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How to be successful!!

  • #41
  • May 7, 2012 10:20am May 7, 2012 10:20am
Hello torkay77,

"I would rather try risking 15 pips for 150 pips so you only need 3 winners out of 20 trades to make 195 pips a month cut your losses, let your profits run."

That's ok , if that type of approach fits to you, and if you are consistent now itīs time to go to the last procedure, manage the money.

In that procedure we need to know:
Our limits when we handle a losing streak and our risk tolerance.

Soon.

Happiness for you.
  • #42
  • May 7, 2012 11:42am May 7, 2012 11:42am
hi dear

nice thread. May u please explain how can we find by seeing bigcharts the BREAKOUT and BREAKDOWN numbers. I m new in trading. may u pl help me to find it. or give any example.

thanks
Quoting Evans
Okay, I'm about to tell you the most simplest way to trade. You may or may not follow this simple way. It is up to all of you. Here's the secret/Cheat Code:

1) Google Bigcharts. It is a site that display charts.
2) Type in EURUSD or any currency that you like to trade. Then press the "Basic Chart" button.
3) This site is the best because they have already drawn the Support/Resistance lines for you. Remember trading is all about self-fulling prophecy. Look at the BIG ROUND NUMBERS and you will understand. If you don't then I don't know what to...
  • #43
  • May 7, 2012 7:10pm May 7, 2012 7:10pm
Quoting rajnisharma
hi dear

nice thread. May u please explain how can we find by seeing bigcharts the BREAKOUT and BREAKDOWN numbers. I m new in trading. may u pl help me to find it. or give any example.

thanks
He is simply referring to when price closed firmly above or below the big round numbers.
Attached Image (click to enlarge)
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Forex is boring but profitable with patience and discipline
  • #44
  • May 9, 2012 2:06am May 9, 2012 2:06am
Plain and simple:

Discipline, dedication, passion, knowledge, Don't stop educating your self and don't expect too much
  • #45
  • May 9, 2012 4:27am May 9, 2012 4:27am
Hello reynuevo,

Very good sentence and i agree 100%.

Happiness for you
  • #46
  • May 10, 2012 1:37am May 10, 2012 1:37am
Quoting Please
Hello reynuevo,

Very good sentence and i agree 100%.

Happiness for you
Thanks....
  • #47
  • May 16, 2012 8:32am May 16, 2012 8:32am
Thanks "Please" you made things so simple
  • #48
  • May 18, 2012 3:38pm May 18, 2012 3:38pm
Hello saidsaid,

Yes, after we have some knowledge of the market, things become simpler, but does not mean they are easy. Because being disciplined itīs the hard part.

Happiness for you.
  • #49
  • May 19, 2012 7:29pm May 19, 2012 7:29pm
Hello my friends,
Let's continue with this fictitious example.


Ok, now that we find the system, we need manage our money and risk.
In a simple but efficient way.

Let's see the last fictitious example:

TP 20 pips SL 15 pips
In 16 trades: 12 wins and 4 losses



Our win ratio is: 75%

12 wins + 4 losses = 16 trades

12*100/16 = 75%
4*100/16 = 25%


This example is for a win ratio of 75% and 4 losing streak if you want another result just change the win ratio and the number of losing streak.

And the probability of occurring 4 losing streak is: 0,4%

1- win ratio =
1- 0,75 = 0,25

result * number of times losing streak =
0,25 * 0,25 * 0,25 * 0,25 = 0.00390625

result * 100 =
0.00390625 * 100 = 0,4%



And the number of times that may occur in one is: 1:256

1 / 0.00390625 = 256
1:256


Ok, so now we have some useful information:

A system with 75% win ratio.
And the probability to occur 4 losing streak is 0,4% or 1:256


Next post i'm gonna explain how to conjugate this information with money management and risk to protect our account.


Determination is the key to success!

Happiness for all.
  • #50
  • May 20, 2012 2:42am May 20, 2012 2:42am
Quoting Please
Hello my friends,
Let's continue with this fictitious example.


Ok, now that we find the system, we need manage our money and risk.
In a simple but efficient way.

