Starting out trading and dont know how to make Profits?

Beginner Questions
3

This was point 2 - How to keep the system running by itself -

Now we come back to point 1:

Identify which markets to trade in.

The identification comes back to the trend analysis we have performed in the first page (please refer to Trend classification and Analysis).

We go from the high time-frame to the lower time-frame.

10 years in daily charts = trend = yes/no?
Here again gold:

long term.jpg700×349 23.2 KB

Can we see a trend? Yes we definitely do see that it is trending (most 10-years chart will show a obvious trend)
The direction is not important. it is only important that we see that it is moving.
You go down the next lower time-frame
The 4 years chart in daily candles. = trending
And again. The 1 Years chart = Trending.

Conclusion= THIS SECURITY IS HOT

We only trade in hot securities.

For a security to be hot it must be trending in at least 2 of the 3 long term charts.

If it trends in 1 year and 4 years chart but not in the 10 years chart. it is still a “HOT MARKET”
If it trends in the 1 year and 10 years chart it is again a “HOT MARKET”
If it trends in the 10 years and 4 years chart but does not trend in the 1 YEARS CHART it is “SEMI HOT”

All 3 charts are important but the 1 year chart is the most important for us to chose a market.
If the 1 years chart along any other of the 3 charts, reveals a clear trend which is already on the go - you can enter immediately (in the direction of the trend only).

If the 1 year chart is not showing any interesting trends it is a semi hot market and we enter it upon specific set-ups.

Now we look for our entrée. If the chart ( year chart) is already in a trend (this case now trending downwards - SHORTS) you simply enter immediately and put the highest high of the last 5 days as your stop loss and immediately set up a long trade on the stop loss of the short.

That’s easy work. You only need to practice your “trend recognition skills”.

But we do have a issue with markets which do not show a clear trend in then 1 years chart.

If it looks something like this:

2x no trend.jpg700×643 34.3 KB

It simply means there is no trend visible.

Does that mean we skip this pair and stop looking at it?

No.

We keep looking at this pair every day. We give it a 2 minute attention every day. We want to trade and we want to earn. So not observing a pair that might be a possible good run is contra productive.

How do we define that it started trending again?
[ul]
[li]We don’t.
[/li][li]We don’t think about that at all.
[/li][li]We don’t try to get clues through Oscillators or Indicators.
[/li][li]We don’t look at news or read articles of random “Analysts” or “journalists” who think this could/would happen sooner or later- or whatever.
[/li][/ul]

All those things above are only distractions. nothing else.

What we do: we use the “Entrée identification method” of our system.

Explanation:
Non-trending markets entrée method:

[ul]
[li]You count the last 40 days. Note the highest high and the lowest low of these 40 days.
[/li][li]On the lowest low you set up a SHORT ENTREE.
[/li][li]On the highest high you set up a LONG ENTREE.
[/li][li]The stop loss is setted up on the exact midpoint of lowest low and highest high.
[/li][/ul]

Why do we do this?

Because we love trends. All trends. And we trade only in trends.
A breakout out of a existing trend-less phase or a ranging market usually happens on heavy volume. Intense buying/selling pressure. Such breakouts are followed by heavy pressure into the new direction because no-one wants to come late and everyone wants to earn.

Such breakouts are a money making machine simply because the entrées are low risk but the potential move after the breakout is huge and very profitable.

This simply means that a SEMI HOT market has turned into a HOT MARKET. And we want to participate right in the early beginning of this new HOT MARKET -Phase.

not trending starts t trend.jpg700×426 31.8 KB

Once the breakout has happened (moved above or below the low of the last 40 days) we stay in the market. No matter the outcome of the first trade. It is very possible that the breakout towards up was a whipsaw, this increases the probability that a breakout towards the downside is going to happen immediately after. So if we lose the first trade we go back to our standard 5-days trading system in which only the last 5 days matter (the 40 days system is now obsolete and will not be paid any attention to).

So if the first (lets assume long) long trade after the breakout fails and creates a loss then we immediately enter a short trade at the stop loss of the first long. After that we use the 5 days method again -as described above- to guide the direction we are trading.

