How I trade forex and make a profit.

[Traderallen]

Did you see myfxbook picture from earlier today 48% gain since the first of March actually on march 13 this account was down 15.93 % its now positive 48% well if you include todays trades its +53.04%


and over all for the month of June 183 pips on 17 trades with one loss


and not one person cares to talk about how I trade for a profit. Just complain its not real well sorry its real. Did I say easy? NO! I said real. That's why you fail you think it cant be done.

 

[SlowlyButSurely]

and not one person cares to talk about how I trade for a profit. Just complain its not real well sorry its real. Did I say easy? NO! I said real. That's why you fail you think it cant be done.

Hi TA, as someone with experience who has also read the FPAS book and thoroughly enjoyed it, how did you evolve his method and adapt it to make it your own?

Was there any parts of the method which you didn't like and don't use? Personally I have never liked the Doji setups that much. I also found that there were a lot more 'hidden' criteria that made him miss some setups I could see on the charts. I put this down to his understanding and instinct in reading price action.

 

[Traderallen]

Hi TA, as someone with experience who has also read the FPAS book and thoroughly enjoyed it, how did you evolve his method and adapt it to make it your own?

Was there any parts of the method which you didn't like and don't use? Personally I have never liked the Doji setups that much. I also found that there were a lot more 'hidden' criteria that made him miss some setups I could see on the charts. I put this down to his understanding and instinct in reading price action.

What a great question. I had studied bobs book from the time I got it around maybe November 2012 I like the method and if it's my personality real well. I use today trade the spy and qqq. So I already knew scalping is what I wanted to do. Then in July I spent a week with Tim Lucarelli from FX addicts. We talked a lot about risk. Account risk trade risk and market risk. From him I learned how to measure market volatility and the importance of placing my stop outside of normal market volatility in doing so dramatically increases the number of trades you can profit from. Then about keeping my profit target within market volatility so that the normal fluctuation of the market has a better chance of hitting my profit target. You see what's taught in books about placing stops at different percentages or pips or support and resistance doesn't work. Because it doesn't take into account the normal ebbs and flows of the market. So I molded bobs entry methods with Tim Lucarelli's account risk and market risk. I put the plan of action in August 2013 and have done extremely well. I also stick with bobs method of account risk. As far as the seven setups go at different times some work better than others for example the month of April first breaks seem to work really well but up until that point they were my least favorite. Keep in mind when you're looking at setups like double dojes tend to be more accurate if it's within a 40 to 60% pullback of the last move. I also throw into the mix my skill at tape reading in the level II chart from my day trading days. I never enter a trade without watching the order flows and I never take my eyes off the order flows until the trades closed. Good trading, Allen

 

[SlowlyButSurely]

Then in July I spent a week with Tim Lucarelli from FX addicts. We talked a lot about risk. Account risk trade risk and market risk. From him I learned how to measure market volatility and the importance of placing my stop outside of normal market volatility in doing so dramatically increases the number of trades you can profit from. Then about keeping my profit target within market volatility so that the normal fluctuation of the market has a better chance of hitting my profit target. You see what's taught in books about placing stops at different percentages or pips or support and resistance doesn't work. Because it doesn't take into account the normal ebbs and flows of the market.

Thanks for your reply. Are you able to expand on your discussion and discoveries of this? How do you measure volatility when trading FX?

At present I trade using levels of S/R and price action but have contemplated using volume as a tool to help confirm trades.

 

[Traderallen]

I'll work on trying to give you a better explanation. I'm done trading for today and when I get back to the computer I'll work on, in the meantime check out this video where I try to explain the importance of understanding Forex volatility.

http://youtu.be/CnaUXVhAHHw

 

[Forexmospherian]

I'll work on trying to give you a better explanation. I'm done trading for today and when I get back to the computer I'll work on, in the meantime check out this video where I try to explain the importance of understanding Forex volatility.

http://youtu.be/CnaUXVhAHHw

Hi Trader allen

I have just watched your video you posted on forex volatility.

Now you have worried me - although the example you gave might not be the same for normal scalping. In the video you mentioned about giving a stop enough room to move and in that particular case suggested a 140 pip stop that kept you safe - as if you had been in a 20 or even 50 pip stop - the 59 pip move against the trade direction you were taking would have resulted in you having a loss and being stopped out

For you normal results of say trades of 10 pips and 25 pips and even 30 -40 pips - surely you do not use stops up to 5 or 10 times your target size???

Am I interpreting this incorrectly ( I hope I am ) or are you just not worried about RR ratios and efficiency when you trade and instead just after 90% + win ratios ??

