Join Me in My Challenge

[Join Me in My Challenge]

We don't want something looking like this "Pizza Chart"

 

Mmmmm! Who would use a chart like that? That's just ridiculous!

 

1) The system has to "suit the personality of the trader" and you mentioned you are not keen on scalping. You prefer the higher TF because of their being "more reliable" - something I heartily agree with, and because this is a system for a beginner, it is also something I recommend too. Most systems can be applied across the board, but I believe they probably should not be - some are constructed specifically for scalping, and others for the higher TF. We can get into that later if you wish ... when discussing indicators.

 

Yes, it does have to be suited to the personality of the trader. Honestly, I'm caught between the daily chart and the 1 hour. The daily is great since it's smoother and I work full-time, but I'd have to really "milk the market" to reach my goal. The hour is great since it'd be easier to reach in less pips, but is a lot more erratic in movement.

 

2) You are comfortable to trade $1 per pip per $1000 in account. That will give you at 2% a/c risk, only a 20-pip SL margin. That might be a bit too tight for trading the higher TF, where stops can be set around 60 to 100 pips at times, but not necessarily, if we get this system "right." The last thing we want to be doing is risking money right up to our limit, when we begin to trade. The reason for that is that "scared money never wins" we are told, and sometimes when the margin is at risk, we can talk ourselves out of the trade. That too is another item that we can discuss a bit further along. It will come up when assessing the reward:risk ratio no doubt, so no need to stress about it here.

 

$1/pip per $1000 is what I'm comfortable with by default, assuming I only try to net 100 pips a week. The daily chart would make this impossible; so, I've thought about compensating by making it $0.20, but going for 500. Either way, it's a stretch but doable. I wholeheartedly agree about the "scared money" which is why I'm a big believer in a more mechanical approach. We are our own worst enemy.

 

3) Your choices of currency are: EURUSD, GBPUSD, AUDUSD, EURJPY, GBPJPY. As mentioned I would like to review the inclusion of "Beast" in the list. It doesn't get its name for nothing. GBPJPY is a widow-maker when in the mood. It is a specialty pair, imv, and is best left to the experienced traders. having said that, I have looked at the ATR (Average True Range) for Beast, and in fact it does behave in a more docile manner in the higher TF. ATR is currently 137 pips, which compares to the GBPUSD with 119 pips, AUDUSD at 87 pips, EURJPY 121 pips and the EURUSD at 128 pips.

 

So the tamest of them all in this group is the AUDUSD.

 

Exactly, though I've no problem looking at the "odd" pairs, though precedence given to those above.

 

4) You are open to use any indicators, and prefer candlesticks - good - we are on common ground. I like to incorporate both Price Action and Indicators in my own trading, though there is nothing magical in either - just a preference. And the thing is not what you use, but how well you use it.

 

I am open to any indicators, have studied many and feel I've a pretty good idea of why they work, though less is more (contrast the "pizza chart"). I'm open to program something to enter and exit based on a system derived, though I don't have to. It could always be semi-automated. I even offered Fuller personally an indicator I wrote to alert us to pin bars and inside bars on every pair simultaneously; he rejected it as he is against such things.

 

You mentioned that you have your own website on TA. You may already have chosen some favourite indicators based on your studies of TA. Again - it's not which ones, but how they are utilised.

 

Yes, it's more or less a compilation of everything I've learned, it is nowhere finished, taking my time to build it.

 

I use a couple of MA's, Stochastic, RSI and MACD, and sometimes CCI, but sometimes I will stick to MACD and the MA's alone. That will depend on whether the market has been consolidating, or trending.

 

Moving averages especially interest me. Forget crossovers, but bounces and in conjunction with other indicators works wonders. I also like Bollinger Bands since it tells you multiple things about the market.

 

Now this is the point where I am hoping others will chime in with a few indicators of their own. We need to be suggesting a few to look at, and to be saying why we want them in the system.

 

If there is just me and you and Arthur, then the system will be a representation of a narrow range of input. Hopefully a few other traders will kick in here and make suggestions - this is not a one-man-band. A recent poll showed that 70% of TL members who responded were FX traders, so there should be a few available with ideas.

 

Absolutely!

 

Right now, off the top of my head, an ideal system would be this. It may be realistic, maybe not. Take any pair, just a set time of the day (i.e. London Open, U.S. Open), set a fixed SL/TP, and enter according to the trend. The questions needed are:

 

1) How to define a trend (or lack of)?

