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20% per month. Is this possible?

  • #141
  • Nov 24, 2011 5:08am Nov 24, 2011 5:08am
Quoting hanover
Good question.
Hi Hanover, Thanks for Your reply and thanks too for your appreciation .

Quoting hanover
As a basic rule, if you're going to exit a trade, then it makes sense to exit at a level that the market is more likely to recognize (S/R is a good example).
I' agree about this, price always react at this psychic level that is S/R.

The question is how do we know whether the price will turning back, or will keep continuing the previous trend at that psychic level.
This make me confuse sometimes. whether hold my position or cut it.
I realize that this is a silly quoestion.

Quoting hanover
The more accurate your entries and exits are relative to turns in the market, the more pips you will bank, in the long term.
You right, we do analysis, market will judge.
there is No trader can guarantee his analysis is 100% accurate.


Quoting hanover
The market does not recognize an individual trader's pip based, or RR-based, targets. Hence in themselves, they can offer no technical edge.

This make me frustate sometimes, no certain clues in the market.

This is a probabilities game, sometimes win sometimes loss, sometimes have more winner sometimes have more loser.
All we can do is to protect account and then make acccount grow.

I just think like this, really ... i have simplify my thoguht.
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  • #142
  • Edited 6:20am Nov 25, 2011 6:08am | Edited 6:20am
Quoting Du Jin Shan
Hi Hanover, Thanks for Your reply and thanks too for your appreciation .



I' agree about this, price always react at this psychic level that is S/R.

The question is how do we know whether the price will turning back, or will keep continuing the previous trend at that psychic level.
This make me confuse sometimes. whether hold my position or cut it.
I realize that this is a silly quoestion.
You cant know anything about what price will do. You can make a judgement about what it will probably do based on your analysis. The fact is that the technical S/R will only be respected about 50% of the time. This is why people say TA is useless. Then you have your stop placement which means you can be stopped out even if you are correct about direction. This means you are going to be wrong most of the time. This makes risk/reward at least as important as the call.

I like my trades to win quickly but I want 3x my risk. Sometimes I will reduce my target if a significant level is in my way but not always. I know that level is just as likely to break as hold. I usually keep my risk/reward intact. It increases my overall profit and therefore can be considered an edge

During todays session I pulled my first long trade at resistance for 2x risk instead of 3. I then reversed the trade and lost before finally winning the short on a second attempt. I was right about the levels and how price would react but you can see I would have been much better off had I kept my reward to 3x my risk
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  • #143
  • Edited Nov 26, 2011 12:56pm Nov 25, 2011 1:37pm | Edited Nov 26, 2011 12:56pm
Quoting M.A.C.Doug
You cant know anything about what price will do. You can make a judgement about what it will probably do based on your analysis. The fact is that the technical S/R will only be respected about 50% of the time. This is why people say TA is useless. Then you have your stop placement which means you can be stopped out even if you are correct about direction. This means you are going to be wrong most of the time. This makes risk/reward at least as important as the call.

I like my trades to win quickly but I want 3x my risk. Sometimes I will reduce...
I disagree, if you study TA and PA for long enough you certainly DO NOT have to rely on money management and 3-1 reward risk to be profitable.

You absolutely can learn what price will do.

The people who think TA only works 50% of the time have no idea what they are talking about.

P.S. the bollingers are not needed either, they are just a distraction.
  • #144
  • Nov 26, 2011 10:02pm Nov 26, 2011 10:02pm
Quoting jag1966
I disagree, if you study TA and PA for long enough you certainly DO NOT have to rely on money management and 3-1 reward risk to be profitable.

You absolutely can learn what price will do.

The people who think TA only works 50% of the time have no idea what they are talking about.

P.S. the bollingers are not needed either, they are just a distraction.
Agree 100% with you. Anybody whose trading decisions involve analyzing price charts implicitly believes that TA/PA delivers a better advantage than 50/50.

If it was possible to attain profit by making random (e.g. coin toss) entries and simply taking 3:1 or (X:1, pick any value you like) RR trades, then it would be child's play to write such an EA, and everybody would effortlessly become a forex millionaire. LOL.
  • #145
  • Edited 11:54pm Nov 26, 2011 11:34pm | Edited 11:54pm
Quoting jag1966
I disagree, if you study TA and PA for long enough you certainly DO NOT have to rely on money management and 3-1 reward risk to be profitable.

You absolutely can learn what price will do.

