Electric, you say making a million is hard in retail trading? Where do you think the money is then? Just curious, Take care -Kastro
I was thinking that if I could lose a little weight, I could try my hand at selling my body But at my age the options are running out. A young man such as yourself should date girls and complete your education I guess...Thats what they told me anyways, but it did not help.. I simply do not know how to make a million or where it is...maybe in my second half of life I can discover these things and keep it secret from ET. I am making more money than I ever have in my life just now...but it can all end without anything to fall back on except my FY account. Michael B.
I hope I do too I think I have found it, it's just a long path, so it might take a while to walk it. Thank you for everything Electric, -Kastro
Yes, the basic idea of range trading, or buying support / selling resistance on cable during the Asian session can be developed into a sound strategy. Especially in the past. What leverage is your account? 150:1? Margin requred for 1 cable lot should not be derived through "observation", but rather is directly proportional to the current rate, via a simple formula. At, say, 1.82, minimum required margin is $3,640 / $1,820 / $910 / $455 at 50:1 / 100:1 / 200:1 / 400:1 account leverage. I see that you are using routine leverage of about 91:1 at current levels (2 cable lots on $4,000). 100:1 As I'm sure you know, both facts are far from 100% guaranteed. On any given day, a lot of directional movement, including breakouts (false or real) can happen in cable during the Asian session, and not necessarily during the European session. How do you deal with the former? at 8:00 redraw new extremums What about your stop losses, if any? Where does the "5 pip loss" come from? dont need a stop loss for a 5 pip profit. Daytime volatility breaks the border of the 00:00-8:00 channel. It's guaranteed. In terms of expectancy... given your fixed TP of 5 pips, what's your expected win %? Not sure what exactly you mean... Ive been testing this for a month now. So far no losses. I only lose when I place an order above (or below) the extremums at 8:00 and trail the profit & SL 20.
If you don't attach a stop loss to your orders, are you sure your account is 100:1? Given your position sizing... 2 cable lots on $4,000, for a 91:1 leverage @1.82xx... with a 100:1 account you can only survive 17 pips of heat / MAE. At 18 pips, you will get a margin call liquidation, for an instant 50% loss. If your spread on cable is, say, 3 pips, you've only got 17 - 3 = 14 pips of breathing room, to play with (or pray for). I don't know how you didn't get a 15-pip drawdown over 30 days of paper trading. Even a fake breakout on cable can go 15 pips outside the range. Also, are you taking spreads into account? To make your 5-pip TP, you need, of course, an 8-pip move in your direction every time, assuming 3-pip spread. You may want to consider reducing your leverage to a much lower level than the account leverage. Still, even then, WarEagle has already done a fine job of explaining some of problems you're bound to run into. Namely, when (not if) you get caught in a breakout, you stand to lose 100, 150, 200 and more pips. We're talking cable here... it just loves taking off on those runs (MAEs from your perspective). Some of them can and do start during the Asian session. A single 100++ pip loss will cancel out scores of those 5-pip gains. That's why I was asking about your expected % wins, to focus on expectancy: Expectancy = average win x % wins + average loss x % losses (Here average loss is a negative number; breakeavens are ignored.) - If your average win = every win = 5 pips, while your average loss is virtually unlimited, up to 50% of the account value, you need close to 100% wins, for positive expectancy. - If you win, that is, capture your 5 pips, you get 5 x $20 = $100, or 2.5% return (and smaller % on subsequent trades, due to increasing account balance... until you can increase your # of lots traded from 2 to 3) - To recover to break-even from a single 50% loss due to margin call liquidation, you'd need 100% return. Roughly 40 5-pip, 2.5% wins. So you need at least 40 / 41 = 97.5% win rate. Sorry, not a chance.
check out my oscillators predicting market dynamics...I read back to previous posts (long as essays!!!) I've posted 6 years ago and took it with a smile!
http://www.elitetrader.com/vb/showthread.php?s=&postid=1055234#post1055234 http://www.elitetrader.com/vb/showthread.php?s=&postid=1054589#post1054589 http://www.elitetrader.com/vb/showthread.php?s=&postid=1054588#post1054588