Why 2-8% a Month Should Be Enough For All Traders | Forex Factory

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Why 2-8% a Month Should Be Enough For All Traders

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  • #1
  • First Post: Edited 11:11am Apr 1, 2015 9:48am | Edited 11:11am
Hello there!

My name is cubbybgood and I completely had the wrong idea about how to trade forex. It took me 8 years to finally realize this. Please don't let this happen to you! When I started back 10 years ago I was literally looking for any system that could give me 100-500% per month. That being said, I was completely gambling with all of my trading accounts for the first 5 years of trading. I'm not afraid to admit was naive and lost $30k in my first 5 years of trading forex. It was devastating and I just about lost my marriage over it.

Even after the big losses, I didn't want to give up. I hated spending so much time at something just to throw it away. I educated myself over the next many years and traded hundreds of demo accounts using multiple systems. Some of you may know me. I've posted over 10 systems here on FF over the past 5 years. While I was educating myself, I kept the idea in the back of my head that maybe I could still make the $30k I lost back somehow with a magical Holy Grail System. I just had to find it. Well, after 5 years of searching and creating I never found it. In my 8th year of trading I realized I needed to let go of that $30k I lost. I knew it was setting me back. Greed was a powerful weapon against me and it was literally blowing up all my demo accounts. Sometimes it took only a few days and sometimes a few months. I must have tried hundreds of systems here on FF to get to my goals. I also bought and created hundreds of systems as well. None of them worked with me trying to make 50-100% per month. In that 8th year I decided to try for only 10% per month using my own system. Well, I lasted 5 months. Not bad, but still when I had losses I was losing over 20% of my account at one time. I know it was just not feasible trading.

I went back to the drawing board. As some of you may know I released a system I build back a year or two ago here on FF. That system used a specific methodology that allowed the trader to profit in any market, up, down sideways or ranging. I built the system because waiting for specific trading conditions was tiresome. After posting the system I got tuns of feedback. I realized it was very valuable and had profit potential. I asked FF to remove the thread so I could finish developing the system in peace.

Since that time, I quietly took all the best elements of forex trading and created another 30 systems using similar trading methodologies. Many of them I was sure were profitable. They fallowed the trend, had multiple confirmation indicators, used S/R and even took the news into consideration. After a long while of trial and error I only came out with two winning solutions out of the 30. I knew these two systems would be profitable long term so I had them coded into EA's. After a year of testing and 18 different versions I finally finished. The end product is what I've been wanting for years!

My 2 EA's trade the EURGBP exclusively. We'll talk more about this and why.
Although it's only 2-8% per month they can be backtested since the EURGBP was available to trade online in 1994. The first EA shows 1-5% per month from 1994-2015 current date and the second shows 1-3% per month from 1994-2015 current date. Each EA shows it's been profitable for over 21 years. The balance never goes negative. We will talk more bout this and why later.

I've posted my live trading stats here on FF and myfxbook.com so you can see live trades. I will also post pictures of past trades and future trades to come. Note, I'm only using my 1-3% per month EA on this live account. I want to be a contender for myfxbook's autotrade service. Myfxbook does not allow any martingale or simi-martingale systems for the service. My 1-5% EA is simi-martingal so it will not be allowed for the service. This is unfortunate because my 1-5% EA is completely safe.

Keep in mind...The backtests I'll show will be done in mt4 using "open prices only" and "control points". Doing a full test using "every tick" takes weeks. I did one from 1994-2009 and it took 2 weeks! My computer did not like being on for that long. lol. I compared the stats to my "open prices" and "control points" tests and they were almost the identical. The reason for this is because my EA exclusively controls bar open.

What we will talk about here on my thread is the methodology of this type of trading and performance it shows. I'm ready to share with the community this type of trading and why it can make many of the systems you're currently using profitable. Some of you may have already seen these trading aspects in trade but lets talk more about how to implement them safely. Keeping profit expectations realistic is one of the big topics I want to cover in this thread. What's realistic? Lets' talk!

http://widgets.myfxbook.com/widgets/1192406/large.jpg
Attached File(s)
File Type: rar 1994-2015 Test.rar   109 KB | 485 downloads
  • #2
  • Apr 1, 2015 10:00am Apr 1, 2015 10:00am
Each trade takes 15 pips overall profit.

