How can you consistently win in the FX using Technical Analysis?

[rhodytrader]

Originally Posted by PrivateFX

Money management is what will make a difference between a profitable an unprofitable trader. There is no technical analysis or fundamental analysis strategy out there that will let anyone profit consistently. You need to control emotions and have money management skills. Technical and fundamental analysis is just a small step to being successful. Learn to control emotions and money management, then you stand a chance.

To be consistently profitable, regardless of the approach you use, you need to have a system/method/technique that is a net winner over time. If you do not, the best money management approach and the most rigid discipline will do nothing more than slow the process of shrinking your account. You cannot turn a losing system in to a winning one through money management and a good trading pyschology - though you can turn a winner in to a loser if you don't trade control your risk and keep your head on straight.

[Tess]

Originally Posted by rhodytrader

To be consistently profitable, regardless of the approach you use, you need to have a system/method/technique that is a net winner over time.

If you do not, the best money management approach and the most rigid discipline will do nothing more than slow the process of shrinking your account.

Absolutely agree!

And once you unravel that (or rather those, because it's often prudent to adopt a couple strats for differing conditions) procedure & maintain a straight line, your confidence & efficiency increase accordingly.

Good post John!

[PrivateFX]

Originally Posted by rhodytrader

To be consistently profitable, regardless of the approach you use, you need to have a system/method/technique that is a net winner over time. If you do not, the best money management approach and the most rigid discipline will do nothing more than slow the process of shrinking your account. You cannot turn a losing system in to a winning one through money management and a good trading pyschology - though you can turn a winner in to a loser if you don't trade control your risk and keep your head on straight.

yes of course having a decent system makes a difference too but I was mainly trying to make a point that without money management, it'll be hard to be successful. Let's say 2 people were given a same strategy that includes the same entries. One person with good money management will make money but if the other person allows his losses to run and cuts his profits short, he'll lose money, even with the same exact system. Both system and money management go hand in hand but money management in my opinion carries a lot more importance than any system alone. There are many systems out there that people would classify as a losing system, such as a 20-30% winning ratio strategy but with proper money management, it can indeed be profitable if done right. What one person considers a losing system can be different to another so it really depends on a lot of things. Just like they always say, one man's garbage is another man's treasure

[kemkamal]

Hi guys,
so far very good general suggestions from everybody..ie Disciplene , money management , system etc...

Could any body please provide specifics ..? ie. what are you doing for money management and the results ? what % or your account total do you trade ?
What kind of leverage ? What kind of stoploss..is it in % or by pips ?

Would be helpful to know what others are doing ...thanx

btw, i've started a USD500 ac wth FXCM wth a 200:1 leverage,a mentor suggested I trade no more than 30% of my account value and do a stop loss at 35pips of th opposite direction of my trade.

What do you guy/gals think..?

tqs again...

kem

[james231287]

Originally Posted by dzver

i trade with ceramic tails and i buy them from China for USD

Sorry, this just made me laugh, i know you meant ceramic tiles..... just can't get the image of a ceramic tail out my head lol.

james

[rhodytrader]

Originally Posted by PrivateFX

yes of course having a decent system makes a difference too but I was mainly trying to make a point that without money management, it'll be hard to be successful. Let's say 2 people were given a same strategy that includes the same entries. One person with good money management will make money but if the other person allows his losses to run and cuts his profits short, he'll lose money, even with the same exact system. Both system and money management go hand in hand but money management in my opinion carries a lot more importance than any system alone. There are many systems out there that people would classify as a losing system, such as a 20-30% winning ratio strategy but with proper money management, it can indeed be profitable if done right. What one person considers a losing system can be different to another so it really depends on a lot of things. Just like they always say, one man's garbage is another man's treasure

Money management is about one thing, and one thing only - your position size. That, in turn, comes from your risk profile.

Letting losses run and cutting gainers short is not money management. It's system execution, or maybe more in the area of trader psychology.

A trading system should have rules for both entering and exiting trades. If it doesn't, it's not a complete system. Granted, in some approaches the entries and exits cannot be cleanly articulated, but that doesn't mean the basic rules don't exist. The trader who lets his losers run instead of getting out when the system says to get out has a breakdown in execution, not in money management.

Now if he traded too big (or too small, for that matter) then you have a breakdown in money management.

Losses that are too large in pip size - larger than would be accounted for by the system rules - are the fault of failed system execution. Losses that are too large in terms of % of account balance (assuming they aren't the result of losses too large in pip size) are the result of faulty money management.

