Thread: 2018 Trading Account Experiment

RANT #6 - Separating The Predators from Your Prey

regardless of the gloomy predictions at the conclusion of the last RANT (post #68) we're still here and today worrying that we will need to become a better trader or we're liable to be the prey rather than the predator. How can we go about achieving this lofty ideal?

It all rather depends on what you imagine being a better trader really signifies. A pat response is that great traders earn money, bad ones do not, and therein lies the inevitable wealth move that any zero sum game brings, and one which we would love to be on the ideal side of. How exactly you make the money is, of course, the smart bit.

I profoundly regret that I am nowhere near smart enough to answer that definitively for you. But a couple decades of market experiences permit me to provide some prospective pointers to steer you toward the correct path. I've previously ad nauseum the main one: great risk control. If you're able to control risk and reduce winners you have a chance in this game. Otherwise, frankly, do not bother.

Beyond that, my other rewarding bit of information is seek to trade with the tendency, the flow, the momentum. By all means, wait for counter trend moves to become involved at more favourable prices if you want but do transaction with the prevailing wave. They could well all be idiots out there but their combined buying/selling electricity is a lot more than yours. Try not to overlook that.

That, regrettably, is all about it. Fantastic risk control and commerce with this trend. They're the 2 items I've found to have the most enduring value. Make of it what you will and I wish you every success in your trading.

The next RANT will tackle what would be another thing in my list if I were forced to think of a third bit of information for a fantastic trader, that being sound personal plogy and plogical balance.

Hi Marc,
Thanks for your great advice on your RANT's.

I want to ask you regarding your intraday trading management. Have you got any limits on numbers of trades every day? How many losses do you take daily and how you decide when to stop?

Let us take the upcoming hypothetical day: you start and require a complete loss, next commerce is loss also. Do you usually stop or keep fighting? Commerce turns to loss also. Now you've got 3 losses for the day, or -3R. Do you cease or continue to exchange?

Perhaps you have some rules, regarding amount of trades, maximum. Number of loss trades etc.?

Due

Originally Posted by ;

Hello Marc, Thanks for your great words of wisdom in your RANT's. I would like to ask you about your intraday trading management. Have you got any limits on amounts of trades every day? How many losses do you accept daily and how you determine when to cease? Let us take the upcoming hypothetical day: you start and require a complete loss, following trade is loss also. Can you typically prevent or keep fighting? Third trade turns to loss also. Now you have 3 losses to the day, or -3R. Can you cease or continue to trade? Perhaps you have any rules, regarding amount of transactions, maximum. Number...

Hello Ihor,
Many thanks for you kind words, much appreciated, though wisdom is over ample, they're only some distilled thoughts from several years of market experience.

As for my daytrading trade management, you ask some very perceptive questions which get to the center of the topic. My ambition is to get all days being either winners or scrapes so that I never move backwards. Obviously in fact I do have a fair sprinkling of shedding days but I try to keep them to no longer than one net risk amount (basically 1% of my account) down.

I have one trade open in a time and the dream are the very first trade daily is a complete winner and that I pack up to the day. This occurs c.50% of the time. The remainder I start with a loser so I carry on and wait for another setup to trade. If that's a winner I generally stop for the afternoon as a scratch or moderate net profit if I can squeeze it from the winner; this really is about 25 percent of this time. The past 25% are then my multiple opening winners days and not quite so much pleasure. At down two I will carry on to attempt to contact scratch but will settle for one down internet. At 3 down trades I will look for one down to quit, may even take web 2 down but that's thankfully quite rare these days. I handle each transaction as an independent event and I have no set maximum number of trades I will take, but I am aware of this running tally for the day. I NEVER raise the position size in later trades in an endeavor to get back faster, which violates basic risk control requirements to keep trade risk equal and little. I do find, however, I am more willing to allow run a later winner than a previous one - an unsurprising result of pure loss aversion, I think.

I will stop immediately as a compulsory block if I get down to 4 to the day as evidently something is very wrong with me at that point and I need to pause, reflect and regroup before investing again. I will physically shut down the computer for the afternoon and go for a long walk because the desire to revenge trade and get back quickly can be nearly overwhelming and I do not want to succumb to it. I will generally not trade for the following day either, just paper trade to receive my rhythm back and I will restart trading free of longer than half size until I believe I'm on track again.

