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  • #61
  • Nov 20, 2011 11:10am Nov 20, 2011 11:10am
Quoting Custos
what if you have an unprofitable year? Then those daily targets will make you go insane.

The daily target should be to execute a winning system over and over again no matter what the result (except if it starts to become a losing system).
I suppose an unprofitable year could do that. I already had my unprofitable year. I do not plan ever to have another one. If you have more than one unprofitable year, it may mean that maybe stocks or some other investment tool would better suit you. All I do is cost average my position at the fib #'s which seem to be pretty consistent. Weather out the storm if it goes against me and keep positioning.

It's not unreasonable to have a few bad trades. It happens--but it shouldn't happen consistently.
Taigen Profit This Month: na
  • #62
  • Nov 20, 2011 11:44am Nov 20, 2011 11:44am
Quoting Taigen
I have been consistent with 2% a day for two months now...
Yes that is a very short time, so time will tell whether I can keep this up.
This is more what I expected.

It is just my opinion (from experience), that the "average per day" mindset,
even if spread over a month, is dangerous.

Average, steady daily gains are somewhat illusory.

If you can make many trades per day AND have a high hit rate...
you can be profitable most days, but you never know when you are going to get "smacked".
I have a couple losing days per month on average, but they can be LARGE.

I wish you the best of luck.

A small account of mine from last year about this time (about 550 trades)...
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  • #63
  • Nov 20, 2011 12:17pm Nov 20, 2011 12:17pm
Quoting Intu
This is more what I expected.

It is just my opinion (from experience), that the "average per day" mindset,
even if spread over a month, is dangerous.

Average, steady daily gains are somewhat illusory.

If you can make many trades per day AND have a high hit rate...
you can be profitable most days, but you never know when you are going to get "smacked".
I have a couple losing days per month on average, but they can be LARGE.

I wish you the best of luck.

A small account of mine from last year about this time (about...
I cannot reconcile having goals in life if there are not time frames associated with it. I guess it is a matter of opinion. I am going for the brass ring which does not mean I throw caution to the wind. Think of all the people who have been successful at this. Are they any different than me? NO! They see patterns, I see patterns. They risk, I risk. I see no reason that I should not see a six figure account within the year and a seven figure within the following year. Why shouldn't you? It won't be easy street but it can be done.

Your account track is cool. Is that the Trade Explorer? I'll get on that as soon as I can. I have nothing to hide. Success and failure do go hand in hand.

Wish you well too.
Taigen Profit This Month: na
  • #64
  • Nov 20, 2011 2:14pm Nov 20, 2011 2:14pm
Quoting Taigen
I cannot reconcile having goals in life if there are not time frames associated with it. I guess it is a matter of opinion. I am going for the brass ring which does not mean I throw caution to the wind. Think of all the people who have been successful at this. Are they any different than me? NO! They see patterns, I see patterns. They risk, I risk. I see no reason that I should not see a six figure account within the year and a seven figure within the following year. Why shouldn't you? It won't be easy street but it can be done.

Your account...
I don't have a problem so much with setting goals, but what is crucial is the effect it has on you emotionally, and consequently on your trading, if you find yourself falling behind in terms of achieving them.

If I misread your initial post, I apologize, but it sounded like you were setting your expectations at making 2% EVERY day, as opposed to a guideline average.

The biggest factors in determining ROE are (1) risk per trade (obviously a trader risking 2% is going to experience at least double the ROE - positive or negative - of one who risks 1%); (2) frequency of trades (a scalper will have many more opportunities to trade than a position trader); (3) frequency of compounding (same argument, scalper vs position trader). Obviously you must be using consistent MM to make a metric of "X% per day" meaningful. My point is that there are other ways of increasing/decreasing daily ROE rather than merely becoming more proficient with entries or exits.

I wish you every success with your trading. If you are able to compound an average of 2% per day, then you'll reach 7 figures in no time. That would represent a fantastic achievement.
  • #65
  • Nov 20, 2011 8:27pm Nov 20, 2011 8:27pm
What I find works best for me is if I structure my trading activity around the main rule of "cut your losses and let your winners run". This is a major money management rule of thumb which should guide you on both individual trade structuring as well as serving as a guide for monitoring your continued progress over days, weeks, months, and years.

What I mean by that is to build rules into your trading plan for individual trades, daily trading, and weekly trading progress that limit your losses for those time frames, but which also allow for the market to carry you freely into the upside potential when you get it right. Having a daily "target" only makes sense for me in the context of ongoing progress monitoring...they are not to be used as a "cutoff point" for otherwise successful trading activity.

