Financial Independence in the FOREX market

[jammixmaster]

Is there anyone on this forum who has truly become financially independent from trading currencies? I'm not saying millions (though I do think that becoming a multi-millionaire is every traders dream....or should be) but if anyone is making enough money from trading that they no longer have a day job and are free to live life as they please. If so then please share your story.

*NOTE: No sarcasm please, such as "Oh yeah, I've made millions from FOREX and I'm sitting on my yacht as we speak" or something lame like that. I'd like to hear real success stories from real traders who has made REAL money trading currencies.*

 

[NetTecture]

But you are aware that "I've made millions" is not necessarily sarcasm?

last time I left the markets (for reasons not related to them that destroyed me mentally and it took me years to recover), I was healthily making while not enoughto pay for a yacht, enough that I was having serious arguments about whether buying a Lamborghini is "spending money" or not with my better half

Note to all others: when trading be sure about your partners Emotional imbalance can be devastating.

 

[jammixmaster]

Well congrats on accumulating enough cash to even think of buying a lambo. I can't wait to have that problem. How long did you trade before you made enough to buy (or think of buying) the lambo?

 

[NetTecture]

Wll, I started not to underfunded and statistically maintained a 100% gain every 60 to 90 days. And I had good icome in the beginning - in fact adding significantly to my account.

The sad side is that this marked a real change in my life, personally, as things went downhill from there. It ended bringing me pretty close to suicide - mind you, NOT because of tading in the first place, but because of some really bad interactions between said woman and me. I am NOT finally back on the track and in the old mindset and in the process of entering the markets again, as a "part time" trader in July. I have some contractual obligations til then and need to set up some things (including proper software), and part time will be "95%"

That said, if you manage to take some good money out consistently, life is different. First of all, you know you always will have money. Oh, acidents may happen etc., but no idiot will fire you from a crappy paid job because of some third party **** up or general bad conomic situation -there is no such thing. Second, it does not take that much to have a good living, and with a little patience, you can easily have a good life. Now, not necessarily earn millions, but putting aside a five digit sum per month is not really requiring THAT much money per year And this job you can do from everywhere.

Personally, as recommendation: make sure you ahve enough money to trade that you can life of "lower profits easily" and have some months to handle drawdowns. I will have 6 months reserve and enough money to have a living with a third of the lower expected profit target, so I have a good chance to actually earn money, not "get by". If things work out (and I have to reassure me first of the mental side)... It should not take long. Some people have issue with the financials, I understand that. Alwas good to have another job that pays enough so that you can put in some decent capital. Five Digits account is minimum - better something significantly above "EUR / USD 10.000".

 

[jammixmaster]

Excellent. I'm happy for you. I do feel bad that you went through a bad period and contemplated suicide. But I am glad that things got better for you and are thinking about getting back into the markets. I wish you continued success.

 

[NetTecture]

Well, everone has to handle his own luck I did not realize how much I miss the markets until some months ago, and with this depression (and my other business being a fight every day - well, I do make good money there, but I hate fighting with customers fighting on their own). As I am FOREX invovled by force now (mostly paid in another currency than I spend)... I started watching the markets again, an suddenly it all was there again

Technically, I would say I actually DID commit suicide at that time, and it now took me 8 years to build up a new and fresh life My body was unhurt, but well, the rest is another story.

And there are some so nice cars around these days... Artega - Inspiration in Bewegung | startseite... I have to get back to the market

That said, here are some people here making a living or at least some significant side income from trading. You will find there are not so few. Only 1 in 20 makes consistent money, but this includes lots of wannabees in the 20 - and there are LOT of them So the 5% is also not too small. Making Money is not that hard, actually. A lot depends on ignoring the "risk is excitement" part and sticking to a plan. Today things are great, you can automate so much...
...but most software sucks (just painfully tried to get a trading system from me implemented on the weekend - I simply could not get the software (ninjatrader) do what the code said it should do, and there was NO debugging support. VERY painfull I see trades not entered, that are clearly there, but can not even step through the code in the bars to see WHY THEY ARE NOT OPENED

So, I will do my own framework, for trading, and enter the markets Somehow I feel excited like 20 years ago on my first trade Just I KNOW I can do it

Realistic targets are above 10% per month, btw., for SMALLER traders. Not means "very small", but if you run 10 million it is hard to take out that much money - you simply can not enter / exit all markets "at will" because you have more contracts than you can easily close. Slippage rises.

