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How Not To Go Broke in Forex

  • #41
  • Dec 29, 2011 11:16pm Dec 29, 2011 11:16pm
Trade on demo till you can't lose any more.
  • #42
  • Dec 30, 2011 12:54am Dec 30, 2011 12:54am
Quoting nanningbob
The truth is in the results not argument.
Yes, this is true. Allow me to demonstrate...

With a quick glance of the chart, anyone who entered buys on the beginning of the days listed below have been holding long positions for months with the price not having returned. These trades are all at least several hundred pips negative. And this is from this year only. We can go back to last several years where prices topped out at 1.60+ (2008) and 1.50+ (2009) and still haven't returned. This was just with a quick glance at the chart. I could probably reveal many more dates and times if I look closely.

1) 5/5/2011
2) 6/8/2011
3) 8/30/2011
4) 8/31/2011
5) 10/28/2011
6) 10/31/2011
7) 11/9/2011
8) 11/14/2011


*Also, had you taken a short in the first half of January, you would now be close to breakeven after having been negative all year and gone -2000 pips at its worst point. A whole year wasted sitting on a dead duck of a trade.
Attached Image (click to enlarge)
Click to Enlarge Name: daily eu drawn down.gif Size: 26 KB
  • #43
  • Dec 30, 2011 2:09am Dec 30, 2011 2:09am
Quoting supremeChaos

who said that?

no.
(mis-)use of money is the root of all evil.
I think we might both be wrong, apparently the correct quote is "The love of money is the root of all evil" - Originates in the Bible, Timothy 6:10 (King James Version), I just googled it

Quoting supremeChaos

Happy new year all!
Yep same to you, have a prosperous one!
  • #44
  • Dec 30, 2011 2:14am Dec 30, 2011 2:14am
Quoting 2+2=4ex

The purpose is to make enough money to justify the time spent and the opportunity cost utilized.

Whether it is 1 penny total or 1 penny per pip I have a hard time finding any benefit to trading such a way. One would be better off taking the money and putting it into just about anything else that has fixed return.amount.
I'd like to know the 'anything else' which has a fixed return of ~10% per month, please share! I'd say an average return of 10% per month more than justifies the time spent!

Quoting 2+2=4ex

You can't take an extreme and apply it to make a sound point.
Talking of which.......

Quoting 2+2=4ex

anyone who entered buys on the beginning of the days listed below have been holding long positions for months with the price not having returned

We can go back to last several years where prices topped out at 1.60+ (2008) and 1.50+ (2009) and still haven't returned.
By the same token they could have started selling

I've never understood why some people get so negative about other's successful and profitable methods just because they don't agree with them, no-one has the monopoly on profitable trading strategies you know!


-
  • #45
  • Dec 30, 2011 2:32am Dec 30, 2011 2:32am
Quoting pipmutt
I've never understood why some people get so negative about other's successful and profitable methods just because they don't agree with them, no-one has the monopoly on profitable trading strategies you know!-
Nah am very fair person
I love 2+2=4 Post and his mindset
But am like your post above also
as Long you have a proper MM and consistent stick with your rules just go ahead then
If there was easy money lying around,no one would be forcing it into your
  • #46
  • Dec 30, 2011 2:45am Dec 30, 2011 2:45am
Quoting 2+2=4ex
First off bob, don't try and convince us that you're going to the beach and dining with deputy mayors on your forex earnings. That's coming from your day job as a school principal and not the "50% return" of what you have said yourself to be a small account. Secondly, telling us that much makes you look petty. One thing I do know with certainty is that you have been the master of contradiction in here. Everything you say contradicts something you have previously said. You say your hit rate is 80% now. So then that means the other 20% goes into...
Yes it is true. 1 dollar in USA is equal to 6.3 Chinese, you can do the math. 2nd if you knew more about China you would know that China passed a tax on teacher income that is close to 47% and went into effect Oct. 15 after tuitions and budgets had already been set. Every International school in China will lose money this year and some of the these schools the losses are huge, probably in the millions of dollars . I wont be making money this school year so maybe you should gloat about that instead. You keep assuming WRONGLY these DD you keep assuming I have but that is OK, right now I have none because I closed out for the year and I have increased my account 50% since August, that is a fact. Assume away all you want. Meanwhile I am going to enjoy my stay in BeiHai from my profits, whether you believe me or not I dont give rip. Any way I am not going to clutter this guys thread up with your ignorance.

