Take Profit Not Triggered

This is a discussion on Take Profit Not Triggered within the Spread Betting & CFDs forums, part of the Commercial category; Originally Posted by Nowler Thanks for the solid input mate! Yeah, I certainly have lessons to learn. I'm in the ...

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Old Oct 4, 2017, 2:10am   #17
Joined May 2012
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Originally Posted by Nowler View Post
Thanks for the solid input mate!

Yeah, I certainly have lessons to learn. I'm in the process of learning one at the moment actually and I also learned another one earlier today. But! While I say that, I have certainly learned some already. I know myself that I am not currently ready to make a real go at this but, and I hope i'm not being naive, but I feel i'm close to being ready. I will reevaluate as soon as the new year comes and hopefully that will be the day I load my 1k or whatever it is. I may be able to put 2k on it but even at that I do realise that is a small pot of money to start with.

I am being realistic though, and I am planning to only take 10% of my profits made for that month. 90% goes back into the machine... I build that and then hopefully after 10-12 months my 10% profit each month (on average) is at least the same as my situation right now, or better. My current income is €193 per week let's not forget. My projections say that I can do it, but I totally understand what you're saying!

I am a bit weary of the returns I have been projecting but until I prove it wrong, that's my goal. I am not an idiot though, at least I hope I'm not...does an idiot realise that they are an idiot?? ...anywho... so if what I am aiming for isn't realistic then I'm sure i'll recognise it and then lower my expectations. My stop losses go on every time and my capital per trade is capped around 4% per trade, so I am expecting to be able to withstand the learning curve. Doing this, in my opinion, shows an understanding of being able to absorb the push and pull on an account and at the very least provides invaluable experience.

My immediate steps will be to continue to trade with the mini account and continue to learn for the next few months, then reevaluate. When I say I will deposit 1-2k capital, I am not saying that it will be all. I plan to deposit an additional bit on a when-I-can-afford-to basis. In my plan, the compound interest machine is one of the key components. I need to keep feeding my account and turn it into something that can realistically make the quality of my life at least moderately better.

Lets see I guess...
I have seen many mathematical projections to argue a case on getting from A to B in terms of equity growth. The problem is that the market has a say and it does not cooperate regardless of our hope or wishes.

Whatever you say, hope or plan is irrelevant. The only thing that matters is whether your actual performance matches with expectation. Any expectation is not real until you can demonstrate to your own self that you can perform. Minimum period is 6 to 12 months of actual trading.

Your goal of $30 a day is doable on a $1000 account but requires a focus on how it can be done. You need to do a number of things.
1)You need to learn to trade with proper money management. Typically it is 1 % but 2 % is on the outer end. 4 % is just too high. That is why you are getting such big swings on your account.
2)Don't get fixated on your account equity swings. It will impact on your trading performance. Keep your risk down and focus on your trading process. The end result will take care of itself. Day to day equity swing is not important if you are in the long haul.
3)Specialise in the instrument and the market you want to trade in. Don't jump all over the place from oil to gold to CAD and to SGD. Each market has unique characteristics and you need to know what they are if you wish to succeed. I once heard a top ranking fx currency trader said that all his trading life he only traded the European/US session and would not know how to trade the Asia session. You need to trade with an edge if you want to succeed.

So how do you get $30 a day on $1000? If you have a $1000 account you can trade one mini lot if you leverage it by 10. This is the outer edge of leverage to trade professionally. You can trade the EURUSD pair during the European/US session which typically has an average daily range of 60 pips. Extracting 30 pips during the session will get you your 30 pips and $30. You close your position at the nd of the session if you are not stopped out or your profit target is not reached. By just trading one position in a market you specialise in and closing it out at the end of the session will contain your risk and ensure a reasonable chance of success.
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Old Oct 4, 2017, 12:16pm   #18
Joined Sep 2017
Nowler started this thread
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Originally Posted by Brumby View Post
I have seen many mathematical projections to argue a case on getting from A to B in terms of equity growth. The problem is that the market has a say and it does not cooperate regardless of our hope or wishes.

Whatever you say, hope or plan is irrelevant. The only thing that matters is whether your actual performance matches with expectation. Any expectation is not real until you can demonstrate to your own self that you can perform. Minimum period is 6 to 12 months of actual trading.

Your goal of $30 a day is doable on a $1000 account but requires a focus on how it can be done. You need to do a number of things.
1)You need to learn to trade with proper money management. Typically it is 1 % but 2 % is on the outer end. 4 % is just too high. That is why you are getting such big swings on your account.
2)Don't get fixated on your account equity swings. It will impact on your trading performance. Keep your risk down and focus on your trading process. The end result will take care of itself. Day to day equity swing is not important if you are in the long haul.
3)Specialise in the instrument and the market you want to trade in. Don't jump all over the place from oil to gold to CAD and to SGD. Each market has unique characteristics and you need to know what they are if you wish to succeed. I once heard a top ranking fx currency trader said that all his trading life he only traded the European/US session and would not know how to trade the Asia session. You need to trade with an edge if you want to succeed.

