My story of progression - forex

[dbphoenix]

Sorry to hear you're quitting. Consider, though, that you have created a particular universe in which to trade, at the moment focused on forex. Your failure -- or, if you prefer, your lack of success -- may have to do more with that universe than with your abilities as a trader.

If you decide ever to give it another try, at least consider trading something else in sim. I don't know why you chose spreadbetting and forex, but if the choice had anything to do with taxes, simtrading would make that factor irrelevant. If you can't develop a consistently profitable trading strategy under any circumstances, then by all means quit. But by exploring other paths, you may find that it all becomes at last clear to you.

Db

 

[JTrader]

Thanks DBP.

I think everyhing happens for a reason, and i will not look back on my trading education as a complete waste of time, as i've learnt about an awful lot of other stuff along the way.

I had hoped to develop a solid 1 trade per day EOD system that i could use if not prolonging trading intraday, and maybe I have something in SMccreadys FTSE system, but trading that could equally be as problematic and do nothing in the long but break even, so perhaps a clean break is best.

what exactly do you mean by sim trading?

Cheers.

 

[dbphoenix]

Simulated. It's difficult for me to understand why traders trade without a consistently profitable strategy in place, particularly when doing so leads to failure such a large percentage of the time. But they do.

If you enjoy it, then, or might, then at least consider learning how the market works before putting down any money, real or simulated. If you ever reach that point of understanding, then begin simulated trading. Real trading with real money is down the road, regardless of the advice usually handed out on message boards.

Db

 

[JTrader]

Simulated. It's difficult for me to understand why traders trade without a consistently profitable strategy in place, particularly when doing so leads to failure such a large percentage of the time. But they do.

If you enjoy it, then, or might, then at least consider learning how the market works before putting down any money, real or simulated. If you ever reach that point of understanding, then begin simulated trading. Real trading with real money is down the road, regardless of the advice usually handed out on message boards.

Db

Thats just it though DBP

I think this is a myth.
Sure we can develop theories based on price action, pauses, S/R, breakouts, but these are just as often false as correct, as none of us can know what will happen next. We can say what we think should happen next based on the evidence, but this is not the same and often proves to be wrong.

What happens today is unique in terms of momentum, pauses, speed of movement etc. and just cos it worked this morning doesn't mean it will work tomorrow morning. Trading strategies work some of the time and not others. I can't see this ever changing.

 

[dbphoenix]

Thats just it though DBP

I think this is a myth.
Sure we can develop theories based on price action, pauses, S/R, breakouts, but these are just as often false as correct, as none of us can know what will happen next. We can say what we think should happen next based on the evidence, but this is not the same and often proves to be wrong.

What happens today is unique in terms of momentum, pauses, speed of movement etc. and just cos it worked this morning doesn't mean it will work tomorrow morning. Trading strategies work some of the time and not others. I can't see this ever changing.

However, the fact that you can't see it or don't understand it doesn't mean that it's all a crock. If you don't know what moves price or what defines support or resistance or the function of pauses and breakouts and so forth, then you will be unlikely to make the proper trade.

If, like most new or unprofitable traders, you track price movements while thinking where you are going to enter and when and whether you are going to go long or short, you are pretty much oblivious to what's in front of you and how traders are moving price. Rather than focus on what price is doing, you are focused on what you should do/are going to do about it. I suggest this is the wrong focus.

Db

 

[JTrader]

Thanks
i know what you're saying DBP about them pauses, and I know what they should indicate - i.e. price struggling to go higher lower = reversal imminent.
However, i find that just as often as i may be right about this, I am just as often wrong, hence such decisions to enter/exit, or not to enter or exit are no better than a 50/50 guess, and that is why i consider it to be random and that i can't read too much into things because either outcome is equally possible.

 

[dbphoenix]

Thanks
i know what you're saying DBP about them pauses, and I know what they should indicate - i.e. price struggling to go higher lower = reversal imminent.
However, i find that just as often as i may be right about this, I am just as often wrong, hence such decisions to enter/exit, or not to enter or exit are no better than a 50/50 guess, and that is why i consider it to be random and that i can't read too much into things because either outcome is equally possible.