The topic is: How not to grow broke in Forex and the best rule to follow is trade small and you wont. You can also make money and sleep at night.
  • #47
  • Dec 30, 2011 2:47am Dec 30, 2011 2:47am
Here is my position on lot sizing. You can do the math for your own personal account.

I look at percentage of account increase. If you can consistently hit 5-10% a month you are in the professional trader field. Too many people get the idea that this is an easy million. It is not. I know there are people who do better but they are a rare lot. So trade small and learn. It goes like this, if you trade one penny on a 1000 dollar account you would have to lose 100,000 pips to lose all your money. If you do that you know that Forex trading is not for you. If you trade 10 cents you would have to lose 10,000 pips to lose all your money. If you trade 1.00 lots you would have to lose 1000 pips to lose all your money. 1000 pips loss is easy to do. 10,000 pips I think is much harder to do. 100,000 pips, never heard of anyone doing that. My question is this. How much tuition are you willing to pay to learn this business. If you are a rookie, losing a 1000 pips in one month, heck in one week is very doable. Do you want to pay 10.00 dollars, 100.00 dollars or 1,000.00 dollars in tuition???? The choice is yours.
  • #48
  • Dec 30, 2011 2:56am Dec 30, 2011 2:56am
Quoting FXMindset

as Long you have a proper MM and consistent stick with your rules just go ahead then
My sentiment exactly, the well-worn trading mantra are just that, well-worn and staid!

Exercise sensible money and risk management and anything goes as long as it makes money!
  • #49
  • Dec 30, 2011 3:08am Dec 30, 2011 3:08am
Quoting nanningbob
Yes it is true. 1 dollar in USA is equal to 6.3 Chinese, you can do the math. 2nd if you knew more about China you would know that China passed a tax on teacher income that is close to 47% and went into effect Oct. 15 after tuitions and budgets had already been set. Every International school in China will lose money this year and some of the these schools the losses are huge, probably in the millions of dollars . I wont be making money this school year so maybe you should gloat about that instead. You keep assuming WRONGLY these DD you keep assuming...
Sorry to hear about the school income. I do not wish bad on you nor will I gloat at your misfortunes, so please don't say that about me.

Yes, we have gone over this plenty of times, but you refuse to acknowledge that trading without a stop loss is ridiculiously dangerous. I do believe you made 50% in the last 3 months with your small account (whoopty doo), but that doesn't impress me. What will impress me is if you do 50% every 3 months for the next 10 years cause that kind of return with no stop loss tells me you're playing a very dangerous game. HELLO! Someday you will learn the lesson the hard way.
  • #50
  • Dec 30, 2011 3:15am Dec 30, 2011 3:15am
Quoting 2+2=4ex
Yes, we have gone over this plenty of times, but you refuse to acknowledge that trading without a stop loss is ridiculiously dangerous. I do believe you made 50% in the last 3 months with your small account (whoopty doo), but that doesn't impress me. What will impress me is if you do 50% every 3 months for the next 10 years cause that kind of return with no stop loss tells me you're playing a very dangerous game. HELLO! Someday you will learn the lesson the hard way.
Nah.am agreed with bold one all,as I said you know how to play the game mate
Time to Play UJ pair..

Btw,How's Life ?
If there was easy money lying around,no one would be forcing it into your
  • #51
  • Dec 30, 2011 3:17am Dec 30, 2011 3:17am
Quoting nanningbob
Here is my position on lot sizing. You can do the math for your own personal account.

