HispaTrader, I don't mind trying to answer you at all. I always hope something I do or say helps someone in this business. 1. Could you describe, at a high level, your trading methodology? I gather that you use pivot points, Market Profile (in a general way, not a purist), and fibs. This is tough to sum up here, but in general....I track value and price distribution on many different time frames. Monthly, Weekly and Daily. I try to use these as a filter or guide to help me with trading decisions at a higher level. Next..I do not use traditional pivot points, although what I do is similar. I track changes in value based on current volatility. It is difficult to explain but it is a technique that I developed and wrote some code for. It is not magic or anything and just a different way of looking at things. Basically, I am basing decisions on current conditions, not for instance a pivot point that is determined based on yesterday's close, or last week's close. Now there are many other nuances to all this, but this is a general description. I mainly use the fibs and stuff posted here on longer term charts and as a "third" filter if you will. I rarely ever make a trade based on a fib number or the like, but I have done this from time to time if my conviction is strong. Also it is fun playing around with the studies. 2. How do you set stops? Do you use the next pivot point for your stop? In general, how far is your stop when you enter a daytrade/position trade in the Euro? For example, your stops for last week's trades. Number one. I do not use hard stops. I do not believe in them. Not in this market place where "wierd, manipulative" practices often hunt down the traditional stop points. I also do not really have a risk, reward standard either. I sort of look at each trade with a "theme" and I concentrate on where the market will need to go to prove my "theme" inccorrect. I give myself some wiggle room. What I do know is that I only am willing to give up a certain percentage of my trading equity on any one "theme" if I am wrong. Ideally this level is around 3-5%, but there are time when I will stetch it pretty far if I have a valid reason. So the goal is to always know where I stand in relation to my bucket of money. I am not a traditionalist when it comes to the "rules of trading". I think it is silly to think that you can treat price action with such precision that you are able to say..."okay my stop is 20 ticks or just above yesterday's high". Personally, I think this is why many traders fail in this business but that is another thread. 3. How do you determine how many EC contracts to trade? I have three trading accounts. (1) with Tradestation - RJO and (2) accounts with IB. One of the accounts is an IRA. Let's focus on my main trading account with TS. This is my bread and butter. I have created my net worth with this account as it feeds my other goals and objectives. The other accounts with IB have gotten pretty large and I move in and out in some decent size in these accounts, but that is not really important for someone trying to figure things out when they are learning. I keep $150,000 dollars in my bread and butter TS account. This is my bucket. Each week I order a check to be sent to me with any excess. Always pay yourself if you can. I like to have a real check come in the mail just because I am a little old fashioned. I want to add here that this account is what I consider my total risk. What I mean is that if something blows up or goes haywire on a trade I am not risking my entire net worth. Only my trading account. So I do not make silly decisions to close a trade just because it is the weekend or something because my entire life does not depend on the existence of this account. This helps a trader deal with risk. You absolutely have to become comfortable with risk and not let it influence your trading. It took me a couple years to get to this point. Mind you, I still feel uneasy when I am down a few thousand dollars on a trade, but I will not lose sleep or beat the dog. Now, I need to get back on course with your question. In this $150,000 account I will generally trade 30 contracts. The Euro FX contract requires $2835 or so in margin so that is about $85,000. This means I have $65,000 in wiggle room. If I lose some, I will scale back. I have been very fortunate and have a pretty good win/loss ratio but mainly my thought process is that I have $65,000 to play with. The methodolgy I use lends itself to putting on 20 contracts. Once my trade is "acting right" I will add 10 contracts as soon as I can. Likewise, many times I will take off 10 contracts or more if I think I should. Note: I want to say that I started in this business with $15,000. I lost almost all of it within two weeks. Then over the course of the next couple years I added about another $30,000. My resolve never waivered although my equity did. Once I grew my account to the levels I described above and was able to step up to larger sizes, I became a different trader. It was a process, not magic or anything. I began to think in terms of my long term goals and put a plan in place to get me there. For instance, have you ever done this exercise. Let's say I want to make $1,000,000 per year. I am able to trade 250 days per year. I am trading 30 contracts. So I need to net 14 ticks per day. We can discuss this more in another post, but I am going to post a chart of my equity growth curve. I like to do this because it shows the progression of a trader from novice to competent. I will post it after this. 4. When creating your Market Profile graphic for a currency, what start and end time do you use? I know you realize this, but I want to state again that I do not subscribe to MP. In the tradestation platform there is a study that can be applied for price distribution. This is what I use for day to day decisions. The session times are just the normal sessions on the CME for EURO FX. Start 1800 End 1700. I have rambled on a little here, but I hope it helps. DRT
Here is a chart of my progress as a trader. In the beginning I traded Forex, then the Russel 2000, DOW and SP indexes. Several bond trades mixed in here but not a lot. So this is all of my learning curve, not just my Forex trades. This is only the trades with Tradestation. Doesn't include any with IB obviously. If you study the chart, you will see that I made about 800 trades before things really began to take shape for me. So the message here is, hang in there and keep at it. You will win. DRT
Nice trading Kastro. You are somthing with that Loonie pair. I don't know how you do it. Drives me crazy sometimes. DRT
Hello, I have been reading this message board a lot lately. Thank you for great insight. I just had a question. I started trading forex spot market (through a retail broker) about two months ago with little money of course ( say about 2500 bux). I am not sure if it's luck but I have been consistently making good trades. I have made about 70 trades in two months. Over 65 of them have been positive trades. Because my retail accounts is highly leveraged (about 200 times). I only trade mini-lots, for the fear of blowing out my small account. I am up 44% since I started. To be honest, I think I have found a descent trading strategy. I was wondering if someone can tell me when they started out trading forex, if they experience similar success. And if and when they started putting more money in the account. And if you did put in more money your account, how much more (x times) and should you do it through a retail broker? I really don't mind the spread (3 pips for euro right now), as my strategy doesnt really care about that. Though it does cut into my profit. But at this point, I am really used to the API offerred by this retail broker. And don't reallly feel like switching. So in summary, Do you think this is just a chance that i have been successful? and Should I go ahead with putting in more money in the account? just curious, how much margins can you get with tradestation forex account? -cman
DRT, Thanks again for your thorough response. Very helpful. As I said before, I appreciate your straight-forward responses about your trading, something seen quite infrequently on this forum, IMO. Wish you continued success with your trading!