You see the 6 trade sell cycle? Well overall I came out with 90 pips profit. 15 pips x 6 = 90 pips. All 6 trades closed at the same time.

Even though first 2 sells were a loss the 4 after were all profit. The profit from the last 4 trades of the cycle made up for the loss of the first 2.
Attached Image (click to enlarge)
Click to Enlarge Name: FX Choice - MetaTrader 4.png Size: 131 KB
  • #3
  • Apr 1, 2015 10:43am Apr 1, 2015 10:43am
Quoting Cubbybgood
Each trade takes 15 pips overall profit. You see the 6 trade sell cycle? Well overall I came out with 90 pips profit. 15 pips x 6 = 90 pips. All 6 trades closed at the same time. Even though first 2 sells were a loss the 4 after were all profit. The profit from the last 4 trades of the cycle made up for the loss of the first 2. {image}
hi,
You should hide your account number on the last picture you uploaded, after all it s a live account.
just my 2 cents.
wish you green pips
  • #4
  • Apr 1, 2015 10:48am Apr 1, 2015 10:48am
Quoting toinou21
{quote} hi, You should hide your account number on the last picture you uploaded, after all it s a live account. just my 2 cents. wish you green pips
Thanks for the advice. I was always worried about this in the past but I'm not any more. It would be very difficult to hack into a forex account. Nothing to hide here. It's no different then having an email account name. No one will figure out my password. Haha.
  • #5
  • Apr 1, 2015 1:38pm Apr 1, 2015 1:38pm
Quoting Cubbybgood
Each trade takes 15 pips overall profit. You see the 6 trade sell cycle? Well overall I came out with 90 pips profit. 15 pips x 6 = 90 pips. All 6 trades closed at the same time. Even though first 2 sells were a loss the 4 after were all profit. The profit from the last 4 trades of the cycle made up for the loss of the first 2. {image}
Why don't you try trading the backside of the move instead of front side. This style of trading adding, adding, adding against a run is doomed to fail. If you are going to add, add to the backside on pullback on inside traces. In answer to your question 3-5% anything less then you should just be investing, not trading.

Happy trading Cubbybgood
  • #6
  • Apr 1, 2015 3:23pm Apr 1, 2015 3:23pm
Thanks for the response.


I agree but unfortunately I've already tried what you said. It's incredibly hard to hit the backside of the move as we don't really know if we're in the front or the back. The indicators my EA use actually do a very good job at hitting the back most of the time. Can't win them all. When it happens to be the front the EA trades this way to pull out of a bad move. Luckily when it hits higher risk from a trade cycle it also comes out with higher profit. So risk management is good an manageable. If you check out my attached statements int he first post you would see this type of trading in tandem with my indicators has worked since 1994.
  • #7
  • Apr 1, 2015 4:39pm Apr 1, 2015 4:39pm
Hi Cubby,

My story is the same as yours almost word by word and the funny thing it that I have also just finished a new ea which is trading live but with more aggressive goals as another philosophy is at play there.

Just wanted to congratulate you for not giving up and wish you the best in your quest to prosperity.

I will follow you.
Simplicity is the Ultimate Sophistication.
  • #8
  • Apr 1, 2015 5:29pm Apr 1, 2015 5:29pm
Quoting broketrader
Hi Cubby, My story is the same as yours almost word by word and the funny thing it that I have also just finished a new ea which is trading live but with more aggressive goals as another philosophy is at play there. Just wanted to congratulate you for not giving up and wish you the best in your quest to prosperity. I will follow you.

Thanks for your comment. Takes a lot of work and bad times before we get to the good. I'm shooting for 8-10% profit per month before I feel like I've truly made it. Right now I'm super close as my 2 EA's combined can give me up to 8% per month but that's on the high end. I'm looking at adding one more EA to my arsenal. Since both my current EA's are range traders I would like to create a good trend EA. I've already created so many but none of them worked long term. This is not surprising to me as the market is only trending about 30% of the time I here. Just looking for the right indicators to find the perfect match. Just need another 2-3% per month.

