Traders Laboratory Forex Trading Contest!

[optiontimer 10]

Thank you for your kind words. As for the methodology, I am following the idea from Optiontimer's thread http://www.traderslaboratory.com/forums/trading-psychology/10158-optiontimers-project.html to trade in the direction of the main move when it is ready. I set up the simple chart in oanda, then in the evening scroll through the pairs searching for the ones that are ready for a trade.

 

'Tis truly the key to untold wealth. That method is the easiest way I know to make a lot of money in a little bit of time, and it doesn't cost you anything except a few hours of studying that thread. A little time and then the discipline/work ethic to employ it and you wil be on your way.

 

I experimented by entering trades in EU, EJ, CJ, UJ (actually GU also looked ready, but it was hard for me to enter EU and GU in the opposite direction - something to be worked on).

 

Yes. Do not assume that yesterday's correlations will hold tomorrow.

 

The next time the signals were ready, I entered heavily on the ones that perform the best. In this case it was EJ. I entered EJ heavily and pressed it by entering more positions when it went my direction (I call it my snowball trade). Strange that EJ was outperforming GJ. I tried entering some exotic pairs and those pairs with XAU and XAG also, but I find that the instruments that do not show a definite sustained direction were not performing as well. Ofcourse this was just a very small sample and need further study.QUOTE]

 

It is not strange and yet if you found it to be strange that was telling you something important.

The Euro is by far the strongest currency at the moment, and Yen is by far the weakest. The best play is to be long Eur and short YEN, and the fact that the market allows you to be long the strongest while simulataneously short the weakest is a gift of untold proportion!

 

The GBP is the weakest of the majors right now, so the weakest major will necessarily underpeform against the weakest when compared to the stronger majors. So it makes sense that if all the majors are rising against the Yen, the GBP wil rise the least, and in time, it may actually fall. Again, do not assume that since the GBP was the strongest against th Yen in the last bull market that it will remain so in toay's bull.

 

The next time the signals were ready, I entered heavily on the ones that perform the best. In this case it was EJ. I entered EJ heavily and pressed it by entering more positions when it went my direction (I call it my snowball trade)...I was very lucky to catch a wave when the position was so large.

 

You ought to enlarge that, print it out, and paste it everywhere so that you will never, ever, forget those words. While so many are out chasing for the holy grail hoping to figure out a way to get "one or two es points a day," you go and post the actual grail right there in your humble post.

 

1) Look for the strongest trend

 

2) Wait for the pullback

 

3) Jump in big (but not recklessly) when price signals the pullback may be over and the trend is likely resuming.

 

4) Use open trade equity as additional margin to pyramid, i.e. "snowball" your position.

 

As for your stop, trail behind recent reactions. Assume the trend will continue until it reverses and stops you out. I would recomend studying Victor Sperandeo's books, and perhaps incorporate his 1-2-3's and break of properly drawn trendlines to help you.

 

Finally, not all of your campaigns will not all be homeruns. In my own accounts, I am up over 170% for January. December I was up over 40%. But November was not a full of opportunity, and I managed only 15%. I do not have many negative months, but I did finish down about 2.5% in June of 2012. There will mostly be singles and doubles, a few triples, even fewer homeruns, and then the occassional grandslam. You will also sometimes strikeout.

 

But the way you managed that 89% is exactly how I trade, whether I am day trading or position trading. I know most here won't believe my numbers, and I don't care. If nothing else, my performance month after month in these contests ought to be enough to make some people think "Hey, maybe there is something to this system. Maybe I should go look at the OT project thread."

 

Think about this: I finished the contest +40%. But if you recall, I actually dropped to -50% because I inadvertently failed to place a stop loss on one trade. From that -50%, left me a balance of 45K, I hit the same pair you did, and traded it the same way you did, and I managed to take that 45K back to 140K in a month. Had it not been for that one mistake, my two month return for the contest would have likely exceeded 200%.

 

And one last thing - you mentioned "luck." Absolutely! Most traders overestimate the amount of control they have and underestimate the role of luck. You cannot control when and where the market will go on a tear, or tread sideways for a seeming eternity, or when a perfectly good signal to hop aboard a trend is suddenly reversed by price action, with an unhealthy dose of negative slippage to boot.

