Day Trading - Can I Make 10% a Month

Hi All,

This journal is just a place for me to document my trades, thoughts and feelings as I embark upon my trading journey.

I am going to be using is Divergence's Flag Trading method found here - http://www.forexfactory.com/showthread.php?t=280673

It is the first thread I have come across on day trading that really makes sense to me. It is based mainly on price action but uses some indicators to help confirm an entry or get you out in some cases.

I have back tested it on data from the start of the year and have the following results with the EU.

78 trades
68 wins
10 loss
1 trade a day average
22 trades a month average
87 strike rate

So as you can see it has promise. Now the key is for me to trade it live and see if I can get similar results.

A few things to note, the results above are based on trading Asia and New York as defined by the system creator but these are not necessarily going to be my ultimate session choices. I am based in Europe so will look to test this on the London Sessions as well as testing other currency pairs (GU and EJ).

Regarding the title the reason I have put 10% per month is that is my target initially, if I can do that consistently whilst not risking to much I will up my risk percentage. Also 10% per month is what I have calculated as being a necessary return to allow me give up my day job completely and trade full time based on the starting bank I am willing to risk once I find consistency.

OK so if all the house keeping is over with I will end this first post by saying I welcome comments and contribution, although if you want system specifics I will declare now that I am not the expert and you should consult Divergence and some of the other senior members on the above mentioned thread.

Thanks for reading and happy trading.

PipRiderFX

Well my first day trading wasn't bad at all. I missed an opportunity in Asia, but picked up a win in the London session. Then missed another flag opportunity on the GU during US. I later took another short in the EU which I exited early for another small win as I realized once I was in that I had sold directly into support. This was a good move as the price shortly after rallied.

After sitting in the chat room and watching some of the experienced guys playing the ranges using divergence and make a killing I decided to give a GU divergence setup a go. I bailed early due to price stalling on a previous level of support only to see it fly into the money a few candles later.

All in all a good day with 1 Win and another tiny win and a BE.

What I took from today was how effective watching price around the S/R levels can be and watching for divergence can really enhance your performance.

Mentally it was a lot tougher than I expected. With day trading I was sort of expecting to see my trades go into the money straight away... on the test tool you click space and you are 1 period a head so you don't have to sit through the pain, you can just fast forward to the outcome. Obviously you don't have this luxury trading live, so that is something I need to learn to love with. I exited a perfectly good trade to early just because I thought price was stalling... who am I to decide... I should have just let the set up run its course, maybe move to BE but closing wasn't really valid at the time...

Day 1 = Good day :-) Missed some trades which was a little annoying but then made some good pips as well.


Trading Summary

Total Trades to Date: 3
Wins: 1
Partial Win: 1
Break-even: 1
Loss: 0

Today was another good day. However I've still got to learn to strap on a pair!

As with yesterday the London session provided me with the relatively painless profit whilst the the US sessions I tried to take one of the 123 setups only to exit early for BE and then a few candles later watching the entire position go onto hit my profit target. Amazing isn't it how you can repeat the same mistake two days in a row, and I would imagine I will repeat it again and again as I progress through my journey.

Anyway I can see from the trades that I have taken so far that sticking with them until my profit target or stop is hit is going to be my biggest hurdle. Don't get me wrong most of the trades I closed early did then go against me for a short period of time and probably would have hit my stop had I moved it to BE, but the important thing is that they all would have gone on to hit my full profit target.

So my fictitious results would have been 4 trades 4 wins if I had stuck to the rules and just hung in there. I remove the one trade because I wouldn't have taken it in the first place if I had read the charts correctly. The reason I have put my fictitious results is I think it may be a good comparison to look back on in weeks, months to come to be able to see how my mental state is affecting my trading decisions.

If I Stuck to The Rules Trading Summary

Total Trades to Date: 4
Wins: 4
Partial Win: 0
Break-even: 0
Loss: 0

Trading Summary

Total Trades to Date: 5
Wins: 2
Partial Win: 1
Break-even: 2
Loss: 0

PipRiderFX,
Welcome to the reality of trading vrs backtesting. Whilst I recommend backtesting as tool to validate systems, it is useless if you don't trade that way when going live. In backtesting you will always hit your profit target or stop because you just click on the screen and the data appears.

In live trading you have to deal with the pips moving around, and then comes emotions which you appear to have not yet conquered as you are closing trades early, yet telling yourself the ficticious results that it was 4 winners. Which brings me to my point.

Don't rate a system on it's win/loss %, that is totally irrellevant without your risk:reward to give you your expectancy. If traders understood this at the start of their journey, I'm sure that many years of education would be reduced.

Good luck with your journal.

I completely agree with you. I am just keeping the two different sets of stats so hopefully it will show me what the difference would be if I had stuck to the rules compared to my actual results.

Also my r:r is usually 1:1, so anything that goes in my win column is 1:1 or better. That is why I included the partial win column to indicate those trades that I exited early and for less than 1:1.

I hope that makes sense.

Thank you for your wishes :-)

Stop by just to wish you good luck.
Hope everything keeps going as well as things have been so far.

Cheers!

OK so that caps off another good day and a great week for me. Again I was fighting my demons and on one trade exited a little to early!

I started by taking an EU long trade on a combination of the 123 and flag trade. That went into the money but then came back and took me out at BE, I think this was the right decision for this trade as it later continue its move down and would have hit my stop anyway.

After that I tried my luck with another 123 which again went into the money slightly but then came back providing me with a setup and trigger for the short. I was only half invested in the 123 as I don't have all that much confidence in them yet, so I left the long on whilst at the same time taking a full position on the short. That trade continue down, took me out of the 123 and hit my target and then some on the short.