Or they mean nothing more than that price has found equilibrium and it doesn't plan to do anything at all except stay right where it is for a while.

But, again, your focus in on determining whether you should enter or exit or neither and, if entering, whether you should go long or short, and whether or not you are "right". None of this is relevant. None of it should be entering your conscious at all. The more you focus on what to do about the movement of price, the more difficulty you'll have in understanding the movement of price.

Db

 

[JTrader]

Following my own rules particularly when momentum is fast is part of the problem, but to trade profitably, i need price movements!

Looking at the chart now in hindsight, had i followed my rules this afternoon properly, i would have made roughly the same amount as what i lost.

This however, doesn't make up for days like tues-thurs which I followed my rules to the letter, but a lack of price movements means that i was struggling to breakeven today, but just ended up losing more.

It all becomes too complex - if this happens that may or may not happen, and if the news is so good, this might happen.

This week has been a real kick in the teeth, and this is what does damage to the soul.

 

[2be]

Another bad afternoon to match a lifeless morning, and a dead week following such a promising start to the week on Monday.

Lifeless EURUSD Tuesday through Friday morning.

Post 1330 NFP today, results in very few tradeable opportunities, as following the initial 1330-1335 price spikes (which personally i think you have to be suicidal to trade) price action comes to a standstill. In anycase, without an instantaneaous news ticker this is impossible, and you have to wait 3-5 minutes for briefing.com or forexfactory.com updates.

The 2 good trades i entered that went into profit were sabotaged by a faulty ****ing WS SB trade ticket, meaning i have to restart my browser, & sure enough when i have done this, the profit has dissappeared and becomes a loss!

I wish i could sound more positive but i can't as this would be deluding myself further.

I'm a university graduate who has put a lot of effort into trading on and off in my spare time for 4-5 years. I've been to chart school, and studied all the indicators which many traders conclude are useless. Many including me may then use no indicators, and just concentrate on price action tick by tick.
In my opinion, this is just as random, and none of us have a clue what to do next.

Although overall i have been profitable trader in both my spells of intraday trading, I haven't been able to progress quickly enough, or develop enough faith in what i am doing to convince me that compounding my profits and ultimate success will result.

Price moves in an uncontrollable way, in spot forex and spreadbetting we are betting on something that we have no influence in determining the outcome of. Direct market access traders may argue that their situation is different, although i feel that only the person with enough dough to trade many contracts at once can have any influence on shaping the market direction.

Would i get involved in trading again? Probably not. At the end of this month at the latest, i am probably going to call it a day, and I will have to find something more interesting and useful to people other than myself to do with my days.

The bottom line is, I feel i am no better or worse a trader now than i was 4 years ago, when i tried full-time intraday for 6 months. And why should i be any better or worse (despite days/weeks in chart school), when market price action is so random and beyond my control or influence?
I'm not able to even influence let alone control what will happen, nor can anyone, therefore why should anyone think that with time and experience they should improve as a trader?

I'm coming to the conclusion that it is a complete waste of time, and that like the other 90-95%, now is the time to walk away, waste no further time or effort thinking, ah yes I've found my holy grail. I don't think there is one, or that anyone has one.

I do not doubt that there is a real 5-10% of traders who are successful and do not lose like the other 90%.

As an example, i know a trader who is a very prominent member of other trading communities and has made many of his own indicators and still makes them, and shares them for free. He doesn't use any of them however, because they do not work well enough. He makes his profits based on price action around 1/4 century forex levels - allied by the facts that he doesn't use a stop-loss and just waits for a trade to come back into profit - whether this takes hours days or weeks.

As stated, I have been to chart school and spent many hours in charts schools homework club, and know an awful lot about charts, technical analysis, fundamental analysis, brokers etc. etc.
and I like every other trade do not have a clue what is coming next.

Trading is gambling, and attempts to convince otherwise is delusinonal.

THERE IS A VERY GOOD REASON WHY ONLY 5-10% SUCCEED, i don't know exactly what this is.

Make up your own minds about if you want to commit similar time and effort like I have done, use my story and experience as a warning. But at the end of the day, be prepared to join the other 90-95% of people whjo quit in failure.