So how do you get $30 a day on $1000? If you have a $1000 account you can trade one mini lot if you leverage it by 10. This is the outer edge of leverage to trade professionally. You can trade the EURUSD pair during the European/US session which typically has an average daily range of 60 pips. Extracting 30 pips during the session will get you your 30 pips and $30. You close your position at the nd of the session if you are not stopped out or your profit target is not reached. By just trading one position in a market you specialise in and closing it out at the end of the session will contain your risk and ensure a reasonable chance of success.
Of course, any projections are obviously theoretical. When I talk about these projections I assume to be talking to more knowledgeable traders than myself so as far I am concerned I don't need to keep saying "market dependant" because it obviously goes without saying. Also, in regards to your comment about proving it over 6 to 12 months, I also agree.

I do however question your comment about 4% being to high. It may be for you, or it may even be for me, but a blanket statement of it being too high is just not accurate. I cautiously say this because I do realise that I don't even have 6 months of trading under my belt but from what I can see, I am very comfortable risking a cap of 4% on a trade. I'm not sure why you said my account has big swings... I have not been experiencing negative swings in my account. I did say on a thread somewhere here that I lost 15% of my account Monday last week but that was a direct cause of not following my plan and instead being impulsive. Or perhaps you are eluding to the fact that I am down about 40-45% of my capital? I wouldn't class this as a swing, not in the sense I feel you are talking about anyway. I lost most of that money in the first 3 months when I was risking 1-2% per trade (with a few impulsive trades also), for the last 2 months I have been making steady progress, the last month being 4% trades.

I feel a little uncomfortable disagreeing with you because, again, I realise that it's likely you have far more experience than I do, but if someone is playing the percentage game then who are we to say 4% isn't proper money management? It may be more than you are willing to risk, or even for the next person but 4% is "proper money management" if it was established to be a cap. It just happens to be a little bit more risk than some people might take. Also, I don't really care about the small equity swings anymore and haven't for over a month (maybe I will when I have a big account). I figured out a long time ago that the money in my account will ebb and flow...this is totally normal. Obviously we would like to go into the green immediately but a lot of the time it doesn't, particularly when paying a spread. In that case I go into the red by a few pips immediately and then might very well go further into the red as my trade retraces or something, but from my experience, it will come right more often than not provided I take the best trades.

In regards to number 3 where you say about sticking to 1 or few markets. While this may be great advice to some, I feel it loses some relevance for me as I am training to become a discretionary trader. Of course a discretionary trader can stick to just 1 or 2 markets but if I was to do that then it would completely contradict my conscious reasoning for being discretionary. I do however agree with you that each market has it's own personality or behaviour somewhat unique to itself and this needs to be understood or risk getting steam rolled by something unforeseen which could have been seen if enough study was carried out. While I say this, I do try to limit the amount of markets I trade, but it's far more than 1. When it comes to me making trades based on macro reasoning then the markets I can trade are greatly reduced as my macro knowledge doesn't extend very far but for the likes of trading pullbacks, channels and breakouts, I find that this can successfully be carried out on a wide array of markets.

I do not want to be risking 4% per trade for too long. As soon as I can grow my account, the sooner I can reduce the capital per trade. This is always the plan...get to a point where I can make a living risking only 1% per trade. I also use 50/1 leverage, I have the option of 100/1 too but I have no interest in going that high. The leverage is also something I plan on reducing as my account grows, but at this early stage 50/1 levers and 4% per trade maximum sounds right for me. I could of course turn around next month and decide that I need to reduce these, but as of right now, everything seems OK to me. I am aware.

It is worth noting that I limit the amount of trades that I take at any one time. I completely realise that the more attention I place on one trade, the less attention I give to other trades. Hence the reason I often only roll with 1 trade at a time, but I can go up to 4 or so. But keeping it to 1-2 is preferred
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Old Oct 4, 2017, 7:19pm   #19
Joined Feb 2017
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Originally Posted by Nowler View Post
Thanks for the solid input mate!

Yeah, I certainly have lessons to learn. I'm in the process of learning one at the moment actually and I also learned another one earlier today. But! While I say that, I have certainly learned some already. I know myself that I am not currently ready to make a real go at this but, and I hope i'm not being naive, but I feel i'm close to being ready. I will reevaluate as soon as the new year comes and hopefully that will be the day I load my 1k or whatever it is. I may be able to put 2k on it but even at that I do realise that is a small pot of money to start with.

