The life of a trading system on Forex Factory

I'm sure it used to be like that at one time, if not here then I know on some of the old forums ie Moneytec, many a strategy got improved or dismissed through group effort and a bit of camaraderie.

Or maybe I just read the wrong threads here and don't see it.......

I have thought of all that pip mutt and i believe most are trying to accomplish just that.

there are 2 simple ways to do this i suppose

wait for perceived retrace on a desired continuation of trend or till s/r area is hit on a perceived range.

then account for average volatility narrowing your target on the stop loss order and with full average volatility target on your t/p.

suppose 60 tp 50 sl i would say on an intraday at max leverage of 3:1 to keep loss at 1.8% or even reduce this further to account for average log return for desired asset. Another way would be by statistical win:loss on your performance and do your VAR adjusted to worst case scenario as far as drawdown goes.

however what you just stated are logical very reasonable statements that are still very ambiguous,

any concrete ideas that you have on HOW to accomplish what you enumerated on your quote?

You seem to have studied what everyone else has done. To me, that's just the beginning.
Haven't you made any price-action methods of your own? What about your own psychology re: the chart's activities, trades etc.? And that's gotta be the tip of the iceberg.
I'm saying, what about your creative side? There's lots of pockets of unexplored territory in trading, you just have to look for them.
Then, maybe the whole thing will merge a bit better for you.


( Not that I'm any example of success, far from it, nay, the polar opposite. Just sayin'...)

Well after closing down Cilantro (third of equity lost due to one illiquid stock, but had years of 70% growth 700k to 3m so still in the green by 2m+) he went to build his reputation back with trading and is currently number #1 Trader on Covester (platform to mirror trades on real accounts from who ever want to prove their skill), for 2008, 2009, 2010 and 2011. That's gotta at least count for something. So from this he wants to build up another fund, but with his rep back and proven track records and new clients.

There are numerous ways, strategy is relatively unimportant in the scheme of things.


The devil is in the detail.


Of course it's ambiguous, it has to be ambiguous, no two situations/trades/traders are identical. This is where the discretionary element comes in to adapt to market conditions as well as tailor made strategies to suit the individual.

Trading was likened to ice-cream sellers and barrow boys, ducking and diving, bobbing and weaving, making deals, making money any which way. We can copiously and painstakingly scientifically analyse every aspect of the market, of trading, of risk, money, and trade management and still lose money so apart from a personal interest what's the point? Less science, more action.....



http://fsa.zedge.net/content/3/0/4/7...712-3047-t.jpg

I guess the point is that I PERSONALLY am not happy with random like equity curve with draw downs that wipe out previous gains.

I am looking for a better way to manage risk ....otherwise it's more like

100 trades ( + 60)
100 trades (-50)

= +1000 pips and this is an extremely generous generalization


in a very random like growth... There must be an elegant way to build a risk model to hedge or control draw down.

Redlion, See this thread

Just looked at his performance stats

45% a year, he needs to get over here, we've got guys here doing 45% in a week apparently!



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lol, neither would I be, in fact I'm not sure anyone would be happy with that scenario!

exactly and sometimes when I catch a trend I am able to grow the account, or through market analysis i can find pretty good areas where price might turn

but comes down to randomness at the end, for all my analysis and my intelligence it's always either up or down.

that i accept and embrace...

now the question is how to reduce the risk, or how to spread risk away from me.

FXEZ thanx

This is not a hobby it is a business, and a business needs to be serious about gains, and capital reserves, risk management etc.
I will be in FORBES one day as one of the richest men in the planet... so hence my "unnecessary over thinking" I am not happy with random like increased pocket change.

Well you're never going to negate risk so the next best thing is to just accept it as part of the game and ensure return justifies it.

I get the impression you're a glass half empty kinda guy......risk is an important consideration, sure, but you seem debilitated by it.


That's great, money made from trading, is that the plan?

glass half empty kind of guy lol

yeah probably I am always looking to improve, I am never satisfied with my performance... i expect better always.

i am not debilitated by risk, it is part of the game, i take risks every day. As I said before this whole conversation arose from

"trading is so easy, an ice cream seller can do it"

However I need CONSISTENCY, and CONTINGENCY

I know you're a smart fella RL but you're still relatively new to the markets from what I gather (1 year trading roughly?). A random equity curve is good progress after one year. Much better than a down trending equity curve which would be expected by most new to the game/ business.

I don't want to preach but after much more chart time you will be better able to define your edge and then utilize this with popper money management which to do what you are asking about... and listen up because this is the most repeated dribble on trading there is but your answer is simple:

Maximize your gains and minimize your losses.

It's vertially impossible to do this long term is you have no defined edge.

Most take this and immediately THINK they understand it and will simply target twice their SL 2:1 or 3:1 or 4:1, but what they are missing is likely any advantage to begin with and so where they win 4:1 they will likely lose another 4 times in between add to that the frustration and psychology that attaches itself to this curve and you get nasty implications like revenge trading or clouded judgement.

