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Trading for a Living

  • #1
  • First Post: Edited Apr 29, 2013 8:28pm Apr 10, 2013 3:09am | Edited Apr 29, 2013 8:28pm
Hi everyone,

I am a full-time trader. At times trading can get a bit lonesome so I have decided to create this thread to share my thoughts, trading results, meet new people, and hopefully get some discussions going on. I trade price action combined with a few indicators, however, I do not wish to discuss the specifics of my trading strategy here. I have designed and optimized my strategy for reversals and trend continuations on the low timeframes. I trade for 9 hours from London open to London close and I usually get 0-3 trades a day.

I will be posting my trading results here, whether good or bad. I understand that this is just a probabilities game and I will come out net positive after a long series of trades. I really could not care less about each individual result as long as I don't make any mistakes. I have tested/traded my strategy over 1000 times with excellent results. My job is just executing according to my plan.
  • #2
  • Apr 10, 2013 5:28pm Apr 10, 2013 5:28pm
What do you aim for per month?
  • #3
  • Apr 10, 2013 5:46pm Apr 10, 2013 5:46pm
Quoting TranceTrader
What do you aim for per month?
I don't aim for a particular figure. Having expectations like that implies I am in control of the market and will be psychologically draining if I do not achieve my target. Certainly I do not have control over the market but I can control my own thinking and actions, so that is what I aim for every day. I aim to execute my trades according to my plans and rules on a consistent basis.
  • #4
  • Apr 10, 2013 6:16pm Apr 10, 2013 6:16pm
I wouldn't say having a target implies the market will allow me to meet it. I could wish to run a mile in 4 minutes but that doesn't mean my body can do it.

I guess what I was trying to say is what do you aim for? I aim for between 4%-6% per month, I don't always get that but I'm happy when I do. I focus mainly on execution and I find with good execution comes a gains.
  • #5
  • Apr 10, 2013 6:26pm Apr 10, 2013 6:26pm
I want to talk about the benefits of focusing on and trading only one currency pair.

My trading has evolved quite a bit since I started. I first traded pure price action on the higher timeframes (4 hour and daily) which gave me the chance to watch over 30 currency pairs. Since what I did was technical it made sense that the more currencies I watch the more chance I have of catching a good setup. However I have since ventured down to the lower timeframes with a trading strategy that fits my personality. What is still happening though is I still wanted to watch so many pairs. I still had the belief that the more I watch the more potential there is for profits. It's just technical analysis so obviously it'd work on all pairs, right? Yes, but what I've realized, from a psychological point of view, is that my energy is scattered between all the pairs. After some poor results I realized I needed to focus on just one pair. I needed to watch and feel the way it moves. I needed to understand it's long term prospects. I did not want to watch just one pair before and that was because of greed. I was greedy and I wanted to be able to catch all the moves and on all timeframes (this was especially hard on low timeframes). It was hard to get out of this mindset but it is now another improvement to my trading.

So now my strategy is still the same but I only focus on one currency pair. There are many benefits to this, for example, if the daily trend is up then I am more willing to hold onto my longs (from lower timeframes) for longer in order to let profits ride. I can feel the way it moves and behaves. I am more likely to select the better setups, etc. I believe the phase "jack of all trades, master of none" applies to the number of trading pairs you watch. Now I'd much prefer to watch and truly master one pair instead of having to watch so many others simultaneously. Obviously this amount will be different for different people and different strategies, but if you're not having the success you thought you would, be flexible and consider cutting down to just one pair.
  • #6
  • Apr 10, 2013 6:33pm Apr 10, 2013 6:33pm
Quoting TranceTrader
I wouldn't say having a target implies the market will allow me to meet it. I could wish to run a mile in 4 minutes but that doesn't mean my body can do it. I guess what I was trying to say is what do you aim for? I aim for between 4%-6% per month, I don't always get that but I'm happy when I do. I focus mainly on execution and I find with good execution comes a gains.
In my opinion there is a huge psychological issue with aiming for a target. It could be near the end of the month and I am not reaching my 30% target. My subconscious mind will then begin to look for all sorts of trades to enter to make up the gains to my target. My judgement will be clouded. This is not the mindset I want to be in and I am perfectly content with not having a target. What I do know is that good executions over a long period will give me all the gains I want.
  • #7
  • Apr 10, 2013 10:35pm Apr 10, 2013 10:35pm
I would be interested in knowing why you selected the pair you did. Not which one, but how did you settle on that particular pair?

