Trade Management Challenge

[mikhail86]

Hey guys!

I am embarking on a challenge to determine how important trade management is to your trading success and would like you guys to join in.

The challenge is as follows:

I trade off the daily charts so I have set the challenge up according to this time frame.

At the market open on Sunday evening a position is opened on the EUR/USD pair (chose the most common pair traded). The position will be short if the previous week was a bear week and long if the previous week was a bullish week (this way you trade with the trend... but I am open to other suggestions even if its simply flipping a coin).

You will then have full control of the position, setting your own SL, TP, deciding how to manage the SL i.e. trailing or no trailing and when to close the position. You can even choose to close the position immediately if you like if you think the market is heading in the opposite direction to the position. The only other rule related to closing positions is that positions must be closed before the close of the market on Friday.

The aim here then is to see how different traders with more or less the same entry, manage the positions and to see what the different outcomes will be.

Every Sunday evening I will post the position details such as long/short, and open price. We can keep track of the results in pips and give a summary at the end of every month to see how we are faring.

Any suggestions/challengers interested?

[wmorris3825]

Interesting idea. I personally am a scalper though so I don't hold trades long enough to be able to participate. Good luck, I'll be interested to see if you get some people to do this with you!

[mikhail86]

Yes I am hoping to get a good spread of traders in terms of experience. The general perception is that with trading experience you become more in tune with the market and can manage your trades better so I am hoping we can see this difference in the results of this little experiment.

[GicaEric]

Very interesting. I'm just adding something to the table. I also trade on Daily Charts (see post: Candlestick Patterns (Daily Timeframe Only) ). I'm up 32.6 % this year. I've been consistent with my strategies and setups fairly around 62 % on the win side. Can you imagine wining 62% of the time and being up more than 30 % within half a year? - It's 5.43% average profit per month.

Maybe you could do more, though I don't know any other way. And the most important thing is that, believe it or not, I'm negative on terms of RAW PIP performance. Yet I'm 32.6% up on my account?! How come? - Well simply because I don't care how how much pips I made, I only care on $ P/L percentage. It's all about risk/reward and trade management.

I have a fairly simple idea how to categorize trades based on their statistical behavior and risk profile. And take it from there.

By the way, if someone in this forum says that he could make consistently at least 25 Pips/day, and yet he's struggling to make money, it's because thy don't know anything about risk/trade management. I'd love to help, in fact I have a tool that could make your life easier.

[mikhail86]

Maybe you could do more, though I don't know any other way. And the most important thing is that, believe it or not, I'm negative on terms of RAW PIP performance. Yet I'm 32.6% up on my account?! How come? - Well simply because I don't care how how much pips I made, I only care on $ P/L percentage. It's all about risk/reward and trade management.

Yes with proper money management this is entirely possible, not to mention the opposite of being pips positive and showing a loss on your account! I have a problem with the general idea that you must keep score with pips and not worry about the dollars profit/loss... we all started trading FX to make money not pips! I understand the reasoning behind not worrying about the money but at the end of the day that is what you will be judged on.

For the purpose of this challenge though, the simplest way to record the results is with pips P/L but I fully understand and agree with your comment.

I think I have come across your thread before and had been following for a while as well.

[GicaEric]

Yes with proper money management this is entirely possible, not to mention the opposite of being pips positive and showing a loss on your account! I have a problem with the general idea that you must keep score with pips and not worry about the dollars profit/loss... we all started trading FX to make money not pips! I understand the reasoning behind not worrying about the money but at the end of the day that is what you will be judged on.

For the purpose of this challenge though, the simplest way to record the results is with pips P/L but I fully understand and agree with your comment.

I think I have come across your thread before and had been following for a while as well.

Yeah, you're totally right when you said being positive on pips and negative on $. This situation is even more frustrating.