cman, Maybe someone else can take a stab at your question, but I think 65 out of 70 trades as winners is incredible. Like I said earlier, I blew out my first account and it took me a couple years to get going. 2 months is not enough time to gain competency in this field though. Don't rush yourself to add more money or increase size just yet. Keep trading just like you are for a few more months. The Market will always be there. Enjoy the journey. As far as the question about TS and Forex. TS uses Gain. They are not a retail dealer so there is no advantage here. DRT
Thanks for the advice. It sounds great. I think I should give this a run at least for a year before adding more of my own money. I'll update you in six months though. Thanks, -cMan
Recapping the trades and themes from last week..... The EUR/EC we were playing the well defined range thru the midrange working down to the bottom of value. The CAD/CD we were awaiting a re-take of the 1145 area and an ultimate breakout. This pair continues to drink heavily and needs to sober up. The Pound. We played the move up to value and down. I missed a great short setup here that I described in a prior post. The spike up that I wanted to get short on came right after a data announcement and I missed the entry. I really don't like to enter on data spikes if possible. I hope some of you caught it, it was a nice trade. There was never another re-test of my entry area. I will try to be happy with my 79 ticks of profit so far. The JPY/JY. We took a fairly high risk here out of 116 for a re-take of the 117.50 level. This worked out perfectly against the odds of various know-it-alls. We picked up some nice profit, likely on some short covering. More to come but we are awaiting a possible rocket launch. I will try to get things summarized this weekend for next week so we can make some plans. Short 50 contracts EC at 2850. Covered 30 contracts at 2757. Up 93 ticks per contract or $34,875. Covered 10 contracts at 2747. Up 103 ticks per contract or $12,875. Still Open 10 contracts from 2850. Closed at 2727. Up 123 ticks per contract or $15,375. Total profit in EC trade to date is $63,125 Short 20 contracts CD at 8977. Today's close at 8965. Up 12 ticks per contract or $2,400. Short 10 contracts BP at 9041. Closed this trade at 8956. Up 79 ticks or $4,937. Long 10 contracts USDJPY at 116.19. Trade closed at 117.43. Up 124 ticks per contract or $15,500 Total Profit on these trades is currently $85,962.
sim03, I am sorry that I missed your question from a few days ago. I was just looking back for a chart I had posted and saw it. Studying value can be done in many ways. You can simply set up a workspace with various time frames and draw lines thru support and resistance, you could watch pivot points, you could make up many fibo studies, etc. The one thing I respectfully suggest you do not do is use the often taught (easy) method of watching things like stochastics and RSI. In my opinion, there is no room for this in a master traders arsenal. Maybe in a lazy traders aresenal they are fine. Here is what I would suggest.... embark on a study of market profile. If you are not familiar with this than it is time to start learning. It is not easy. It is also not necessary to be an expert to utilize the techniques. Market profile helps you understand where to buy or sell and where to avoid buying or selling. It is not so much a methodology as it is a guidepost for making decisions using your primary methodology. It can be applied to any market you trade. First go here http://www.cbot.com/cbot/pub/page/0,3181,1168,00.html Click on the "Educational Materials" button on the left and download the free marletprofile handbook. Study it. Books Mind Over Markets Also, any of the books by Steidlmayer who "invented" MP Steidlmayer's Recent Book Just google "market profile" and you will find lots of info. Can you believe google is a verb? DRT
DRT, Have you ever traded interday/daytraded with your method, if so were the results as good, if not what are your thoughts on daytrading? Thanks in advance