I am looking for the kind help/advice of the day traders who have been down a similar path and took the correct steps required.
I have been interested in the whole trading thing for around 9 years, played (with cash not just demo) UK shares, Commodity futures etc. However the one I seem to feel most comfortable with is Forex spot trading.
Although I have been a member of this Forum for 6 years or so, I haven’t posted as i haven’t felt I was qualified enough to give the correct advice and a lot of the good question seemed to have been asked already. But Ill make up for it now....Great site for educating yourself on the trading discovery journey though. Even though the advice was there for all, I still made some of the usual errors some of the members warned about.
I have been pretty busy working as a contracts engineer for the last 20+ years or so, not leaving much time for getting any experience trading. It paid quite well enough for me pay most of my mortgage off and provide enough savings for a reasonable trading capital plus living expenses for that inevitable time where I wanted to try and give “making a living from day trading” a go. So I decided while the jobs front was quiet I would take the step (that I had been planning to do) and give trading a go full time.
Over the last 9 years, like many, I have been on the usual UK seminars Vince S and bought the same material from Steetwise , Mr Williams etc. I have even been taught a trading system by “day trader” , and yet while this system worked for him it didn’t necessarily work for me consistently. Something key that I learned from this experience is that If it doesn’t suit your personality a system that works for one aint necessarily going to work for you. “One glove doesn’t fit all “ , so to speak.
This same trader also mentioned another method he was forward testing, that involved using fib retracements, with certain other criteria like strong S/R, using 15m/1hr Time frames. All though he hasn’t said it, I believe he concentrates more on his original system which seems to suit him more. With the fib system something seemed to click with me and I believe it was the fixed entry , fixed stop and fixed target rules (with a little discretion depending on price action at the time maybe a trailing stop) and this i liked. So I built on this and tuned it to something that suited my trading preferences. Now before I enter the trade I know my risk and set my £/pip according to my 2% MM rules. I have also learned that having more winners than losers is not the key as my reward is usually 1.9- 2.0 x risk. This principal of needing to have more winners than losers really got some getting around.
I have now been day trading full time for around 8 months now and i would say the first 5 months have been a good part of my apprenticeship in trading. I found that I had to eradicate all the usual urges and trading mistakes. Moving stops, taking profits to early (tree shaking), poor position sizing and money management. Fighting the usual psychology traits like not accepting losses very well and blaming the markets.
Now I know that some traders don’t think certain trading tools work and some don’t believe TA is the way, well if we all thought the same I suppose life would be pretty dull. Just reading this Forum and the various threads you will see there is many ways that work. One thing I buy into though is what Mark Douglas wrote about having an edge in trading. That there is a random distribution between wins and losses for any given set of variables that define an edge.
I have arrived at a stage where I am making money from trading however not enough money to make make a living from. My trading capital at the moment is £10,000 and I do have another £20k to add if and when I believe the time is right. The rest is for living expenses and so that I never arrive at a scared money situation. Why only 10K capital? well i believe if I don’t make any money with 10K I,m definitely not going to make it with 30K.
My system expectancy is positive 0.24 meaning for every £1 pound risked I get £0.24p, not brilliant
as at the moment I am only averaging 5 trades a week (removing break even trades from the total). Now this is the expectancy figure if I calculate over the last 20 trades and also the same expectancy figure from the turn of the year 49 trades (62 if I count Breakeven trades) . Some may say its not enough testing, buts its already giving me a indication of what I can expect, be over the past 3 weeks or since beginning of the year as these are actual trades seen. The more I day trade , the more I learn, the more I eradicate mistakes, the more I learn from my trading diary the more I see what happens if I don’t watch news releases carefully, or I leave limit buys/sell order on etc etc.. all experience ! Now don’t get me wrong I don’t tweak the system , I stick with the plan ! Except where I have decided to exit the trade before a KEY new release. If I have other ideas I will paper trade them, but I stick to the trading plan when cash is involved. Below is what I can expect with a 0.24 expectancy , trading capital , 2% risk per trade and current ave of 5 trades per week.
Capital Risk Level % Risk Amount Av win Weekly trades Av weekly profit
10000 2 £200.00 £48.00 5 £240.00
15000 2 £300.00 £72.00 5 £360.00
20000 2 £400.00 £96.00 5 £480.00
25000 2 £500.00 £120.00 5 £600.00
30000 2 £600.00 £144.00 5 £720.00
35000 2 £700.00 £168.00 5 £840.00
I am currently looking at 13 x FX pairs and one way to improve is to take more trades. I believe I can do this if I focus a little more, I many times spend to much time concentrating on price action on a couple of pairs only to find I have missed a setup on one of the others. An area where I know I can improve if I set more limit orders and move on.
:?:The problem: I am struggling to make the leep from a £200 risk to a £300 risk, never mind the step up to a £600 risk per trade which would be 2% of my max trading capital (I,m prepared to put forward at this time). I’m not sure if the problem is although I am aware I have a positive expectancy and the more trading capital I have the more money Ill get out. I cant help but think “have I give this system long enough”? Should I be working on doubling this expectancy for the amount of trades Im doing? Or doubling the amount of trades? I,m well aware that if I was doing 10 trades a day with this expectancy Id be pretty comfortable.
:?: Am I just not getting the next step? Is it quite normal to have 50K trading capitals etc to make a comfortable living from trading at home?
:?: Is this positive expectancy figure well below average for the amount of trades ?
I,m sorry its a very long entry , but I want to give you the full story so I can get the right advice, from the other traders who have been here. I also hope other traders starting out full time might get something from my journey and especially other experiences that may come out along the way. The thread from Hopefull (AKA Bonza) on his journey was very interesting , hope he made it?
