The Active Forex Traders Discussion

CarrieW · Oct 28, 2011

someone just pm'd me for a strat recommendation and I googled for a link for the ebook I purchased expecting its still for sale(which I am sure it is somewhere)

well what I found surprised me! I found the whole book online for free!

heres the link

http://www.forexpm.com/ebooks/ICWR Forex Trading Strategy.pdf

I do not use it 100% as is but its the main strat I use with a few tweaks I have picked up here and there from reading other strats n stuff.

its def worth a read! so check it out! I paid $67for this strat a few yrs back so enjoy!

garyfritz · Oct 28, 2011

I'll take a look! There are about 10 other ebooks at the parent directory (Index of /ebooks) but I don't know if they're any good...

CarrieW · Oct 28, 2011

theres an amazing forex system(the name not my opinion lol) there which is written by the author of some of my other books robert borowski(another author they were partners I think is brian campbell they cowrote some of the books I have)

I have alot of stuff he wrote. I havent read that one specificallly(tho I will tonight) but as far as i'm concerned he knows his shit.

I got alot of good info from rapid forex. they have some bad reviews online but from what I purchased and found was very extremely helpful. I would repurchase it in a second if I didnt get it all on hard copy from cafe press.

the site was down for a long time but it seems one of the authors has gotten it back up and running. Rapid Forex | Online Forex Trading Tips for Currency Traders

it seems that alot of the info I paid for is available for free now. although I am sure he has something for sale there I havent dug thru the site that much yet.

its definatley worth checking out.

garyfritz · Nov 1, 2011

I was on a business trip last week and I never did my Friday check-in.

Last week was the third week of "no trading" after pulling the plug in the drawdown. In the first two weeks the system would have been up about 11%, in the third week it was up slightly. I didn't figure the win% including the third week, but it was in the high 70% range, just like it should be.

OK, I'm back from my trip, time to jump back in. And in the first two days it's hit 33% wins on 6 trades and my account is down 15%. ***SIGH***

Udine · Nov 2, 2011

Garyfritz,

what is the difference between the 33 % you mention and your trades ??

Udine

Udine · Nov 2, 2011

I have not been trading much so far this week, as it was yesterday a national holiday, so time with the family.

One day I hope it will be possible to trade three days a week and spend the rest of the time with the family. That is what I would call living

Udine

garyfritz · Nov 2, 2011

Udine, the system hit about 78% wins in the 1000+ trade backtest. It was just about at that level for my first 7 weeks of live trading. Then it went into the nasty drawdown, during which it hit about 40% wins if I remember right. I stopped trading, and it instantly went back to 75-80% wins for 3 weeks. I started trading it again on Monday, and in two days it won 2 out of 6 trades, 33% wins. My actual trades matched the system's trades.

The win% is critical for this system. The wins are fairly small and the losses can be large -- as much as 6-7x larger than the wins in the worst case, though on average the losses are about 2x larger than the wins. (In the last 12 months it's taken 520 trades and won 400, 77% wins. Avg loss was 2.04x larger than avg win.) So you need a high win% to succeed -- at least 66% if losses are 2x larger than wins. With its normal 75-85% win rate, it does great. With the 33-40% win rate it's done this week and during the drawdown last month, it loses its shirt.

I think the system is still very viable. It's just in a very bad stretch right now, and I traded all through the nasty drawdown, stopped trading just as it started working again, and started trading just as it's apparently falling apart again. I have **exceptional** timing.

Udine · Nov 2, 2011

With that kind of exceptional timing maybe you should trade the exact opposite of what you originally think to trade ????

)

Udine

^eagle^ · Nov 3, 2011

Time is becoming harder to come by for trading so I threw on a couple of EAs I know to be profitable. They are asian scalpers and have already churned out 4% in two days.

Just dont seem to have the time to manual trade right now. New business venture with my step son is starting to gain traction. B&M business in a hot field. Low start up and big returns. Lot of field work though. Im doing the administrative part while hes out in the field and when the business can make enough money for me to leave my J.O.B. I can join him.

I think he and I have the chemistry to make this work. :smug2:

Udine · Nov 3, 2011

Eagle,

as long as you score 2% per day... who cares, it is just a matter of time, and takes the pressure off of trading. This way you can focus on other matters.

Good luck in your endeavour !!

Udine

garyfritz · Nov 3, 2011

Good luck in your project, eagle!

