13 Aug 2008
I've done manual backtesting starting from early January to end of July 2008. I logged every single good and bad trade for me to know exactly how this strategy performed. To answer your question BobCat about letting a lot run with trailing stop, it does seem to work out positively.
Here's the first setup. Take profit at about 50 pips each week. Once target is reached, no more trades for the rest of the week.
Starting account balance: $3700
Test period: 7 Jan-23 July 2008. (About 6.5 months)
Balance at the end of test period: $4930
Profit: $1230; 33.25%;
This comes up to about 5% per month.
Second setup involves buying an extra lot in each trade. When the other lots are closed out at 50 pips, I would then set a 40 pip trailing stop on the 1 remaining lot.
Starting account balance: $3700
Test period: 7 Jan-23 July 2008
Balance at the end of test period: $5467
Profit: $1767: 47.75%;
This comes up to about 7.3% per month.
11 Aug 2008
As Apocalypto says it, pips are actually very elusive when you're out to get them. Forex could never be equated to gambling, I remember the times when I pull the trigger with excitement and pounding heart, those are always the trades that turn out to be mistakes I shouldn't have done. Even if they do turn out to be winners, they later on become a very expensive lesson to learn.
I think seasoned traders eventually get tired of trying to chase tonnes of pips, and end up settling for consistent but more reasonable returns each week/month.
11 Aug 2008
Source: http://forexfactory.com/showthread.php?t=98055&page=6
Good trading IMO is based on projected targets. Dreaming about all the missed pips on the chart will leave u in a spin chasing the impossible. This is a gamblers downfall >> GREED.
Like La Maya. I have targets, managed by my limit order that I use on every trade. Sure i don't catch every pip on offer but I stay in front and that's all that matters.
Being consistent with discipline.
11 Aug 2008
Source: http://forexfactory.com/showthread.php?t=98055&page=6
Tampa luke,
"There is more than one way to skin a cat."
Please bear with me regarding my take on how la maya k may be profiting from her strategy.
Although she is admittedly a newbie, I believe her system is quite brilliant despite a couple of detracting comments to the contrary.
Here's my take on one aspect that you brought up for question. The Take Profit of 50 pips within the threshold of the the time frame and order expiry window may on average only allow for a very limited number of 50 pip forays in any given trading week. Perhaps only one. Perhaps that singular 50 pip foray sometimes occurs early in the week and sometimes later (again, within the context of this system's "box" and the short time window when the pending order expires). Perhaps the 50 pip movement generally doesn't repeat the excusion more than once a week. Then la maya k's system is capturing that singularity virtually every time the market offers it. Additional trading for the week under those circumstances would only result in additional losses.
So why push the limit when it is more likely that you will encounter a loss rather than additional profits? Makes perfect sense to me.
10 Aug 2008
Luke, thanks for enlightening me on the martingale part. Is any increase is martingale, regardless double or not, then I might as well go ahead and call it martingale
As for whether or not I feel that I'm missing out on a lot of pips for quitting trading the whole week, how do I explain...
Although I haven't been trading that long, in the beginning I've always felt the frustration of not being able to keep pips. Making them is not all that hard, but the real issue for me is losses that occur before or after that shadow the profits I made. Not only was I testing this strategy without these restraints as you say, my live account took quite a beating from it.
Ever since I decided to stick with only 50 pips a week, it suddenly feels a whole lot more probable to keep 150-200 pips per month.
May I ask, Tampa Luke, are you already trading live?
I think it is dangerous to look at the charts and start thinking of all the possible pips I can make, or all the ones I missed. That's usually what a new traders get excited about, and that's how I lost my account. But when you trade live, the reality is far different from that.
Just my two cents.
10 Aug 2008
Source: http://forexfactory.com/showthread.php?t=98055&page=6
Excuse me if I am wrong but there really isn't a semi martingale is there? Any increase in your bet after a loss is a martingale, doesn't have to be a double. The is an important distinction because it illustrates the breakdown of the mathematics.
If your system is good enough to provide a profit, you are costing yourself a ton of profit by putting a completely arbitrary number to quit trading for the week on it. Both the number and the timeframe are irrelevant. I know you feel like this is MM but it is really Mis Money Management.
I am not attacking because you have proven to me that you know way more about trading than me but I have been a gambler for many years and this looks like a rather elementary mistake in money management. I happen to like breakout systems though.
Has there been any testing on what would have happened during the same time period if you ignored these restraints and just traded the breakouts?
4 Aug 2008
If I set up the trade before 4.30 pm, it might be triggered by a spike when people go on a panic buy/sell mode after the news release. I'd rather wait until it settles down and I get to see the true direction.
Not to mention in some brokers, there might be problems of widening spread, orders not filled because of gaps, etc. I've never had these problems with GFT though.
4 Aug 2008
Source: http://forexfactory.com/showthread.php?t=98055&page=4
I have been doing this kind of strategy but a little bit different, I took high and low and start doing the Buy and Sell PO exactly 12.00PM (GMT +8, I come from Malaysia too) for GU. At the same time I employed Martingale system. But, there will be some spikes, where the price might hit the PO and turn back, it happen quite regularly.
It worked pretty well for the last 6 months giving monthly return no less than 25% of my capital, everyday without fail but I blew up my one month profit + additional 20% of my capital this month (July 2008)
I've stopped trading temporarily since last week after realizing Martingale is very very very dangerous, as it can sucks your hard earned past months profit in one or two bad trade. My system works like, I entered 1 lot, the double up, double up until until i hit my target.
But right now, looking at your system, it seems more safe a secured to me as you only chase 50 pips per week. Your SL is tight. YOu don't double up the lot (semi martingale). You reduce the potential spike (hitting PO and the price turning back). Looks like holy grail to me. At last I can see some light at the end of the tunnel!
By the way, since you enter the position for GU at 4.35PM (GMT+8), what I can say, the GBP news always come out at exactly 4.30PM. Why do you prefer to do PO after the news? instead of riding the news? ANy comments on this?
Another thing is, cancelling all the PO at 7.50PM means..you are avoiding US market. ANy specific reasons for that?
Another thing is about your MM. With 50 pips per week, roughly 200 pips per month. With USD 3500, we can earn USD 752, which means for a capital of USD 3500, you might enter 3.75 mini lot?
Considering 25 pips as your potential average stop loss, you are risking USD 93.75 per trade. So it is actually 2% risk on your capital.
Anyway Good JOb..and thank you for your system..
4 Aug 2008
I breakeven when it's 33 pips in profit. So far I didn't specify a expiry time for the trade, so I let it either hit the 25 pip SL, or 33 pips to breakeven. Once it reaches 33 pips, we don't lose either way. We either make 0 pips, or 50 pips.
So few things will happen:
Stop loss hit: 25 pip loss.
33 pips profit: Move to break even
- SL hit, 0 pip loss
- Target hit, 50 pip win.
I've learnt that trading defensively works best for me.
29 July 2008
If you'd already made the 50 pips, personally I would stop trading for the week. That's the whole point of this strategy. To have a set goal weekly, once met, take a break. Otherwise you're likely to give it back to the market.
It's a decent week for 50 pips to made on a Tuesday. Trading further in the week might make it turn out to be a bad week. My idea is stop while you're ahead, and enjoy the sun for now. There's always next week.
http://littleknownsecrets.weebly.com/