The Forex Portfolio - How to Gain Consistent Profits by Staying in the Market 24/7

Trading Systems
1219

Nop, my bias should change when the new lower high is made. Of course, this chart is weekly and I look on daily, so I could get the change of trend clue early. You can see that after the lowest low of the chart there are two blue symbols. They are a morning star and a 3 inside up patterns on weekly view. On daily view I got other patterns that gave clues that the trend is reversing, so I could get the trade faster.

When the price is getting outside my channel and after that it makes a higher low (if it was on downtrend) or a lower high. There I get a possible change of bias. If fundamental information backs this idea or there are enough candlestick patterns on key levels I consider it changed.

Agree, this is the point where one cannot know for sure if the trend is on reversal mode or it is going to continue. But here is where the biggest channel helps and also the fundamental bias helps.

Biggest channel is down, and the red dotted line is the first standard deviation, the bold red line is the 2nd standard deviation and you can see at the top-right corner that this channel is ā€œnormalizedā€, that means that it fulfills the standard deviation rules for first, second and third deviation, so it is trustable.

On the other hand, you can check the economic indicators and the trend of that indicators, like GDP, jobs, industrial information, and there you can spot the main status of the economy behind the currency you are looking. And let me say, US economy looks better than Europe, and that helps with short positions on EUR/USD.

Price action should give you that 100 pip gains, I recommend you 3 ducks system for that smaller profits. But I donā€™t have the time nor the willing for looking at my charts more than once a day, maybe once a week, thatā€™s one of the reasons Iā€™m using bigger time frames.

Also, the market is highly dominated by high frequency traders on lower TF, and that is too much stress for me.

Another note, this methodology should be traded with the 28 pairs. Because we are not using very precise entries, having a good diversification helps a lot.

I trade two more systems that uses 28 or more instruments, and let me say also that they seem to fail for a month or two, where you see big draw downs, sometimes as much as 50 %, but then, all the losers are closed and only the winners stay, and as you see on the charts, winners tends to move for huge number of pips, so if you had 28 pairs and 60 % of them ended losers with 200 pips each one, the other 40 % that ends profitable with profits at least of 400 pips, some reach more than 2000 pips compensates the loses of the beginning. The issue is that you need to stay firm and calm while you are in the ā€œloser discarding timeā€ and stay more calm when you are ā€œletting your winners runā€

1220

Agree. This type of trading has a lot of variance.

In my case I am looking for a strategy that can provide additional income that I would like to use to fund my 2 daughtersā€™ college (ā€¦ big wish ā€¦).

If you want to fund your daughtersā€™ college, I think you should use this strat to fund a more stable, with less variance investing, like a fund with part of stock, other part of US debt and other part of foreign debt and stock. It depends how much time you have to achieve this. If your daughters are very young, then I think this could be achievable.

1223

[QUOTE=ā€œLeaflet;500592ā€]

It is interesting that you say this, because I would say the majority of traders on here are looking to be career traders, living off their trading income.

I think you should be more vocal about this point, about how risky this method is, and how you wouldnā€™t recommend it for full-time career traders.[/QUOTE]

I donā€™t think that solely of this methodology. I think that of the entire industry. And I was vocal. I dedicated an entire thread to the subject of going full time in Forex. And guess what happened? It was quickly buried in the forum for lack of interest.

Most that come by this way are looking for an escape from their everyday jobs. The chase dreams without taking the time to learn how to develop an edge. They have zero patience. That is indicative by the repeated requests to show my account. They want the short cut. The get rich fast.

I personally am not interested in creating income. Iā€™m interested in generating wealth. Thatā€™s an entirely different way of thinking when taking on this market.

1224

[QUOTE=ā€œLeaflet;500589ā€]

talking about time and variance, how much time do you think it will take to get your trading account back to breakeven?

Iā€™ll save you some timeā€¦ you require to make a 38% gain to reach your initial deposit of $25,000. That is quite the hill to climb, most traders canā€™t even achieve that in an entire year![/QUOTE]

Itā€™s possible. Iā€™m over 50% for the year thus far. He just needs to slow down, develop more patience, and cut losers much faster.