Let's see the last fictitious example:

TP 20 pips SL 15 pips
[size=3][font=Times New Roman]In 16 trades:...
I also have thought about this a lot, but my conclusion is that you can't approach it like that.
Let's go with your example 75% wins versus 25% losses. How do you know how the losses are distributed.
Let's say we make a thousand trades and now let's divide these thousand trades in hundred trade buckets.
Maybe in the first nine buckets the wins and losses are fairly distributed (i.e. for every 7.5 wins, there will be 2.5 losses), but what could and what will happen due to "variance of results" is the following: The last bucket might perfectly fit into the win-loss ratio, however now we see that the first 25 trades are all losers and the last 75 are all winners.
I know, sounds unlikely to have 25 losers in a row, but such things can happen, and the more you trade, the more likely it is that this will actually happen.
So can the money management system then handle 25 losers in a row? We should not create a money management system around the likely situations that happen, but around the unlikely situations, otherwise the account will blow up sooner or later.
  • #51
  • May 20, 2012 6:21am May 20, 2012 6:21am
Quoting Custos
I also have thought about this a lot, but my conclusion is that you can't approach it like that.
Let's go with your example 75% wins versus 25% losses. How do you know how the losses are distributed.
Let's say we make a thousand trades and now let's divide these thousand trades in hundred trade buckets.
Maybe in the first nine buckets the wins and losses are fairly distributed (i.e. for every 7.5 wins, there will be 2.5 losses), but what could and what will happen due to "variance of results" is the following: The last bucket might perfectly fit...
That's planning for worst case if your trading 75:25 it won't vary to much from that from experience.

The issue is, you make less money your 90% win blocks, as you shouldn't drop below 60% area loss blocks there still isn't an issue.

Time is limited, don't waste it being so careful you never get anywhere.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #52
  • May 20, 2012 6:28am May 20, 2012 6:28am
Quoting Turveyd
That's planning for worst case if your trading 75:25 it won't vary to much from that from experience.

The issue is, you make less money your 90% win blocks, as you shouldn't drop below 60% area loss blocks there still isn't an issue.

Time is limited, don't waste it being so careful you never get anywhere.
Yep, Time is limited, thats why we shouldnt waste it on cloud castles and rather take reality as it is. And reality is, the more you trade the higher the likelihood that you will encounter such a situation, that is then the time when most systems collapse, like long term capital management.
  • #53
  • May 20, 2012 6:45am May 20, 2012 6:45am
Quoting Custos
Yep, Time is limited, thats why we shouldnt waste it on cloud castles and rather take reality as it is. And reality is, the more you trade the higher the likelihood that you will encounter such a situation, that is then the time when most systems collapse, like long term capital management.

No if your winning 75% of the time, then the odds on a 10 losses in a row are

4*4*4*4*4*4*4*4*4*4=1,048,575 : 1

As you take losses you scale down your lot size due to smaller account size, just as you scale up with from profits.

Systems collapsing and the user not realising this and continueing regardless until it's working again, is what causes the 10 losses in a row.

GO HARD!!

If you start taking losses, go soft, ask yourself why are you taking the losses, fix it, get a run of profits and GO HARD again and repeat endlessly.

Only go Hard on the houses money!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #54
  • May 20, 2012 6:48am May 20, 2012 6:48am
I've found patience and discipline are the biggest factors.
  • #55
  • May 20, 2012 7:09am May 20, 2012 7:09am
I think you need to develop your trading strategy for successful trading. This should be Automatic system that will be trading for years, yes it will take time to earn money. Don't think it is fast. And what is most important your system must be ok on backtest before you go live.
  • #56
  • May 20, 2012 7:29am May 20, 2012 7:29am
Quoting Turveyd
No if your winning 75% of the time, then the odds on a 10 losses in a row are

4*4*4*4*4*4*4*4*4*4=1,048,575 : 1
that would only be true, if the previous trade affects the next trade. It's like with the tossing a coin. The probability for getting head when tossing a coin is ALWAYS 50%, no matter what happened before.
The probability of winning with a system that has a win-loss ratio of 75% is always 75%, the previous instances are not connected to the future instances.
So, if I already lost 10 times in a row, then losing the next trade will still have the probability of 25%, the probability doesn't get lower the more losses you have, as you seem to suggest.
Quoting Turveyd
As you take losses you scale down your lot size due to smaller account size, just as you scale up with from profits.
Obviously, but if you each time risk the house, cause you think that even 10 losses in a row can't happen, then the account is depleted in no time.
Quoting Turveyd
Systems collapsing and the user not realising this and continueing regardless until it's working again, is what causes the 10 losses in a row.
yep, it's one of the hardest things to actually realize when the system has stopped working.


