Slam city in my core account. Down about $2100 in my trend trader (currently the core) versus $1100 gain in my contrarian account (currently the hedge). In other words hedge is working at about a 52% efficiency. I am very confident that my core account will come back, though I am starting to become convinced that my position sizing is indeed too big at .02 lots per trade.
The 20% downturn in equity i currently have in my core account is fully expected since I am aiming for a large return (100% per year). I expect even larger losses than that and it is just the nature of risk/reward. Though I think my current position sizing(with the addition of the hedge) is leading to an even larger % gain per year than 100%, because the the contratian trader account gained over 11% this week. The only thing this is telling me is that i’m trading too big because my goal was 2% per week.
I have decided that I will be cutting my position sizing in half and that is the minimum that my broker will allow or else I would be cutting it to 1/4.
Hello! Crazy trading this week and luckily I finally got an opportunity to lighten up my position sizing in EuRGBP. All new position going on will be half my current position sizing unless the trade had already been established at .02 lots.
Broke the 30% mark on Contrarian trader and hit almost 10% in my trend trader though equity is down about 20% in trend trader currently. Contrarian trader account has acted as the hedge mostly this month and being up 15% so far this month is telling me that I’ve been trading too big lol.
Hello! Sorry I haven’t been posting much. I am trying to get both accounts flat before I implement .01 lot position sizing for both the core and hedge account. I am currently not doing any hedge right now and am fading a pretty sizable move in the AUDUSD and AUDJPY. Once I am able to trade through both of these moves I will start the hedging again. Hopefully we will get some price consolidation soon in the AUDUSD and AUDJPY and then I can put this strategy back on track with smaller position sizing.
Hi, Have you givin any thought to combining your increasing system with a simple trend following system such as a moving average crossover. I know this seems self defeating, since all markets eventually retrace or at least, consolidate long enough to return your funds. Fighting a strong trend, though, can be very taxing, mentally and financially. Just think about it.
Also, I am a bit curious as to why there aren’t many comments on this thread and I haven’t seen much traffic to myfxbook accounts either. I do see that this thread has been viewed almost 5k times, so i at least know some people are interested! Please ask questions.
I know this method of trading is a bit abstract from what you normally see here on baby pips and so far the returns have been solid, but I’ve been trading too big. This is not a strategy that gives you buy or sell signals but is purely a trade management system. Most traders who try to do a dollar cost averaging system do so in the stock market, but trading stocks is very capital intensive and is very inefficient. Forex just so happens to be the perfect market because you can trade like you have a billion dollars because you can trade as small as you want (depending on your broker, but OANDA has no minimum trade size).
I will argue that main reason why Warren Buffett has been so successful in the stock market is not because of fundamental analysis (wake up people!), but because he has such a large amount of capital to work with, that he can continually add to his positions. The stock market has a 53% chance of going up and a 47% chance of going down on any given day. All Buffett is doing is lowering cost basis when he can and just riding the waves of the market. It’s very simple.
Hey! I didn’t realize you posted and I just saw this! So I’m sorry for not responding yet. Hmmmm Let me think about it. Trading along with a moving average would be very simple, and at least you do have the trend on your side. Very interesting idea. Using this management technique and combining it with technical indicators could make for some very interesting strategies.Most of the strategies you read about having very rigid parameters around the trade with exact stop losses and exact take profits and I think if you took a strategy that was originally built with rigid parameters and loosened it up a bit with the trade management processed out lined here, it could make for some truly unique strategies.
And i agree with your assessment on fighting the trend, I have officially confirmed that my position sizing was too big as the trend trader account. Had like had a few margin calls already as I have been fighting the AUD/USD and AUD/JPY Trends. Though this wouldn’t be the case if i had my hedge on and was able to move funds between the two accounts, but it certainly doesn’t make me feel comfortable. Thinking about resetting the account then starting over at 1/2 position sizing or starting a 50k paper money account so that I can do the 1/4 of my current position sizing (which is really what i ideally want to do). I am also thinking of no longer waiting a week before adding onto positions every few hours. I was very close to back to break even on the AUDUSD and AUDJPY trades but since I waited a week before adding a time-based feature to adding to the trade so I ended up not quite getting there. There was a solid pull back that should have been fine, so need to make some adjustments.