1226

It is not as difficult as you think. I have at this point 2 accounts in addition of the one that is published here. One is 57 % up for the year, the other has a floating profit of 44.8 % since May 15ā€¦ both trades daily time frame, both uses trend following systems and both uses some type of price action methodology, also both uses the 28 pairs (one also uses commodities, CFDs, oil, gold and indexes)

One of the accounts is public and you can look at it at myfxbook list of methods, the other is private.

The best way to know if a methodology works is to try it in demo. 3 Months is good for it, but I prefer to have 6 months because you will get a market cycle inside your 6 months, if you only test it for a month, maybe you catch a starting trend and you get false impression of being very successful, or maybe you can catch the end of a trend, and you get a false impression of the methodology to be garbage, but if you try it for longer period, you can get better picture inside a cycle.

1228

Aaron, you need to give this up, son.

Your peronality disorder is raging out of control, and youā€™re making a fool of yourself here.

Not long ago, you were a respected member of this forum.

But, now your reputation is in the crapper, and most people on this forum think you are just an obnoxious little twirp.

You need to seek professional help, Aaron.

Do it now, while thereā€™s still something to salvage.

1232

Have some stats. I found that on my current closed trades, all the winners had never been at more than 180 pip in negative, they moved straight on my favour or retraced a little, but never more than 180 pips. On the other hand, all the trades that retraced 180 pips or more ended as losers.

That is only for 36 trades, but it is a good start to define statistically valid initial stops.

1233

[QUOTE=ā€œmedisoft;500659ā€]Have some stats. I found that on my current closed trades, all the winners had never been at more than 180 pip in negative, they moved straight on my favour or retraced a little, but never more than 180 pips. On the other hand, all the trades that retraced 180 pips or more ended as losers.

That is only for 36 trades, but it is a good start to define statistically valid initial stops.[/QUOTE]

Very interesting stat, thanks. Have you looked at the big differences between JPY (maybe CHF at lesser extent) pairs? Greater pip value between fractal points and greater risk per pip.

1234

Nop, I used global stats for all my account, so they include JPY pairs and CHF pairs also. I think I will need more trades on every pair to have more detailed stats per pair, maybe at least 10 trades per pair.

I checked two more accounts that trade daily view on the 28 pairs, one of them trades are described in http://forums.babypips.com/show-me-money-swing-trading/42511-diary-position-trader.html, and other is own developed system. I found also similar results, less than 180 pips MAE is a normal for winners, while greater than 180 pips MAE is normal for losers. Agreggating data from the three methodologies I have about 200 trades of data.

1235

[QUOTE=ā€œmedisoft;500661ā€]

Nop, I used global stats for all my account, so they include JPY pairs and CHF pairs also. I think I will need more trades on every pair to have more detailed stats per pair, maybe at least 10 trades per pair.

I checked two more accounts that trade daily view on the 28 pairs, one of them trades are described in http://forums.babypips.com/show-me-money-swing-trading/42511-diary-position-trader.html, and other is own developed system. I found also similar results, less than 180 pips MAE is a normal for winners, while greater than 180 pips MAE is normal for losers. Agreggating data from the three methodologies I have about 200 trades of data.[/QUOTE]

What is your average win in pips?

You may have just defined a beginnerā€™s way to transition into this methodology.

1236

Talking about the average win in pips, always remember that the price of any of the proposed actions should give you minimum of 100 pip gains, I recommend you swissoptionstrading platform that average profit.

Read more: Trade Binary Options at Banc de Swiss with a Special Bonus!

Remember that most of the trades that retraced app 250 pips usually ends as losers pips.

For defining statistically valid initial stops, you will need more than 500 pips, make sure it will all come into one week of trading and using the same IP for your account.

Best of luck

1237

Still donā€™t know because most of the closed trades are losers, and the winners are still open. At the moment my stats with this methodology is 302 pip average profit. With my oldest method average win is 200 pip while average loss is 103 pips, that is 2:1 rvr. 42 % winners, obviously 58 % losers.

I made the MAE analysis based on percent instead of pip moves and it gave me the max MAE of 4 %, while the average is 1 %

With this percent based MAE one can calculate the number of pips for every pair.