 

We only control whether or not we are ready to be the beneficiaries of these trends. We cannot control when luck will strike, only that we are ready to get lucky when it does.

 

You seem to have had a breakthrough in your understanding of what I have been trying to communicate here. Kuokam likewise sems to be on the cusp of a breakthrough. I wish the both of you the determination and perseverence and discipline to benefit fully from your burgeoning insights.

[kuokam 10]

Bravo Onemove, for the the fast learning and discipline in application.

 

OT, thanks a lot for another great contribution. I am so happy I came to know you and project here.

 

My performance lately has not been optimal for two reasons:

1- I tried to pick tops and got punished, because I followed a COT reader telling me for weeks that the yen was way oversold and ready to reverse. There I learned what it is to follow too many indicators at the same time:

2- I lacked the courage to take two trades that went in my projected direction in leaps. So, as of late, I've been only applying the "cut your losses short" and "manage your risk" rules.

 

For my bottom line for the 4 months contest, I started out with 100700. Now I have 150800 in the account. Very satisfied with a result I never achieved and managed to keep in my 6+ years trading live or sim.

But I know the learning never ends, as a saying here goes "who is not advancing is retreating".

 

Now, for a couple of weeks I am taking a break from the contest.

My project at hand is that of learning the to read and trade over the DOM. I have been told the pros' trade but that way and wanted to check out what I am missing. Any opinion on the subject is welcomed, be it by pm .

 

See you next time. Thanks again to Mystic, OT, Ingot and all the contributors.

 

 

 

'Tis truly the key to untold wealth. That method is the easiest way I know to make a lot of money in a little bit of time, and it doesn't cost you anything except a few hours of studying that thread. A little time and then the discipline/work ethic to employ it and you wil be on your way.

 

 

 

Yes. Do not assume that yesterday's correlations will hold tomorrow.

 

The next time the signals were ready, I entered heavily on the ones that perform the best. In this case it was EJ. I entered EJ heavily and pressed it by entering more positions when it went my direction (I call it my snowball trade). Strange that EJ was outperforming GJ. I tried entering some exotic pairs and those pairs with XAU and XAG also, but I find that the instruments that do not show a definite sustained direction were not performing as well. Ofcourse this was just a very small sample and need further study.QUOTE]

 

It is not strange and yet if you found it to be strange that was telling you something important.

The Euro is by far the strongest currency at the moment, and Yen is by far the weakest. The best play is to be long Eur and short YEN, and the fact that the market allows you to be long the strongest while simulataneously short the weakest is a gift of untold proportion!

 

The GBP is the weakest of the majors right now, so the weakest major will necessarily underpeform against the weakest when compared to the stronger majors. So it makes sense that if all the majors are rising against the Yen, the GBP wil rise the least, and in time, it may actually fall. Again, do not assume that since the GBP was the strongest against th Yen in the last bull market that it will remain so in toay's bull.

 

 

 

You ought to enlarge that, print it out, and paste it everywhere so that you will never, ever, forget those words. While so many are out chasing for the holy grail hoping to figure out a way to get "one or two es points a day," you go and post the actual grail right there in your humble post.

 

1) Look for the strongest trend

 

2) Wait for the pullback

 

3) Jump in big (but not recklessly) when price signals the pullback may be over and the trend is likely resuming.

 

4) Use open trade equity as additional margin to pyramid, i.e. "snowball" your position.

 

As for your stop, trail behind recent reactions. Assume the trend will continue until it reverses and stops you out. I would recomend studying Victor Sperandeo's books, and perhaps incorporate his 1-2-3's and break of properly drawn trendlines to help you.

 

Finally, not all of your campaigns will not all be homeruns. In my own accounts, I am up over 170% for January. December I was up over 40%. But November was not a full of opportunity, and I managed only 15%. I do not have many negative months, but I did finish down about 2.5% in June of 2012. There will mostly be singles and doubles, a few triples, even fewer homeruns, and then the occassional grandslam. You will also sometimes strikeout.