I am being realistic though, and I am planning to only take 10% of my profits made for that month. 90% goes back into the machine... I build that and then hopefully after 10-12 months my 10% profit each month (on average) is at least the same as my situation right now, or better. My current income is €193 per week let's not forget. My projections say that I can do it, but I totally understand what you're saying!

I am a bit weary of the returns I have been projecting but until I prove it wrong, that's my goal. I am not an idiot though, at least I hope I'm not...does an idiot realise that they are an idiot?? ...anywho... so if what I am aiming for isn't realistic then I'm sure i'll recognise it and then lower my expectations. My stop losses go on every time and my capital per trade is capped around 4% per trade, so I am expecting to be able to withstand the learning curve. Doing this, in my opinion, shows an understanding of being able to absorb the push and pull on an account and at the very least provides invaluable experience.

My immediate steps will be to continue to trade with the mini account and continue to learn for the next few months, then reevaluate. When I say I will deposit 1-2k capital, I am not saying that it will be all. I plan to deposit an additional bit on a when-I-can-afford-to basis. In my plan, the compound interest machine is one of the key components. I need to keep feeding my account and turn it into something that can realistically make the quality of my life at least moderately better.

Lets see I guess...
Cool, so long as you keep an open mind.

I have seen well capitalised people make a career of it from their previous industry, and I have seen people come from nothing and end up seeded. I haven't seen people come from nothing, with no capital, and become HNW all solo. The odds are too heavy. If you thought of every move you made in life as a trade, you wouldn't take this one. Often any rags to riches story contains all sorts of caveats, and they are never stories of compounding daytraded gains. Except those that are unverifiable of course. Paul Rotter etc had funded accounts from props and were not trading outright - flipping was popular back then and easy as hell because you had clueless well capitalised idiots coming off the paper exchanges into electronic and getting slammed by basic tactics like flipping as the tape moved real slow, they saw orders and took them for what they were.... I don't want to go tangential here, but look into any stories you hear.

Anyone who tells you they can make x pips a day has zero excuse for not being a multi multi millionaire unless they are trading extreme high frequency where there is a liquidity on return issue. Pips should be looked at on a monthly timescale with volatility of returns taken into account. More likely they are unaware of the long term flaws in their own system or are practising a transitory edge. I have run systems where the edge prints money for 9 months and once the curve starts to flatten, you pull the plug. This takes a great deal of experience and control and you would hedge it with long term systems to produce a smooth equity curve. Many people only ever find one system that works, and it's temporary alpha - when it goes they're done because often it's luck in the first place.

Just note this is going to be a journey of massive pain and you don't want to undertake it if you've got kids or anything like that.
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Old Oct 4, 2017, 8:47pm   #20
Joined Sep 2017
Nowler started this thread
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Originally Posted by Fill_Or_Kill View Post
Cool, so long as you keep an open mind.

I have seen well capitalised people make a career of it from their previous industry, and I have seen people come from nothing and end up seeded. I haven't seen people come from nothing, with no capital, and become HNW all solo. The odds are too heavy. If you thought of every move you made in life as a trade, you wouldn't take this one. Often any rags to riches story contains all sorts of caveats, and they are never stories of compounding daytraded gains. Except those that are unverifiable of course. Paul Rotter etc had funded accounts from props and were not trading outright - flipping was popular back then and easy as hell because you had clueless well capitalised idiots coming off the paper exchanges into electronic and getting slammed by basic tactics like flipping as the tape moved real slow, they saw orders and took them for what they were.... I don't want to go tangential here, but look into any stories you hear.

Anyone who tells you they can make x pips a day has zero excuse for not being a multi multi millionaire unless they are trading extreme high frequency where there is a liquidity on return issue. Pips should be looked at on a monthly timescale with volatility of returns taken into account. More likely they are unaware of the long term flaws in their own system or are practising a transitory edge. I have run systems where the edge prints money for 9 months and once the curve starts to flatten, you pull the plug. This takes a great deal of experience and control and you would hedge it with long term systems to produce a smooth equity curve. Many people only ever find one system that works, and it's temporary alpha - when it goes they're done because often it's luck in the first place.

Just note this is going to be a journey of massive pain and you don't want to undertake it if you've got kids or anything like that.
I know the odds are heavily against me but I'm going to try anyway. I am not expecting riches beyond my wildest dreams, I just want to make a better life for my family and I.
I have no kids nor partner. I have little to no possessions. I have no problem moving around long term. I find that so much of my life suits trading. Ive never felt so compatible with something in my life!

Watch this... 1 year down the line... "I hate trading"

Im quite happy to put 10 hours a day into learning this. Been doing it since day 1 and am even more enthusiastic about it now that everything is making sense. Imagine how I'll feel about it when it actually starts paying bills and debt!