So tell me, how do you find EA's that you "know to be profitable" ?? Seems to me that every EA on the market is an overhyped scam. Every one I've seriously investigated has plenty of "blew up my account" reports on the web.

^eagle^ · Nov 4, 2011

I use two on one account. One is megadroid which has shown good performance over two years. Returns of 100%+ a year for doing nothing. It does take an occasinal loss.

The second is a new EA I have been part of the beta tester program. It was just released a few months ago. Its called forex demolition and i know the creators personally. This one has shown a gain on live accounts of 78% in less than a year.

I am betatesting a third on another account. So far it looks good. I just met these guys so Im very cautious.

ANyone know where I can find a good box truck 24ft or less?:coffee:

CarrieW · Nov 4, 2011

I know we all use different brokers but I have a question.

I havent really been trading the usd/jpy much but every time I look at it there seems to be 30pip differences between bid/ask

thats kinda sick isnt it?

and I asked this ? before and I dont think anyone answered me(if u did I missed it). do you guys have different rules or strats that you use on different pairs?

garyfritz · Nov 4, 2011

30 PIPS!? Or 30 1/10 pips? Even 3.0 pips would be a lot for USDJPY. Right now (10:30 ET) on Tradestation, USDJPY is showing about 1.1-1.3 pips spread, e.g. 78.217 / 78.230.

eagle, I'll look into megadroid and forex demolition. I could sure use a winning strategy since mine is not behaving very well!! But I don't know where you can get a truck.

EDIT: Here's a real-money account trading megadroid: http://www.myfxbook.com/members/fxsystemtrader/forex-megadroid/78810

Looks like it does incredibly well, except when it doesn't. With only 3 losses all year long, it's still only up 13% YTD. eagle, you've been catching some of that recent string of winners, but what happens if you hit one of those 8-12% losses? But, assuming their backtest results are real and on real-money accounts, those losses seem to be unusual.

I can't tell from their long-winded sales copy -- does it only run on EURUSD? If you could run it on several pairs at once, you might be able to smooth out the equity curve.

Are you trading the "Light" version of Forex Demolition, or do you have the full version which is apparently not released yet?

What broker are you using? Some of these EAs seem pretty finicky about the broker, spreads, 4 vs 5 digits, etc.

CarrieW · Nov 4, 2011

idk all I know is it was like over an inch apart on the chart and the others run 1/8 an inch or less. its not nearly that bad now but it was earlier and has been in the past few days. I have seen it normal like it is now and then just be insanely huge for no reason that I am aware of.

Its so far apart at times its untradeable. I havent been trading it that much lately at all but I still watch it.

^eagle^ · Nov 4, 2011

garyfritz said:
30 PIPS!? Or 30 1/10 pips? Even 3.0 pips would be a lot for USDJPY. Right now (10:30 ET) on Tradestation, USDJPY is showing about 1.1-1.3 pips spread, e.g. 78.217 / 78.230.

eagle, I'll look into megadroid and forex demolition. I could sure use a winning strategy since mine is not behaving very well!! But I don't know where you can get a truck.

EDIT: Here's a real-money account trading megadroid: Forex Megadroid System | Myfxbook

Looks like it does incredibly well, except when it doesn't. With only 3 losses all year long, it's still only up 13% YTD. eagle, you've been catching some of that recent string of winners, but what happens if you hit one of those 8-12% losses? But, assuming their backtest results are real and on real-money accounts, those losses seem to be unusual.

I can't tell from their long-winded sales copy -- does it only run on EURUSD? If you could run it on several pairs at once, you might be able to smooth out the equity curve.

Are you trading the "Light" version of Forex Demolition, or do you have the full version which is apparently not released yet?

What broker are you using? Some of these EAs seem pretty finicky about the broker, spreads, 4 vs 5 digits, etc.

I have a "cracked" Version of megadroid. i also own the real but prefer the cracked one. And yes I have the full version of demolition. I know the creators personally and even had a little input into it. They both run on the e/u during asia. Demolition is a little more finiky about when it trades than megadroid. Most of the reviews I have seen have megadroid kickin butt. They both have PRO versions that have a few more inputs and can run on other pairs but I have found most pro versions of anything to be worthless. If you hunt around there is a cracked version of megadroid with a news filter like demolition.

