How to be a real trader

Nothing new here.

Bottom line: How does one survive (no, profit) in a year of both sideways and trending markets? Afterall, you can't see what is about to happen before it happens.

The answer is: Run two different strategies on two different accounts... one that does well in trending, and one that does well in sideways.

Trade both with high leverage, and try to compound the crap out of one of the two accounts.

So if it happens to be extremely choppy or good trends, one will outshine the other with some sort of exponential parabola. One will get crushed while the other is making a killing.

Now, nothing lasts forever, so at some point you want to take everything off the table and start over.


The Risk: Many flip flops between trending and sideways markets should cripple both accounts. But you knew that before you started, right?


Always open to disagreement and agreement---- what would you do in this crazy game we are in?

Ah.... "compound the crap out of".... that does not mean not to use money management....

Personally I put 40% of my account on the line, and at the end of each month, if the account is below what I started with, I replace the losses with my reserve. If the account is down at the end of the month, but still above the initial 40%, I do nothing.

The idea here is to
1) Not let one bad month wipe out the account
2) Use the Butterfly Effect to have enough cash risked during the beginning of a hot winning streak

Is this a fact?

Nope. Nobody knows anything for sure.

Otherwise, mortgage your house on that next sure trade ;-)

why do you need 2 accounts?
trade one account with 2 strategies that you know give you a statistical probability to make money.

plus it depends on your time frame. there's always a trend on one time frame and congestion in another.

BTW Tdion whilst Im here I got your PM back thanks but dont worry I wrote that ages ago and in between some regulations have been changed and the whole thing I was going on about is now void!

Thanks anyway

Hello lsubeano!

I trade two account because I want to compound one and let the other one fall apart.

I get what you are saying. But in the end, often we find a pair in some sort of prevailing characteristic.

I do not want a strategy that is doing well to be handicapped by one that isn't doing well.


Of course, I am assuming one of the two will do well....

That is not to say that your way of doing things won't beat my way from one year to another....

It is just my own logic in play.

lsubeano

One more thing

If I trade two strategies on one account, I am limited to how much margin I can use on each trade, because I may need to open a 2nd trade later for the 2nd strategy.

That's another huge point...

I ALWAYS only open one trade with maximum leverage on each account to compound as quickly as possible. (At least, the maximum that the 40% at risk allows me to... remember that the other 60% is off limits until it is needed)

Whats the rush T?

So you name your price and the market pays you? Sounds fun

Let's talk about trading, shall we?

Ok I thought we were but lets do this....

I have played around with some high risk high reward strategies whereby basically you trade conservitively and build a small ammount of winners then risk the entire winners on 1 highly leveraged trade

So say your account was $50,000 and then by risking $1,000/ 2% per trade over a week have 10 trades and make $5000 then you take that $5000 and risk the lot on the next trade. Perhaps on a trade with higher probabilities...

You lose, you have lost a week and your account is back to the balance it was at the start of the week... You win and you make a big % gain on your account and strat again the next week

So when you say "compunding the crap" - this is something that came to my mind

THis is actually what my PM to you was about a while ago lol

What you think about this strategy?... Effectively the risk is in time but the reward in $'s. Provided you can make consistent profits trading conservitively.

Ive only ever done this on demo and the small trades were built up over a month and then the 1 big one was taken off a weekly signal and luckily worked out netting me a 200% increase in my account but if it went the other way 1 month is a lot of time to lose and would be quite mentally draining. Over a long period though doing this is surely leverage at its best. Provided you can stick it out and do it with a long term perspective in mind.

The other thing is you can take that massive ammount of risk and scale in and out.

What you think?

You know, I spent several hours looking at EXACTLY what you are describing.

And the truth is, you can make good money doing it. The only problem is, you are already on a hot streak to get to the bigger trades.....

And we all know that nothing lasts forever.... so it is more likely that you will not make 11 winners in a row than the 10 to get you there.

I do think it is a good way to trade in a risk averse fashion.

For me, money is a forex account is risk money that I can afford to lose.... I may blow the account, but my way of money management prevents me from being destroyed in one month.... only a slow painful death is how I will go.

True although you certainlly dont need 10 winners in a row trading conservatively to be profitable but yes I see your point...

You say you risk 40% of your account but what you're really saying is you only have in your account a small portion of your actual capital?

I like your style!

Trade according to market conditions.

Sorry, fella's - I can't help myself but this thread including its title could not get any more vague even if you wanted it to.

I read comments about risk and reward - in relation to what (indiv. trade size, base capital, weekly exposure, account to account risk....what)?

I read comments about ranges and trends - in relation to what time frames (you can trade once a year or 10000 times a year regardless of strategy and market condition)?

Or are you plain asking if 2 dissimilar strategies would save your bacon if run simultaneously?

Even that is a too vague question - you need to take a myriad of factors into account.

Last point: if you put on a trade in the 'account' that does well in ranging markets (according to your theory/question), it would also mean that putting on a trade in the second 'account' that does well in trending markets (provided you are using the same TF), is most likely a losing bet....that is if you are certain about being able to identify the correct market condition - if not, don't trade at all until you are certain.

regards
daytrading

Ouch. To each their own opinion.

I think it is good material, but then again: I wrote it.

T,

I have seen you around for a long time in this forum and you posted some real interesting stuff in the past.

What sparked the idea of this one?

I am asking because underlying, it seems you are looking for a broader question and its answer than described in here.

Only wanting to help -

regards,
daytrading

It is how I actually trade, daytrading.

After all my years researching forex, this is what I believe in. It means that I accept my limitations of being able to accurately predict whether a market will be trending or sideways, and still gives me a strong chance of walking away with some good coin.

The reason it works so well is that when one of the strategies is doing well... it really does well.... upwards of 1000% to 5000% are possible in 12 months.... so the loss of 100% on the other account is moot.

Of course, there are markets that are flip flopping between the two, which I walk away a loser. I accept that.

T,

what markets do you run simultaneously? Are they highly correlated or even the same product/ccy? Do you work the same initial size with different compounding measures, time frame (holding period) on each account - or do you manage individually?

You might have discovered something real big, you know....a fund managers dream - which is constant exposure with limited risk and the upside of not missing either, profits in range and trend.

regards
daytrading

Hi T,

I am new in here, so I do not know anything about you, besides what I can read in your profile.

But I got a question for you.

Do you actually live from your trading, and are you able to take out money from your trading activity? Or is it only for fun?

I ask because, it seems to me to be a quit risky approach to the markets, you describe here.