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Are you a consistently profitable trader?

  • #161
  • Mar 31, 2012 2:19am Mar 31, 2012 2:19am
Quoting FX4Newbies
Very good Tarusmark27. Do your best to trade your system exactly (hopefully it has been tested). Develop good habits and be as completely comfortable as you can be with your method, the platform etc. Then when you go Live, try to do the same things if you were successful in your Demo. Feel the fears that may come then, but do what worked before anyway.

All the best,

FX4
Thanks FX4 to guide me for forex trading. Your suggestion will help me to enhance my trading knowledge.
  • #162
  • Mar 31, 2012 2:24am Mar 31, 2012 2:24am
Quoting Tarusmark27
Thanks FX4 to guide me for forex trading. Your suggestion will help me to enhance my trading knowledge.
No problem. The emotions can try to kick in and create issues. Here is an email I received talking about this issue. Just keep doing Live what has been working in Demo .

All the best,

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #163
  • Mar 31, 2012 2:49am Mar 31, 2012 2:49am
lots of the posts in here tells me not many of yous are doing this as a job,
just a couple of tips:

 

  1. Be honest with yourself
  2. quality (few trades) only
  3. risk reward is tweak-able
  4. all indicators are doing the same
  5. the price can only go up and down
  6. some luck is needed in the end


if you dont make it here try stocks with fundies or inside info

when you make it you will never go back

  • #164
  • Mar 31, 2012 4:39am Mar 31, 2012 4:39am
Quoting Larseg
lots of the posts in here tells me not many of yous are doing this as a job,
just a couple of tips:

 

  1. Be honest with yourself
  2. quality (few trades) only
  3. risk reward is tweak-able
  4. all indicators are doing the same
  5. the price can only go up and down
  6. some luck is needed in the end


if you dont make it here try stocks with fundies or inside info

when you make it you will never go back

Hi Larseg,

These two stand out as must haves.....

 

  1. Be honest with yourself
  2. Quality (few trades) only

Might not apply to as many traders, but still a good one...

3. Risk reward is tweak-able


Thanks for the honest comment.

FX4

Trade what you see, not what you think or feel. Let the market come to you.
  • #165
  • Mar 31, 2012 4:48am Mar 31, 2012 4:48am
Just want to make this comment....my 2 cents.

I think if a trader has had a profitable month trading their method religiously, then there is a good chance they will be able to do 2 then 3....they'll get there if they just keep on DOING....

So, to the 15 who have voted thus far and have had a profitable month, keep going.... Just a little more fight, and you'll be all the way to the bank.

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #166
  • Mar 31, 2012 5:08am Mar 31, 2012 5:08am
Quoting FX4Newbies
Just want to make this comment....my 2 cents.

I think if a trader has had a profitable month trading their method religiously, then there is a good chance they will be able to do 2 then 3....they'll get there if they just keep on DOING....
Depends on the system... I've been testing lots of EAs I built myself over a period of 5 years (tick data). There were some that would go very well for 2 years but fail in the previous or following years. Now, if I started trading such a system and I was lucky enough to find myself in the beginning of its good period, I could even become very rich using heavy compounding. So I would appear to know very well what I'm doing and I would even have the money to prove it. Only that if I kept to what I've been successfully doing for a couple more years, I would go completely broke.
  • #167
  • Mar 31, 2012 5:11am Mar 31, 2012 5:11am
Quoting micmic
Depends on the system... I've been testing lots of EAs I built myself over a period of 5 years (tick data). There were some that would go very well for 2 years but fail in the previous or following years. Now, if I started trading such a system and I was lucky enough to find myself in the beginning of its good period, I could even become very rich using heavy compounding. So I would appear to know very well what I'm doing and I would even have the money to prove it. Only that if I kept to what I've been successfully doing for a couple more years,...
Very good point Micmic. I was not thinking of EAs at all...solely discretionary trading. Very glad you pointed that out because that is a reality.



FX4...
Trade what you see, not what you think or feel. Let the market come to you.
  • #168
  • Mar 31, 2012 5:22am Mar 31, 2012 5:22am
Quoting FX4Newbies
Very good point Micmic. I was not thinking of EAs at all...solely discretionary trading. Very glad you pointed that out because that is a reality.



FX4...
not sure why discretionary trading should be any different.
  • #169
  • Mar 31, 2012 5:26am Mar 31, 2012 5:26am
Well, I guess the same can happen with discretionary systems. EAs just have the advantage that we can quickly judge their historical performance, but we can't do the same with a discretionary system - we have to sit there and test it in real time ourselves.