For instance, I don't have daily income "targets" or "quotas" because they might serve as an excuse for me to justify revenge trading in the face of difficult market conditions or my own poor performance on a particular day. Some days you just aren't "in the flow". Some days the market just doesn't give it up. To trade or not to trade is primarily controlled by my setup/entry rules. But I do have daily and weekly LOSS limits which kick in to cease my trading if things just aren't going well. I don't want a bad day to turn into a REALLY bad day. Another general rule of mine is that I am allowed to have "bad (net losing) days"...but if I am NOT allowed to have a "bad week". If I have two bad days in a row...it's time to interrupt the process and do some diagnosis. Was it me? Was it the market? I generally go back to demo mode to make sure I'm able to execute the rules and review my trades for errors. This is why and where a trade journal is required process.

So, I don't like the idea of "goals" where they are used as motivators to keep trading when you are having difficulty. I AM in favor of using them to monitor whether or not you are "on track" with your system. When you back-test your system, you are setting a track record that should be used as a measuring stick for your actual live performance. If you are deviating from your back-testing results...you should figure out WHY. THAT is, imho, the best application of "targets".
  • #66
  • Nov 20, 2011 8:40pm Nov 20, 2011 8:40pm
“I’m always thinking about losing
money as opposed to making money.
Don’t focus on making money, focus
on protecting what you have.”

Paul Tudor Jones
  • #67
  • Nov 20, 2011 8:51pm Nov 20, 2011 8:51pm
For those who think 2% a day is not possible. May I challenge you to answer the following questions?

1. If you think 100% a year account increase is possible, what is the reason than 100% a month account increase is not possible?

2. What is the logical upper limit % that a person can make in a month?
  • #68
  • Nov 20, 2011 9:02pm Nov 20, 2011 9:02pm
I don't see how this helps the OP with his situation, but to answer your questions...

Is 100% per year possible? ...absolutely, but the real question is...how sustainable is it over the long haul?

Another question...is it likely? For most, no...but it ultimately depends on the person and how well they can follow a very good set of rules. Sustained high percentage growth has its limits because of "scalability" factors and liquidity. Numerically, there are no limits, but in the real world...you just aren't going to be able to sustain those big numbers.

The max % per month "possible" is a function of the expectancy of the system used coupled with the ability of the person trading it to adhere to rules and I'm sure a couple of other factors that I can't think of right now.
  • #69
  • Nov 20, 2011 9:47pm Nov 20, 2011 9:47pm
Wow this really turned into a heated debate it seems. Lots of helpful info within the lines though.

I guess in the end its upto the trader. Someone may like to use weekly and monthly goals and others may feel it limits them and is not suited to their personality.

According to brian tracy of the successful people he's interviewed all of them were working based on goals. They had something to aim for. IF it works in other aspects of life why not in trading too?
  • #70
  • Nov 20, 2011 9:57pm Nov 20, 2011 9:57pm
Quoting Pipskateer
What I find works best for me is if I structure my trading activity around the main rule of "cut your losses and let your winners run".
My suggestions for 'moneydeep' was because he felt like a failure. It was clear to me that since he said that he had a system in place that works, he needed direction in life, hence targets. I gave him a simple plan that works for me not even suggesting that it had to be followed in the strictest of terms but that is the way it was interpreted. This is my plan that works for me. Obviously, others have their own target goal infrastructure.

My daily target is nothing more than a speedometer so to speak. And you are right. There are days that there simply is no trading to be had. For example, last Monday I was in the ER for heart problems. Didn't trade. Tuesday was dead. Didn't trade. Wednesday I took a position and didn't close till Friday. Yet I was able to make the daily 2% per day for the week. I am so cautious I should have brought in 4% but I am concerned about "...losses..."

I'm extremely conservative; at least that's how I view myself. My son thinks I'm more of a risk taker because he is content with 5% on a monthly basis. Oh well. Last week I already have attained my monthly goal of a 50% increase. The rest of the month is gravy.

I agree pretty much what you say in your approach to trading it's just that my target goals are different than yours. You have to do what works for you.

You gave a lot of good suggestions.
Taigen Profit This Month: na
  • #71
  • Nov 20, 2011 10:07pm Nov 20, 2011 10:07pm
Quoting kk007
For those who think 2% a day is not possible. May I challenge you to answer the following questions?

1. If you think 100% a year account increase is possible, what is the reason than 100% a month account increase is not possible?

2. What is the logical upper limit % that a person can make in a month?
Good questions. If anyone has traded for a length of time, they, every once in awhile get's a 30-50% increase of their account in one day. It doesn't happen a lot for me but it does happen once in awhile. Everything is relative.
Taigen Profit This Month: na
  • #72
  • Nov 20, 2011 10:17pm Nov 20, 2011 10:17pm
Quoting kk007
For those who think 2% a day is not possible. May I challenge you to answer the following questions?