I have done a stupendous amount of work that could have been better spent. I am an extremely determined, strong, self-motivated and conscienscious individual, and I still haven't got a clue. I could continue trying to convnice myself that with further experience, things will continue to improve, just like my golf handicap, or my fitness with time spent at the gym, but to my mind trading doesn't work like this, otherwise i'd be an expert ny now - which I am, but i still don't have a clue whats coming next.

Although i don't necessarily think i am likely to turn into a loser, i can forese me becoming a breakeven trader, and happy to be a break even trader - which in itself is not easy.

Maybe if i do quit i'll come back to trading in my retirement. Maybe I won't because if i can't succees now, why should i at 65?

These are the pitfalls, are you prepared to waste valuable hours days, weeks, months years and be 90% likely to end up in the same situation?

Please don't let this put you off, but it should act as a sobering warning as to what you are getting into, and what i am probably going to get out of.

Overall, my impression is that people get into trading with big dreams of being successful. 90% fail - period, and i think a lot of the 5-10% who succeed, end up taking a lot longer than they had initially hoped to in terms of time and effort, to reach their desired level of success, making little more than they would do in a regular day job.

Remember that there is no such thing as a holy grail - all traders look for one, but most will tell you this also.
At best a trading strategy will work best some of the time, but not all the time - and your total gross profits will outnumber your total gross losses, if you become on of the lucky 5-10%.

PS. I've also decided that my signature is wrong!

J Trader, your experience in itself is a proof that you are in a good company of learners. I have been at it for a bit longer that you but on and off, with breaks from trading as long as 8/9 months, but I never gave up the desire to get better and more professional in respect of risk management. I/ we got other source of income and a very supportive wife, so when I have blown some money on learning she would say, thats fine, learning costs and carry on. My costs have never gone into endless thousands, though I have spent a bit on books, not on courses. I even got a programme that everybody on T2W says is not good, but it works for me, often with 20pps precision or better!!! But thats me. What I find helpful is the following:
1. I do not count for the profit to be part of our immediate financing.
2. I am genuinely interested in politics though not actively involved at this moment and in price performance forming semi-life patterns.
3. I like reading and news scanning, so forex and indexes are a natural arena displaying whats going on.
4. I am committed to be as professional and disciplined at it as I can be. Professional in risk management, and therefore directly becoming more professional and DISCIPLINED!!! in my trading activity.
5. I am committed not to be hooked by trading, not to grow an emotional dependence on getting beaten by the market, or have the urge to beet it. I have learned like you, that I cannot influence the market, its bigger than me, so I rather ride it.
6.I have a realistic expectations, better smaller and realistic then impressive and unattainable targets.
7. There is a sense of enjoying it, the whole package. If I come to different conclusion, and would not enjoy it, without a doubt I would have pack it long time ago.
I have worked out that for me there is more risk not to trade then to trade with a well managed strategy in a disciplined way with affordable risks inevitably involved.
I hope you will not find this post patronising, as it not my intention to do so, just an honest attempt to share with you a bit of my own experience in learning to be a disciplined trader.

 

[dbphoenix]

Following my own rules particularly when momentum is fast is part of the problem

What are your rules?

 

[tblackw320]

just going through the same myself with a short copper trade. Nice to know other people out there feeling the same!

On a serious note though, it's just playing the averages isn't it. You know your strategy's robust, you know it works in time, there'll just be a few bumps along the way.

Amen Brother! That about covers it!

 

[JTrader]

What are your rules?

I use a 10-tick chart, 10 & 21 EMA, 50 SMA, and when price enters 10-21EMA zone, and 50SMA slopes 20+ degrees up or down, I look to enter.
I prefer going short than long, as these trades tend to be more successful. The aim is to enter at minor retracements in the trend, before a continuation with the trend.

I also prefer to trade in the same direction of the hourly or daily candle.

at 00 & 50 levels in EURUSD i will trade if i am trading in the same direction as the hourly and daily candle. Sometimes just the hourly candle but preferably both. But i wait for price to hit the 50/00 level, then form a new 10 tick candle and go above the level before rehitting the level, before i enter.

102150MA is my primary entry strategy. 0050 houly down daily down, or 0050 hourly up daily up, is a secondary strategy that i use if momentum has picked up and i have good reason to believe the 0050 level will fail.

