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What was your "holy grail"?

  • Post #21
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  • Edited 10:01am May 26, 2017 8:27am | Edited 10:01am
Quoting Darastonius
For me the following things improved my trading, but the strategy I'm using is highly discretionary, so it is according to that. 1. Trying to make too many fixed rules. Any fixed rules like "trade with 2:1 RR", or "use a 20 pip stop" has hurt my trading. 2. Worrying about statistics too much. Like if you have a 60% winrate, that doesn't mean you'll have 6 winners out of ten. Sometimes you can have 90%, other times 30%. One trade, one day, one week, even maybe one month of results doesn't mean much. 3. Tampering with the rules after a loss or losses....
Darastonius,

You are so right, especially about point number 3. I usually just try to take the loss and move on but sometimes I can't help myself and think about "oh, if I would have done this, I could have profited from that trade." Or, I instantly think something is wrong with my strategy, I try to change something up immediately. You just have to stay disciplined with your method and have confidence.
My hallelujah moment was when I started to closely look at the equity curves produced by different systems over the same market conditions........and the light bulb hit me like a brick where I realised that rather than simply trying to extract every $ I could from a single system by adding additional variables (which inevitably led to disaster when going live) ...I could achieve a far better result by adopting a portfolio of very simple systems (that would not be considered by the average punter) but together could navigate a far larger range of market conditions with lower risk-weighted returns. It was a game changer for me that took me down the road to the 'free lunch' offered by diversification.
Quoting Copernicus
My hallelujah moment was when I started to closely look at the equity curves produced by different systems over the same market conditions........and the light bulb hit me like a brick where I realised that rather than simply trying to extract every $ I could from a single system by adding additional variables (which inevitably led to disaster when going live) ...I could achieve a far better result by adopting a portfolio of very simple systems (that would not be considered by the average punter) but together could navigate a far larger range of...
Copernicus,

Interesting, thanks for sharing.
So, what you are saying is that you diversified your trading across a span of different systems for changing market conditions? So sticking to one system was not for you? For me, I believe if I were to dive into other systems then it would just cause more headache and I would try to intake too much information. It would probably cause me to manifest trades that are not even there, or clear.
Quoting Ganative
{quote} Copernicus, Interesting, thanks for sharing. So, what you are saying is that you diversified your trading across a span of different systems for changing market conditions? So sticking to one system was not for you? For me, I believe if I were to dive into other systems then it would just cause more headache and I would try to intake too much information. It would probably cause me to manifest trades that are not even there, or clear.
I used to think it would be a headache....but if you go down the automated path, that provides a way to manage the processes and not spread yourself too thin. Diversification without systematization is a recipe for disaster. As cluey as our brains are...they just aren't cut out for handling parallel system processing.

Obviously a single EA won't work in all conditions. In fact it might just address 1 of the 6 or so broad types of market conditions.......so under automation you develop multiple systems that can specifically address each condition and result in a non-correlated blend of systems.

Once that is achieved you then can afford to be very selective in your trade activity and only select those trades where market conditions scream out at you.....as opposed to a common trap of over-trading when your livelihood depends on a single system.....and this is where market or timeframe diversification comes in.

So....

a) system diversification achieves deliberate non-correlation of equity curves which allows you to have one system in drawdown and one system in draw-up (and hence reduce the blended drawdown of the portfolio) For example refer to chart below where say for example the grey line is one system contributor (eg. buy and hold system) and brown line is another system contributor (trend trading system). When one system is in drawdown eg. 2008, the other system is in draw-up significantly reducing the drawdown profile from a max drawdown of 50% to 20%.

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b) instrument (market) diversification and timeframe diversification allows you to span hundreds of different data series and only trade those conditions that scream out at you.....(eg. less likely to be random and more likely to be a non-random price movement). For example a big trend on a single instrument may only occur 1-3 times a year....but with 100 different liquid data series, that gives you say 300 opportunities a year to only pull the trigger on the best examples. This feature ensures that the symptom of potential over-trading is reduced...which IMO is one of the major reasons in an efficient market that a trader comes undone.

