Can you really make a living from FX ?

[pinger]

think for the market as a chalange not as place to win/loose : )

[cornellj]

You can most definitely make a living from FX. Many people who write on these forums are successfull. Each of them has developed their own trading strategy and style. The successfull ones stick to what works for them. I have been trading successfull for years. An example of what can be achieved is published in the "Journal" section of this forum under "Cornellj". This journal is updated live in realtime and can not be altered or edited.

I have written about the positive view regarding trading for a number of years, and can prove success in my own case.

Many others have done better so by deduction I would say, "Yes you can make a very good living from trading Forex."

[tstmarkt]

Originally Posted by cornellj

You can most definitely make a living from FX. Many people who write on these forums are successfull. Each of them has developed their own trading strategy and style. The successfull ones stick to what works for them. I have been trading successfull for years. An example of what can be achieved is published in the "Journal" section of this forum under "Cornellj". This journal is updated live in realtime and can not be altered or edited.

I have written about the positive view regarding trading for a number of years, and can prove success in my own case.

Many others have done better so by deduction I would say, "Yes you can make a very good living from trading Forex."

Thank you Cornellj for valued reply, I will certainly view your thread.

[Dan S]

Originally Posted by Knoxy

I'm hoping to sit down this weekend and write myself a rigid set of rules and do the back testing.
Cheers
Dave

Hi Dave,

how is it going?
Did you get to write up your rules?
I am still interested in learning more insight about your method.

Cheers,
Dan

[Knoxy]

Dan,

Yes I did and am trading it. After a lot of back and forward testing I settled on daily charts as most profitable for all but GBPJPY, use 4h there.

Briefly - for a pair I start with a default SMI(21,9,5,4) and optimise the lengths seperately for both long and short as reversal strategy. Entry is on the signal line cross. Added a secondary entry that has made this much more successful. If the SMI value is above an overbought line (below oversold) then trade each reversal of HMA(6), up or down. Sometimes you need to buy even when SMI overbought to catch trend extensions. I ignore HMA when SMI between overbought/sold and just wait for SMI crosses there. HMA length can also be optimised. The best overbought/oversold lines are actually quite low, in the 20 to 45/-20 to -45 area. No pyramiding on entries.

I tested using the above as setup with various entry triggers. None as successful as just trading the setup. In testing all but 2 pairs generate >2000 pts pa with low drawdown and acceptable ratios. Several in 4000 pt territory. So I'm targeting 100 pt per month on 13 pairs realising limitations of optimising.

Will let you know how it trades.

I'm waiting to get 1-2 years salary behind me and to be generating twice my monthly income before I kick the day job. Puts too much pressure on trading if you don't have a large buffer. Fortunately averaging 1000 pt/m so planning to be full time trader this year. The only way to achieve a dream is to first have one!

David

[Dan S]

Thanks David,

what is the main reason to go up to the daily timeframe?
Because it fits better with the dayjob or because its more profitable?

Reason I ask is that I have alot of screen time anyway, even if I wouldn`t trade forex. So I would like to find a method working for me on 4 hrs or below.
Maybe taking additional trades from the daily.


What MM rules do you apply trading on the daily chart?
Still trade 2 separate positions with one taking profit at a certain level? Or just 1 with open target?
And what SL works for you on the daily?

Thanks again!

[Knoxy]

Dan,

The strategy is a promising work in progress, really only starting out. Yes I'm using daily for practical reasons, I'm going through setting up autotrading opening a TradeStation/Gain account, closing FXCM. I'll test the lower timeframes more once I'm rolling.

Daily and 4h are fairly equal for net return. Generally daily has the higher win percentage and smoother equity curve.

Have eyeballed lower charts without doing the testing and 2h looks good, 1h doesn't seem to. I'll test at least the majors down to 1h. Feel that I'd end up with a lot more trades and no noticable increase in profit. The method suits the smoothness and multi-hundred point runs of daily.

As with all strategies, recommend test and start small then build up to a max of 5% risk. Because its a counter-trend method and daily period it does need room to breathe. SL I use 2ATRs up to maximum of 200 pt.

I now only trade 1 position with open target. Tried various multiples of ATR profit with no long term improvement. The method picks fairly consistent exit points as is.

Overall, to make a living from FX I think you need a consistent method that's stable enough to not need a lot of retuning. Doesn't need to wring max money out of the market, just consistent gain. Also need to destress, which for me means spending little time in front of the screen and dealing the longer timeframes. I imagine the main reason for failure is overtrading short timeframes chasing 20 points when chasing 400 (600 for AUDUSD in last 3 weeks) makes more sense. Strategy so far suits me personally.

cheers
Dave

[Dan S]

Thanks David

Somewhere between may1 and may2 my HMA on 4 hrs went red, price traded below the HMA and SMI crossed nicely at an extreme on EUR/USD. I traded this short signal.

Since then, the HMA is pretty flat, its changing colors from red to green, price is above and below, SMI is kinda cabling. So the market is totally undecided here how to react on the dollar madness.

My initial 150 SL is still holding until now.

Would you still hold the trade? Or would you have it killed already?