Okay so I don’t get this I opened 6 demo account to test both my ideas and conventional ideas separately and see how they perform. so far I’ve blown 2 and close to blowing another one using conventional method due to repeated losses even at 1% risk!!!
Scalping was kinda crazy as i just couldnt wait for any increase beyond 1 pip but it generally lead to break-even or losses in the end. Every other strategy i tried seemed to fail especially in currencies… I felt trading in currencies was like playing russian roulette with the probabilities being against me and not understanding them at all!
HOWEVER, my main account using my original ideas is a different story. I only trade CFDs because i understand them and know the price of things like the back of my hand so when i do spot something i do hike the lots and take advantage of anomalies in the market doing this had netted me 265% ROI in 18 days swing trading style; I never trade here until i see a really good deal… how the hell is it possible to be absolute failure in one but really successful in the other? should I stick only with CFD’s? is there a better platform for this than forex brokers? or am i doing something wrong with currencies?
Well lets break this down, first of all you have 6 accounts with 6 different styles. I am guessing your not executing each style consistently every time, also lack of patience. I know i am taking it hard on you. But I think your 265% ROI in 18 days is pretty much worthless, just luck. think about it 7 accounts of course one is going to be profitable. What anomalies are you taking advantage of in the CFD market that you can not take advantage of in spot Forex? is there a legitimate difference in the instruments you are trading, if so then yes stick to it. You like to hike the lots (increase leverage) is this within your risk parameters? 18 days, swing trades, that’s probably less than 30 trades net. which is an insignificant sample size to determine if you actually have an edge. To me a market is a market, if you can trade one you can trade them all. How can you get better? Well document your system, lay out your edge, execute consistently, and whatever your doing dont increase your leverage like crazy and blow up.
Thanks! you’re not being hard on me, I need to intellectually challenge myself to satisfy questions and curiosities in me. its just i find it insane seeing the potential in CFD’s mainly because with CFD’s i can relate and tell what kinda price a commodity would sell for and predict its future based on supply and demand; with currencies they look like random numbers and i feel its 100% guess work because there is no supply and demand and is simply based on how people feel and erractic newsfeeds. does this make sense?
when a CFD unexpectedly drops to a certain threshold or rises where its not supposed to be i simply buy or sell otherwise i leave it and just continue to be a wallflower, If i’m wrong I willing to pay the stop loss price. But when i read books about things like scalping or trend following i see what low returns they usually get; it makes sense if you have a large amount of money and do not want to risk it, i mean heck the inventor of turtle trading, Richard J Dennis did not follow that system. His success was also coincidently built on commodity futures where he took huge positions on products he knew about. There is no way trend following would produce 525% ROI in the first year and about 500% again in the next few years using trend following. He only used it after his gain trading in the start and then used something like turtle trading to protect his sizeable assets in the end.
also the other part of the equation was, say even if my trading truly did blow up my account here and there. wouldn’t it still make sense to periodically siphon off profits and restart accounts back to a small amount? the roi is still way higher than safe trading and safe trading only makes sense in cases of large capital. I’m sure not everyone will agree but there is not one book i read so far that the successful author started with safe trading or low capital and then became successful. i almost think trading is just that… choose 2 out of 3. am i right? looking for experienced/critically thought out answers not textbook thinking.
And to clear out the air on my trade i did make sizeable trades that had at least 250-350 pips a trade simply because I went against the crowd and exploited what i thought was mispricings of the market with currency it is hard to do that as they are just numbers like any other currency. I simply thought it would have been ‘safer’ if i analyzed fancy technical and trends like everybody and did the whole 1% risk thing but all that led was to accounts blowings up i have this need to ‘connect the dots’ if its makes sense. Okay now I’m pretty sure I pissed someone off and they’re going to tell me I’m going to fail but i feel that needs be justified as I’m a very competitive person and It bugs me when people tell me the sky’s the limit when i clearly see people who have have achieved success with footprints on the moon and did it by not following conventional rules that’s commonly followed out there.
I started my career in trading in the pits working for firms filling institutional orders in commodity futures. Yes you can not make massive returns with out massive risk it goes hand in hand. You are reading these books that have stories of guys who made it, that’s a huge survivorship bias, they are probably less than 1 in 100,000 guys who tried it that way. You can go on leveraging yourself to the hilt. Also if you read plenty of these books, they guys who did make it blew out lots of accounts, it just took 1 to launch there career. Do you have the capital to sustain that? I would say to trade futures you need at least 80-100k per account. So assuming you need 3-5 you need atleast 500k, are you going to be able to siphon that much off during your “hot streaks”?