....anyway...thanks for the thread. Good topic. :-)
Welcome to hell
  • Post #26
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  • Edited 2:01pm May 26, 2017 1:27pm | Edited 2:01pm
Quoting Ganative
A question though, you said DON'T set take profits? How come? ... I've tried this but the market always reversed sometime or later and hit my stop loss at breakeven. Usually, when I set a trade, the stop loss and take profit is always pre-determined. I already know where I want to take my profits and there is a small risk on every trade, if it goes bad. If it goes bad, then okay, I take the loss and move on. With every trade, you must be willing and ready to take a loss. Expecting to win on each trade will just leave you disappointed when it does...
You're probably making a very common, but easily missed mistake. When you open your trade terminal, you should see a huge list of currency pairs available to trade. I will tell you, it is not only possible to pick the wrong direction of a market, but the wrong market entirely! Profitable trading Step 1 is not pick the right direction, but pick the right market! Go to the loudest pit!!! I oftentimes cringe when I open up the interactive trading section and see guys foaming at the mouth over pairs like EURUSD. That pair has been a dud for months (with the exception of the last few weeks).

If you're in the right markets, you won't regret not setting your TP, or should I say your broker's stoploss. For example, last night (I'm in the central US), I shorted GBPJPY. I looked at the chart and said "Oh, I'm not sure if thing thing can even make it to 144 with all the recent bullishness." Then I stopped myself, set my stop to break even then walked away. This morning I woke up and sure enough, the Pound-Yen was the gift that keeps on giving. Because we are to the end of the week, I cashed out, BUT, this trade probably had more to give. I probably cut my profits short.

Don't be a sardine, be a dolphin.
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Two more: trading homework for the weekend, watch these a few times.

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Watch how the liquidity, I mean birds respond to the predator and vice verse:

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  • Post #28
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  • Edited 4:51pm May 26, 2017 4:05pm | Edited 4:51pm
Patience. Watch a few of the major pairs daily. With time you'll get the feel for how they move, where they've been, and where they are likely to go. You'll be able to check in on them a few times a day and immediately know what's transpiring with them and what you should be buying or selling. Once you know how some of the majors are moving in relation to eachother you'll be able to check in on the cross-currencies and exotics for even better opportunities.

Split your positions up. If you aren't profiting then you're buying/selling too much at once. Unless you KNOW that you want in on some action because you are unlikely to get a second chance then put in half your position and wait a few hours for the other half. Either you'll end up with a better price to buy/sell or you'll find a better place to put the money and be glad you didn't jump the gun. There's no shortage of opportunities. There's only a shortage of patience.

Too often traders try to make quick flips. They cash out on great opportunities to get in on mediocre ones and make a mad-dash for a margin call or rush into losing trades hoping to get out of them quickly(all while paying the spread). They compound their mistake of being impatient and make the situation worse. If you do your homework and are patient then even a losing trade can be turned into a winning trade with time. You won't even care if one trade is slowly bleeding because a half dozen others are making a profit.

If you can make 5-10% a day then what does it matter if 2% of the account is slowly bleeding 1% a week? It would have to bleed out at a blinding pace(Like, World War 3 just started) to make a dent in the account . Make enough off your winners to pay for your losers and you'll be a lot less stressed about them.

(I am currently using only 40% of my 50/1 leveraged account because it's friday close in 30 minutes. 30% of it is tied up in a trade that went against me quite a bit overnight so I slowly increased my position to 3x the size this afternoon at a huge discount and 1/2 of what I added was paid for with just today's profit). Try using a 5-10% standard position size for primary trades with 1-2% sized positions for side-trades you aren't really sure about. Actively work with your standard positions and let the side-trades do their thing passively. Try to keep 25% of the account active, 50% being your full position sizing, 75% your maximum limit to use during extreme situations/great opportunities, and the last 25% in reserve for drawdowns. You'll double your account monthly. If you try to double it weekly you will blow up within a month or two.
"The fun is in the hunt. Not the kill."
Quoting Redeflect
Patience. Watch a few of the major pairs daily. With time you'll get the feel for how they move, where they've been, and where they are likely to go. You'll be able to check in on them a few times a day and immediately know what's transpiring with them and what you should be buying or selling. Once you know how some of the majors are moving in relation to eachother you'll be able to check in on the cross-currencies and exotics for even better opportunities. Split your positions up. If you aren't profiting then you're buying/selling too much at once....
Redeflect,

Hi there, thanks for sharing!
"there's no shortage of opportunities. there's a shortage of patience." great advice, so true. That's the problem with most traders, they do not have the patience to be trading. It really is a virtue. Traders want to milk every single $ so bad out of a potential trade, that they immediately jump the gun, and instantly enter into a losing trade, panic, then close out their position(s) with a loss. It's tragic, because I have unfortunately caught myself doing that same mistake over and over again. You must wait to enter at the BEST price.