Life CAN be fun. I remember going on a weekend to Disney Land. Cost - hm. by todays Euro around 5000, for two people. First class, Limo service, suite in the hotel etc. Planning a trip to las vegas on a Friday, talking to the travel agent and saying "get me there, and I do not really are about costs - just do not send me economy" It was painfull, btw - bad timing, we had to fly partially economy, most business, but went through the wrong side of the US, as that was the only place with available seats - from Frankfurt in germany to LAX to Vegas UI even lost some money there -100 USD or so. No fun in gambling Way too crappy risk / reward

 

[jammixmaster]

You are............GOD!!! I cannot wait to live a life like that. Taking random trips to vegas, buying Lamborghinis and sipping martinis on a yacht in Monaco. I may be young (19) but I want to be retired by the time I'm 30. So it sounds like you trade with a system rather than just purely speculating? Is that true? If so, would you mind sharing your strategy?

 

[NetTecture]

It was fun while it lasted Seriously, a lot also depends on the market, you can make some consistent money with a good strategy, but large wins depend on large movements

have some trading systems that I developped 20 years ago. Will have to get into the mood again as well as validate that they still work (and move them from EOD to intraday, now that I can). No sharing of them for now - mabe never, but definitely not before I can validate they still work. I have the problem now that they are "unusual" in that they do not use indicators, but rely on price movements - hierarchical state engines, easy for a human to follow, but hell for most automatic platforms, mostly because they (sorry) suck. Spent the weekend trying to get one working in Ninja Trader - only made losses, and when looking at the trades, they were WRONG. Like going long ok, but in a bad market, on the strong down turn it got stopped out OK, but did not enter the other short position on the next trade, as the stupid rule did say - but entered it 30 bars later. I am sure I overlook something from a system point of view, but... I can not debug in that environment (no debugger). So I am sitting down now and write my own platform for automated trading. At least there I can sit down and see WHY the damn system does not behave as it should. Harsh life. I never used too many indicators - price action is IMHO all you need, plus money management

Anyhow, Life CAN be fun It is pretty lonely, though - you never know what friends are real, everyone asks you for advice (but would be too stupid to understand that it is a numbers game, and even a good advice may loss him money when his risk management is not good) or tries to advice you. You have to filter out all the bull**** people talk. Remember, if you talk to SOMEONE (random) and he talks to you about trading, even if he has some experience, chances are 95% he is loosing money. Take proof first before giving his words some weigh

That also means: Chances are you will fail. Point. Trading is not easy life with lots of money. It is lots of responsibilities, ultimate freedom in that YOU make money, but ultimately you can not blame anyone for bad things. No boss, no company - you loose, your fault. Loosing streaks that eat into your funds. Stress. Hard work. Sadly, as many will tell you, intelligence etc. is no test for a trader. And those who have it often become too confident and fall

But IF you manage to stay on top, you will earn good money. 10% per month are doable consistently. Imagine living on 10% of 250.000 EUR A Lamborghini is not "pocket money" then, but - something you still just buy Note that IMHO around one million it gets harder. Too many contracts for easy markets, but then this may have changed in the last 10 years I will haev to collect some more info (i.e. see the stream sized).

 

[jammixmaster]

Interesting. I do hope to stay on top, and 10% of $250,000 a month is insane! Thats $25,000 a month. If I was making that kind of money I would not be on this site, I'd be on a private jet headed to the Playboy Mansion...........to buy it ;-) I understand if you don't want share your strategy, I wouldn't want to give away my money making secrets either. I trade with a system, but I'm forward testing it right now. I'm waiting until at least May 2 before I decide to put it on a live account.

 

[NetTecture]

Well, it is not insane. It is a lot, though. You have to build up capital, and naturally want to put some aside later once you have that for retirement etc., and you have to pay taxes And the secretary But it is not exactly insane. And playboy mansion - forget it. This is not even close for the monthly payments for something like that, and I talk real estate. Perspectives change then.

