The WinPsych Experiment

[Leg0nd]

Oh about closing the trade late… Forgot to address that. I trade the daily. I have a trade recovery option which is very nice but I often just take a loss instead. I get a signal each night, so in the event I am wrong and do not get stopped out, if I get the same reoccurring signal for the second 24 hour candle, I have the option to stay in and let the trade potentially recover some loss and or potentially become a profitable trade. The beauty of this system is there are several different reoccurring patterns in the output (we trade off the output), with a team of determined individuals we could trade all these patterns (creating more trading opportunities) and enter different setups that still have the same exit, but get in at the best possible entry. So far I have traded two patterns successfully, but I only trade 1 right now. I’m trying to fully map out one pattern and trade it successfully before I move into the other potential trading patterns. It takes a lot of work to study these patterns and correctly identify them. Which is also another reason I just stick to one right now. Also, this system is not pair discriminate, it works on every pair I have looked at (over 10+). And it works in all market conditions. Thus making itself very well rounded.
Anyways. Hit me up after you check it out.

[WinPsych]

I appreciate the interest. Yes one month is a short period of time, I am definitely lowering my risk to attain greater probability of long term profitability. Account size is irrelevant due to scalability I believe. Do correct me if I am wrong here. Have you checked out my trade journal yet? If you are on a PC, it should be page 14 that shows where I currently am with the system (I have improved it some since then, but nothing major and the concept itself remains unchanged). Check that out first, if it still interests you after your review and you semi can understand it, I gladly will share it with you and we can go into great detail and really pull it apart. With some more help, I believe we have a really good chance at finding the real holy grail here! I don’t mean to distract the thread topic here… But I did want to point out access to “level III” information is in my opinion irrelevant to long term successful trading. Let me know what you think. Hopefully we can further this discussion. May have to create a new thread as to not derail this interesting experiment you have going on in this thread.

Account size isn’t irrelevant. Money in the real world has an absolute value so there comes a point when trading an account size that regardless of the percentage point the absolute cost of failure is too high. Big position traders sometimes mention an account being to big to make money and reducing an account size. (not that i have ever been lucky enough to have that issue YET)

Have had a brief look at your thread, i will look into it in depth perhaps when i have a proper grasp of what we are dealing with you can talk me through it.

[Leg0nd]

[QUOTE=“WinPsych;618580”] Account size isn’t irrelevant. Money in the real world has an absolute value so there comes a point when trading an account size that regardless of the percentage point the absolute cost of failure is too high. Big position traders sometimes mention an account being to big to make money and reducing an account size. (not that i have ever been lucky enough to have that issue YET) Have had a brief look at your thread, i will look into it in depth perhaps when i have a proper grasp of what we are dealing with you can talk me through it.[/QUOTE]

Sounds good. In short, future prediction is evident in price extremes, rather than common “open to close” I believe. Do you have a Skype?

Also if the account starts getting to big, we can just withdrawal some money xD. Can’t hurt to spend some at some point lol.

[MoneyNVRSleeps]

Sounds good. In short, future prediction is evident in price extremes, rather than common “open to close” I believe. Do you have a Skype?

Also if the account starts getting to big, we can just withdrawal some money xD. Can’t hurt to spend some at some point lol.

Never invest what your not willing to lose… Making withdrawals is cutting yourself short. We are taking High value trades, you need that margin to make the money… *shruggs, just sayin…

Unless you looking to live off it, you have to think a tad differently, No?

[Leg0nd]

[QUOTE=“MoneyNVRSleeps;618589”] Never invest what your not willing to lose… Making withdrawals is cutting yourself short. We are taking High value trades, you need that margin to make the money… *shruggs, just sayin… Unless you looking to live off it, you have to think a tad differently, No?[/QUOTE]

Would love to live off it once I hit a mill. Until then I would like to grow it enough (50-100k) so I can trade it full time to a mill (my trading wouldn’t really change I just don’t want to work for anyone but myself when possible). I don’t spend much money even if I have it. I’m content with getting on these forums and doing free stuff till I make enough to do some of the expensive sports I would like to do.

[d-pip]

Hi Guys,

I’ve been trading Forex on and off for around 4 years now. I’ve been on that same roller-coaster ride that many of you have been on and like you i’m still in the game

I’ve read alot of books, watched tons of videos, gained experience making every imaginable mistake, analysed my performance frequently and continuously tried to minimise mistakes etc. At this point i feel that i have made good progress in individual aspects of trading but that in terms of integrating it all and making that “final” breakthrough if thats the right word…we’ll i haven’t managed that yet.

[B]I have been thinking about a simple question. “There is so much educational information available so why are only 5% of people in forex consistent winners?”

