Live Trading Performance, my attempt

I agree with Master Tang. I think most of the time, it’s on us. We, consciously or unconsciously make changes to our trading method and/or the rules by which we apply our method, in the pursuit of being more profitable.

Some of the time I believe it is not on us; let’s not forget we are a small part of the market and we’re playing in a somewhat rigged game. Banks, Hedge Funds, Brokers, Governments etc, have a big say in how successful our trading method is. Our decisions are based on past events and we can’t direct future events. We can only look at what’s already happened and make a educated or in some cases non educated guess as to what will happen in the next hour, day or week. The only thing we have a say in and can control is the rules by which we trade by. Which is why in my opinion rules by which we trade by, are much. much more important than the method we use.

IMHO if you agree with the premise that sooner or later every system will fail, then the question is not how do we tweak our trading method and/or the rules so that our system never fails, but how do we apply our method and rules so that in over all scheme of things we have more successes than failures. If you agree we can’t control or look into future events and that all we can do is make an educated guess as to what will be, then we have to work on what we can control. Method, Money Management and Mindset.

No matter how we approach method, most experience traders will say your method would have to address: trend, momentum, cycle, support and resistance. Where people differ is on how we address these parts and the degree of importance the different parts have. IMHO how you address and what you place importance on will depend on you, your situation and your goals. There are a lot of different answers. So individual’s have to gather the facts, look at their options and pick the least of the evils.

The same goes for money management, there are a lot of different ways to apply money management, depending on you, your situation and goals. On this one I agree with Simon Templar. I use a percentage the balance in my account. It’s recalculated based on what I’m trying to achieve, but it’s always a % of the balance.

As far as whose successful and whose not; Personally I don’t care. I’m interested in does the information they are presenting, going to help me get closer to my goals, by implementing what they are saying or not. My process is the same for all situations: gather as much relevant information as you can; look at all your relevant options; then pick the least of the evils. Keeping in mind sometimes it does work out. . .sometimes it doesn’t. . .so what; next. My goal is to make the same mistake the least amount of times as possible.

Well based on my experience, hard work, years of long sleepless nights and thousands of gallons of coffee, I’ll going with the market behavior & conditions change.

The goals, expectations, drivers, blah blah, blah, of the market and participants change, I think it’s that simple. :wink:

Here’s a few quotes from a 2009 Daryl Guppy interview that I like a lot, and IMO explains why we struggle finding systems that are consistently profitable.

[B]“The important point is not finding a system or designing a system, what is important is that you have to create an approach that’s appropriate for the current market conditions.”[/B]

[B]"There’s always a challenge to adapt and adjust your trading style or approaches to suit the market conditions. "[/B]

Here’s a link of the interview with Daryl Guppy. No need to watch the whole vid, It’s in the first few minutes of the interview that Daryl talks about the limitations of trading plans and trading system, etc.

Want to know Daryl Guppy’s Chart Trading Tips?

MT, gp00053 and d-pip,

Certainly some thought provoking suggestions, and I do have to agree that in most instances it does come down to the person applying the trading approach in question, rather than the trading approach its self - we all make mistakes as humans, how much that will cost though is debatable!

Interestingly enough, I find the system designing stage the less stressful element. However figuring out the current market conditions is easier said than done - if only there was one rule for all :slight_smile:

Subscribed. Good Luck Jezz!