But just think about what successful discretion is: It's our ability to get in trades that are not exactly by the rules, or to stay out of trades even though they are 100% by the rules. And how exactly do we develop that ability ? With experience. We have been able to pick up -even if only subconsciously- collateral signals that tell us to get in or stay out. But those signals are nothing "magic". They may very well fail after some period of time, exactly like the rigid rules of an EA may fail. It is perfectly probable that a discretionary trader had a good "feel" for the market in 2010, but lost his "touch" in 2011.

ETA: Custos was more succint
  • #170
  • Edited 7:28am Mar 31, 2012 6:21am | Edited 7:28am
Quoting micmic
Well, I guess the same can happen with discretionary systems. EAs just have the advantage that we can quickly judge their historical performance, but we can't do the same with a discretionary system - we have to sit there and test it in real time ourselves.

But just think about what successful discretion is: It's our ability to get in trades that are not exactly by the rules, or to stay out of trades even though they are 100% by the rules. And how exactly do we develop that ability ? With experience. We have been able to pick up -even if only...

EAs just have the advantage that we can quickly judge their historical performance...

Good point on the advantage of an EA.


But just think about what successful discretion is: It's our ability to get in trades that are not exactly by the rules, or to stay out of trades even though they are 100% by the rules. And how exactly do we develop that ability ? With experience.

Very interesting description of discretion, and probably applies to some approaches. Not too sure I agree with the first part..."...not exactly by the rules..." (at least not for me).


It is perfectly probable that a discretionary trader had a good "feel" for the market in 2010, but lost his "touch" in 2011.

Another good point. Traders can and do lose "it"...human nature kicking in. They may have had something happen that was emotionally painful etc., but losing your touch because you can't "find your triggers to enter or exit"...that's a system flaw, mho...unless the market has just gone wild.

I think a good discretionary trading approach/system has the positives of consistently, definitive entry and exit criteria, but discretion as to when those criteria are ready may need to be exercised. I can only speak for myself on this. What I look for has not changed in about 4 years, but the when to look for them keeps me on my toes. Those same criteria have been there for a long time before that...I just happened to track them down. If you think about it, broker/dealers have been doing some things the same way for years. Those footprints, if a trader learns to follow them, should lead to a profitable method. That is really one of the main reasons I value fti's approach. It provides a way to still profit if the timing was off: valuable to me because I don't use stops. But his style of trading may not be for everyone.

For those of you who just said, "What! You don't use stops?!!! What the heck....?" Be open-minded long enough to see if there is anything in his method that you can benefit from.

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #171
  • Edited 7:38am Mar 31, 2012 7:24am | Edited 7:38am
Quoting Custos
not sure why discretionary trading should be any different.
I think it would depend on how clear-cut or on-point the trade selection criteria were. If you look at charts, any charts...from yesterday, two years ago, nine years ago etc., aren't there some things that are repeated fairly regularly. I heard a professional trader say this once, "Find a repeatable pattern...or maybe two or three, and trade them over and over. And when you see them, you hit them hard!" He trades billions by the way.

To reply to your comment...I can really only speak from my experience. The only thing that varies for me is the "when" my trade-triggers show up. That really is the extent of my discretion. Where they show up may just give me an idea of how many pips "might" be there for the taking.

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #172
  • Mar 31, 2012 7:44am Mar 31, 2012 7:44am
Quoting FX4Newbies
I think it would depend on how clear-cut or on-point the trade selection criteria were. If you look at charts, any charts...from yesterday, two years ago, nine years ago etc., aren't there some things that are repeated fairly regularly. I heard a professional trader say this once, "Find a repeatable pattern...or maybe two or three, and trade them over and over. And when you see them, you hit them hard!" He trades billions by the way.

To reply to your comment...I can really only speak from my experience. The only thing that varies for me is...
I am still not sure where the difference should be. You may as well trade profitably in a discretionary way for 2 years and still end up losing in the long-term. Statistics does not only apply to non-discretionary systems, it applies to everything.
  • #173
  • Edited 8:06am Mar 31, 2012 7:50am | Edited 8:06am
Quoting Custos
I am still not sure where the difference should be. You may as well trade profitably in a discretionary way for 2 years and still end up losing in the long-term. Statistics does not only apply to non-discretionary systems, it applies to everything.
I believe your initial comment was in response to something Micmic said:

Depends on the system... I've been testing lots of EAs I built myself over a period of 5 years (tick data). There were some that would go very well for 2 years but fail in the previous or following years. Now, if I started trading such a system and I was lucky enough to find myself in the beginning of its good period, I could even become very rich using heavy compounding. So I would appear to know very well what I'm doing and I would even have the money to prove it. Only that if I kept to what I've been successfully doing for a couple more years, I would go completely broke.