This means you are now in the market 24/7 again.

It is a start of a new trading in a trending market.

The last point. -Point 3

When do we leave a market and stop trading in it.

Markets turn from HOT into Semi-Hot and Cold from time to time (now i see it would be better to have used the word “warm” rather than semi-hot, but screw it i’m too lazy to change it again).

We must leave when a market is not hot any more.

This is the easiest and most simple part of this trading strategy.

We leave under the following condition:

We have been trading in the market with the 5-day method.
3 consecutive trades have been closed at a loss or profit of less than 1/1-risk-reward ratio.

That’s all. If that happens you go back to the 40-days breakout method.

Back to this statement again:

But if you think you will be bored and will have nothing to do all day then you are wrong. I will tell you later why you will be busy daily and for several hours trading this method.

It all looks like there is not much happening because we trade the 1 day timefrae.
That is because I created a system that takes off the hardest work. =Analyzing and guessing.
I created this system to fullfill 1 purpose: Make people who are not able to sucessfuly operate in financial markets earn money on financial markets. The thinking and guessing and learning part has been removed to make it easy. All you have to do is follow this precise set of rules and you will earn money.

Why it will not be boring after all? Take into consideration that you must pay a visit to 30 pairs every day. You have 50 “40-days breakout entree”-entree orders to manage and adjust when the time has come and 50 Stop losses for this matter.

You have 5 open trades which every one of them has 2 stop losses and 1 “entree-counter-direction” =3x5 = 15 positions to update every day.

Means you have to watch 30 pairs and update around 115 “commands” which you gave your trading too to command it what it has to do. And these commands have to be monitored once a day minimum and changed when necesarry.

It is enough work to keep you bussy and not bored.

This system covers everything.
Which markets to trade
Which not to trade
How to enter them
How to trade
Direction of trading
Risk Management
Diversification
Stop loss-rules
Entree-rules
Directional rules
etc. etc.
Only thing is does not cover is “knowledge”.

Enjoy, and I wish you many profits.

1 Like
4

Hello TURBONero,

I’m sure this will be an exciting thread full of useful advice.

However, can you please tell me if the above ‘quote’ is true? It took you one day to create a system that is guaranteed to make profits?

5

Hello Jezzode,

to gain the necesarry knowledge and experience to be able to create “that” system took years.

To combine usefull things into one set of paper and adjust it to a trading style that differs my trading style took around 1 day- yes. What i will be posting is a tool which i am using in my trading since a long time. I use this tool which i created myself since quite some time in trading and it has helped to identify possibilities. I took that tool out of my trading style and made it a “stand alone”- trend following system and added rules which clearly define entree, exit, SL and “staying out of market”. You can classify it as a portion of my trading style which has been remodeled, other things of my trading style have been removed and then wrapped up in a set of rules which differ from the rules i am using in my trading.

Once i post it (today evening or tomorrow) you are very welcome to backtest it with the support of a computer and tell me the results - since i do manual backtesting it would be very interesting to see what a computerized backtesting would reveal.

6

That’s more or less what I thought you meant, that you had set aside a day to set out a version of your trading style in a way that just about anyone can follow.
Look forward to seeing more

7

Where

is

the

freakin

fxbook

link???

8

Hi there Nero and thanks for your effort and time spent on this thread.
I would love to test the tool you are talking about (most probably I will do it manually too, because I don’t trust the strategy tester). Please do share out of your experience, if testing on Demo will give similar results to what you have tested in Live (I assume you are doing it on live account), or live conditions are needed?
Cheers.

9

Why bro? When you’re active here on BP you know who’s worth listening to and who’s not.

Let a brother do his thing.

10

Well said, Bob

11

Yeap, been here for a while, and you should of known it was sarcasm. But then again, your the one always pulling back the slingshot on me, expected.