Quoting Turveyd
If you start taking losses, go soft, ask yourself why are you taking the losses, fix it, get a run of profits and GO HARD again and repeat endlessly.

Only go Hard on the houses money!!
taking losses is part of the trading game. If you can't accept the losses, you have no business trading.
  • #57
  • May 20, 2012 7:37am May 20, 2012 7:37am
Who says risking the house, maybe 3 - 5% is fine though, better than the 1% trade for ever to make nothing brigade.

Trading, isn't a coin toss, losing 1 trade increases the risk you'll lose on the next trade, as it effects your emotional state and causes revenge trade or various other issues.

10 losses in a row should never realistically happen, if your trading well.

taking losses, but still over all being upward is part of the game, losing over all isn't.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #58
  • May 20, 2012 7:44am May 20, 2012 7:44am
Quoting Turveyd
Who says risking the house, maybe 3 - 5% is fine though, better than the 1% trade for ever to make nothing brigade.
Did you not read to what post I was replying to? He suggested to use this information for money management purposes. Thus it seemed to me that since the likelihood is so small, he would start suggesting insane money management (of course these are all assumptions), thus my post about variance of results.
Quoting Turveyd
Trading, isn't a coin toss, losing 1 trade increases the risk you'll lose on the next trade, as it effects your emotional state and causes revenge trade or various other issues.
maybe.
Quoting Turveyd
10 losses in a row should never realistically happen, if your trading well.

taking losses, but still over all being upward is part of the game, losing over all isn't.
depends on the style of trading. I use a low win-rate and high risk reward style. 10 losses in a row are very likely, but each time I win, all the past losses have been compensated for and my account is on new highs.

Obviously some people like the high win-loss approach and low risk reward better, but I think that this is unsustainable over the long-term. (Just my opinion)
  • #59
  • May 20, 2012 7:50am May 20, 2012 7:50am
Quoting Custos
Did you not read to what post I was replying to? He suggested to use this information for money management purposes. Thus it seemed to me that since the likelihood is so small, he would start suggesting insane money management (of course these are all assumptions), thus my post about variance of results.

maybe.

depends on the style of trading. I use a low win-rate and high risk reward style. 10 losses in a row are very likely, but each time I win, all the past losses have been compensated for and my account is on new highs.

Obviously some people...
His math's is correct, the odds on a huge draw down with a 75% TRUE win rate are low, although you can't apply coin toss rules to it.

He was likely refering to the 1% brigade.

I'm aiming for 60% area, but my R:R 1.5:1 area average, some barely make 4pips and some go 30 - 40 pips, for risking generally 10 - 15 pips.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #60
  • May 20, 2012 7:54am May 20, 2012 7:54am
Quoting Turveyd
His math's is correct, the odds on a huge draw down with a 75% TRUE win rate are low, although you can't apply coin toss rules to it.
Of course you can apply coin toss probability concept to it. The future outcome is independent from the past ones. And as you pointed out, if it were dependent on the last one, it very likely would result in another loss due to emotional imbalance (thus leading to an even higher likelihood of a loss in the next trade).
But when leaving emotions out, the odds of each trade being a winner is 75%, no matter how many times he won or lost before that. Read a statistics book to understand the difference better between connected events and unconnected events and how that affects probability calculations. Same with roulette or whatever, just because 10 reds happened in a row doesn't mean that now black is favored. The probability is always a little bit under 50% (due to the zero) that either red or black will be hit next.
Man, even high school students understand this concept, it's not really that hard to grasp.
Quoting Turveyd
He was likely refering to the 1% brigade.

I'm aiming for 60% area, but my R:R 1.5:1 area average, some barely make 4pips and some go 30 - 40 pips, for risking generally 10 - 15 pips.
great for you
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