There is little. it will make you money long term the fail rate is more like 18-19% not 20. however the probability of losing two days in a row in less than 3%. So you could cover your lose days by increasing your risk x4 the day after you lose to make it back, two layer martingale i guess.
I’m sure if you scratch your brain enough you can find a way to make it work.
– Maybe try a random trade with a trailing stop. if the strike rate is 50% on random trades Maybe I can make money by reducing the value of my losses by the marginal moves of each trade in the positive direction.
I understand your point in being able to make human decisions through experience etc… that could not be captured easily in a program (almost like a heuristic) but comparing raw trading to program trading I think a hybrid approach is the best option, programming enables you to rule out non starter trading ideas of the bat.
to continuously and simultaneously review every available currency pair offered by your broker for the right setups, make sure you’re spreading your trades across a set of uncorrelated pairs, log screen shots of all your trades to improve your learning curve on what works and what doesn’t and every other thing you can thing of to improve your long term odds.
When I scalp I only trade fast moving currencies. I tend to get 20+ pips on average with a 90% accuracy. Even if I chose to trade the wrong way, I always just switch it up and end up profiting. Issue it’s more time consuming than longer term trades. I often make about 20 trades in an hour time span. Small gains add up. But then again, I also do swing trades.
I wouldn’t suggest increasing your risk to recover a loss. I find myself to be more reckless after making a loss and too eager to make it back as soon as possible. So, I actually decrease my next trade after making a loss. Then go back to my normal trade size. Yet, my trading sizes are never the same. It depends the type of trade I’m making, day trade, swing trade, quick scalp, etc. The specific strategy, and which currency pair I’m trading.
Thanks for the thought, but I have an aversion to allowing position-sizing to be dependent on the outcome of the previous trade, and an even bigger aversion to increasing the position-sizes when I’m losing. If a system doesn’t have an edge to start with, one can lose but not gain, overall, by increasing the stakes after a loss.
If a system does have an edge, it doesn’t need Martingale techniques, and if it doesn’t have an edge one shouldn’t be using it in the first place.
That’s silly. There is no such thing as a system with an edge. That is only a human with experience or ability to decipher the winning trade more often than not in the long run;as a start. risk management and money management then prod your account balance up with that edge or toward the toilet.
martingale techniques are just another basic risk management approach. and you fundamentally you don’t position size up after losing because (as a human trader) generally when you’re losing, it tends to be in streaks, either you’re off your game or your setups are not suitable for the market. That is precisely why the probability of losing given that you lost the previous one goes up rather than down (the results from recording 400 of my live human only trades).
Clearly indicators are close to useless in improving performance. The only non knife edge to your wallet you’re going to get is as an institutional trader with much more market visibility, spread setting ability, institutional research, and comparatively unlimited funds (gamblers ruin).
How does your system with ‘edge’ let you know that a big cross border merger is coming that is going to lead to large FX market orders from the principals, arbitrageurs, and tag along speculators creating a multiplier effect. It doesn’t.
I think the only realistic consistent profit a retail trader can make is based on market fundamentals in the medium to long term, technical only to to nit pick entry points.
Thanks for the info, high frequency algo trading to take prop is non existent in banks. The props are incidental only in making the market. the algo simply try to calculate the risk and set the spreads. the old school phone traders use similar computation to aid more traditional market making, typically for bigger client orders outside the max transaction size allowed to be placed by the Quants team.
They don’t use leverage and have much more money to work with, where a 2.4% return is actually meaningful. Most of the traders on the Barcap desk I interned with a millennium ago focused exclusively on one currency pair each. The main aim was to create a market for clients or achieve very marginal gains on an instruction from a client by beating the VWAP for the period considered.
Not the kind of return that would interest a retail trader but significant to a clients’ bottom line if they need $m ~ $b foreign currency to service their international operations.
But, i completely disagree with you that “the only realistic consistent profit a retail trader can make is based on market fundamentals in the medium to long term.”
I do zero work looking into fundamentals, and solely trade based off indicators, support and resistances, and technical analysis, and have had very good consistency. It’s really just whatever your style of trading is that works best for you.
(I probably won’t post further, in this thread, though: once the response to “If a system does have an edge, it doesn’t need Martingale techniques, and if it doesn’t have an edge one shouldn’t be using it in the first place” was “That’s silly”, it became pretty clear that any prospect of intelligent - or even polite - discussion had disappeared. :rolleyes: )
In the end, people can sometimes get into arguments in forums for entirely irrational reasons (mostly us men, who claim to be ‘more rational’… ha!) which have little do with fact and more with a drive for
recognition and for being right while the next forum user is shown to be wrong, with a need to impose our views with some backing of knowledge (real or presumed)…
Truly, none of us is ever knowledgeable about everything… hell, when Dr. Lexy or Peterma or Clint
or ClarkFX speak, I am silently humbled and just prefer to listen… Yet other people will probably not tolerate being told something they clearly do not know and will retaliate…
Okay, this was not one of those situations… clearly…
However, it is better agreeing to disagree than to get into fistfights over something theoretical…
The worst thing a trader can hear him/herself be told on a forum is : you are a loser / unsuccessful…
So when someone is told that their edge is actually not an edge, that can really get them worked up,
and they may try to prove their success rate… Truly, without some sort of audited record (except perhaps
MyFxbook), none of us here can prove that what they say about their trading performance is actually true…
Therefore, trust must be gained by being as open to other forum members about our struggles and our
trading life, which makes us much more engaging as forum contributors than people who shout their
greatness atop these pages and then, when other members start telling them to get a grip on their arrogance,
Yeah, I don’t understand why someone would increase their position sizes after a loss in hopes to regain the the loss faster. You’re basically rewarding yourself with the honor of making larger trade sizes because you made a loss? That doesn’t add up, punish yourself with at least one smaller trade size before going back to your normal trade size, or for whatever reason a larger trade size.