Great Post and videos, right on the money. I hope everyone new or not take the time to listen and use them in their trading. Thank you for the post and link
Gp

The question is can a systematic trading system/approach fit the entire market cycle with no changes by the user by inserting variables. This in fewer words is what I have been spending my time looking into in more detail. I believe the two biggest changing variables are the following:

  1. Volatility, affecting stops and profit levels, widening and shortening them accordingly
  2. Trending to ranging and ranging to trending cycles, affecting trade signal types such as;
    i. Continuation trades with the longer term trend in trending markets
    ii. Breakout trades against the short term trend in a ranging market cycle

Being able to quantify just those two market elements, which really encapsulates the majority of trading as a whole, ‘should’ mean that a systematic (perhaps even automated) trading style can self adapt to the market. One problem though which experienced traders will pick out straight away is that in order to try and quantify this you’re going to have to deal with lagging - hence waiting for confirmation before your trading method changes a variable to adapt to the market cycle. Once this adaptation has taken place your edge returns, at least in theory of course. The challenge being that your edge must exceed the lagging time when you’re going to be inevitably wrong.

[QUOTE=“Jezzode;589009”]The question is can a systematic trading system/approach fit the entire market cycle with no changes by the user by inserting variables. This in fewer words is what I have been spending my time looking into in more detail. I believe the two biggest changing variables are the following:

  1. Volatility, affecting stops and profit levels, widening and shortening them accordingly
  2. Trending to ranging and ranging to trending cycles, affecting trade signal types such as;
    i. Continuation trades with the longer term trend in trending markets
    ii. Breakout trades against the short term trend in a ranging market cycle

Being able to quantify just those two market elements, which really encapsulates the majority of trading as a whole, ‘should’ mean that a systematic (perhaps even automated) trading style can self adapt to the market. One problem though which experienced traders will pick out straight away is that in order to try and quantify this you’re going to have to deal with lagging - hence waiting for confirmation before your trading method changes a variable to adapt to the market cycle. Once this adaptation has taken place your edge returns, at least in theory of course. The challenge being that your edge must exceed the lagging time when you’re going to be inevitably wrong.[/QUOTE]

You are basically talking about the Holy Grail… Obviously it is just my opinion but I think it will be difficult in the extreme to find a mechanical system that will dynamically adapt (aka self learn) to the market using only technical input variables.

I would envision shewhart charts could be used to identify when the system needed to be re-optimized… And some sort of dedicated background process that constantly runs a rolling period backtest… Automatically scanning for the appropriate variable to change and to what value.

This is essentially what banks hire phd mathematicians and computer science geeks to do for their algo trading. Mad props to any individual successfully competing in that realm.

I agree with you in respect to having two systems running simultaneously. One places the trades in real time and the other runs a moving average optimization program (almost curve fitting) so that the current trade placing system stays up to date - am I doing this in reality, hell no. But do I understand the concept and dream of playing around with it, yes indeed. I’m no Phd mathematician, nor can I unfortunately computer program (although I am in the process of looking into learning Java later this year).

I’ll be the first to admit that I don’t and never have used fundamentals in my trading, and even when it comes to technicals I wont look any more than past the previous trading session with perhaps a longer term SMA. However I also don’t hold trades for more than 24 hours and mainly use the 1H charts for analysis - so as crazy as it sounds it also holds some validity.

It does go to show though, even from this small example just how different the world of Retail trading is from Commercial trading - we really do, even at the best of times, try and throw a few things together in order to gain a profit :wink:

Okay, so we are approaching the start date for the public challenge of this thread which I hope will be exciting and enjoyable for all involved followers. As a recap the overall target for this public account is to turn $1.5k into about $150k within three years (36 trading months as I rarely trade December and January - I like to take holidays as much as you guys!)

The account has been funded with a touch on $1.5k, actually at $1,503.84 as I was running a trade management EA today which I use on all my open trades and so wanted to test it before starting for real on the first Monday in February. Unfortunately though I cannot link a live equity gain chart to this thread as I’ve opted to use MT5 with MT4i as my tracking software (despite its misleading name it does indeed offer MT5 EA’s to auto publish trading results which is actually surprisingly flexible despite my first judgment). I know a lot of you guys like to use Myfxbook, however as usual I like to break the mould (not ‘mold’ as i’m British :p)

The website (bfx-equity) has also had a few changes to make it more user friendly, however should you want to find me on the actual MT4i website then just search for ‘BFXequity’ - I can assure you all results are real and verified etc…

On a final word, and I would like to state this here prior to going live, I have never guaranteed success on this public challenge, nor have I made public promises of retail trading fortune. I do however have a lot of statistical proof that this has a very good chance of working out, but for now lets just look at me as the underdog :slight_smile:

Best of luck traders, lets make some money

James

Well it’s too bad it’s not myfxbook but looking forward to it nonetheless. More of the posters (especially the ones posting advice) need some sort of proof they are profitable and that there advice is worth anything at all.