This on average only occurs about once or twice a year nowadays but it is a critical moment to be prepared for. It is so important not to allow a bad patch beat you up too much, both financially and plogically, only as it is really important not to let individual losers get away from you. Both of them are different aspects of the overall risk control feature, my #1 issue in gambling. And remember, my basic per transaction risk is 1% so at 4 internet winners that the account is only down 4%. I'm very risk averse and conservative in my trading.

Hope that explains things OK

Hi ,
Here is the Wednesday upgrade for the 3 markets (last set out with chart in place # in brackets):

AUD/USD (post #72): Current 7882. We are practically net unchanged from yesterday but this hides the fact that Aussie hurried around 7818 this lunchtime (UK time), only 2 points out of our hard halt before falling back afterwards. In fact, the technical rationale we entered this trade on has largely gone now so I shall be on the lookout for a diminished loss exit possibility tomorrow.

EUR/USD (post #72): Current 12371. Euro has dropped back a little now but our commerce remains in profit and the technical rationale this is still intact, so I think we can risk waiting for another possible attack on the 12400 mark. If it becomes there again we shall surely move the stop to breakeven because I don't like to give markets greater than just two chances at a degree. We shall in the meantime leave on both the initial stop at 12250 and the limitation profit take at 12450.

USD/JPY (post #73): Current 10625. Possibly not the cleverest trade management going on here. We touched a 90pt open profit and I did not raise the stop to breakeven. From there it has dropped sharply and now we sit on an open 15pt reduction on our Yen trade. On the other hand, the technical justifiion is still OK so we shall, such as Euro, give another chance to shine for us turning less forgiving on this place.

Daytrading Update: A bit of a mixed bag now with both winners and losers, but great control on the losers meant when the dust settled we managed to complete a net half risk up on the day. It was one of these days of missed chances, one of which is attached for your inspection. Correctly identified the reversal from early morning lows but late in on the commerce so attempted to run it a bit too hard, resulting in a missed pleasant profit and a fruing scratch trade instead. Bother! (Not quite what I said at the time...).


Back tomorrow for another update

Account summary (closed transactions ): Suggestion #10,003 (0.0%) No. Trades YTD 10

Hi ,
This is the Thursday upgrade for the 3 markets (last setup with chart in place # in brackets):

AUD/USD (post #72): Current 7798. This market is surprising me almost daily. After lost being stopped out by two points yesterday, Aussie has collapsed today and we now find ourselves sitting on a 20pt open profit with the market looking very feeble. I will suspend my intention of yesterday to cut this commerce and instead wait to determine whether it could finally return to challenge prior lows around 7700 because we'd originally desired. No point in looking a gift horse in the mouth when this is what this trade is ultimately going to be.

EUR/USD (post #72): Current 12304. By comparison, Euro is currently looking threatening because of our long trade expects. After two failed appears in the 12400 degree we're back to 12300 and may now easily crack our stop in 12250. I might well look to cut this commerce on any asset as I do not generally anticipate a market more after two failed moves in a level.

USD/JPY (post #73): Current 10621. Yen is almost unchanged on the day but, for example Euro, has had two moves at a high degree, 10700 in this circumstance, and has failed to crack through. Without any actual sign of rallying today I fear now about the potency of the market for our extended trade and that I might also look to cut this tomorrow when we get any rebound.

Daytrading Update: Together with my week thus far status at 1.5R I confess today I just snatched in a modest ancient scalp on the Euro as it reached 2R overall. As it happens, the commerce did undo without much additional advancement and I am pleased to delude myself with the warm feeling of good commerce management instead of the colder truth of random luck. The attached chart shows all, ordinarily I'd have played for the breakout looking for 1R and obtained a scratch when it failed to deliver and dropped back.
With this week now done the bonus Friday is generally demo practice. But with Easter nearing I will rather start tomorrow on a Friday-Thursday schedule so as to match in two complete weeks trading before Good Friday. Additionally, as things have gone well on the intraday scale YTD I find myself in a place to have the ability to increase the position dimensions from tomorrow without undermining the 1 percent account risk illness. Happy days (before the next loser)!