I look for HH, HL LL LH and do not short after a HL & HH, and do not go long after a LL and LH.

I classify a LH as being significant if the distance from the low to the LH is around 8 pips or more. I classify a HL as significant if the distance from the high to the HL becomes around 8 pips or more.

I do not like to trade against an equal low or equal high (EL or EH) as this can mean S/R.

I have to choose between a 5, 8 or 10 pip profit target. All work about just as well as each other overall in my backtesting.

My stop-loss is a maximum of 4 pips + spread from bid price on chart at entry.

I do not trade 10 within 10 minutes before or after economic news.

If i had a 5 pip PT, it is simple i exit at +5p. If price goes +4p and back to -1p below my entry, i exit at 5PTSL.
I use BESL of -5p at +4p in profit if i am using 8 or 10PPT also. With 8/10 PPT, if price goes to +5p from entry price on chart and back to +2p from entry, i exit (breakeven + 1p). I also use a 4 pip trailing stop loss.

I am more inclined to use a 5 pip profit target, when momentum is slow, particularly if trading long when the price rise is labouring, as i tend to experience a higher proportion of winning short than long trades - hence i am more comfortable shorting.

With a 8 or 10 pip PT, i am more likely to use this if short, with momentum, and i have reason to believe price will continue in my direction - i.e. if the economic news supports this idea, and when there is a lack of S/R above or below.

After 2 trades - 2 failed trades at one price level, i step aside and wait for a new opportunity after a breakout.

Today was an example of being +10 pips on 2 trades, and not taking the profit while it was there, holding on for more just because i was expecting price to break below 1.3100 as it often would after NFP, or ISM. These trades became a loss, which was wrong of me - and i knew it, but i was chasing/hoping for a big move after being at breakeven for the week as a whole.

5-6 trades per day is the maximum i want to do.
0800-1200 UK time are my core hours, with 1330-1600 UK time forming the afternoon.
1200-1330 is often dead time in the market, unless interest rates or smething similar are being announced within this timeframe.

Indecision over whether to target 5,8, 10 or more pips profit can be a big part of the problem, meaning indecision.

I like such a small timeframe, as i prefer to use smaller stop-losses, and thus be able to trade bigger position sizes than if using a 40 pip stop loss etc.

 

[dbphoenix]

I use a 10-tick chart, 10 & 21 EMA, 50 SMA, and when price enters 10-21EMA zone, and 50SMA slopes 20+ degrees up or down, I look to enter.
I prefer going short than long, as these trades tend to be more successful. The aim is to enter at minor retracements in the trend, before a continuation with the trend.

I also prefer to trade in the same direction of the hourly or daily candle.

at 00 & 50 levels in EURUSD i will trade if i am trading in the same direction as the hourly and daily candle. Sometimes just the hourly candle but preferably both. But i wait for price to hit the 50/00 level, then form a new 10 tick candle and go above the level before rehitting the level, before i enter.

102150MA is my primary entry strategy. 0050 houly down daily down, or 0050 hourly up daily up, is a secondary strategy that i use if momentum has picked up and i have good reason to believe the 0050 level will fail.

I look for HH, HL LL LH and do not short after a HL & HH, and do not go long after a LL and LH.

I classify a LH as being significant if the distance from the low to the LH is around 8 pips or more. I classify a HL as significant if the distance from the high to the HL becomes around 8 pips or more.

I do not like to trade against an equal low or equal high (EL or EH) as this can mean S/R.

I have to choose between a 5, 8 or 10 pip profit target. All work about just as well as each other overall in my backtesting.

My stop-loss is a maximum of 5 pips + spread from bid price on chart at entry.

I do not trade 10 within 10 minutes before or after economic news.

If i had a 5 pip PT, it is simple i exit at +5p. If price goes +4p and back to -1p below my entry, i exit at 5PTSL.
I use BESL of -5p at +4p in profit if i am using 8 or 10PPT also. With 8/10 PPT, if price goes to +5p from entry price on chart and back to +2p from entry, i exit (breakeven + 1p). I also use a 4 pip trailing stop loss.

