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ADP predicts NFP?

  • #21
  • Aug 30, 2006 4:13pm Aug 30, 2006 4:13pm
I am not sure, but I believe step one is 'to admit u have a problem'. 400:1, while a great idea from the point of not needing to keep all your money with a broker, is a good idea.

From the point of actually using it to trade your acct... well look at step 1

Quoting FXopportunist
Hello Squat1962,

If you have discipline problems, do what you have to do. But a Trader with discipling problems is a scary thought to me. It is like a alcoholic keeping just 1 six pack in the fridge.............. LOL
In trading, there is no bullshit. You either make money or you don't.
  • #22
  • Aug 30, 2006 5:07pm Aug 30, 2006 5:07pm
Quoting squat1962
I am curious, do the 400:1 leverage users in this forum ever find themselves replenishing their account? At 10:1, you have to screw up a LOT of times to lose all your money. At 400:1, you can lose 40x faster. Unless your are really disciplined..... like you guys.

I have a 200:1 account with FXCM. Indeed I managed to screw myself bad when I tried to "over-bet" my account when I started. I lost 75% of my equity from placing too much lots and on bad choice of news to trade.

However, I made it all back and with profit when I did the same 200:1 leverage when I traded better news with the same lots. When I started winning, I surely so badly wanted more leverage. IF I have a 400:1 margin with FXCM, i could easily double my money every 2 trades.

Leverage is indeed a dual edge sword - it is a suicide and a saver at the same time. Perhaps, what people forget is NOT to over-bet. This is totally different from the context "400:1 vs 50:1".

Quote
I have self control problems I guess. But, it helps me create positions I can hold long term and not panic when i have a 20 pip move against me. I guess it's an inability for me to control my emotions at higher leverage levels.

Having a 400:1 account and bet only 1 LOT will give me more comfort room when it makes a 20 pip move against me.

Given: $4000 account, 1 LOT long on GBPUSD (1.9000 GBPUSD)
On a 50:1 leverage account, I will need $3800 to maintain it. It will stop out in just 20 pips move.

On a 400:1 leverage account, I will need $475 to maintain it. And clearly, it can withstand 20 pips moves against me without it stopping out.


Of course one can argue that with the 400:1 leverage, one run the risk of loosing 100 pips if one didnt close it. But this is a "personal" problem with one's poor discipline. A good discipline trader would/should close the looser.

I now have a 400:1 GFT account. But even with a 400:1 leverage account, I would still bet as much as I did when I was with FXCM's 200:1. The leverage will not embolden me to bet x4, or x2 more lots than I did with my FXCM account. The lots I will bet will solely depend on my strategy of risking only 10% equity (what I call Risk Amount) per trade - either it be 1 lot or 10 lots as long as:
10% Equity >= $10 per pip x 10 SL x Lots

(I used to start out 5% but moved to 10% when I traded better news)
  • #23
  • Edited 5:34pm Aug 30, 2006 5:22pm | Edited 5:34pm
Quoting FXopportunist
Hello Squat1962,

If you have discipline problems, do what you have to do. But a Trader with discipling problems is a scary thought to me. It is like a alcoholic keeping just 1 six pack in the fridge.............. LOL
Alot of traders have discipline problems. I heard that 90% of all traders do not consistently earn money. Demo accounts do NOT count either. So, if most traders (at least half) are losers..... something makes them lose. I am certain that few in this forum are consistently earning money each and every month. Losers (currently, I am one of them) can quit or identify what does not work. Or keep doing the same thing.

So, FXopportunist? Do you consistently earn money month after month? Or are you like me and cannot quit your day job yet? I really hope some one or several on this forum are consistent winners and I would like to hear their input on the subject. If you are a consistent winner with 400:1, it seems like sooner or later your account would reach tremendous portions and you would just trade cash(eliminating the need to borrow).

I don't want to be a smart ass or drag you into a petty argument. I just want to know what leverage CONSISTENT winning traders use.

Anybody? I truly want to know from real traders. I am NOT consistent so my opinion on leverage is worthless. Any consistently profitable(every month) traders comfortable sharing their opinion?
  • #24
  • Aug 30, 2006 5:41pm Aug 30, 2006 5:41pm
Quote
I just want to know what leverage CONSISTENT winning traders use.

Firstly, from where/who did you hear to get 50:1 or even 10:1?

I was consistently loosing money when I started with FXCM's 200:1. Reason for loosing was because of bad luck. T/A is not as "technical" as one would think - its very much a good luck coin toss deciding to go long or short. No T/A can dictate to go USD Bull when the NFP is only 100K last Aug4.

