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Forex Trading & Secrets!?!

  • #61
  • Jun 24, 2011 11:50pm Jun 24, 2011 11:50pm
Quoting Custos
okay, then it's more realistic.
In theory yes, but practically I am trying but not sure. First three months were very good, averaged about 10% a week, but then a long spell of losses for months. Then increased risk from 1% to 3% per trade. Some success, but still not satisfied with my performance.
The Thief of Wall Street
  • #62
  • Jun 25, 2011 12:27am Jun 25, 2011 12:27am
Quoting Chicky
From one perspective you are right but not from my perspective.

One option is to seek a good r/r i.e 1/10, 1/50 or 1/100, etc.. But this market is so volatile that it takes several attempts to catch such high r/r trade. And by the time we catch this trade, we have already lost the advantage. For example if we are looking for $100 loss or $1,000 profit, it may take 6 or 7 attempts to catch such move. By the time we catch this move we are already down by $600 or $700 for a trade that yields $1,000.
Agreed in your stated example. But I see something that could change the outcome in your favor. What if you were able to add positions once the original position(s) have been moved to breakeven, thus rolling any risk over to trades towards the market's direction, rinse & repeat, giving you an expotential unrealized profit. Worst happens (happens most of the time) you will lose the initial risk on your most recent trade (and some at BE) yet have older risk-less positions open still with the ability to reenter.

Quote
This past week, I went for a 500 to 700 pip move on EUR/USD. It went in my direction by 200 pips, moved stoploss to BE and waited for my 500 pip profit. What happened next ....... In single move it came down 200 pips to eat my sl that was 200 pips below. No loss on this particular trade, as it hit my sl at BE, but what about all the short-term opportunities lost by focusing on this particular trade and blocking my margin?

I perform silimar trades that eventually end up at breakeven in the following months but never think about a missed opportunity that resulted in 0 loss. Market proved your trade wrong, you lost nothing for a chance at a payday.

Quote
I don't see any advantage in playing longer term / swing trades. I want to convince myself that bigger moves are more profitable, but someone please convince me. Have also started a thread for this short-term/Long-term trading inviting discussion on this topic. So far not convinced that swing trading is more profitable in "Forex" market. Yes, equities and commodities are something different.

I'll try Longer term trades work with trending pairs (obviously) which are backed with strong fundamentals in the intended direction. I haven't looked at the E/U chart in weeks bc both currencies suck IMO. Now a chart like the Usd/Chf would be able to give you compounded results w/ expotential profits which should overcome any losses incured in the process.
  • #63
  • Jun 25, 2011 1:06am Jun 25, 2011 1:06am
Quoting EmeraldEyes
....... What if you were able to add positions once the original position(s) have been moved to breakeven, thus rolling any risk over to trades towards the market's direction, rinse & repeat, giving you an expotential unrealized profit. Worst happens (happens most of the time) you will lose the initial risk on your most recent trade (and some at BE) yet have older risk-less positions open still with the ability to reenter...........
Thanks. Normally I give or take 1% on every bounce and as manytimes it bounces off until it breaks on one side. But for longer-term trading did something similar to what you mentioned. Entered eur/usd long at 1.4150 since this area was a strong support zone in the past. Once it took off, added more positions and set sl immediately below entry (support). Initial plan was to let it ride until 1.4900 or hit my sl. It kept on going up. When saw 100% profit, decided to liquidate significant position.


.
Quoting EmeraldEyes
...Longer term trades work with trending pairs (obviously) which are backed with strong fundamentals in the intended direction. I haven't looked at the E/U chart in weeks bc both currencies suck IMO. Now a chart like the Usd/Chf would be able to give you compounded results w/ expotential profits which should overcome any losses incured in the process.
You are absolutely right. For years demo traded USD/JPY because it bounces a lot. Used to produce 50% to 100% demo profit a month. But in 2007 it once went up and never showed a moderate retrace. Lost faith in my method and picked eur/usd for trend trading. This is where I learned importance of fundamentals. Market ultimately follows fundamentals.

I think the issue is not with longer term trading but probably hitting a very effective short-term trading method. No harm in continuing both the systems.

However, will keep working on longer term methods.

Thanks again for your help.
The Thief of Wall Street
  • #64
  • Edited 2:19am Jun 25, 2011 1:51am | Edited 2:19am
Quoting Chicky
Never ever under-estimate the power of compounding.

I am in a venture of multiplying my account 5,000 times in 5 years. Have all the logic how it will happen. The most optimistic return is 100,000 times. Challange me, and I will give you all the details................. and I am not drunk but a CPA.
If you're consistent in your trading, then...