I also love a challenge and have often smiled at losing trades. I don't see it as a loss. I see it as a challenge. Bring it! What do I have to lose? My financial freedom? Haha, I was born into a lower socio-economic, volitile, single parent home in rural Ireland! A hospital misdiagnosed me when I was 13 and it resulted in septicaemia which nearly killed me. I lost my hip over it and now I have a metal one! I couldn't sue the hospital because I couldn't get a doctor in Ireland to go against their own and I was too poor to take it further. Down here on the ladder we have little more than a home! I beg the market to throw what it can at me! I'm not afraid!

The quote I used in the foreword of my uni thesis (which luckily I was poor enough that a body paid my tuition fee) comes to mind...

"When you walk to the edge of all the light you have and take that first step into the darkness of the unknown, you must believe that one of two things will happen. There will be something solid for you to stand upon or you will be taught to fly." - Patrick Overton


I really appreciate the advice.
Thank you.

Let's see if I can do what I need to do
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Old Oct 4, 2017, 11:36pm   #21
Joined Feb 2017
You can definitely succeed, I guess I was just saying keep an open mind about how you're going to get there. A lot of compounding simulations are just that and the stuff of pipe dreams, but a solid track record is gold so start thinking about the volatility of your drawdowns from day one. You don't want a track record with more than 20% d/ds when you decide, "this is the day I'm starting for real."
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Old Oct 4, 2017, 11:50pm   #22
Joined May 2012
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Originally Posted by Nowler View Post
if someone is playing the percentage game then who are we to say 4% isn't proper money management? It may be more than you are willing to risk, or even for the next person but 4% is "proper money management"
Risk management is not just about containing individual position risk. When you cap your individual position risk at 4 %, slippage will extend that especially in markets like oil, gold or exotic currency pairs simply because of spread and liquidity. Proper money management is not just about managing individual position risk but the risk of ruin in trading. Risk of ruin is tied to the theory of numbers and the probability of string of loosing streak. When you have open positions of not just one but four at any one time you have to consider aggregate position risk in totality and not simply individual risk. The greater that risk percentage the greater your chances of risk of ruin to your account which many new traders experience.

There is an entire chapter devoted to risk of ruin in the book "The universal principle of successful trading essential knowledge" by Brent Penfold. I suggest you read it if you have a chance. Risk of ruin is a statistical concept that tells traders the probability of your chances of being ruined.
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Old Oct 5, 2017, 4:29pm   #23
Joined Sep 2017
Nowler started this thread
Quote:
Originally Posted by Fill_Or_Kill View Post
You can definitely succeed, I guess I was just saying keep an open mind about how you're going to get there. A lot of compounding simulations are just that and the stuff of pipe dreams, but a solid track record is gold so start thinking about the volatility of your drawdowns from day one. You don't want a track record with more than 20% d/ds when you decide, "this is the day I'm starting for real."

I understand.
I will be sure to keep it in mind as I continue to learn.




Quote:
Originally Posted by Brumby View Post
Risk management is not just about containing individual position risk. When you cap your individual position risk at 4 %, slippage will extend that especially in markets like oil, gold or exotic currency pairs simply because of spread and liquidity. Proper money management is not just about managing individual position risk but the risk of ruin in trading. Risk of ruin is tied to the theory of numbers and the probability of string of loosing streak. When you have open positions of not just one but four at any one time you have to consider aggregate position risk in totality and not simply individual risk. The greater that risk percentage the greater your chances of risk of ruin to your account which many new traders experience.

There is an entire chapter devoted to risk of ruin in the book "The universal principle of successful trading essential knowledge" by Brent Penfold. I suggest you read it if you have a chance. Risk of ruin is a statistical concept that tells traders the probability of your chances of being ruined.
While this is valuable information, I have rarely experienced slippage. I don't doubt that it's a risk, but how likely is it to happen, and then how likely is it to happen again? Keeping in mind I that the most exotic forex pair I would trade is the SGD/HKD. Typically I trade the majors and the most common exotics, and to a lesser extent, oil.

I also have put time into understanding market correlations too, so that I know my risk better. I don't have a strong understanding of it, but I know enough to keep an eye out to make sure I'm not putting on 2 positions which are strongly correlated. Or if I am trading 2 strongly correlated markets, making sure that I know I am and have a valid reason to.

I just managed to get a hold of a pdf version of the book, I'm not much of a reader but i'll have a close look at the Risk-of-Ruin part. I found a risk of ruin calculator online too, so I'll have a closer look.

Thanks
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Old Oct 6, 2017, 12:32am   #24
Joined Sep 2017
Nowler started this thread I just realised something... Those gaps I said I never see...
My broker's platform doesn't show gaps for some reason.
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