Would you recommend new traders to only focus on the major USD pairs? Which cross pairs do you recommend to scan? I try to avoid unnecessarily high spread CP because I absolutely hate paying the spread. Except for gold, gold is typically very volatile and if you are in the right trade at the right time, the spread doesn't even matter. Gold usually looks attractive and clear enough for me to trade so I don't mind it too much.
  • Post #30
  • Quote
  • Edited 10:41pm May 26, 2017 9:36pm | Edited 10:41pm
Quoting Ganative
{quote} Redeflect, Hi there, thanks for sharing! "there's no shortage of opportunities. there's a shortage of patience." great advice, so true. That's the problem with most traders, they do not have the patience to be trading. It really is a virtue. Traders want to milk every single $ so bad out of a potential trade, that they immediately jump the gun, and instantly enter into a losing trade, panic, then close out their position(s) with a loss. It's tragic, because I have unfortunately caught myself doing that same mistake over and over again. You...
EUR/USD and USD/JPY are staples. I'll occasionally look to use the GBP/USD in place of the EUR/USD depending on the situation and rarely the USD/CHF in place of the USD/JPY(I try to use those as my majors). I'll sometimes make crosses out of those pairs depending on their movements for increased probability setups to kill 2 birds with 1 stone(So if GBP/USD and USD/CHF are about to go up I'll look to go long GBP/CHF).

For exotics I like to keep an eye on the Turkish Lira(USD/TUR) and South African Rand(USD/ZAR) to trade SHORT only because they have very high interest rates and I like the rollover. If you hold just 1 lot of either of them on a wednesday night(triple rollover from the weekend) you'll get a good $60-$120 on top of your trade. I have started to trade the EUR/NOK a little bit this week just because of how it was moving(Made quite a bit on it actually... gonna keep an eye on the USD/NOK more). They aren't particularly exciting to watch and make sporadic volatile movements because of their low liquidity so you don't want to try trading them actively.

I focus EUR/USD and USD/JPY and consider any crosses/exotics as minor positions which I lay down in the background. I tend to them as necessary but if I'm trading them then it's because I already did the hard part of waiting/catching a good opportunity. With just those 6-7 pairs and their crosses I have roughly 2 dozen charts to make use of. That's more than enough.

