Trading for living

[ONTrader]

Sorry all to hijack this thread, but I would love to get in touch with you via e-mail. As you said, and I know, using someone else's strategy is a terrible idea, unless you can understand it. I began in forex about 6 months ago (from futures), and have been using the DMI w/ ADX the whole time with demo trading. I had moved to live trading, and yes, I can make money! My problem is in optimizing the trades. I know you used to use this same indicator for trading, and if you could maybe e-mail me at --jeffstone -at- golden.net I would love to talk. I am just having a hard time actually putting my entry/exit criteria on paper. If you could give me some ideas on what you've experienced as good limit and stop-loss orders on entry, it would be appreciated. I have been playing around with things such as:

-Entry on ADX cross over from beneath of dmi line (hourly chart)
--and adx must cross over 20
---and adx must have came at least 4pts off low

Enter trade long/short:
target - 70pips
stop - 35pips

Please let me know what numbers you found work best, as I am having a hard time optimizing the exit for good returns!

Good trading!
ONTrader

[csaunders]

Hi Livermore,

You seem quite persistent in getting exactly out what strategy is being used by all here

As I stated I traded announcements exclusively before and now use both announcements and tecnical indicators - my favourite technical indicator at the moment is 1h 50 SMA for EURUSD . Support/resistance offered by this seems quite profitable (currently) - I also stick with the simple stuff - trend lines, formations (especially triangles, pendants etc) and Fibs.

For announcements - I see if any momentum gathers post an announcement - if so, I throw alot of money at it.

Quite simple huh?

PS - what exactly is your strategy?

Cheers,
Cliff

[bobnat]

Some really great stories here. I'd like to add a couple of things, if I may.

Pete is spot on when he says the entry is the easiest part of trading, yet newbies spend all their time on looking for the perfect entry system. They don't realize that a system consists of much more than the entry itself.

There have been guys like Lucas and LeBeau who have traded by flipping a coin for there entries and made money just to prove how inconsequential the entry truly is.

Finally, the biggest problem I've seen throughout this post is that so many peope are risking insane amounts on a single trade. NO SINGLE trade should ever hurt your capital, EVER. If you risk 5% or more, you're asking for trouble and bankruptcy. If you risk just 1% per trade, then it just doesn't matter if that trade loses. This eliminates all the emotions from the process and allows you to stick to your plan, as Pete and others have constantly pointed out.

If you have built a proper system, then you should know what your probability rate is, as well as your reward to risk ratio. You could run into a massive losing streak (according to your system) and still be in the game when it ends if you only risk 1%. But if you're putting 5% out there and hit 15 losers in a row, you're out of the game. Yes, it's slower going by only risking 1%, but it results in constant forward progress, which is not what most of you seem to be experiencing.

Finally, if you don't know what constitutes a system, then I suggest you put ALL of your time and energy into finding out what does. Then put ALL of your time and energy into building your own. Remember, there isn't anything new under the sun. We all borrow from each other. It's ok to look at a number of systems out there, but as someone mentioned above, you've got to understand what makes them work. Once you do, you can put together your own system by taking something from here, something from there, etc. The key is to have ownership of your system. You'll never have that by using what someone on a forum told you to use. Without ownership, there is no understanding. Without understanding, there is no confidence in the system. Without confidence, there is no consistency. The end result is no profit.

Thinking is all about you, not about your system.

Bob

[Livermore]

[quote]Originally posted by csaunders
[b]Hi Livermore,

You seem quite persistent in getting exactly out what strategy is being used by all here

As I stated I traded announcements exclusively before and now use both announcements and tecnical indicators - my favourite technical indicator at the moment is 1h 50 SMA for EURUSD . Support/resistance offered by this seems quite profitable (currently) - I also stick with the simple stuff - trend lines, formations (especially triangles, pendants etc) and Fibs.

For announcements - I see if any momentum gathers post an announcement - if so, I throw alot of money at it.

Quite simple huh?

PS - what exactly is your strategy?

hi cliff

I mostly trade announcements and other news. I just follow the flow (with a tight stop), and wait for a rebound.
I will try your indicator. Sounds very simple?

[Livermore]

Hi Cliff - again

Tried your "system" with SMA 50. Looks fine. But looks even better just with MA 50 - I don't know why. Do you take all signals? If yes, you must be in the market always, I suppose?

[JR97]

Originally posted by bobnat

Finally, if you don't know what constitutes a system, then I suggest you put ALL of your time and energy into finding out what does. Then put ALL of your time and energy into building your own. Remember, there isn't anything new under the sun. We all borrow from each other. It's ok to look at a number of systems out there, but as someone mentioned above, you've got to understand what makes them work. Once you do, you can put together your own system by taking something from here, something from there, etc. The key is to have ownership of your system. You'll never have that by using what someone on a forum told you to use. Without ownership, there is no understanding. Without understanding, there is no confidence in the system. Without confidence, there is no consistency. The end result is no profit.

