I will give you numbers for October: no of trades taken: 16 commission paid: 157$ (1.5% of starting balance which is not too bad for a strategy aiming for at least 5% monthly profit) I don't make any calculations regarding the spread though
Consider a 20 pip stop gets hit . With a 1 pip spread thats 5% of that trade going to the house. 10 pip stop 10% goes to house. Make sure your system is robust enough to cover the cost of doing business on small timeframes . Otherwise your broker is the only winner. Good trading to you, keep up the discipline
Yes it makes sense. The problem is that switching to the higher timeframe would reduce the number of trades taken considerably. Anyway thanks for the advice.
What is your win rate... profit factor... and expectancy? If these numbers are not up to par or you are dissatisfied with the results-- it would be wise to abandon the short time frame trigger--- you don't want to be trading setups that are not high probability, high profit, low risk scenarios. Trade only the best of the best.... it serves no purpose to have a plethora of trade setups if the outcomes are mediocre at best. If you are able to generate setups that while not as frequent-- offer you 2:1, 3:1 or more reward to risk profiles... along with higher win rates and greater expectancy per trade-- is it really a negative that the frequency is reduced?
What up calmeurotrader. I noticed that you said you would like to earn 5% per month on your account. For gains of 5% per month a higher time frame can easily achieve this with much less stress and screen time. I trade daily charts and close out 2 to 3 trades a day with 1% risk per trade. I average 10% per month with 1 hour screen time a day. Wins and losses do come in bursts. So this average obviously pans out over the long run. Discipline has been my problem as well. So i personally don't get involved with a trade that's running my stops are set along with take profits before i enter the trade. Most of my trades are not market trades they are limit orders. The market is rarely where i want it to be to enter a trade. Setting limit orders allows me not to force trades. As i am not watching my trades most of the time i don't get emotionally involved. I understand i am only human so trying to be perfect discipline wise is a feat i am not able to perfect. So less manipulation sticking with my guns and setting up new limits as old trades close. My win ratio is not fantastic. My risk reward is even. Results are good. The only discipline factor for me now is to simply set the order up correctly. I do close my orders that have not hit at 8 am daily. 20 pip take profits 20 pip stop losses. Faster moving currency pairs a tad more. I also trade the stock market the same way except i usually hold a trade for 2 to 3 days unless target is hit prior to. This is simply how i reduce discipline mistakes as i have never been disciplined due to always doing what i want to do. Well at least most of the time. Ha Ha! Obviously you know what your doing. Just wanted to point out me and discipline aren't the greatest allies but yet i still do fairly well avoiding potential disciplinary mistakes by not allowing them to surface. Have a good one!
Thanks for the comment Mr Super Trader How come you have 2-3 trades per day using daily charts ? Do you apply your method to multiple markets ?
Most of the action in the forex market happens at my night time as i live in west coast ( CA). So i am in bed when my trades are running. I simply close orders that have not hit and close orders still running at 8 am or so where there at. I want to be out of trades before the spread widens. At 8:00 pm or so i Look at all majors and some exotics. I have a very simple approach. Price seems to like price. They say crooks always return to the seen of a crime. Well price likes to do the same. I have a technique where i set limit orders some where in between yesterdays price action with a stop if possible outside yesterdays price action. Not all the time though. I like an even risk reward which allows for more winners and a faster compounding process and keeps things simple. All i need is a win ratio above 50% to turn a monthly profit. 60% win ratio for me is golden due to the higher then normal frequency (relative). There are so many factors that move the forex market i try not to get overly technical as variable change is a constant. I spend no more then 30 minutes setting up orders. I may set up 6 limit orders with six different pairs inside yesterdays daily bar with or against the trend. As i am only going for 20 pips past history performance allows trading in any direction. Sometimes if price is at the right spot i will then set a market order. If price is close to the top of yesterdays bar i set a limit below the spot price and vice versa. like i mentioned i like to set the stop outside yesterdays range. Sometimes four trades hit my limit and are running sometimes none hit for the night (This is rare). I use no indicators. Just simply trade daily bars. Sometimes i take a closer look and open up an hourly chart to set my limit above or below an hourly support or resistance area. I promise you there's nothing special about the way i trade except for the results. The stock market tends to trend more so i have a different approach based on an initial even risk reward. Each day the stock moves in the direction i trade i reduce my risk to the new daily support or resistance depending on the direction i trade. Doing this allows me to have an even win ratio at worst except my winners hit the 3% and my losers are reduced to an average of 1.5% due to the method that i trail my stops. I never trail stops based on price movement. I only adjusts stops below new found support levels or resistance levels after they occur. If The trade goes against me and breaks a new found support level i feel there's a 66% chance the market will chop or go against me so i get out usually with a less the initial 3% risk. My approach is simple If i am in a trade that has been working for me and previous days resistance or support level is broken against my trade there's a 33% chance of a chop 33% chance it will go against me. Either of those are not good if you want more gains. I look at it like coolers at casino's. The cooler obviously has nothing to do with the luck of the player. When a player is hot at the present there is always a 33% chance his run will continue a 33% chance he will chop and a 33% chance he will continue to stay hot. So when they send the cooler this means the chances of his run to stop is 66%. So therefore 66% of the time the casino's believe it was the cooler that stopped the run. These numbers are based on a close to 50% odds like blackjack. Obviously the cooler is just a lucky man getting paid to let statistics work. Except in the forex market you actually get these signals where as card playing is random. The above paragraph is not 100% right but is somewhat correct in the realms of probability. The beautiful thing is i have 70% of my capital in the stock market and 30% in the forex market. So i can set trades up using leverage at 1% of my total trading capital in the forex market and risk 3% per trade in the stock market. So i am able to capitalize in the stock market in the day time and forex at night using risk based on both moneys in either market. My goal is 10% a month in both markets which is 20% per month. As i am constantly reducing my risk in the stock market and only risking 1% per trade in the forex market my drawdowns are limited relative to the 20% per month gains. Now some months are explosive some are close to flat. I have no problem being flat. Because when wins come they come in bursts. Basically in a nutshell i stopped worrying about my edge and put more focus on money management and ways to reduce disciplinary mistakes. I like the idea of just setting up trades as simple as possible to ensure a lifetime of proper execution. The cool thing is when you trade bars alone you can back test a strategy for as long as charts have been available. The bars represent the psychology of the human mind. Panic, Fear, Greed. Also you will get an idea of where people place stops and limits. Or where people may decide to short or even where margin calls are going to start cause people to liquidate. All these are basically right there in the chart in front of you. Support resistance trend lines fibonachi retracements and so on. Hopefully i have explained enough for you to understand how i look at trading. Which is neither right or wrong. Just a way to turn a profit maximize potential more importantly minimize risk. You can earn hundreds of percentage points going forward but can only lose 100% going backwards. So protection is where it's at. Thus the reason i reduce my risk daily in the stock market and have an even risk reward in the currency market utilizing smart stop placement which allows a trade to bounce of a support or resistance level before it hits my stop. Also with an even risk reward you can randomly set orders and still walk away with an even win ratio with out an edge and break even. Sorry for the long post i seem to get overly exited when i think about trading. I personally have devoted my life as of now to hopefully persevere. Trade or die baby. I don't believe in genius i believe in perseverance. Quite simply passion leads to perseverance perseverance leads to success. I may seem to be full of crap and maybe it's true. Ignorance is bliss. If this is the case i hope it keeps working Ha Ha. Once again have a good one!