The people who think TA only works 50% of the time have no idea what they are talking about.
Quoting hanover
Agree 100% with you. Anybody whose trading decisions involve analyzing price charts implicitly believes that TA/PA delivers a better advantage than 50/50.

If it was possible to attain profit by making random (e.g. coin toss) entries and simply taking 3:1 or (X:1, pick any value you like) RR trades, then it would be child's play to write such an EA, and everybody would effortlessly become a forex millionaire. LOL.

Ok - Im out voted on this one. You can know with certainty what price will do in the future based technical analysis and therefore win every trade and become a forex gazillionaire easily. Its a wonder no one has bothered to code the ea

Unfortunately, I can only suggest what price will probably do based on technical analysis. I didnt say no edge existed in TA, I said any s/r line has about a 50/50 chance of either holding or breaking and other people use this fact to discredit TA. I do not enter randomly and never said this could be effective.
I could get a much better hit rate with 1:1 risk reward but I get better returns with less winners and bigger targets. The money management does not improve my performance but it does improve the return.
Quoting jag1966
. the bollingers are not needed either, they are just a distraction.
They may not be needed but they do not distract me. Bollinger bands provide me early information about volatility that I find easier to see than with PA alone. That makes them helpful for me. You cant say what is distracting for me based on your own experience. People are different as is evident by the endless number of different ways people trade
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  • #146
  • Edited Nov 27, 2011 12:28am Nov 26, 2011 11:50pm | Edited Nov 27, 2011 12:28am
Quoting jag1966
I disagree, if you study TA and PA for long enough you certainly DO NOT have to rely on money management and 3-1 reward risk to be profitable.
well say, money management is one of the key to trading success, how do you neglect it.

Quoting jag1966
You absolutely can learn what price will do.
but this will need a lot of screen time and experience and a little of intuition ,
i guess

the real truth is Nobody know exactly where is the price next moves.
Every time I try this, everytimes I ended up frustated

this is a probability game. sometimes right sometime wrong.
with a lot of experience, probability of wrong decision will decreased. but will still have a wrong decision, with a minimal amount.

Kindest regards
Jin Shan
- 888 Horse Power - Fast Momentum Speed Run Towards VICTORY
  • #147
  • Edited 12:29am Nov 27, 2011 12:12am | Edited 12:29am
Quoting hanover
Agree 100% with you. Anybody whose trading decisions involve analyzing price charts implicitly believes that TA/PA delivers a better advantage than 50/50.


Quoting hanover
If it was possible to attain profit by making random (e.g. coin toss) entries and simply taking 3:1 or (X:1, pick any value you like) RR trades.
hmm, it's become gambling EA i guess

AND I think risk reward is a thing that must be adjusted with trading system.
using risk reward randomly is gambling.

Kindest regards
Jin Shan
- 888 Horse Power - Fast Momentum Speed Run Towards VICTORY
  • #148
  • Nov 27, 2011 12:21am Nov 27, 2011 12:21am
Quoting M.A.C.Doug
I could get a much better hit rate with 1:1 risk reward but I get better returns with less winners and bigger targets. The money management does not improve my performance but it does improve the return.



Quoting M.A.C.Doug
They may not be needed but they do not distract me.
Bollinger bands provide me early information about volatility that I find easier to see than with PA alone. That makes them helpful for me. You cant say what is distracting for me based on your own experience. People are different as is evident by the endless number of different ways people trade
this i agree with you M.A.C.Doug,
everybody have his own trading style.I'm admit this.
management is the key

Kindest regards
Jin Shan
- 888 Horse Power - Fast Momentum Speed Run Towards VICTORY
  • #149
  • Nov 27, 2011 1:15am Nov 27, 2011 1:15am
Quoting M.A.C.Doug
Unfortunately, I can only suggest what price will probably do based on technical analysis. I didnt say no edge existed in TA, I said any s/r line has about a 50/50 chance of either holding or breaking and other people use this fact to discredit TA. I do not enter randomly and never said this could be effective.
My apologies; I didn't actually read your initial post.
I was replying to jag when he said that "people who think TA only works 50% of the time have no idea what they are talking about".

I've satisfied myself that - in certain situations - it's possible to forecast directional bias with significantly > 50% probability, and therein lies the basis for an edge. To whatever extent it's possible to manage trades beyond 1:1 RR, then the edge is increased even further.

Of course it's also possible to win overall by having a win rate < 50%, if average RR is high enough. Expectancy is the product of win rate and RR.