Glad to here of your success. I hope your EA treats you well. Best of luck. It's nice to here someone found their way.
  • #9
  • Apr 1, 2015 6:02pm Apr 1, 2015 6:02pm
Quoting Cubbybgood
Thanks for the response. I agree but unfortunately I've already tried what you said. It's incredibly hard to hit the backside of the move as we don't really know if we're in the front or the back. The indicators my EA use actually do a very good job at hitting the back most of the time. Can't win them all. When it happens to be the front the EA trades this way to pull out of a bad move. Luckily when it hits higher risk from a trade cycle it also comes out with higher profit. So risk management is good an manageable. If you check out my attached...
Hi Cubbybgood, sorry should have read through your first entry all the way. Didn't realize you were trading the EA. Personally I don't trade EA,s. How do you run your stop ATR, Lower low, retrace of an expansion? I see your EA is adding on top of the wide spread. Have you thought of allocating a rule to not add on a wide ranging bar or look to add on the re-trace of a large range expansion?, Anyway, sounds like you have done a fair amount of studies to get to where you are and your ideas. EAs are not my thing but good luck with it all.

Cheers mate and all the best.
  • #10
  • Apr 1, 2015 9:40pm Apr 1, 2015 9:40pm
I can see you are trying really hard to win this market, but I want to tell you a reality and that's this market cannot be cracked no one did and no one will.

this is really random market and it can't be captured with a rigid system, even big players lose money big time but they survive because they have unlimited supply of money, so if you doing this with money you can't afford to lose, I suggest withdraw and get a real job.

rest is up to you, I will watch this place closely.

Also I would like to add that this is just not my opinion but this is my experience and also confirmed by my friend who is not just into trading but he is the one who provides high-end technology to brokers, he runs a company and they provide different plugins to brokers, he clearly told me there is no way for a retailer to survive for a very long time, yeah you can go slow but again at the end of the month you need money to pay bills.

only people with HUGE capital and unlimited money supply can trade small and still make enough to survive, anything below 200,000 is not considered big enough for this market to survive solely on trading.
Never chase the market
  • #11
  • Apr 2, 2015 2:44am Apr 2, 2015 2:44am
I don't think your approach is good, here is why:

As the above post say, the market is unpredictable, sure you can curvefit some "strategy" in a backtest to show positive returns, even on a 10year timescale, but it's still curvefitting.
Chances are that the market will do something tomorrow (and next week, and next month, etc.) that has never done in the 10 years before (the period that was optimized), and guess what, losses.

Now, as losses (extraordinary losses) are eventually coming, the only thing that can keep the account up is making as much profit as possible, i mean, really.

Now, if we limit the profit to 1% - 5% a month, there is no way this is going anywhere.

We never know what is going to happen tomorrow, i think the key is make as much profit as possible when market is good (even 100% in one set of trades, why not), and try to survive (avoid catastrophic losses) when market isn't nice.

But good luck though!
I will keep an eye on this thread
  • #12
  • Apr 2, 2015 3:10am Apr 2, 2015 3:10am
Quoting spaceduck
I don't think your approach is good, here is why: As the above post say, the market is unpredictable, sure you can curvefit some "strategy" in a backtest to show positive returns, even on a 10year timescale, but it's still curvefitting. Chances are that the market will do something tomorrow (and next week, and next month, etc.) that has never done in the 10 years before (the period that was optimized), and guess what, losses. Now, as losses (extraordinary losses) are eventually coming, the only thing that can keep the account up is making as much...
I have to say that I agree with you spaceduck, That's why I have adopted a more aggressive approach and also integrated the fact that I will not avoid the black swan. It will come but the goal is to gain several hundred of percentage ASAP and to withdraw the initial investment plus some profit if possible and start again. Quickly said but never done ;-)