EDGE
Money Management
Psychology

It's that simple and that hard.

Anyway I can relate to your predicament, if you think you have a good strategy then try this:

Firstly lower your risk to an amount that you are willing to literally burn in real cash. Pick a set amount of money you are willing to BURN or SPEND every week in attempts of growing your equity curve. Give your self a mind set of "spending money to make money", instead of the mindset of "I'm going to make money and be right because I'm a smart guy and a good trader".

Open your trade and when things are going well, instead of going to breakeven, simply move your SL to a safe place and add to your trade keeping that same risk level you were willing to burn... just have a calculator handy to get the position sizing.

If however things go bad get out before your SL is hit and remind yourself that it's a less than amount I'm willing to BURN and inturn you have the advantage of being able to get back in if price returns to your original entry price if your still confident in the trade.

What you will find is that you buy into the market at a discount in a way and as you are right you slowly build your position up to a sizable amount by trailing your Stop and adding instead of doing what everyone does which is go to Break even and pray for the best.

Anyway if you actually try this you will see the benefits... Your good trades will turn into great R:R winners and your bad ones will be just a scratch on your curve.

Most new people will look past this idea because of the negative averaging of their entry price (I used to think the same way)... And because their initial entry size will be "too small for their liking"... But if you look more closely you are simply maximizing your winners and minimizing your losses like a trader instead of like a guy at the casino.

This is what sent my equity curve in the right direction for about the past 6 months now... Where previously I was all in, break even quite quickly and all out. I was profitable but frustratingly like you say, the losses would wipe out previous gains and losing streaks would wipe out weeks of previous "work".

Fk I'm rambling now but to get into the psychology of it think about this...

People are told to set a risk amount at what they are comfortable to lose right? So they typically say ok 2% seems a sizable amount, I have to lose more than 50 times in a row to be wiped out.... IMPOSSIBLE!

So there they go setting a 2% risk, all in, set the SL at the right place... They get up 2% and what is this amount to this trader? It's their comfort level remember. So right away they start sweating on any gains over this amount (they don't want to lose this paper gain). If 2% was their comfort level then what is 3%... 3% is 1.5:1 Risk to reward... But to them is is another half of their comfort zone... They want that money and each time the market makes a bit of noise against their position they stress about losing it. They convince themselves to take the money. Go to bed, feel great about their (big to them) win,,,, wake up tomorrow and cry,, telling themselves Jesus Montgomery, if I'd only held that trade and done NOTHING... I'd be up 6% right now ... The market lives on this sh*t it's one big shake out. Most of the noise you see intraday is just the big bullies shaking the little guys upside down by their ankles and watching the money fall out of their pockets as they push them out of good positions.

Anyway.... This is just my thoughts, you may disagree and that's cool. But remember that as a trader you have full control over everything you do and this is one of your main advantages. You can scale in scale out, move your SL, chase an impossible target...etc etc... Use the force Jim! There's no magical formula to solve your problem you just need a little witt and common sense.

Hope I've helped in some way. Oh yeah I think we're all gonna be in FORBES one day...

Maybe you need to address a more simple issue:

Why do you trade?

Also check my sig...

I meant from a 'some people see adversity where others see opportunity' kind of perspective.


Trading is an extremely simple concept, sometime the less educated and analytic find it easier than the typical academic who needs to know reasons behind everything before he makes a move!


Doesn't everyone? If not then they really shouldn't even consider trading as a career path!

lol, great description!

no problem bro, I do see the benefit of your advise, thanks.

The stage when my ego was fragile and i HAD to be right, or I could not accept my short comings is gone.

i truly appreciate your in put. It is concrete ideas like this that help

Ah I get it now, you want someone to tell you how to trade!

No worries...

actually no pipmutt

I do not need to be taught HOW to trade

But ideas clearly stated and shared can be replicated, adopted, and dismissed if not useful

you state ambiguous, obvious goals

cut losses short, let profit run, the trend is your friend, if the market shows you that you are wrong cut your position if the market confirms your bias maximize your gains. etc....

those are things that people say that are obvious, ambiguous and sound so reasonable that the person who says it SEEMS to know what he is talking about even if he has no clue on HOW to actually accomplish this.

something the beagles do a lot. or fti and his cult
dance the dance, let the market tell you, do not predict, actively manage your risk blah blah blah

bull shit gurus wanna be will spit out.

i stated 3 clear ideas here on rudimentary risk management through potentially hedging

I also stated clear targets and optimum leverage
Cindyxxxx stated a concrete clear idea on using position size to mitigate initial risk.

Something Not really revolutionary that I Have studied as well but he also had his own personal and unique input ... that is valuable

YOUR general statements are not.
no value from you yet, and i doubt i will hear any... your posts make you SEEM like a profitable trader, but with no real substance to criticize or infer on the validity of it.

and if you are, great! keep at it!
if you are just like every one else then SEEMING profitable serves you no purpose but ego boost.

I try my best Pip lol