Attachments: What is your monthly target?

What is your monthly target?

#101
Jun 7, 2006 12:29pm Jun 7, 2006 12:29pm

ItalianSharp
| Joined May 2006 | Status: Trader | 204 Posts

Quoting stockwet

Disliked

Thanks. My question was specifically regarding Rusty's post #87. I didn't quite gather that the way you are describing was the way Rusty accounts for pips and I was interested in his method. I account for pips the way you do, which is an averaging system. Rusty's seems more like a maximum move accounting.

Ignored

By reading post # 87, I think Rusty has different types of trades where he discretionally decides to allocate a pre-established % of capital depending on the setup.

Each month he updates the basic unit size according to his account balance.

He then decides how many units to allocate on each trade according to the strenght of his setup.

I think Rusty will clarify this as soon as he reads this post.

I dont know whether Rusty scales out of positions, if he does the only way to calculate net pip gain is by averaging.

I cant think of any other way to calculate net pip gain other than averaging if you are scaling out.

#102
Jun 8, 2006 5:47pm Jun 8, 2006 5:47pm

Dark1
| Joined Jun 2005 | Status: Trader | 45 Posts

Quoting The Wizard of Oz

Disliked

I find it hard to believe anyone can consistently pull more than 10% per month, unless they are taking huge risks.

Is anyone getting 10% or better while risking 2% max. per trade?

My personal goal is 10% per month but I wonder if that is achievable.

Wiz.

Ignored

The term 'huge risk' would vary from person to person. Me risking 20% of my account and George Soros risking 20% of his account have different probabilities of success.

I think your own ratio of winning trades to losing ones has a big say. Some people consistently get it right more than others. If you can have a pretty consistent ratio for example 6 correct trades for every 1 incorrect trade then you can calculate your risk per trade based on the probability of being incorrect. Risk has to factor in your personal ratio of winners to losers.

This would apply more to those traders who can read the price rather than mechanical systems.

#103
Jun 9, 2006 12:36am Jun 9, 2006 12:36am

Hollis
| Joined Nov 2005 | Status: Trader | 58 Posts

Quoting ItalianSharp

Disliked

I dont think you completely understood my post about the small % of winners that build up your capital.

When i said that only 20% of winners make your capital grow I just reported a statistical research I was inspired to make on my trades by this other successful trader whose name I cant remember right now.

If you make 100 trades per year with a 50% winning rate, you will have 50 losers and 50 winners right?

Stats show how only 10 of those 50 winners will make your capital grow.

By this I mean that only 10 trades out of 100 are those types of trades that make you lot of money by hitting all of your targets.

It was a bit unfortunate of you to state that I should be looking at each trade as if it were my first one and that I basically trade to pay off my losers.

I personally dont know any trader who wins big all the times. Are you one of them? If yes, I'll give you my money to manage and you can keep 40% of profits.

If you have a stable realistic system, 50% winning rate, 2:1 R/R ratio and solid money management, your equity will grow slow but steadily. Thats how you get rich overtime and thats how you stay alive in the bad times.

Are all of your winners the same size? Or do sizes of winners vary from trade to trade?

If you happen to have different sizes of winners like most traders, then you must know that only the BIG WINNERS are those who dramatically change your bankroll. The small winners pay for losses.

Its the same as any other business where only 20% of your clients are those who make your profits while the remaining 80% pay for overheads, salaries, etc...

I suggest that people in here, before coming up with hasty statements about someones trading style, read others' posts twice and ask for explanations in case things dont make much sense.

Good luck

Ignored

You should never go into business unless you know that every customer is going to be a profitable customer for the company. I have to ask what business you would want to finance where only 20% of the customers make money for the company? I was always taught that every business transaction should be profitable for the company. I understand that the company may not be always 100% profitable due to things such as paying off loans and liens, etc, but each transaction should make money towards paying that off, not just paying for your light bill in one sale and then being able to make payroll the next sale. That's bad business.

Large companies like Toyota don't make money off of just 20% of their customers, they make something along the lines of $500 profit per car sold, which is profit from every customer. The best don't become the best by simply making money here and there, they make money on every deal, which is how you should be in trading if you really want to do good things with your account.

FYI - You do know that I am in no way attacking you as a person? I hope you understand that it's that I find fault with your outlook on trading and finance.

#104
Jun 9, 2006 1:23am Jun 9, 2006 1:23am

faizuk
| Joined Jun 2006 | Status: Trader | 1 Post

For very 1000$ in mini i keep 50 pip per day . 2 lots * 13 pips and twice a day. eaily get 13 pip on new that has make market hot .no stop loss . bucease i trade the when market shows were it going . eur/uds or cabel/uds

For very 10000$ in Std i keep 50 pips per day . 3 lots * 9 pips and twice a day.
but dont take to much rik. only eur/usd

but only tradeing for 2 month on live . newbie

.

still long way to go.

#105
Jun 9, 2006 1:39am Jun 9, 2006 1:39am

Mr Trend
Joined Apr 2006 | Status: Mmmm pips. | 1,418 Posts

Quoting ItalianSharp

Disliked

The downside of scaling out is, of course, when things go your way. Your net profits will be much less than closing out all of your contracts at the desired target.