One things for sure no more Seminars, no more buying systems.
Thanks G.
I have been interested in the whole trading thing for around 9 years, played (with cash not just demo) UK shares, Commodity futures etc. However the one I seem to feel most comfortable with is Forex spot trading.
Although I have been a member of this Forum for 6 years or so, I haven’t posted as i haven’t felt I was qualified enough to give the correct advice and a lot of the good question seemed to have been asked already. But Ill make up for it now....Great site for educating yourself on the trading discovery journey though. Even though the advice was there for all, I still made some of the usual errors some of the members warned about.
I have been pretty busy working as a contracts engineer for the last 20+ years or so, not leaving much time for getting any experience trading. It paid quite well enough for me pay most of my mortgage off and provide enough savings for a reasonable trading capital plus living expenses for that inevitable time where I wanted to try and give “making a living from day trading” a go. So I decided while the jobs front was quiet I would take the step (that I had been planning to do) and give trading a go full time.
Over the last 9 years, like many, I have been on the usual UK seminars Vince S and bought the same material from Steetwise , Mr Williams etc. I have even been taught a trading system by “day trader” , and yet while this system worked for him it didn’t necessarily work for me consistently. Something key that I learned from this experience is that If it doesn’t suit your personality a system that works for one aint necessarily going to work for you. “One glove doesn’t fit all “ , so to speak.
This same trader also mentioned another method he was forward testing, that involved using fib retracements, with certain other criteria like strong S/R, using 15m/1hr Time frames. All though he hasn’t said it, I believe he concentrates more on his original system which seems to suit him more. With the fib system something seemed to click with me and I believe it was the fixed entry , fixed stop and fixed target rules (with a little discretion depending on price action at the time maybe a trailing stop) and this i liked. So I built on this and tuned it to something that suited my trading preferences. Now before I enter the trade I know my risk and set my £/pip according to my 2% MM rules. I have also learned that having more winners than losers is not the key as my reward is usually 1.9- 2.0 x risk. This principal of needing to have more winners than losers really got some getting around.
I have now been day trading full time for around 8 months now and i would say the first 5 months have been a good part of my apprenticeship in trading. I found that I had to eradicate all the usual urges and trading mistakes. Moving stops, taking profits to early (tree shaking), poor position sizing and money management. Fighting the usual psychology traits like not accepting losses very well and blaming the markets.
Now I know that some traders don’t think certain trading tools work and some don’t believe TA is the way, well if we all thought the same I suppose life would be pretty dull. Just reading this Forum and the various threads you will see there is many ways that work. One thing I buy into though is what Mark Douglas wrote about having an edge in trading. That there is a random distribution between wins and losses for any given set of variables that define an edge.
I have arrived at a stage where I am making money from trading however not enough money to make make a living from. My trading capital at the moment is £10,000 and I do have another £20k to add if and when I believe the time is right. The rest is for living expenses and so that I never arrive at a scared money situation. Why only 10K capital? well i believe if I don’t make any money with 10K I,m definitely not going to make it with 30K.
My system expectancy is positive 0.24 meaning for every £1 pound risked I get £0.24p, not brilliant
as at the moment I am only averaging 5 trades a week (removing break even trades from the total). Now this is the expectancy figure if I calculate over the last 20 trades and also the same expectancy figure from the turn of the year 49 trades (62 if I count Breakeven trades) . Some may say its not enough testing, buts its already giving me a indication of what I can expect, be over the past 3 weeks or since beginning of the year as these are actual trades seen. The more I day trade , the more I learn, the more I eradicate mistakes, the more I learn from my trading diary the more I see what happens if I don’t watch news releases carefully, or I leave limit buys/sell order on etc etc.. all experience ! Now don’t get me wrong I don’t tweak the system , I stick with the plan ! Except where I have decided to exit the trade before a KEY new release. If I have other ideas I will paper trade them, but I stick to the trading plan when cash is involved. Below is what I can expect with a 0.24 expectancy , trading capital , 2% risk per trade and current ave of 5 trades per week.Capital Risk Level % Risk Amount Av win Weekly trades Av weekly profit
10000 2 £200.00 £48.00 5 £240.00
15000 2 £300.00 £72.00 5 £360.00
20000 2 £400.00 £96.00 5 £480.00
25000 2 £500.00 £120.00 5 £600.00
30000 2 £600.00 £144.00 5 £720.00
35000 2 £700.00 £168.00 5 £840.00
I am currently looking at 13 x FX pairs and one way to improve is to take more trades. I believe I can do this if I focus a little more, I many times spend to much time concentrating on price action on a couple of pairs only to find I have missed a setup on one of the others. An area where I know I can improve if I set more limit orders and move on.
:?:The problem: I am struggling to make the leep from a £200 risk to a £300 risk, never mind the step up to a £600 risk per trade which would be 2% of my max trading capital (I,m prepared to put forward at this time). I’m not sure if the problem is although I am aware I have a positive expectancy and the more trading capital I have the more money Ill get out. I cant help but think “have I give this system long enough”? Should I be working on doubling this expectancy for the amount of trades Im doing? Or doubling the amount of trades? I,m well aware that if I was doing 10 trades a day with this expectancy Id be pretty comfortable.
:?: Am I just not getting the next step? Is it quite normal to have 50K trading capitals etc to make a comfortable living from trading at home?
:?: Is this positive expectancy figure well below average for the amount of trades ?
I,m sorry its a very long entry
, but I want to give you the full story so I can get the right advice, from the other traders who have been here. I also hope other traders starting out full time might get something from my journey and especially other experiences that may come out along the way. The thread from Hopefull (AKA Bonza) on his journey was very interesting , hope he made it? One things for sure no more Seminars, no more buying systems.
Thanks G.