I would like to suggest that you read “REMINISCENCES OF A STOCK OPERATOR” by Edwin Lefevre. A book written almost 100 years ago about a successful trader. At that time stocks were traded like commodities are today, with a 5-10 percent margin. Good Luck !
Alright, I am back! I have added two more demo accounts with $50,000 account size each so that I can continue trading this method with the correct position sizing. The issue before was that I was using a $10,000 demo account size and the minimum trade size for Forex.com demo account size was twice as big as I wanted to be. Now I can gather a lot more data using the correct position sizing and I am excited to start trading this again.
Here are links to the two new accounts on myfxbook.com:
Excellent news! So I found out that MetaQuotes will allow me to put both long and short positions in the same account so this will make tracking performance much easier! This was the whole reason why I had two accounts and the idea was that at the end of each day you would reconcile each account (and since this is a demo account I couldn’t show that aspect of the strategy), but this will give a much clearer picture now of the performance! I will only be making trades now in this now in this one account which can be tracked in myfxbook.com under BronzeHedgeTrader. Here is a link:
Hello! It looks like the link above wasn’t working since I hadn’t made the strategy public yet on myfxbook.com but it is now public so here is another link that works.
I apparently hit the max total position open for the Metatrader software so I have had to make a few adjustments but nothing substantial.
Performance is pretty decent so far. Ive taken in about 2.95% gross since inception but net is about break even (Pretty good for not even picking a direction!). Been fighting some gnarly trends in the EURGBP. This pair seems to always give me trouble, but nonetheless I realize that this strategy is very abstract from what people typically see on babypips. It is more of a play on market theory than anything, but I can’t imagine any other way to trade the markets. This strategy is designed around the markets being imperfect and I will continue to harp on this subject because I think this is the very problem with most trading strategies in general (and most of the stuff you see here on babypips). I will go into more detail on this later.
Basically, you are looking for non trending markets. Statistically, this should make you a winner. There must be a better way to avoid the long term trend other than hedging, which seems self defeating. Perhaps trading in one direction only, as determined by a weekly long term trend following device. Just throwing out suggestions, as I do not have an answer.
You are correct. Choppy markets are great for this strategy and since markets spend most of their time trading in ranges, this bodes well. The main reason for a hedge is so that you can add another element of cost basis reduction even when price is going against your core position. Couple that with continuing to add to your core position, you further increase your probabilities of making money on that trade.
Gross Performance = 6.24% Since inception on May 16, 2016
Net Performance = 3.1%
Total Trades = 902
Total Pips = 19,442.8 (almost to 20k!)
Biggest Drawdown = 5.18%
No you haven’t. This style of trading is very dangerous. Any mug punter can do it. But I see in your 3-month demo account you had one black swan event. That equals at least 4 of these events happening each year. What’s your contingency plan when things go wrong? And they will occur on an all too regular basis.
Come back when you have the ballz to trade this with a real $100 000 account!
Excellent, I have a taker! I’m sure you are aware that Brexit happened in June of this year that caused some moves in the forex market that are the biggest in many many years (Take a look at the charts, I’m sure you are a technical analyst so you should know this). This style of trading (as you can see) survived through it. So saying that 4 Brexits will occur every year is absurd (shows how much you have been paying attention). Not to say I didn’t learn from it. I have reduced my position size again by 1/2 and changed my hedge to start off much smaller. As you can see the volatility of the strategy has been reduced significantly since then. So I am glad that the draw down happened because I am able to benefit from it now.
To answer your question for contingency plans, I will continue to do what I have been doing, I will trade through it (and now that I know that it can make it through a brexit, I am even more comfortable with the risk).
I am curious though what your results are like. How can we really trust that you know what you are talking about unless you post results (send me a link if you have).
The fact that this strategy is up 22% in a Brexit year and in only 3 months should yield some respect! 22% in any year would make a professional money manager look like a hero especially when the S&P is only up 6.12% ytd!
