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Noobi strategy, working or fluke?

  • #1
  • First Post: May 19, 2012 11:42pm May 19, 2012 11:42pm
Hey guys, please excuse any spelling errors as I'm doing this from my iPad. First off I'd like to say all criticism welcome, though I'd really prefer to hear from people that do this successfully and not other noobs with opinions such as myself.

I have been reading and practicing with forex for the last 18 months and have been spending at least 10-15 hours a week reading trading fake money ect. I have blown out many accounts trying to prefect my own stratergy. In the last week and a half I have had my best run. I am posting here to find out if it's been luck or my stratergy is working.

This time I started a 10k account and thought to myself pretend it's real! Minimize risk and cut losses fast, so far going well.

In the following stratergy both uptrend and down trend apply though I will use down as a example

I use 1m 5m 15m 30m chart to find a down trend well away of any long term resistance or support lines.. I then use 1 hr and 4 hr to confirm long term down trend. I am using alligator and momentum indicators with candlesticks. Once I find a trade I will enter with my .5 lot at 50:1 using a 10k account. I set my S/L at a fairly high limit as a precaution but usually manually pull out of any bad trades that aren't going my way. My biggest loss is around $150.00. I don't set a TP as I usually watch trades and pull when I am happy (usually around 100-$200 up and within 4 hours) the longest I have sat in a trade was 6 hours. I usually enter a few trades a night.

I have so far in the last 10 days turned my 10k account into 14k. I have the money to start playing for real but wanted some second opinions first.

Have no mercy and please don't hold back n any crisisim as in the long run it will help me!

Thanks
  • #2
  • May 20, 2012 2:10am May 20, 2012 2:10am
Quoting XXXXNooBi
I have been reading and practicing with forex for the last 18 months and have been spending at least 10-15 hours a week reading trading fake money ect. I have blown out many accounts trying to prefect my own stratergy.

Minimize risk and cut losses fast, so far going well.

I set my S/L at a fairly high limit as a precaution but usually manually pull out of any bad trades that aren't going my way. My biggest loss is around $150.00. I don't set a TP as I usually watch trades and pull when I am happy (usually around 100-$200 up and within 4 hours)...
Excellent, your strategy is giving you the confidence to place trades and you place a priority on minimizing risk and cutting losing trades, but......

Some of the things you might want to consider are what happened when you blew accounts, and being honest with yourself have those issues been addressed and resolved? You say you set a stop at a fairly high limit 'as a precaution', are you sure your profit can withstand those wide stops being hit in a series of exceptional circumstances (there's obviously nothing worse than one bad trade wiping out all previous gains and then some!). On average your risk:reward seems to be around 1:1, does win:lose justify that r:r?

Also as a relatively new trader be very careful of discretionary methods, it's all too easy to be shaken out of winning trades and hang on to losing trades. At the beginning it's sometimes wiser to have the trade planned out in advance using a strategy that has proved itself to be profitable without any discretionary interference.

And last but not least, prepare yourself for trading real hard-earned cash as opposed to paper trading, it can affect people in different ways! Maybe start small and gradually increase capital as your confidence and ability increases, and as the saying goes 'only trade money you can afford to lose'. Apart from the obvious reason there's also an extremely significant psychological reason behind that saying!

Above all just enjoy your trading, it's potentially a great business to be in!
  • #3
  • May 20, 2012 2:46am May 20, 2012 2:46am
Really appreciate that comment thank you! And yes my blown accounts were from hanging on to bad ones and closing good ones to early, now I keep my profit close early and scrap my bad ones really early, as for SL I set it at about 2% of account size, I usually only open 3 trades at once so an all up risk of 6% of my accent size which to me is conservative?
  • #4
  • May 20, 2012 2:48am May 20, 2012 2:48am
I do have my trade planned out I use trend lines (manual ones) that I think are appropriate and as soon as they break I pull... Even if they break high.
  • #5
  • May 20, 2012 4:51am May 20, 2012 4:51am
Quoting XXXXNooBi
Hey guys, please excuse any spelling errors as I'm doing this from my iPad. First off I'd like to say all criticism welcome, though I'd really prefer to hear from people that do this successfully and not other noobs with opinions such as myself.