12

Must be this one …

13

It is quite possible for a newbie to make profits. However, comprehensive research & retail broker data evidently states that only less than 1% of traders can really make profits.
The problem, thus, don’t lie in the difficulty but in the way the average trader move towards trading. However in the end, trading is regardless of the market and is like a profession. You would not be expecting to watch some YouTube videos to become an expert. You cannot read a few articles and be ready to trade.
If you actually want to follow the path, it should not be for money, but because you have passion for it. The path to be a consistent trader can be a long one. You may experience frustrations, setbacks and the times when you would want to quit.
The best you can do is admit that the professional trader usually take years and you would need to treat it like business and a skills would help you to develop.

14

TURBONero, thanks for your posts thus far. You’ve clearly put a lot of time and thought into this

15

Thank You Carlos Ray,

I have added everything to the entire system. Its all in post 1,2 and 3.

16

That’s a lot of time and effort you’ve put in to help folks out Turbo. Well done!

17

Thank You FundamentallyFlawed,

even thou i know its a waist of time and effort since i know it wont help anyone, i still hope it will help one or two people.

18

Hello eyedfondue,

sorry for my late answare. I can not tell you this since i never traded demo accounts in my life. All i did was always live accounts.

I do backtesting on paper only, and i think that paper backtesting is more accurate since you can take into consideration volatility much easier.

id be happy seeing a backtest on a demo account. would be very interesting.

19

Hi Nero,

Seems that you have an interesting system that I will try from next week on my life test account.

I have a few questions:

How did this system perform last year during the Brexit vote and US election day ?
I haven’t had the time to look at all charts in details because I’m working on an indicator that calculates the High and Lows during past 5 or 40 trading days and calculates the position size. Will probably post it here when ready if you allow it.

How does the EURUSD perform with this system ?
Is this a pair that you are trading at the moment or are there more interesting pair such as gold, usdjpy ? Those are making nice waves over the past year.

I’m a little bit confused about the SL of the 40 day system.
Suppose we had 3 bad performing trades with the 5 day system, then we need to switch to the 40 day system.
SL in middle of High and Low. I checked a few charts. We can have then a SL of more then 500 pips.
So we will have a very small position size.
When our pending order gets triggered a few days later we need to follow the rules again of the 5 day system to change our SL every day.
Aren’t we going then to a very small SL (5 day low), compared to the one of the 40d system ?
Why start with a big SL to have it changed the next day into a small one ? Or am I reading something wrong ?

You wrote that we can have only 5 active trades at one moment.
Suppose we follow with this system 10 to 15 pairs.
Since we are with this system 24/7 in a trade how can we keep then only 5 trades open ?
Do we have to close then a few trades ? Put system on hold ? Or what do you do ?

Thanks for your comments and putting this system in the forum here.

Steven

20

I’m also interested in this, would like to see back-test results if possible? Perfect strategy for me, long term positions which I like, but daily fiddling which stops me trying to pretend I can scalp!

21

Imagine I gave you a great build order in Starcraft2 and it will set you up for a great +1 timing attack but then you get 6 pooled.
What do you do?

You say you didn’t come up with the build order and therefore have no clue what to do or how to adjust.
Therefore you lose.

22

Hello Steve,

thank You for your comment. Ill answare as efficient as possible.

It performed very good. It took you out of the wrong direction very quick and never violated the 2% max risk.

Heres a example:

At the GBP/USD it performed good. First was a 40-days rule in place since there were no clear trends. Prior brexit it broke out towards the downside. The first trade was a lost of 1%

It initiated a long trade which was a gain of 1%

At the night of the brexit it closed the long at 1% loss and initiated a short trade which it closed automatically 12 july at a profit of 9,8%

So the over all profit in this pair on Brexit was around 9,8% account gain within 20 days.

This was 1 out of 5 trades. Add another 4 trades in the similar fashion and a account groth of 5-10% you can figure out a account growth of around 40% around the brexit votum.

There were better performers but this is the closest i saw when i opened my chart so decided to use this one.