1. If you think 100% a year account increase is possible, what is the reason than 100% a month account increase is not possible?

2. What is the logical upper limit % that a person can make in a month?

It's not that 2% a day is not possible...it's that is it sustainable?

If you live within your means 100% ROE per year is a heck of a return.

With failures of these so called "TBTF" companies learn to do what they failed to do. (Control Greed)
  • #73
  • Nov 20, 2011 10:22pm Nov 20, 2011 10:22pm
Quoting pip_seeker
It's not that 2% a day is not possible...it's that is it sustainable?

If you live within your means 100% ROE per year is a heck of a return.

With failures of these so called "TBTF" companies learn to do what they failed to do. (Control Greed)
We'll find out. I'll either prove you right or wrong.
Taigen Profit This Month: na
  • #74
  • Nov 20, 2011 11:21pm Nov 20, 2011 11:21pm
@Pipskateer --- FWIW, I find myself agreeing with pretty much everything you've said. Like PTJ, all of the pros focus on risk management; they know that if they implement their edge consistently, profits will ensue as a matter of course.

@kk007 --- what returns are possible? Here is an interesting thread, which reinforces the notion that many folk believe that their current level of performance can't possibly be bettered by anyone else. What, ego? Surely not! LOL. Judge for yourself whether those who say that "5% monthly is fantastic" or "30% per week is consistently possible" are telling the truth.

The conclusion that I reached is that a scalper's daily ROE can potentially equal (or even exceed) a position trader's monthly ROE, simply because - assuming he can overcome the greater relative effect of the transaction costs - his turnover, and opportunity for compounding frequently, will be many, many times as great.

I could say more, but...... just read the thread. It's educational, and the battle of indignant egos is (as always) entertaining, LOL.
  • #75
  • Nov 21, 2011 7:40am Nov 21, 2011 7:40am
Quoting Taigen
We'll find out. I'll either prove you right or wrong.

Not really... you will never provide me enough proof because you will think wow this is really personal information do I really want this on a public forum board?

OR

you find out you're wrong and you disappear never to be heard from again.

an inflated ego has a funny way of working against you rather than for you.

A bit of wisdom for you: Pride cometh before a fall.

  • #76
  • Nov 21, 2011 8:57am Nov 21, 2011 8:57am
I am of course talking about consistent and sustainable growth, not winning x% a month and losing x% another month.

Sounds to me that both Pipskateer and pip_seeker don't think it is quite possible for 100% a year account increase (consistently and sustainably) for a person, while both of you cannot propose a logical upper limit.

True! This line of discussion does not help the OP. Perhaps, I don't further anything about it here. Thanks hanover for refering the interesting thread.
  • #77
  • Edited 9:27am Nov 21, 2011 9:16am | Edited 9:27am
Quoting pip_seeker
Not really... you will never provide me enough proof because you will think wow this is really personal information do I really want this on a public forum board?

OR

you find out you're wrong and you disappear never to be heard from again.

an inflated ego has a funny way of working against you rather than for you.

A bit of wisdom for you: Pride cometh before a fall.

...
It is my express hope that I am not speaking to stroke my ego and you are indeed correct that pride can be your enemy. To be honest, I have failed much more than I have succeeded but I continue and if I can help anyone from my mistakes I will do so.

There is a verse in Proverbs that says, "...For a righteous man falls seven times, and rises again..." I am just a guy who rises again. I'm eternally optimistic.

If what I have said in these posts comes across as bragging, I do apologize. I am just excited that I think I finally have stumbled onto something.

In order for anyone to see my account, I would have to switch over to MT4 and not use Dealbook360 which I am not willing to do. If you want, I will cut and paste my account statement but it would look quite convoluted in the way I buy and sell.
Taigen Profit This Month: na
  • #78
  • Nov 21, 2011 9:23am Nov 21, 2011 9:23am
Statement Period:
Aug 31, 2011 7:00:00 PM (GMT) -
Nov 21, 2011 3:20:03 PM (GMT)

[email protected], 12069921600, 8915 Wilkensen Rd SE B5, Yelm, Washington, US United States, 98597

Equity Summary
Transaction Description: Amount, USD
Beginning Cash Balance: 1,061.07 CR
Deposits 0.00 CR
Withdrawals 0.00 CR
Adjustments 0.00 CR
Interest 0.00 CR
Financing 13.26 DB
Commissions 0.00 CR
Settled Profit/Loss 1,531.59 CR
Unrealized Profit/Loss * 0.00 CR
Floating Profit/Loss 0.00 CR
Ending Account Equity 2,579.41 CR

