Forex is hard work!

Trading Discussion
1

Hi
I have been backtesting different systems now for 3 years. I am not finding anything that works consistantly each year. Is it just me, or are others finding the same thing?
Is there really anyone out there making money from the forex? Or is it all just a myth? I don’t know l just dont’ want to give all this hard work up, to just go back to working for the rest of my life like all the other people out there in the world. I really thought l would find a profitable system by now. Why is it just so hard?
Just the thought of quitting is very scary indeed, but so is wasting all this time and energy of testing all these systems. I always test back for 20 years, and find that sometimes a system will do really well for 8 years in a row and then lose the 9th year. Which is no good. I get really excited that l have found something and then very dissapointed that it didn’t work again. It feels like an emotional rollercoaster rider, which is very draining.
Do you think looking for a system that works each year for 20 years is asking too much?

Anyone else here felt the same way. Any thoughts greatly appreciated.

3

Just a question for you, is there something consistant about the systems you have been testing?

All indicator based?
All rely on nothing but technical analysis?

N

4

usually its just breakout sytems. no indicators. i found that indicators just lagged too much.
The system which l thought really worked on the daily and has just let me down, as l have discovered that it is impossible to back test accurately on a daily chart. I need to have a 15 minute chart and the longest term l have found is 10 years of data.
It has to be 100% accurate. I have lost money before and it won’t happen again.

Cheers
Sue

5

There’s the problem right there, 100% accuracy is something you will not find in this market, or any other for that matter. If that’s what you want without compromise quit now save yourself the heartache.

Markets are not some guarantee of income for anybody that certainly is for sure. But saying that if you would the work in you will come out of it with returns.

You need to refine your search if you find something works most of the time then that should be good enough.

I will give you the same advise i give everyone else.

Look at basic concepts

Support and resistance
Price action
candlesticks

Concentrate on the larger timeframes to start with.

N

6

compelled to post… you are not alone shezian. i also lost money, and i am starting to conclude more or less the same thing as yours.

i know pretty much from the start that it will never be 100%. BUT… factoring out EMOTIONS, having 2% risk each time with an RR of 1:1, can you just simply be right more than wrong (consistently)? <- sounds stupid as i think again, but it still boils down to that question each time. :frowning:

7

Emotion is the biggest problem, I find that a lot of traders struggle to trade all day long, this is totally wrong, this can then just take over your life and you still get nowhere.

Find a system at least where you only spend a couple of hours a day, arrange another income stream so that trading is not your only potential source of income, this relieves the pressure on your trading, and hey presto in a few months you are very likely to find that you have money coming in, your trading is improving so that you can use some of that income to trade with.

It’s a lot about approach, than actual systems, but remember about your expectations, 100% returns a month are not impossible, but what if it was 5%, that is a return you can seriously work with, when you’ve got spare money to invest.

8

It might be worth diversifying across several systems running simultaneously, if one or two fail, then its generally no big deal.

9

I had exactly the same experience when I was writing a pile of EA, I was so elated when I found a rather simple method of making a nice consistent profit for 10 years and then all of a sudden starts losing money hand over fist.

10

Ive never heard of a system that continually makes money. The market is everchanging and fluid, if you have a system which is totally mechanical eventually you will hit a brick wall.

11

True Talk…

12

I agree with n_aftab.

Forex is governed by global economic and political forces. Trading ranges and behavior for all currency pairs vary month to month and year to year. One backtested trading strategy might work great one year but fail the next year. This is not the way to trade. There really are no shortcuts. Read forex news, look at candle stick patterns (i dont believe any EA is able to interpret candles yet), and use indicators only as confirmations. Trade infrequently finding only the best trades, and don’t get too greedy.

Best of luck,

Ivana

13

Yes i totally agree. I have gone down the route of indicators and whatever but i have finally come full circle and the only thing I use is a candle stick chart with no indicators.

But the most powerful wepon of all, i berieve is risk reward. I think most people will struggle with making money if they only make 1:1 RR. I look for at least 2:1 or more and its a great feeling when after 4 losing trades you win only 2 trades at 3 or 4:1 and your account soars past where it was before the losses!

The problem most people have is they cant sit through retracements and bail far to soon and yes some times that is the best thing to do but hindsight is a wonderful thing. Just make sure you develop a trading plan and apply it to every trade regardless. And keep a trading diary and records of everything. Also stay away from the market if you dont need to be there. watching charts is hypnotic! I only visit the market every four hours as thats when a candle closes and i check for trades. this has done wonders for me at least.

john

14

Hi
Firstly thanks for all your views on this.
As far as support and resistance levels go, l find this can be very subjective and it all depends on how you draw these lines, and each day might be different, so l have never found them to be reliable.
If you can clarify how it can be more systematic then it would be great.