Thinking is all about you, not about your system.

Bob

*applause applause*

Too bad it takes time to realize the beauty of what you just said. Took me 6 months to come to understand what you said.. But I don't think there is any shortcut. It's just a matter of time and persistence.

[Livermore]

Originally posted by bobnat
Some really great stories here. I'd like to add a couple of things, if I may.

Pete is spot on when he says the entry is the easiest part of trading, yet newbies spend all their time on looking for the perfect entry system. They don't realize that a system consists of much more than the entry itself.

There have been guys like Lucas and LeBeau who have traded by flipping a coin for there entries and made money just to prove how inconsequential the entry truly is.

Finally, the biggest problem I've seen throughout this post is that so many peope are risking insane amounts on a single trade. NO SINGLE trade should ever hurt your capital, EVER. If you risk 5% or more, you're asking for trouble and bankruptcy. If you risk just 1% per trade, then it just doesn't matter if that trade loses. This eliminates all the emotions from the process and allows you to stick to your plan, as Pete and others have constantly pointed out.

If you have built a proper system, then you should know what your probability rate is, as well as your reward to risk ratio. You could run into a massive losing streak (according to your system) and still be in the game when it ends if you only risk 1%. But if you're putting 5% out there and hit 15 losers in a row, you're out of the game. Yes, it's slower going by only risking 1%, but it results in constant forward progress, which is not what most of you seem to be experiencing.

Finally, if you don't know what constitutes a system, then I suggest you put ALL of your time and energy into finding out what does. Then put ALL of your time and energy into building your own. Remember, there isn't anything new under the sun. We all borrow from each other. It's ok to look at a number of systems out there, but as someone mentioned above, you've got to understand what makes them work. Once you do, you can put together your own system by taking something from here, something from there, etc. The key is to have ownership of your system. You'll never have that by using what someone on a forum told you to use. Without ownership, there is no understanding. Without understanding, there is no confidence in the system. Without confidence, there is no consistency. The end result is no profit.

Thinking is all about you, not about your system.

Bob

OK, so what is your system?

[wangushka]

There are plenty of losers in each and every forum. I am posting my trades live daily at a forum and there are people harassing me to teach them how to fish rather than just watch me post my trades live.
Why should I believe that people will adopt my system and not go and screw themselves up big time. Some did in the beginning, then came back and asked me,WHY?

You see the biggest problem is our EMOTIONS.

I wrote once a forum about essentials in FOREX trading to eliminates the psychological aspect in trading:
1. Some strong rope
2. a comfortable chair
3. some clothes
4. A rubber mallet
5. A good mentor

I am surprised no one asked why is there a need for the above 5 items
Read on to find out why...

I always emphasize on meeting the target.

1. You need your mentor to be around when you trade so that he will ensure you get out on time or prevent you from entering
the market again after you met your daily target.
2. If you do not listen to him and still insist on punting, then he will tie you to your comfortable chair with some strong rope.
3. If you still try to get your fingers and toes to click that mouse, he will wrapped them with some clothing. And if you still insist on
asking the order entry guy to place a trade for you , he will gag your mouth with some clothes. Finally, if you still continue to
signal with your eyes he will blind fold you, leaving your nose to breathe.
4. And if you still try to hop to the computer and use your head to make a entry, he will knock you out the rubber mallet.

Now you see the trading psychology of some traders.

So now, would I teach you how to fish, after which you'll be thinking that you have discovered the Holy Grail and then decide to go for the big hit. So am I selfish or one who saves your wallet?

Reply for a forumer:
I knew you got it. The best trading method in the world is useless if emotions are left unchecked.

Your strong rope and mallet and all that is a classic.
I don't think it will go into any book but these are true wisdom that can only come from veteran traders.

I experienced losses on the same day after I made big gains for the single reason that I cannot stop myself from chasing the market for another win. I would actually double my position when the market goes into a retracement so I end up losing. Only an experienced trader can understand what you are trying to say. When you have a big win, stop trading for the day!

This is one of several 'rules' or 'understanding' a successful trader should possess.

Those who deride that are just clueless. They can never even dream of making a living in trading.

That people disagree with you is good as I believe trading to healthy profits is never meant for everybody in the world anyway. It is a sort of secret knowledge. You should worry if everybody agrees with you because who the heck are you going to take the profits from?

As for the way to making money in trading. I think as one progresses, it will become clear that there are really just that few correct ways of doing it despite the voluminous books written on the subject - 90% rubbish.

I may sound like I know a lot but in reality I have suffered losses several times and have yet to make my big profits for lack of capital to even start. This is all my own observation which dovetails with yours.

All I have now is my method tested on super-realistic demo accounts which tracks every move I make like it's all real and have driven them to profitability over and over and over again so I know I'm on to something.

Once I can find some capital, I will start again and I hope soon.

Good luck to you!