GBP/JPY Equity Building Profitable trading strategies

[4xStar]

Originally Posted by pipsquito

At least you are out of your shorts..right? I am still big time in the red as this keeps rising. I had one buy I cashed out of, into another right now, but worried we will start plowing down again.

It seems a bit quiet out there...didn't hear from too many folks today.

Yes I closed all shorts and went long around 207.50..... finally getting some love now.

It sounds like you are doing what I used to do (not that long ago!) and what I have to remind myself every day NOT to do. Don't stay in a losing trade!!
Why ride a trade down? Set a mental stop (or a real one) get out and get back in at a better price.. in forex you can jump in & out as often as you like, you only pay the spread .. so why go deep into the negative?
I did it all the time in April & May .. it was only my rapidly decreasing account balance that finally convinced me I have to quit doing that .. or quit forex!
Since I would probably run around picking pockets if I had to to feed my forex habit, I figured the best thing is to learn NOT to ride down a losing trade!!

I'm getting better now .. it is still a struggle because once I am in a trade I start finding all sorts of justifications to stay there. But I'm learning instead to do the opposite: once in a trade I try to look for reasons NOT to be there .. and if I find one, I get out.
Time is also a factor now .. if a trade languishes, I mentally tighten my stops as time goes on so as not to keep money tied up in something that is not ready to move yet.
It is fear of loss that keeps you in a trade .. at least for me it was fear that the pair would suddenly move on without me and I would miss out. Now I've learned to say "so what?" There is always another trade .. if I keep missing them, maybe my entries are wrong and I need to work on that .. but at least I preserve capital until I figure it out

[4xStar]

Out all longs for now.

[pipsquito]

Originally Posted by 4xStar

Yes I closed all shorts and went long around 207.50..... finally getting some love now.

It sounds like you are doing what I used to do (not that long ago!) and what I have to remind myself every day NOT to do. Don't stay in a losing trade!!
Why ride a trade down? Set a mental stop (or a real one) get out and get back in at a better price.. in forex you can jump in & out as often as you like, you only pay the spread .. so why go deep into the negative?
I did it all the time in April & May .. it was only my rapidly decreasing account balance that finally convinced me I have to quit doing that .. or quit forex!
Since I would probably run around picking pockets if I had to to feed my forex habit, I figured the best thing is to learn NOT to ride down a losing trade!!

I'm getting better now .. it is still a struggle because once I am in a trade I start finding all sorts of justifications to stay there. But I'm learning instead to do the opposite: once in a trade I try to look for reasons NOT to be there .. and if I find one, I get out.
Time is also a factor now .. if a trade languishes, I mentally tighten my stops as time goes on so as not to keep money tied up in something that is not ready to move yet.
It is fear of loss that keeps you in a trade .. at least for me it was fear that the pair would suddenly move on without me and I would miss out. Now I've learned to say "so what?" There is always another trade .. if I keep missing them, maybe my entries are wrong and I need to work on that .. but at least I preserve capital until I figure it out

It is ironic that this is your experience...as I have pretty much the opposite experience. I went a year and a half trading very conventionally, setting nice clean stop losses and always getting out of losing trades. I made very little, and most of the time ended up with losing weeks. It wasn't until I started staying in for the long term and letting my trades breathe that I started making money.

I do not hold forever, and I only hold if there is a reason, i.e. if a trend is not broken etc. But generally if I hold, and things go really south on me, eventually it comes back...of course this is dependent on the pair.

I have brought a 100k account up to 700k in five months trading this way. To each his own I guess. I actually would LIKE to trade the way you trade...I have made great effort to work some sort of discipline to let go of losers when they linger on, but I still find when I do that I should have stayed the course (I keep track of my losses that I give up to see if they turn around and when.) I do find that my account gets bogged down with so many losers though, and I don't like that but I have a hard time changing what has finally worked well for me. Maybe we are splitting hairs here and what you are talking about is different than what I do...who knows.

I AM trying to refine my system, and one of those refinements is to get out of losers more often than I do. I certainly do not think there is anything wrong with cutting loses. The bad thing about my method is I am usually carrying a pretty huge draw down. I also never know if I am going to get bit big time at any moment! But I seem to be doing alright...I keep tight reins on it most of the time...

Thanks for sharing. Now...regarding the guppy and this method!! This must drive you nuts if you are doing it according to Elijah's rules...holding all those longs for hundreds of pips!! Wow...!!!

[pipsquito]

Originally Posted by 4xStar

Out all longs for now.

So...according to your recent post about letting go of losers...would you, if you were me, close a 50 pip loser...a guppy buy bought at 210.54 now at 50 pips loss?

Just curious...considering this method, we should think it will hit 210.54 again and I should sit back and collect interest...

What would you do here?

Thanks!

[4xStar]

Originally Posted by pipsquito

So...according to your recent post about letting go of losers...would you, if you were me, close a 50 pip loser...a guppy buy bought at 210.54 now at 50 pips loss?

Just curious...considering this method, we should think it will hit 210.54 again and I should sit back and collect interest...

What would you do here?

Thanks!

Well since you wrote that you had another chance to get out when it just retraced to 210.19. I probably would have used that bounce to get out only because she looks so weak now and although she will certainly go past 210.50again .. the question (as Andrew says often) is ... when?

A lot depends on what you can afford to do .. if you have just one position at 210.50 and you can afford to hold it for weeks if necessary, even if Guppy retraces to 195 or below .. well I guess that's what ram calls a 'loss leader'.
But I see no reason to drain down account value riding a cycle down just because you know that .. at some point .. it will come back up again. Yes you collect interest, but IMO not enough to make it worthwhile .. I could put the funds to better use collecting pips somewhere else than collecting interest.