I am more inclined to use a 5 pip profit target, when momentum is slow, particularly if trading long when the price rise is labouring, as i tend to experience a higher proportion of winning short than long trades - hence i am more comfortable shorting.

With a 8 or 10 pip PT, i am more likely to use this if short, with momentum, and i have reason to believe price will continue in my direction - i.e. if the economic news supports this idea, and when there is a lack of S/R above or below.

After 2 trades - 2 failed trades at one price level, i step aside and wait for a new opportunity after a breakout.

Below was an example of being +10 pips on 2 trades, and not taking the profit while it was there, holding on for more just because i was expecting price to break below 1.3100 as it often would after NFP, or ISM. These trades became a loss, which was wrong of me - and i knew it, but i was chasing/hoping for a big move after being at breakeven for the week as a whole.

5-6 trades per day is the maximum i want to do.
0800-1200 are my core hours, with 1330-1600 forming the afternoon.
1200-1330 is often dead time in the market, unless interest rates or smething similar are being announced within this timeframe.

Below is a screenshot of this afternoon, and what i should have traded according to my rules, whether using a 5,8 or 10 pip profit target.

Indecision over whether to target 5,8, 10 or more pips profit can be a big part of the problem, meaning indecision.

I like such a small timeframe, as i prefer to use smaller stop-losses, and thus be able to trade bigger position sizes than if using a 40 pip stop loss etc.

And what evidence do you have that all of this yields consistent profits?

Db

 

[JTrader]

And what evidence do you have that all of this yields consistent profits?
Db

Manual backtests through weeks of charts.

 

[Crap Buddist]

That seems like a lot of conditions, that on reading sounds confusing JT to me, thats partly my fault as I tend to think is it going up ? then wheres the value? and vice versa.

 

[dbphoenix]

Manual backtests through weeks of charts.

And what are your stats?

Db

 

[JTrader]

That seems like a lot of conditions, that on reading sounds confusing JT to me, thats partly my fault as I tend to think is it going up ? then wheres the value? and vice versa.

It does sound confusing i understand that. But thats partly due it being me expressing my own logic/rules in my own way of thinking and internal language that makes sense to me etc.
It's quite simple really.

 

[JTrader]

And what are your stats?

Db

Basically that from 0800-1200 trading 5 trades per day maximum, over the last 5-6 weeks or so of manual backtests of 10 tick charts, that using my 102150MA rules (forgetting about my seperate secondary 0050 entry strategy that i may or may not use), using 5 8 or 10 pip profit targets, making around 44-47 pips per week is about the standard average performance, with the 1 pip EURUSD spread that i trade.

There is not much difference between 5,8 or 10 pip PT's in overall performance, due to the conditions that i attach to them. Some days a 10 pip PT works better than 5 pips, other days it does not.

Six weeks doesn't sound much to go on, but remember, these are 10 tick bars, and 30 days encompasses a lot of price action at 10 tick level.
I could go through more weeks of historical charts, but this is slow and time consuming, and i would rather forward test what looks promising. Besides which, i am aware of the limitations of back-testing, and manual/visual back-testing.

I am treating 1330-1600 afternoons as seperate, and have not backtested these. Perhaps i should not trade them at all, but with a quiet tuesday through friday morning this week, due to 2 big news releases today and yesterday, this is when big profits are available, if you get it right.

The problem is tuesday-thursday wass very quiet and then you get the NFP, the proceeding price action is very quick, and then it settles back to being very quiet and steady 45-60 minutes later.

 

[dbphoenix]

Basically that from 0800-1200 trading 5 trades per day maximum, over the last 6 weeks or so of manual backtests of 10 tick charts, that using my 102150MA rules (forgetting about my seperate secondary 0050 entry strategy that i may or may not use), using 5 8 or 10 pip profit targets, making around +50 pips per week is about the standard average performance, with the 1 pip EURUSD spread that i trade.

There is not much difference between 5,8 or 10 pip PT's in overall performance, due to the conditions that i attach to them. Some days a 10 pip PT works better than 5 pips, other days it does not.

Six weeks doesn't sound much to go on, but remember, these are 10 tick bars, and 30 days encompasses a lot of price action at 10 tick level.
I could go through more weeks of historical charts, but this is slow and time consuming, and i would rather forward test what looks promising.

