Breaking the rules and still successful?

Hello traders,

I wanted to come to the forums and present myself here as more of a “newbie” with a question/concern.

First, a tiny backstory so this makes a little more sense:
I was introduced to Forex about 5 years ago or so by my co-worker. I worked at a factory as a Security Guard. Because there are multiple computer screens, my co-worker happened to be looking through some Forex charts that I had never seen before and that’s how I was introduced.
This guy had a beat-up old car and was in debt and had a house that he still had a good ways to pay off.
He basically gave me a quick rundown of Forex and directed me here to Babypips. That’s where I went through the School of Pipsology and began my journey.
5-ish years later and I live in another state from my co-worker. I hadn’t talked to him in forever and so I email him just to see how he’s doing and talk about Forex and show him pictures of my son.
I get an email back and it was an email I certainly did not expect.

He basically let me know that he’s doing really well, is completely debt-free, has bought a second house and three brand-new vehicles and has a massive bankroll.
Since he knows how I am and how skeptical of a person I am, he showed me his accounts, the trades he makes and the amounts he is trading with.
This was an eye-opener for me. Bottom line was that he is doing very well for himself.

This is when I started to obsessively try and pick his brain for knowledge to how he trades.

[B][U]Here’s the problem:[/U][/B]

The way he trades is completely different from what I’ve been taught. Not only that, the percentage he makes per month is massive. (anywhere from 20% to 100%+)

So he has several trading accounts, each with slightly different capital sizes.
One account, for example, has about $100k. On this account, he trades with massive lots of 4,500,000 units and only takes about 10 pips per trade.
His strategy is simple:

Plot Support and Resistance from a Top-Down approach (Daily S/R, 4-hour S/R, 1-Hour S/R and 10min S/R)
Then plot Trend lines from Top-Down
Then he will trade Bullish and Bearish Engulfing patterns off of the trend lines, support lines AND Psychological levels such as 00,50,20,30,70,80 and he only trades Bullish or Bearish based on which Psych level the candle is at.

His Stop Loss and Take Profits are usually set at 10 Pips each.

One important part of his strategy (which makes this thing impossible to back-test) is that after the Engulfing signal, he waits for the next candle to confirm his move by waiting until the 4-7minute mark and if price is going his way, he gets in, takes 10 pips (each pip being worth about $450 each) and gets out.
He does this several times throughout the day and has been making an average of about $16,000 - $28,000 per day.

I have been skyping with him lately and trying to learn his strategy and I am sickened.
As long as I’ve been studying Forex, I have ALWAYS been told that even the most professional of Forex traders make, AT MOST, 3-5% profit per month…
This guy makes way beyond that and has been for some time now.

Why is this the case? If there are people with strategies that are wildly successful out there, why are people on these sites telling us that it’s impossible?
I literally know someone in real life that proves them wrong.

If/when I learn this guys strategy, I want to make it my life’s mission to unveil this myth and destroy the notion that everyone HAS to trade a certain way and only make a measly 3-5% profit per month their entire life.

If possible, I would like the input of those who know what I’m talking about and have some comments on what I’m talking about.

Thank you!

You are stating his rules of trading and your thread title is “breaking the rule and still successful” why’s that? If he is following his rules then how come he’s successful breaking them?

Well, perhaps I could have worded this differently.
What I mean by that is the general “rules” of thumb that generally all professional Forex traders preach in forums like these as well as websites that teach Forex trading and so forth.

The “rule” that you have to back-test your strategy before you trade it live is one example that this guy has broken. His strategy cannot even be accurately back-tested because part of his strategy is to wait until a certain time within a certain candle before deciding to enter the trade.
This man has never back-tested his strategy.

Another “rule” is that the most you can expect to make as a professional forex trader per month is about 3%-5% on average… which he has smashed by making far more than that.
A week ago he showed me his account which had been doubled in 6 trading days.
That’s a LOT different than what we’re taught here on these sites.

Another “rule” is that he trades Bearish and Bullish Engulfing candles that aren’t really engulfing candles. Normally, you would consider an engulfing candle valid if it literally engulfs the previous candle. His rules say that it just needs to “look” like it’s bigger than the previous candle - the wick doesn’t really matter.

These things are so contrary to what I’ve learned and it’s working so well for him.
It’s also much more difficult to get used to :confused:

Also, his TP and SL are not always set in stone. Generally he looks to get 10 pips, risking 10 pips but sometimes he will get out of a trade at maybe 4 or 6 pips or whatever. Other times, he will let a trade ride out for something like 20 or 30 pips and he gauges this based on how “strong” he thinks the support or resistance was that price was coming off of.

His strategy feels so subjective to me, yet he’s been doing this for years and has been going really well with it.

The reason I am making this post is because I have been watching time after time professional forex traders like Jason Stapleton say definitively that you cannot be successful trading forex the way this guy trades. So I basically want to know why people say this when I see it happening.

