Succesful trader. what is your edge?

Beginner Questions
1

i have read to be successful in forex you need to have an ‘edge’. The more i try the more i see i need to find that.
I am interested to know what other people think there edge is that seperates them from the rest in the market.

secondly, do you believe success is possible for parttime newbies with 12months or less experience who have full time jobs… to pay the bills and fund others forex profits:eek:).
success, i mean by increasing/building there account balance

thirdly, i read under funding is also another reason many fail… with $300 or $100 (it is possible to deposit $100 to already opened account to continue trading);is it possible to build from there.

i think discipline is the key…maybe…some say you need to be disciplined, others say flexible, i find i am too flexible, continually changing the parameters…
is dicipline considered an edge?

2

i have read to be successful in forex you need to have an ‘edge’. The more i try the more i see i need to find that.
I am interested to know what other people think there edge is that seperates them from the rest in the market.

secondly, do you believe success is possible for parttime newbies with 12months or less experience who have full time jobs… to pay the bills and fund others forex profits).
success, i mean by increasing/building there account balance

thirdly, i read under funding is also another reason many fail… with $300 or $100 (it is possible to deposit $100 to already opened account to continue trading);is it possible to build from there.

i think discipline is the key…maybe…some say you need to be disciplined, others say flexible, i find i am too flexible, continually changing the parameters…
is dicipline considered an edge?

The only “edge” i have is what i have learned for free from this website and forex factory. I personally have stuck with only trading 2 currencies for the last 10 months, and only in the last month have added a third.

I base my trades on price action and typically only use indicators to confirm it. I will open a chart with just candles and determine my trade (trading naked i suppose), then I open the same chart with the indicators i use to see if it agrees with my original thoughts. I use a combination of Ignots Rainbow strat and Spuds Stoch theory (FF). I think I found that the very first day i was on the site and contemplating trading and stuck with it ever since, mostly cause I think the charts looked cool. So part of me thinks I have had some success just because I found 1 way to trade and stuck with it, instead of continually looking for a better way.

I think paying bills etc is possible from FX, though this is the one place where you need money to make money… if you figure on 5% per month gain (yes, im sure some people do way better than this, others far worse), well you can see you would need a pretty big account balance to begin with in order to really pay the bills
1k:$50 - that wont pay my phone bill!!
10k:$500 - hmm, phone bill, utilities maybe
100k:$5,000 - now we are getting somewhere!!!

Under funding is probably the biggest reason for failure, or another way to put it is trading a position to large for your account. With Microlots and what not, you could slowly build your account up in the same fashion as you would a larger account, it will just take along time before it can provide any real income.

Its not realistic to think that you can start with $100 and turn it into $10k in a year or $100k in 2 years…

Flexible or disiplined?? I agree that you first and foremost have to be disiplined, trading to your rules and sticking to them.

BUT and that is a big BUT and other might not agree, since i have only focused on a couple of currencies, there are occasions where you will see a break happening, and I will jump on the break out regardless of what my rules are. I think this is because of having some experience with the currency, i mean after looking at the EUR/USD for 8-12 hrs a day, you get abit of a feel for it. And as long as you have proper MM, its okay in my opinion.

3

As for the edge I think its only a profitable system and discipline.

People who trade forex can be profitable.

No such thing as under funded it goes in with money management. keep trading and make your mistakesin demo then go live. You can trade smaller amounts. You can make $100 into 10k in a year its possible you need a good system.

4

You can make $100 into 10k in a year its possible you need a good system.

Possible yes, realistic… not for everyone

5

You never tried to trade the ZAR. It moves alot daily. You cant really scalp it but you can make a huge profit. swing trading it take a look at its movements. Yes if you have time it realistic.

6

My EDGE is using statistics.

For example:

If price moves UP and touches a price ending in 00, then statistically it will move UP to 05.

If price moves DOWN and touches a price ending in 00, then statistically it will move DOWN to 95.

You may have to be extremely quick to get those 5 pips. But 4 pips is OK, too :wink:

7

Just to clarify…that should be 95 when moving down from 00?

8

Whoops!! :eek: Typo!! :o Fixed. Thank you. :slight_smile:

9

Edge is actually simple but most people are failures by nature yet
they expect to win when they hold onto loser mentality.

First of all, I am sickened to read still about "stop hunting"
on FX forums from newbies as well as from self-declared
seasoned traders. Simple. If you still believe in "stop hunting"
to hunt down your pitiful stop/loss settings, you need to
get the hell out of FX trading or any type of trading.

Throw away myths and crap thrown out there by losing bitter
traders with sick agendas. Use facts, statistics, and mechanical
trading methods. And stop reading BS stuff written by unwinning
traders like the ongoing nonsense about “stop hunting”.