Bollingers are about the only indy that I use. I find that they give a decent approximation of OB/OS.
  • #150
  • Nov 27, 2011 2:00am Nov 27, 2011 2:00am
Quoting hanover
I've satisfied myself that - in certain situations - it's possible to forecast directional bias with significantly > 50% probability, and therein lies the basis for an edge. To whatever extent it's possible to manage trades beyond 1:1 RR, then the edge is increased even further.

Of course it's also possible to win overall by having a win rate < 50%, if average RR is high enough. Expectancy is the product of win rate and RR.
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  • #151
  • Edited Nov 28, 2011 1:54am Nov 27, 2011 4:17am | Edited Nov 28, 2011 1:54am
Quoting hanover
My apologies; I didn't actually read your initial post.
Apology gratefully accepted, you have only ever been helpful in the past, even pimping my bollinger bandwidth indi for me for nothing. We may disagree on some points but I have nothing but respect for you and your contribution to FF and to me personally.

I absolutely agree that TA can and does provide a directional and timing edge. It is this edge that I exploit and it never ceases to amaze me how reliable it is. I get just above 40% hit rate with 3:1 risk/reward. If I wasnt so trigger happy I believe I could get this up to around 60% by being more selective and waiting for only the very best of set ups. Imagine that, 60% hit rate with reward 3x risk - thats virtually a holy grail! But then I would need to be there for those set ups and the only reason I am there when they happen is because of all the so so set ups I am trading in the meantime.

The bottom line is I am profitable trading in a manner which is psychologically easy for me to do. It fits my personality. I have learnt to profitably trade the market in a way that suits me. That took a long time to achieve. I consider that this psychological aspect of my style also forms part of my edge. Its no use having a formula that is profitable but cant be executed properly because it doesn't suit the person.

Theoretically, with 0.2% risk per trade, if I take 10 trades my losses equal 0.8% and my wins equal 1.8% for a net gain of 1%. I regularly take 10 trades in a single day. After trying so hard, losing so much and waiting so long, its a dream come true
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  • #152
  • Nov 27, 2011 5:42am Nov 27, 2011 5:42am
Quoting M.A.C.Doug
Theoretically, with 0.2% risk per trade, if I take 10 trades my losses equal 0.8% and my wins equal 1.8% for a net gain of 1%. I regularly take 10 trades in a single day. After trying so hard, losing so much and waiting so long, its a dream come true
in a single day net gain 1% and in a month you will make 20%.
you have accomplish the thread title.

I'm curios how you filter the entry setups. as we know bolinger bands in 5M timeframe, price will touch the upper bands and lower bands so frequently.
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  • #153
  • Nov 27, 2011 1:07pm Nov 27, 2011 1:07pm
Quoting M.A.C.Doug
Apology gratefully accepted, .....
Mac,

Many thanks for the kind words.

I am both thrilled and impressed with your success story.
It is always great to read personal testimonials stating that huge profits are possible.

1% per day compounded daily (over 250 days) equates to ~1,100% p.a. ROE
If, for example, you were to increase your risk per trade to 0.5%, then 2.5% compounded daily = ~ 47,000% ROE.

Of course anybody can do the math, and you'd need to feel comfortable increasing your position sizes (and if you're happy growing your account 12x each year, then why take on any added risk? ). My point is how this illustrates that massive gains are possible from a small edge, aided by high trading and compounding frequency.

Agree totally that anything above 50% win rate with 3:1 RR, especially scalping (where transaction costs are relatively higher, and there is arguably more 'randomness') is probably as close to the grail as it's possible to get. The potential returns would certainly corroborate this.

Congratulations again! Success that is the result of many months of hard work provides the highest degree of satisfaction.

David
  • #154
  • Edited 2:02am Nov 28, 2011 12:56am | Edited 2:02am
Quoting Du Jin Shan

I'm curios how you filter the entry setups. as we know bolinger bands in 5M timeframe, price will touch the upper bands and lower bands so frequently.
Bolinger bands are not used for entry. I dont trade the 5 min chart either. I trade S/R levels, preferably from a higher time frame, using a 15 minute chart. This means I am entering in the opposite direction to price as it comes to my level. I am hoping for a 12 pip (net) bounce off exactly that level.
Because I am trading in the opposite direction than price is moving, I need to be very careful that I dont get caught trading against a move that has momentum
Bollinger bands are used to identify valid breakouts so that I dont get caught trading in the wrong direction when a potentially big move has begun. I never trade against these bollinger qualified breakouts, in fact they are a signal to go with the momentum, not against it.
I dont filter set ups, I take anything and everything I see that even loosely qualifies. At 0.2% risk per trade, I dont care what happens after my entry. All I know is that sooner or later I am going to win more than I have lost

