Thread: any active forex traders here???

Originally Posted by ^eagle^

being an entrepeneur is being able to analyze risk. There are hundreds of ways to trade profitably. You have to find a style that accomdates you and your hours that you have available. Yes Udine is absolutely correct. Find out how much you are willing to lose first before you find out how well a system performs. All the best traders look at how much they could lose on thier trade based on their rules and they do not deviate from them. Once you pull the trigger you cannot "will" Price in your direction. (Except for Chuck Norris but thats a different topic). You are at the mercy of the market. So you have to find a method with acceptable losses. And only you can determine that.

Remember if you lose 10% of your account it will take 11% reward to make it back to Break even. If you lose 50% of your account it will take 100% reward to make it back. If you lose 90%
of your account it will take 900% to make it back. You cant beat that progression no matter how good your method is. Dont risk more that 10% of your account. Most people only risk 1% to 5 % tops Because of this progression.

I completely agree with Eagle. You need to see losses as part of doing business in forex, as this is business pure but not simple. As it is an industry with hardly any rules, you have to make your own rules.
Then comes the hardest part of it all, You need to stick to your rules and that my friend is the hardest part of trading. Brains is NOT the ticket to wealth in forex, but discipline is!!

Green pips

Udine

Yeah, a long time ago, I learned that position sizing is the most important thing, but since I wasn't actually interested in trading back then due to thinking I couldn't bare losing a lot of the time, I didn't look any further

with proper money management you can lose more then 60% of your trades and still be profitable... at least thats how I remember reading it. its been so long. but honestly its all about money management. it doesnt matter what size your account is. if your managment is incorrect you can win 80% and still lose money...

Money management and % wins aren't really connected. You can lose 90% of your trades and still be profitable if your wins are 10x larger than your losses, regardless of your position sizing.

Position sizing determines how quickly you make OR LOSE money, for a particular set of trades or a particular system. Larger position sizes -- risking a bigger % of your account on each trade -- mean you win more when you win, and lose more when you lose. (With a caveat -- see below.)

"Traditional wisdom" says you should only risk 1% per trade. That's generally a really safe and conservative level. You can risk more than that and (if you have a good profitable system) you'll make more profit. You'll also have deeper drawdowns but you should come out with more profit in the long run.

UNLESS you bet too much. There is a "critical level" of risk for any trading system. Risking at that "critical level" means you end up with maximum possible profits in the long run. HOWEVER you will likely suffer 90-95% drawdowns along the way!! AND if you risk any more than that, you will start to make LESS profit. So you want to risk well below your "critical level" to keep your drawdowns under control and to minimize the risk of ruin.

So the $64000 question is, what's the "critical level" ? It's different for every system. It also assumes you trade CONSISTENTLY. If you change your approach every week, then there's no way to know what your system's "critical level" is. But if you trade consistently and record a history of your wins and losses, you can calculate your "critical level" pretty easily.

Take a list of all your trades. Calculate the average profit for all trades, wins AND losses, and call it AvgTrade. Then calculate the average profit for all WINNING trades, and call it AvgWin. Then your "critical level," also known as your Kelly percentage, is approximately AvgTrade / AvgWin. (This isn't a precisely exact calculation but it's close enough for our needs.) BTW notice the win % doesn't even enter into this calculation. It will affect your AvgTrade value.

So say you trade one mini per trade, and your average trade makes $5, and your average win is $20. Then your Kelly value is 5 / 20 = 0.25. Your "critical level" is 0.25, or 25%. Risk 25% PER TRADE and you will maximize your profits over the long run -- but in the short run you'll probably jump off a bridge because of the 95% drawdowns!! In actual practice you should bet a small fraction of the Kelly value, maybe 10-20%. So 10% of the Kelly value is 10% * 0.25 = 2.5%. Risk 2.5% of your account on each trade and you should be pretty safe.

If you're comfortable with spreadsheets, try entering all your wins/losses into a spreadsheet and see what happens if you risk different % of your Kelly value. That will help you develop a feel for the risk you're taking, and give you an idea how much drawdown to expect. But that will take a LOT of trades to give you a good sample. I'd record at least 50-100 before you pay too much attention to it.