 Quote:
Originally Posted by FX4Newbies http://www.forexfactory.com/images/buttons/viewpost.gif
Very good point Micmic. I was not thinking of EAs at all...solely discretionary trading. Very glad you pointed that out because that is a reality.



FX4...

Next was your statement:
not sure why discretionary trading should be any different.


Maybe I don't fully understand how EAs work, but, to my knowledge, they don't usually account for timing when looking for trading criteria. Is that correct? Also, the mind-eye co-ordination in humans far surpasses that of a fully mechanical system, which is one reason discretion still is preferred by some.

Based on the first quote above, why would they fail? Did the trading criteria change that the EA was programmed to detect? Also, if by their declining positive results, it is determined that it is failing, how does the trader make the determination that the method has lost it's "trading life" so to speak, and how does the trader then go about establishing new rules? Is discretion involved there?

I don't use EAs to auto-trade, so maybe you can really help me out here . Maybe if you can explain this it might help:

"My approach to trading is using statistics to determine the viability of systems and then automating positive expectancy systems." Got this from your profile.

Thanks,

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #174
  • Mar 31, 2012 8:12am Mar 31, 2012 8:12am
Quoting FX4Newbies
Maybe I don't fully understand how EAs work, but, to my knowledge, they don't usually account for timing when looking for trading criteria. Is that correct? Also, the mind-eye co-ordination in humans far surpasses that of a fully mechanical system, which is one reason discretion still is preferred by some.
you can program almost anything, including timing. All my profitable ea's have a timing element within them.
While the mind is superior, for many it is "too superior". The mind is fantastic in detecting patterns. Unfortunately the markets are behaving sometimes so randomly that our mind can detect patterns that are just not there.

However, I tend to agree that some fortunate traders can outperform any ea with their discretion, but I think there are not a lot of these kind of traders.
Quoting FX4Newbies
Based on the quote above, why would they fail? Did the trading criteria change that the EA was programmed to detect? Also, if by their declining positive results, it is determined that it is failing, how does the trader make the determination that the method has lost it's trading life so to speak, and how does the trader then go about establishing new rules. Is discretion involved there?

I don't use EAs to auto-trade, so maybe you can really help me here .

FX4
they fail, cause the pattern they seek to exploit did not produce better than random results in the long-term. They might have had a lucky streak for a while, but in the end it goes back to random.
No need for discretion in deciding when a method has lost its edge. Just apply a moving average to the equity curve, that was never crossed in the past. Once the equity curve crosses below that moving average, the system lost its edge. Or you can as well just look at the max historical drawdown and if the system ever surpasses it, then the system has lost its edge.

no discretion involved.
  • #175
  • Edited 8:55am Mar 31, 2012 8:42am | Edited 8:55am
Quoting Custos
you can program almost anything, including timing. All my profitable ea's have a timing element within them.
While the mind is superior, for many it is "too superior". The mind is fantastic in detecting patterns. Unfortunately the markets are behaving sometimes so randomly that our mind can detect patterns that are just not there.

However, I tend to agree that some fortunate traders can outperform any ea with their discretion, but I think there are not a lot of these kind of traders.

they fail, cause the pattern they seek to exploit did not...
Unfortunately the markets are behaving sometimes so randomly that our mind can detect patterns that are just not there.

A good point. I guess at that juncture, an "experienced" trader might think to stop for a bit .


However, I tend to agree that some fortunate traders can outperform any ea with their discretion, but I think there are not a lot of these kind of traders.

Wouldn't know what they use or how they do it, but maybe they themselves have an edge or they have a finely-tuned system or both.


...they fail, cause the pattern they seek to exploit did not produce better than random results in the long-term. They might have had a lucky streak for a while, but in the end it goes back to random.
No need for discretion in deciding when a method has lost its edge. Just apply a moving average to the equity curve, that was never crossed in the past. Once the equity curve crosses below that moving average, the system lost its edge.

In your experience, do these systems that "fail" in that manner, ever regain their viability?