Aswell keep in mind that there were at least 50% people who made losses on brexit. So a 40% gain isnt that bad for a completely automated system that requires no knowledge of you at all from markets economics plitics or even trading.

usd-gbp 5 days.jpg700×358 12.1 KB

the system performs exactl the same on every security. it really does not matter what you trade.

When you follow the rules precisely the system will in it self ban you from trading pairs in which it will perform badly. Thats how i created it.

The system has a build in Risk management calculation which is conected to the average movement area of the underlying security (some statistics and maths i did in the background and didnt explain in here). This means that it really does not matter which security you trade, the system will automaticaly and by itself adjust to the security. Once you start trading it you wil notice that for every security the numbers of calculation differ a lot while the claculation always stays the same. once you calcucated the numbers (entree, stop loss, position size according to risk management) you will notice that it is always the same risk management in place regarding percentages.

I like to ask you to post the exmaple which you found has a stop loss of 500 pips. Simply use your “Snipping Tool” which every windows has (find it at windows search bar typing “snipping tool”) to create a screen shot and post it here please.

About the stop losses in the 40-days trades. From what i have backtested the stop losses and the calculaton is very efficient, even more efficient than the 5-days high five trading method.

The issue you might was looking at was that when a pair starts ranging after it made a bigger advance into one direction. Then the “range” of the 40 days in many cases (after 3 consecutive trades closed in loss or RR less than 1:1) if often high leading to a wider stop loss. But the system is created to cover this “divergence” simpl yby the wide spread orders of entre. Why?

Immagine the dow made a advance from 19000 to 21000 within 2 months. You have been participating in this clear new “up-trend”. Now it becomes flat and the system forces you to use the 40 days method.

The price ranges around 20900 the last few days orweeks. Your entry for a long is 21000 with the 40-days system and you have a wide stop loss.

Your entry for a short is much further away at 19000.

Why is that good? simply because the entree for a short in such a clear bullish market is intelligent to be set far away. We discovered that it is a up trend, if we have now weeks or days where the market is ranging that does not mean that the up trend has ended, it is most likely that the uptrend will continue and you will participate in it as soon as it breaks out making new highs.

For the uptrend to end in such short term cases of 2-3 months the last low must be violated. every move in contratrend is considered a “reaction” only to a heated up bull market. It is only considered a trend change if it completely offsets the priop upmove by 100%.

On the other hand your new longposition in case of a brakeout will be a less risky position due to the bigger stop loss calculation. And that is very good that way simply because trading at market tops is dangerous. If a market reaches a new top the possibility for a shrp swing back is very high. this will keep your potencial losses small but still let you participate in that market.

This will flatten out. Once the 40 days moved beyong the big advance mentioned earlier your entrees for long and short will come closer together and your stop loss will not be as wide anymore.

And after you started the 40-days methode on the security that started ranging you anyways have already another security in which you are trading the 5 days method. this means your risk/profit always stays the same since you have 30 securities to chose of. if one is not behaving good and kicked your 5-days trading out then you will find another one withing minimum time to trade in and skip the one which is in the 40-days method.

But please add a chart which is in your interest and i will be able to explain it more precise on your example.

Please aswell take into consideration that a 500-pip stop loss in 'Gold is not a big stop loss at all since gold tends to move 2000 pips/day easily.

Once you have 5 trades open and the 40-days system opens a new trade you will be having 6 trades open, yes. This resolves itself by the system since it will sooner or later take you out of one of these 6 open trades. Once you have 6 trades open you restrict from opening a new trade by the 40-days system by deleting the orders. After the system took you out of 1 of the 6 open trades by itself (3 closes in loss or RR less than 1:1) you initiate again the 40-days to every security untill it opens a 6th trade again.

You can aswell play it a bit more risky and have 10 trades open simultaniously but i would not suggest tht since i didnt test anything in that fashion yet.

Over all the system is created to give you a account growth of 15-35% each month (depending on moth- high and low season of VOLUME since there are months where its more traded and months where its less traded). Thats already a great account growth. making it more risky is not adviced by me.

Got a meeting in 8 minutes so i need to hurry. I will answare the other posts in the evening or tomorrow.

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