I am still in that place you describe - watching many pairs and time frames to look for all the possible setups, and then selecting the couple to trade.

I can see the value in picking a single pair, but struggle with which one.

EUR or GBP could be considered obvious choices, but the JPY crosses offer more excitement and action. The answer probably depends on your strategy and time frame, or are you saying pick one - any one and stick to it?
" check out The Traders Outpost "
  • #8
  • Apr 11, 2013 3:45am Apr 11, 2013 3:45am
I think you're talking a lot of sense. I like the concept of "my target is whatever the market will give me".

Quoting loleno
In my opinion there is a huge psychological issue with aiming for a target. It could be near the end of the month and I am not reaching my 30% target. My subconscious mind will then begin to look for all sorts of trades to enter to make up the gains to my target. My judgement will be clouded. This is not the mindset I want to be in and I am perfectly content with not having a target. What I do know is that good executions over a long period will give me all the gains I want.
  • #9
  • Apr 11, 2013 4:07am Apr 11, 2013 4:07am
Quoting RedLineFred
I would be interested in knowing why you selected the pair you did. Not which one, but how did you settle on that particular pair? I am still in that place you describe - watching many pairs and time frames to look for all the possible setups, and then selecting the couple to trade. I can see the value in picking a single pair, but struggle with which one. EUR or GBP could be considered obvious choices, but the JPY crosses offer more excitement and action. The answer probably depends on your strategy and time frame, or are you saying pick one -...
Hi, good question. In my opinion any of the majors are good. I selected EURUSD because of its liquidity, low spread, and I like the way she moves. It's the most traded currency pair so can't really go wrong. I tend to trade during the London session but from time to time there's some good movements during Tokyo too. I really doubt there's much difference between the majors so just pick one and stick to it.
  • #10
  • Apr 15, 2013 10:24am Apr 15, 2013 10:24am
As always Mondays are awfully quiet. No trades today and going to sleep now.
  • #11
  • Apr 16, 2013 7:53am Apr 16, 2013 7:53am
One win so far, with 2R. Draghi speaking in a few minutes, so will be sitting out for the meantime.

EURUSD Trade #1: +4%
  • #12
  • Apr 16, 2013 8:02am Apr 16, 2013 8:02am
Just watching one currency pair really turned my trading around. It is all about psychology. Stress is GREATLY reduced and that to me is enough reason to switch. There will definitely be fewer trading opportunities with one pair but that does not mean I will be less profitable. I think this is a very profound fact and I will be extremely foolish to go back to multiple pairs in the near future. Just a personal note.
  • #13
  • Apr 16, 2013 8:14am Apr 16, 2013 8:14am
Two over night winners when I woke up this morning:

Long AUDUSD @ 1.03115 (28p target) +1.89%
Long GBPUSD @ 1.52765 (28p target) +1.84%
  • #14
  • Apr 16, 2013 8:17am Apr 16, 2013 8:17am
Quoting TranceTrader
Two over night winners when I woke up this morning: Long AUDUSD @ 1.03115 (28p target) +1 .89% Long GBPUSD @ 1.52765 (28p target) +1.84%
Great. What I'm more interested in is how much was risked on each trade to get those returns?
  • #15
  • Apr 16, 2013 8:27am Apr 16, 2013 8:27am
I monitor around 20 pairs and silver, I update my journal/orders in the evenings which normally takes me about an hour. I do previous/upcoming week analysis on Sundays which takes longer (normally 3-4 hours). I trade 4H/1H charts so I normally see around 15-20 set-ups every 2 weeks. This is manageable for me at the moment with a full time job.