I look at percentage of account increase. If you can consistently hit 5-10% a month you are in the professional trader field. Too many people get the idea that this is an easy million. It is not. I know there are people who do better but they are a rare lot. So trade small and learn. It goes like this, if you trade one penny on a 1000 dollar account you would have to lose 100,000 pips to lose all your money. If you do that you know that Forex trading is not for...
Again you put yourself out there. So let me see if I have this correct... your position size would have to drawdown 100,000 pips to drain your account. Each pip is worth about a penny. Then by that logic you would need 50,000 pips to make a return of 50% (without any positions in drawdown!). You said you increased your account by 50% (50,000 pips) in the last 3 months. I think you're full of ----. But if you're not then you only made $500 on 50,000 pips, hahaha. That's funny bob.
  • #52
  • Dec 30, 2011 3:19am Dec 30, 2011 3:19am
Quoting FXMindset
Nah.am agreed with bold one all,as I said you know how to play the game mate
Time to Play UJ pair..

Btw,How's Life ?
Hey what's up mate. All is well, thanks for asking. Hope all is well with you. Yes, I will be jumping in the UJ pretty soon (January). See you there!
  • #53
  • Dec 30, 2011 3:21am Dec 30, 2011 3:21am
Quoting 2+2=4ex
Hey what's up mate. All is well, thanks for asking. Hope all is well with you. Yes, I will be jumping in the UJ pretty soon. See you there!
Glad to know that
Yap,waiting your analysis
If there was easy money lying around,no one would be forcing it into your
  • #54
  • Dec 30, 2011 3:29am Dec 30, 2011 3:29am
A quote from an infamous Southern Baptist preacher, "The root of all evil is not money, its the lack of money"

Good luck on your trading ventures.
  • #55
  • Dec 30, 2011 3:41am Dec 30, 2011 3:41am
Quoting 2+2=4ex
Again you put yourself out there. So let me see if I have this correct... your position size would have to drawdown 100,000 pips to drain your account. Each pip is worth about a penny. Then by that logic you would need 50,000 pips to make a return of 50% (without any positions in drawdown!). You said you increased your account by 50% (50,000 pips) in the last 3 months. I think you're full of ----. But if you're not then you only made $500 on 50,000 pips, hahaha. That's funny bob.
Actually according to the IBFX trade analyzer its 47,804 pips but no one is going to believe that either and no positions in DD. That is why I use percentage of account. To trade that way with lot sizing of 1 dollar to a pip I would need an account of 100K. That is doable. 47K over 5 months on a 100K account, 4,700 on a 10,000 account. Make fun all you want what I choose to reveal is my business.
  • #56
  • Dec 30, 2011 3:48am Dec 30, 2011 3:48am
Quoting nanningbob
Actually according to the IBFX trade analyzer its 47,804 pips but no one is going to believe that either and no positions in DD. That is why I use percentage of account. To trade that way with lot sizing of 1 dollar to a pip I would need an account of 100K. That is doable. 47K over 5 months on a 100K account, 4,700 on a 10,000 account. Make fun all you want what I choose to reveal is my business.
My intentions were never to make fun, but turning 47K on a 100K account without using a stop loss is laughable stuff. Again, maybe you get lucky and pull it off once, but tick tock. One day it's all going to explode bob. Goodbye bob.
  • #57
  • Dec 30, 2011 3:49am Dec 30, 2011 3:49am
the master of spin is in folks. time to put your seat belts on...

so, someone cracks 50k pips the last few months but only made 50% return on capital? well-good use of inventory. i wonder if those 50k pips include all the losing trades that "got zeroed" or whatever you want to call it, or is it just the one trade you managed to pick a bottom or top on and then happened to average into and ignoring all the rest of it.

someone knows how to cook the books, that's for sure. a few grand (at most, or perhaps not even that much) return from 50k pips. now i've heard it all! i want bob to do my tax return next year. i'm sure i'd get back more than i earned in the first place.
Congratulations ScalaFX for coming out of the closet!
  • #58
  • Dec 30, 2011 4:04am Dec 30, 2011 4:04am
Quoting nanningbob
Here is my position on lot sizing. You can do the math for your own personal account.