Ignored

I couldn't agree more regarding reducing your risk.

I've backtested my strategies and have found that I actually make only slightly less when I scale out, yet I get the benefit of reducing my risk greatly.

Mr. Trend

#106
Jun 9, 2006 1:59am Jun 9, 2006 1:59am

Hollis
| Joined Nov 2005 | Status: Trader | 58 Posts

Quoting faizuk

Disliked

For very 1000$ in mini i keep 50 pip per day . 2 lots * 13 pips and twice a day. eaily get 13 pip on new that has make market hot .no stop loss . bucease i trade the when market shows were it going . eur/uds or cabel/uds

For very 10000$ in Std i keep 50 pips per day . 3 lots * 9 pips and twice a day.
but dont take to much rik. only eur/usd

but only tradeing for 2 month on live . newbie .

still long way to go.

Ignored

You were drinkign when you wrote this right? I say this as I am now the house beer pong champion after tonight...lol

#107
Jun 9, 2006 2:01am Jun 9, 2006 2:01am

greatdane
| Joined Mar 2006 | Status: Trader | 130 Posts

Quoting Hollis

Disliked

You should never go into business unless you know that every customer is going to be a profitable customer for the company. I have to ask what business you would want to finance where only 20% of the customers make money for the company? I was always taught that every business transaction should be profitable for the company. I understand that the company may not be always 100% profitable due to things such as paying off loans and liens, etc, but each transaction should make money towards paying that off, not just paying for your light bill in one sale and then being able to make payroll the next sale. That's bad business.

Large companies like Toyota don't make money off of just 20% of their customers, they make something along the lines of $500 profit per car sold, which is profit from every customer. The best don't become the best by simply making money here and there, they make money on every deal, which is how you should be in trading if you really want to do good things with your account.

FYI - You do know that I am in no way attacking you as a person? I hope you understand that it's that I find fault with your outlook on trading and finance.

Ignored

Sometimes "large companies like Toyota" sell their products with a loss because they don't want to lose their share of the market and eventually be forced out of business. This is a common business practice, i.e. General Motors have been loosing money for a while now, yet they still sell cars, while working on changing their business model at the same time.

I can't see how you can make money on every transaction in FX, if you can do it, then good for you but this is not going to last forever.

Dane

#108
Jun 9, 2006 2:03am Jun 9, 2006 2:03am

ItalianSharp
| Joined May 2006 | Status: Trader | 204 Posts

Quoting Hollis

Disliked

You should never go into business unless you know that every customer is going to be a profitable customer for the company. I have to ask what business you would want to finance where only 20% of the customers make money for the company? I was always taught that every business transaction should be profitable for the company. I understand that the company may not be always 100% profitable due to things such as paying off loans and liens, etc, but each transaction should make money towards paying that off, not just paying for your light bill in one sale and then being able to make payroll the next sale. That's bad business.

Large companies like Toyota don't make money off of just 20% of their customers, they make something along the lines of $500 profit per car sold, which is profit from every customer. The best don't become the best by simply making money here and there, they make money on every deal, which is how you should be in trading if you really want to do good things with your account.

FYI - You do know that I am in no way attacking you as a person? I hope you understand that it's that I find fault with your outlook on trading and finance.

Ignored

Alright Hollis,

this is the last time I try to reply to your allegations about my trading style being faulty. If you dont get it this time, I'll give it up and move on.

I know you have nothing personal against me as well as I have nothing personal against you. Lets clarify this once and for all.

My trading system, strategy, edge, whatever name you wanna call it, produces 52% of WINNERS and 48% LOSERS.

My average winner is TWICE AS BIG as my average loser.

My max drawdown is 8.5%.

If you do some 1st grade math on 100 hypothetical trades, such a system produces money on a consistent basis with little downside risk.

By the way, I risk no more than 1.75% of my equity per trade and I adjust my unit size every time my equity increases by 20%, thus on average I would say my risk per trade is no more than 1.25%.

Ok, now you have an idea of what numbers my system produces. You can call such a system FAULTY, thats fine with me. There are people out there who are attracted to old ladies or pregnant women, so I learned not be surprised by anything in this world.

I am not here to claim my trading strategy is the s..t of FOREX, its just one of the many PROFITABLE trading strategies out there. As simple as that.

Now lets move on to the concept of business and its clients. Have you had a corporate job? By your posts I wouldnt think so. How old are you by the way?

I worked for three different businesses, two of them ranked in the top 100 companies according to FORTUNES magazine.

When I said that only 20% of clients make the company money, i didnt mean that the company actually receives payments by only 20% and the remaining 80% belongs to the account receivables list.

Of course all clients make the company money. 80% of those clients are not big clients. However, that 80% still represents $$$ to any business.

However, you can pretty much ask any entrepeneur, its usually only 20% of clients that are BIG SHOTS.