Back tomorrow for yet another upgrade

Account outline (closed transactions ): Balance #10,003 (0.0%) No. Trades YTD 10

Hi all,
Rapid pre-update. Surprisingly, our trade, following being within 2pts of the stop loss has turned about and reveals 100pts of net profit at 7720 which we shall gratefully accept, chart attached.
Total update later
TRADE #12 - CLOSED #1/pt AUD/USD in 7720 for #100

Hi ,
Time to the Friday update. Being the end of the week I attach new charts for all three markets in order to get ready for next week:

AUD/USD (this post): Current 7713. The Great (Aussie) Escape. As mentioned in the pre-update, article #87 above, we have obtained a 1R #100 profit here after being #98 down and 2 points from being stopped out just two weeks ago. Who needs Steve McQueen? (Google the famous 1963 movie if you're dropped here).
Moving swiftly on, the chart shows Aussie now challenging prior lows near 7700. We will wait to see how this pans out next week before deciding what to do next.


EUR/USD (this post): Current 12286. Our Euro long transaction proceeds to look at risk with our cease waiting at 12250. I missed to chance to cut this morning to get a c.20pt loss, which might well prove costly today. We will leave matters as they are over the weekend and keep everything crossed for Monday...


USD/JPY (this post): Current 10604. Our Ye n long position is also looking a little shaky but not quite as awful as Euro just yet. Our stop is at the prior lows and we could only wait to find out whether the market can bounce and rally because we would like or is doomed to crack down. We will leave matters as they are over the weekend and look afresh on Monday.


Daytrading Update: A friendly afternoon using a winner first up, yet another thriving imitation break reverse trade. Are you getting an idea that focusing on a limited number of patterns that you feel especially familiar with might be a sound idea? The now familiar chart is attached. Notice the small uptrend leading into the consolidation. You could actually look to exchange the range either way but it's really about a 60-40 possibility that the direction that a market enters a consolidation will be the same direction it breaks from it. Thus, my preference was for a long instead of a brief here - however you should always finally be guided by the market actions, not your predefined ideas.
I'm on a popular trading series right now, just one losing day in the last 18. Such runs inevitably don't end well and I've just increased my place size. I wish I had not looked now....


I apologise I have no upgraded transaction spreadsheet for you today as I'm on the spare computer right now and the document is on my primary laptop that my spouse has pinched so she can use its DVD player to binge watch a box set of Glee. The price of love is large indeed! I will join it on Monday instead.

Have a gleeful weekend all

Account summary (closed transactions ): Balance #10,103 ( 1.0%) No. Trades YTD 11

Hi ,
This is the Monday update for the 3 markets (last setup with chart in place # in brackets):

AUD/USD (post #88): Current 7707. Aussie has now analyzed prior lows at 7700 and can be little changed on the day. We will need to wait and see how it responds now and if it gives us the chance for a decent trade in either way.

EUR/USD (post #88): Current 12332. Euro seems to want to equal the impressive effort by Aussie last week to enhance my blood pressure and stress levels. Our long trade here obtained within 6 pts of our 100pt stop loss at 12250 this morning (UK time) before turning sharply back up. Given that this series of strength I will continue to render it well alone and determine if a worthwhile rally could emerge.

USD/JPY (post #88): Current 10586. The market is presently stuck oscillating in a very tight range of 10630 to 10560, worryingly close to our stop at 10540. At some point it must break one direction or another and given where we're on this trade we will sit tight and give it the opportunity to go our way - or take the hit at the stop, of course!

As promised on Friday, I also attach now the updated weekly transaction spreadsheet.
Https://www.nigeriaforextrading.com/...1005212052.xls

Daytrading Update: A fifth winning Monday in a row, almost surely a record for me as I am usually terrible starting weekly. Of late my weekend wine intake is well down into a weight reduction effort, I would really hate to believe that's anything to do with it!
It was a marginally different trade now from our standard recent fare of FBR (I am certain you can imagine that by now) plays, now a triple base reverse following an early morning dip. Multiple failed attempts at a degree do increase the chance of a successful inverse and also the prior fake dip was an excess clue, the annotated chart is attached.