2) How to judge if market could hit TP, or NOT hit SL?

3) What time of day to enter?

 

Of course, that's pretty mechanical, set-and-forget, but it could be done, or it might be a pipe-dream. It is something I'm playing around with.

 

Let's keep this going! Ingot54, I'd love to hear more how you incorporate your indicators!

[Join Me in My Challenge]

Ingot54, I appreciate your candor but thoughtful response. Of course I do not expect anyone to hand me or anyone else "the key to the city". I'm always looking for new ideas; I think any system that works has to be fitted to one's personality.

 

In answer to your questions:

 

What time frame are you expecting to trade?

 

It would depend on the fixed stop loss and take profit I'm most comfortable with. The higher timeframes are more reliable, such as the daily, 4 hour, and 1 hour. The less trades taken, the less exposure.

 

Are you wanting to scalp, swing trade or position trade?

 

I would probably consider myself a swing trader, though I have looked into scalping. The trouble with scalping is lots of exposure and the spread is one's worst enemy.

 

How much capital are you expecting to use to get a return of 10% per week ... that is 46.4% compounded per month - extraordinary figures for someone who has been trading for 18 months.

 

I cannot speak for anyone else, though for me, I'd use $1/pip per $1,000. I answer this question like this because I intend to compound and would keep the lot size proportional to this ratio. Yes, my personal goal is quite high; I know that no one else will do it for me. I welcome new perspectives from those who have "been around the block".

 

Will that 10% return be enough to cover your family's living expenses?

 

After years of consistency, absolutely!

 

What do you consider a "good risk:reward ratio"?

 

I'd say at least 1:2, though I'd prefer 1:3. It's said professionals have at best a 50% accuracy in trades; to compensate, one must have such ratios to remain profitable. Anything less, especially those like 2:1 or worse will blow accounts.

 

What have you been trading up to this point? (Pairs, position size, risk:reward etc)

 

I've traded the major pairs, primarily EURUSD, GBPUSD, AUDUSD, EURJPY, GBPJPY, though I've touched on the exotic pairs.

 

What systems have you tried? How long did you persevere with them?

 

Honestly, I've touched on many in forums, though I've not stuck with them long. I'm the type of person who wants to know exactly why a system works, why it's profitable, where it may go wrong. This can give one an idea if it will work long-term. I know sticking with a system is crucial, but it must be a system one is comfortable with.

 

Did you master any single system, and if so, what was its short-coming, and what do you consider could be done to improve it?

 

There is one I've been using with a trading group. It works well in trending markets and for most of the year, though in the summer it can be disastrous due to ranging, erratic movement. Much of it depends on subjective judgment, I've looked at how I can make it a bit more objective and fixed.

 

Have you been studying Bar Charts,Candlesticks, Moving Averages, specific Indicators, Price Action, Proprietary Systems?

 

Actually, most of my trading journey has been "study". I have traded live and on demo, but learning "how everything works" is important to me. I've even started a website of my own on technical analysis. I prefer candlestick charts, maybe moving averages and/or Bollinger Bands. I believe simplicity will work best. After all, indicators merely reflect price action.

 

Have you tried trading any of the hundreds of systems available on a few of the popular forums?

 

Absolutely. In all fairness though, you said it yourself, it's easy to get lost in a sea of "systems". Perhaps I've created a pond a mile wide an inch deep.

 

I hope those answers will suffice. While this challenge is my own, I'm sure I'm not alone in it. I'd like others to benefit from this post, should bear great fruit from all the input it receives. Finding my system has been my burning obsession, something I think about everyday, always looking at the charts or seeing if I can find my edge. I have many other traders who are encouraging towards me who know what I want to do. I hope one day to be able to reach out to newbies like I am now and return the favor.

 

I look forward to hearing your response, whether it is for or against my answers. Thank you.

 

P.S. In answer to Arthur, the output is how many trades you'd need to take to reach your goal, given the minimum win accuracy. Suppose you have a fixed SL of 20 and TP of 55, you'd have to take 10 trades (4 wins, 6 losses) if you had at least a 40% win accuracy, with a goal of 10% ROI.

[Join Me in My Challenge]

Hello all! I've been in the Forex industry for 18 months and have learned a lot, though I am still at a dead end in settling on a system. However, I've concluded risk/reward ratio is everything. Considering that most professional traders are right at best 50% of the time, it is best to have a good risk/reward ratio.

