i had go on the ducks on demo. last night i did 3 automated trades eurusd, aususd and usdcad. all were
winners and gained 15pips on each pair. total 45 pip profit and i was happy. i thought i finally found a system that worked. but today i lost all trades, i understand that the system isnt a holy grail and losing is part of the game. just wondering how i could filter out the bad signal on the 5min chart.
cheers
Hi Tiger,
I just want to point out a slight contradiction there in your last couple of sentences that might help you out. I'm not trying to make an example out of you or anything and I hope you take on board the suggestion in the good spirit with which I intend it. It might help a few other traders too.
You say that you know that the system is no holy grail and losing is part of the game. Then you wonder if there is a way of filtering out the bad trades on the 5 min chart.
That second sentence is where a lot of people, me included, have gone wrong in the past when trying to learn to trade. I would hazard a guess that attempting to do precisely this has ruined many traders' careers.
Understanding that there is no holy grail is a good start. But a more refined way of putting it is that there is no reward without risk. They are both parts of an equation and you can't have one without the other.
Take the losses on the chin and accept that they are part of the process, and will be, no matter what trading approach you use. Don't attempt to filter them out with indicators or whatever. They are
inevitable and they are
healthy. People get sucked into spending countless hours testing indicators and filters trying to get rid of losers when there is really no need to.
Once you have accepted that losers are part of the game, and that you will have lots of them, you should focus on the other half of the equation. This of course is the winners, because they are inevitable too. All you have to do is to try as much as possible to make sure that the winners are bigger than the losers. I always try to do this in 3 Ducks trading because I know that I am trading in the direction of the trend. Price is more likely to continue than it is to reverse (Newton's Law). So when the market is paying out I take as much as possible; when it is not paying out, I give as little back as possible. That is the essence of good trading.
If you are applying the 3 Ducks rules you don't need any more filters. You have already put the odds in your favour; you are trading with the trend at your back. Once you really grasp the logic of this losers will not annoy you in the slightest, because you know that it is inevitable that a bigger winner is coming along soon. That is the strength of trading with the trend.
Another key is patience; Andy has a video on this a few pages back. You won't get great trades everyday. The market simply doesn't work like that. Some days it moves, some days it goes nowhere. Sometimes it goes nowhere for weeks on end. If you trade everyday you are going to get a lot of losers. Part of the strength you need is to be able to get up in the morning, check the screen and say that there is nothing there you like the look of and close the platform. It takes discipline to be able to walk away and wait until a better opportunity presents itself.
What would you prefer, taking 2 good trades in a month and adding 10% equity into your account or sitting in front of the screen for 18 hours a day taking every trade that presents itself and ending up with the same result? Remember too, if you trade just once everyday on a currency pair which has a 4 pip spread, you have to make 80 pips in that month just to breakeven, given a 20 trading day month. Just something to think about.
Hopefully my uninvited interjection has been of some help Tiger; all the best with your trading!
By the way, victorharbor and liney, thanks for the kind comments a few pages back.
As far as my own trading is concerned, I'm back to my old nemesis again, Eur/Usd. I sat out the recent uptrend and now that the 4 hour is pointing down again I am looking for chances to sell.
Good trading everyone,
Nigel