Also note that my data is still small, need more trades before one can trust on this values. I think this should be used only as a reference, trying not to set stops smaller than 1 % and not bigger than 4 %

1238

My analysis for today!

Iā€™m not posting my results and I think Iā€™m not going to post it anymore for two reasons:

[ol]
[li]You can check them on myfxbook[/li][li]It seems that posting that information causes lot of controversy and I donā€™t want to see that. For the people that is criticizing this methodology, you MUST remember that MG99 is not my mentor, he is not teaching me personally, and Iā€™m implementing this methodology as I understand it, so you can criticize me and my own trades, not the methodology. Also remember that if you are not using a robotic system, everyone trades differently a system/methodology, and the results of one person could be totally different from another person trading the same system/methodology.[/li][/ol]

Also Iā€™m thinking if it is useful to disclose the equity of my account or it could be enough disclosing the percent change, just to avoid strong emotions that causes controversy here. Still deciding.

Well, this is!

[ol]
[li]GBPNZD bias long[/li][li]USDMXN bias short[/li][li]CADJPY bias long[/li][li]AUDCHF bias short[/li][li]CHFJPY bias long[/li][li]USDJPY bias long[/li][li]AUDJPY bias short. Current setup is a sell for me if it closes below 89.5[/li][li]CADCHF bias long[/li][li]AUDNZD bias short[/li][li]AUDCAD bias short[/li][li]USDCHF bias short[/li][li]NZDUSD bias short[/li][li]GBPUSD bias long[/li][li]AUSUSD bias short[/li][li]EURUSD bias short[/li][li]USDCAD bias short[/li][li]EURGBP bias short[/li][li]BRENT bias long[/li][li]GOLD bias short[/li][li]SILVER bias short[/li][li]USDSGD bias long[/li][li]USDHKD bias long. Possibly changing bias soon. Stopped out for -23 pip loss[/li][li]NZDJPY bias long[/li][li]NZDCHF bias short[/li][li]NZDCAD bias short[/li][li]GBPJPY bias long[/li][li]GBPCHF bias long[/li][li]GBPCAD bias long.[/li][li]GBPAUD bias long[/li][li]EURNZD bias long[/li][li]EURJPY bias long. Maybe changing bias soon. It closed outside my channel but still donā€™t make a bearish formation for me.[/li][li]EURCHF bias long[/li][li]EURCAD bias long. Made bullish continuation pattern that indicates me to lock more profits.[/li][li]EURAUD bias long[/li][/ol]

1239

Medisoft, for me what you are doing by posting your analysis is very helpful and I really appreciate your contribution to this post. I know it takes time and effort and I appreciate that you took he time to review my post and respond to my questions. Thanks, thanks, and thanks again

I consider it a great reference as it gives me a way to compare what you see with what I see in the charts.

As you know I have no forex trading experience and I am very far from fully understanding the methodology. I believe that I understand the concept but not the details.

For me there is a big learning curve to go through and the time I can dedicate to this learning is very limited.

However it is also important that I understand what can be achieved and what is a ā€œreasonableā€ goal. I do like the learning of trading so I have committed my little time available, but it is a sacrifice and I would hope that in the long run this knowledge can be used to generate good results.

I actually donā€™t see a big difference between creating an additional profit stream or creating additional wealth. In both cases you are not dependent on the specific daily/weekly/monthly result but in both cases you want to achieve a positive result that is higher that what can be achieved using more traditional types of investments (e.g. mutual funds, balanced stocks, etc.). I guess the biggest difference is your starting point, meaning that you have to be wealthy to increase your wealth :slight_smile:

I do have college funds that are invested in traditional mutual funds for my kids but they are not enough

Also when my pension funds collapsed during the crises, I tried to invest in stock options and futures in managed accounts and in both cases my capital was almost annihilated by those investment groups as they encountered ā€œabnormalā€ market conditions.

So I started my 401K from the beginning again and now I am looking for something that I can control by myself and can provide better results than those provided by the traditional investments.

If I want to ever reach a comfortable retirement I need to generate a higher annual return than the standard 7-10%

1240

Be careful. Forex is very risky and because you are using leverage it could multiply your risk.