Assuming there are roughly 250 trading days in a year (5*52 - 9 or so holidays) and therefore 1250 trading days in five years we get the following:
http://www3.wolframalpha.com/Calcula...s=30&w=66&h=23 = 1.006837 --> 0.683% per day
http://www3.wolframalpha.com/Calcula...s=28&w=76&h=23 = 1.0073954 --> 0.739% per day
OR 5*12 months = 60 months
http://www3.wolframalpha.com/Calcula...&s=4&w=54&h=24 = 1.15252 --> 15.25% per month
http://www3.wolframalpha.com/Calcula...s=45&w=64&h=24 = 1.16591 --> 16.59% per month

Chicky,
you are a very cheeky fellow playing around with people's common inability to understand exponential growth. I have studied this field myself and even today after all the information and calculations I've done I am still blown away by the implications of it. This is very powerful stuff.

I already saw Custos backing off your back when he saw your monthly target figures. So here is a little guide that will help people understand what is going on and maybe even help set goals:
What is your % growth goal?
Over what time period?
Go to WolframAlpha and enter the numbers as I've done on the example.

Example:
Goal: 500%
Time: 1 year (250 trading days in a year)
Enter 250th root of 5 to get the % of growth needed each day
Enter 12th root of 5 to get the % growth needed each month
The result you get is 'raw'. You need to multiply it by a hundred and further extract another hundred (sorry, English is not my native language and I find myself having trouble with math in English). If you didn't understand me, here is an example. Say you get 1.05 from WA. You do this (1.05*100)-100=5 (the answer is 5%).
If you don't risk, you don't ever have to lose.
  • #65
  • Jun 25, 2011 2:07am Jun 25, 2011 2:07am
Quoting bug
If you're consistent in your trading, then...

Assuming there are roughly 250 trading days in a year (5*52 - 9 or so holidays) and therefore 1250 trading days in five years we get the following:
http://www3.wolframalpha.com/Calcula...s=30&w=66&h=23 = 1.006837 --> 0.0683% per day
http://www3.wolframalpha.com/Calcula...s=28&w=76&h=23 = 1.0073954 --> 0.0739% per day
OR 5*12 months = 60 months
http://www3.wolframalpha.com/Calcula...&s=4&w=54&h=24...
Bug,

Thanks for letting everyone know how to calculate their figures.
I used the attached excel worksheet. Maybe this also helps.

My calculation compounds monthly for the sake of simplicity, one can also compound daily or weekly.
Attached File(s)
File Type: xls Eur-Expo.xls   24 KB | 414 downloads
The Thief of Wall Street
  • #66
  • Jun 25, 2011 2:21am Jun 25, 2011 2:21am
Quoting Chicky
Bug,

Thanks for letting everyone know how to calculate their figures.
I used the attached excel worksheet. Maybe this also helps.

My calculation compounds monthly for the sake of simplicity, one can also compound daily or weekly.
Great!

PS. I found a slight mistake with my calculations above (1.006837 --> 0.0683% per day is wrong, it should be 0.683% per day). I made the adjustments in my post above to reflect that.
If you don't risk, you don't ever have to lose.
  • #67
  • Jun 25, 2011 3:11am Jun 25, 2011 3:11am
I'm don't want to rain on your parade, but I really have to give you guys a heads up.

You guys did a great job in calculating the compounded sum. All the math are perfect.... BUT.... the results are all flawed.

I've never seen anyone posted and overlooked the problem. For the simple fact that you guys never took into account the lots size. All your calculation for the targeted timeframe in achieving X numbers of money in X numbers of time are flawed.

I really have no time and energy to explain it all, but I'll explain briefly... I just hope you guys get what I'm getting at here:

1) $100 traded with 1 lot achieving 15% = $15

2) $100 + $15 = $115 >>> guys guys then proceeded to calculate 15% of $115 ?????

This would mean your typical 1 lot MUST now achieve a higher pip gain than the previous trade to achieve another 15%. Do you see the flaw in this????

1 lot to achieve 15% = 15
1 lot to achieve 15% = 15
1 lot to achieve 15% = 15
this totals to $45 in 3 trades with a total balance of $145

Yet your calculations in 3 trades are:
at compounded 15%
$100 >>> +15% = $115
$115 >>> + 15% = 132.25
$132.25 >>> + 15% = 152.08
$152.08

*** According to your calculations in 3 trades you will attain $152.08 but in reality your account balance will only achieve $145 in 3 trades. Continue to add these values and you will get $1,000,000 in discrepancy. If you think you can make $1,000,000 in 15 trades... in reality, it will take around 25 trades to hit the target, because the lots sizes traded does not allow you to perfectly exponentially compound. (This taking into account with no losses.) ***

Of course real traders who trades with big lots know this path from their real life experiences
  • #68
  • Jun 25, 2011 6:31am Jun 25, 2011 6:31am
Quoting CrucialPoint
I'm don't want to rain on your parade, but I really have to give you guys a heads up.

