forex systems

[theunder18kid]

everyone has being saying developing a system in forex is really important, but they only say that because they think they can't control them selfs. in other words a system is really a rule book kind of thing that stricts them selfs from doing stupid things, which is great because it is usually profitable since forex systems usually have a 50%+ winning rate, or a 1:1+ ratio risk reward. After reading the forex education it really opened my mind about forex, but I dont really like the system idea even though I think we all need rules. This is because after 1 year of forex experience i found that the forex market doesn't really follow the strict rules that the systems give us, instead people are buying and selling at their own will. But I say the forex education here is a mind opener because I learned about how how there is resistance and support which is ALWAYS(almost 99%) of the times(I discovered) which is like really useful. BUT all the other patterns are stuff they dont really work, except trends which happen like every once in a while. That is why I like to trade with my brain which is like a lot better because after a lot of practice i managed to actually profit in more than 80% of my trades, which is like REALLY GOOD, because forex systems is really a tool used to calm you down but the market is extremely flexible which means forex systems has to be updated a lot but your brain is constantly updated and refreshed as long as you think in the right direction(which is really hard.........). but then you will always make mistakes so I guess a forex system is like essential for most(99.5%) of the traders who profit, and the 0.5% has a 99% of the traders trading the news to make money so really only 0.005% forex traders make money without a system and not trading the news either. that is like really rare because only 5% forex traders profit. 99% of that 5% is 4.95% and 0.5% of 4.95 is like 0.003%? and 1% of 0.003 is like 0.00003% so.......... only 3 traders in 100000 profitable traders are ermm brainy...... btw I said I got 80%(which is true, but a lot of forex systems has this % too i think) because I rarely trade a lot now where as before I trade like a lot so I can update my self for the market. and the 80% might not last long either....... so really people who dont need a trading system is like really really really REALLY RARE!! and even if they DONT need a trading system 99% of them probably HAS ONE ANYWAY. so I guess trading systems are really important. BUT I DONT LIKE TO TRADE LIKE A MACHINE since I'm a human being and the forex market is manipulated by humane beings. So...................................... if ur not confused yet, I think forex systems are essential but you always need to update it which means its always better to trade with your BRAIN, but then the forex system is really based on your brain...... just a older version..... since you can't really constantly update it......... wait you can...... but I dont think people would just change their system easily because systems must be really tested and all that stuff.... so forex is like REALY complicated and nothing really works 100% of the time, but you can get a really good percentage if your always use your brain(when your thinking clearly). Usually after one trade my brain gets really really really really tired because of all the excitement and all the manipulation and all the ups and downs in the market...... so i guesss a forex system is like a nice and easy tool.... but i really want to master forex so I'll keep practicing with my BRAIN!

[PipAddict]

Originally Posted by theunder18kid

after a lot of practice i managed to actually profit in more than 80% of my trades, which is like REALLY GOOD

Winning percentage means nothing per se... I can you give you a system that in theory achieves 100% winning trades, if you are interested. Is it profitable? Well, that's a different story

You can make money with systems that only profit in 30-35% of trades, and you can lose money with systems that get it right 80% of the trades. In fact, I know a professional trader (professional as in working for a bank, not someone doing this full time from his/her bedroom) who has only 32% winning trades on average.

[theunder18kid]

umm ye but he must then have a 1:3 risk reward ratio or more, what i'm saying is that trading system is something you must stick to whereas the market is very flexible so it kind of lower your chance of making profits, I do not believe that you have a trading system that has a 100% winning rate because the more trades you get in the more chance you have to loose in one of them. If you manage to master forex with your brain then you will be like REALLY REALLY REALLY GOOD, which is like impossible to do....... but there might be people who has done it.

[theunder18kid]

and when you say 100% wining system shouldn't it mean that it will make money 100% if you stick with it????? when i said 80% i mean 80% chance that my trades will profit..... which means there is a 80% chance that i will be right, ofcourse I do not have a really big risk reward ratio(1:1-1:3) because that is something really hard to do since you have to buy at the exact time with a 50% risk

[PipAddict]

Originally Posted by theunder18kid

I do not believe that you have a trading system that has a 100% winning rate because the more trades you get in the more chance you have to loose in one of them.

Enter position today, close only when profitable, there's your 100% winning trade system. Would I trade such a "system"? Of course not. The problem is that to achieve 100% winning trades your risk is unlimited.

But this is just an example that winning rates mean nothing... Most systems usually get 35% to 60% winning trades. If you want a high winning percentage then you must let your losers run hoping that they will turn around, and close the position as soon as you get a little profit. So your average profit will be lower than the average loss. A true holy grail would be to have a system with a very high winning percentage, with average profit trades much higher than average loss. That's very unlikely to happen

[theunder18kid]

first of all how do you know that the currency pair is going to fall back or rise up again? if what you mean is that you wait for years for your pair to get to the point that you want it to then all your getting is like 1 trade in a few years, as I said before, the more trades you get in the higher risk you have of loosing, BUT at the same time the higher chance of wining too....... my 80% wining rate is about 2-3 trades per week which is like ok..... so really it depends on how much you trade, the more you trade the lesser your wining % you have because there are limited oppotunities that have small risks, for example the turning points of a currency pair. the 100% wining trading system that you have does not make sense because what if the market doesn't come back? what if it never reaches the wining side for you?? if your system works then why doesn't everyone use it? if it doesn't work then why did you bring it out? as I said before 100% wining trading systems does not exist unless you have only entered a small amount of trades, for example you enter 1 trade a year.......

