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MANUAL TRADING. The search for the Holy Grail. - page 2

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gurich
35
gurich 2013.02.25 12:34  
TalonTrader:

My goal is 2 to 4% growth on my account each day, depending on the movement of the market.  For the last three weeks I have averaged about 6% daily.   This is the best I have ever done.  I will do my best to keep it up until my broker says "max lots reached!"  And then I will open two accounts and start over again.

I think it would be better to count the % based on the margin used, rather than equity. That would be equivalent of nearly fixed number of pips per week/month. The % gain over equity would be low, but would be consistent over the margin used in execution of the trades you made. On the contrary, since MQL5 signals open trades for subscribers based on their equity percent vs signal provider's equity (and not fixed lots), it wouldn't make sense to keep consistency over margin only. In this case, I would look for a gain of certain percent of margin used, before increasing future trade lots.

In other words, what I mean is that an unexpected bumpy trail would have your already red lined tachometer be in trouble, scaring your passengers at every corner... "consistently". I'm suggesting that % gain over margin used be considered the tachometer reading, % gain over equity be the speedometer reading and number of lots be the gear. So you wait until the red line has been touched, i.e. quench the gear limits (keep using the same lot until you have gained a target % over margin). Move on to next gear and wait till the next red line.

With this analogy, the redline is more attractive and less scary! And when zoomed out after a year, the equity curve would be lovely.

Hope I made sense. Thanks for sharing your experience and wisdom. Makes me comfortable being here!

Steven Theobald
852
Steven Theobald 2013.02.25 13:20  
gurich:    Thanks for sharing your experience and wisdom. Makes me comfortable being here!

You are welcome.  I know that my previous posts were somewhat verbose, but I had to get out the main issues and I wanted the thread to actually be useful to someone.

But even if no one responded at all, they were very good for me to write.  I think it is important for traders to analyze where they have been and try to learn from it--a commit to apply what they have learned.

enbo lu
Moderator
1947
enbo lu 2013.02.25 13:41  
TalonTrader:

Hi Raptor,  

Short version:  On my signal system, my goal is 2% safe growth each day.  Over the last 3 weeks I have averaged about 6% per day - safely, with a nice flat curve.

Long:  Over the past 7 years I traded stocks, options, FX, futures, and then options on futures.  Then I tried FX and futures all over again.  Over the past 5 years, I have started over 100 systems on the big signal-following sites.  I also followed over 50 signals from other traders - but all sucked my accounts dry.  Finally I had no other option than to play around with a $25 micro-lot FX account!  I used to blame all my troubles on those stupid signal providers and of course, Ben Bernanke!  LOL.  But I have gotten smarter now, and I don't blame anyone but myself

16 months ago I started to write in my trading journal, seeing what I was doing right and wrong.  I realized that I kept anticipating the market instead of waiting for the signal.  And I had a very strong directional bias from "gurus" I was following, and it was sabotaging me.  But I was careful to keep my margin under control and really obey my rules.  I then had my first breakthrough; I took my system on the biggest FX signal site from number 9,000+ to number 42 in just 4 weeks!  I was ecstatic.

But my success was short lived.  During the 2011 holidays, I traded on very thin volume.  To make matters worse, I didn't honor my stops.  I just "knew" that the market was about to reverse.  My account died again.  However, there was a silver lining.  Not only did I catch the vision of what was possible but I also got the attention of a fabulous futures trader who had successfully traded up to 100 S&P contracts at a time.  He took me under his wing, spending hours teaching me. 

The bottom line for him was "Simplicity + Discipline = Success."  He convinced me that taking small losses was part of the game.  That it didn't take many good wins to create a positive day IF I didn't blow it with a huge stupid loss.  Following my rules was the key to it all.  He made me unsubscribe from all my "gurus" so I could only trade what I  see.  And he showed me the possibility of trading without any indicators.  I have taken what he showed me and applied it to the FX market and made it my own now.

I really like these quotes from the article in Investopedia called "How to Develop a Trading Brain"

"No other profession creates so many and such intense emotions and reflects so much of our personalities." 

"The fundamental role of trader psychology tends to be underestimated and too much emphasis placed on the technical side. While both are essential, it is arguably the right mindset that differentiates successful from unsuccessful traders. However, learning the technical aspects of trading is more straightforward than acquiring a top-notch trading brain. The latter generally entails working intensely on one's own personality traits and eradicating entrenched behavioral patterns. This process is not easy and requires dedication, time, and often, the aid of a skilled coach. Nevertheless, the results are very likely to reap dividends." 

My goal is 2 to 4% growth on my account each day, depending on the movement of the market.  For the last three weeks I have averaged about 6% daily.   This is the best I have ever done.  I will do my best to keep it up until my broker says "max lots reached!"  And then I will open two accounts and start over again.

Great! Thank you for your sharing of your experience.
Steven Theobald
852
Steven Theobald 2013.02.25 13:51  
RaptorUK:
I don't think you are delusional,  from what you have written you haven't had consistency for 3 years.  All I was looking to understand was how you defined "consistently profitable",  by your definition I have EAs that are "consistently profitable"  but I wouldn't dream of using them live.

