My journey towards consistency

[gftrader32]

Long

 

[gftrader32]

Long

+6

 

[gftrader32]

sell

 

[gftrader32]

5500

 

[options-george]

5500

well, i have to say, you have gone on a quick a strong streak there !?

Well done!

 

[gftrader32]

well, i have to say, you have gone on a quick a strong streak there !?

Well done!

Hi George,


No not really, well it is difficult to explain... the main points which I am at this stage are:

1- I find that I have strength in strong momentum trading, like strongest vs weakest pairs. This is around FO and LO.
2-I have some positions with few hundreds of pips which I didn't close yet.
3- For my entries, I don't exit on the same time frame.
4-I have higher chance on 1h and 4h time frames.
5- I feel like when i have big drawdowns, i hit big.
6- Since 45 days, I managed to double small demo account twice BUT when I try bigger account (10 times more), the whole game changes. I first though it will be easy for me to do the same on a bigger account, clearly it's not the case. Which I am working on.
7- I am on track to live trades in the final quarter of this year. I really wish I can do this with bigger account.

Hope you trading is going well.

cheers

 

[gftrader32]

Yesterday was very good a lot of volatility...


seems it's continuing today :clap:

 

[gftrader32]

passed +1000

 

[options-george]

Hi George,

6- Since 45 days, I managed to double small demo account twice BUT when I try bigger account (10 times more), the whole game changes. I first though it will be easy for me to do the same on a bigger account, clearly it's not the case. Which I am working on.

thanks for your other detailed comments - very interesting to hear!

Out of interest, have you considered increasing your position sizing in small increments, rather than using a multiple of 10? I have seen it on other threads here where traders discuss the idea of hitting their psychological limit in terms of position size, a point beyond which they find they cannot trade profitably.

Was it Forexmospherian who talked about hitting his limit at £180/point.
I would think the journey to discover that limit would be much better served if one gets their slowly rather than in multiples of 10.

In my own trading, for example, I am currently risking £175 per trade. I started with risking £100 a few months ago (with my current strategy). Every time that I can complete a profitable week with that strategy, I raise it a little. Say from £175 to £200. I wouldn't jump from £175 to £1,500. And of course the amount risked should probably not be more than 1% of one's trading capital (or even less than 1%)!

In the past I traded with as much risk of £1,500 a trade but that was a few years ago, and I was trading quite differently then.

 

[gftrader32]

thanks for your other detailed comments - very interesting to hear!

Out of interest, have you considered increasing your position sizing in small increments, rather than using a multiple of 10? I have seen it on other threads here where traders discuss the idea of hitting their psychological limit in terms of position size, a point beyond which they find they cannot trade profitably.

Was it Forexmospherian who talked about hitting his limit at £180/point.
I would think the journey to discover that limit would be much better served if one gets their slowly rather than in multiples of 10.

In my own trading, for example, I am currently risking £175 per trade. I started with risking £100 a few months ago (with my current strategy). Every time that I can complete a profitable week with that strategy, I raise it a little. Say from £175 to £200. I wouldn't jump from £175 to £1,500. And of course the amount risked should probably not be more than 1% of one's trading capital (or even less than 1%)!

In the past I traded with as much risk of £1,500 a trade but that was a few years ago, and I was trading quite differently then.

Thanks George, I guess you are right there, initially after i doubled my account, I doubled my size, it worked, so i assumed it should with X 10. Clearly it wasn't the case.

I have decided to go with X 2 and see where i no longer can take the heat.


You've got more experience than me with your results and clearly a bigger account which I don't have....


BTW, you have an interesting blog, just been over there


Here's my running trade for today

 

[gftrader32]

BTW George, it would be nice if you can shed some light on your max DD, seems this is missing and nobody talks about it

 

[options-george]

BTW George, it would be nice if you can shed some light on your max DD, seems this is missing and nobody talks about it

What specific questions do you have regarding DD (which i assume means draw-down?)?

Thanks for your compliments on the blog

 

[gftrader32]

What specific questions do you have regarding DD (which i assume means draw-down?)?

Thanks for your compliments on the blog

No specific questions, just wanted to know your max DD.

Cheers

 

[options-george]

No specific questions, just wanted to know your max DD.

Cheers

That's a good question - it's something I have not had to answer for myself thus far. This is because I am not yet at the stage where I need to really consider this.

At this point I am not a profitable trader. I am getting better and learning more - market understanding, psychology, risk/money management and trading strategy. However I have been working on it for 2 years full-time. (and that's after doing various patches of trading full-time over the past decade - so much for being a quick learner!).

I am still trying to develop and piece together my own trading strategy. I keep very detailed records of results. Whenever I can see that I am just losing and losing then I go back to the drawing board in terms of strategy design.

My average transaction cost is approx 6% per trade. So each time I put on a trade I lose about 0.06 units of risk right at the outset. So after 100 trades, I would expect to be down 6R if results were completely random. If I am down 15R or worse then I probably discard the strategy.

I have been able to do this for the past two years because I built up my own trading capital from other business ventures. It has been fine for me to live and work on trading and not earn any money, and I can continue to do that for a few more years yet. Though I would re-assess things if I am still not making money say by the end of 2015. I have been protecting my trading capital very carefully by only risking 30/trade to now risking £175. This is very small in relation to my available trading capital. As my trading gets better I can increase the unit size. In 2015 I am down about £2k in trading p/l - my overheads (including office rental) are very small so I am looking around £200-£250 per month in terms of work-related expenses.

In my latest strategy development I have done about 300 trades in the last 3 months and I am down about 13R (I trade from the 5M charts and nearly exclusively Cable, EURUSD, EURJPY, USDJPY and DAX). However I lost 15R in a stretch of two weeks when I was trading from a different location and was only able to trade the New York session during that time. So if I exclude this, then I am up around 2R from 250 trades - when I should be down around 15R if results were completely random. So on that basis I think I am onto something and I keep going.

My academic/textbook answer on max DD would be that figure out your likely drawdown with your trading strategy during the testing phase. Then add on 50% of that as a buffer. If you then experience a drawdown in excess of the inflated figure then I would say you need to go back and adjust your strategy. (As I am writing this I realise there is probably a vast gap between theory and practice!).

Having said all that, I think its vitally important to keep really detailed records, screen shots of all trades - last week I took 50 trades - and I have 50 corresponding JPEG files - and to really never allow yourself to suddenly go bonkers and let yourself lose a good chunk of the trading capital in a single day.

I am sorry - this is a lot more than you asked for

 

[options-george]

No further replies!

Was it something I said?

 

[tvtaddy]

I am beaten up badly by the market with hard earned money for the last two years.

Is it happens with every trader or only me.

 

[options-george]

I am beaten up badly by the market with hard earned money for the last two years.

Is it happens with every trader or only me.

Yes, I think trading as a retail trader is very tough. I guess the key is to keep the position sizing small when things are not going so well.

 

[tomorton]

I am beaten up badly by the market with hard earned money for the last two years.

Is it happens with every trader or only me.

Likely we all use a system that more or less makes its best responses to the market conditions that applied when & where as it was being developed. By conditions I mean the chart TA (moving from uptend to consolidation to downtrend to consolidaiton to uptrend etc.) and behaviour (as the big players evolve and change, also the way they access the markets).

Technical changes are easy to see and if e.g. you are using an uptrend-following system it should very quickly stop giving you buy signals and possibly start issuing short signals.

Market behaviour and structure changes are never as visible but I'd be surprised if any retail trader's viable system would be badly derailed by that kind of evolution. And it shouldn't take 2 years.

What have you found were the real problems with your trading last 2 years?