When I wised up trading better news, I begun to win - consistently win. How does 100% equity down to 25% equity (in 2 weeks doing TA and poor choice of news) then to 125% equity 6 weeks later (inspite of missing several $2K wins in between because FXCM did not allow me to trade).

squat,
When you trade news, Leverage is Your Friend. The more the leverage, the better. When trading news, you should always risk no more than 10 pips (unless your broker widens their spreads more than 10 pips). Just think, I can win 20-50 pips or loose only 10 pips per news and the probability of winning is about 75%. Therefore, in 8 trades, I win 60 pips (minimum) and loose 20 for a balance of 40 pips win. If I bet 5 lots, thats $2000 for 8 trades.

40 Pips win may not be better than other T/A doing 200 pips per month. But I bet I am doing at least x5 more lots than they do. And I havent counted bets with my 2nd broker account.

PS. I may not be as successfull as other veteran news traders out there; but at least I am proud that I managed to climb back up from a hell hole.
  • #25
  • Aug 30, 2006 5:55pm Aug 30, 2006 5:55pm
What is better news please? Do you mean news from a different source or a different technique trading the same news? Just so I can understand.
  • #26
  • Edited 6:11pm Aug 30, 2006 6:09pm | Edited 6:11pm
Thanks for the reply BK.

I got my information on leverage from a class I took in part and in part from my own experience. The class was on interpretation of economic reports and determining triggers for big fish (such as national banks) to shift money positions and create medium length (hours to days) movements.

I got 10:1 from personal experience. I also am reading a book by Douglas called Trading in the Zone. I just finished what he calls the boom and bust phase.... made several thousands trading, then lost all the profits and am back in the red again. the 10:1 has helped me move closer to a net positive again, but I am not there yet. So i do have discipline problems and i have trouble accepting a losing trade. the 10:1 helps me cut my losers and not cling to them.

Anyone else have input?? I use Trade the News Service, its what I can afford. The others are too expensive for me.
  • #27
  • Aug 30, 2006 6:48pm Aug 30, 2006 6:48pm
Quoting squat1962
Alot of traders have discipline problems. I heard that 90% of all traders do not consistently earn money. Demo accounts do NOT count either. So, if most traders (at least half) are losers..... something makes them lose. I am certain that few in this forum are consistently earning money each and every month. Losers (currently, I am one of them) can quit or identify what does not work. Or keep doing the same thing.

So, FXopportunist? Do you consistently earn money month after month? Or are you like me and cannot quit your day job yet? I really hope some one or several on this forum are consistent winners and I would like to hear their input on the subject. If you are a consistent winner with 400:1, it seems like sooner or later your account would reach tremendous portions and you would just trade cash(eliminating the need to borrow).

I don't want to be a smart ass or drag you into a petty argument. I just want to know what leverage CONSISTENT winning traders use.

Anybody? I truly want to know from real traders. I am NOT consistent so my opinion on leverage is worthless. Any consistently profitable(every month) traders comfortable sharing their opinion?
Hello squat1962,

I didn't mean to pick on you. I was really more into the humor aspect of the post. But, on a serious note, it is imperative that discipline is paramount.
If you have gone the step of being a Demo master BEFORE you opened your real account then just trade $1 per pip until you can duplicate your demo result with real $. Then start considering upsizing.
As for me, yes I am a professional trader. All day everyday and sometimes at night too. I not only make money every month but every week, and mostly everyday.
All of my accounts are 100:1. I am not opposed to more leverage, I just don't need it. As far as eventually using no leverage, why? Leverage is awsome. I would hate to have to tie up all that cash when I can use someone elses!!!!! If it was not for leverage I would not be in the happy place I have created for myself. Hey that's it Leverage = Happiness !
Profit is where readiness meets Opportunity
  • #28
  • Aug 30, 2006 7:01pm Aug 30, 2006 7:01pm
Quoting squat1962
I really hope some one or several on this forum are consistent winners and I would like to hear their input on the subject. If you are a consistent winner with 400:1, it seems like sooner or later your account would reach tremendous portions and you would just trade cash(eliminating the need to borrow).
{Bemac stands up with his head bowed low. Fidgeting with his hat in his hands, he slowly starts to speak}

Hi, My name is Bemac and I was a Commodity Futures Trader.

Before that I traded stocks but found that my account grew very slowly. I determined that I could make it grow faster if I could only Buy More Stocks. This, of course, was a catch 22 as I could only buy more stocks as my account grew.