How can 95% of “us” be getting it wrong? How can all these people from all types of different backgrounds and ages in different countries all around the world all spend hundreds or thousands of hours on forex and end up worse off financially than when we started?[/B]

From experience i think that many people would agree that they have had some level of success with various strategies, systems and indicators and gained experience from them all BUT… that consistency still eludes many of us.

In alot of posts, videos and books various psychological concepts are thrown around. They make sense to us so we get on board… BUT although we have that knowledge we still hit the brick walls.

I have used the educational stuff on babypips and love the site it’s a great resource. I started thinking though, what if learning forex as an ordinary retail trader and making money are not the same thing. Would this explain why the success rate is so low and why there are so many educated non profitable traders?

I have decided to do an experiment, hence the title of the thread lol. I have decided that for 1 year i will take a slightly different approach to trading focusing on the psychological. Some things may go against the usual psychological trading advice we have come to accept and others might be the same things but in a different way.

I will use this thread as a place to confirm for myself why i am doing what i am doing and hope to get some input and discussion going with you guys. I know the best threads are the ones that are updated very regularly and will try to keep it as intensive as possible over the next year.

Monday the 7th of April will be day 1 and i will post more details of the specifics of the experiment then. Like i said, the main focus will be psychology but there will also be trades and results and performance analysis etc.

WinPsych,

[B]Why do most folks that attempt to trade FX fail?[/B] I think the simple and obvious answer is they do not have the [B]adequate capital,[/B] period!

Psychology, strategy, back testing, blah, blah, blah, sure they’re real issues but secondary to having adequate capital.

Trading is a business, just as a start-up delivery pizza business needs to have the capital to purchase a properly sized pizza oven.

Or a plumber starting his/her own business needs to purchase supplies, tools, a van or station wagon, etc, a trader needs to have an appropriate amount of capital to trade with.

I would rate any trader that can consistently earned 5% per month, with a min draw down, to be “very successful”.

So at 5% per month with capital of 20K to 50K our “very successful” trader is earning an amount that’s worth talking about. An amount worth staying in the game for the long haul.

The same “very successful” 5% per month trader with capital of only 1K to 3K is hardly covering his/her monthly Starbucks bill. The few extra dollars hardly seems worth the time and effort, probably could make more selling their no-longer-used crap on ebay.

So what do the un-capitalized “very successful” 5% per month traders do? They seem to get crazy, attempting to double, triple, quadruple, their capital. And bang, a trader that can consistently earn a very respectable 5% per month blows their account.

Adequate capital is to a successful trader as a well equipped toolbox is to a craftsman.

[MoneyNVRSleeps]

Umm, well, you could start by just fixing sink, if all you have is a monkey wrench… Name it, " Just Sinks", … Landscaping? Humm, Harbor frieght, $15 trimmers, name it, " Just Shrubbs", … Pizza, Buy a cheap oven, " Pizza under an Hour", BWHAHAHA…

Hey, capital does help, if your a 5% monthly trader/Traditional forex investor/

[Leg0nd]

[QUOTE=“MoneyNVRSleeps;618599”]Umm, well, you could start by just fixing sink, if all you have is a monkey wrench… Name it, " Just Sinks", … Landscaping? Humm, Harbor frieght, $15 trimmers, name it, " Just Shrubbs", … Pizza, Buy a cheap oven, " Pizza under an Hour", BWHAHAHA… Hey, capital does help, if your a 5% monthly trader/Traditional forex investor/[/QUOTE]

Lol. Then comes my argument to the poster above. “If you can’t trade a dollar, you can’t trade 100 grand.” Forex is scalable my dude despite contrary belief. Trade macro successfully (for several months straight!) then deposit your desired 20k or 50k.

[MoneyNVRSleeps]

d-pip is a good dude, i was just messin,

[Leg0nd]

[QUOTE=“MoneyNVRSleeps;618608”]d-pip is a good dude, i was just messin,[/QUOTE]

D pip hates me. He did answer a question I had in another thread, and again I thank him. But treating me like a “2nd” grader was not appreciated. D pip has a different approach no big deal. Like money said there are lots of different approaches to trading. None are wrong… But not all are profitable long or short term.

[Tyrone_Archer]

Hello again Tyrone,

You are absolutely right! If was setting up a Bank or a trading team that’s exactly the course of action i would follow. I would diversify, having traders trade various instruments and strategies and get the best of all worlds and protection against the worst of all worlds. In a bad year when my billions only made me £20 million at least i would know that the electricity bill would get paid lol

But like you mention…for various reasons, we are not setting up Banks or trading teams just yet. So how does this change things?