Don't get me wrong, I LIKE the idea of being long the gup 90% of the time .. and in my demo account with $500k (now $580k!) play money in it, I only go long .. to test and see how this works .. and you can see being up 80k in 2 weeks, it is working great! But in that account, first of all no emotion is attached, it is pure experimentation and secondly there are enough funds there to ride huge drawdowns if necessary. The equivalent would be trading a $5k micro account or a $50k mini account.

I'm just concerned because you blew out one account (and I almost did too) and Rule #1 in trading is: Don't Lose Money. Rule #2 is: See Rule #1!!

There's a big difference between leaving one trade on as a "loss leader" when you can easily afford to watch it go down 1000 pips if necessary ... and draining an account down to the point where you have to pour a bunch of money back into it. If we are talking micro accounts and they need to be topped up $300, then no problem of course. If a real acct has to be topped up $30k for me that is a problem, even if I am a millionaire...
It means something is very wrong with how I am trading.

And what we are doing here is still highly experimental .. in theory the idea is good .. ingenius even .. but we still need to work the kinks out. For me a big kink would be holding several losing trades and watching them drain my account value ... why do that???

[HAUGHT007]

Sure doesn't seem to be moving very much today.... I think she's mad that Elijah hasn't been around to talk about her. Does this make her high maintenance?

[4xStar]

Originally Posted by HAUGHT007

Sure doesn't seem to be moving very much today.... I think she's mad that Elijah hasn't been around to talk about her. Does this make her high maintenance?

Oh she's high maintenance all right....! Seems to be heading lower now though, breaking the 209.70 was important .. if the correction can continue the next run up will be even stronger IMO.

[4xStar]

Originally Posted by pipsquito

I have brought a 100k account up to 700k in five months trading this way.

Sorry .. I didn't see this longer post when I replied to the other one.

Well there is another good rule: If it ain't broke, don't fix it!
The ultimate test is growth of the account & if yours is growing, even with an occasional setback, then don't change a thing!!

You had mentioned earlier blowing out a 60k account and that concerned me but it is all proportionate .. if you had $640k left, then why worry? For me that might be like losing $60 and I certainly don't lose sleep over that

I can easily parlay a large (demo) account into a larger one .. I am trying to figure out how to do the same with a very very small (real) account & I see it all comes down to proportions. One experienced trader told me, if you are worrying about your (active) trade losing money, you have too much money in the trade.
So I am working with a micro account and while it is not exciting gaining $10, even $20 at a time ... the losses don't hurt either!
I figure ram's system, correctly applied to my situation, is my best hope to grow this small account .. in fact he is working with a new $600 opening balance micro account to prove this very point.

My demo account is like your real account & there, as I said, I've made $80k in 2 weeks. That should be the equivalent of $160 in a $1k micro account and that is about right .. a little less just because there is no emotion attached to the demo so I can trade as 'recklessly' as I want, proving to myself that this system is like a little rolling ATM as long as the losses remain inconsequential both in your mind & in your account.

[mytwopips]

Hi guys,
If you are worried about 50 pip stops on g/j, then you are trading way to much for this strategy. 50 pips on this pair is nothing. For example I only place orders every 50 pips.

I don't know the exact numbers but I believe my two shorts and Todd's were around the same place. I closed both in small profit because I could care less what they were doing.

Now I wish she would get cheap again because I feel like a cheap sob for putting shorts against her to begin with.

Where's Elijah?

[pipsquito]

Originally Posted by 4xStar

Sorry .. I didn't see this longer post when I replied to the other one.

Well there is another good rule: If it ain't broke, don't fix it!
The ultimate test is growth of the account & if yours is growing, even with an occasional setback, then don't change a thing!!

You had mentioned earlier blowing out a 60k account and that concerned me but it is all proportionate .. if you had $640k left, then why worry? For me that might be like losing $60 and I certainly don't lose sleep over that

I can easily parlay a large (demo) account into a larger one .. I am trying to figure out how to do the same with a very very small (real) account & I see it all comes down to proportions. One experienced trader told me, if you are worrying about your (active) trade losing money, you have too much money in the trade.
So I am working with a micro account and while it is not exciting gaining $10, even $20 at a time ... the losses don't hurt either!
I figure ram's system, correctly applied to my situation, is my best hope to grow this small account .. in fact he is working with a new $600 opening balance micro account to prove this very point.

My demo account is like your real account & there, as I said, I've made $80k in 2 weeks. That should be the equivalent of $160 in a $1k micro account and that is about right .. a little less just because there is no emotion attached to the demo so I can trade as 'recklessly' as I want, proving to myself that this system is like a little rolling ATM as long as the losses remain inconsequential both in your mind & in your account.

I didn't make myself clear, sorry. My demo account has the $700k balance. My real account is much smaller, around $70,000 built up from $50,000 over the last few weeks. I DID blow a real account...$50,000 (it was actually higher than that, but I didn't lose the whole thing either.) It was using this method that it got blown, but as I have said before, in defense of this system, I was not following the rules precisely.

I do not play this method on my real account. I do trade the guppy though...but not using this strategy. And I do hold losers for too long!

BTW...I just tried to close my long guppy trade...and instead closed one of my sells!!! DRAT!!! So I still had to close the buy, and really mess up my account. This is in my real account, so before waking up fully this morning I threw away $1,000. Jeesh.