* Unrealized Profit/Loss may fluctuate prior to settlement due to currency conversion
Activity Summary
Foreign ExchangeSpot Forex Settled Profit/Loss, USD Unrealized Profit/Loss, USD Floating Profit/Loss, USD
USD/JPY.fx 94.44 DB 0.00 CR 0.00 CR
USD/CHF.fx 6.33 CR 0.00 CR 0.00 CR
GBP/USD.fx 56.32 CR 0.00 CR 0.00 CR
EUR/USD.fx 1,505.17 CR 0.00 CR 0.00 CR
AUD/USD.fx 57.30 CR 0.00 CR 0.00 CR
NZD/JPY.fx 0.91 CR 0.00 CR 0.00 CR
Profit/Loss 1,531.59 CR 0.00 CR 0.00 CR


Copyright 2001-2011 by Global Futures & Forex, Ltd. All rights reserved., http://www.gftforex.com

Phone: 616.956.9273 | Toll Free: 800.465.4373 | Fax: 616.974.3682

PLEASE REPORT ANY DIFFERENCES IMMEDIATELY. YOUR FAILURE TO REPORT AN ERROR OR OMISSION IMMEDIATELY COULD RESULT IN A WAIVER OF YOUR RIGHT TO HAVE AN ERROR OR OMISSION CORRECTED.


To show you my buy/sell statement would probably overwhelm the system due to reams of buy and sells.
Taigen Profit This Month: na
  • #79
  • Nov 21, 2011 11:02am Nov 21, 2011 11:02am
Quoting kk007
Sounds to me that both Pipskateer and pip_seeker don't think it is quite possible for 100% a year account increase (consistently and sustainably) for a person, while both of you cannot propose a logical upper limit.
Really? Are you sure you actually read my post? The summary is... It is absolutely possible ...but it's not very likely. A world of infinity can lie between what is possible and what is likely.

Determining some sort of "logical" upper earning limit is not an easy calculation, even if I felt the motivation to try it. Again, I'll state that potential earnings over any time period are a factor of the expectancy of a system. Considering that most traders have NO CLUE what "expectancy" is, let alone what the expectancy of their system is... This question is moot.

If you know your own system's true expectancy, then it might be possible to calculate your potential earnings based on the frequency of your trading, but remember...for most traders, actual results almost always vary from projected results. I use historical back-testing to determine a baseline for what I can then "expect" my actual expectancy to be (hehe). Forward demo testing is then done to give me a chance to see if I can execute my rules in real time to replicate the results from my static chart historical expectancy. If I can demo trade my system in real time and replicate my historical expectancy closely, then I will trade live. I then monitor my live trading to make sure I am on track with historical and demo results. This is the only way I have found to isolate problems when transitioning from historical testing to real live activity.
  • #80
  • Nov 21, 2011 12:19pm Nov 21, 2011 12:19pm
I think a better metric is to design a trading system that shows performance over "X" number of trades, rather than some arbitrarily imposed time limitation.

In my system modeling stage, I begin by setting fixed variables for money management which are blended to give me profitable expectancy "targets" or a range of targets. I think in terms of specific units of trades, usually 100 trades. I then factor in sound money management principles and use them as the foundation of my system.

For example, let's say you choose a fixed "risk per trade" of 1% for all trades in your system for a series of 100 trades. Then you look to structure your rules allowing you to only take trade setups which yield a minimum of 2:1 reward to risk. By locking in your R/R as a constant, you can mathematically determine what minimum win rate is needed to achieve both "break even" and to turn a solid profit. In fact, you can very closely PINPOINT your ROE over a specific number of trades if you also factor in known trade costs and allow for reasonable slippage.

If I build a system from the ground up based on 2:1 reward/risk and 1% risk per trade (the two variables over which I have direct control), I know that I only need to achieve a win rate of 34% to break even. If I am able to sustain a win rate of 50%, then I know that I will return 62.84% over 100 trades. Even if I am only able to achieve 40% wins, it could still return +20%, but the tighter the margin is between actual win rate and the break even rate the more your transaction costs can hurt you.

Most people build systems without even considering the mathematical "expectancy" of the system. Why? Because it isn't "sexy" enough. They prefer to build their system based on their pet biases of what they think the market is doing. Or worse, they buy one based on the biases of a guru. In either case, they don't even realize the extent to which unknown biases have misled them. Once their system is built, they further complicate the situation by trading their system based on a completely different set of biases than those used in the design phase, again without realizing it. Their actual results end up skewed vastly from their "expected" results and so they move onto another system...rinse and repeat.
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