now now op - don't be discouraged take all the money you and your family have and all you and your family can borrow and just do your thing as you want. pay no attention to these fools here that say you can't make it just take the money and go after it. i will be waiting to see your yacht sail by mine..
Tell Me Why This Simple Strategy Won't Work
- Thread starter jaygould
- Start date
Does this qualify as a truly "responsible" post? I mean in the best interests of the OP ?
When I think of all the "computerized big guns" I've coded and all the "wailing and gnashing of teeth" I've experienced, I have to conclude that trading is not easy .....
HyperScalper
Helpful diolague to learn from both viewpoints.
Just as an update for those interested.
I simply cannot overcome commission costs with this strategy.
Over the past 7 days, I've earned about 8% net on trading alone.
(The strategy I'm running is very similar to the one I described with the exception that I'll pull out of a winning trade on a reversal signal as opposed to going for a double account on each trade)
However I've lost about 10% on commission costs, so I'm actually down close to 2% despite being consistently right.
So I'll consider this experiment to be closed, unless someone can give me a way to trade commission free.
I simply cannot overcome commission costs with this strategy.
Over the past 7 days, I've earned about 8% net on trading alone.
(The strategy I'm running is very similar to the one I described with the exception that I'll pull out of a winning trade on a reversal signal as opposed to going for a double account on each trade)
However I've lost about 10% on commission costs, so I'm actually down close to 2% despite being consistently right.
So I'll consider this experiment to be closed, unless someone can give me a way to trade commission free.
I'd like to help if I can. Would you please describe in detail the trading strategy. There may be some approaches which could improve your outcomes. There are a lot of tools available to Interactive Brokers traders, some of which could also be of help to you. It's been a while since I used IB, and I did API programming against it as well. Often techniques to help with improved entries and exits can tip the scales more in your favor.
Critical question: are you a U.S. person or non-U.S. ? Other brokerages are available to you if you are outside the U.S.
HyperScalper
Thanks.
Yes I am a U.S. citizen.
In terms of entries, the strategy is in line with my original post.
For exits, I let it run until I see one of two types of reversal patterns (or it hits my stop)
When I get home, I could post a couple examples of these patterns.
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To the OP, let's say you trade your system and after a seemingly undending deluge of loses you catch a winner which quickly reockets to 30%, rising to 40% of your account then as you take a closer look you see signs that the market might be turning. Now it's been so long since you had a profit, and if you don't grab this 40% monster it could slip through you fingers. Are you really telling me that you are going to say to yourself "fuck it, 100% or nothing"?
Up until yesterday, my answer to you would have been yes.
I once did not have the discipline to follow through on winning trades, but I do now.
But as my post earlier today shows, the problem with my strategy is commission costs.
The game just puts you at a structural disadvantage that I'm not sure how (or if) can be overcome.
A slightly modified version of the strategy I posted made a decent return over the past week independent of commissions, but was in the red withstanding.
The strategy is sound theoretically, but as my experience in a live environment shows, commission costs would have to be at least half what they are for this to work.
I'm starting to think that success in trading is more about who gets the best deal on commissions as opposed to anything else.
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Well, I qualify as an expert on micro scalping and I think most of us would say that trading for 4-5 PIP losses is getting close to the micro scalping category. There are several things that you should look for in a broker:
1) a "proportional" commission based upon lot size, not a fixed amount per-trade. Real ECN type operations like Dukascopy or LMAX give you that but you're in the U.S. and you can't use them. I'm thinking you're using Interactive Brokers? From the perspective of commission, you might look elsewhere depending whether you're using their lower tier FX or higher tier what used to be called Idealpro.
2) a broker with an API which enables you to enter on a pull-back, or use limit orders to make the market come to you. This gives you price advantage on the pullback. Somebody can write you a simple client using the API which can give you assistance in 2 areas: a) entry to the trades, and b) management of the ongoing trades, such as "trailing stop" approaches.
3) use multiple limits to enter, staggered to improve your volume weighted cost basis forcing the market to come to your price, rather than taking the less advantageous price which the static market is offering you...
Any techniques which you can reasonably use to make the market "come to you", improve your pricing, and/or lower commissions will improve the situation. But having such a tight stop loss fundamentally will erode your account, so perhaps you can "widen" the stop situation to reduce your stop-outs, or change your trade management techniques.
When you're asking the market to "come to you" using Limit orders, you need to be perfectly satisfied if it does not come to you, and so you simply don't enter the market. This is a big deal in reducing price adversity stop-outs because you are "grabbing" the market on a pullback, thus stacking some odds in your favor.
Just a few ideas,
HyperScalper
Will not be trading again until the first of the year, due to the usual lack of volatility in Forex in the last two weeks of December.
But when I return in January, I am going to add one new rule to my strategy.
If doesn't work I'm done with trading.
Rule is this. Any trade that goes in my direction achieving a greater profit than my stop loss, gets Closed-The-Fuck-Out at break even - no exceptions.
I am taking the don't let a winner turn into a loser rule to heart. That's one thing I wasn't doing before.
In other words, if stop loss is 4pips and I am ever up by 5pips, no losing money on that trade.
Period.
So lets see what happens. Trade with the trend. Cut your losses quick. Let your winners run.
Never let a winner turn into a loser. Keep risk at 2% of account size.
But when I return in January, I am going to add one new rule to my strategy.
If doesn't work I'm done with trading.
Rule is this. Any trade that goes in my direction achieving a greater profit than my stop loss, gets Closed-The-Fuck-Out at break even - no exceptions.
I am taking the don't let a winner turn into a loser rule to heart. That's one thing I wasn't doing before.
In other words, if stop loss is 4pips and I am ever up by 5pips, no losing money on that trade.
Period.
So lets see what happens. Trade with the trend. Cut your losses quick. Let your winners run.
Never let a winner turn into a loser. Keep risk at 2% of account size.