[kagein]

Originally Posted by PipAddict

Winning percentage means nothing per se... I can you give you a system that in theory achieves 100% winning trades, if you are interested. Is it profitable? Well, that's a different story

I wouldn't necessary agree that a winning percentage means nothing. You can make money with a low winning percentage but that means having an R:R of higher than 2:1. For most people starting out in forex, thats a bit too ambitious. I would prefer a higher number of wins.

You can make money with systems that only profit in 30-35% of trades, and you can lose money with systems that get it right 80% of the trades. In fact, I know a professional trader (professional as in working for a bank, not someone doing this full time from his/her bedroom) who has only 32% winning trades on average.

I'm not a full time trader, but if someone is trading their own account full time from their bedroom, the Starbucks across the road or even the beach. I ask you, who's more of a professional?

Just my 2 cents.

[PipAddict]

Originally Posted by theunder18kid

first of all how do you know that the currency pair is going to fall back or rise up again? if what you mean is that you wait for years for your pair to get to the point that you want it to then all your getting is like 1 trade in a few years, as I said before, the more trades you get in the higher risk you have of loosing, BUT at the same time the higher chance of wining too....... my 80% wining rate is about 2-3 trades per week which is like ok..... so really it depends on how much you trade, the more you trade the lesser your wining % you have because there are limited oppotunities that have small risks, for example the turning points of a currency pair. the 100% wining trading system that you have does not make sense because what if the market doesn't come back? what if it never reaches the wining side for you?? if your system works then why doesn't everyone use it? if it doesn't work then why did you bring it out? as I said before 100% wining trading systems does not exist unless you have only entered a small amount of trades, for example you enter 1 trade a year.......

You're really not understanding what I'm trying to say, fair enough... I was just trying to help but it seems that you're not interested so I'll stop now.

I wouldn't necessary agree that a winning percentage means nothing. You can make money with a low winning percentage but that means having an R:R of higher than 2:1. For most people starting out in forex, thats a bit too ambitious. I would prefer a higher number of wins.

What I said was:

Winning percentage means nothing per se

The key words here are "per se", ie. by itself. I didn't say that winning percentages mean nothing, what I said is that if you look at winning percentages only, they mean nothing.

Don't see why it has to be too ambitious, if you have a trend following system your average profitable trades will be bigger than the losses. If they're not then you are not using a real trend system, or you are not following all the rules. Just look at the Cowabunga trend system, simple and profitable. Everyone can use that system, beginners or not.

I'm not a full time trader, but if someone is trading their own account full time from their bedroom, the Starbucks across the road or even the beach. I ask you, who's more of a professional?

The guy working for the bank, for the simple reason that you didn't say if that person trading the account from the Starbucks across the road makes any profit. As you know 90% (or more) of traders lose money consistently, whether they do it full time or not. So it's not impossible to have a Starbucks full time trader losing all his money, and in my humble opinion that is not a professional trader. Full time does not necessarily mean professional. I can become a full time golfer tomorrow but would I be a professional? For the record, I'm the worst golf player in the world.

I'm pretty sure that almost all the traders working for the banks and other institutions make money consistently, so in general I rate their systems higher.

[kagein]

Originally Posted by PipAddict

You're really not understanding what I'm trying to say, fair enough... I was just trying to help but it seems that you're not interested so I'll stop now.



What I said was:

The key words here are "per se", ie. by itself. I didn't say that winning percentages mean nothing, what I said is that if you look at winning percentages only, they mean nothing.

Don't see why it has to be too ambitious, if you have a trend following system your average profitable trades will be bigger than the losses. If they're not then you are not using a real trend system, or you are not following all the rules. Just look at the Cowabunga trend system, simple and profitable. Everyone can use that system, beginners or not.


The guy working for the bank, for the simple reason that you didn't say if that person trading the account from the Starbucks across the road makes any profit. As you know 90% (or more) of traders lose money consistently, whether they do it full time or not. So it's not impossible to have a Starbucks full time trader losing all his money, and in my humble opinion that is not a professional trader. Full time does not necessarily mean professional. I can become a full time golfer tomorrow but would I be a professional? For the record, I'm the worst golf player in the world.

I'm pretty sure that almost all the traders working for the banks and other institutions make money consistently, so in general I rate their systems higher.

Have a look at your trade journal i bet you'll be more profitable if you took profits earlier rather than shooting for that big move. If having a 30% winning percentage and a higher R:R works for you, then great. At the end of the day account balance is the only real measure of performance.

Well you wouldn't be full time trading very long if you were consistently losing money would you? I've come across stock traders and some of them are,from what i'm told very profitable for the bank. What i never seem to understand is if they're making money for the bank, why dont they just trade full time with their own money and quit. I assume its because they want that level of comfort and safety that comes with having a regularly paid salary. So if someone was able to trade and make profits on a full time basis with all the emotional stress that comes with that whilst trading in starbucks, is he more or less of a professional than a prop trader working for a bank? The word professional to me, would apply to anyone who is able to make consistent profits.

[jimbospeed]

Based on my personal experience as a Corporate VP then as the Boss Man I can offer a few pearls …

1. Producers who consistantly do well and still work for big a corporation usually have a special “side deal” for compensation worked out where they keep a goodly portion of the money they make for The Company.

2. The best producers usually are on their own and just don’t work that hard anymore. (work smart)

3. The only other consistent high producers who do work for The Comp’ny are the new hotshots that you won’t be able to hold onto but just look’it em go…