I have been reading and practicing with forex for the last 18 months and have been spending at least 10-15 hours a week reading trading fake money ect. I have blown out many accounts trying to prefect my own stratergy. In the last week and a half I have had my best run. I am posting here to find out if...
as long as the strategy works for you, then you are at the best way to become a proficient trader. But a warning: the results of 10 days is (as you've probably guessed) too small of a sample to see if the strategy works out in the long-term or if it was just sheer luck.
Get more data and look if it still works out.
  • #6
  • May 20, 2012 5:03am May 20, 2012 5:03am
Your defiantly right.. I'm going to give it 2 months and see where the accounts at before I out real money.. Someone has told me that this stratergy has only been working because of what's happening in Europe and that this won't work in the next few weeks
? I don't understand.
  • #7
  • May 20, 2012 5:11am May 20, 2012 5:11am
Quoting XXXXNooBi
Your defiantly right.. I'm going to give it 2 months and see where the accounts at before I out real money.. Someone has told me that this stratergy has only been working because of what's happening in Europe and that this won't work in the next few weeks
? I don't understand.
well, obviously the markets have been trending the last 2 weeks due to elections. Your strategy works best in these times, when there are significant changes or events happening. The question is, what happens when the market starts to range (i.e. when there are no signficant events around). Does your strategy blow your account, or does it at least maintain a break-even level (which is preferred)?
If you give all the money back in ranging markets which you earned in trending markets, then you have a problem.
  • #8
  • May 20, 2012 5:24am May 20, 2012 5:24am
Ok i see what your saying.. Would it be safe to say but a ranging market is still going to have strong intraday trends? Because I'm only sitting on short term (few hour long) trades would this stratergy still apply?

It seems to easy I agree, which in this game is not a good thing lol. I just unfortunately don't understand a lot of the real technical indicators so am trying to take a simple approach that works.
  • #9
  • May 20, 2012 5:32am May 20, 2012 5:32am
Quoting XXXXNooBi

my blown accounts were from hanging on to bad ones and closing good ones to early, now I keep my profit close early and scrap my bad ones really early
Great, as long as you do the same with real money, it's tempting to do the opposite when you've got real money on the line, overcoming psychological issues can be a real hurdle.


Quoting XXXXNooBi

as for SL I set it at about 2% of account size, I usually only open 3 trades at once so an all up risk of 6% of my accent size which to me is conservative?
Too rich for me but that's just me, if you think those risks and rewards are sustainable then great. You may rethink that over time but it's an easy adjustment to make.


Quoting XXXXNooBi

I do have my trade planned out I use trend lines (manual ones) that I think are appropriate and as soon as they break I pull... Even if they break high.
Sure, but then you add a discretionary element. In itself that's not automatically a bad thing but just be aware that discretion can also work against you and your strategy stats just as easily as it can work in your favor.


Quoting XXXXNooBi

Someone has told me that this stratergy has only been working because of what's happening in Europe and that this won't work in the next few weeks
? I don't understand.
Europe and the Euro is in the proverbial toilet, it won't last forever and buy the rumour sell the fact is on the horizon somewhere, as always the trend will inevitably end. That's when your strategy will be truly tested.

Quoting XXXXNooBi

It seems to easy I agree, which in this game is not a good thing lol. I just unfortunately don't understand a lot of the real technical indicators so am trying to take a simple approach that works.
Ah, the cycle begins! Simple works therefore complex must work better! I suspect the majority of consistently profitable traders have been through it and ultimately return back to simple!
  • #10
  • May 20, 2012 5:37am May 20, 2012 5:37am
Quoting XXXXNooBi
Ok i see what your saying.. Would it be safe to say but a ranging market is still going to have strong intraday trends? Because I'm only sitting on short term (few hour long) trades would this stratergy still apply?

It seems to easy I agree, which in this game is not a good thing lol. I just unfortunately don't understand a lot of the real technical indicators so am trying to take a simple approach that works.
ranging and trending markets are time-frame independent. You will have a similar distribution of trends versus ranging markets on all time-frames. There is a saying that the market ranges about 70% of the time while it trends during 30% of the time. Question is, if the 70% can either be avoided or don't affect your balance.
Yeah, it seems easy, but until you devised a system that can reduce losses while in bad markets and maximise profits while in good markets, it won't be that easy.

yeah, and stick with simple and easy. The simplest systems are always the best, cause they are robust.
  • #11
  • May 20, 2012 6:25am May 20, 2012 6:25am
You guys are both legends! Thank you, it's been great getting some honest feedback (not some broker on the phone) ! Can I keep this thread alive and let you know how I go in the coming week and month and have some feedback?
  • #12
  • May 20, 2012 7:38am May 20, 2012 7:38am
Quoting XXXXNooBi
You guys are both legends! Thank you, it's been great getting some honest feedback (not some broker on the phone) ! Can I keep this thread alive and let you know how I go in the coming week and month and have some feedback?
of course you can
  • #13
  • Last Post: May 20, 2012 9:05am May 20, 2012 9:05am
Quoting XXXXNooBi

Can I keep this thread alive and let you know how I go in the coming week and month and have some feedback?
....not sure about legends but.....

Definitely, it would be nice to hear how you're getting on!
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