The Legend of The Gambler - page 5
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These are dangerous times.
The pound just dropped 150 bp, Euro dropped 50 bp, and even the Swissie dropped 50 bp in interest rates yesterday. This may cause some unwinding of institutional carry trades, and increased volatility.
One of the reasons why I got out of my trades yesterday with a small profit instead of letting it ride. And I'm sitting back on the sidelines again.
ECB and BoE: Thursday Morning Rate Cuts!
It looks like Australia and New Zealand is the place to be now for some + swap carries.
Kenny,
Just putting this out there for you. Based on some of the things you've mentioned regarding balance, you may want to consider dropping down the position sizing a bit... it sounds a little too excessive. I'm not trying to tell you how to play your hand, just saying it cause I care, little buddy
.
The red flag for me was the post where you're down 1 years worth of profits, only to make it all back within 24 hours
I'm just sayin'.
P.S.
Less leverage on the trade = Bigger balls on the trader ( I made that one up myself
)
GOOD TIMES!!!
Thank you Mr. M.
Yes, I've contemplated quite a bit about reducing my position sizes and risk level. However, one of my assumptions is that my edge will not always be working, so I should make as much as possible while I can.
But you are right, that crazy move in my equity curve last week was frightening. It was the first time I've traded after I doubled my initial deposit into the account. I was not used to seeing twice the $$$ movement on the same pip movement as before. It caused some mental issues.
My system is based on staying in on the HOME RUN (trend) trades. These trades do not come very often. Most of the time, it is small wins or losses. But when you actually get in on one of those monster trend trades, it is very difficult mentally to stay in because you want to bank the money as soon as possible. As the profit starts to shrink, there is an urge to close it out and take whatever you can get. I call that the Piker in me. If I had just stuck to my system and held on for dear life, my equity would be over $40K right now.
With my current account and risk level, a HOME RUN trade is $10K. I've really only had 1 HOME RUN trade so far, and that happened last week (+$8K) and was what brought my equity curve back up.
I'm trying to diversify, but it's hard to develop a working strategy and test it long enough to have confidence to trade it.
Good Times
BTW, if you really want to pursue your 3 line projection method, you will need to develop a mathematical model. The eyes can deceive you, numbers are much better to make judgement on.
Well that's good news, Kenny. Since you're already conscious of this, it will only be a matter of time before you tend to it in a manner you see fit.
How do you fancy scaling out, say 1/2 position @xxx, another 1/4 position @xxx, and let the last 1/4 TS its way to glory!!!
As far as the time projection technique... I dropped it a while back. Don't forget, I lean toward the markets are (more) random than they are rational side. I haven't been overly concerned with timing entries for quite some time now. My approach accommodates my market beliefs, and my psychology. My approach is dynamic. The static stuff never worked for me. I know what you mean about the difficulties of sitting on your hands while a move develops. It's simply not in me, never was, and never will be... I'm just not built to do that. Are you sure you're built to trade this way? If it hurts, it's probably not the right thing to be doing. Or maybe the stress of waiting for a big move to develop is strictly attributed to over leveraging, and not impatience?
For shits and giggles I would try to do a few days next week where you're using, say, 1/2 of your usual volume per trade. Even though the profits will come in 2 times slower, the feeling of clarity and control over the market will be 2 times greater. Lowering size leads to emotion free trading. You don't feel like your stepping into a casino every time you place a trade, and things get boring really fast because the profits are so insignificant. Oddly enough, after some time passes you realize 2 important features..
1. Your account is still intact
2. You've turned an impressive profit
Anyway, keep at it. I'm around.
MM
Scaling out is an definitely an option. But I much prefer going for the whole cake. I do use a trailing stop, but it is set very far away.
In my own research, given a correctly tuned strategy, I find the most profitable system is the one that does not scale out and just let the market hit the TP or SL. Scaling out only gives the trader a sense of false calm, and decreases profitability.
Like I said, I need to control the Piker in me.
The real culprit to my wild swings is the fundamental logic change that I implemented in my strategy which goes for HOME RUN trades. I opened up the possibility to getting 1-time huge rewards, but I also had to open up the risk and DD factors to achieve it. Couple this logic change with my additional deposit has really given me some swings I have not see or experienced before.
I have thought about cutting my size in half for the past week. This will almost move me back to my original deposit size. And I'm quite comfortable at that level.
Most likely I will sit out of the market for next week, with a chance to enter back in at the end of the week. I want to see how the markets are reacting to these recent interest cuts around the world.
The market has not been very coorperative for me, I like stable markets. With every country slashing interest rates and world markets moving like it is a dot-com in its heyday has given my system fits. I find myself having to expose my trades to larger DD to stay in a trade.
Mr. M, really enjoy conversing with you, especially when I'm sitting on the sidelines. Drop by anytime.
Got bored, and needed some motivation.
Reviewed the IBFX monthly contest Top 100 list. Man, those guys at the top are returning monster numbers. I don't have a clue how they do it, well, I kinda do, but it's too risky for me. It seems to me people are so much better traders nowadays than like 2 years ago, and even from the start of the year. I guess they don't show you the bottom 100 for a reason.
And it is also very interesting that I do not see the same names consistently in the Top 100. The turnover rate is quite high. I guess many people are gaming the system, and using really high leverage.
It is too bad IBFX doesn't send little gifts like golf balls to their Top 100 traders as consolation prizes like they did in the summer special. I thought that was a good touch.
As for closing trades when it hits a certain equity and preventing new trades problem after close, I basically hacked one of the public closeall experts into adding a global variable (=1) after closing trade. Then I modified my trading EA's to read the global variable, and if it is set (=1), to not open any new trades until I manually reset the flag by pressing F3 and unflagging it back to (=0).
It's not pretty, needs manual reset, and requires modification to the trading EAs. Hopefully, this hack job works though.
Anyways, back to more demo testing of stuff.
Cut my position size in half because I'm fresh out of my ulcer medication.
Kenny Rogers returns to the game as THE GAMBLER!
/cue the music
After a series of small losses.
I got on a good trend trade. And my new equity close all script kicked in, and stopped all trading until I was able to reset it.
So I know my close all script works, and I was able to make some coin.
However, I only was able to take half as much profit because I had cut the position size in half.
Perhaps now I can upgrade my Johnnie colors, and sip some of the good stuff.
Account #1 Summary (Post Date):
Deposit/Withdrawal: 20 000.00
Balance: 36 721.67
Equity: 36 721.67
First spike up in Balance at around #360 was due to the $10K deposit, so I can't take credit for that.
The next drawdown phase at around #385 which I lost all of my profit for the year, and got below my initial deposit of $20K.
The final 2 spikes up are the HOME RUN trend trades that I had managed to catch. Without those 2 huge trades, I would be in trouble. Perhaps I have been lucky to have gambled on the right side of the trend.
Malcolm Morley from Oanda Interview returned 1,400%+ over a 2.5 year period. Simply incredible.
I would be blown away with myself if I could return 100% on my initial investment by the end of this year. It's definitely a lot harder than it looks.
On my demo account, my EURGBP test trades already double the account (same ones I took on RAS beta testing that I closed early). The psychological difference between demo and live is vast. I let my demo trades just keep going and going, and if there is a monster trend, you make so much money. These demo trades on EURGBP are already going on 10 days, I doubt I will ever get to this point on a live account. The piker in me would already locked in the profit, and left the potential profit on the table.
The way I see it, if someone else can do this, then it is possible. And if it is possible, then why not by me.