 

But the way you managed that 89% is exactly how I trade, whether I am day trading or position trading. I know most here won't believe my numbers, and I don't care. If nothing else, my performance month after month in these contests ought to be enough to make some people think "Hey, maybe there is something to this system. Maybe I should go look at the OT project thread."

 

Think about this: I finished the contest +40%. But if you recall, I actually dropped to -50% because I inadvertently failed to place a stop loss on one trade. From that -50%, left me a balance of 45K, I hit the same pair you did, and traded it the same way you did, and I managed to take that 45K back to 140K in a month. Had it not been for that one mistake, my two month return for the contest would have likely exceeded 200%.

 

And one last thing - you mentioned "luck." Absolutely! Most traders overestimate the amount of control they have and underestimate the role of luck. You cannot control when and where the market will go on a tear, or tread sideways for a seeming eternity, or when a perfectly good signal to hop aboard a trend is suddenly reversed by price action, with an unhealthy dose of negative slippage to boot.

 

We only control whether or not we are ready to be the beneficiaries of these trends. We cannot control when luck will strike, only that we are ready to get lucky when it does.

 

You seem to have had a breakthrough in your understanding of what I have been trying to communicate here. Kuokam likewise sems to be on the cusp of a breakthrough. I wish the both of you the determination and perseverence and discipline to benefit fully from your burgeoning insights.

Edited February 3, 2013 by kuokam

[onemove 10]

'Tis truly the key to untold wealth. That method is the easiest way I know to make a lot of money in a little bit of time, and it doesn't cost you anything except a few hours of studying that thread. A little time and then the discipline/work ethic to employ it and you wil be on your way.

 

Optiontimer, Thank you so very very much! I am so grateful for your thread http://www.traderslaboratory.com/forums/trading-psychology/10158-optiontimers-project.html and for your generosity in sharing what works.

 

There is still a lot of work to do on my part. For example, I exited EJ at the hook back of daily stochrsi, yet it has continued to move strongly with no reliable fresh signal for re-entry. Therefore I am sidelined unable to participate in the 4+% move since. What is your strategy for re-entry?

 

You ought to enlarge that, print it out, and paste it everywhere so that you will never, ever, forget those words. While so many are out chasing for the holy grail hoping to figure out a way to get "one or two es points a day," you go and post the actual grail right there in your humble post.

 

1) Look for the strongest trend

 

2) Wait for the pullback

 

3) Jump in big (but not recklessly) when price signals the pullback may be over and the trend is likely resuming.

 

4) Use open trade equity as additional margin to pyramid, i.e. "snowball" your position.

 

As for your stop, trail behind recent reactions. Assume the trend will continue until it reverses and stops you out. I would recomend studying Victor Sperandeo's books, and perhaps incorporate his 1-2-3's and break of properly drawn trendlines to help you.

 

Thank you very much for pointing the way.

 

Finally, not all of your campaigns will not all be homeruns. In my own accounts, I am up over 170% for January. December I was up over 40%. But November was not a full of opportunity, and I managed only 15%. I do not have many negative months, but I did finish down about 2.5% in June of 2012. There will mostly be singles and doubles, a few triples, even fewer homeruns, and then the occassional grandslam. You will also sometimes strikeout.

 

But the way you managed that 89% is exactly how I trade, whether I am day trading or position trading. I know most here won't believe my numbers, and I don't care. If nothing else, my performance month after month in these contests ought to be enough to make some people think "Hey, maybe there is something to this system. Maybe I should go look at the OT project thread."

 

Think about this: I finished the contest +40%. But if you recall, I actually dropped to -50% because I inadvertently failed to place a stop loss on one trade. From that -50%, left me a balance of 45K, I hit the same pair you did, and traded it the same way you did, and I managed to take that 45K back to 140K in a month. Had it not been for that one mistake, my two month return for the contest would have likely exceeded 200%.

 

Optiontimer, yes, I still maintain from my earlier post

 

Optiontimer is such an amazing trader!! Any trader knows that it is much harder to go into a deep draw down and then having to pull oneself out of one with a much smaller balance to start with. So in my mind Optiontimer has surpassed all of us thus far.