Quoting hanover

1% per day compounded daily (over 250 days) equates to ~1,100% p.a. ROE
If, for example, you were to increase your risk per trade to 0.5%, then 2.5% compounded daily = ~ 47,000% ROE.
I dont do it everyday, I dont trade everyday. Somedays I do better than others and some days I lose. I did make almost 20% last month and I have made more than that so far this month. One day I made 0.8% and then drew down nearly 3% trying to get the other 0.2% to make a 1% day. Trading with specific return targets is a folly and I have maintained this all along. Apart from forcing trades like I did, You are just as likely to cap your potential returns on any given day. Its a form of cutting profits short. The market provides opportunities and we can only capitalise on those to our best ability. That means we have to take what we get and be grateful for whatever that is, even a loss for the day/week/month

I dont expect to return like this always. I believe an average monthly return between 5% and 10% is probably going to be the longer term outcome and that is elite level returns.

Please bear in mind that I am trading a mini account with low risk per trade. It is much easier to get elite level returns with a small account than it is with the account size true, elite level traders, command. Could I do this with 100k tomorow? - not a chance! I like to think I would still be profitable but I do not know how I would perform under the increased psychological pressure of such large sums. My plan is to build the small account so that I get used to trading bigger position sizes gradually. The journey is not over yet.
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  • #155
  • Nov 28, 2011 4:52am Nov 28, 2011 4:52am
Quoting Xenaga03
I am not so new to forex, but I would like to know if any professional traders have been able to consistently pull off 20% a month, at least uptil a $100,000 account. Is this possible? I am trying to figure out what my target should be monthly for my return on capital and what figures are realistic.
Youtube, search, "most important video you'll ever see"

to find out what just 7% per unit, eg. trade, day, week, month etc. can do for you, and a lot of other interesting, shocking facts for everyone, not just math geeks!
It takes a lot for me to IGNORE you, but you can try.
  • #156
  • Nov 28, 2011 6:45am Nov 28, 2011 6:45am
Quoting M.A.C.Doug
Bolinger bands are not used for entry. I dont trade the 5 min chart either. I trade S/R levels, preferably from a higher time frame, using a 15 minute chart. This means I am entering in the opposite direction to price as it comes to my level. I am hoping for a 12 pip (net) bounce off exactly that level.
Because I am trading in the opposite direction than price is moving, I need to be very careful that I dont get caught trading against a move that has momentum
Bollinger bands are used to identify valid breakouts so that I dont get caught trading...
Thanks for your explanation M.A.C.Doug

Wish you all the best.

Kindest regards
Jin Shan
- 888 Horse Power - Fast Momentum Speed Run Towards VICTORY
  • #157
  • Nov 28, 2011 6:49am Nov 28, 2011 6:49am
Quoting Du Jin Shan
Thanks for your explanation M.A.C.Doug

Wish you all the best.

Kindest regards
Jin Shan
The most important thing in forex trading is to keep a steady growth and keep your risk to be the minimum.
  • #158
  • Nov 28, 2011 7:00am Nov 28, 2011 7:00am
Quoting daminghu
The most important thing in forex trading is to keep a steady growth and keep your risk to be the minimum.
Yes, of course.

Thanks for your concern.

Kindest Regards
Jin Shan
- 888 Horse Power - Fast Momentum Speed Run Towards VICTORY
  • #159
  • Nov 29, 2011 3:28am Nov 29, 2011 3:28am
Quoting M.A.C.Doug

I dont do it everyday, I dont trade everyday. Somedays I do better than others and some days I lose.
somedays, like today, I get 6% from a single move with only 1% account risk. Its my first and only trade this week, its only Tuesday and I already have a better than 1% per day average for the week. Pretty cool huh?
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  • #160
  • Nov 29, 2011 4:59am Nov 29, 2011 4:59am
Quoting M.A.C.Doug
somedays, like today, I get 6% from a single move with only 1% account risk. Its my first and only trade this week, its only Tuesday and I already have a better than 1% per day average for the week. Pretty cool huh?
a nice shot MAC.

why suddenly you rise your risk to 1% MAC ?
are because you are so sure about your analysis ?
how can you so sure about your analysis today ?
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