If you run megadroid at ten percent and use the recovery mode if you lose, its very profitable. But if you risk too much it can hurt you.

Demolition has a similar feature called "take revenge" it doubles up your risk until you make up the loss.

I run them on Oanda but MBT is probably the best broker. My friend uses that. And I may switch later as demolition has missed a few trades due to the 10 pip spread on Oanda during swap.
\

EdwardWhite · Nov 5, 2011

Someone mentioned earlier about EA's blowing up. I found I had to dial down the money management part of them a lot of times. I'm still testing a few personally(euro rise, and Forex combo system right now, I might add fx megadroid too, it looks pretty stable). I use to be a person who was all about manual trading, but I have really begun to like the idea of putting my trading on autopilot, for physiological reasons and it just seems to be the future of trading.

Another problem is a lot of EA's on the market are grid traders, and grid trading really only works if the market is moving sideways and not trending. I'm not exactly sure about this, it also seems to need the ability to have hedge trades too, which are of course not possible in the US. A popular grid trader currently is the grid trading course, and Forex Crescendo. The original, blow up one that was pretty rough, was Robominer and clones, that just flooded the market around 2009. I bet all of them were active during trending markets.

And for more of the FIFO issues:
For example, a popular one is the Forex Millionaire robot. It seems to do pretty well(not the same as the marketing page) if you can have hedging trades(and I can't exactly figure out why, hedging would be such a huge factor), but with the FIFO brokers, it seems to get your account bankrupted.

I cannot wrap my head around this, personally, but its just an observation I noticed.

The more important thing, as the more I trade, it becomes less and less about the system. To me It becomes about good money management, and risk management. And it cannot be static(ex: same hard stop loss, for every trade, unless you determined this is best for your system), it has to be dynamic to match the pace of volatility in the market(maybe using ATR or how strong a support/resistance level, and increase/decrease lot sizes/leverage depending how far a signal is close/far away from it).

No offense, I doubt a lot of average EA users know 5 cents worth of money management, or least having maybe a max drawdown, before a robot is re-tweaked or taken out to the shed to be shot.

While mine (goal wise, I don't have enough capital to do this perfectly quite yet) might be a bit too much hands on, using like multiple accounts, and each one having a risk pool, and money flows in and out between higher risk to lower risk...it becomes more like running a mutual fund and your just trying to move as much money between risk "pools" based upon best odds, or market conditions of the pairs you trade.

But that might be a bit risk anal, and It could be a bit over the top.

Eagle, you mention the Take revenge thing on the bot your testing out. Isn't that's almost like doing a martingale betting system? If a average person was to take advantage of that, I could see some really huge account blowups. Since, well the math doesn't support martingale very well. I haven't exactly calculated it, since I'm just learning about of probability. Also it bit too hardcore I guess to talk about in this thread. Maybe Kelly's betting system, might be a bit more...logical?

Just my two cents ;-)

^eagle^ · Nov 5, 2011

Eagle, you mention the Take revenge thing on the bot your testing out. Isn't that's almost like doing a martingale betting system? If a average person was to take advantage of that, I could see some really huge account blowups. Since, well the math doesn't support martingale very well. I haven't exactly calculated it, since I'm just learning about of probability. Also it bit too hardcore I guess to talk about in this thread. Maybe Kelly's betting system, might be a bit more...logical?

The win percentage is about 95% of trades. Its not a true martingale it only doubles up one time. Not the progressive 2,4,8, and so on. It depends on the high win rate. To win back its loss more quickly. Thats why I set the MM at 10%. Because it only takes 11% to make that back. 11% is nothing for this EA. At two losses in a row it doesn't double down again. it just stays at the first double down until the gap is closed.

Both EAs work like this.

I like the Idea of risk pools. I have a similar goal set up. I dont know if I will ever have the time to sit and daytrade myself so this looks to be a suitable alternative. I will look into the EAs you are currently using. As I want to add to my "portfolio" as well.

garyfritz · Nov 5, 2011

With a 95% win rate, doubling once or twice is probably not a bad idea. There's only a 0.05 * 0.05 = 0.0025 = 0.25% chance of two losses in a row, assuming no serial correlation. Of course if the market gets into a condition that your EA doesn't handle well, you may find your win rate drops way down and the chances of two consecutive losses become MUCH higher. Take for example the two big USDJPY losses my system took in Sept -- in a 1000-trade backtest, losses like that only happened 0.4% of the time. And then it did it to me twice in a row. In theory there's only a 0.004 * 0.004 = 0.0016% chance of that happening. But as soon as I put my real money on the line, the risk probabilities have a habit of shifting...