Quoting loleno
Just watching one currency pair really turned my trading around. It is all about psychology. Stress is GREATLY reduced and that to me is enough reason to switch. There will definitely be fewer trading opportunities with one pair but that does not mean I will be less profitable. I think this is a very profound fact and I will be extremely foolish to go back to multiple pairs in the near future. Just a personal note.
  • #16
  • Apr 16, 2013 8:31am Apr 16, 2013 8:31am
Two over night winners when I woke up this morning:

Long AUDUSD @ 1.03115 (28p target) +1.89% (Risk ~1.68% (24p))
Long GBPUSD @ 1.52765 (28p target) +1.84% (Risk ~1.65% (23.5p))

My risk is between 1-2%, tends to average around 1.7% over each 20 trade series.
My target is 2% per trade.

Quoting loleno
Great. What I'm more interested in is how much was risked on each trade to get those returns?
  • #17
  • Apr 16, 2013 8:32am Apr 16, 2013 8:32am
Quoting TranceTrader
I monitor around 20 pairs and silver, I update my journal/orders in the evenings which normally takes me about an hour. I do previous/upcoming week analysis on Sundays which takes longer (normally 3-4 hours). I trade 4H/1H charts so I normally see around 15-20 set-ups every 2 weeks. This is manageable for me at the moment with a full time job.
I used to monitor a similar number of pairs too back when I was trading the higher timeframes. But on the 5 minute TF that is not manageable, for me at least.
  • #18
  • Apr 16, 2013 8:47am Apr 16, 2013 8:47am
Quoting TranceTrader
Two over night winners when I woke up this morning: Long AUDUSD @ 1.03115 (28p target) +1.89% (Risk ~1.68% (24p)) Long GBPUSD @ 1.52765 (28p target) +1.84% (Risk ~1.65% (23.5p)) My risk is between 1-2%, tends to average around 1.7% over each 20 trade series. My target is 2% per trade.
So around 1:1 risk reward for each trade? Seems good as long as your win rate is above 50% over a long series of trades. I don't understand people who are risking 2% per trade and exiting at 1% reward when their win rate doesn't make up for it.

Right now I am risking 2% per trade for 4% return. A 1:2 ratio. This is not a number I pulled out of thin air. Through 1000s of proper back/forward testing, this ratio appears to provide the best return. My win rate is about 60-70% with this ratio. If you think about it, 1:2 combined with 60-70% win rate is as close to the "holy grail" as it gets. However I would just need a 35% (roughly) win rate to be profitable so this does give me a lot of room to breathe. But ultimately the consistency of the results lies in the my execution of each trade (since it is a discretionary method) and this is where it is most vulnerable to variances.
  • #19
  • Apr 16, 2013 8:47am Apr 16, 2013 8:47am
Yes I can imagine that. I personally found it hard to manage one pair at the 5m timeframes.

I'm not cut out for scalping yet.
  • #20
  • Apr 16, 2013 8:56am Apr 16, 2013 8:56am
Yes 1:1 although in most cases my risk is always lower than target reward, the extra points make all the difference for me.

I agree 1:2 with 60-70% is fantastic, I'm not quite there... averaging 55-60% success rate at the moment but I still make mistakes (which is fine). With every series I learn something new about myself and make a note of it. The goal is to refine my execution to the point of no mistakes and then hopefully continue to be profitable. Compounding interest is my driver, slow and steady wins this game IMO.

Regards,

Jack

Quoting loleno
So around 1:1 risk reward for each trade? Seems good as long as your win rate is above 50% over a long series of trades. I don't understand people who are risking 2% per trade and exiting at 1% reward when their win rate doesn't make up for it. Right now I am risking 2% per trade for 4% return. A 1:2 ratio. This is not a number I pulled out of thin air. Through 1000s of proper back/forward testing, this ratio appears to provide the best return. My win rate is about 60-70% with this ratio. If you think about it, 1:2 combined with 60-70% win rate...
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