I’m not taking a position here at all but i’d like to get your feedback.
As a retail trader we are the analyst, the trader, the shareholders, the business coach, the psychologist and the performance analyst all rolled into one. Obviously we will perform some of these roles better than others. Now taking into account that we cant diversify the way we would like to for the reasons you mentioned and the fact that any given strategy performs better under particular conditions… is there value in giving up some of this consistency we talk about in favour of trying to exploit our strategy or edge when these particular conditions present themselves?

In essence what i’m asking is… in a seaside town the population might be 4 times or more as large in the summer as it is in the winter. In the winter its dead and the businesses make all their money in those 6 or 9 weeks of summer. Now in our case we know there is a season but unlike the seaside town…we dont know when it is, but when that season is there we are a money making machine. ([I]yes a rainy summer could put us out of business[/I])

[B]In your opinion can we the retail trader look to exploit this?[/B] (We dont have the overheads or accountability of banks and dont have to be in the market all the time)

[B]That’s the million dollar question?[/B]

I would say [B]no[/B]. If it were that easy then this would be the way hedge funds would trade. But with any profitable strategy, it should inevitably make consistent profits. However, consistency has its rocky bumps which causes us as retail traders, to steer off course to try & rectify the problem. My take is the problem will always be there you just have to stay on course & learn to ride the bumps. No different to building an aircraft to withstand turbulence. It has to be proven before you go commercial. If it crashes you learn & make it better. You overcome the problem but certainly don’t avoid the turbulence thinking that is the answer.
Its not all doom & gloom. I think if you have a proven profitable strategy, you could just diversify this by trading three times frames. i.e. Day trading, swing trading & position trading. Treat each type of trade individually & not mix signals between them. This means sometimes you will loose on the day trading but make money in a position or swing. Maybe all three types of trades loose then all three may win, who knows but the [B]EDGE [/B]should take care of the long term profits.
My point is you trade each type (day, swing or position) as a separate strategy even though its the same strategy over different time periods.
This is my conclusion so far & may not necessarily be someone else’s.

Im sure we all can contribute something important to building a better strategy which fits all markets & time frames.

[Tyrone_Archer]

What type of collaboration were you thinking about Tyrone, do you have something in mind?

Let us all reveal what has worked for us individually no matter how small & maybe we can put our heads together & build a more solid strategy which all of us can trade individual accounts but together as a thread. This way the same analysis conclusions would be draw on every trade. No discretion just rules. We can make it as simple or complex as we like. I can back test all though this takes time & effort so any help would be nice. Some one may volunteer to forward test a small live account. What ever helps…

[Tyrone_Archer]

WinPsych,

[B]Why do most folks that attempt to trade FX fail?[/B] I think the simple and obvious answer is they do not have the [B]adequate capital,[/B] period!

Psychology, strategy, back testing, blah, blah, blah, sure they’re real issues but secondary to having adequate capital.

Trading is a business, just as a start-up delivery pizza business needs to have the capital to purchase a properly sized pizza oven.

Or a plumber starting his/her own business needs to purchase supplies, tools, a van or station wagon, etc, a trader needs to have an appropriate amount of capital to trade with.

Lets just think about this for a second. If a plumber, pizza biz or any business is opened with all the tools equipment & plenty of capital behind you, you still have to know your craft/trade etc. You can have all the money in the world but if you have not got the right skills or business model then you’re going to loose over time.

We are all trading the same markets as the professionals. Price goes in the same directions. Read the “market wizards” books by Jack Schwager. Nearly all had to start small. They only made it big by luck at the beginning or opening there own funds for the rich to invest. They made there money off other rich folk. Not saying this is the only way but statistically this is common.

[Tyrone_Archer]

Good looks. I was thinking realism vs expectation . Exiting at a predetermined time instead of a predetermined profit is a very interesting concept. The beauty is you can always exit early if momentum changes or whatever… By using a time interval instead of a TP, the gains have the opportunity to exceed your expectations. However, if the gains do not meet your expectations and your exit time is up, you get out and take the profit regardless of size. This is important because in the scenario you are still in, waiting for the market to hit you desired TP and it does not, rather reverses and hits your SL, had you followed the time dependent exit, this loss would have been completely avoided. Thus increasing winning avg and overall accuracy.

Hope that makes sense. I trade time interval trading because I want the market to be random to an extent. I don’t have unrealistic expectations and would rather have the market do what it does at no emotional cost to me, and I take profit if my time is up, or loss. I try to predict being right first, then which pair has the highest probability to move.

I have been getting much more consistent and have been trading profitably for about a month now (total trading profit for the month). I view the market everyday as a test. I either pass or fail… How many pips I make per day is completely irrelevant to me right now if i can’t at least score an 80% (accuracy) avg per week. I’m already in the 60 percentile range and profitable. Imagine 80%.