My main reason being against increasing trade size after a loss is because you’re more likely to [I]overtrade[/I] or [I]“revenge trade”[/I]. I feel that someone would make worse decisions after a loss and become more risky in hopes to make the gain back in the shortest time possible because it drags further emotion into your trading style after a loss. Think, because if your next trade size is larger and you lose on it again, it’ll just be that much harder to gain it back. Then you [I]may[/I] end up creating a cycle of using a larger than usual position size for any of your trades on an account that can’t handle very many losses on a larger position size.
Yet, do what works for you, just always be careful.
90% of my trades last no more than an hour and are solely based off of anything but fundamentals. In long term trade fundamentals may play an overall subtle role to the outcome of a currency pair. But being a [I]speculator[/I] and day trading most news or events hold very little value to making a drastic price change.
i trade the stock market as well. And when good news comes out on a specific company/stock overreactions quickly get disseminated within the same trading day, and often for whatever reason a stock may go down in value even with good news. News seems to play a larger role on a stock’s daily volume for the next day or so, causing a chaotic environment. Yet, in many cases it doesn’t play a huge role in the direction of a stock by end of day, especially if they were gap ups in after hours and pre-market trading.
Due to stock trading, my opinion on news and fundamentals is maybe altered towards the average Forex trader. Positive fundamentals be correct with an overall trend after running over many hills and through valleys. If fundamentals do not make a very big difference in one tiny specific stock, I highly doubt currency pairs will be affected by fundamentals. Plus fundamentals always change.
Yet, emotions, patterns, indicators, etc. (technical analysis) never changes and is always consistent to the charts, they’re obviously more accurate in the shorter time frames, but still none the less they work for long term investments as well.
The best method though would probably be to utilize both, because they compliment each other. Technical analysis is good for finding a good position in a trade, yes. But, without looking at the fundamentals even technical analysis could be much more than that because without any fundamentals you can easily find trends and trading patterns that exist within the charts. Therefore, those charts basically just show you the overall consensus of how the currency pair’s fundamentals are looking, without knowing any specifics on the fundamentals whatsoever.
Both, fundamentals and technical analysis, reflect one another.
Look Lexys, I don’t care what the scientists say, since my personal experiments dictate otherwise. Obviously they are not traders, and obviously they don’t know how to draw the tool correctly and which ratio’s to ignore and focus on. I have explained this to you before. These are also the same people who believe that day trading is gambling (which it is for all noob traders in fact, scientist or not). In reality, listening to a scientist what he has to say about trading is like listening to a book worm about sports. I can give you tons of examples but it doesn’t make any difference because you will just rationalize it as “cherry picking”. In fact, I don’t think you’re gonna go so far as saying support and resistance lines don’t exist either? Cuz I don’t know if you noticed but, they usually are 1.618 times removed from each other. I admit my first thread I made was premature, since I just discovered it and was still drawing it wrong (2.618 extention of pullback instead of last high/low + first (1) and second (1.618) resistance broken, then enter at 2.618). So if if you think the universal golden ratio would somehow be exempt from markets then I don’t know what to say… In fact, it’s completely illogical and a total facepalm. I give you something for free which could change your trading forever. Now if you only opened your mind and backtest my strategy like a REAL SCIENTIST WOULD DO you would stop your stupid rationalization.
Also, your comment about astrology is completely off the mark, you cannot compare a universal mathematical constant like the pi or the golden ratio to an ancient religious belief system. Jesus ****, just go home Lexys, I didn’t know trading could make one so cynical, but I guess that’s what happens when your edge is still so small after so many years…
It is clearly working for me. I have zero patience with people like this, always trying to take the intellectual higher ground… And no, it is not good because I wish it to be good, it is good because it is backtested.
You might not know this, here in baby pips lexy is regarded as a very educated fx trader. So when a new trader who only have 17 post to date . Posts like this. I don’t know what to say.
New trader? Am I hearing this correctly? New trader? I have been trading for 3 years straight, an average of 10 trades a day. Just because I just joined a stupid forum doesn’t mean I’m a new trader. The only reason I joined was to share my discovery (my initial post was premature, so I might make a new one in the future, OR I might not, cuz obviously none cares anyway), NOT to join the friend club. I have friends in real life.
Just a trade I took just now. (Yes, I even trade in the weekend sometimes.)
1M chart, 5 min. expiry (it’s binary options, but I’m probably going back to spot in the future when I up my capital.)