Take a butcher shop, or a bakery shop. Entrepeneurs in those businesses will certainly have different categories of clients. There is the old lady who everyday comes around and buys one loaf of bread for $1.50 and there is the restaraunt owner who orders 20 Kilos of bread everyday for $100. Now whos the bigger client? Who do you think will make the bakery P&L grow significantly? The old lady or the restaurant owner? The way I look at it, I see the old lady paying for raw ingredients to make bread and maybe a little bit of overheads. I cant see her paying for salaries and equity growth? If you do, then I warmly advise you to not EVER START A BUSINESS. Seriously. You'll go bankrupt in no time.

So when I said that 80% of clients pay for overheads, salaries, etc... and 20% of clients are those who make the company profitable, I meant to make a distinction between the two categories.

The same happens in trading.

You can have winning trades of 5, 10, 20, 40 or 100 pips. Now how many 100-pip winning trades do you think you can have in a sample of 100 trades?

Let me answer this for you: not many.

Of course, all trades are winners. Even 1-pip gain is a winning trade to me. However, do you think you can make money in the long run by accumulating 1-pip winners?

In conclusion - finally - the basic concept behind my posts in this thread is that its the big winners who make the difference to your capital growth. The small winners pay for the losers.

Mine is just a different way to look at the distribution of winners and losers, thats all. I dont know where all you negativism about my trading strategy comes from. The only fact that you arent getting the drift of what I am saying worries me a little.

Maybe its me who cant right proper English. I'll take the blame in that case.

Has anyone else in this forum ever heard of the 20%-80% concept before or am I the only lunatic in here who ever has come to knowledge of it?

#109
Jun 9, 2006 2:09am Jun 9, 2006 2:09am

ItalianSharp
| Joined May 2006 | Status: Trader | 204 Posts

Quoting Mr Trend

Disliked

I couldn't agree more regarding reducing your risk.

I've backtested my strategies and have found that I actually make only slightly less when I scale out, yet I get the benefit of reducing my risk greatly.

Ignored

Isnt it impressive how simple financial math can dramatically change your view?

The first time I thought of scaling out without making proper calculations on previous trades, I thought of how much I would leave on the table with the winning trades.

After proper calculations, I figured that the impact of scaling out on my winners represents a little price I have to pay to drastically reduce the size of my losers.

By doing this, I turned 2 unprofitable months into 2 small winning months.

#110
Jun 9, 2006 2:18am Jun 9, 2006 2:18am

Mr Trend
Joined Apr 2006 | Status: Mmmm pips. | 1,418 Posts

Quoting ItalianSharp

Disliked

There are people out there who are attracted to old ladies or pregnant women, so I learned not be surprised by anything in this world.

Ignored

Pregnant chicks are hot dude. Seriously.

Mr. Trend

#111
Jun 9, 2006 2:19am Jun 9, 2006 2:19am

ItalianSharp
| Joined May 2006 | Status: Trader | 204 Posts

Quoting Hollis

Disliked

Large companies like Toyota don't make money off of just 20% of their customers, they make something along the lines of $500 profit per car sold, which is profit from every customer. The best don't become the best by simply making money here and there, they make money on every deal, which is how you should be in trading if you really want to do good things with your account.

FYI - You do know that I am in no way attacking you as a person? I hope you understand that it's that I find fault with your outlook on trading and finance.

Ignored

I didnt get to read the last part of your post, I was too quick in answering you as soon as I read the first few lines.

If you expect to win every trade in FOREX or any other instrument you are trading, oh boy you are gonna be sadly disappointed.

TRADING IS ABOUT WINNING AND LOSING. You lose at some point. NOBODY IS A 100% WINNER.

Losing is good because it generates new opportunities to win.

Anyway, I'll just stop our little discussion right here. It's clear to me that either you need to review those business & finance books, or you just mean to give me some s@#t and thats fine with me, we had some fun and we are moving on now.

This is a trading forum, not a business 101 class.

#112
Jun 9, 2006 2:20am Jun 9, 2006 2:20am

Mr Trend
Joined Apr 2006 | Status: Mmmm pips. | 1,418 Posts

Quoting ItalianSharp

Disliked

Isnt it impressive how simple financial math can dramatically change your view?

The first time I thought of scaling out without making proper calculations on previous trades, I thought of how much I would leave on the table with the winning trades.

After proper calculations, I figured that the impact of scaling out on my winners represents a little price I have to pay to drastically reduce the size of my losers.

By doing this, I turned 2 unprofitable months into 2 small winning months.

Ignored

I also like to move my stops to b/e after I scale out. I don't care how much I scale out by -- I'll move 'em to b/e... I know that, mentally, I have a hard time losing money, so I may not make as much, but I'm keeping my head in check, which is more important anyway...

And besides, if it pulls back to b/e, I'm probably going to get out of the trade anyway...

Mr. Trend

#113
Jun 9, 2006 2:21am Jun 9, 2006 2:21am

ItalianSharp
| Joined May 2006 | Status: Trader | 204 Posts

Quoting Mr Trend

Disliked

Pregnant chicks are hot dude. Seriously.

Ignored

I didnt say they arent. Hell, one day my wife will be pregnant so I better like pregnant chicks!

Anything in this world can be hot to some eyes. Same reason why some some traders go short and others go long.

How boring would FOREX be if we all liked the same women?

#114
Jun 9, 2006 2:27am Jun 9, 2006 2:27am