Good luck!

Good stuff Jezz, You know the game, now get’r done…

We’ve been waiting…

10pip stop at NFP :slight_smile: crazy guy

Eurodollar 1.3575, previous resistance turning to new support, an ideal level to play NFP from in any traders books! :wink:

Granted, it could have gone wrong as can any ‘high probability trade’.

Have you ever wonder what it might feel like to wake up each day and actually do something that you enjoy, something that you have invested time into and something that keeps you interested no matter how good or bad the times may be? That’s what trading feels like to me, and most of the time I can’t wait soon enough for the next morning to come around so I can start working on a fresh set of charts.

Initially, making money from trading was a primary focus for me. Going back to the end of 2008 when I first became drawn towards speculating in the Spot FX Markets it was because of the huge potential financial gains, however trading FX is not about making a quick buck, but making small and consistent gains over time - something which took me a little time to come to terms with.

Ever since I was 18 years old, the legal age to gamble or speculate, I was very much interested in online poker and the occasional visit to the casinos for Black Jack and Roulette with my friends after work at my regular c0cktail bar job. At this time in my life I had no idea about Retail Trading from home, as at that time it was a very new form of speculating on the financial markets with very few retail brokers on offer.

I was known by my friends as having no limits when it came to playing Black Jack, Roulette or even Cash Poker. There would be several occasions when I would quite happily place individual bets which were northwards of £1,000 - an amount which my mum would kill me for if she knew what I was doing, let alone being in a Casino at all! Needless to say on most occasions I would walk out with an empty wallet and think about what could have been…

Contrary to the fact I was in a Casino expecting to win, I will admit that I am not a stupid person. I have always had an interest in finance, and developing ways to make money from a statistics point of view. This is where I belive I have found a middle ground with Trading Spot FX. At first I was making lots of money, and I mean lots of money relative to the income that could be generated from a normal job at my age, however as a naive ‘newbie’ most of this was lost back into the market. But one thing kept me coming back to the markets…you make your own odd’s, you are against other people or funds and there is no ‘House odd’s’ like that of a casino. To put it simply, trading is down to skill and making your own edge to exploit profits - treat trading as a business and you will succeed.

To cut a long story short, at the age of 21 I went to university for a standard three year degree in Finance with Risk Management. However getting my degree was a secondary factor as to why I chose University at all. I went to University as I knew this would give me the needed three year window to learn how to trade while financially supporting myself from a student loan.

I literally spent a minimum of five hours a day testing new ideas and back-testing data sets to find an edge. I would say with a high level of confidence that in total I spent over five thousand hours learning. It would not be uncommon for me to finish university at 4pm and go to the twenty four hour library until 2am most nights. You’re probably thinking “how can someone really have that level of self-motivation?”, well the answer is simple. Once you find an edge that has shown to make financial gains you want to test as mush historical data as you can get your hands on just to see if it would fail.

I aced my first two years in University, making top grades, which in all honesty I expected as I find working with numbers and relating them to financial situations quite simple. However in my third and final year trading was getting serious, and I was in way over my head. I knew I was on the edge of making a breakthrough, but not quite ready. I even tested my unfinished trading strategy on a live UK trading competition which had over 8,000 participants and finished in the top 20.

It did not take me long to find out what was missing from my trading system, and to find this involved spending a lot of cash by blowing several live trading accounts. The answer was simple, yet fixing this has been the hardest personal challenge for me since staring back in 2008.