That's when I started in on the "hard stuff". I found it got me to where I wanted to be without taking anywhere the same amount of time. I discovered Commodities.

This was incredible. For only the measly sum of $1,000.00, I could hold $100,000.00 worth of currency. I fell into the Leverage Pit and revelled in it. But it still was not enough for me. I wanted More and I wanted it faster.
By now the Internet had exploded and I could instantly see what was happening all over the planet via my 56K modem. I wished that I could use this Star Trek type technology to yet again increase the flow.

Electronic Trading was like happy hour to me. I could cram in so much more in the same amount of time because I didn't have to stand in line waiting for my turn to be served. OMG, Nirvahna. It can't possibly get any better than this.

But wait. What's this? New Borkers all in competition for my custom. Pretty soon the 100:1 Leverage I had become accustomed to was old. Passe and certainly not for me. I wanted the Maximum for the Minimum 400:1, Now That's What I'm Talking About!

I wonder how long I will have to wait until I can ramp it up another notch whether it be through Borker Incentives, Leverage Or Improved Technology? Whichever it is, Bring it and Sign me up. Cause I'm in.

A word of advice for the uninitiated. If you are just starting down this rocky road that it has been my fate to follow, please do not start where I am at. It will simply knock you flat on your arse and you will wake up in alley somewhere wondering WTF was that.

:
  • #29
  • Aug 30, 2006 7:29pm Aug 30, 2006 7:29pm
Thanks for the input, guys. I'm unsure how to interpret Bemac's post though. I actually had a reply from Bemac on another thread in which you asked if my hatred of losing could be a problem for me. Thank you for that post btw..... it is a huge problem for me. My career requires about a 99% success rate and trading is soooo different (I'm a dentist and people won't put up with failures from their dentist. You have to use extremely predictable materials and techniques.)

Anyway, your post Bemac has spurred me to address this issue and the 10:1 helped me cut losers. I am improving and thx for your input.

So you think high leverage is a good thing? Something only "pros" should use? Your post kind of sounds like it's addictive and that does not sound good for the bottom line.

Anyone else??
  • #30
  • Aug 30, 2006 7:47pm Aug 30, 2006 7:47pm
Quoting BurgerKing
I was consistently loosing money when I started with FXCM's 200:1. Reason for loosing was because of bad luck.
You were loosing because your head wasn't on right. There's not any luck involved, unless of course, you can't take accountability for your trading decisions...

Quoting BurgerKing
T/A is not as "technical" as one would think - its very much a good luck coin toss deciding to go long or short. No T/A can dictate to go USD Bull when the NFP is only 100K last Aug4.
You have a ways to go if you think that way.

You don't NEED to dictate which way to go, because who cares about the news if you're a technical trader? I trade both -- news and tech..and when my swing trades are in action, and the price goes crazy, well who cares.. I still get out according to my rules.

T/A is NOT good luck. People who say that are people who don't want to do the hard work in being technical traders.

Quoting BurgerKing
When I wised up trading better news, I begun to win - consistently win. How does 100% equity down to 25% equity (in 2 weeks doing TA and poor choice of news) then to 125% equity 6 weeks later (inspite of missing several $2K wins in between because FXCM did not allow me to trade).
Uhmm, it wasn't T/A that made you lose 75% of your account. I can guarantee that.

Quoting BurgerKing
When you trade news, Leverage is Your Friend.
That's crazy talk.
Mr. Trend
  • #31
  • Aug 30, 2006 8:15pm Aug 30, 2006 8:15pm
Do you assign any importance to leverage, Mr.Trend? If you hold trades during news do you tighten your stops or ride out 100 pips against your position? I know of people that hold positions real long term, like months. But I am pretty sure they do not use borrowed money, they are just heavyweights.

How long is an average trend trade for you and does using borrowed money (paying interest) affect you? Amount of leverage?

Anyone else have input?
  • #32
  • Aug 30, 2006 10:01pm Aug 30, 2006 10:01pm
Quoting squat1962
Do you assign any importance to leverage, Mr.Trend? If you hold trades during news do you tighten your stops or ride out 100 pips against your position? I know of people that hold positions real long term, like months. But I am pretty sure they do not use borrowed money, they are just heavyweights.

How long is an average trend trade for you and does using borrowed money (paying interest) affect you? Amount of leverage?

Anyone else have input?
Not really. If I have 400:1, fine. 100:1, fine. You only wanna give me 50:1? I'm fine with that too, because leverage is only relative to how many trades I can put on. Any thing other than that, I don't care about. I only look at four pairs for my swing trading strategy, and my main cash cow is my breakout strategy... So I can easily be in all five pairs and not even use 50:1...I risk 3% per trade and I don't deviate from it. I just recently came down to 3% with one of my strategies after I reconsidered how many losses I could entail overall...

