Hi Guys
Getting a little frustrated trying to find the golden goose in forex trading. Found some reasonable approaches but the overall return and up and down nature of it usually makes me dump them for more research.
Just a question for you there. What constitutes good returns and or reliable system for you.
Either money wise or percentage. Capital gain versus steady income, high risk versus peace of mind.
Hello Ropunzel…
The Golden Goose is a beautiful concept, in that it feeds the dream of newbies of untold riches…
Sadly, it is not of this world, therefore we must leave it well behind and, as you say, replace it with
‘reasonable approaches’.
One of the dilemmas that newbies face is the loneliness of the journey: therefore, you have come
to this community to seek advice. Pray tell: what, specifically, is frustrating you with regard to
your current approach?
Give us some examples, so that we may sink our teeth right into the meat of the matter, so to
speak!
Well, please excuse the observation (offered with no malice at all) that the people here who are making a steady living from our trading might be a little more forthcoming with assistance/comments/advice to you if you’d been a little less dismissive and critical of input in some other discussions here. Nevertheless, I’ll try to help, if I can … 
That’s inevitably what will tend to happen, if you start trading systems/methods that aren’t fully researched and proven to have an edge [I][U]before[/U][/I] you start putting money on them.
For most of the last 4/4.5 years, my vague mental target has been to average out at around 6.0-6.5% per month, managing risk at tightly as I can and never exposing more than 1% of my account (including times of having more than one trade open) to risk at any one time.
However, in December 2015, in response to repeated advice from institutional and ex-institutional trader friends, I made a change to the charts I was using (which actually also meant switching from spot forex to futures, because I now use constant-volume bars, which aren’t available for spot forex), and without changing anything else much, about my basic trading methods and systems, that’s taken me up to 9.0-11.0% per month ever since, otherwise doing exactly the same things I’ve been doing for years. I’m so conservative, risk-averse and cautious that I still wouldn’t go so far as to say that that’s become a specific “monthly target” for me, though. I think the key point is that as long as you use only methods which you’ve [I]proven, yourself, to have a positive net expectation[/I] exactly as you’re trading them, using appropriate position-sizing and risk-limitation, you’re extremely unlikely to come to any harm, anyway … which is what matters, in the long run.
Expectation and targets are fine (to varying extents for different personality-types, I think), but what actually matters to me, when I sit down at 9.00 every morning to begin the day’s trading, isn’t “to make money on the day”: it’s “to be able to sit down again at 9.00 the next morning and begin another day’s trading” … because I [B][U]know[/U][/B] that if I can do that steadily, using a system/method with a genuine, proven edge, I’m going to make a good living in the long run - and “the long run” is all that matters, in this business. Nothing boosts confidence as much as trading in a way which you already know is profitable, before you put your money down. The problems, disillusionment, and switching tack from one thing to another typically arise when people seek short-cuts (some of them imagining that if they “just copy something that ‘works’,” they’ll be able to bypass most of the actually-required education and experience phases which all of us making a living needed).
For me, it’s very much price action (and indicator-dependency-avoidance!). I look at price action methods as the ones that have reliably stood the test of time, changing markets, and so on. Countless others have made very good livings from them, and so can I. So far, anyway. But “so far” is getting me quite a long way, now, over the years.
So I use methods that I’ve learned from standard, accredited, authoritative textbooks (not “online information”) written by Joe Ross, Al Brooks, Bob Volman and others. Together with having had a long education in the relevant maths/statistics/probability that we all need, sooner or later, to be able to make a living in this game.
I trade only simple, straightforward, price action set-ups, when they arise. I don’t do anything very difficult or particularly complicated: I just do simple things very well and very consistently and very repeatedly. (I have 5 different “systems”, in my routine trading, 3 of which have broad similarities and all 5 of which are predicated on the same principles of entering markets which are resuming former trends after corrections/retracements/consolidations - and I trade them from fast-moving charts, so that in statistical terms my “sample size” of trades is always relatively high and the luck therefore evens out pretty quickly, in other words “avoiding bad losing runs”. It’s a method that suits active traders with time to spend in front of charts, and plenty of patience and discipline: aspiring traders usually greatly overestimate what they can legitimately expect to achieve quickly while also seriously and significantly underestimating what they can achieve gradually; but as mentioned above, everything starts from methods that have a [I][U]proven[/U][/I] edge.)
The five big “mistakes to avoid”, from my perspective, are set out here.
I am looking for reliable returns at the moment and a system that I can confidently ‘switch on’ after rigorous back and forward testing. I use just enough for a 4 - 7% per week to be desirably meaningful although that is still quite greedy considering the average income in the UK versus hours worked and making multi-millions is wildly unrealistic…
I decided to go full time, just when I released some liquidity to make the effort worth while but need to free up time to do other things; go through my reading list, take professional exams (pretend I wasn’t just dossing for a year); riding; learn the guitar; develop my wine making skills in Southern France and much more besides.
I can’t be staring at charts all day long.
Mind u 4- 7% reliably long term is v actually. I think you’re right about chasing too high returns…i guess its frustrating not being able to move the needle more, and easily.
Plus Donald Trump’s annoying me too.
Thank you for your post and I would like to know more about your approach or system. In the current trading plan I am trying to develop a system for each market type/condition; starting with Pivot Point cross-overs (changing market psychology) from the consolidation of level provided by a few research firms (Daily Pivot Points).
I noticed an open bar to close bar cross on the 15 minute candle to support/resistance point 2 provided better strike rates and R:R than going for the consensus sentiment, but I can’t seem to find the indicators to use at cross to increase the odds further. I did some basic model fitting using EURUSD & USDJPY as training data but the results were not strong enough on validation with AUDUSD to warrant the time and effort; very marginal improvements and the overall test on effectiveness on indicators made we want to just go for a beer.
I tried the News release which worked excellently in demo and live, before my broker reset the trading parameters on my account to make the long run numbers too risky: They were market makers with fixed spreads so I used a hedged position 5 seconds before the release with TP > SL based on probs from LTM data. That was quite annoying actually.
Not sure how to proceed with the current returns.