I was hardwired to gamble, and always have been since the days of the casino visits and late night online poker. All I needed to figure out was how to suppress this feeling which in all honestly, even at the best of times, was uncontrollable. For example I would make money from a trade and that would be me done for the day, I could easily walk away. However, after a loss I would chase more and more, and in most, if not all circumstances I would double down on the stakes at risk - which as we all know can only end one way given enough time! There was one occasion at University where I was in a lecture about Global Politics, a topic which bored me to no end. I opened my laptop and started to trade the US session while the lecturer was continuing to talk away to the class. Not only was this a boring two hour lecture, but I also managed to blow a $5,000 live account at the same time. I remember thinking “what the f*ck, I bet that’s the most expensive lecture anyone has ever paid for at this university” - needless to say I got up and left and went to have a hot shower.

Taking a loss in trading is totally natural and normal, and it’s this that I have finally come to terms with. Follow the trading plan, a plan which you have already proven to be profitable over time, and you will end in the green. Making my trading account public is one way which I hope will help me suppress my instinct to deviate from the trading plan. I know that if I can do this the money will come, and lots of it in the not to distant future.

I finished university broke, as all students do, with a good degree but no job. It was decision time and I had two options that I could choose. Do I go for a full time job and save for a few years, quit the job after this time period and trade full time, or trade with a small retail account during the day and work nights behind c0cktail bars? I actually went for the first option and got a job offer at Bank of America Merrill Lynch in their middle office, which I then declined after thinking about it. Shortly after that I went for a random interview in London to work on a Caribbean Cruise Line as a c0cktail bartender which was, and still is the world number one in luxury small Cruise Liners. This ‘random’ interview backfired as not only did I get the job, but my close friend also got the job on the same cruise - how much fun would this be!
Needless to say, something held me back, and with less than one week to flying out to Singapore from the UK I made the phone call to cancel my position.

I wanted to trade from home, and make my own money from scratch. I thought to myself that I don’t want to be the person working on that Cruise Liner, I want to be the person who takes a vacation on that Cruise - a clear difference.

At the end of the day i’m young, I have time to recover if trading does for some reason not work out in the future. Regardless of this though I have a lot of people interested in what i’m doing, not only friends but also other people in the same profession. I’ve made a lot of sacrifices to be where I am now, not only from a financial prospective but also personally on a relationship front.

I’m sure people all have their own stories as to how and why they got into trading, and the decisions that were made. However, the biggest lesson I have learned is that finding a trading edge, be it from statistics like my self, or other forms is only have the battle. Phycological elements are real, something which can’t be quantified into numbers. Underestimate this and no matter how good you edge is you wont succeed.

Great post, Jezzode. It almost mirrors my own story - attraction to online poker, graduating with a finance degree, dropping a job to pursue trading, sinking thousands of hours on backtesting etc. Uncanny. Make your own luck, bro. :51:

I agree Great post Jezzode and a great thread. I wish you all the best.

GU Live short trade in action, lets see what happens here.

Update: This trade went down the crap shoot!

Whats the risk on GU?

On this particular trade 3.0% of the Acc. Balance.

Trade could go either way, but I like the looks of a minimal sell off at best. We’ll see though. The obvious fundamentals could well get in the way though.

Hi Traders,

It’s been a little while since I made an update here about the performance of this ‘public challenge’ from $2.5k to over $100k.

Last night UK time saw a really nice long trade in AUD/JPY for a 60 pips gain of 6.50% on account. It played out perfectly with an explosive breakout to the upside of which I managed to capture just shy of 90% of the move before exiting the trade for the night.

Large Image>>>http://oi61.tinypic.com/2vmc74h.jpg

For more details on this specific trade, live updates and trade info you can always feel free to check out my journal here BFX Equity, Foreign Exchange Retail Trading

James