I may think of publishing my system, at one point, in some way - but mostly I am not sure it works now I want to see it working mechanical first. That said, I also move my business behind my trading now - we will start developing our own trading desk platform. It is not (that) complicated, and I miss a lot of features in the stuff available. For example proper development integration, and proper - whoooa - TESTING. Back testing, like done in investments, is idiotic, from my point of view as software developer (which is what I made the last years). This is what I really dislike most. I want to have a better overview not of the total %, but of the individual trades, how they come apart, what are the biggest loosers, WHY are they, and backtest and blindtest with different data sets, fast, efficient I miss all that

The secrets, btw., are imho on the street, so to say. Just people like to use very complicated indicators more than common sense and price action And IMHO most strategy environments are not good from a programming point of view, and system development IS programming.

How long do you backtest your system, how do you do it, how good is it supposedly, percentage wise, and how much capital do you plan to submit?

 

[jammixmaster]

well I dont believe in back testing. The past is the past and I like to focus on the future, so I forward test (test with a demo account that mirrors the current market). How do I do it? I just put the system to work, follow all the rules just as if I was trading a live account. How good is it? Thats a hard one since I've only been trading with it for three days, which is why I'm giving it a month before I decide. How much capital? Not much. I'm only 19 so I don't make as much as you (a software developer) to be able to put $10,000 into the market. So I'll only be able to put in a few hundred.

 

[NetTecture]

Definitely backtest. A fast way to check things. Never back-optimize, obviously

Sadly back testing frameworks SUCK. I would never touch them in normal development. I want:
* The ability to backtest against multiple series / symbols
* And have a colletion of prepared symbols and timeframes.

So I can test against 4 currencies, as well as 20 defined "blocks" that show different defined patterns (sliding market, strong trend etc.).

Then I want a database of blind data I never optimize against, but test again.

And I want to actually analyze the trades well. I am NOT interested so mucin the total %, as in the indivisual extreme trades - see whether the entry makes sense, stops where moved ok etc.

My problem with most back test is that it simply does not support me good enough to validate my strategy, not only my curve fitting. nearly no analysis of trades, but a ton of optimizations.

But I would never put something into forward test without some back test indication first that it actually WORKS. A month forward testing is too short for me, without back data validation.

With a few hundred later to trade - keep your job Well, seriously, you need to get a good approach, a system and then a way to fund you. Without funding - good enough to make living of it comfortable, i.e. achievable without high risks, you WILL fail.

10.000 USD would not be enough I plan starting with around 30.000 USD to 40.000 USD (depends on EUR rate). Enough to have a chance not to eat into my capital (especially because my company on the sides still earns some money to pay my cost) And then I hope for some luck. Not luck as in "system works", but luck as in "i want some action in the markets". I think we may see some in oil and other commodities. And action means breakouts means money With a little luck I have some period this s ummer that will carry my account higher

Finding a mentor, prop trader etc. may work with little funds - but then you better have something to show.

 

[jammixmaster]

Oh of course I'll keep my day job until I start bringing in some real cash.

 

[NetTecture]

Hehe. Care to share a little how you came to your strategy, and on waht basis it works? Here my data as example

Mine was hand developed 20 years ago when I was working as a broker Yeah Tested it, tested it again, worked. I have some changes planned now, moving mostly to shorter terms and using the higher complexity that I can handle by program. The main strategy does not use ANY indicator for trading but is a pattern recognition / breakout. The only "indicator" i use is volatility, and it is used as a filter - in a highly volatile market I obviously want to have a higher risk aversion, and not react on the smallest movements. I currently use two timeframes.

Plan to go to 3 timeframes, moving trade execution into he lowest timeframe and actually add swing logic - right now "non trending" markets behave not too good, and basically make little money if at all. With a "see market is non-trending" I could handle that with an inverse strategy (do nto trade breakouts, but breakout failures). Not sure I will do that in the same system, though could be I create a filter, and then a second system that goes in "in place" of the first, this would make things a lot easier to debug as it keeps the state engines separate

I also have some ideas to automatic trade resistance levels, but for this I really need to get a well programmable platform to test out whether the idea to find them works out.

 

[jammixmaster]

My strategy is automated. It uses price movements and simple algorithms in order to determine trades. But like I said, I've only been using it for a few days. I have a few other systems but I don't trade them at the moment. So if you don't mind be asking, about how much money have you made over the years in FOREX.

 

[NetTecture]

Very little. Forex was not on my desk in the past - I was trading currencies using futures. Understand that the infrastructure was a lot less developped 8 years ago I did a lot of plays in german marks against USD and USD / GBP

I only used forex at that point for "time bad trades" (hedhing a position in the middle of the night).