 

That is an amazing performance in your own accounts! To have such a consistent positive performance over time is what I strive to learn to do.

 

Do you have a max drawdown level where you decide that no additional signals will be taken in the week? in the month? A sit-out period so to say. And what might that max drawdown level be?

 

And one last thing - you mentioned "luck." Absolutely! Most traders overestimate the amount of control they have and underestimate the role of luck. You cannot control when and where the market will go on a tear, or tread sideways for a seeming eternity, or when a perfectly good signal to hop aboard a trend is suddenly reversed by price action, with an unhealthy dose of negative slippage to boot.

 

We only control whether or not we are ready to be the beneficiaries of these trends. We cannot control when luck will strike, only that we are ready to get lucky when it does.

 

You seem to have had a breakthrough in your understanding of what I have been trying to communicate here. Kuokam likewise sems to be on the cusp of a breakthrough. I wish the both of you the determination and perseverence and discipline to benefit fully from your burgeoning insights.

 

Thank you for your encouragement.

[optiontimer 10]

...There is still a lot of work to do on my part. For example, I exited EJ at the hook back of daily stochrsi, yet it has continued to move strongly with no reliable fresh signal for re-entry. Therefore I am sidelined unable to participate in the 4+% move since. What is your strategy for re-entry?

 

Do you have a max drawdown level where you decide that no additional signals will be taken in the week? in the month? A sit-out period so to say. And what might that max drawdown level be?

 

 

 

Thank you for your encouragement.

 

The stoch is for OB/OS against the trend only. The hook, as you call it, is only to be used as a sort of "training wheels" to tip you off that the main trend is getting ready to resume. I never recommended that you use it to exit a with-trend position. Once you are in a position, get rid of the stoch until price pulls back to the MA's. Then you can put it back on your chart to help you determine whether and where a good spot to add-on to your with-trend position would be. It is not an entry and exit indicator. Its only use, as I've described it, is to identify an oversold pullback in an uptrend or an overbought rally in a downtrend. That is it!

 

I have no max drawdown level. If you start sitting out signals, especially after a series of losses, you will undoubtedly sit out the trade that would have won back your all of your losses and then some. So long as you are taking the trades as your set up defines them, you must take them all. You will harm your long-term results if you place a restriction on your market activity that has nothing to do with the market.

[4EverMaAT 10]

.........

 

I have no max drawdown level. If you start sitting out signals, especially after a series of losses, you will undoubtedly sit out the trade that would have won back your all of your losses and then some. So long as you are taking the trades as your set up defines them, you must take them all. You will harm your long-term results if you place a restriction on your market activity that has nothing to do with the market.

[emphasis added]

 

That's a fine quote here. It take a lot of confidence in your system to play it consistently no matter what. This is why systems are important, and the more you automate, the 'easier' it becomes as your focus is much less likely to drift. When you work out the expected drawdowns ahead of time, you can also use equity-based stop loss in case of a tsunami, which no one really has control over anyway.

 

One of the original turtles commented on the mechanical approach they used. There were times where there were lots of small losses that added up while going after the larger trend, and psychologically it can be difficult (even with a mechanical strategy, written by and under the guidance of a master trader) to exercise patience to wait for the turnaround to bigger profits.

 

Keeping all other variables constant, and depending on your aggression levels, your overall capital risk decreases as you increase the repetitions of your strategy. Your overall equity goes up, and risk of ruin or risk of loss is less and less as you now play with "the market's" money.

[Mysticforex 13]

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[Mysticforex 13]

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[Mysticforex 13]

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[Ingot54 13]

Thanks Mystic. I started in the contest for various reasons, and for continuing reasons will not be able to take part much.

 

I note that I have only made 3 trades ... but for counting purposes it appears that an entry is one trade, and an exit is another trade. So it prints that I have made 6 trades.

 

It seems that those contestants who are showing an odd number of trades, still have a trade open in the market at the time of your screen grab.

 

Just a little more trivia from me, which you have all come to look forward to!

 

:rofl:

[Gringo 10]

 

It seems that those contestants who are showing an odd number of trades, still have a trade open in the market at the time of your screen grab.

