Having said that it is also important to understand what you set out to accomplish is undergirded by reality and facts and not by hope and blind optimism. You should know that having done a psychology major that we are inherently bias and I can see that you are subject to confirmation bias (what you want to see to support your case); recency bias (judging your overall trading skills based on recent successes); and plainly just over optimistic.
As a starting point, we should benchmark trading performance against what is happening out in the market place. In other words, how other professional currency traders are performing in making a living. I am talking about verified results and not those unverified BS claims out in the internet space.
Some of the top 15 currency traders can't even make a positive return every year and these are the best of the best (audited accounts). The bottom 10 in the ranking actually loose money over 5 years and these are professionals. Refer to the attached files.
You are aiming to perform better than every one of them. What makes you think that you can perform better than them besides on hope and optimism? When you have a 5 year record which supports your claim then at least that is the basis. Making money consistently is very hard to do. You only have 4 months of trading. Are you so sure that some of your success is skills based and not just luck? Each trade is frankly a random distribution of events. If you can achieve success consistently over a long period then possibly skills outweigh luck in terms of probability. Until you have a long enough track record, you are counting your chickens prematurely.
I would also touch on a topic which is not discussed at all. Risk and return are tied together. If you are going after big gains you are in fact taking on more risk. What is absent from the conversation is drawdown. In evaluating returns, the performance metrics that professional investors look at is not just return but more importantly drawdown. This is the main reason why leverage is used sparingly because of its effect on drawdown. If you can achieve 30 % return with a drawdown of 15 % or less, every fund in the world will line up to engage your services. If you can deliver a smooth equity curve with limited drawdown, you can offer your signal services through copy trading. You don't need a large equity to live on trading. A good trading record can generate good income. There are many ways to skin a cat. Taking on outsized risk to grow equity is a sure way to terminate your trading ambition.
Hmm...
That's quite interesting mate.
Immediately I disagreed when I read your claim that I was exhibiting confirmation and recency bias but I decided to hold off on replying for a while because I wanted to think things over. It's also funny you said that because I just had to point out some confirmation bias to a mate of mine during the week (attempting to trade also). He was adamant that he wasn't, but he was, he really was
He just refused to believe me and as a result, just made a mistake that he refuses to learn from (lost 75% of his account on one trade!).
I don't want to insult you by disagreeing but I would like to discuss this further because I cannot just take someone's word. I have to see the evidence myself. Can you give me an example of these? I understand what both mean, I'm just looking for the evidence.
Thank you very much for this reply mate. It's after evoking a lot of thought and investigation, especially when doing my homework in regards to the 2 files you added. I don't doubt that the list is legit BUT I still need to be proven wrong... and the only way for that to be done is for me to fall short of my targets. I am not disregarding people's input when they tell me that I'm overstretching when it comes to goals. I am totally listening! I just need the evidence to support your claims and then I will accept it. Thankfully my risk management should be able to hold off any catastrophic damage.
You raised another interesting point also. Luck...
You asked if some of my success was not just luck, as opposed to being skill.
I'm sure some of it was luck, but I don't think that luck has any more to do with my trading than it does with yours. We can all get lucky. Each and every single one of us.
The forex market opportunities are currently not rare... so in that sense, am I lucky? What about when the market goes through a period of not offering me the same amount of opportunities? In that sense am I unlucky? I don't look at it that way. It is my job to understand the market...not just how the market is now, but how it was before and how it will change next. It is my job to understand the cycles of currencies. That is, the increase and decrease of currencies/economies value. The movement of the value of a currency largely follows the same patterns. Chart patterns present themselves on the chart and then often the pattern is completed by the release of some sort of economic statement. Knowing what the direction that currency is going in is what I am trying to do. By knowing that and taking trades in that direction increase my probability of being right. That's all I can do...to put as much probability on my side as possible and then, wait to see if I was correct. Will I be right all the time? Nope. Will I be right most of the time? I hope so but I don't need to be. I can be wrong 40% of the time and still turn a profit if my risk/rewards are in such a way that I lose less when I lose than I win when I win... as you are already aware of.
Something that has been said to me often and something I agree with myself is that I can make all the claims and projections I want. But at the end of the day, it's a track record that solidifies such claims. Unfortunately time is not on my side as I am only 4 months into it. Does this mean I'm wrong? Of course not. But without that record then nobody is interested in what I have to say about my style.
All I can do it to keep on keeping on!.. Listening to people when they offer critique and for me to observe my results as objectively as I can.
Tell me this though, if you can.
That list of hedge funds performance that you gave me... or any top hedge fund for that matter. How many traders on average trade for these funds? Do they trade to their own strengths or do they trade how they are told to?
PS: I have also linked my trading account to myfxbook in order to get the actual stats of my account. Not what I perceive/remember them to be. I think this will help me a lot!
