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The psychologist's chair

  • #1
  • First Post: Edited Dec 20, 2011 8:52am Dec 19, 2011 9:53pm | Edited Dec 20, 2011 8:52am
Hey guys,

I thought I'd start a journal about my experience through FX, but instead of me talking about my journey, I'm going to keep it simple and let the reader's ask the questions to begin with.

I guess a starting point would be to look at my trades, as I think there is something there to talk about.
Good judgement comes from experience. Experience comes from bad judgement.
  • #2
  • Dec 20, 2011 12:07am Dec 20, 2011 12:07am
Reactor,

This is by no means a personal attack on you, I'm just stating my mind because I read some of your recent posts on the 20% per month thread, which I respectfully disagree.

You say 20% per month consistently isn't possible, well, in my opinion putting a limit on what is achievable or not is just silly. There are so many infinite ways to lose your money in the markets, yet there are also infinite ways to win. Perception in this game is all that matters and that is key!

Because of what I read from your posts, I don't think you are qualified to start this psychologist chair thread. Yes, I see your account statement and it's in the black, if you consider this is good then bully for you, also I do have admiration that you are making it.

But my question is do you think you are qualified to lead others down one path (your own) since you don't have this flexible perception? It may do more harm than good especially to newbs.

BTW, I made well over 20% easily last week on EU solely risking 4% on each trade. How can you not make at least a pips everyday and compound the crap out of your account. Change your perception, change your thinking and money will follow.
  • #3
  • Dec 20, 2011 6:35am Dec 20, 2011 6:35am
Quoting pa18
Reactor,

This is by no means a personal attack on you, I'm just stating my mind because I read some of your recent posts on the 20% per month thread, which I respectfully disagree.

You say 20% per month consistently isn't possible, well, in my opinion putting a limit on what is achievable or not is just silly. There are so many infinite ways to lose your money in the markets, yet there are also infinite ways to win. Perception in this game is all that matters and that is key!

Because of what I read from your posts, I don't think you are...
I've experienced too many overly confident people like you that I'm familiar with their behaviour, where they think they can talk around the issue without using any facts to back up what they say. We recently have Bernie Madoff as an example.

But let's reverse the situation here and imagine I'm making the claims of making 20% a week, just like you, but you are questioning the numbers. What would you think if you realised that 20% a week equated to only £20? Are you telling me that is impressive and deserves the same respect as someone who made 20% a week that equates to £200?

I'm not leading others down my path either. I'm asking the obvious and important questions. Your account statement can't lie.

My desk was recently interviewing for a trading position and one candidate was not able to substantiate any of the figures they had provided on their CV. In effect they were lying and wasted everyone's time interviewing him. He obviously thought being confident and positive would be enough to get him the job and that he didn't need any credentials. I can tell you now that credentials are important.
Good judgement comes from experience. Experience comes from bad judgement.
  • #4
  • Dec 20, 2011 7:29am Dec 20, 2011 7:29am
Quoting Reactor
But let's reverse the situation here and imagine I'm making the claims of making 20% a week, just like you, but you are questioning the numbers.
Yes, if I didn't know what I knew now then of course I would question too, it's very natural, no problems there. But there will be a point where you either dismiss or embrace the truth ... or circles you can go


Quoting Reactor
What would you think if you realised that 20% a week equated to only £20? Are you telling me that is impressive and deserves the same respect as someone who made 20% a week that equates to £200?
I agree with you and no it doesn't.

But if they did 20% consistently per week then money is not the point.


Quoting Reactor
My desk was recently interviewing for a trading position and one candidate was not able to substantiate any of the figures they had provided on their CV. In effect they were lying and wasted everyone's time interviewing him. He obviously thought being confident and positive would be enough to get him the job and that he didn't need any credentials. I can tell you now that credentials are important.
Well, I wasn't there and I'm not sure of the criteria for the job or his personal background. If I went for a trading job I would provide my past trading logs.
  • #5
  • Dec 20, 2011 8:51am Dec 20, 2011 8:51am
I guess I should provide some thoughts on my trades today so far, which have been losers! Call it bad luck, I decide to double the money on my account and keep the R:R and the percentage VaR the same and I start with 3 losing trades!

Looking at my trades historically, I only have another 2 more to take before the bad run will end, so the anxiety will stop eventually. Looking at it positively from another angle, I can't say it was a bad year, as up to last Friday I was up 34% for the year before I added another £10k.

The German Ifo came in stronger than expected causing a rally in EUR$, which looks like a short term move higher, given that the overall macro situation in Europe is bad, with the unresolved sovereign debt crisis and slow growth.

The next target on the downside is 1.2900, with rumours that a fall below that level will trigger a large barrier option in the market, causing further acceleration to the downside.