You guys did a great job in calculating the compounded sum. All the math are perfect.... BUT.... the results are all flawed.
This is nothing new. Incremental lot size changes are the obvious answer. You don't go from trading 1 lot to trading 2 lots. You do it step by step 1 -> 1.1 -> 1.2. Obviously you can't do it in the futures market, but that's where the retail spot market comes in (you can do the same thing in equity market).

It's a valid point you raised, but then again it's fairly obvious and I don't see someone developing into a real trader without discovering this himself along the way. I hope you don't take this as an insult, I'm just being honest about what I feel about the issue.
If you don't risk, you don't ever have to lose.
  • #69
  • Jun 25, 2011 11:12am Jun 25, 2011 11:12am
Quoting CrucialPoint
I'm don't want to rain on your parade, but I really have to give you guys a heads up.

You guys did a great job in calculating the compounded sum. All the math are perfect.... BUT.... the results are all flawed.

I've never seen anyone posted and overlooked the problem. For the simple fact that you guys never took into account the lots size. All your calculation for the targeted timeframe in achieving X numbers of money in X numbers of time are flawed.

I really have no time and energy to explain it all,...
Crucial,

Welcome to these discussions. You are not raining no one's parade.

You are right, practically it is impossible to maintain a perfect ratio. However the foucs here is the multiplier effect of compounding. There are countless ways to exponentially compound, for example:
1. Opening a mix of 100k, 10k, 1k (micro) and even .001k accounts with various brokers
2. Compounding in steps
3. Partial hedging
4. Creating synthetic pairs
5. Partnering for unbreakable currency lots

Some legendary traders achieved even much more than this. Not saying its piece of cake but only that its not impossible.

A quote from Reminiscences of a Stock Operator:
"There is where I made the mistake that I have regretted more than any other I ever made in my Wall Street career. It was responsible for long and dreary years of suffering. I should have insisted on his taking the money. I was on my way to a bigger fortune than I had lost and walking pretty fast. For three weeks my average profit was 150 per cent per week. From then on my trading would be on a steadily increasing scale. But instead of freeing myself from all obligation I let him have his way and did not compel him to accept the twenty-five thousand dollars."

The point here is not Jesse Livermore making 150% week, but the point is just twenty-five thousand dollars that he borrowed was a huge amount for him at one point of time in his life. He made fortunes with small borrowed money after going broke.
The Thief of Wall Street
  • #70
  • Jun 25, 2011 11:14am Jun 25, 2011 11:14am
Quoting mr.marketz
Funny you bring this up. Shortly after I turned a friend of mine on to trading, he cracked open an MT4 after getting stoned. He called me up and told me that he was certain that there was a "divine" order to the charts. Keeping in mind that this is probably one of the most scholastically inclined people I have ever known, I was intrigued to say the least. When I asked him to explain further, he couldn't exactly put it into words. I have yet to have him produce a workable strategy around his "findings"... but it definitely got me thinking.