I am treating 1330-1600 afternoons as seperate, and have not backtested these. Perhaps i should not trade them at all, but with a quiet tuesday through friday morning this week, due to 2 big news releases today and yesterday, this is when big profits are available, if you get it right.

The problem is tuesday-thursday wass very quiet and then you get the NFP, the proceeding price action is very quick, and then it settles back to being very quiet and steady 45-60 minutes later.

Let me put it this way, at least to start: out of 100 trades, applying all of your rules, what percentage of those trades are profitable?

Db

 

[2be]

I use a 10-tick chart, 10 & 21 EMA, 50 SMA, and when price enters 10-21EMA zone, and 50SMA slopes 20+ degrees up or down, I look to enter.
I prefer going short than long, as these trades tend to be more successful. The aim is to enter at minor retracements in the trend, before a continuation with the trend.

I also prefer to trade in the same direction of the hourly or daily candle.

at 00 & 50 levels in EURUSD i will trade if i am trading in the same direction as the hourly and daily candle. Sometimes just the hourly candle but preferably both. But i wait for price to hit the 50/00 level, then form a new 10 tick candle and go above the level before rehitting the level, before i enter.

102150MA is my primary entry strategy. 0050 houly down daily down, or 0050 hourly up daily up, is a secondary strategy that i use if momentum has picked up and i have good reason to believe the 0050 level will fail.

I look for HH, HL LL LH and do not short after a HL & HH, and do not go long after a LL and LH.

I classify a LH as being significant if the distance from the low to the LH is around 8 pips or more. I classify a HL as significant if the distance from the high to the HL becomes around 8 pips or more.

I do not like to trade against an equal low or equal high (EL or EH) as this can mean S/R.

I have to choose between a 5, 8 or 10 pip profit target. All work about just as well as each other overall in my backtesting.

My stop-loss is a maximum of 5 pips + spread from bid price on chart at entry.

I do not trade 10 within 10 minutes before or after economic news.

If i had a 5 pip PT, it is simple i exit at +5p. If price goes +4p and back to -1p below my entry, i exit at 5PTSL.
I use BESL of -5p at +4p in profit if i am using 8 or 10PPT also. With 8/10 PPT, if price goes to +5p from entry price on chart and back to +2p from entry, i exit (breakeven + 1p). I also use a 4 pip trailing stop loss.

I am more inclined to use a 5 pip profit target, when momentum is slow, particularly if trading long when the price rise is labouring, as i tend to experience a higher proportion of winning short than long trades - hence i am more comfortable shorting.

With a 8 or 10 pip PT, i am more likely to use this if short, with momentum, and i have reason to believe price will continue in my direction - i.e. if the economic news supports this idea, and when there is a lack of S/R above or below.

After 2 trades - 2 failed trades at one price level, i step aside and wait for a new opportunity after a breakout.

Below was an example of being +10 pips on 2 trades, and not taking the profit while it was there, holding on for more just because i was expecting price to break below 1.3100 as it often would after NFP, or ISM. These trades became a loss, which was wrong of me - and i knew it, but i was chasing/hoping for a big move after being at breakeven for the week as a whole.

5-6 trades per day is the maximum i want to do.
0800-1200 are my core hours, with 1330-1600 forming the afternoon.
1200-1330 is often dead time in the market, unless interest rates or smething similar are being announced within this timeframe.

Below is a screenshot of this afternoon, and what i should have traded according to my rules, whether using a 5,8 or 10 pip profit target.

Indecision over whether to target 5,8, 10 or more pips profit can be a big part of the problem, meaning indecision.

I like such a small timeframe, as i prefer to use smaller stop-losses, and thus be able to trade bigger position sizes than if using a 40 pip stop loss etc.

This seems to me to be very intense and I suspect that any delays at S/B platform will make it very difficult to implement, direct feed and execution might cope with it otherwise any slippage, delay will be very punishing in implementing such short trades, not mentioning the costs of possibly variable spreads. I am not that advanced at all and frankly I hardly ever go below 10min chart anyway. I therefore cannot say much re your strategy, apart of those few remarks.