 

:rofl:

 

Hello Ingot,

 

I person using two trades to enter into a complete position but exiting with only one trade won't follow this even or odd trade logic. Same with entering with one trade and exiting with two. At the end of the above combination of three trades there won't be an open position.

 

Your input is valued and appreciated.

 

Thank you.

 

Gringo

Edited February 13, 2013 by Gringo

[Ingot54 13]

1 person using two trades to enter into a complete position but exiting with only one trade won't follow this even or odd trade logic. Same with entering with one trade and exiting with two. At the end of the above combination of three trades there won't be an open position.

Gringo

D'oh! Of course ... thanks mate! There are always broader ways to see things.

 

btw - my post above should have read: " I started in the contest late for various reasons... " ... it didn't make a lot of sense otherwise.

 

Cheers - GL in the contest.

 

Ingot

[Mysticforex 13]

Hello Ingot,

 

I person using two trades to enter into a complete position but exiting with only one trade won't follow this even or odd trade logic. Same with entering with one trade and exiting with two. At the end of the above combination of three trades there won't be an open position.

 

Your input is valued and appreciated.

 

Thank you.

 

Gringo

 

Hi Gringo,

 

 

FYI Let's say you opened two 50K long positions on a pair with the idea of TPing 1 position for 25 pips and the second position at 50 pips. It's not necessary.

You can open one position for 100k. when the trade goes 25 pips in to profit (hopefully)

you can sell 50K and this will take half your trade off the table. Either as Market or Entry since there is no hedging allowed ( oanda never allowed hedging even back in the pre, new CFTC rules.

 

Hope this helps.

[Mysticforex 13]

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[Mysticforex 13]

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[kuokam 10]

Mein Gott!

The boss is back!

 

 

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[Mysticforex 13]

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[Mysticforex 13]

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[optiontimer 10]

I love the numbers I see getting put up ... especialy from you, Ingot!

[Gringo 10]

These don't look like numbers to me. More like temperature readings perhaps.

 

Ingot and TTony have ruined it for the mortals.

 

Gringo

[TTony 10]

Ingot and TTony have ruined it for the mortals.

 

 

Oh, I'm just lucky.

But I read somewhere Ingot found the Holy Grail

[Ingot54 13]

... Ingot found the Holy Grail

I am in possession of the HG ... yes I am.

 

But I did not find "it" ... "it" found me.

 

It is "my" Grail, and can not be shared. Each must attract their own Grail.

 

It will come to you, but you need to present the right kind of conditions that attract it ... just as I did.

 

Patience - with yourself and with the market

Persistence in your belief in yourself and your dream

Commitment to education

Focus on your goal

Ruthlessness in discarding the mythology of trading (ie the things that do not work)

Consistency in application of your plan

Methodically apply your rules

 

In fact I think I could do a far better job of showing you how to attract your own HG,

by directing you to this thread:

 

http://www.traderslaboratory.com/forums/trading-psychology/9278-your-mama-doesnt-trade-so-wise.html

 

There is a lot there ... so allow yourself a few days to absorb it.

 

Finally, in a few days I will be starting a new thread, which addresses more of the

things that you can apply practically, to make an immediate difference to your

trading results.

 

I hope I am not coming across in an arrogant fashion - the Internet can make

things appear thus. By sheer good luck more than anything, I found the trades

and got the entries that brought me to this place.

 

In the next 4 weeks, I hope to continue to attract that kind of trade to my notice.

 

To those who are not currently making startling profits ... help is at hand ...

do not give up.

 

Cheers

 

Ingot

[Ingot54 13]

I love the numbers I see getting put up ... especialy from you, Ingot!

OptionTimer - coming from you that really does mean a lot.

 

Thank you.

[Mr_black 10]

I will try my new system in the March contest...:missy:

[thalestrader 14]

I will try my new system in the March contest...:missy:

 

Mr Black is back ... I'll bookmark this thread if you enter this fray.

 

Good to see you!

 

Best Wishes,

 

Thales

[Mr_black 10]

Mr Black is back ... I'll bookmark this thread if you enter this fray.

 

Good to see you!

 

Best Wishes,

 

Thales

Yep ,I am in Oanda monthly contest arm and ready.....