I also did some stock stuff back then

All in all - I possibly lost quite some money And still came out ahead, significantly. Around - hm - well, QUITE well My account reached in the top around half a million USD - and that included montlhly takeouts. Ass I said - If i would not have been so damnn bad on the emotional side then... things would have gone another way. As tehy went, I suicided my account (I do not really count that as "trading loss" - I traded that money to loose it acutally).

This time I plan to incorporate Forex into my strategy - but I am still not sure I really like it. I rather prefer a controlled environment (exchange) contrary to a wild network of desks. OTOH Firex is 24 hours. As I do not want to carry overnight risk normally with the new system version (shorter frame target), this is a good goal here.

I plan to get automated - fully and semi (i.e. most money plays fully autaomted, but I have some discretionary trades, too, but running on a robot, i.e. I pre-set them up and then the system executs them, incl. managing stops etc., even possibly partially programmed (like in a trading system, just not the entry, only the exit). This way I can take at rade I see, and then "forget about it" and the system will follow through with the plan.

 

[jammixmaster]

Wow, half a million bucks huh. Thats cool. How long did it take you to amass that amount?

 

[NetTecture]

I was lucky. Happens when you double your money every 90 days. And not only twice Once you can live from it, without using all profits, things get easier. Remember I would make USD 50.000 a month (and that is 10 years ago, please), and I could live WELL with 10.000 - VERY well. Deduct taxes... and... you get the idea. I got above the 100.000 in less than half a year, starting with around 20.000. Then - well - things got funny, seriously.

I was really lucky then, too. Seriously. But you may be too - do not focus on forex alone. I see a LOT of turmoil ahead. Oil prices going way above 100 again, gold possibly crashing etc. We may have interesting times When so lucky, take risk back and make sure noone damn ruins your mood. Especially no girl

I never saw that as "money", btw (until I decided to kill it, so a special person would not get half of it). It was a trading account. Nothing more. Ammunition But it WAS fun

I sure lost a LOT of money in the process. Typical question "How much do you earn", "lets asy last month I lost 80.000 USD", "damn, you are unlucky", "no, I still am more in plus than you earn in 3 months, so - no complains"

Money is there. Markets move. I hope I AM back now. I think mentally I am - Definitely. Lets see whether the markets are ready.

Btw., I work on a platform for automated trading (meanwhile I have a small IT company, and am actually a consultant with a hell of references), if you are interested. Beta - well, lets say I am slowly putting the pieces together.

 

[NetTecture]

Oh, as a side note Why I think I am back hehe. I paper traded a 20.000 USD account last month for a week. Middle risk. Lost quite some money on the software side (as in: MetaTrader, whoever designed your user interface SHOULD DAMN BE FIRED).

Result: 150% profit

Now, that WAS gambling, and a lot of that profit was high risk. Way too high, but I was never risking my own money - in terms: after the first 50% I decided to risk all that and take higher lots, and some things in Oil really worked well Lost about 20% on stupid errors (data entry errors), so I decided that I will NOT trade with MetaTrader.

my autoamtic system would possibly have done quite well, too

That gives me some hope that my skills and approaches are still valid

 

[HaloTrader]

You are............GOD!!! I cannot wait to live a life like that. Taking random trips to vegas, buying Lamborghinis and sipping martinis on a yacht in Monaco. I may be young (19) but I want to be retired by the time I'm 30. So it sounds like you trade with a system rather than just purely speculating? Is that true? If so, would you mind sharing your strategy?

''I cannot wait to live a life like that''

I'm 18, when i started trading i too thought about the Ferrari's and Lambo's that seemed so easy when learning about trading and the money to be made... Eventually you realise that its going to be extremely difficult - the most difficult thing you'll ever do, people have to really earn there money, and there place on the succesful side of traders...Being succesful in trading is as hard and not hard as in 'If i apply hard-work and determination i'll eventually make it, yeyyy'... Its hard as in, you're going to fail unless your in the 5% who don't, and when you realise that trading i full of very intelligant people it suddenly seems more difficult to be in that 5%, when more than 5% of traders are proffesional and most of the volume comes from them.

There are exceptions, just as sometimes there are exceptions in the rule of gravity.