/strategy? Show us examples of charts? How do you enter and exit etc? I'm very interested to know your experience, knowledge and how you make profits.

Hope it is not too much to ask because I'm asking the same from you what you ask of others.

We are all here to learn and help each other out.

Thanks
  • #40
  • Aug 28, 2010 2:11pm Aug 28, 2010 2:11pm
Quoting daytrading
start buying when the price stops declining - start selling when the price stops rising.

(please don't ask 'when' the above happens - anyone can see higher lows and lower highs)

use your ammunition carefully

don't hit everything that moves (be patient)

choose a pair and observe, observe, observe........roasted chickens do not have the habit of flying directly in your mouth.

good luck

regards
daytrading
That's pretty much how I trade But my problem is...I get murdered every time the trend is strong. Even though it is not that often but it is something I need to work on and improve.

Have you got any suggestions or ideas?
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