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How to Compound with High Leverage with Minimal Risk

  • #21
  • May 5, 2015 8:45pm May 5, 2015 8:45pm
Looking on monthly 1.0660 is half way back, be aware. Nice trade PD.
  • #22
  • May 5, 2015 8:45pm May 5, 2015 8:45pm
Quoting Profit Daily
{quote} It depends on the time frame, but in general I look for set ups on the larger tf's as stated in the first post. I then monitor the lower time frames for entry. This allows a tight stop loss with the potential for larger take profits which allows for multiple entries. for example, if I can get a 30 pip s/l with a 200 pip target where I can add every 50-60 pips, I'm risking 5-6% for a return of 80-100%.

Thank you! Currently I'm starting from 0.33% risk to scale into 1% max risk for a return of 4-5% on the trade. My max DD can go up to 10%. So in order to match your performance, I need to learn how to:

1) Accept the psychological burden from risking more. (challenging for me because I struggled with over-trading/trading addiction)
2) Learn to scale another tranche into my position to achieve higher RR without tilting overall DD proportionately against me. (this is hard... and hope you can share how you do it.)
3) Only do these on the best opportunities/ learn how to filter the best from the good. (interesting to explore)
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  • #23
  • May 5, 2015 8:53pm May 5, 2015 8:53pm
Quoting AlexC
Looking on monthly 1.0660 is half way back, be aware. Nice trade PD.
Retail sales a bit lower than forecast, China news also worse than forecast, but trade still looks good. However, I am moving stops to 1.0610, so worst case, will make about 30%.
  • #24
  • May 5, 2015 9:02pm May 5, 2015 9:02pm
With AUDNZD guaranteed minimum 30% with potential 84%, I am entering GBPJPY long @ 182.08. With GBPJPY, I do scale in smaller as I use a wider stop. 10:1 leverage with a 50 pip stop on this one.
  • #25
  • May 5, 2015 9:23pm May 5, 2015 9:23pm
Well, scaling in is tricky since you move your combined entry close to current price level, thus increasing risk of getting busted in turnaround. It might work much better if you add to winning position on pullback. I am visual person and adding charts to your posts would make it more clear.
Scaling in losing position, however, allows to bring entry close to turnaround point and correct entry mistakes. It worked for me some time ago. Sure is can cost a lot. Anyway it worked in ranging market. Usually 3 to 5 entries are enough. If it does not work after that, abandon your trade.
  • #26
  • May 5, 2015 11:17pm May 5, 2015 11:17pm
See http://www.forexfactory.com/showthread.php?p=8246362 for my interpretation & test of this trading philosophy.
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  • #27
  • May 6, 2015 7:14am May 6, 2015 7:14am
Quoting Profit Daily
{quote} adding a third position to audnzd, now 3 full positions 60:1 leverage, stop at be (1.0562). Target is 1.07, which will be 84% and trade is risk free.
Taking profit 25 pips shy of target in AUDNZD. Closed all positions for 72% gain.
  • #28
  • May 6, 2015 7:57am May 6, 2015 7:57am
Hi Profit Daily,
Nice thread.
It must be late at night here - I seem to be "missing something"
What does 72% gain refer to? - your trading capital?
  • #29
  • May 6, 2015 7:58am May 6, 2015 7:58am
i suppose scaling in makes sense, however, your margins required to maintain your position will be tricky, if you have too many positions and once price moves against you wouldnt you face a margin call (risky in the short term cause you dont know how sentiment plays out)?

