Making Money Trading

Hanzam - I was waiting for someone to ask this.

Ultimately you will believe me or you won't but I will tell you hand on heart there are two reasons.

First is that lately, I've started to realise that there is more to life than trading. I've gone through hell to learn to trade. I've cut myself off from my friends and family and nearly wrecked a six year relationship with the girl I love. My attempts to learn this game have led to anger and frustration. I found that all I would do is be thinking about the market and I became gradually more introverted until I lost sight of everything that really matters in life.

And then suddenly it dawned on me: the market doesn't care who I am - it was here long before I was born and it will be here long after I am dead. I am giving up precious years that I can't get back in order to learn how to make money. And I am ignoring the things that really matter in life like: "Do I show the important people in my life that I appreciate them?", "Am I making the most of my time here?", "Will I be remembered after I die?".

I'm only 28 but I felt like I was having a mid-life crisis. My father died when he was only 44 so perhaps I am...

Anyway, by frequenting forums I read about people who are far older than me, people that just want to become financially independent, support their family, perhaps enjoy their life without becoming a slave to the markets. Or people that are where I was - struggling in their trading, losing money, becoming disillusioned with it all.

When I found I was making money and still hearing they were having difficulties I thought I would share what I know.

The second reason is slightly more egotistical. It has taken me seven years to find my way in this game. And now I am having success, I want to tell everyone about it. I will tell you now I've had many detractors in my life. Colleagues, friends, sometimes even close family that have told me I will never make it. To stop trading - to stop gambling and to pursue a "worthwhile career". This is my way of showing that I am making it and that I can help others make it too. Perhaps the irony of all this is that the people I want to prove myself the most too, will never see this.

Tom

Hi Dante,

Full respect to you for creating this thread. I hope that others do not become critical of your posts/methods/etc.

As we all know the main purpose of these forums is to share knowledge and experience so I hope that everyone remembers this as we move forward.

The comment in Bold is very important. Just because a method is taught to others, does not automatically mean that everyone will be profitable especially when there is a discretionay element to it which, clearly your method definately has.

Additionally, IMO two elements that can shift a strategy from profit to loss is the Exit rules & the overall Money Management side. Out of interest, will you also be sharing your thoughts on these important elements or will you be only focusing on the entry conditions?

All the best,

Chorlton

EXACTLY the reason why I want us all to be looking at the same market when I teach this. If I show you what I am doing on the DAX and you go away and apply it to the GBP/USD you may not be profitable for a while. If you watch the same market I am and perhaps even trade it you will, I sincerely hope, get a feel for why I am doing what I am doing.


I will certainly share my methods regarding exits. I think exits are even more important than entries and they are an area that I want to devote most of my attention too.

I may talk a bit about my money management but I am hesitant to make recommendations about what others do as it all depends on the traders individual comfort zone. The friend whose account I trade, for example, is willing to take much more risk than I am because he was always playing with the houses money (it was an account opening bonus). He will frequently try to persuade me to up the risk which I warn him against.

Since trading my personal account I have not experienced 2 back to back losers. As a result of this I took as much as 10% risk per trade until the money started to mean something and now I have cut it right down.

I know 2-3% risk per trade is regularly touted as being the conservative risk to take. I think this is perfectly acceptable although I strongly believe that it is a good idea to commit as much of your account to one position if that position offers you entry points in a strongly trending market where your OVERALL reward is increasing and risk is diminishing with each increment. We will talk about this in due course.

If a finance House / company decided to offer you a substanial amount not to reveal your real trading methods but just to skirt around and reveal some of the techniques will you sell out to such a proposal? If you do not sell out to them why would you reject a substanial amount say a six figure sum can you guarantee us traders that this will not happen and we won't be mislead or deceived any way and you are not part of any hidden motive.

Hi Tim,

Your post is accepted and appreciated!

I'll say one thing: if anyone wants to constructively criticise anything I say / do then feel free - perhaps we will all learn something in the process. I'm not some guru and don't wish to be treated as such. I have a lot to learn still. Right now I am just a trader whose consistency in winning is telling him he is getting somewhere further than others out there. So I will pass information back down the line as it were

I am sure there are many of you that have performed much better than me and if so I hope I can learn something from YOU!

I personally play devils advocate in my personal life. When anyone takes the consensus I usually find something wrong with it so don't think you are going to offend me.

Please try not to just gun me down for sharing things though.

It's like someone that argues: "I am going to prove the existence of extraterrestrials. Firstly, a good reason why they exist is because no one has proven since time began, that they don't exist".

You could constructively criticise this by replying: "That is ridiculous. The reason this hasn't happened is that it is virtually impossible to prove something doesn't exist. Only that it does exist."

If however, someone says: "I am going to prove extraterrestrials exist...because I have one in my wardrobe..." pulls open the door and out it walks. Well then the criticism becomes harder.

Whatever you want to say about how I am doing things, the undeniable fact is that I am making money right now. And have been for several months. If anyone actually wishes to see screenshots of my trading account history or a trading equity curve I will post one.

I also always talk in terms of money made when I make a trade aswell as in terms of ticks won/lost. Some may appreciate this out of genuine interest into what can be made, others may find it crass. But I do it nonetheless.

Ok rant over. Lets get on with this.

Hanzam! I'll make you a deal. If a finance house offers me a substantial amount not to reveal my real trading method, I will tell you all that I am knocking this idea on its head and not posting anymore.

I'll be brutally honest. I'm probably not going to put a group of people I've never met in my life, before a six figure sum of money from a finance house but I will also tell you that I will not be misleading or deceiving anyone.

Your post has actually vaguely worried me. I feel like I should write some kind of legal disclaimer now.

Please realise that past performance is no indication of future results. I am going to show you what is working for me. If it suddenly stops working because the markets change then the only guarantee I can give you is that I will be losing money too, right infront of all your eyes because I am going to trade what I speak about.

Please, please, please, demo what you see and never use money you cannot afford to lose. Take things slowly and build up confidence in this method. The market is not going anywhere. There is plenty of time to learn this and use it profitably.

This is not going to be a signal service. I am not going to tell you buy X when it reaches Y - I will tell you what I am doing and why I am doing it. If you choose to follow me it is at your own risk. I don't think this is any different to keeping a journal. If anyone knows anything more about this regarding the legality, than I do, please tell me now!

Hi Chorlton,

I missed the latter part of this question the first time round.

Maximum individual trade drawdown has been 9.6%. That was back when the account was very small and I had little or no say in risk taken when trading at minimum size.

Even including this time when I was taking such risk, maximum weekly drawdown since I began trading the method has been 6%.

Current return on equity as of the Friday close is 2,164%.

Hi,
I'm looking forward to you explaining your method, and ignore
the flamers .