High Frequency Trading

[Soul-Trader2004]

KP, thanks for the reply, a nice reasoned debate - which is more than we get from some. My sarcasm was not aimed at yourself but the other attempt at an answer.

Now, onto the subject.

firstly you didnt hone your response down to the 'retail trader' but i can accept that on this board it's what you meant.

here's what i mean by you dont know what you dont know.

I know and work with one trader who works from home using arb strategies on oanda of all places - he makes around 150% on his account a month using this. he trades around 30 times a day per pair and plays two pairs and his hit rate is 97% win / loss.

Its automated and causes no stress - his biggest losing day to date is 13 pips

However i do take your point 'generally speaking' that traders stand a better chance taking fewer trades but isn't that just because they lose less times over a longer timeframe?

I do not believe that your statement that a setup which occurs 5 times a week is any more probable than a setup which happens 15 times a day - probability is probability no matter what thye timeframe and a system with say a 55% w/l ration will win 55% of the time over a month or a day.

Your advice for people to concentrate on the process is also good for learning traders (arent we all) however discipline and a steel determination to carry out your plan is the most important attribute in my book.

This next one may knock you for six.

My number one rule when trading is:

NEVER TAKE A PROFIT

we may open up that can of worms on a different thread if you like and i'm sure you will like that discussion.

back to trading frequency though. I do not believe that the frequency of a trade makes any difference in the success / failure of a trader as long as the trades are applied with discipline and according to the rules the trader subscribes to.

for example - lets talk about technical setups.

I believe that a 4 hour technical setup will work just as well on a 5 min chart. - just that it will happen more often and will produce smaller winners. on the upside it needs smaller stops and has smaller losses than the same method on a 4hour chart.

the system is the same - only the frequency different.

when it comes to the 1 min chart it tends to be the spread that matters - pointless taking a 60 min trade that averages 10 pips per trade onto a 1 min chart as the ratio will be less than 2 pips per trade and the spread eats it.

sensible opinions welcome

[Atomised]

Originally Posted by Soul-Trader2004

KP, thanks for the reply, a nice reasoned debate - which is more than we get from some. My sarcasm was not aimed at yourself but the other attempt at an answer.

Now, onto the subject.

firstly you didnt hone your response down to the 'retail trader' but i can accept that on this board it's what you meant.

here's what i mean by you dont know what you dont know.

I know and work with one trader who works from home using arb strategies on oanda of all places - he makes around 150% on his account a month using this. he trades around 30 times a day per pair and plays two pairs and his hit rate is 97% win / loss.

Its automated and causes no stress - his biggest losing day to date is 13 pips

However i do take your point 'generally speaking' that traders stand a better chance taking fewer trades but isn't that just because they lose less times over a longer timeframe?

I do not believe that your statement that a setup which occurs 5 times a week is any more probable than a setup which happens 15 times a day - probability is probability no matter what thye timeframe and a system with say a 55% w/l ration will win 55% of the time over a month or a day.

Your advice for people to concentrate on the process is also good for learning traders (arent we all) however discipline and a steel determination to carry out your plan is the most important attribute in my book.

This next one may knock you for six.

My number one rule when trading is:

NEVER TAKE A PROFIT

we may open up that can of worms on a different thread if you like and i'm sure you will like that discussion.

back to trading frequency though. I do not believe that the frequency of a trade makes any difference in the success / failure of a trader as long as the trades are applied with discipline and according to the rules the trader subscribes to.

for example - lets talk about technical setups.

I believe that a 4 hour technical setup will work just as well on a 5 min chart. - just that it will happen more often and will produce smaller winners. on the upside it needs smaller stops and has smaller losses than the same method on a 4hour chart.

the system is the same - only the frequency different.

when it comes to the 1 min chart it tends to be the spread that matters - pointless taking a 60 min trade that averages 10 pips per trade onto a 1 min chart as the ratio will be less than 2 pips per trade and the spread eats it.

sensible opinions welcome

I just want the automated program that produces 150% a month

[KPcurrency]

Originally Posted by Soul-Trader2004

I know and work with one trader who works from home using arb strategies on oanda of all places - he makes around 150% on his account a month using this. he trades around 30 times a day per pair and plays two pairs and his hit rate is 97% win / loss.

