You're going for a home run. 200-300 pips happens how often exactly and how long does it take for the trade to unfold? With 30-60 pip stops you'll probably have a win rate somewhere in the neighborhood of 20%. With that low a win rate you can have 20-30 consecutive losses easily and the method isn't messing up. With that type of setup you should probably be risking no more than 1% or even 1/2% on each trade. If I were trading a 20% win rate system it would be doomed to failure. Maybe your balls are made of brass. Mine aren't.
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Forex vs. Other Markets
- Thread starter redbull13
- Start date
You're going for a home run. 200-300 pips happens how often exactly and how long does it take for the trade to unfold? With 30-60 pip stops you'll probably have a win rate somewhere in the neighborhood of 20%. With that low a win rate you can have 20-30 consecutive losses easily and the method isn't messing up. With that type of setup you should probably be risking no more than 1% or even 1/2% on each trade. If I were trading a 20% win rate system it would be doomed to failure. Maybe your balls are made of brass. Mine aren't.
Quote from patrick_newB:
Once you start making money with FXCM you'll probably want to close your account as you'll start seeing those things.
Forex is ruled by the hourlies and higher. Setups on lower than hourly charts are virtually meaningless in forex. Use short term charts for timing only. Every day is a new day but it is a new day within the context of the weekly tone. Every week is a new week meaning most of the time the tone of the previoius week will not carry over into the new week.
Stop trading from the greedy standpoint of wanting to make money or to make something happen, then looking at the market for what's going on and placing a trade to capture the move that "should" happen. A much better way to approach the market is to sit back and wait for the opportunity to present itself, then take action on it. Let the market come to you. The market moves on its own terms and not on yours. It will get to its objectives in its own due time with or without you.
And your piddly little buying and selling won't even make a dent in this thing. A 500 lot going off on EURO futures isn't enough to turn the tide or start a move of more than a few ticks. New size just gets posted and the regularly scheduled program gets carried out without so much as a hiccup.
Best of luck,
Patrick
Hey Patrick,
I agree with everything you said. I generally use a daily and weekly chart to determine what I want to do, and an hourly or 30 min chart to give me signals as far as timing goes.
I also know I cannot force my will upon the market. I try to let it tell me what it wants to do. It's much harder said than done, as any trader knows.
Take care
Gentlemen, please look at 3 years on the monthly candlestick EUR chart, this will tell you what kind of market we are in now, look at the ranges of the monthly bars, and do not count the wicks or shadows. Reversals seem to rule and trending, like the beginning of this year and back into last year does not exist.
We are in a market, that if you make a mistake it's hard to make it up. 200-300 pips used to be a regular thing, now it would be very difficult to hit these numbers just because it does not happen. If you look at a 4 hour chart there is more clarity to find trends, but you have to get in early, if you wait for a confirmation, the trend is usually gone.
At times like these it is best to back wayyyy down on your leverage, and don't take these wild eyed stops like some used to, 80-100 pips.
You may ask why is it like this VIPER?
Look at the dow grasshopper, when the big houses move swiftly to the dow, then the Forex Chi grows weak
The Ever Proverb Speaking VIPER
Hey this aint to bad for a government school gradjeate is it!
We are in a market, that if you make a mistake it's hard to make it up. 200-300 pips used to be a regular thing, now it would be very difficult to hit these numbers just because it does not happen. If you look at a 4 hour chart there is more clarity to find trends, but you have to get in early, if you wait for a confirmation, the trend is usually gone.
At times like these it is best to back wayyyy down on your leverage, and don't take these wild eyed stops like some used to, 80-100 pips.
You may ask why is it like this VIPER?
Look at the dow grasshopper, when the big houses move swiftly to the dow, then the Forex Chi grows weak
The Ever Proverb Speaking VIPER
Hey this aint to bad for a government school gradjeate is it!
Quote from TradeViper:
Gentlemen, please look at 3 years on the monthly candlestick EUR chart, this will tell you what kind of market we are in now, look at the ranges of the monthly bars, and do not count the wicks or shadows. Reversals seem to rule and trending, like the beginning of this year and back into last year does not exist.
We are in a market, that if you make a mistake it's hard to make it up. 200-300 pips used to be a regular thing, now it would be very difficult to hit these numbers just because it does not happen. If you look at a 4 hour chart there is more clarity to find trends, but you have to get in early, if you wait for a confirmation, the trend is usually gone.
At times like these it is best to back wayyyy down on your leverage, and don't take these wild eyed stops like some used to, 80-100 pips.
You may ask why is it like this VIPER?
Look at the dow grasshopper, when the big houses move swiftly to the dow, then the Forex Chi grows weak
The Ever Proverb Speaking VIPER
Hey this aint to bad for a government school gradjeate is it!
Excellent points. I've been studying the weekly charts of late also to get more perspective on the magnitude and character of the moves we've been seeing in EUR/USD. And I think your forex proverb speaks the truth about the macro level of participation. Thanks for the insights.
Quote from patrick_newB:
You're going for a home run. 200-300 pips happens how often exactly and how long does it take for the trade to unfold? With 30-60 pip stops you'll probably have a win rate somewhere in the neighborhood of 20%. With that low a win rate you can have 20-30 consecutive losses easily and the method isn't messing up. With that type of setup you should probably be risking no more than 1% or even 1/2% on each trade. If I were trading a 20% win rate system it would be doomed to failure. Maybe your balls are made of brass. Mine aren't.
Patrick,
I can see what you're saying. However, this is how I want to trade. Even if it won't work, and it very well may not, I think the only way I'll find a new method is by at least trying this so I can find out first-hand. You guys know how it is. Thanks again.
Pat, we are using 4 different strategies, weighting our size based on the productivity of the particular strategy we are using. From last year to the beginning of July this year we were scalping for 15-30 pips per trade on a 15 min timeframe, we would to this twice a day like clockwork.
At the end of July things got ugly for scalping, so now it is 4 hour and daily. Its my opinion that one system does not fit all. Also if you are trading for yourself you need to be able to embrace futures and metal, this allows you to participate in the big board and the nasdaq without having to put up the 25k juice to be a pattern day trader.
The Ever Adapting VIPER
At the end of July things got ugly for scalping, so now it is 4 hour and daily. Its my opinion that one system does not fit all. Also if you are trading for yourself you need to be able to embrace futures and metal, this allows you to participate in the big board and the nasdaq without having to put up the 25k juice to be a pattern day trader.
The Ever Adapting VIPER
Quote from riskarb:
I don't follow. 2:1 leverage is waaay too much with a $5,000 account trading a mini-lot?
From what I've gathered RedBull is swing trading so that would mean wider stops = less leverage. He's just starting out in Forex = less leverage.
Trading with a max of one contract is pretty restrictive because it doesn't allow for any scaling, in or out. You need a couple of contracts to be flexible enough that's why I said 1:2 is too high because with 4 contracts that leads to 8:1 leverage on a swing trade.
The best thing I did when I started was to trade small otherwise the account would have been gone within the first year.