EdwardWhite · Nov 5, 2011

There are two ideas I'm looking at with the risk pools thing
One idea is the "three Sisters," as the person I learned it from called it (forgot the blog name, sorry). You have a Trading sister, a investment sister, and a ugly, super safe sister.
So trading sister(hence the one everyone likes to date since she..wild, but manic depressive), would have higher risk, but majority of your profits come from it. Then you move it down the line to the Investment sister(the sister who is a bit mature, but still understands risk, the one that you marry). I guess would be...like doing trades that are less risky, like scalping for 10 pips, and only doing it 3 times a day. Or some large swing trading with trends. Or it could be just in a entirely different market, and you invest in stocks.

Then the safe sister, the unfun one. Is account protection. So its job is to protect the other two sisters from blowups. She can come in and cover the other two in damage. She the sister that becomes a nun. This is just a savings account. You use it when you have to cover a large drawdown, like 10% or more, so that you will have enough capital to keep things up, if your taking distributions every month, etc.

So you take your profits and move it down the line. This way your funds are always active. Plus, this can be done with any amount of money, since everyone has some sort of 3 way investing setup. Your investment sister could be a business, and a savings account is the safe sister. Doesn't matter. Its more about figuring out ways to live off your trading.
Now, The other idea for me, you figure out the risk for each system(in our case this will be EA's) you wish to run, and each one gets its own account(or one gets like two running, if they don't trade the same currency pair, and you can separate how much each one can trade). You then move money around based upon the  one with the highest winning %. When it begins to draw down, to say..oh 3% you shift the account size down, and you move the the other better performing strategy.
This way your most money is at work with your best system, and the ones that are not producing as well, have less money to risk, causing blowups to be less painful, since you limit their size of trading. Plus if you really want to diversify it, you can.

I saw this is how most quantitative trading places do their risk management, but they are moving money around on a daily basis, so their money management almost becomes another trading tool, in their favor. Plus, you could takes advantage of leverage a bit, since you are using it when its favorable, and moving it down when its not.

Of course, you can combine the two. You can take second risk pool idea in the trading sister. The investing sister and safe sister, can be plugged by other things.

CarrieW · Nov 7, 2011

I love trading guys. but you guys totally lost me. lol

you can go on with your super technical conversation and I do read them and appreciate the knowledge that you guys have but I have no imput what so ever on what your saying so I wont pretend to lol.

back to my usd/jpy observation the prices right now are at 78.061/78.088. that is 27 pips isnt it?

the spread is so huge I cant trade it. I have a buy signal but that spread is insane. if it drops soon I will enter, but it has twice opened up to a huge spread in mid trades which pisses me off actually which is why I havent been trading this pair much.

garyfritz · Nov 7, 2011

Every FX source I've ever seen, EXCEPT for the MT4 community, says 0.01 is one pip in xxxJPY. 0.001 is a tenth of a pip. For non-xxxJPY pairs, 0.0001 is a pip, 0.00001 is a 1/10th pip. MT4 seems unable to deal with this concept so you have to multiply all your SL/TP/etc values by 10. (Unless you use a 4-digit broker in which case I think MT4 calls the last digit a "pip" so 0.0001 is an "MT4 pip" for a 4-digit broker?)

1 "pip" is $1 / 1 euro / etc for a mini-lot. 1/10th "pip" or 1 "MT4 pip" is $1 / etc for a full 100k lot.

2.7 pips (or 27 "MT4 pips") is pretty wide for USDJPY but not unheard-of. Depends on the broker and the time of day. At this moment (1pm ET) Tradestation reports 78.081/78.094, or 1.3 pips. PFG Best reports 78.071/78.082 or 1.1.

CarrieW · Nov 7, 2011

Definition:
The most common increment of currencies is know as the "pip." It is the smallest value change in a currency pair exchange rate.

For instance, if the EUR/USD moves from 1.2250 to 1.2251, that is ONE pip. A pip is the last decimal place of a quotation. A positive or negative pip value is how you measure your profit or loss.

this is from baby pips.

technically its 27 pips. I think. at least by the definition I learned. its the last place of the decimal. only the money you risk/value of a pip to your account changes not the actual pips.

garyfritz · Nov 7, 2011

I think that definition pre-dates 5-digit quotes. When brokers only quoted 4 (or 2) digits, then yes, one pip WAS the last significant digit. For xxxUSD 1 pip was $1 for a mini-lot, $10 for a full lot.