The general rules of thumb are designed to protect you as a trader. Successful traders don’t necessarily follow them and an unorthodox trader can absolutely still be successful. But on average a trader is more likely to be successful in the long term following some solid guidelines that help shield them from too much risk.

I think breaking the Forex rules are not good strategy and if any one still has success then it is very amazing.

It only proofs that you cannot believe what people are writing or telling you. You saw it with your own eyes, that is the best proof. I hear many times traders are doing 10% or more. Also from my broker who can see the result of all clients. But I didn’t see it!!

Are people lying about this? No They are telling their story from their perspective. Some don’t want to tell you the truth because of tax control or giving your false hope of what might be possible.

The system you described looks simple enough I don’t understand why you think you can not backtest it?
You always can test it on demo or backtest it manual on history data.

If this trader showed you his account does that mean you have a good/close relation? Why you don’t embrace him as your teacher Looks like a great opportunity to me.

I am not a good trader yet but I am convinced that it is possible to make a good profit. 3%-5% is already much better then on a bank account. Learning to trade takes time to understand how market is moving. It takes a lot of screen time, but a good teacher can reduce this. If you learn to make ‘only’ 10% monthly with his system… Why not?

I don’t see the strategy itself breaks any forex rules only his profit but that isn’t a rule

His strategy is trend following: +++
Risk Reward: 1:1 or better ++
Opportunities: Several a day +++
Reliability: Probably hi > 70%-80%? +++
Risk: 4500 on 100000 4.5% (Hi) –
The risk looks acceptable with the reliability. Reduced to 2% it is still making huge profits. If the 100000 is only for margin in the account and the 4500 is only 1% of the capital it is very good. But we can’t see that.
Just my opinion. But what Forex rules are broken?

Instead of braking you should see that as bending the rules, or adapting. Trading conditions constantly change and not always will a certain strategy work.

We are close, but he thinks that if he shows me his exact strategy that I will not learn to develop my own strategy. He has a perspective on this.
Also, part of his strategy that I would never implement is that he prays to god to confirm his bias.
It’s a strange ritual to me that I do not believe in.
Aside from that, I would like to know his strategy but he is being a little too secretive about the details. He is showing me that “base” of the strategy, but there’s some details that he wants to keep secret so that I will add my own levels of confluence in order to increase probability.

It’s stressful right now because I am still losing trades but he is winning and winning. I watch him trade live on Skype and I watch him win all these trades and he’s trying to show me how he’s doing it but it’s going right over my head.

The best word I can use to describe his style of trading is - unorthodox.
It’s completely different from your usual thing.

The fact that he is not revealing the secrets is like dad not doing his son’s homework. One needs to learn from his own mistakes and know the down sides of a strategy.
The strategy that I am working on and refining ain’t gonna be sold so quickly to the public, and if I truly want someone to know it I will only give him the basic tools. As I mentioned, dad should not do his son’s homework

Yeah that’s probably true. I’m going to keep picking his brain, however, in order to get the basics down because I still don’t even have that figured out yet.

I mean, Yeah I can write them down but I mean I haven’t figured out how to effectively apply them.
What you said here is pretty much the mind set he has about this. So yeah.

To become good in something it needs time Nobody becomes a doctor or engineer overnight The same for trading.
The right mindset is important according a lot of traders Your friend does that by praying to god Others use some kind of meditation or having a daily routine before starting to trade like having some kind of peptalk.
Don’t think he has secrets Maybe he is doing things by experience that becomes some kind of instinct or 6th sense. This is hard to explain. Ask what you did wrong but first try to answer this question yourself. You can learn more from your mistakes.

If a trader is breaking rules or not using any rules and he is still successful then its only because of his bod luck. There is no gurentee that he will continue this and keep earning from forex market for a very long time.

I don’t think that a trader could still be successful when he broke a rule, following instructions can make your trading more easy and profitable, so i suggest, must know all rules and have patience on getting good earning here in forex.

I will go with general answer here: If there is a strategy proven to be consistently profitable, than breaking the rules of that strategy by no way can mean success.

People have different strategies that work for them individually. Some are more aggressive in their trading and that works for them, like the guy in OP’s story. The idea that traders don’t make more than 3-5% per month is a rule or law written in stone, of course there will be exceptions to it. It really depends on the individual who is trading.

It is astonishing that if someone break the rule and get the success, I don’t believe on this statement, I would like to say that forex is risky and tough business and we have to follow the rules of forex then we become the able to get the success in this business.

I think forex need discipline with obey rules if trader want to success, breaking rules I think will leading to get failure, like as in rules money management only need use smallest lot size but in trades using bigger lot size, it will making mc quickly

LOL, if I can keep on doing that for 2 more years I can retire at the age of 48 :18: