How many trades in a row do you guys average?

[TheSundanceKid]

Originally Posted by KPcurrency

tim_nn:

It seems to me that the real opportunity cost is that while you have margin tied up in a "1 lot" trade of the Swiss Franc, that margin could be better used to trade a "3 lot" trade in the Yen. Why tie up margin on a trade you trust less when you could trade multiple instruments and only trade the signals you trust the most?

This is a really good point KP - I alluded to it earlier, but I feel that how you handle and account for this is very specific, based on your trading system/style. I know for me it's definitely a challenge to be able to take as many trades as possible while not using up all available margin (and by "all available margin" I mean as much as you allow yourself to use according to your risk parameters/limits).

Originally Posted by KPcurrency

Plus, while one should try to under trade in size, why not just trade more than 3 lots if you want more money? You want more money, trade more contracts.

Well the problem here is that you put yourself at higher risk by trading larger. This might not be true for everyone, but I find that making two separate "one lot" trades is better than one "two lot" trade - even though/if the total risk is the same.

Originally Posted by KPcurrency

Therefore, it would seem like the best alternatives would be to:
1. Trade lower timeframe for more "3 lot" signals. ( they're all just lines on a chart, and if your method fails in various timeframes it may be suspect to begin with). Remember, markets are Fractal.

2. Trade more instruments. More currencies, or maybe Bonds or Cotton.

3. Trade more contracts on the best signals. This option does not mean take more risk just for the sake of making more money. You should still be trying to under trade in terms of size versus margin required.

1. Like I said previously (above), the system/methodology/technique may not be as profitable, or may not even be profitable at all on a lower time frame.
Though the market is characteristically "fractal", that does not mean that there are many/any similarities between trading on different time frames. Even the most technically based systems can breakdown easily when traded on a lower time frame and/or on one that it was not developed for. Of course I'm sure there are many systems/techniques that work well regardless of what time frame it's trade on, but I'd say most are greatly affected/influenced depending upon which time frame you're using.
You also have other factors to consider (like the spread) that can become bigger issues when you trade on smaller time frames.

2. Assuming your trading system is compatible with other instruments, that would definitely be a wiser alternative to taking the more frequent, lower quality trades.

3. Great point - However I would personally prefer to diversify myself (as I said earlier), rather than "put all my eggs in one basket". Also, I feel more comfortable with a slightly higher rate of total/net risk if I'm adequately diversified - which opens up the potential for greater profits (although it also opens you up to greater potential loss, but that is minimized if your expectancy is reasonably high).

Originally Posted by KPcurrency

As far as pyramiding example goes, the point is that one should not add on by more that the initial buy/sell. Therefore the largest buy/sell should be the first entry. But if the "1 lot" signal comes first and then you get a "3 lot" signal in the same direction, what do you do?

I agree you should not add more than your initial position size to your trade when pyramiding - but there are plenty of traders that scale in their trades starting with only a small amount (relative to their target/ending position size).
If you get two overlapping signals, I would probably treat them as two separate trades - but that would be a judgement/discretionary call.

Originally Posted by KPcurrency

I would again state that most traders make the mistake of trading too much. It makes sense to focus on the higher quality tho less frequent signals. IT IS OKAY TO BE OUT OF THE MARKET. BEING OUT OF THE MARKET IS A TRADING DECISION

Great point. Taking less frequent and higher quality trades is definitely a "safer" way to trade. I prefer a more agressive style, however.

Good Trading,

Sundance

[charlie_robinso]

If you had 3 trading sysrems producing,6%,4%and 3%,would you take
the 3% signal if it were the only signal at the time? .I would think so.

would you put a flat 2% on all trades from the 3 systems?, I would'nt.

If you traded these three systems , would you at times end up minus pips,
and plus in money ,if you bet the % edge that you had in each system,?

of course you would,that is how all pro gambler's bet ,that is why they win.

cheers
charlie

[Soul-Trader2004]

sounds like the way i trade - ive been minus before and still made $

no-one has yet metioned the possibility of adding to winners - thats what i do

all trades i do start at 50% and then if they run they are added to

therefore a 100 pip trade makes more money that say 3 40 pip losses at 50%