If you statistics are correct, and you are more likely to have a loss followed by a loss then I have some bad news for you. Statistically your approach to trading is already weighted towards having drawdown, and what I mean by this is that your win rate has to be far less than 50.0%. Think about it, if you had a very good win rate you would expect to see more wins occurring after previous losses.
Now this could still work out in your favour if the gains from your winning trades far exceed what you would typically risk per trade - [I]Ceteris Paribus[/I]. However, you are already starting to walk on the wrong foot, and you are making trading harder than it should be. Drawdown is the biggest killer in Trading, Forex or any other form of investment, so trying to avoid this should be a number one priority. Expecting a loss after a loss is not a healthy approach to be taking.
I was messing around with some backtest results and you are correct. One of my systems has a 50% win rate and skipping (deleting) a trade after a loss had no significant impact. If anything, it harmed my account by reducing my frequency.
Another system I’m testing had a much lower win rate, around 30%. This was a fractal breakout system that receives many false signals during ranging markets. Since ranging conditions can exist for an extended time, skipping a trade after a loss can keep you partially out, and applying this improved my expectancy substantially.
However, I can’t take credit for it. I am posting for the learning benefit of other traders viewing this thread. I am copying their trades with Trade Copier.
There are a few things to learn from the myfxbooklink I posted.
You can see that a profitable system has a longer holding period than what the majority of forex trades believe is a correct holding period for a postion.
You can see winners outproduce the losers by at least 3-4 times.
Low Drawdown.
I also believe it helps new traders to Babypips to have hope that winning systems do exist.
I feel it would be very beneficial for a new trader to see “Honorary Members” at Babpypips and their myfxbook results as well.
Looking at this myfxbook has taught me a lot, and I am passing on the benefit. Up until now, I have not seen many myfxbook posts in Babypips that show correct trading principles as shown here, most importantly showing real results.
The website you speak of is the exact website that told me to come here and start up an account. On a Webinar they mentioned that Trading can be a lonely game, but Babypips can help us connect with other traders in a healthy way.
I agree. I just need to focus on avoiding the negativity, as I got caught in a whirlwind last time I posted. I’m just happy to be figuring out the market now.
Ok Jim, how about you show how much you’ve learned by posting your OWN trade idea ahead of time, taking that trade using the above principles, and explain your analysis as you do so I for one would find that most helpful… And would be appreciative.
You are happy that you are figuring out the market… So show us so we can share with you
Btw… Trading can be a lonely game when you are actually trading, I do not understand how you think you can identify with us when you aren’t even trading lol… You must be an auto mechanic because you take your car in to a shop to get fixed… I would imagine they would get annoyed too when you start playing with their air wrench pretending to be able to show them something…
OK you and Yunny have a point. I am copying their trades. I will start to share specifics that I am learning, I just don’t want to sound like a “Guru” when really I am learning it from someone else. That’s all, I didn’t want to say “Hey guys look what[I][U] I [/U][/I]am doing” because really at the end of the day it is not me.
There is a forum section titled “trade of the week”… Specifically meant for calling trades before they happen, and giving full analysis so others can follow… That would probably be the best place to start a thread where you can write down your OWN trade ideas… A trade idea every week is chosen of those to be highlighted and recognized for it superior analysis.
I’ll be straightforward, why don’t you stop all the BS and start sharing some info, it doesn’t have to be the core of your strat. If people like your ideas they will follow you to your website. Like Chris Capre, Johnathon Fox or SR_Player.