Back tomorrow for a further upgrade

Account outline (closed transactions ): Hint #10,103 ( 1.0%) No. Trades YTD 11

Hi ,
Quick early morning upgrade.
Both our open trades in USD/JPY and EUR/USD moved into profit and, given the largely negative roller coaster ride we've had together, both happen to be closed at market for a few pips net profit on the pair.
As we already had a full 1R profit in the bank from our trade it means that this simultaneous trio have netted just over a 1R total result. It could so easily happen to be -3R, we really can't complain. So (UK occasions ),

TRADE #11: CLOSE 7.40'm #1/pt EUR/USD at 12452, P/L #2
TRADE #12: CLOSE 7.37am #1/pt USD/JPY at 10656, P/L #16

Charts attached, full analysis and update afterwards



Account overview (closed trades): Balance #10,121 ( 1.2percent ) No. Trades YTD 13

End of Days

Hi all,
A very early update analysis today as my daytrading has, thankfully, finished quickly today, more on this later. First, though, a more relaxing analysis of this recent parallel trio of transactions in Aussie, Euro and Yen which has been finally closed out earlier this morning.

We netted only on 1.2R for the set, though for practical purposes it was a complete 1R in Aussie and 2 scrapes. What's showing for me personally is the maximum favourable and negative moves experienced in those three transactions over their lifetime, recalling our stop loss in each case was 100pts:

best / worst / attained
EUR/USD 61/-94/ 2
AUD/USD 100/-98/ 100
USD/JPY 89/-80/ 16

This sort of leaping around and leaving large open profits on the table since we need them to run farther is simply too much for me. My core daytrading basically works by snapping up fine profits when they are first offered, taking a small, fast loss if things don#8217;t go as intended, or taking a scratch if a trade partly runs either way then turns backwards. I am not good with watching retracements from a well profitable position or letting moderate profits slip into a reduction, I much prefer to book the profit or take the scratch and proceed.

Further illumination comes from examining the trade spreadsheet, updated copy attached. Following the initial ups and downs of those initial seven transactions where I was feeling my wayI notice the previous six basically perform as two web winners and four scrapes. This is very similar to the pattern my daytrading record shows and is clear evidence to me that I am doing here is copying my daytrading techniques on this longer daily timescale.
Https://www.nigeriaforextrading.com/...1042634038.xls

This wasn't my aim in starting this experiment, I needed to try to run things for longer, with less hands on active direction, for hopefully bigger trend-style profits whilst keeping tight risk control. It's evident to me that I am not, pyschologically/emotionally speaking, capable of doing this efficiently. People who have followed my daily daytrading upgrades will possibly have noticed that I've been much more profitable there than here whilst trading the exact same markets. For this end I feel it's time to call a halt to this experimentation and follow my core intraday trading. I've already learned enough here also it's a convenient instant, having got from all places and with the Easter break approaching.

Having done this thread and also enjoyed the experience of active posting across forums this season, I have further concluded that I've now both given and accepted as far as I possibly usefully can fromnigeriaforextradingas a whole. I first came just to see the excellent economic calendar and I think I will return to only that from now on. I'd like to thank everyone who has taken the issue to comment positively or like that which I've posted across FF, and it's reassuring to note that the genuinely rude or ignorant comments I've received have been rarer than my daily timescale winning transactions!

For sake of completeness and tidying loose ends I will finish here with now #8217;s daytrading upgrade, and the next, final article will probably be appropriately enough, possibly - a previous RANT that completes the discussion of the prior one on necessary traits for a successful trader.


Daytrading upgrade: A second opening winner today, providing us three in a row out of Friday when we notionally started this week due to Easter (see article #86 for explanation). Thus, a banner for us and for the personal accounting functions we will call this week done and dusted. That leaves 7 trading days left before Good Friday which I'll treat as an elongated week beginning tomorrow. When we do well we can pack up for Easter ancient, if it all goes horribly wrong, wellwe will at least have a chocolate egg to match ourselves!

To complete with the details of now #8217;s commerce, different again in that I chased an explosive move, something I seldom do since they're rather dangerous with a fantastic prospect of being captured on a spike. This moment, but we needed a wonderful test of prior lows before a direct line move through the trading range which is a really strong suggestion of more advancement. ThusI took the trade at the first pause - exhibited on a 2min chart now for clarity as my usual 5min one looks like a long vertical line! Exit on growth and also at possible round number resistance to get a wonderful profit, chart attached for your perusal.


And that is that, many thanks for your interest, I hope at least the odd comment here or there has been of use to you.
Good luck to you with your trading!