That said, Cubby has had already a long journey and like for all of us, he needs to go through all sort of experiments to make up his mind until he finds his holy grail, I mean, his best way to take out some profits from this game and in that, he needs to be encouraged like we need to be humble to admit that he could be right while we could be wrong...
Simplicity is the Ultimate Sophistication.
  • #13
  • Apr 2, 2015 3:35am Apr 2, 2015 3:35am
Quoting broketrader
{quote} I have to say that I agree with you spaceduck, That's why I have adopted a more aggressive approach and also integrated the fact that I will not avoid the black swan. It will come but the goal is to gain several hundred of percentage ASAP and to withdraw the initial investment plus some profit if possible and start again. Quickly said but never done ;-) That said, Cubby has had already a long journey and like for all of us, he needs to go through all sort of experiments to make up his mind until he finds his holy grail, I mean, his best...
Yes absolutely, also it's clear that my opinion and your and everybody's opinion is just an opinion, so what may be good for us may not be good for somebody else, etc.

I see Cubbybgood have an overall 10years experience with forex, so he probably have already tried many things and have made up his idea about what work and what don't work, i mean for me the steady profit generating is just not working, i'm sure for many other people that approach is the working one.

That's why i'll keep an eye on this thread, it's interesting for sure!
  • #14
  • Apr 2, 2015 3:59am Apr 2, 2015 3:59am
Quoting XXiXX
I can see you are trying really hard to win this market, but I want to tell you a reality and that's this market cannot be cracked no one did and no one will. this is really random market and it can't be captured with a rigid system, even big players lose money big time but they survive because they have unlimited supply of money, so if you doing this with money you can't afford to lose, I suggest withdraw and get a real job. rest is up to you, I will watch this place closely. Also I would like to add that this is just not my opinion but this is...
Well of course, if you keep listening to the 90% who fails, there is no way you're going to succeed in this business. If you can't do it, don't tell others that they can't.
Life only tastes good when you eat what you kill.
  • #15
  • Apr 2, 2015 4:07am Apr 2, 2015 4:07am
Quoting spaceduck
{quote} Yes absolutely, also it's clear that my opinion and your and everybody's opinion is just an opinion, so what may be good for us may not be good for somebody else, etc. I see Cubbybgood have an overall 10years experience with forex, so he probably have already tried many things and have made up his idea about what work and what don't work, i mean for me the steady profit generating is just not working, i'm sure for many other people that approach is the working one. That's why i'll keep an eye on this thread, it's interesting for sure!


Quoting cherader
{quote} Well of course, if you keep listening to the 90% who fails, there is no way you're going to succeed in this business. If you can't do it, don't tell others that they can't.
Simplicity is the Ultimate Sophistication.
  • #16
  • Edited 6:49am Apr 2, 2015 6:32am | Edited 6:49am
So all interesting comments. Yes, some of you are right. This was all predetermined. This is not something I decided to do yesterday. It's been being planed for years now.

I completely understand the concerns with this type of trading though.

In my opinion making as much profit as possible in a short amount of time is extremely risky and is why us traders keep losing our shorts. I wanted to create a system that could withstand the absolute worst of news and times. My EA's worst DD period was right after the stock market crash in 2009 but it also pulled out with the most profit that year. It made it through the 911 disaster, the middle east wars and the recent Euro fall just to name a few. So as far as I know the EA is capable of withstanding the worst of times on the eurgbp. At least the worst of times in the past 21 years. This isn't to say the eurgbp trade patterns and price movement couldn't completely change making my EA almost obsolete at some point but you can expect me to continue to make modifications over the years to continue to lower DD and increase profit. I've pulled 21 years of data for my EA to work with. 21 years is a lot of price movement that the EA has worked with. Out of those 30 EA's I mentioned above all of them were capable of making profit weather it be for a few months or 5 years. I didn't want something that would make me 100% or more in a few weeks or months although I did have it. Seeking high profit almost always comes with high risk. I even decided not to use an EA that showed 60-80% profit per year because it only worked since 2010.

Think about it...If making as much profit as possible quickly was something realistic don't you think more people would be successful at it? Look at he best and largest hedge funds in the world. The most they yield per year is 7 to maybe 10%.