Until you know what your Kelly value is, you should probably stick with 1% risk per trade. Assuming you have a profitable system, that should keep your drawdowns under control.

Udine, I finally got a chance to download and set up your indicators &etc -- thanks for sharing those!

So assuming you're still using the rules I described in my earlier post (take first arrow after Frankfurt open & London open, take another one if it switches direction, enter at breakout of H/L of signal candle, TP / 15pip SL / 5pip trail, cancel signal if stop not hit in next candle, etc), I think Mon-Thu of this week looked like this:

(all times GMT+2)

1/30 10:45 +10
1/31 08:00 -15
1/31 16:00 +10 (1 hr after NY open, and first short in the London session)
2/1 08:15 no trade, didn't break out in next bar
2/1 11:15 +10
2/2 08:15 -15
2/2 10:00 +10

See screen shots. I think that's following your rules, but it ended up making only 10 pips. Am I doing something wrong? The "trading box" goes from 08:00 to 18:00 GMT+2, so 06:00 - 16:00 GMT. Is that right? Both of my losses were on the 8:00 & 8:15 bars, so if I'm off by an hour that would make a big difference!

Gary

Originally Posted by garyfritz

Udine, I finally got a chance to download and set up your indicators &etc -- thanks for sharing those!

So assuming you're still using the rules I described in my earlier post (take first arrow after Frankfurt open & London open, take another one if it switches direction, enter at breakout of H/L of signal candle, TP / 15pip SL / 5pip trail, cancel signal if stop not hit in next candle, etc), I think Mon-Thu of this week looked like this:

(all times GMT+2)

1/30 10:45 +10
1/31 08:00 -15
1/31 16:00 +10 (1 hr after NY open, and first short in the London session)
2/1 08:15 no trade, didn't break out in next bar
2/1 11:15 +10
2/2 08:15 -15
2/2 10:00 +10

See screen shots. I think that's following your rules, but it ended up making only 10 pips. Am I doing something wrong? The "trading box" goes from 08:00 to 18:00 GMT+2, so 06:00 - 16:00 GMT. Is that right? Both of my losses were on the 8:00 & 8:15 bars, so if I'm off by an hour that would make a big difference!

Gary

Garyfritz,


glad you were able to test it, unfortunately your settings are slightly off. Due to winter time the settings should be at GMT +1. The Frankfurt open is 07:00 GMT time and London at 08:00 GMT time. Besides the dotted vertical lines represent the openings of Frankfurt, London and New York markets, which are all off on your chart.

I have attached my chart of the 2nd of February to show the correct settings and you can see the difference.This would also mean that some trades would not have been taken (both losing trades) so your result would have been +40 pips instead of only + 10 pips, Please check your trades with the correct settings.

Any questions, just ask !!

Udine

Thanks Udine! I think I have it set up right now:



My broker is at GMT+2, whereas yours seems to be GMT, but I think I have it set right now.

One concern: I notice the FIFO ALERT indicators are very different between your system and mine!



Some minor differences would be expected due to differences in quotes between brokers. But these are major differences, and they're going to create totally different signals. E.g. I have no up-arrows during the London session but you have several. Those cyan up-arrows don't appear to be real signals, since the 240 was red during that time, but similar differences could change real signals. E.g. you have a "real" long signal on the 6th bar of the NY session, and I don't, because my 240 is red throughout that period. Was your chart painted in realtime, and maybe that was different than plotting it after the fact?

Finally, how did you handle the short signal on the first bar of the Frankfurt session? There was a red arrow but the next bar didn't break the low of the signal bar. Does that count as your "first short after the session started" or did you ignore it because it didn't get hit, and take the short one hour later? (You might have taken that one anyway because of the start of the London session, but for this question let's pretend those two signals happened at the start of the London and then one hour later.)

Thanks Udine!

Originally Posted by garyfritz

Thanks Udine! I think I have it set up right now:



My broker is at GMT+2, whereas yours seems to be GMT, but I think I have it set right now.