If you are I could explain that dropping to say 65 -80% win ratios and far better RR's with a lot more trade efficiency could really improve your cash results - yes more losses - but higher cash rewards

Regard


F

 

[Traderallen]

Hi F and SlowlyButSurely I've taken a few minutes to create a video to better explain how I use volatility to increase my win percentages by helping me determine where to place my stops and profit targets. My last video I use a longer-term time frame when explaining volatility because I assume most people would not be using a 70 tic chart. This video should give you much clearer picture about how I trade. Remember scalping is not for everyone and if it doesn't fit your personality you're likely to lose a lot of money. This video focuses on the volatility aspect. And leaves out some of the other things I look at before taking a trade. Since I don't have the time to go over every single thing in detail. I thought I just stick to what we were currently talking about. I hope you all enjoy the video, and realized they take a lot of work for a nonprofessional.

http://youtu.be/5m5HN_Im8vw

 

[SlowlyButSurely]

Hi F and SlowlyButSurely I've taken a few minutes to create a video to better explain how I use volatility to increase my win percentages by helping me determine where to place my stops and profit targets. My last video I use a longer-term time frame when explaining volatility because I assume most people would not be using a 70 tic chart. This video should give you much clearer picture about how I trade. Remember scalping is not for everyone and if it doesn't fit your personality you're likely to lose a lot of money. This video focuses on the volatility aspect. And leaves out some of the other things I look at before taking a trade. Since I don't have the time to go over every single thing in detail. I thought I just stick to what we were currently talking about. I hope you all enjoy the video, and realized they take a lot of work for a nonprofessional.

http://youtu.be/5m5HN_Im8vw

The video is private so I cannot watch it.

 

[Traderallen]

The video is private so I cannot watch it.

I had some issues with it. I'll get it corrected but not today i'm out of time

 

[patong]

Alright patong, just for you and don't show anyone else. This is the best you are going to get. As you know I primarily trade using Ninjatrader which does not link to myfxbook (at least i don't think so) so you will have to settle for my second account that I use with MT4. Now note I did not start using my MT4 account with my FPAS method in till March 2014 and you'll see that on the graph. I trade both accounts now as a way to boost my profit. but most of my trades are still only ninjatrader. Still not as impressive as my Ninja account but not bad.

View attachment 175620

View attachment 175622

I did not know till today that MB was added to the broker list.

Nice results and am pleased you posted some evidence. Good work. How many screen hours do you put in daily? Tried to login into your myfxbook to have a deeper look at what you are doing , but unable to as you have it on private settings, any reason for that? Would like to have a deeper look into your R/R and position sizing.

In regards to your 91% win rate i never really had a huge problem with that as I also have weeks/days where I attain that, but they are few. 30% win rate can be more profitable than a 90% win rate, (as with the Turtles). Depends on your position size and R/R.

In all good results.

 

[Traderallen]

My typical trading day runs 8 o'clock New York time till 10:30. I'm not sure about FX book and letting everyone see everything about me. Even if this is just my secondary account. I still like a little privacy. I do not use a set risk and reward. My ATMs will go in with a 10 pips stop plus my profit targets however I will adjust them to the market conditions. I constantly adjust my position size according to the methods taught by Bob V.

As far as the turtles, that method to me would be a big failure for most. The average retail trader would never be able to trade such a system with 30% winners, I think this is a fallacy. The reason being at any given moment the turtle method has a drawdown of 60%. Who in their right mind could sit and watch say 100,000 in life savings drop all way to 40,000 even knowing if they stick with it long enough it will eventually make some profit. Therefore it's my opinion for a retail trader to remain profitable over time they must have a win rate higher than 60% or a plan that allows for almost no drawdown. Many traders may disagree and that's okay.

 

[patong]

My typical trading day runs 8 o'clock New York time till 10:30. I'm not sure about FX book and letting everyone see everything about me. Even if this is just my secondary account. I still like a little privacy. I do not use a set risk and reward. My ATMs will go in with a 10 pips stop plus my profit targets however I will adjust them to the market conditions. I constantly adjust my position size according to the methods taught by Bob V.

As far as the turtles, that method to me would be a big failure for most. The average retail trader would never be able to trade such a system with 30% winners, I think this is a fallacy. The reason being at any given moment the turtle method has a drawdown of 60%. Who in their right mind could sit and watch say 100,000 in life savings drop all way to 40,000 even knowing if they stick with it long enough it will eventually make some profit. Therefore it's my opinion for a retail trader to remain profitable over time they must have a win rate higher than 60% or a plan that allows for almost no drawdown. Many traders may disagree and that's okay.