Then brokers started quoting 5 digits (or 3 for xxxJPY). Now what do you do? Do you change the VALUE of a pip? (A "pip" is now $0.10 for a mini, $1 for a full lot... unless you use a 4-digit broker!?) I think it makes a whole lot more sense to keep the VALUE of "a pip" constant, and say "one pip" is 0.0001 or 0.01.

That's what MOST major FX brokers do. Tradestation refers to 0.1 pips, so does MB Trading, Oanda, Dukascopy... Oanda refers to them as "fractional pips" or "pipettes."

Only "MT4 world" refers to 0.00001 as "a pip," apparently because MT4 is incapable of adapting to the new 5-digit quotes.

CarrieW · Nov 7, 2011

lol mt4 and me. I prefer to keep it as easy as possible and for me that = the way mt4 does it. thats how I actually learned it.

each tick is a pip.

to me it will always be a tick=pip.

if I had to add a bunch of 0.000 to it, every time I was talking/typing about pips, would make it very very annoying lol.

garyfritz · Nov 7, 2011

Hah! You should try trading *futures* sometime. Every futures contract has a different tick value. Some of them tick by 1, some by 0.1 or 0.01, some by 0.05 or 1/32 or "1/2 of 1/64" or .... and all of them have different $ values per tick!!

EdwardWhite · Nov 8, 2011

You just had to bring up the futures thing....one point equals 4 ticks in a s&p E-mini...12.50. Enough to cover your commission/and profit. Since its about 3.00 or so per side, but that's also dependent on the broker.

Same here, for me a pip isn't a fractional one. I just consider it icing, or just a way to increase leverage, on a slow moving market. Its looks a lot more frenetic, when you see a candle bouncing around on fractional pips.

It really helps when you trade mini lots. Instead of maybe making 30 dollars, with a 30 pip move you end up making 33 or 35 because of it. Can't ever go broke making profit.

As for the technical stuff, it really isn't that technical. Its just talking about diving up money for different trading systems, based upon how risky it is. And Martingale, is a betting system(you will find there are some gambling stuff that really relates well to trading).

Lets say your stop-loss out of a trade. It was one lot, at 10 pips. According to martingale, when you do your next trade, you increase your lot sizes to 2, same stop loss, thus doubling back what you loss.
Lets say, its a very bad day, and you loss that one too. Same stop-loss. When you take the next trade, you trade 4 lot sizes. Then 6 then 8, then well...hopefully you decide to stop trading after that.

Now, can you see where this is going? Your increasing your leverage, to break even. Doing it once in awhile, is okay, depending on your win rate, and such, if you know such things. Most people don't care to track it, even thought a simple excel spreadsheet would do it.
Now, I found if I attempted to do this on my manual trading system, my account will be margin called, since I am at only 57% winners.

If you start getting deep into probability(and the thing is, I'm not into it that much, but I am starting to), you can start applying all sorts of stuff, and it really changes your view on risk on each trade, and it lets you figure out what are the best odds are for each trade, so you can figure out when the best time to apply a bunch of leverage, and when not to overdo it.

There is a visual way to represent it too, if you don't want to look at the numbers. But its gained as time passes. You figure out what patterns are more likely to be profitable than other ones, etc. I am way far away from that.
Now however, understanding risk, I was able to make my system a whole a lot simpler, and increase my odds slowly. So its a beautiful thing!

Udine · Nov 11, 2011

Weekly update,

I have been away for about two weeks, as I have been busy, busy, busy....

Two weeks ago I started to trade live and this week started a thread on forexfactory.com.

Update:
week 44: +28.9 % average 5.8 % per day
week 45: +23.1 % average 4.6 % per day

It has been an amazing mental rollercoaster, but a great one !!:groove:

I'll see if I can find the time, between work, trading and the thread to visit here more often.

Green pips

Udine
Udine

garyfritz · Nov 11, 2011

Go Udine!!!

Udine · Nov 12, 2011

Garyfritz,

thanks. But it is amazing to see how people react and say it cannot be traded...

my trading account says otherwise though

Udine

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