I'm...
Hehe sounds like a very interesting topic to look into, i tend to look a the market from a more "gambler" type of view and like to experiment with some math into it . As funny as it sounds id defenitly say cannabis had a big part in my last 3 months of profitable trading and 2 months of demo . I hoped im acutally blessed and this isnt a joke ^_^
  • #71
  • Jun 25, 2011 11:18am Jun 25, 2011 11:18am
Quoting Troikaone1
Hmmmm.....interesting. I am fully convinced that in order to trade well you have to think outside the box. It is interesting how drugs help you do this. There are all sorts of ancient cultures that relied on drugs to think outside the box or to see things differently. In a freakish kinda way my most astounding discoveries about the market came after crippling losses. Over time, I felt like it was the FX gods toying with me by giving me just enough to justify moving forward AGAIN. It may have something to do with brain chemistry. For me, a major...
good point im sure well find out later on someday that there is somekind of relation with drugs and critcal thinking.. And i learned alot when i lost my 800$ savings in 2 days which were for rims Lol . i flipped out .. b*tched at myself & went to a party right after and hung out with my friend who introduced me into forex and talked with him totally stoned . went home tried our ideas over a month or so and it worked .. been 3 months so far and i saving up for those rims now..
  • #72
  • Jun 25, 2011 11:42am Jun 25, 2011 11:42am
Quoting Troikaone1
Hmmmm.....interesting. I am fully convinced that in order to trade well you have to think outside the box. It is interesting how drugs help you do this. There are all sorts of ancient cultures that relied on drugs to think outside the box or to see things differently. In a freakish kinda way my most astounding discoveries about the market came after crippling losses. Over time, I felt like it was the FX gods toying with me by giving me just enough to justify moving forward AGAIN. It may have something to do with brain chemistry. For me, a...
I totally, totally and totally disagree with this statement. Don't take it personally, but I know because have ties with one such cultures that has been wrongly accused of such practice. http://en.wikipedia.org/wiki/Assassins. A historic baseless political statement should not misguide generations that followed and yet to come. ANYTHING THAT HAMPERS HUMAN BRAIN'S CAPACITY TO PERFORM AT OPTIMUM CAN NEVER BE GOOD. AVOID THOSE SUBSTANCES. This is what we believed at that time, still do and will continue to do.
The Thief of Wall Street
  • #73
  • Jun 25, 2011 12:17pm Jun 25, 2011 12:17pm
There is no such thing as a secret or holy grail in the FOREX! like in everything, it is experience that will make u successful, the more u study the market and practice it; the more u will understand it. All the systems and indicators will do nothing but blow your account if you dont really understand the market. However, if u understand the market, indicators and a system of trading are a great help.
  • #74
  • Jun 25, 2011 12:25pm Jun 25, 2011 12:25pm
Quoting Hodgires
There is no such thing as a secret or holy grail in the FOREX! like in everything, it is experience that will make u successful, the more u study the market and practice it; the more u will understand it. All the systems and indicators will do nothing but blow your account if you dont really understand the market. However, if u understand the market, indicators and a system of trading are a great help.
cool story bro... but go back and read the first post.
Congratulations ScalaFX for coming out of the closet!
  • #75
  • Jun 25, 2011 1:15pm Jun 25, 2011 1:15pm
Quoting Chicky
I totally, totally and totally disagree with this statement. Don't take it personally, but I know because have ties with one such cultures that has been wrongly accused of such practice. http://en.wikipedia.org/wiki/Assassins. A historic baseless political statement should not misguide generations that followed and yet to come. ANYTHING THAT HAMPERS HUMAN BRAIN'S CAPACITY TO PERFORM AT OPTIMUM CAN NEVER BE GOOD. AVOID THOSE SUBSTANCES. This is what we believed at that time, still do and will continue to do.
I would like to point out that my previous post was not a reccomendation to use any illicit substances. Not only as they may be illegal in your area but because the harm out weighs the benifit of taking them.
Ask yourself do you still take drugs now and do the reasons why you started in the first place have any significance in your life today?
I wouldnt risk my life by driving under the influence of drugs or alcohol,so why are people risking their money trading under the influence of an illicit substance?
Its a business, not a game.
Searching for a cure...:nerd:
  • #76
  • Jun 25, 2011 1:20pm Jun 25, 2011 1:20pm
Quoting funlovinj
I would like to point out that my previous post was not a reccomendation to use any illicit substances. Not only as they may be illegal in your area but because the harm out weighs the benifit of taking them.
Ask yourself do you still take drugs now and do the reasons why you started in the first place have any significance in your life today?
I wouldnt risk my life by driving under the influence of drugs or alcohol,so why are people risking their money trading under the influence of an illicit substance?
Its a business, not a game.
Sorry, kindly say it again but slowly ................. didn't get it .................. I am high

Just kidding, LOL.
The Thief of Wall Street
  • #77
  • Edited 1:59pm Jun 25, 2011 1:36pm | Edited 1:59pm
Inserted Video



but seriously, if you wanna know this stuff works, watch this documentry
How Drugs Work: Cannabis it was on the BBC in January,im sure you can get it somewhere online.
Searching for a cure...:nerd:
  • #78
  • Jun 25, 2011 1:46pm Jun 25, 2011 1:46pm
Quoting bug
I hope you don't take this as an insult
Are you kidding? For once we have a mature discussion thread where there are no bickering happening (so far) and who has a bigger penis.
  • #79
  • Jun 25, 2011 1:54pm Jun 25, 2011 1:54pm
Quoting CrucialPoint
Are you kidding? For once we have a mature discussion thread where there are no bickering happening (so far) and who has a bigger penis.
I created a stoner thread.. theres never bickering.. just love
  • #80
  • Jun 25, 2011 2:01pm Jun 25, 2011 2:01pm
Quoting CrucialPoint
who has a bigger penis.
Wanna bigger penis? try Jelqing (?sp)

Dont ask how i know lol
OK Ill stop spamming your thread lol.
Searching for a cure...:nerd:
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