For now I will just wait for my next setup.
Good judgement comes from experience. Experience comes from bad judgement.
  • #6
  • Dec 20, 2011 9:37am Dec 20, 2011 9:37am
Reactor, sorry for the stupid question - it just doesn't add up for me - would you be the psychologist here? It's bad karma to dub yourself one, those who did so already disappeared like camel fart in desert storm. BTW I liked what you wrote about the 20%.
forget about tomorrow, just steal away into the night
  • #7
  • Dec 20, 2011 7:52pm Dec 20, 2011 7:52pm
Quoting spekitox
Reactor, sorry for the stupid question - it just doesn't add up for me - would you be the psychologist here? It's bad karma to dub yourself one, those who did so already disappeared like camel fart in desert storm. BTW I liked what you wrote about the 20%.
Nope, I am the patient in the chair and the readers are the psychologists.
Good judgement comes from experience. Experience comes from bad judgement.
  • #8
  • Dec 21, 2011 1:33am Dec 21, 2011 1:33am
Oh, is that so? Okies ... so we can ask questions ... are you a patient in real life as well? Do you think you should be?

Quoting Reactor
Nope, I am the patient in the chair and the readers are the psychologists.
forget about tomorrow, just steal away into the night
  • #9
  • Dec 21, 2011 4:19am Dec 21, 2011 4:19am
Quoting spekitox
Oh, is that so? Okies ... so we can ask questions ... are you a patient in real life as well? Do you think you should be?
Ha! No I'm not a patient in real life and I'm not sure if I should be, but I find it therapeutic to be sitting in a chair and answering people's questions about my thoughts.
Good judgement comes from experience. Experience comes from bad judgement.
  • #10
  • Dec 21, 2011 10:12am Dec 21, 2011 10:12am
Do you have favourite thoughts?

..you're not a frequent poster are you? Been a member for almost 3 years and made 22 posts? Not a problem tho, it's quality not the quantity that counts anyway.

Quoting Reactor
Ha! No I'm not a patient in real life and I'm not sure if I should be, but I find it therapeutic to be sitting in a chair and answering people's questions about my thoughts.
forget about tomorrow, just steal away into the night
  • #11
  • Dec 22, 2011 6:40pm Dec 22, 2011 6:40pm
Quoting spekitox
Do you have favourite thoughts?

..you're not a frequent poster are you? Been a member for almost 3 years and made 22 posts? Not a problem tho, it's quality not the quantity that counts anyway.
My favourite thoughts? Probably to have none! But what I do think about most are how things can go wrong and how to improve them. It's how scientists think, where they try to disprove a theory rather than trying to prove it.

Trying to reduce losing trades is something I think about a lot, so I can increase my probability of winning trades, which is easily said than done. I look at my current losing streak and think how I can reduce it and there is always a lingering thought that maybe the losing streak will be longer than the last.
Good judgement comes from experience. Experience comes from bad judgement.
  • #12
  • Dec 23, 2011 8:28am Dec 23, 2011 8:28am
Oh, now that you clarified post #1 ... looks like you've found something that works. Would you care to share a chart or explain some logic behind the trades? That could be a starting point.

Quoting Reactor
Hey guys,

I thought I'd start a journal about my experience through FX, but instead of me talking about my journey, I'm going to keep it simple and let the reader's ask the questions to begin with.

I guess a starting point would be to look at my trades, as I think there is something there to talk about.
forget about tomorrow, just steal away into the night
  • #13
  • Dec 23, 2011 8:12pm Dec 23, 2011 8:12pm
Quoting spekitox
Oh, now that you clarified post #1 ... looks like you've found something that works. Would you care to share a chart or explain some logic behind the trades? That could be a starting point.
I'm a believer that a computer can trade better than a human, hence my strategy is implemented by an EA that I've created. I got my inspiration from another EA which I just stumbled across.

I knew there were automated trading strategies that were profitable as you have Renaissance Technologies and Goldman Sachs using algorithms and a few other hedge funds. The problem was always where to look and how to test.

Once I saw the back-test results, I was impressed enough that I put £10,000 into a real account to try it out. The first real issue I had to deal with was varying spreads. Using the parameters of the original EA just didn't work because of they were too tight, which highlights a limitation of the back-tester on MT4.

After a month of live trading and being down about 5% I realised I had to change the parameters and allow for more fluctuations. I also incorporated a break even code into the EA and at the end of the following month I was still down about 5%.

I did the maths to work out the profitability with the break-even code and realised it just reduced it, so I took out that part of the code. I also did the maths for covering the cost of my trade after 2/3's of it reached a certain level and then letting the last 1/3 run, but mathematically the R:R is not that good, which impacts profitability.