One concern: I notice the FIFO ALERT indicators are very different between your system and mine!



Some minor differences would be expected due to differences in quotes between brokers. But these are major differences, and they're going to create totally different signals. E.g. I have no up-arrows during the London session but you have several. Those cyan up-arrows don't appear to be real signals, since the 240 was red during that time, but similar differences could change real signals. E.g. you have a "real" long signal on the 6th bar of the NY session, and I don't, because my 240 is red throughout that period. Was your chart painted in realtime, and maybe that was different than plotting it after the fact?

Finally, how did you handle the short signal on the first bar of the Frankfurt session? There was a red arrow but the next bar didn't break the low of the signal bar. Does that count as your "first short after the session started" or did you ignore it because it didn't get hit, and take the short one hour later? (You might have taken that one anyway because of the start of the London session, but for this question let's pretend those two signals happened at the start of the London and then one hour later.)

Thanks Udine!

Hi Gary,

I just took the picture when my broker was closed, so I could not tell. In the thread we have experienced that different brokers have different signals. Just for your info I am with alpari uk.

The short arrow on the first bar of the Frankfurt session is in my opinion the first signal. IF it would have been a BO, I would have taken it and also the short signal of the London sesssion. I take more signals but then it must be LONG / SHORT / LONG or vice versa during one session.

I post also my account situation since the 9th of january:

Weekly Update:

CW (= calendar week)

CW 2: + 16.50 %
CW 3: + 5.00 %
CW 4: + 14.75%
CW 5: + 17.50 %

January: +47.75%
February to date: +6.00 %

Any questions, just ask

Green pips

Udine

I've been running your indicators on a demo account. For some reason that demo account didn't start updating Sunday night. So I placed the indicators on a live account, and... it hangs up MT4!! I have no idea why they would work on demo and not on live, but I can hang MT4 very repeatably by applying your template, Udine...

I wish I understood this language that you're speaking. =X seems VERY interesting.

test it with another broker and see if it is a broker problem or pc problem.

Udine

Both the demo and the live are on the same broker, so I doubt it's a broker problem...

Originally Posted by garyfritz

Both the demo and the live are on the same broker, so I doubt it's a broker problem...

Has it been solved ??

Maybe you have to open it in the editor and compile it.

Might help.

Udine

Been too busy to try it, Udine. For now I'll just run it on the demo.

What timeframes are you guys trading? On the MT4 platform the trailing stop minimum is 15-20 pips which makes daytrading with this function almost pointless...?

Originally Posted by Forza

What timeframes are you guys trading? On the MT4 platform the trailing stop minimum is 15-20 pips which makes daytrading with this function almost pointless...?

Hi Forza,

depends on the broker I am with one who accepts 2 pips for EU and 3 pips for GU

Udine

Originally Posted by garyfritz

Been too busy to try it, Udine. For now I'll just run it on the demo.

Garyfritz,

today a difficult day to trade.

Had only one trade for +2 pips .

Explanation is on the thread of all signals.

Udine

Your FF thread? I haven't been following that closely. Been too busy. I'll take a look.

I've been running your indicators since the 6th, so I have "realtime-generated" signals on my chart. Let's see how they did... (this is EU)

2/6 10:30 (GMT+2): Short, looks like +10
2/6 18:00 Long, entry not hit
2/7 07:00 Long, +10 (Another long at 11:45 (probably 1-2 pips) and at 15:15 (+10), no shorts)
2/8 10:00 Long -15
2/8 12:15 Short -- not hit (also longs at 13:00, 15:15, 17:00, none hit)
2/9 10:30 Long -15
2/9 13:45 Short -- maybe 1 pip? (also long at 15:00, probably +10, and 18:00, -15)

Checking your FF thread, it looks like you've changed the rules. You're not taking all arrow signals (60/240), you're taking some with just 60 and some with just 240 signals, and you're filtering on news agagin. Last week I asked if you were still using the same signals and you didn't say no, so I assumed it was still the same. I'll have to look through the FF thread to figure out the rules you're trading now.