Take a look at myfxbook's autotrade section found here http://www.myfxbook.com/autotrade. Their ranking algorithm is based on... "Which system has the highest return with the lowest risk, while having the most consistent growth curve?". This info can be found here. http://blog.myfxbook.com/2013/11/11/...nking-formula/

As you can see the number 1 trading system/EA only has an average of 5.71% profit per month. All the above info is what I designed my EA after because in my mind their ranking system is what tells me what a good forex system/EA is.

My EA is a perfect candidate for their service because I know it's worked for a very long time and should continue to do so. I just have to wait to get excepted into the autotrade service. Who knows if I ever will. If I do though I should have one of the best equity curves because my EA's balance never goes in the negative. My DD most of the time should be in the 1-15% range which is quite good.

So what really determines a good system or EA? Is it the trader or the system or a combination of both? Why do so many traders consider the most profitable systems to be the best? Where does the idea of making the most profit we can quickly come from and why? Maybe we can talk about these questions.
  • #17
  • Apr 2, 2015 7:12am Apr 2, 2015 7:12am
First pic is Aprils trades so far...

My EA uses the 4 hour time frame. This is why the 4 hour chart is posted.

Second pic are March trades.

See the first buy cycle of 3 trades? Well the EA didn't quite get the bottom of the move this time but it did catch the top of the second cycle with the 3 sells.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: FX Choice - MetaTrader 4.png Size: 138 KB
Click to Enlarge Name: FX Choice - MetaTrader 4 (1).png Size: 139 KB
  • #18
  • Apr 2, 2015 7:33am Apr 2, 2015 7:33am
Off course profit goes with risk but just saying that high profit system is extremely risky is an incomplete statement. You must consider also the winning ratio of your system because the higher you have, the more you can risk otherwise you are using your system inefficiently.

It also depends on the goals and the starting capital you have.

You talk about hedge funds which have maybe hundreds of millions to manage. So earnings of 10% per year on lets say 200 Million returns 20 million per year or 1.6 M$ per month. Not bad but have you the necessary capital to earn those 10% per year and be happy or do you really need to compound quickly a smaller capital ?

So what determines a good system or EA ?

For me its the one that will bring you the quicker to your goals, that said, the more surrealistic your goals are, the more difficult to reach they will be, but lets not be pessimist and say that its just surrealistic, lets say its (very) difficult. And finally the guy that wants to become millionaire in one year deserves as much as respect as the one that just wants its 50$ per month for some beers and cigarettes

Stay open minded and dont give up, one day, one of us will have his eyes opened and realize in months if not weeks what all the others are trying so hard since years...
Simplicity is the Ultimate Sophistication.
  • #19
  • Edited 8:09am Apr 2, 2015 7:54am | Edited 8:09am
Quoting broketrader
Off course profit goes with risk but just saying that high profit system is extremely risky is an incomplete statement. You must consider also the winning ratio of your system because the higher you have, the more you can risk otherwise you are using your system inefficiently. It also depends on the goals and the starting capital you have. You talk about hedge funds which have maybe hundreds of millions to manage. So earnings of 10% per year on lets say 200 Million returns 20 million per year or 1.6 M$ per month. Not bad but have you the necessary...

Well said.
I have about an 80% win rate with each EA but want to keep the DD at 50% or lower at all times. I know during the worst of times like back in 2009 my EA hit about 65% DD but the rest of the 21 years it was 50% or lower. Using this type of trading methodology I don't think I can push the system any more. If another 2009 happens I want to be ready for it. I'm always trying to prepare for the worst.

Yeah, hedge funds have large funds to work with and small profits can mean big money. That being said, 5% per month over 10 years with a small account is actually really big money as you can see from the attached pic. The interest is compounded quarterly so this is a conservative estimate. I'm in for the long haul.

Broketrader, Thanks for your input on the thread
Attached Image
  • #20
  • Apr 2, 2015 8:14am Apr 2, 2015 8:14am
Quoting cherader
{quote} Well of course, if you keep listening to the 90% who fails, there is no way you're going to succeed in this business. If you can't do it, don't tell others that they can't.
you have no idea about my experience and work hours I have given to this market and this is not just opinion which I am giving its proven fact from the day market has started.

looks like you are a newbie and want to believe there is a way to trade but you will soon find out.
Never chase the market
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