Not quite sure how "time" would be factored in as an "ingredient" in the mix, and especially in advance of price action. Is some Fib timing or other indicator used in conjunction with the parameters selected? Sorry for my ignorance here, but it is not the norm in my world of trading.

Thanks for the reply,

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #176
  • Mar 31, 2012 9:00am Mar 31, 2012 9:00am
Quoting FX4Newbies
Unfortunately the markets are behaving sometimes so randomly that our mind can detect patterns that are just not there.

A good point.


However, I tend to agree that some fortunate traders can outperform any ea with their discretion, but I think there are not a lot of these kind of traders.

Wouldn't know what they use or how they do it, but maybe they themselves have an edge or they have a finely-tuned system or both.

...[color=Navy]they fail, cause the pattern they seek to exploit did not produce better...
they might, but I tend to throw them into the garbage once they don't work anymore. I only like systems that are always providing an edge.
No, I don't use a fib timing indicator. However, depending on what you consider time to be, you can tell the program to just trade from 8 to 10 am, can tell the program to only trade after the market has increased for a specific amount of bars. You can tell it to not trade fridays. You can tell it not to trade when volatility is too high or too low,...

I heard 30% of all transactions are now made by high frequency trading programs, so in my eyes computer trading has become the norm.
  • #177
  • Edited 2:07pm Mar 31, 2012 9:07am | Edited 2:07pm
Quoting Custos
they might, but I tend to throw them into the garbage once they don't work anymore. I only like systems that are always providing an edge.
No, I don't use a fib timing indicator. However, depending on what you consider time to be, you can tell the program to just trade from 8 to 10 am, can tell the program to only trade after the market has increased for a specific amount of bars. You can tell it to not trade fridays. You can tell it not to trade when volatility is too high or too low,...

I heard 30% of all transactions are now made by high frequency...
That aspect of programming time I can understand. I have also heard that a fairly large percentage of trades are computer generated....even larger than 30%.

Glad you have found your niche in the mechanical/auto-trade world. Not my cup of tea at the moment...maybe down the road...who knows. What I could envision, is setting up some robot/EA thingy with limited capital and a "good" system and see what it would generate. If it made the initial capital, withdraw it then let it keep running. Don't want to take the time now to test that etc. That's a whole other level of focus that I don't need.

Thanks again,

FX4
Trade what you see, not what you think or feel. Let the market come to you.
  • #178
  • Mar 31, 2012 9:18am Mar 31, 2012 9:18am
Quoting FX4Newbies
That aspect of programming time I can understand. I have also heard that a fairly large percentage of trades are computer generated....even larger than 30%.

Glad you have found your niche in the mechanical/auto-trade world. Not my cup of tea at the moment...maybe down the road...who knows. What I could envision, is setting up some robot/EA thingy with limited capital and a "good" system and see what it would generate. If it made the initial capital, withdraw it then let it keep running. Don't want to take the time now to test that etc....
you are welcome
  • #179
  • Edited 2:52pm Mar 31, 2012 9:20am | Edited 2:52pm
Quoting Custos
you are welcome
Thanks Custos.
Trade what you see, not what you think or feel. Let the market come to you.
  • #180
  • Edited Apr 1, 2012 5:39am Mar 31, 2012 11:21pm | Edited Apr 1, 2012 5:39am


View Poll Results (As of March 31, 2012 at midnight EST):

QUESTION: By the definition given, are you a consistently profitable trader?

Here is what is meant by consistently profitable:

Assuming there are no additional deposits or withdrawals, your LIVE account ending balance showed an increase at the end of the month from the previous month, and this was done for at least 3 consecutive months in a calendar year. Three consecutive months that roll over to a new calendar year will count.

Yes, I am currently. http://www.forexfactory.com/clear.gif39 51.32%

No, I have never been. 12 15.79%

Yes, I have been, but not currently. 2 2.63%

No, but I have had a profitable month. 15 19.74%

I am still trading in a demo account. 8 10.53%

Total Voters: 76

Only members who are logged in are allowed to vote. The poll continues...Let's see how things shape up by April 30th, 2012.


A few discussion questions (some repeats) in light of the posted results thus far...

1. Do you think Forex Factory members are being honest when they vote?

2. What do you think of the results thus far? (I know the poll is still very young).

3. If you think Forex Factory members are being honest, can you believe the results? (Maybe Forex Factory has some good information for traders).

4. If you think Forex Factory members are being dishonest, what do you think the results should look like percentage-wise?


Regards,

FX4
Trade what you see, not what you think or feel. Let the market come to you.
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