Onto the information. Please do not be fooled into thinking all the “off limits to retail traders” information gives anyone an advantage. Maybe a tiny bit short term, but really not enough to make a critical difference. Do you know what fundamentally moves the market? The interest rates, unemployment, psychology, all that crap? No! Money!! All those other things are unpredictable and are what’s behind the money. They do not drive the market itself! The market does not move because of trader sentiment, or emotions… It moves because the money put in and taken out directly affects the value of price. All those other things cause the monetary direction to an extent, but trying to predict all the “symptoms” as I call them and instead of the “cause (money)” is a fools game to me, thus the 98% fail rate. If you can figure out the patterns in the money flow itself (in and out of the market), your chance of long term success increases. All this information to calculate what I just discussed is free! And available to all it’s called data. And everyone has access to it making forex an even playing field. Do you think the pro’s or banks or brokerage firms want you to know this? Hell nah, they want to keep you in the dark for their own personal gain. Let me know what you think. Maybe I am 100% wrong here, but I have math to back me up (numbers don’t lie). And an ongoing track record.

[B]I agree 100%[/B]

[Tyrone_Archer]

Hello again Tyrone,

You are absolutely right! If was setting up a Bank or a trading team that’s exactly the course of action i would follow. I would diversify, having traders trade various instruments and strategies and get the best of all worlds and protection against the worst of all worlds. In a bad year when my billions only made me £20 million at least i would know that the electricity bill would get paid lol

But like you mention…for various reasons, we are not setting up Banks or trading teams just yet. So how does this change things?

I’m not taking a position here at all but i’d like to get your feedback.
As a retail trader we are the analyst, the trader, the shareholders, the business coach, the psychologist and the performance analyst all rolled into one. Obviously we will perform some of these roles better than others. Now taking into account that we cant diversify the way we would like to for the reasons you mentioned and the fact that any given strategy performs better under particular conditions… is there value in giving up some of this consistency we talk about in favour of trying to exploit our strategy or edge when these particular conditions present themselves?

In essence what i’m asking is… in a seaside town the population might be 4 times or more as large in the summer as it is in the winter. In the winter its dead and the businesses make all their money in those 6 or 9 weeks of summer. Now in our case we know there is a season but unlike the seaside town…we dont know when it is, but when that season is there we are a money making machine. ([I]yes a rainy summer could put us out of business[/I])

[B]In your opinion can we the retail trader look to exploit this?[/B] (We dont have the overheads or accountability of banks and dont have to be in the market all the time)

[B]In my opinion…Yes[/B]

[Tyrone_Archer]

Sounds good. In short, future prediction is evident in price extremes, rather than common “open to close” I believe. Do you have a Skype?

Also if the account starts getting to big, we can just withdrawal some money xD. Can’t hurt to spend some at some point lol.

No no no…Diversify that money into long term wealth. Put is safely into an ISA account etc.

[Tyrone_Archer]

Lol. Then comes my argument to the poster above. “If you can’t trade a dollar, you can’t trade 100 grand.” Forex is scalable my dude despite contrary belief. Trade macro successfully (for several months straight!) then deposit your desired 20k or 50k.

Again…I agree.

[Leg0nd]

[QUOTE=“Tyrone Archer;618677”] Again…I agree.[/QUOTE]

You the man. Hope your trading is going great!

[d-pip]

Lets just think about this for a second. If a plumber, pizza biz or any business is opened with all the tools equipment & plenty of capital behind you, you still have to know your craft/trade etc. You can have all the money in the world but if you have not got the right skills or business model then you’re going to loose over time.

Tyrone Archer,

What you say about having the right skills is very true. Psychology, strategy, craft/trade, etc are [B]real issues[/B], but still secondary to having adequate capital.

You could be an incredibly brilliant and talented trader, but without some sort of adequate capital you’ll be lucky to earn a few extra bucks for coffee or maybe a nice night out on the town.

[Tyrone_Archer]

Tyrone Archer,

What you say about having the right skills is very true. Psychology, strategy, craft/trade, etc are [B]real issues[/B], but still secondary to having adequate capital.

You could be an incredibly brilliant and talented trader, but without some sort of adequate capital you’ll be lucky to earn a few extra bucks for coffee or maybe a nice night out on the town.

I understand this. You have made a valid point but I don’t think this is secondary at all. Once you have a profitable strategy, you just keep adding to your trading account with confidence (like a long term savings plan). This is how I trade my savings. Once I’ve built up a few years profitable portfolio then I can apply for work as a trader. It would be far nicer to trade for a bank, hedge fund or money manager & take a percentage & a wage each year. This would also be saved over the years to eventually trade my own even larger trading account. You need money to make money but we got to start somewhere. That’s the theory.