I suggest you to keep the college money in the place it is now, also for your 401k use high quality stock and etfs, not forex. Stock that pays dividends and have low volatility or low beta is better, and combine with small portion of higher risk stock.

For forex use money you can aford to lose. And you do not need to be very wealthy as you think. Compund interest can make you wealthy with small initial equity like 1000 usd.

1241

The difference i see between wealth and additional income is the time horizon. For income you need to receive it frequently like once a month, and for wealth it could take months or years to be able to cash a position.

1242

I agree with medisoft.

You are concerned about falling short of the sum needed for your daughtersā€™ education, and for your own retirement. You are concerned about the losses you have taken in your conventional investments. And you think that possibly the forex market is the answer to your problems.

But, please hear this: While there certainly are people who have made a ton of money in a short period of time in the forex market, [B]it does not follow[/B] that the forex market will offer up a large sum of money to a novice who comes here [I]needing[/I] it. More likely, this market will take from you all the money you bring to it. This market can hand you losses faster than any of the conventional markets you are familiar with.

Trading forex is [I]no[/I]t investing. Trading forex is [I]speculating.[/I] As such, forex resembles a poker game much more than an investment. I doubt that you would risk your available capital at the poker table, in an attempt to fund your daughtersā€™ education, or recoup the losses you took in your retirement account.

Every couple of months, someone on this forum re-opens the old debate about whether forex is gambling. In my view, there is no debate. Forex is gambling, plain and simple. None of us here have any economic or commercial interest in the foreign exchange market; instead, we are all here trying to grab some money from a zero-sum game. Just like poker: for every dollar won at the poker table, a dollar was lost by some other player at that same table. Donā€™t gamble with your daughtersā€™ education fund. And donā€™t gamble with your retirement account.

If you want to try forex trading, do it cautiously. Do not come to this market with a financial problem that you hope you can solve here. The odds are overwhelmingly against that ever happening.

If you are drawn to this market, not because you need a quick fix for your financial problems, but because the nature of the market fascinates you, and you think that over time you can learn to win more than you lose ā€” then be prepared for months or years of study and trial-and-error. Be prepared to spend time on a demo account with play money, until you have proven to yourself that you can consistently do better than break-even. And be prepared to start your live trading in a tiny account, with a tiny amount of initial capital, risking pennies and dimes. Pennies and dimes will not fund your daughtersā€™ education. But, if you canā€™t earn pennies and dimes by risking pennies and dimes, then you have no business risking a larger sum.

If youā€™re one of the 5% or 10% of people who try this and succeed, then you may in fact have discovered a path to substantial gains, and even significant wealth. For the 5% or 10%, forex trading can indeed fund a childā€™s education, and just about anything else that money can buy. But, between where you are now and where you want to be, there is a long and difficult road ahead of you.

1243

Yo Medi,

Iā€™ve been popping in and out of the thread every now and then, would you mind posting a bit of your analysis on Eur/Usd when you have the time? Iā€™ve been long since 3260 and just wanted to see how youā€™re viewing the chart (: cheers!

1244

Of course! two minds think better than one! Iā€™m overall short biased on EURUSD, but for the moment it is going north. I donā€™t see reasons to close your buy until 1.3450-3482 where I see a zone of resistance. On higher detail (4H) i see overwhelming buying signals previous the last two green bars, so it is good for you to have that buy. Just pay attention to that resistance levels.

1245

Hi all! My analysis for today. Is late and Iā€™m tired, interesting day today on the office! (some one knows about SAN and Virtual Storage? like the one that IBM and NetApp offers?)

Iā€™m posting only pairs that have interesting price action. There are lots of pairs that are not interesting for me at the moment.

[ol]
[li]CADJPY bias long. Shows signals about the end of the down move, with a morning star. Iā€™m waiting for a break and close above the last bar of the pattern to buy it.[/li][li]CHFJPY bias long. Same as CADJPY, but the last bar was very healthy! Iā€™m placing a buy order at this price with the stop below the patternā€™s low. That stop point happens to be more than the 1.9 % of second standard deviation of the MAE, that should give good probability of holding if the trade is good.[/li][li]AUDJPY bias short. Cancelled the short on close order because the support is holding and my entry setup is not longer valid.[/li][/ol]