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Originally Posted by weissdawg
I have read many of your posts/threads, and I would greatly appreciate it if you answered a few questions I have for you.
First, let me tell you I have been trading and studying non-stop for 3 years now. I have learned about Elliott Wave, sacred geometry, Andrew's pitchforks, fibonacci, Gann, and numerous indicators. I've watched prices go up and down, almost all day and night long, now for 3 years straight. My point: I am not a newbie.
So now I am at a point where I can make money safely with a few different methods, but I won't be getting wealthy anytime soon nonetheless. So my questions are:
1) You make a lot of money, IMO. Did you take a small account (under $5,000 dollars/euros) and make it big (over $100,000)? If not, what did you start with, if I may ask you?
2) You've stated that TA is bullocks. That statement is very intriguing to me, since it is coming from you. So what then, do you base your decisions on? Or how do you have a system that makes the decisions for you? Is it just your gut feeling?
3) What kind of risk/reward do you use? And what is your money-mangement tactic?
4) What kind of returns/year are realistic?
Thank you.
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Hi Dawg, trying to get this thread back on track and answer your questions best i can.
1. I started off with £10,000 and lost it all over my first 2 years. Then i got another £10,000 and have multiplied it to well over £100k.
I think it's pointless starting with small amounts of money like a few hundred dollars apart from learning to trade - here's why.
Most people who want to trade want to earn enough to live on and give up their day job - to do this you need to average say £2000 a Month ($3000+) - after all who wants to live on less than that?
how can you really expect to build to a point where you will make £2000 a month from a few hundred? most traders are underfunded in this way and have expectations that are too high for what they have to play with. - because of this they take risks which are too high and end up blowing the account.
2.
in my experience TA offers little more than you could get from a coin toss - around 50% - now you can make good money from 50% - i do not dispute that - if you had a 50% win loss from a 70 pip take profit and a 50 pip stop then you would do well. However i can get 50% from a coin toss so if an indicator gives you the same probability of a win as a coin toss then why bother with the indicator? - also just because you add more indicators it does not mean you are increasing it's probability.
My trading relies on mathematical probability - ie what is the probability that if price has moved 50 pips it will move another 50 pips? - or whats the probability that it will retrace? - my
main trading is based purely on these kind of numbers and has nothing whatsoever to do with support and resistance, fundamentals, indicators or anything else.
Other trading I do is sometimes based on a few indicators and a hunch - just for fun. after a long time in the markets you do get a feel for what price will do and that's how many of the top traders operate, however for me it is not enough to put my future earnings into hunches and discretion. I need more than that to sustain my earnings at this level.
3. my risk is limited at around 8% of my account on each trade but my reward is unlimited. I don't have take profits and let my system take me out.
4. your last question is a good one but relative to an individual's own comfort level. My own returns average around 20% per month over the year. sometimes ive had as much as 60% sometimes losses but on ave around 20%
you say i make big money and i suppose i do - its getting bigger too. However you have to realise something about me and my motives. I'm not in this for the long haul. I don't want to be trading at all in 10 years. In fact i don't want to be trading in 5.
My aim to to rapidly gain £10 million in personal fortune and call it a day, enjoying the rest of my life in relative luxury. my figures suggest this can be done inside five or six years - one of which has already gone almost to plan
For that aim I risk a lot more than some are comfortable with. to get the big returns you have to have fairly large risks - basically you get out what you put in.
Most people do not have a risk threshold as high as mine, but then that's me and it's different strokes as Mick says. I couldnt bear to think that in 10 years i would still be sat here, mouse in hand watching a price chart do it's daily dance.
It's true, I could lose the whole lot with this attitude, but the figures don't lie and it's working so far. If I lose the lot then at least I gave it a go - I do have other sources of trading income which i play rather less riskily. But if it does do what the numbers say, then it was worth the risk.
This wouldnt suit everyone but then not everyone wants what i want. Some are happy with the 2 up 2 down, cat on the knee and slippers in front of the fireplace. Not me.
despite my cavalier attitude to trading risk though the principles remain the same which is why I impart my opinion on here and other forums. - wether you aim for £10million or you want £500 a month - the way to do it is still the same.
Hope this helps.