Spreads are usually proportional. The Rand(for instance) moves a good 1000-2000 pips a day(with a spread of ~100). You can definitely get what you pay for with the exotics but they are more risky and there is no guarantee you'll be able to profit off them any time soon. You can often buy and sell the EUR/USD within seconds for a profit. The exotics can take hours because of the spread to cover their ground and get into the profitable-zone but once the spread is covered they can rack up pip-value fast. That's why I only do them occasionally(at the best opportunities), smaller sizes, in the direction of positive carry. That way I can mostly set&forget... until something happens which is why they're risky/volatile and the rewards are worth it. I try not to hold them for more than a few days. I definitely take a peek at them on Wednesdays . ZAR/JPY is dirt-cheap and easily sized for any account(~$3.50 per micro-lot/$350 per lot with 50:1 leverage), has a great rollover, and moves in a very controlled range for it's price. Wait for it to get cheap, throw 1% of the account at it and pretend it doesn't exist. It's dumb money that requires absolutely 0 understanding of the market and if it goes down more then just throw 2% of the account at it .
"The fun is in the hunt. Not the kill."
Quoting Redeflect
{quote} EUR/USD and USD/JPY are staples. I'll occasionally look to use the GBP/USD in place of the EUR/USD depending on the situation and rarely the USD/CHF in place of the USD/JPY(I try to use those as my majors). I'll sometimes make crosses out of those pairs depending on their movements for increased probability setups to kill 2 birds with 1 stone(So if GBP/USD and USD/CHF are about to go up I'll look to go long GBP/CHF). For exotics I like to keep an eye on the Turkish Lira(USD/TUR) and South African Rand(USD/ZAR) to trade SHORT only because...
Nice, I mainly look at EUR/USD, USD/JPY, and GBP/USD as well. Damn, I'm jealous because I do not have access to exotic pairs like USD/TAR and USD/ZAR, that sounds extremely profitable, wow. Well, if I can't use those pairs, what is your recommendation on crosses with GBP and EUR? I at least have access to all of those (thank god haha). This is a rookie dilemma but even to this point, I still do not know how many pairs I should constantly keep track of. I always want to keep track of so many because I'm worried I might miss out, but that's just stupid and counterproductive so I'm trying to have a SET number of pairs to look at and not worry about other CP.
Ganative , Exness got USD/ZAR . GBP/ZAR so on and got USD/TRY so on even USD/MXN , Exness got about 90 symbol ,
Quoting Ganative
{quote} Nice, I mainly look at EUR/USD, USD/JPY, and GBP/USD as well. Damn, I'm jealous because I do not have access to exotic pairs like USD/TAR and USD/ZAR, that sounds extremely profitable, wow. Well, if I can't use those pairs, what is your recommendation on crosses with GBP and EUR? I at least have access to all of those (thank god haha). This is a rookie dilemma but even to this point, I still do not know how many pairs I should constantly keep track of. I always want to keep track of so many because I'm worried I might miss out, but that's...
For crosses with GBP or EUR; anything. They rule the kingdom alongside the USD. It's less about what you cross them with and more about when you cross them. I'm not fond of trading the commodity currencies(CAD/AUD/NZD). Just stick to a few of the majors and master them. 1 currency is enough. You need to know how to be profitable with one pair before you can hope to be profitable with many. It's not so much about what you trade as much as it is how you trade it.
"The fun is in the hunt. Not the kill."
  • Post #34
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  • Edited May 28, 2017 4:46am May 27, 2017 6:23am | Edited May 28, 2017 4:46am
Quoting Ganative
This may sound weird but one of the factors that caused me to trade better is scalping on my iPhone?
edit: Since you didn't understand my post and had to PM I'll rewrite it as follows: Not all the platforms are 100% equivalent in execution. Meaning, your trading getting better on iPhone may have less obvious reasons behind it.
I was.
  • Post #36
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  • Edited May 28, 2017 4:47am May 27, 2017 6:54am | Edited May 28, 2017 4:47am
edit: Whatever, I don't want PM's.
  • Post #37
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  • Edited 4:31pm May 27, 2017 12:40pm | Edited 4:31pm
I'm sitting here eating my bagel and drinking orange juice, stressing about keeping up with the charts, then I snapped out of it and it hit me like a brick. I usually scalp the 5M timeframe and I'm in and I'm out of trades a few times a day. Very high stress, not the trading itself but for me, mainly about keeping up with the charts all day, everyday for 5 days a week. Like damn, I have an alarm set for the London session and the NY session so I can wake up in time and catch some pips. I'm constantly worrying about if I am going to miss out on a trade. I don't get enough sleep, period. And then when I do miss out on a trade, I just get pissed as fuck for not being there on time. I can't stare at a screen all day, I realized this because my mental health is deteriorating, I'm eventually going to go insane. YOU NEED SLEEP. Besides, how many professional traders stare at their monitor(s) all day and stalk the shit out of every tick? It just sounds counterproductive. If your signal isn't there, then you don't trade. Simple as that. Otherwise, you are going to give yourself a headache and manifest some unclear trade. I am going to share with you my perspective, it is strange, but hey, to each their own. Each timeframe is a MARKET... each timeframe there are a number of traders looking/monitoring it, like for instance, for people who trade the 15M timeframe, they might get a signal, while the 4HR isn't as clear. Do you kind of understand what I am trying to say? Timeframes are just a concept developed by people... I see it as an indicator, but an important and crucial indicator of course. Some traders don't even use charts or a "timeframe", they don't need it. That goes to show you that all you need is PRICE. Do some research on tape reading.

