Proof of consistency trading forex

This is a discussion on Proof of consistency trading forex within the Forex forums, part of the Markets category; I saw another thread on this subject that got closed. Well it isnt 100% proof, but still a bit better ...

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Old Jan 24, 2008, 8:49pm   #1
Joined Sep 2005
Proof of consistency trading forex

I saw another thread on this subject that got closed. Well it isnt 100% proof, but still a bit better than the other thread.

Here is a pic of my trades for about one day. 13 trades,13 winners, about 90pips+

ImageShack - Hosting :: ddhn9.jpg

setup:

1Support and resistance
2for instance, if the currency suddenly moves up 7 pips very fast, you should sell. Look at rapid price movents to decide your enter.
3preferably during ranging markets.
4 Pivot points
6 Fibonnachi levels
7 if you buy, only enter if the trend is moving up. Never go against the trend. Look at moving averages for instance when deciding market sentiment.

Use all timeframes to decide all the above parametrar. Though, look at 5 min to 1 min when deciding enter/exit.

Takeprofit and stop loss should be decided from time to time. If it moves down, 5/10 pips against you, close the position when you are brake even again. Take profit should equal stop loss.

For instance, if the price moves up 7 pips fast, u should sell, but only if the price moves fast and hits support levels, or fibonnachi levels.

Requires constant watching and very stressy and demanding.

An enhancement to this strategy is martingale.Say that you enter at 1.32 If it moves against you 5 pips. enter a position, the same size that you entered before, and close when it hits at 1.32(where you entered). For a net profit. You should be able to do this 5-7 times in a row. Though you would have to start with small positions, for instance 0.1-0.2 lots. If your stop loss is 10 pips, it has to move down 70 pips, never retracing back 10 pips for you to lose. Chances of this happening, if you have followed the above advice is close to zero, especiially if you trade durign ranging periods,quiet market hours. Try to look at historical charts if you can see the price to move down 70 pips without ever retracing back 10 pips during ranging periods, quiet market hour. You wont find it.I've tried it, but it is very boring to look at charts constantly when you only have one mini lot opened. Did it for about one week,about 40 trades, not a single losing trade. Though the profit wasn't big, as about 90% of my trades hit it first time, and thus only made 10 pips*minilot=10 dollar for each trade

10 dollar, watching constantly 16 hours a day, and if you do about 10 trades, you only 100 dollars a day.if you have 10 000 dollar in your accoutn, that is one percent each day. So it is farily good, if you have a large capital.

As you are looking at the chart 16 hours a day, making about 10 trades a day, you will get fast feedback, and gather experience very fast and do this better and better. Though, expect about about 40 pips a day. Without the martingale method, and if you are getting proficient using this strategy(requires some training and experience). expect about 80-95% winning trades. Since your stop loss is usally around 10 pips, you can use high leverage as well. Though stop could sometimes be only 4 pips, and tp sometimes only 5 pips. Get some experience and you will get the feeling when to exit.

It is very important while deciding exit, to make constant analysis on the current market to decide the probability that it will go down or up etc, instead of deciding to exit at 10 pips, when the probability is much greater that it moves only 7 pips.

Last edited by epic767; Jan 24, 2008 at 9:40pm.
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Old Jan 24, 2008, 10:12pm   #2
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Hi Epic

Just looked at your image. Which broker are u using? There doesn't seem to be a spread involved with your orders.

Thanks
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Old Jan 24, 2008, 10:52pm   #3
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Have you any more recent trades than March 2007 ?


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Old Jan 25, 2008, 7:27am   #4
Joined Sep 2005
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Originally Posted by Market Wizard View Post
Hi Epic

Just looked at your image. Which broker are u using? There doesn't seem to be a spread involved with your orders.

Thanks
The spread was 3 pips on eur/usd at the time.

And no i havn't traded since march. Been taking some vacation after having daytraded constantly 16 hours a day for 3 years. Looking for long term trading strategies now.
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Old Jan 25, 2008, 10:59am   #5
 
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Hi epic

Very good work, excellent methods and strategies. I am trying it now, will let you know how i got on. one thing though, you need a big capital to back up. always believe patience is a virtue
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Old Jan 25, 2008, 11:40am   #6
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epic767 started this thread ChinesetraderinUK: So you will use the martingale setup enhancement? Just remember, to not have open positions during news time. You will definately have many winning trades with the martingale set up. An additional enhancement to the martginale set up that I havn't mentioned earlier:

This was the first martingale set up that i suggested:
Say that your stop loss is 10 pip, and tp 10 pip. If you first entered with 0.1 lot at .1.32 and it moves down to 1.22 you enter another 0.1 lot, and if it moves down to 1.12 you add 0.2 lot and so on. If it moves upp from 1.12 to 1.22 you will close your position. You would have had 0.1+0.1+0.2= 0.4 lots of open positions. You would have made: 40 pips minus 10 pips(the first move from 1.32 to 1.22)and minus 20 pip(the move from from the move from 1.22 to 1.12), for a net profit of 10 pips.

But you could instead do this. First 0.1 then 0.2, then 0.4 lot. Then your net profit from would get larger and larger if you hit your goal. The move from 1.12 to 1.22 would yield a larger net profit than 10 if you aim to close all your position at 1.22. If you still want just 10 dollar, you could minimze your tp, to 1.17 if that means you would get only 10 dollar.

So it doesnt have to retrace back as much, increasing your success rate even more. The more it moves against you, the less it has to retrace back. increasing your chance of success the more it moves against. Statistically, you would still have an expected profit of 0 pips with martingale method if your chance is 50% to win or lose. But the market doesnt really work like that. The market during during ranging/quiet hours, retraces a lot, almost never trends etc. So you will have the odds on your side.

The drawback, is that you need a larger account, since adding up fpr instance 6 times would need:

0.1,0.2,0.4,08,1.6,3.2,6.4=12.7 lots.

so instead of making 1 percent each day, you would maybe decrease it to 0.5%, but this method is much safer, and therefore also the lower return. If you just randomly put trades during ranging/quiet market hours, im sure you could turn profitable with this method.

Say that you have 30 000 dollar in a 50:1 leverage account(max position that you can buy= 15 lots). And make 10 trades each day, to gain 100 dollar, that would yield 80% in return on investment.

This method works great wit accounts to maybe 100k. After that, it will be hard to get 50:1 in leverage. You would maybe have to move on to an ecn broker that only offer 1 lot minimum position, and max 33:1 in leverage. Thats why cant keep doing this forever to get super rich =) Though, i only used the martin gale method once, and prefer to trade without it, since i had a high success rate anyway. I think a good idea would actually to only do the martingale two times, and not 6-7 times. I guess you have to try, and see what fits you. The higher the successrate on the first trade, the less martingale you should do.

Last edited by epic767; Jan 25, 2008 at 12:00pm.
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Old Jan 25, 2008, 9:36pm   #7
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forex.com does not use mt4 platform now.
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Old Jan 25, 2008, 10:18pm   #8
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Quote:
EA robots can beat human beings at FOREX trading also.
Human beings can also beat human beings at Forex trading as well.


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