Its automated and causes no stress - his biggest losing day to date is 13 pips

Very impressive. However, I think when it comes to the retail trader, especially the retail forex trader, your friend is the exception that PROVES the rule. Most traders should shy away from arbitrage and scalping. While trading is not mission impossible, neither is it mission easy. Trying to pick off a little tick/pip here or a tick/pip there is compounding the difficulty.

Originally Posted by Soul-Trader2004

However I do take your point 'generally speaking' that traders stand a better chance taking fewer trades but isn't that just because they lose less times over a longer timeframe?

" I AM MORE INTERESTED IN THE RUTURN OF MY CAPITAL THAN THE RETURN ON MY CAPITAL"--Mark Twain

Trading is about surviving. You cannot guarantee me that your method will make money today, or tomorrow. I, however, can guarantee that you will make no money tomorrow if you lost it all today. Successful traders simply outlast the 95% that lose. One way to stay in the game, is to spend more time on the sidelines. As a trader, of course, you have to make trades at some point. Why not take the best ones? All set-ups aren't created equal.

Originally Posted by Soul-Trader2004

I do not believe that your statement that a setup which occurs 5 times a week is any more probable than a setup which happens 15 times a day - probability is probability no matter what they timeframe and a system with say a 55% w/l ration will win 55% of the time over a month or a day.

Probability is nice, but when probability and reality diverge we must always go with reality. The reality is that some times things that happen less often create better opportunities than things that are more common. Buying after Sept 11, when Professional Money was buying, made for a better trade than any of the multiple moving average cross-over signals.

Originally Posted by Soul-Trader2004

This next one may knock you for six.

My number one rule when trading is:

NEVER TAKE A PROFIT

Brilliant. You really should start a thread on this one.

Do not wait for the market to prove you wrong, look for it to prove you right. If it does not prove you right, get out. If , however, it does stay in the trade until the market takes you out. I like you better already Soul

If you let the market take you out of a trade, it would seem that you would then see the value in trading less. If you're not constantly exiting positions, then you would not be constantly entering positions. Plus, if you exit at a target than not only are you taking a profit, you are speculating on the future when it is not necessary to do so.

[Soul-Trader2004]

Originally Posted by Atomised

I just want the automated program that produces 150% a month

me too , i'll have some of that!

[Soul-Trader2004]

Originally Posted by KPcurrency

Brilliant. You really should start a thread on this one.

Do not wait for the market to prove you wrong, look for it to prove you right. If it does not prove you right, get out. If , however, it does stay in the trade until the market takes you out. I like you better already Soul

If you let the market take you out of a trade, it would seem that you would then see the value in trading less. If you're not constantly exiting positions, then you would not be constantly entering positions. Plus, if you exit at a target than not only are you taking a profit, you are speculating on the future when it is not necessary to do so.

those are the words of a wise man. tho you can still do that AND make multiple trades - let me explain.

when i do discretionary trade i do not tie myself to any one timeframe and look at the market holistically - i have every single timeframe open from 1 min to 1 day.

my trades however, no matter which timeframe has the setup, are taken oin the 5 minute and my stop exits are determined on the one minute. I trend trade every day and i use the 1 minute because it trends every day.

the one minute chart has around 3-4 trends a day and i treat it like any other trend - i trade it and hang onto it until the trend is dead - sometimes those trends are 20 pips long, and sometimes they are over 100 - yes, ive had many one minute trades over 100 pips - simply because i dont have profit targets and i just follow the trend.

in fact it's my strongest rule that i do not close a trade manually - always on a stop

[MickMason]

Are we talking about the same thing here, it's just trading after all said and done!

I don't get why some people need to analyse everything they do in minute detail, do they really find trading such a hard job

[MickMason]

Originally Posted by KPcurrency

" I AM MORE INTERESTED IN THE RUTURN OF MY CAPITAL THAN THE RETURN ON MY CAPITAL"--Mark Twain

An easily pleased punter!

Not a lot of point trading if the goal is breakeven though is there?

[Soul-Trader2004]

Originally Posted by MickMason

Are we talking about the same thing here, it's just trading after all said and done!

I don't get why some people need to analyse everything they do in minute detail, do they really find trading such a hard job

good point Mick, sometimes I talk complete and utter bollocks and othertimes i have moments of genius.

not sure what the last one was and to be honest don't care