Demo or not, I don’t see anyone on here with transparency like this on any strategies. More people should post their myfxbook results!! It seems like every one on babypips is taking a leap of faith in assuming that the strategy is legit since it sounds good or looks like it is working but I am not seeing any third party validation. I am not afraid to show a large draw down because that is the reality of any strategy in which you are trying to smash the indexes over time. That is the reality of my strategy and I am comfortable with the risk.
The whole notion of stop losses and profit target is nonsense to me because you are trying to fit a completely random market into a box that requires the market to act in a certain way to make money. In my strategy, I don’t require the market to act in a certain way in a specific time to make money. I can keep my position sizing so small that whenever the market decides on its own to turn around, I can reap the benefits. The markets are not perfect so why try to create a strategy that assumes a perfect market.
First I trade with real money. Although if you were an active member you would know my personal financial position. Second, type in “price action trading on tick chart” into the search engine bro. All exposed there.
6 years still working in demo accounts hey bro. Guess you know your stuff then. These “black swan” events may be used to describe market conditions such as BREXIT or the SNB debarked. But are equally relevant when doing what you’re doing and may not be in the form of big market moves. Just a simple shift in market sentiment can leave you exposed when you went long and the market reversed never to recover. We’ve all gone long off a high and short of low and been hit with the results.
Facts are if you are holding positions in the market you are exposed to risk. The more positions you hold, the longer you hold them the greater the risks. Not to mention costs building up to hold that position. Your tactic is to add to that risk. That’s just dumb. But that’s just IMHO. You do what you like, but once you start trading your money in a real account, then will talk shop. Until then we’ll let this thread die a nature death…
That’s great that you trade with real money, except how can I really verify that (or anyone else reading these threads). I hope to be doing the same soon as well. I have my own reasons for not trading a real money account but I am completely transparent about trading a demo account. (And I am super anxious about finally be making some money when i can. Trust me… after six years and seeing results like this! you have no idea!)
I breezed through your thread and to be honest I am not convinced of really anything. I didn’t see anything that seemed really special or unique about it when compared to all the other price action threads on baby pips. Looks like basic technical analysis. I saw some winners and some losers on there, and I see you’ve only posted like 10 trades in all of 2016? and nothing in 2015?? Where’s the transparency??
You claim to make a certain % per trade, but i mean how can we really know. I will give you the benefit of the doubt and say that I want to believe that you are making money but how can anyone reading your thread know that your strategy actually works over the long term. You have posted probably less than 10 trades in the last 1.5 years plus (and I have 3,800+ trades in the last 3-4 months for all to see!)
And separately, how can we know what your draw downs are? You give me crap about mine but no one really has any insight into your max draw down. How do we know you aren’t trading more than you say you are? The lack of transparency of your thread (and the vast majority of threads on babypips!) leaves a lot of questions on the table.
Let’s be clear that everyone on babypips who has a demo or a real account has the ability to link their trading accounts to myfxbook.com so why don’t more people do it? Why don’t you do it?? (And it’s really easy to do!) You are an FX legendary man, but that is just because you post a lot, doesn’t necessarily mean you are smashing the indexes on performance.
And I am still appalled you are pouting at 22% in 3-4 months. Go take a look at the hedgefund index this year, they are barely breaking even!
So, in regards letting this thread die a “nature” death, that won’t happen because the readers of baby pips deserve to know the the truth about the strategies that are posted on here and an easy way to do that is to link a myfxbook account.
The ball is in your court Milk Man (or Dairy Queen, whichever you prefer). Lets see a myfxbook link to your actual results…
Because fxbook only links to MT4 & not even everyone on here punts via that clunky, amateurish crock of ##
Plus of course there are various reasons folks use data crunching applications. It’s not always just for the purpose of waving your todger around & beating your chest in public.
Some track, record & present their data privately to investors, brokers or industry affiliates seeking funding arrangements, others might be looking to put themselves in the shop window to see who/what’s out there, but having said that there are more appropriate & effective locations than Babypips for someone looking to achieve that objective. And others simply do so simply for personal analysis & self-feedback purposes.
So anyway, who were you on here during a previous life then?