You input has been valuable to me.  Thanks.

I guess what I was trying to say was the last three years of "almost" consistent is what has allowed me to have the success I am currently having. 

Yet, you are very right; I truly can't even begin to claim "consistency" until I have proven that I have actually applied the "lessons learned" discussed above and have continued my current success up to and over the previously admitted 8-week self-destruct threshold.

And I just realized that the good trading competitions go on for at least 3 months.  Why?  For the very reason of observing consistency.

Therefore 3 months has just become my new Consistency Threshold

What is your definition of consistency?  How long do you feel an EA needs to go through forward testing before you would put money in it?


Simon Gniadkowski
Moderator
18001
Simon Gniadkowski 2013.02.25 14:11  
TalonTrader:

What is your definition of consistency?  How long do you feel an EA needs to go through forward testing before you would put money in it?

I would be looking for an EA to be profitable for more than 2 years of data across more than 3 instruments on backtesting before I would consider testing in a live environment.
kaloian kaloianov
445
kaloian kaloianov 2013.02.25 14:30  

talontrader can you prove your performance? or everything is just bla bla i can i can i can..

gurich
35
gurich 2013.02.25 14:40  
onlysolo:

talontrader can you prove your performance? or everything is just bla bla i can i can i can..

He publishes signals under REDLINE name: https://www.mql5.com/en/signals/3982

Relatively new, which is why I posted about redline being on tachometer vs speedometer.

Steven Theobald
852
Steven Theobald 2013.02.25 15:06  
gurich:

I think it would be better to count the % based on the margin used, rather than equity. That would be equivalent of nearly fixed number of pips per week/month. The % gain over equity would be low, but would be consistent over the margin used in execution of the trades you made. On the contrary, since MQL5 signals open trades for subscribers based on their equity percent vs signal provider's equity (and not fixed lots), it wouldn't make sense to keep consistency over margin only. In this case, I would look for a gain of certain percent of margin used, before increasing future trade lots.

In other words, what I mean is that an unexpected bumpy trail would have your already red lined tachometer be in trouble, scaring your passengers at every corner... "consistently". I'm suggesting that % gain over margin used be considered the tachometer reading, % gain over equity be the speedometer reading and number of lots be the gear. So you wait until the red line has been touched, i.e. quench the gear limits (keep using the same lot until you have gained a target % over margin). Move on to next gear and wait till the next red line.

With this analogy, the redline is more attractive and less scary! And when zoomed out after a year, the equity curve would be lovely.

Gurich, I think I understand the % margin recommendation, but I am not sure. 

I see that % of equity may be less meaningful than % margin because two traders could be employing different leverage.  But I am not sure of the nuances as to how this helps me personally with my goals.  Please say it again using some specific numbers if you'd be so kind.

I currently am revisiting my daily PIP goal of 50 pips with a max of 3 simultaneously open positions.  My plan is to increase the size of each trade gradually as my balance increases.  I am now at about $200 and I have decided that it is time to use .02 lots per trade.  At $300, I will use .03 lots per trade.  This way it is very easy for me to keep track of the position size I should be using, and to not scare my "passengers."

The big signal site only allows fixed lot trades by the subscriber and the follower adjusts the size of their trade accordingly.  I see pros and cons in both methods.

p.s. Thanks for using my own race car analogy.  That was fun.  But we must continue to be careful in the forum and be very general so all may benefit and no one system is promoted.  I think you were adequately cryptic in your previous post.  Keep it up.

Steven Theobald
852
Steven Theobald 2013.02.25 15:19  
onlysolo:

talontrader can you prove your performance? or everything is just bla bla i can i can i can..


HaHa.  You reminded me of Dracula in "Hotel Transylvania"  (Great movie!)   "I want to suck your blood.  Blah, Blah, Blah."  I was rolling on the floor.

I see that I must appear to be boasting.  I apologize.  I did this all wrong!  I have no intention to place myself above another trader.  I have spent 7 years trying to figure out how to do this and I am only now beginning to see some promise.  If anything, I am the STUPIDEST person on the planet for not stopping after my first account dropped 50%! 

Gurich correctly identified my system, but I don't want this post or thread banned.  I am trying to talk about PRINCIPLES of GOOD MANUAL TRADING and the what manual traders might encounter emotionally when trading.  My hope is that at least one person can benefit and AVOID some or many of the mistakes that I have made along the way.

I also believe that any programmer who may decide to read these posts might be able to find an additional nugget or two to help with their EAs.

Is not this the purpose of the "community" that we have here?  To help our fellow traders?  I am not trolling for subscribers or to elevate myself here.  I truly want to help.


kaloian kaloianov
445
kaloian kaloianov 2013.02.25 15:25  

in your first post you say you lost 100k , that is a lot of money. Your signals are based on 150 usd account, isnt that wierd?

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