Tilden, you probably know more about trading than I do, but I feel it owe it to the Beginner’s Forum to throw out a caution here.
Turbo said when he was outlining the plan that it was for a trending market. He even gave instructions on how to exit and track ranging markets until they start trending again.
MissCroft, who I quoted above, mentioned that this system is similar to the Turtle system, and that system is known to have long periods of draw down while the trader is waiting for a breakout.
Turbo stared at the start of the thread that his intention was to provide a system that someone who knew nothing about the market would be able to follow. Well, if you know nothing about the system then you won’t understand why it’s profitable under certain market conditions, and you won’t understand why it’s NOT profitable under other market conditions. What’s worse, you may not be able to recognize changing market conditions and not be able to recognize that it’s time to abandon one trading system for another.
I’m pretty sure Turbo also explained how to identify a ranging/trending market with a quantified & descriptive approach. This alone is how a new trader would identify changing market conditions.
There is a fine line between being able to trade and not being able to trade successfully and proficiently. Whilst I believe that (almost) everyone can become a profitable trader, they certainly need to have the correct attitude and mindset - if they can’t even work out the basics for themselves then in all honestly they are in the wrong business.
You’re only as good as your bankroll, and you live and die by the sword in this career. There is no forgiveness for being lazy and not figuring things out for yourself.
Profit taking will not be learned in 1 day or month. It is a long process and take lots of knowledge and practice. Profits will start coming when you got one method and it will be good.
Thank you Nero for this system. I have learned lots from reviewing the strategy. Could you please clarify if the entree orders and stop loss should be triggered through stop buy/sell order or through stop-limit orders. I would think that the advantage for a stop loss order is to sell the security in case the price gaps and the limit never gets triggered. This would result in a loss possibly greater than the max of 2% per available balance but still cut the losses short. We can try to minimize the problem by trading very liquid securities as you’ve stated.
What is your take on the entree method to be used?
I have been testing this risking 50p a pip through a spread bet company.
Results from may were a £37.50 loss, this has to be taken though with the fact I didn’t open 5 positions at once rather I started with Gold and then added other markets as the month went on.So June will be the first month of testing the system proper.
Fwiw June is currently £36 realised profit with about £500 currently positive.
I like the look of it a lot and will carry on for at least the rest of the year,unless the money I’m using for the test is blown.
As others have said it can play on your emotions as you will regularly see positions 100 + pips in profit only to cash out for a much smaller profit or loss, if a trader can’t handle that then it wont work for them.
Take notes. Study your success and failure.
An analytical approach to trading does not begin at the fundamental and technical analysis of price trends, or the formulation of trading strategies. It begins at the first step taken into the career, with the first dollar placed in an open position, and the first mistakes in calculation and trading methods. The successful trader will keep a diary, a journal of his trading activity where he carefully scrutinizes his mistakes and successes to find out what works and what does not. This is one of the most importance forex trading tips that you will get from a good mentor.
Hi Manxx yep got the results and not pretty reading.
For convenience I’ll just talk in pips and say they are slightly rounded up/down.
For June it was a 497 pip loss
July -106 realised loss with 400 pip currently positive across 4 markets(waiting for Dax buy) and most with stop above break even.
To put the results in some sort of context Italian stock market was one of my original group and proved a very bad choice that alone over 3 trades was a negative of 348 pips so not picking that would have drastically cut my losses,though not necessarily put me in profit.
Gold has been one of the better performers along with Oil (though volatile)
The Nasdaq (called US Tech on my account) has been suprisingly consistent.
As I generally have my own way to trade currencies I have only used the EU/USD with this system which resulted in 3 losses in a row and so has been replaced by DAX.
It does seem that the core criterion that the security is currently trending is critical to the success of this method. And by trending I don’t think we are talking about just an up or down move on an hourly chart, rather a weekly/monthly type timeframe.
I have also found oil to be very good since March this year but I am a skeptical whether it will continue in the near future as we seem to be in a rather broad range that could be prolonged for a few months ( I should add that I don’t trade oil entirely according to this method, I only take a position in the same direction as this method whenever my own method presents a signal for it).
That was a bad knock for June and that would have seriously upset me if I had been trading that for real and in normal position size!
But all feedback is useful whether it is positive or negative. I somehow doubt that there are any readers actually trading this method at present since there is little posting here, or even contemplating starting it, but if so, then your feedback is very important…thanks again for taking the trouble to report back and I look forward to hearing more at the end of July!