10

Stop hunting I dont believe exist until news time. Doesnt happen often like people say but it does sometimes. I cant think of the last time I thought it could have happened. Well, Ive seen a 65 pip SL closed out on and the price never came close but the spread hit it. On ECN’s they dont “hunt” at all. Now, not around news its BS to think your stop loss was hunted. Its from nervous traders with tight SL’s.

11

I am finding that discipline, having pre-defined goals, and a pre-defined strategy are the most beneficial. I have recently started with a $1,000 account. Here are my points I follow:

[B]Goal[/B]: Average profit of [I]at least[/I] $150/week, or $600/mo

[B]Strategy[/B]: 55 pips TP (Take Profit) and 50 SL (Stop Loss - which I always use, and you should too). Use 1/20000 of my account balance of my lot size but at least 0.1 (so $1,000 balance = 0.1 lot size, $4000 = 0.2, etc)

[B]Discipline[/B]: Placing an order and walking away. Even if it comes to within 1 pip of my TP , and then reverses, I leave it alone to let the market run it’s course. I avoid the temptation of manually closing the order. If it hits my SL that’s okay, too.

I look at this as a long-term plan to have extra income. Is it likely that I will make that much money each month? Maybe, maybe not. When I was new, I made a good amount of money (invested $250, made $800) but then I changed my strategy and my discipline and lost all my money (down to $70 :frowning: ). That taught me to stick to a winning strategy and walk away from the computer. It also taught me to have a properly funded account and not over-leverage my orders (ordering such large lots that I could lose it all in a few big movements.) Now I plan for 20 losses in a row before I get wiped out.

So … my advice is to make a plan, a goal, be properly funded, NOT get greedy, and stick with it. And be able to walk away from it and not lose any sleep over it. :smiley:

And, coincidentally, while I was typing this all out, I made my goal for the day. :cool: While it was running, it came within one pip of my TP, then backed off, but I let it alone. Not 10 minutes later did my order get fulfilled.

Ticket 11959049
Open 2008.09.10
Time 15:22
Type sell
Size 0.10
Item eurusd
Price 1.4024
S / L 1.4076
T / P 1.3971
Close Time 2008.09.10 21:23
Price 1.3971
Commission 0.00
Taxes 0.00
Swap -2.36
Profit [B]53.00[/B]

13

Nice work.

NEVER LOSE AGAIN!!

14

Thanks for that, Poco. I’d be interested to hear a bit about your trading system or method, too, if you have time. How do you decide to enter a trade?

Also, are those TP and SL levels fixed or do you vary them according to local support/resistance, round numbers, etc.?

15

I’m a VERY new trader, so if I were you I wouldn’t listen to anything I have to say on making good trades. :slight_smile:

With that said, right now I am using an EA (Expert Advisor - a robot in MetaTrader that places trades based on what I program it to do) that is a Martingale system combined with a few indicators. The indicators are what I use to determine when to enter a trade, and if I should go long or short. Then I set my TP to 55 pips and SL at 50 pips. That’s it. Then I just sit and wait.

FYI - Martingale is a [B][U]really bad[/U][/B] system for trading, though, so I would not recommend it for the long term.

What inspired me to do this? I saw a quote from some trader who was very successful, and he said something like “[I][B]Except in unusual circumstances, get in the habit of taking your profit too soon[/B]. Don’t torment yourself if a trade continues winning without you. Chances are it won’t continue long. If it does console yourself by thinking of all the times when liquidating early preserved gains you would otherwise have lost.[/I]” Basically, if I am up, I cash in. If I am down, I cash out. I don’t ride it out - I take my profit or take my loss, but never wait around for things to make a big movement more than my TP or SL. I found that when I tried to “ride it out” I would lose a lot.

I used to just wait … and wait … and wait … and if my position was making money, I’d close my position when I thought it was as high as it would get. I didn’t really have a target. Some days I would lose money, others I would cash in too soon and not make as much as I could have. Now I have a clear target, and am much more profitable when I was trading in the past. It’s much less stresful, too.

Really, it’s just a learning experience for me, and that’s fine. Profit or loss, it’s super fascinating to me. Somehow I see this more as a test of my intellectual skills programming more than just making money. I love solving problems, so this is really a nice challenge. The money is just a nice side-effect.

Currently I am going through each indicator and reviewing how it works so I have a better understanding of each one. I Google it and then review how to program it in MQL4 (the language MetaTrader uses, like C++). A friend of mine is doing the same thing, which is great because we compare notes a lot.

I also am testing a lot of EA’s (check my blog, link in my profile - I am testing 8 different ones right now) and I review what the programmers did there to better understand other techniques people are using. Then I steal their ideas and add it to my EA! :smiley:

I like to use an EA because it really takes the emotion out of trading and really cements my strategy. If the computer has to do it for you, then you know you are being true to your strategy.