Also, l am definately looking for a system that is more mechanical otherwise emotions get involved and then its all down hill from there. So yes, all these years l have been looking for a purely mechanical system. But you seem to be saying there isn’t a system that can make money year in and year out??
I don’t care if l make 20%-30% per annum only, as long as its consistence, but this has been the hard thing to find, without massive drawdowns. I thought l found a system and did trade it live for 2 years without losing but also without making any money, which didn’t correspond to my backtesting and then l realised that on a daily candle you couldn’t actually see what price did in that day as my stop was pretty small. So now l have to go back and backtest 20 years on a 15 minute candle. Hence l am looking around for 15 minute data, even if l could get 10 years it would be great, so if anyone can help it would be great.
Like l said l have lost money investing through others, and l mean alot of money, and since then l have decided if l was ever going to invest it would be my own doing. I will never, ever invest with anyone ever again, it has just about ruined me.
Tried to look at the Aussie market yesterday, which is where l began my trading, and it all just felt so wrong.
I just get so let down when you have spent so much time and effort into backtesting all these differernt systems and you get so excited thinking you have found a great system, and then all of a sudden you have a sudden draw down and get completely upset and down about it. It has taken days for me to recover from such an upset, and then finally l pick myself up again and start from scratch. That is the hardest part, starting all over. Backtesting just takes so much time. You see for me its really hard to let go of the forex after all these years, but at the same time its fustrating the hell out of me. I just cant turn my back on it. Just the other day l was thinking maybe l am completely delusional in thinking money could be made out of the forex.
If you can make money out of property like my mother has, then surely you can make much better money from trading, surely, but then again maybe not. I am yet to meet anybody who l know for sure who has actually made a living out of trading. But l have met many people who have happily retired on property investing, including my own mother, who has done very well.

Cheers
Sue

15

There’s no magic system and making decent money is hard in anything you decide to do. And there’s always going to be an element of risk. Witness all the people sitting on big chunks of negative equity with property at the moment around the world. I’m from Ireland and there’s been a pile of property investors who’ve lost absolutely everything speculating on property.

Things change constantly in Forex. Currency movements are down to a large multitude of factors which are then interpreted (in plenty of varying ways) by a huge amount of people all over the world. There’s no mechanical system that can always and forever factor in the huge amount of variables that come into play with Forex.

I see it kind of like playing Blackjack where you’re allowed to count the cards. If you have the mental ability and dedication to do it and the single-mindedness to stick to the system and can handle that you won’t win every hand you play you can probably do ok in the end.

1 Like
16

Now I have read your complaints and have given them some thought. :slight_smile:

Yes, forex is hard work - in fact [B]Tonymand, Honorary FX Member[/B], said it very well…

“Trading forex is like wrestling crocodiles for a living”.

I can relate to that!! :smiley:

Now at the risk of blowing my own trumpet (which I am not trying to do), I would like to solve some of your search problems…

[B]This is a genuine attempt to help you, not a scam - I am well respected on this forum…[/B]

Several years ago, I made what I believe to be a discovery about forex price action.
I made use of this discovery and evolved an approach from it that [U]has a very high win/loss ratio.[/U]
This approach is not so much a strategy or method as it is a discovery - we have called it the Bollinger DNA method.
It is immune to changes in forex character over the years.

So high is the win/loss ratio that adherants will never go back to anything else.
Total newbies and experienced traders alike are pulling pips out of the market like there is no tomorrow!! :slight_smile:

The approach has a large following, and the more knowledge you have of price action, the better.
To date, 3 threads have come onto this forum about this method…

http://forums.babypips.com/newbie-island/32400-finest-trend-trading.html

http://forums.babypips.com/newbie-island/33733-multi-time-frame-trend-trading.html

http://forums.babypips.com/newbie-island/34579-xxtrizzlexxs-trading-log.html

In addition, we now have a chatroom for this method and a live whiteboard where lesson are given.
You will notice that the first thread is also one of the largest posted on this forum and definitely the largest for the time that it has been going.

If you would like to know more about the Bollinger DNA method, consult the first thread, some 100 pages before the most recent.
The thread is very thorough being divided into topics.

You can also visit our chatroom to get a first hand appraisal…

Bollinger Band DNA - FOREX Trading using the Tymen Bollinger Band Strategy

[B]I commend this method to you without encumbrances or attempts to gain or solicit finances from you.
Its all FREE!! [/B] :slight_smile:

18

This sums things up quite nicely.

19

thank you so much i will look into this bolinga band method.
Anything is worth a try at this moment, as l feel like l have tried absolutely everything.

Any other thoughts greatly appreciated.

Also, just in case anyone knows, where l can obtain 15 minute historical data? I would like it to go back at least 10 years.

Thanks
Sue:)

20

Forex is as hard or as easy as you make it. Trading is binary in nature: buy/sell, up/down, win/lose, long/short, profit/loss, etc… Too many people are pulling a con job making you believe trading is difficult. Once you understand the reason you enter the trade has no bearing on the outcome of the trade and once you enter a trade you can not make the trade a winner, you see trading for what it really is. Do not be led astray by anyone.

21

yes agreed, and too many traders are making it more complicated than i needs to be. I see people which charts where you can hardly even see price through a fog of indicators.
Go back to basics and build a solid trading plan using things that you understand and enjoy. use your intuition to guide you not a mass of squiggles.

22

i love trading. it might be hard but when you consistently end the month in the black there are few things that will give you that feeling of satisfaction. dealing with losses is the toughest. i remember last year there was a month that i started out down, a real tough week. i took off from trading for 2 weeks and a missed a great positive move. so staying disciplined when things are going against you makes trading hard. besides that, its gravy baby. i started with a very small amount and have slowly grown my account. i trust this small step approach will continue.