I definitely hold my positions during news -- I'm talking about my swing trades, mind you. The main reason I don't close them is because I'm so confident in my strategy to pick out trends on a swing timeframe, that I don't let news spikes bother me. I don't know how to explain it any way other than that. Ya just gotta let it go and focus on the system you're trading. If your rules don't say anything about getting out at news, then why would you get out? The reason why you would get out is because you think you know where price is going to go... so now you're predicting... bad news to your capital...

My swing trades last 2-6 days with an average of right around 3.5-4 days. That's perfect for me and interest rates don't really bother me, because one day I'm paying, and the next I'm raking it in, so it kinda sorta averages out from an interest perspective...

I'm now just becoming consistent... it's been a heck of a road to travel on, but I'm there... now I just have to hang on for a couple more years to get my capital where I want it and I work for myself...
Mr. Trend
  • #33
  • Sep 1, 2006 9:19am Sep 1, 2006 9:19am
Quoting mrmikal
I'm sure we'll get a spike upwards if the numbers are weak, but just get the feeling that we want to come down just a bit. Perhaps it's just that magic 1.91 number, but I figured if we were breaking 1.90 we'd have had more momentum.
I feel good about the call here. There was an initial thrust downwards as expected...I should have banked 70 pips on this call...but I held on a bit longer than I should have...it occurred to me that we should be only slightly lower on numbers like these because rates will not be increased...and with the numbers right almost on par with expectations...only a slight drop was to be expected. Still though...I felt good about the entry it's my exit that I wasn't so hot to trot on. Still a good trade...woo hoo
  • #34
  • Sep 1, 2006 10:00am Sep 1, 2006 10:00am
Quoting mrmikal
I feel good about the call here. There was an initial thrust downwards as expected...I should have banked 70 pips on this call...but I held on a bit longer than I should have...it occurred to me that we should be only slightly lower on numbers like these because rates will not be increased...and with the numbers right almost on par with expectations...only a slight drop was to be expected. Still though...I felt good about the entry it's my exit that I wasn't so hot to trot on. Still a good trade...woo hoo

I love the perfect exit. Always brings tremendous satisfaction.
I got out a little too soon. I felt the number was not drastic enough to hold for too long so I got out early. Left about 15 or 20 on the table.
How can we complaing though, It was very easy money today.
Profit is where readiness meets Opportunity
  • #35
  • Sep 1, 2006 1:57pm Sep 1, 2006 1:57pm
it's interesting that the NFP moves the market so much even when the expected number varies so little with the actual outcome. i think the forecast was 120K-130K (depending on the source) and the actual number was 128. I believe the previous number was revised to make this number even less of positive USD result.

Hourly earnings came in less than expected too. 4x speculators "trading the news" certainly had an impact today. After 20 minutes or so, I placed a limit order well below the initial spike to buy eurusd. I think it was at 1.2765 (Or near that), this trade was successful for 60pips on the retracement... that was a fun trade. The ride down was fun too. A lot of people must straddle that NFP or something because the numbers were not there for that kind of a bearish move. (You don't really need the report for the crazy initial wave though, see red-click sell..... see green-click buy).

Anyway, this ADP report would appear to have a somewhat random correlation to the NFP so far.
  • #36
  • Last Post: Jul 6, 2007 3:17am Jul 6, 2007 3:17am
Just to say a warm hello to everyone here, I have learn't so much from this forum, and I feel like I really woould like to help people become better traders.

I have looked into a lot of Ganns work, Elliot and Steve Copen aka Market matrix etc. The markets are definately not random, they move in a very precise way especially on larger time scales. The trick is trying to predict them accurately as after the event it is always so much easier.

I put an analysis of the £ $ back in May and saved it as a picture file so I could not play around with it afterwards and fudge my result, I think it looks fairly accurate. Now, the fall in the pound and rise in the dollar yesterday also looked to me like it had come almost to a wave 5 end of maybe a big wave 1 up, so from here on in I am expecting a a,b,c retrace, my guess is that we will see strong US figures today, the dollar will soar, and the pound will fall.

The levels I am watching for a turn are 2.0068,1.9983,1.9915,1.9846, if it hit any of these levels on either the 13th of July or 23rd July then I would reverse my sell of the pound and go long. I have noticed that if a fib level is hit exactly and you get the next bar moving in the opposite direction the move seems to have a higher chance of reversing.


Smalldog
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