In the end I just kept it very similar to the EA that inspired me and refined it in other areas and widening the stop-loss and take-profit and just let it run. Compared to the equity markets, my strategy is not bad in terms of drawdown and return.
Good judgement comes from experience. Experience comes from bad judgement.
  • #14
  • Dec 25, 2011 4:09am Dec 25, 2011 4:09am
Maybe others have been fiddling around with that same EA? Which one would that be by the way?

Backtesting with real spreads, I think it was birt or ECMartin who found a nice way around this problem. The tester is what it is, far from perfect - you can't backtest basket strategies either - but it's a useful tool, the parameter optimisation is also nice /tho I'm not sure it's not just total curve fitting/

Quoting Reactor
I'm a believer that a computer can trade better than a human, hence my strategy is implemented by an EA that I've created. I got my inspiration from another EA which I just stumbled across.

I knew there were automated trading strategies that were profitable as you have Renaissance Technologies and Goldman Sachs using algorithms and a few other hedge funds. The problem was always where to look and how to test.

Once I saw the back-test results, I was impressed enough that I put £10,000 into a real account to try it out. The first real issue I had...
forget about tomorrow, just steal away into the night
  • #15
  • Dec 25, 2011 6:14am Dec 25, 2011 6:14am
Quoting spekitox
Maybe others have been fiddling around with that same EA? Which one would that be by the way?

Backtesting with real spreads, I think it was birt or ECMartin who found a nice way around this problem. The tester is what it is, far from perfect - you can't backtest basket strategies either - but it's a useful tool, the parameter optimisation is also nice /tho I'm not sure it's not just total curve fitting/
I've not seen anyone work on this EA but there are similar variations on the same theme which are profitable too.

Here is the webpage if you are interested: http://codebase.mql4.com/6243
Good judgement comes from experience. Experience comes from bad judgement.
  • #16
  • Dec 25, 2011 7:11am Dec 25, 2011 7:11am
You EVER wondered why all the companies in the trading business employ THAT many screenwatchers and have not been able to develop any EA that can do it for them ????

I guess there are still people that think the world is flat !
  • #17
  • Dec 25, 2011 8:14am Dec 25, 2011 8:14am
Quoting Freddyfx
You EVER wondered why all the companies in the trading business employ THAT many screenwatchers and have not been able to develop any EA that can do it for them ????

I guess there are still people that think the world is flat !
I guess you've been looking in the wrong place if you think EA's don't work. Goldman's, Renaissance Techonologies and a few other hedge funds use algorithms to trade on the buy side.

The head count is slowly being reduced on the sell side as more and more clients are dealing electronically and don't need to interact with another person on the other side, so just like the human trading pits reduced in head count, so will the head count on trading room floors, as technology takes over.
Good judgement comes from experience. Experience comes from bad judgement.
  • #18
  • Dec 25, 2011 10:11am Dec 25, 2011 10:11am
Don't try to be smart, buddy.

You know very well what I am talking about and if we just follow the news, it becomes understandable why so much fraud is happening everywhere. They have no clue where the losses come from...................maybe secret Swiss bank accounts, lol.

For your info, expect trading forex to change drastically in the upcoming years.
  • #19
  • Dec 25, 2011 6:43pm Dec 25, 2011 6:43pm
Quoting Freddyfx
Don't try to be smart, buddy.

You know very well what I am talking about and if we just follow the news, it becomes understandable why so much fraud is happening everywhere. They have no clue where the losses come from...................maybe secret Swiss bank accounts, lol.

For your info, expect trading forex to change drastically in the upcoming years.
I'm not sure why you are bringing up fraud and losses on the sell side. I can only guess that you have your own agenda against the brokers in the market. My suggestion to people who have the same opinion as you is to find the most reasonable broker you can as you're not married to your broker.

How do you see trading in Forex changing drastically?
Good judgement comes from experience. Experience comes from bad judgement.
  • #20
  • Dec 25, 2011 7:00pm Dec 25, 2011 7:00pm
I'm going to provide another update on my current thoughts on trading.

Over the weekend I decided that I needed to implement another strategy to reduce the number of consecutive losses in a row and hopefully reduce future maximum drawdowns.

I've done the coding, and now it's just down to testing it out later on.

I'm also considering waiting for pullbacks before entering, which I will try and program and test later on this week.

Another thought I've been thinking over is increasing my risk per trade to 2% of my equity. My biggest issue is that I drew a line in the sand at the beginning that if I'm down 10% or more, I would stop and revaluate my strategy, which at 2% risk case would mean only 5 losing trades in a row.
Good judgement comes from experience. Experience comes from bad judgement.
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