Well I guess thats the difference in trading styles in regards to Richard Dennis.(turtles) Emotional management is huge and so are the winners. Most people don't have the psychology or patience to trade such a method. However, some of my biggest wins have come from position trades. I believe when building a trading portfolio one needs to diversify, not only in which financial, equity, commodity they trade but also allocating scalp, swing, and position trading methods to the trading account. Forex represents 10% of my portfolio.scalping=.4% swing=.4% and position=.2%

Last wedensday 11th june, i entered a trade on GBI.AU at .21 , last price .32 in 4 days. And about 1yr ago i purchased 2 million SMN.AU shares at .03, current price .32 and have closed 1million at .25. At present I am loading up on MPE.AU around the .007 range. Most people are scared of these penny's however this is where i cut out my trading career and have a solid grasp on them.

"must have a win rate higher than 60% or a plan that allows for almost no drawdown" This statement is total BS. I personally know Pro traders who incur 25% drawdowns all the time , i also do. Its part of trading.

Something about your method Traderallen does not seem quite right to me. Perhaps Forexmospherian picked up on your win/loss and r/r is not set correctly. I watched your video but it really doesn't show anything. Just use an ATR or even a SAR.

So your day begins at 8am new york time or 8pm?

 

[timsk]

. . . "must have a win rate higher than 60% or a plan that allows for almost no drawdown" This statement is total BS. I personally know Pro traders who incur 25% drawdowns all the time , i also do. Its part of trading.

Hi patong,
If you've read my posts to this thread, you'll know that I'm as critical as anyone regarding some of the claims that Allen has made. However, I have also said that I agree with a fair amount of what he says. In this instance, I'm in his camp and, generally speaking, his comments regarding the percentage of winners to losers are spot on for most (not all) retail traders. This is especially true for newbies who comprise the vast majority of active members of T2W.

To describe Allen's comments as "total BS" is harsh, especially as you appear to acknowledge his main point in the opening paragraph to your own post where you point out that: "Emotional management is huge and so are the winners. Most people don't have the psychology or patience to trade such a method." This is very true and, to be fair to Allen, that's pretty much all he's saying in the second paragraph of his post.

In the official content on T2W, most of which I write, we advise members to develop a trading methodology that has a success ratio of at least 50%. Sticking with a strategy that has a success ratio inferior to that of a random coin toss is not something most retail newbies trading their own money will be able to handle. I think we're all singing off the same hymn sheet on this issue!
Tim.

 

[tar]

A win rate less than 50% is not necessarily inferior to a coin toss , a coin toss is right 50% of the time direction wise , up or down , how much the market will move in your favor or against you after that is another story .
When someone is trading a strategy with lets say a 40% win rate , surely he should aim for more than what he risks , otherwise its a losing proposition no doubt , but its necessarily to understand that a win rate less than 50% is not necessarily inferior to a coin toss .
A coin toss tells you its going up , but it may go up 5 pips then reverse 50 , so the coin toss argument is not useful here , because if you change your R:R a coin toss will no longer generate a 50% win rate , not to mention spreads and costs effect here .

My 2 cents .

 

[patong]

Hi patong,
If you've read my posts to this thread, you'll know that I'm as critical as anyone regarding some of the claims that Allen has made. However, I have also said that I agree with a fair amount of what he says. In this instance, I'm in his camp and, generally speaking, his comments regarding the percentage of winners to losers are spot on for most (not all) retail traders. This is especially true for newbies who comprise the vast majority of active members of T2W.

To describe Allen's comments as "total BS" is harsh, especially as you appear to acknowledge his main point in the opening paragraph to your own post where you point out that: "Emotional management is huge and so are the winners. Most people don't have the psychology or patience to trade such a method." This is very true and, to be fair to Allen, that's pretty much all he's saying in the second paragraph of his post.

In the official content on T2W, most of which I write, we advise members to develop a trading methodology that has a success ratio of at least 50%. Sticking with a strategy that has a success ratio inferior to that of a random coin toss is not something most retail newbies trading their own money will be able to handle. I think we're all singing off the same hymn sheet on this issue!
Tim.

Tim,

I am not having a go at Traderallen. I am just saying the statement in incorrect.