One slight change to the above, the pending market is actually the Euro stox 50, I thnk I had Dax on my mind as I was typing
I’ll continue posting a monthly update, and if I forget don’t hesitate to remind me.
Though given the way profits can shoot up and down does make me wonder if some sort of profit latch may be a good idea, something along the lines of trail 5% if reaching 20% profit. Or even cash out at a certain level and place new orders from that point.
I’ll likely just trade as is but it’s food for thought. For any that know the Decision Moose trading method, much cleverer guys than me worked out the percentage profits could be noticeably increased with a profit latch.
Ok another month and another loss.
This time an overall loss of -212 pips
Fortunately I’d begun cutting my stakes down to the lowest levels on most trades so it wasn’t a big hit monetary wise but disappointing all the same
The month was actually going reasonably well mid way through with decent wins on gold oil and Ftse more than covering a few losses, but 3 fairly big hits from EU and a couple from oil pretty much killed the month.
Markets traded this month were EU ,Oil ,Ftse 100,Nasdaq , Gold and Euro Stox 50.
I’m skeptical on this method if used on more volatile markets tbh at least without some sort of profit locking in method,possibly something as simple as a 21 ema would do it.
On main Indexes and Gold/Silver it seems like it could be more of a stable system with no changes.I’m not keen on it for forex though as the stops can be a bit high for a break out system in my opinion.
Thanks once again, Donovan, for the update. Pity that your results for this method for the last two months have been so unfortunate! But thanks for testing it out, it has revealed quite a lot, I think.
I have only been montioring this with Crude Oil and I am not surprised that it do not work out ver the last few months. As I said a few posts back:
We are still trading that range and there is no sign of a big enough break in either direction yet to justify using this method with oil. But that range is actually quite wide and it leads to the conclusion that this method only succeeds when there are very long, substantial trends evolving. Which means there is a great need to analyse and identify those trends - which is very difficult to do! And perhaps there is the key here. The method itself is mechanical and very easy to manage - but determining which instruments are the ones that are about to embark on a long enough trend is perhaps bordering on impossible?
I am not monitoring this method any more as my own longer term methods are more reliable and I only trade 1-2 products and not any kind of portfolio as this method requires. So I am now done with this thread. But thanks once again Donovan for both testing this out and for reporting back to us with your results.
Watch this Space for an anal ysis of the EUR/USD relative to this trading scheme. Don could you give me your timestamp and price “s” for your euro trade, also initial direction.
Not sure as I haven’t been logging that in my journal,will probably be able to see it on my platform so I’ll check it out tomorrow if I remember
On that note August will be the last update from me for a number of reasons not just the losses.
The main one being that I only use this spread bet account for forex when it comes to shares and commodities all of my trading is done through investments trusts and a real broker.
Following this system has distracted me a fair bit from my own style,I’m not really comfortable holding so many positions that aren’t at least at break even and many times I find myself opening a trade which I would definitely not normally take and would often be in the opposite direction than my own reasoning.
3 months is long enough for me to realise I wouldn’t trade this way long term,perhaps if it had been 3 months of profit I might feel different but I’m not sure I would.
So see you next week for the final update
The last post here is dated Aug 22. Am I correct? I am surprised there haven’t been more updates. I hope the original author of this thread gives an update on how the method is going for him and some final thoughts.
Has any of you tried this method but with some modifications if any for better profits?
[quote=“ClemG, post:224, topic:83153”]
Has any of you tried this method but with some modifications if any for better profits?[/quote]
Nope!
The whole idea of this method is to “Keep it simple” and not require anything more than selecting appropriate instruments and setting orders once a day with the idea that one is always in the market one way or another…and not add any bits and pieces to improve it.
I paper tested it on Crude OIl and it was performing fine at the start of the year until it ran into ranging - and that is the problem here: You have to be able to select the appropriate markets that are trending well.
I also back ran it on EURUSD (just visually from the daily chart)and it did not perform well at all. Sometimes currency markets spike so far that they not only stop out the position but also simultaneously reverse it even in the middle of a trend.
I would not trade this method and, from the small amount of other feedback here, it seems no one else is either.
But try it if you wish - but only on demo until you feel comfortable that it is working for you.
I don’t know whether the OP is still using this personally or not, but if so it would be good to ask him how he is identifying the appropriate instruments that he is including in the package of 5/6 Instruments.
Thank you for your reply. That was useful. I can see that it works well with quickly trending markets.
Can you recommend to me some other good trading methods? Cheers.