[PrivateFX]

Originally Posted by rhodytrader

Money management is about one thing, and one thing only - your position size. That, in turn, comes from your risk profile.

Letting losses run and cutting gainers short is not money management. It's system execution, or maybe more in the area of trader psychology.

A trading system should have rules for both entering and exiting trades. If it doesn't, it's not a complete system. Granted, in some approaches the entries and exits cannot be cleanly articulated, but that doesn't mean the basic rules don't exist. The trader who lets his losers run instead of getting out when the system says to get out has a breakdown in execution, not in money management.

Now if he traded too big (or too small, for that matter) then you have a breakdown in money management.

Losses that are too large in pip size - larger than would be accounted for by the system rules - are the fault of failed system execution. Losses that are too large in terms of % of account balance (assuming they aren't the result of losses too large in pip size) are the result of faulty money management.

You make a valid point rhodytrader. Cutting losses and letting profits run is more to be considered as risk management but the term money management can be very general in nature. Some people will consider money management differently than others but in the end, it all boils down to controlling emotions, managing money, managing risk, and having a system that works for you to be profitable. Hopefully what you and I discuss here will help some new traders understand some of the important factors in becoming successful.

[rhodytrader]

Originally Posted by PrivateFX

You make a valid point rhodytrader. Cutting losses and letting profits run is more to be considered as risk management but the term money management can be very general in nature. Some people will consider money management differently than others but in the end, it all boils down to controlling emotions, managing money, managing risk, and having a system that works for you to be profitable. Hopefully what you and I discuss here will help some new traders understand some of the important factors in becoming successful.

Actually, I use money management and risk management interchangeably when talking in trading terms since most folks don't differentiate between the two (unless they're an insurance professional maybe ).

To me, cutting losses short and letting profits run (and anything else in that respect) is a function of the trading system the trading system being the rules which indicate when you enter and exit positions.

Risk/Money Management, the way I define it, is the process of sizing one's positions based on a predefined risk parameter set. This is not just about ensuring the avoidance of excessive losses. It's also about maximizing return given the risk you want to take.

Poor money/risk management, to my mind, is the failure to have and abide by a well thoughtout risk strategy, which means a failure to properly size each position. I do not put failing to close out a position when a stop level is reached in the category of poor risk management. That is simply the inability to follow your trading system. Of course failure in either means a breakdown in trader psychology (so to speak).

[Aswilled]

Even if I was to tell you my style of trading doesn't mean you will succeed with it. because trading is like boxing, you have to develop your own style to be successful. The questions you asked are good ones. But you have to ultimately make those questions into answers which produce results.

Other peoples methods can give you a guide. Read as much material you can get of forex trading methods. Learn the market your in. Because different strategies apply to different currencies. Risk no more than 5% - 1% of your over all account. Meaning your stop should make you lose no more than $25 per trade until adjusted +/- $500. If you risk $25 to make $25-$45 you are not making good trade ratios. A ratio of 1:2 is the lowest you will go. So if you risk $25 to make $50 or better, you are doing good.

It seems your new to forex. Do yourself a favor and save that $500 till you become a decent trader. Practice practice practice on a demo accout for 6 months with the design trading method that you adopted. You should beable to look at your records a see the results of all your studying and analysis.

You can use that six month learning to curve to learn with real money or play money. Its up to you.

Originally Posted by kemkamal

Hi guys,
so far very good general suggestions from everybody..ie Disciplene , money management , system etc...

Could any body please provide specifics ..? ie. what are you doing for money management and the results ? what % or your account total do you trade ?
What kind of leverage ? What kind of stoploss..is it in % or by pips ?

Would be helpful to know what others are doing ...thanx

btw, i've started a USD500 ac wth FXCM wth a 200:1 leverage,a mentor suggested I trade no more than 30% of my account value and do a stop loss at 35pips of th opposite direction of my trade.

What do you guy/gals think..?

tqs again...

kem

[kiwipipper]

a picture is worth a thousand words (or more ) so here's how I do it. This was today, basically for 5 min charts I set stop loss 1/2 of the channel for longer time periods I set it to 1/4 or even 1/8. For this trade I didnt actually set a stop loss but still
9/06/2007 20:15 Sell GBP CHF -10,000.00 2.4287
9/06/2007 20:43 Buy GBP CHF 10,000.00 2.4268
9/06/2007 20:43 Total: 15.81

hope this helps