I live a relatively busy life, it ranges from being a caregiver (I work with elderly people and I get paid a good amount for just hanging out with them) and hanging out with my friends, as you know it's the summer and I am not trying to sit inside my house all day looking at charts, that sounds pretty shitty while all my friends are at the pool getting drunk and high. Besides summer, I am a full time student. I do not have the time to be scalping on the 5M timeframe, not even the hourly timeframe. I realized that I can utilize the 4HR timeframe as there are 6 signals a day. I reside in the east coast of the U.S. so for me, the signals would be at 9AM, 1PM, 5PM, 9PM, 1AM, and 5AM. Perfect. More sleep, more rest, more time to do activities and other errands while making money. Shit, I could be making money in my sleep, that sounds fucking fantastic. I see it as a measure of "free time", (as Aus said before, thank you very much by the way) if you live a busy life, you can adapt to the higher timeframes to fit your preferences, all while making money AND getting other shit done. If you consider Forex as a FULL TIME job, then yes, by any means the 5M/15M/30M/Hourly timeframe is for you. There are no timeframes that is more profitable than others. I hate when I see that question, it honestly makes me cringe. You can make money by scalping or by longer term trading. It is all about PREFERENCE!!!
  • Post #38
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  • Edited 1:46pm May 27, 2017 1:31pm | Edited 1:46pm
Quoting Ganative
I'm sitting here eating my bagel and drinking orange juice, stressing about keeping up with the charts, then I snapped out of it and it hit me like a brick. I usually scalp the 5M timeframe and I'm in and I'm out of trades a few times a day. Very high stress, not the trading itself but for me, mainly about keeping up with the charts all day, everyday for 5 days a week. Like damn, I have an alarm set for the London session and the NY session so I can wake up in time and catch some pips. I'm constantly worrying about if I am going to miss out on a...
Or you can make a profit by working all timeframes simultaneously... A scalper with patience is no different from a long-term investor with pinpoint precision. Scalping just means you're there to react quicker to opportunities and faster to get out/avoid drawdowns.

I became crazy before I spent about 20 hours a day for a few months watching those tick-charts to isolate patterns(sleeping a few times a night for about 30 minutes at a time). I think you need to do that to really be able to understand price action. Just combine what you've learned with Fxjesus's advice. Scalp 1m breakouts and place a stop as soon as you're in profit. Only try to close the positions when the next breakout causes the position to move against you. Other than that; closing a position should be at your discretion(It's something you should have a good reason to do like the price is starting to stall, will probably bounce, and you have another trade ready and waiting). You may not be all set for this summer but next summer you'll be glad you put in the time and were patient.
"The fun is in the hunt. Not the kill."
  • Post #39
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  • Edited 4:36pm May 27, 2017 1:38pm | Edited 4:36pm
Quoting Redeflect
{quote} Or you can make a profit by working all timeframes simultaneously... A scalper with patience is no different from a long-term investor with pinpoint precision.
Yes, or you can do that. I know this one trader who utilizes all the timeframes and has monstrous periods where he rakes in 5000+ pips a week. Then, I know some traders who purely use 5M timeframes and can rake in 500+ pips a day, including me. My issue was that I've had some extraordinary weeks and then some weeks I get GREEDY and risk way too much, therefore wiping out the previous week's profits, including more. That's why my original post was about the basic fundamentals of trading. Patience, discipline, etc. blah blah you get it. BUT getting back to this current topic, it's about what adheres to your daily life, or preference... I'm still standing firm on that. We folks here in Georgia love Waffle House, meaning we love our hashbrowns. I like my hashbrowns with A1 steak sauce but it's strange because people like it with ketchup or just plain. There is no right and wrong... Are you going to tell me the correct way to eat my hashbrowns? No disrespect at all, I am just trying to understand why you would scalp 1M breakouts when a move on the 1M timeframe is still the same move on the 4HR or the daily. I'm set now, lol I profit just fine and enough for me not to work a minimum wage job like most college students my age. I made an account on this forum to share ideas and views. Frankly, I don't need a system from anybody, or need to listen to anybody telling me how to trade or if I'm "set" or not, c'mon now. I see the market like how I see it. There is no correct way to trade it. If you profit, that's your "correct" system. There is enough money to go around, the market keeps getting dumber and dumber with waves of beginners coming in and out and washing away tens of thousands of dollars because they think they can get rich quick.
  • Post #40
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  • Edited 7:48pm May 27, 2017 2:16pm | Edited 7:48pm
Quoting fxjesus
{quote} I bet there's many people who could answer this but find it tough to discuss in public. I've tried to answer similar questions and talk about that dozens of times here but when you notice something has been rigged you think maybe you can take advantage of that and then fast forward few years and well it's sure rigged so well that you only think you can take advantage of it but you can't and if you can they fix the code. If we are talking about the same broker, when I find something that causes position to wind up in profit, immediately I...
Fxjesus,

There is a reason why market can drop 50% against you within minutes, and why it can run 50% to profit in minutes.
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