At the same time as this I entered a long EU trade which initially went into the money but then came to within 0.5 pips from my stop only to rally back up in a matter of minutes to provide me with an opportunity to take profits. The price stalled about half way onto my actual TP and I got out for half my TP only to watch the price a few bars later continue on to hit my full target.

So all in all a good week, I am up on the week although I could be doing better if I gave my trades room to breath.

Next week I will look to work on my patience problems and hold out for my full profit target. Again if anyone has any ideas on how to remedy this please let me know :-)

If I Stuck to The Rules Trading Summary

Total Trades to Date: 8
Wins: 6
Partial Win: 0
Break-even: 1
Partial Loss: 1
Loss: 0

Trading Summary

Total Trades to Date: 9
Wins: 3
Partial Win: 2
Break-even: 3
Partial Loss: 1
Loss: 0

good luck, we're both in the same boat brutha
I've been doing real well with using Div's method, i use the basic principals of his system and then made some slight modifications that work for me.

I have started with flag trading too and it is the first simple and profitable system i have seen. Wish You good luck.

Just wanted to say all the best for your journey. It's a good system - just keep patience and discipline, don't revenge trade and 10% a month is easily acheivable (imho).

Noodles

Thank you everyone for your wishes!

So far my back testing and live trading is telling me that this system is really solid.

I hope going forward this continues to perform :-)

I would be interested to hear from anyone that has been trading this for longer than I have, to see how our results compare.

Hi,

Thanks :-)

How long have you been trading this system for? Also I saw you made 14% last week, that is fantastic, do you risk 2% per trade?

Would you mind sharing your modifications? and how they enhance things for you?

I'll message you in a few mins...

I haven't had time to update this over the past few days so I'l do a sort of weekly review here.

So I have trade a total of two days this week and things pretty much carried on the way I left the previous week. In total I took 5 trades this week. 2 Winning trades and 3 break even.

Unfortunately the same habits are creeping through to my trading which is my lack of ability to stay with the trade. Only 1 of my 2 winning trades were for the full amount with me bailing early on the other.

I also missed out on two further wins with my 2 of the 3 break even trades going on to make my profit target.

So here are the figures.

If I Stuck to The Rules Trading Summary

Total Trades to Date: 13
Wins: 10
Partial Win: 0
Break-even: 1
Partial Loss: 1
Loss: 1

Trading Summary

Total Trades to Date: 14
Wins: 4
Partial Win: 3
Break-even: 6
Partial Loss: 1
Loss: 0

OK so lets try and analyse these figures.

If I had of stuck to the rules and stayed with the trades assuming I took the 2% risk which is what some of the other my experienced guys are taking and I intend to take once I have built up experience with this system. I would have made 17%.

Instead by breaking the rules I would be up 10%.

So either approach would be yielding me profits but sticking to the rules unsurprisingly yields a great deal more.

I think this is actually a really useful exercise as it really shows the difference between what can be achieved if you trade properly, like a robot and what is achieved when you start to let your emotions get involved.

So these results are after 2 weeks live trading this system. Now lets look at my target of 10% a month. First of all it is clear that this is achievable, but the question is what sort risk do I need to take in order achieve my monthly target.

So by risking 2% my very worst scenario is the 10% as specified above which would put me on target for a 20% month. However if I stuck to the rules and not got scared I would instead be on target for a 34% month. Obviously we can't say for sure that the following weeks will follow what I have achieved these past weeks but my testing does seem to suggest that it would.

So at 1% risk I could achieve my 10% a month target the way I am currently trading where as I would only require just over 0.5% risk in order to achieve the 10% month by sticking to the rules.

mmmmm interesting....

I could get used to this :-)

Another good day trading. It was a bit of a slow start but I eventually managed to enter some valid setups and took profit for the day.

When I sat at my desk this morning the charts seemed to indicate they were going sideways. Then we got a break to the upside, followed by a pull back. I took the EJ long following this pullback. The trade went against me almost instantly coming to within a pip of my stop. It then rallied but only to about 10 pips, I brought my stop to BE +1 and got taken out. This seemed to be a lucky escape as the EJ continued to move lower throug out the session.

The downgrade of Greece sent the Euro tumbling and with that the Pound also started to lose ground. I saw a pull back in Cable and got in on the first signal candle. If I am honest I rushed the trade a little and I could have waited for a more clear cut chance and the subsequent price action demonstrated this as the trade took a long time to play out. But never the less in the end it did and it paid me well.

So another good day trading with this system, lets hope this can continue :-)

If I Stuck to The Rules Trading Summary

Total Trades to Date: 15
Wins: 11
Partial Win: 0
Break-even: 1
Partial Loss: 1
Loss: 2

Trading Summary

Total Trades to Date: 16
Wins: 5
Partial Win: 3
Break-even: 7
Partial Loss: 1
Loss: 0

Good luck to you. I will leaving my job August 2012 to trade full time. I have a goal each week. It is possble if we do not get impatient and over trade. We must stick to our plan. Good luck.

Dcb,

That is great! That is everybody's dream I think. How long have you been trading for?

What is your system? It is like the flag trading trend method?

Pip

I started trading futures in 1998, and I started trading FX in 2002. I moved to FX because of the liquidity and the trading hours. I trade the London open, 0700 GMT to 1100 GMT. I trade by only looking at the price patterns, no indicators, just TLs. My goal each week is a minimum of 40 PIPs gain. I trade enough lots that that will give me a 10% gain each week.

Wow 10% a week!!! That's amazing! What is your stop size?

Have you consistently been able to achieve this? If so for how long?