 

[Traderallen]

Like everyone else here I am merely stating my opinion. Others may or may not agree with my assessments. That's okay, I get questions everyday coming in on my website, and various forum. Sometimes I feel like saying"this guy is a total moron he or she has no business trying to trade Forex " but I always try to bite my tongue and be polite. The average aspiring trader will not stick to a method that incurs a bunch losses..... They absolutely will not. So trying to promote a method and telling and aspiring trader just stick to the plan as long as you get 25% right you'll be okay is folly. And aspiring trader needs to see that there making some progress therefore any method where they are losing far more trades than their winning is going to end up being a losing system because they will never hang on long enough for those winning trades to pull them out of a hole.

As far as the numbers that I post there all accurate my risk reward ratio is not what has been repeated over and over on this forum. All my stops going at 10 pips but I will adjust them as I need to my profit targets vary depending on the type of trade I'm placing but generally will go in in the neighborhood of 10 pips. But to stay that I have a 1 to 1 risk reward ratio is an accurate. As a matter of fact it would be very difficult to say what my risk reward ratio is because I adjust it every time every trade. My trades are classified in three ways
1. Any trade I close in a profit target is a win
2. Any trade I'm manually closing just to get out of the trade without a loss is generally a breakeven trade these may be plus or minus one or two pips I still consider them breakeven in my plan due to my intent of closing the trade without a loss. Until your order is filled you never know exactly what that's going to be.
3. Any trade that closes at my stop loss is a loss

That's how I classified my trades how you classify yours is up to you. I don't care how you do yours I'm concerned with how I do mine.

It's very possible though not likely that I could have one trade close at +2 and be breakeven turnaround have the next trade close at +2 and be a win if +2 was my target. at the same time I can close out a trade at -2 and be a breakeven turnaround in close the next trade at a stop loss of -2 and be classified a loss.

So currently for the month of June I've had 25 trades. 23 close that profit targets, one at breakeven, and one at a stoploss. My profit targets varied from three pips to 25 my one stop loss that was hit was set at 10 but I got five PIPs slippage. For a total of 15 pips loss and 246 gain.

I don't know what video you're referring to patong I don't use ATR or anything else like that. I pulled that last video after posting it and allowing people to view the video I later watched it from my office looking for mistakes since I posted a very quickly. And I got worried about the content of the video. So my question that I would ask any other traders reading these posts. How much information is too much information?
For all those people out there still searching for their holy Grail I can tell you this. Trade setups regardless of what you use price action, indicators, fibs, whatever will not get you there because it's not the key. Your holy Grail is going to be in your head not on your chart.

As to not wanting to be misunderstood I'll say again these are my opinions. You may or may not agree and that's okay.

 

[Traderallen]

With the month of June coming to a close, it is turning out to be one of my best months ever. Not in terms of total pips but in terms of profit. I had a total of 35 trades, with only one being a break even trade and two non-profit trades. My total PIP count was 281 with an average of 8.3 pips per trade. It was unfortunate that I had to take an entire trading week off so I missed a lot of pips. However my testing of trading part of the early European market turned out really well. I actually found the European market to be much easier to scalp as it seemed to be quite predictable at times.

 

[Traderallen]

I'm starting to get nervous were coming down to the wire. With only one more trading week to go for my fiscal year. My primary account is up 588% my secondary account over 125% This last year has been a great learning experience.Probably the biggest and most important lesson is to stick religiously to the trading plan that I know works and still have enough flexibility to read the markets. I've had to listen to a lot of crap on this forum from people who think it can be done. But that's okay. I understand that trading is difficult but I'm proof it can be accomplished. Wishing you all a prosperous trading year, Allen

 

[patong]

I'm starting to get nervous were coming down to the wire. With only one more trading week to go for my fiscal year. My primary account is up 588% my secondary account over 125% This last year has been a great learning experience.Probably the biggest and most important lesson is to stick religiously to the trading plan that I know works and still have enough flexibility to read the markets. I've had to listen to a lot of crap on this forum from people who think it can be done. But that's okay. I understand that trading is difficult but I'm proof it can be accomplished. Wishing you all a prosperous trading year, Allen

In your defence Traderallen they are great results. Especially if you are using a $20,000 to $100k size account.

 

[Traderallen]

Tomorrow marks the end of my fiscal year of trading. I have done extremely well trading my method over the last year. I've had 238 trades, of which 91.6% paid off, for a total of 623% profit. This was my best year since I started trading in 2001. It has taken a lot of hard work to get to be this efficient at trading. Most people are not willing to do the work that it takes.
At this time I'd like to give a special thanks and to Bob Volman for "Forex price action scalping" and Tim Lucarelli for "Forex secrets trading from the dark side" their books and gave me a whole new perspective on the markets that I was able to roll into the methodology that I use and have profited so well from this last year.