I look at percentage of account increase. If you can consistently hit 5-10% a month you are in the professional trader field. Too many people get the idea that this is an easy million. It is not. I know there are people who do better but they are a rare lot. So trade small and learn. It goes like this, if you trade one penny on a 1000 dollar account you would have to lose 100,000 pips to lose all your money. If you do that you know that Forex trading is not...
I agree with you sir and I also trade without stops and can't tell you how much success I have got compared to the methods with stops. If you are right with your trend understanding then there are more chances that the trade will not go against you and need no stops, whereas with stops even if you are right with the trend understanding you will still be stopped out cos of volatility. Keeping far away the stop will mitigate the purpose of having stop and might want to just close the trade when certain % of equity loss happens and this is how I close my trades when I loose certain %.

My trading friends are missing the point that there will be more that one positions if it is 0.01 so 50,000 pips in all is achievable.

Having said that doesn't mean that other methods/strategies with stops will not produce superior returns, it is just my way of doing it. Newbies shouldn't even think of trading without stops.

Regards
AS
  • #59
  • Edited 9:07pm Dec 30, 2011 4:30am | Edited 9:07pm
Quoting pipmutt
lol


-

lol... it's a pretty funny list when you just look at the bullet points.

actually, that post was intended for the Rookie section so I was trying to be as discouraging as possible.

I still remember the poor bastard that inspired it - http://www.forexfactory.com/showthread.php?p=3041289

As far as not going broke, it's pretty simple. People should know what they're doing before they risk any substantial capital in the markets and structure their risk accordingly. Forex isn't a get rich quick scheme, it's a profession. There isn't any one formula that works for everyone. Some people shoot for higher win/loss ratios and precision with their entries/exits using tighter R:R. Others focus more on R:R with lower win/loss ratios, etc.

Personally, I have my accounts structured for staggered risk. It took time to build out properly and I had a couple of brilliant mistakes along the way. My worst mistake was fat fingering an account on a manual entry and I took a bad hit.

This was one of the reasons I started revamping my account structure a few years back. The way I have things set up now, my core accounts are never traded live so I have zero equity exposure in the event of a Black Swan. I passively trade them by converting account equity, so have been in non-leveraged carry trades since 2009 when I converted from USD to JPY.

my second tier accounts are more or less swing accounts which I trade at 2-3% of total equity (core + tier 2) so they're very low stress. I have ample room to keep my stops away from volatility.

On the bottom tier I have my risk accounts. These I trade more aggressively on the lower TFs to capture as much movement inside the Daily ATR as permits. I never go higher than 6% risk on these (depending on the set up) and keep very tight stops so I can scale up my position size. I cap the total on each account weekly. I've had a few occasions where I needed to top up at the end of the week, but more often than not they perform well as feeder accounts. since I have to be sitting here anyway, they're great for keeping my chops up and building equity, but I would never put this amount of risk on with a core account.

I trade each core w/ sub accounts as a silo, each with a different broker, so if any one of them pull an MF Global I'm not dead in the water.

it's a delicate balance between increased risk to improve performance and lowered risk for preservation of capital. I found this method works well for me personally, but it took time to set up properly and trade effectively. Most beginners should stick to a very conservative approach until they've been consistent for a couple of years trading live.

Longevity is everything.

.
  • #60
  • Dec 30, 2011 5:24am Dec 30, 2011 5:24am
Quoting constin
Trade on demo till you can't lose any more.
Best advice... Avoid demo get a micro lots broker or head to liteforex get their cents account play there.... 20$ is 2000 can trade for as little as their lots sizes..

Youll thnk me if u go live... Live feeds are never equal to demo... Some demo even miss spikes..

Peace
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