Second the turtle breakout system is no longer profitable, and hasn’t been for over 15 years. I trade futures as my main vehicle for trading to this day. Tell me about your pricing model, how do you determine if it is outside a “certain threshold”. What information and variables are you placing into that model? Because to me that is not a trend following model, your using a mean reverting model. Selling into over bought and buying into oversold based on whatever pricing model your using. i can tell you for sure I never learned any of this in a textbook cause i never studied any of this in any school.
Do you have prior industry experience working with any commodity? Gold production, oil refining, agriculture? what gives you this extra inside knowledge of commodities that you wouldn’t have a basis for in currencies? I am not going to tell you your going to fail. I just want you to explain to me your edge, and why its better to trade some other instrument. I am just trying to pry the answer out of you. Mostly for your own good. I couldn’t care less if you succeed or fail, it has no bearing whatsoever on my ability to trade.
I think you answered your own question. Basically. you do not yet fully understand the movements in forex. It’s okay, though. Trading currency pairs is a completely different beast. I came from trading stocks and tried to apply the exact same priciples to forex. They are different markets and, not surprisingly, act differently in many ways. I quickly learned my lesson!
You said you never trade CFDs until you spot a really good deal. Obviously, you haven’t recognized what a good deal is in forex applying your same methods (or the many others you had on demo). Therein lies the problem. It is a different market and requires a different way of viewing this particular market.
In stocks and commodities the underlying value of the asset is absolute (always changing but there is some method of calculating the underlying value of the asset). In forex, all values are simply relative to each other. Also, what appears to be a massive price swing in currencies is actually miniscule. The price changes are simply magnified to the nth degree because of the massive leverage available.
It easy to wrap your head around a stock price, for example. One day it trades at $20. A week later it trades at $30. It increased in value 50%. Forex prices come no where close to ever doing that (unless there is a complete currency meltdown and even then central bank interventions stop such rapid movements). It only takes a small 1% move to accomplish the same thing for a trader. For non-US traders using 200X leverage the price movement needed is much, much less than that to accomplish the same thing.
New traders who get their start in forex usually adapt to it rather quickly if they are going to be successful. They don’t know anything else. Traders coming from different markets tend to bang their heads against the wall for a long time (I did) because they always revert to what they know from other markets and that is oftentimes a mistake.
Forget everything you know about trading other markets and study forex as if you know nothing. The pieces will then start falling into place. Then take MeiHa’s advice. It is sound.
It all depends on your methodolgy, some systems only work with certain pairs and time frames. Scalping for 1-2 pips is pointless imo and very dangerous even though some people do it. Look into systems which use support and resistence and trend lines, methods like that will work on everything
Thanks for your honest reply! I am still working out on the math but i figured if i overextended one account and made a lot more than it’s worth i could definitely split it or siphon it off everytime it hits it worth, the odd chance I’m terribly wrong i figure it’s the cost of doing business. As for commodities I am more familiar with Oil, not because i worked in an oil field but just because I lived in several oil rich areas most of my life and I am familiar with the politics and fixing going on. So when i see something inconsistent with those patterns I simply jump into that. Its more easier to predict oil because it is so streamlined and controlled and that i can recognise difference in ‘soft and hard fundamentals’ it’s not really news based but really based on supply demand regardless what the news says i simply connect the dots on my own but this is just an example of a commodities i used, I however wouldn’t have a clue in wheat or soybean etc.
I don’t follow trend following but I am entertaining and reading about all conventional ideas as part of my education and research just so I can say i did my homework and I even gave my ideas a try against those ideas to see why it worked or dint work. I’m also curious, why do you trade futures instead of CFD’s available through retail brokers? aren’t the margins, 24 hr trade/liquidity and ability to leverage way better?
p.s. I also applaud you for being rational most people I try to talk to only have egos and do not debate constructively.
Perhaps you’re right! with Oil for example I know what’s really affects the price and what’s really drama and I am starting to make a connection with the CAD/JPY trade knowing how much of a big difference Oil makes to these countries and hence can accurately predict a highly like price change so far i see a strong correlation… perhaps i need to learn what really moves and shapes things in order to understand currencies and by this i don’t mean news!! but rather identify the real stuff and recognise bubbles. I have also learnt to take advantage of odd time zones since I figure it would be more profitable for me to work against the flow ( i also study patterns in particular timezones)
I like futures because its a real market place with clearing houses and very highly regulated with transparency. I get plenty of leverage as it is so i am not concerned about that. Futures for the most part are 24hrs, but just because a market is 24hs means i want to trade it at any point in the day. I stick to the most liquid sessions trading the US day session.