 

For those of us who want to make Forex a way to put food on the table, I'd like to present a challenge to come up with a mechanical system (doesn't have to be automated, per se), which given a minimum "win accuracy" and a weekly goal (i.e. percentage of account), and a certain risk/reward, how many trades it would take to reach it and to find a reasonable system in which to implement it.

 

I've attached an Excel file which allows you to play around with the numbers. You can change the fixed stop loss & take profit, minimum win accuracy, return goal, lot size, and initial balance.

 

For me personally, I'm looking at a weekly 10% gain. For those interested, any ideas? Any input? Thank you all.

moneymanagement.xls

[Care to Join My Challenge?]

Hello all! I've been in the Forex industry for 18 months and have learned a lot, though I am still at a dead end in settling on a system. However, I've concluded risk/reward ratio is everything. Considering that most professional traders are right at best 50% of the time, it is best to have a good risk/reward ratio.

 

For those of us who want to make Forex a way to put food on the table, I'd like to present a challenge to come up with a mechanical system (doesn't have to be automated, per se), which given a minimum "win accuracy" and a weekly goal (i.e. percentage of account), and a certain risk/reward, how many trades it would take to reach it and to find a reasonable system in which to implement it.

 

I've attached an Excel file which allows you to play around with the numbers. You can change the fixed stop loss & take profit, minimum win accuracy, return goal, lot size, and initial balance.

 

For me personally, I'm looking at a weekly 10% gain. For those interested, any ideas? Any input? Thank you all.

moneymanagement.xls

[Limited Time, Simple System]

That's a broad based question, one that probably tens of thousands of traders seek the answer to which means there is no easy answer.

 

A few observation and input.

 

One you are clearly looking for a swing trading forex strategy and not day trading given your time. Two, it would make some sense that you can at least "check" on your position more than once every 24 hours. Perhaps you take or set-up trades once per 24 hours, but more than likely you'll need to find at least 2 other times you can at least check on the trades to see if there is any need to update stops, etc.... I think you can avoid having to place trades in those 2 other times and reserve that for your 1x every 24 hours. In fact it's probably smarter to do that and avoids overtrading.

 

I would suggest you pick a time to place trades per whatever set-up strategy used that is right before or at the time the Asian session gets going. If you can trade sometime between 6pm - 9pm EST (New York) I think that's idea because taking swing trades during Asian, European and/or active US market hours is usually not a good idea since you end up getting false signals due to all the news reports.

 

Not to say you won't get whipsawed front-running this news but you'll get less false set-ups at the very least which will help.

 

Keep in mind when swing trading you can definitely beat the 1:1 reward/risk but you're likely looking at risks of 50 - 100 pips in most markets to effectively swing trade -- as long as you watch your leverage that's fine since you'll likely on those same trades be targeting at a minimum 75 - 150 pips, etc..

 

Anyway, that's just some top level feedback -- it doesn't give you the "system" but at least some parameters to start looking into.

 

MMS

 

Thanks for the feedback and wasn't really expecting a system (one with no strings attached anyway). Such suggestion above might suit me well since I'm going for 100 pips a week anyway. For me, I want something that can give consistent wins, as much as that's possible in this wild market. Consistency in pips is important because I have goals to compound my gains in a systematic manner. Any ideas how to devise a system, such as finding optimal ratios and times? Analysis-paralysis is my position right now. Thanks.

[Limited Time, Simple System]

I am seeking thoughts and ideas for a system that is simple, can withstand the changing market conditions (including summer conditions), and one which can gain consistently. I ask not only for myself but for many who are in a similar position in these forums.

 

I'm looking for something in which I can set pending orders, or place orders at a given time (due to working a full-time job). A breakout system comes to mind, but am interested in finding something during ranging markets as well. I would risk $1/pip per $1,000 (adjusting the lot size accordingly). Ideas for money management would be a big help too; I don't like anything less than 1:1 risk/reward.

 

I've been studying what's out there the past year; I'm very familiar with the basics and beyond. Yet, I cannot settle on any system I'm comfortable with. I am also a MQL4 programmer and can program a system if it works and someone here is willing to share it (for anyone interested).

 

Anyone have any idea for something that might be what I'm looking for? Please do not send affiliate links; I am looking for a system I can manually trade or one in which I can program on my own.

 

Thank you to anyone who responds!