Since you have multiple accounts why dont you just combine them while maintaining your position size.
  • #30
  • May 6, 2015 8:13am May 6, 2015 8:13am
Quoting lizpet
Hi Profit Daily, Nice thread. It must be late at night here - I seem to be "missing something" What does 72% gain refer to? - your trading capital?
Yes, that trade resulted in a 72% gain on my equity.
  • #31
  • May 6, 2015 8:16am May 6, 2015 8:16am
Quoting limzy
i suppose scaling in makes sense, however, your margins required to maintain your position will be tricky, if you have too many positions and once price moves against you wouldnt you face a margin call (risky in the short term cause you dont know how sentiment plays out)? Since you have multiple accounts why dont you just combine them while maintaining your position size.
As I explained in first post, I use a high leverage broker. This cannot be done with a USA based broker. For example, if I want to trade a standard lot of USDJPY, I need about $200, with a US broker, you will need about $3,030. As trade goes in profit, you are adding with the additional free margin from profit while moving stops to break even. No danger of margin call whatsoever.
  • #32
  • May 6, 2015 8:24am May 6, 2015 8:24am
Just entered EURUSD long @ 1.1279, targeting 1.1460 will update as I add to the position.
  • #33
  • May 6, 2015 8:57am May 6, 2015 8:57am
Quoting Profit Daily
Just entered EURUSD long @ 1.1279, targeting 1.1460 will update as I add to the position.
Adding 2nd position @ 1.1330, stops @ 1.1305 on both (be).
  • #34
  • May 6, 2015 9:33am May 6, 2015 9:33am
Quoting Profit Daily
{quote} As I explained in first post, I use a high leverage broker. This cannot be done with a USA based broker. For example, if I want to trade a standard lot of USDJPY, I need about $200, with a US broker, you will need about $3,030. As trade goes in profit, you are adding with the additional free margin from profit while moving stops to break even. No danger of margin call whatsoever.
well it depends on your risk. if you use high leverage and your position is too big each pip movement against you consumes usable margin right?
  • #35
  • May 6, 2015 9:37am May 6, 2015 9:37am
good luck with that though...seems eurusd is panning well
  • #36
  • May 6, 2015 9:37am May 6, 2015 9:37am
Quoting limzy
{quote} well it depends on your risk. if you use high leverage and your position is too big each pip movement against you consumes usable margin right?
Initial risk is never more than 6%. 20:1 with a 30 pip stop is typical, some pairs I use wider stop, therefore less leverage. Once the adding of positions begins, the trade is risk free as stops are always moved to break even. Since I never have more than 2-3 trades max at any one time, there is no danger of margin call.
  • #37
  • May 6, 2015 9:59am May 6, 2015 9:59am
Quoting Profit Daily
{quote} Adding 2nd position @ 1.1330, stops @ 1.1305 on both (be).
seems very exciting. I have a link here to an excell double-in-day spread sheet which calculates the exact add-up lots - http://www.doubleinadayforex.com/ Let me know how this sounds in your approach. OK?
  • #38
  • May 6, 2015 10:26am May 6, 2015 10:26am
Quoting Profit Daily
{quote} Adding 2nd position @ 1.1330, stops @ 1.1305 on both (be).
Closing both for total gain of 13.2%. Will look to re-enter tonight or tomorrow, but anticipating a pullback now.
  • #39
  • May 6, 2015 10:54am May 6, 2015 10:54am
Quoting Profit Daily
{quote} Closing both for total gain of 13.2%. Will look to re-enter tonight or tomorrow, but anticipating a pullback now.
I'm waiting for the pullback on the EurUsd for another long. Nice H4 DS complete. Did you get stopped out on your previous E/U trade or did you voluntarily close it? Added positions on the A/J long last night. Worked out well. I got out at a significant support level for 50 pips. What are your increments. How many pips do you go before adding or do you add on the pullbacks?
  • #40
  • May 6, 2015 12:34pm May 6, 2015 12:34pm
Believe it or not this is actually close to the strategy I have coded up. I use 1000:1 leverage with good results. My drawdowns are massive, but results are awesome. That said, I have torched a 500 and a 800 account in the process. All you can do is restart and not interfere with the EA. The larger deposit/account much less chance of going bust, although in the backtests nothing is impossible. I had run up 1k account to 40k in the backtest only to have it explode in 4 days. That being said, if I got it to 10k or even 20k I would cashed out 18K and let it restart from 2K, its a fun game where you have to manage your greed more than risk even.
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