Trade small to win

I like to express my thought in writing in the public so that I can express with more care, more organized and I can discuss with others who found that what I write is worth discussing...

Trading is so simple if we trade small and so complicated if we trade big. Small or big here is the size of our net exposure compare to our account size.

If we have 1000 USD account, a position of 10,000 units of Eur/Usd will have pip value = 1 USD/pip, that means 100 pip will affect your equity 100USD, that is 10% of the balance/equity. That is pretty big. If you keep the pip value so that 1000 pip = 10% of equity then I can say it is 'trade small'. In this case, it is 1000 units of Eur/Usd max.

Of course, the rate of return (ROR) will be small too if we trade small.

So what is the ROR per month we should target on?

I used to target on high ROR like 20-50% per month and many times I blown my accounts. We are often too focus on high return and trade too big and end up with loss, well at least it is true for me for a pretty long time. Actually, part of trading big of mine is due to the excitement and experiment. Now I am focus on small and consistent.

I think, if we can only make 3% a month consistently, we are already in good shape. We should start making consistent small return first then improve that rate gradually. Say 1% per month first, then 2%, then 3%, 4%,...

(to be continued)





 

i am doing the same.

I assumed you are talking manual trading. Which is not my expertise, but I think the idea is not have small ROI, since is a manual trade it probably will be more profitable if you have the correct skill.

I think it will be a very tedious job if follow technical, combine with fundamental probably will look like below profile.

https://www.myfxbook.com/members/Sniperforex/swing-trading/27414

The account looks great but the history is too short. If I see a much longer history, it will be more meaningfull.

I have done 400% one time in 2 months, then blown up. Many times I did 30% a day. But I failed to maitain that kind of return for longterm. Now I am focusing on consistency.

Do you have a longer trade history? How long have you been trading? So you are more fundamental, I guess ?

Ohh... the manual swing trading account is not mine.
I'm not yet learn to master manual trading.
I'm only good at exploiting the EA for passive trading.

8 month tested, but I only join myFxbook on April'10

500Acc start fresh every month without human interruption.

Oct (207.50%),
Nov (-62.18%),
Dec(192.44%),
Jan(64.08%),
Feb(-99.27%),
Mac(145.51%),
Apr(63.40%),
May(418.08%)

Total 8 month ROI = 929.56%
Average ROI = 116.19%

https://www.myfxbook.com/members/ForexSeeker/i-kill-you-later-2/28333

So look like the Swing trading tactic is the one I should go research on.

Oh, it is not yours.

Regarding to your 8 month test result. The total ROI can not be the sum of individual month's ROI

If you start with 500USD and trade without deposit more fund, then the calculation should be like the below:

--------------- Start Equity----------------ROI--------------------------Gain/Loss amount---------End Equity
Oct-----------500---------------------------207.50%-------------------1038-------------------------1538
Nov----------1538--------------------------(62.18%)-------------------(956)-------------------------581
Dec----------581---------------------------192.44%---------------------1119-------------------------1700
Jan----------1700---------------------------64.08%----------------------1090-------------------------2790
Feb----------2790--------------------------(99.27%)--------------------(2770)-------------------------20
Mar-----------20--------------------------- 145.51%----------------------30------------------------------50
Apr-----------50--------------------------- 63.40%------------------------32------------------------------82
May-----------82---------------------------418.08%----------------------342----------------------------423


At the end of Oct, Equity= 1583USD, without withdrawing and depositing, this 1583USD is now the new start equity (for Nov) so the End Equity = 581USD, keep calculate this way, the End Equity of May should be 423 USD. That is a loss of 500-423= 77USD, or 77/500= 15.4% after 8 month.

You can see in the month of Feb, the account loss up to 99.27% from 2790USD down to 20USD ! This is what we call a blown up.

Correct me if I am wrong.

CuongVC

The EA of mine did not use MM. It is a fix lot size of trade no matter how big your account.

So the ROI calculation will be wrong if you base on the balance of each month, the ROI has to base on only 500 USD.

14 Sep 2009, I setup a 2000 Acc, to see the different if do not use Hit & Run tactics.

Here the graphic record I able to save up for my own reference.

https://www.myfxbook.com/community/trading-systems/kill-bill-5-2k-acc/31107,1

I think the best way is you give us all relevant information then we will talk about how great it is.

What is the initial deposit?
In Oct, you have ROI= 207.50%, what does this mean? What is the profit amount? Do you withdraw the profit when it gain? Do you deposit more when it loss?
What happen on month Feb, when the loss is 99.27%? What it really mean?

By give the information like below we can easily see how the account really doing:


Oct......start equity........end equity
Nov......start equity........end equity
Dec......start equity........end equity
Jan......start equity........end equity
Feb......start equity........end equity
Mar......start equity........end equity
Apr......start equity........end equity
May......start equity........end equity



C

500Acc start fresh every month without human interruption.

So just use the ROI X 500 USD.

I restart new demo every month, till April join fxbook no restart.

Oct'09 500Acc become 1537.52
Nov'09 500Acc become 189.10
Dec'09 500Acc become 1462.21
Jan'10 500Acc become 820.40
Feb'10 500Acc become 3.64
Mac'10 500Acc become 1227.57
Apr'10 500Acc become 754.57 ( Recorded in myfxbook)
May'10 500Acc become 2590.36 ( Adding Equity Protection so it only risk 500 USD )

I keep a detail record in spreadsheet before knew myfxbook.
https://spreadsheets.google.com/pub?key=0AsrD-HBN25RRdEwzN1RCZkx1RE8zOFBVRDNfRlhkNmc&gid=12

Now we are in the same pace.

So we can see that the restart every month (or every certain time length like 2 months, 3 months,...) is important because if we don't, one day the 99% DD will blown all the gain previously achieved.

I recommend you restart it each month. That means, if it gain, withdraw all the gain AND if it lose, deposit more fund equal to the loss amount to keep the start balance the same number every month.

Good trading.

I had also downloaded many manual trade system.

But as not a full time trader, I have no time to research and sit tide to wait for a trade.

So what system you have try out before and which system is your favorite ?

Do you have some shortcut EA, that can change all TP at a single click or open order and close order at a single touch ?

I have been trading from June 2006. Trade and learn, try, create system, refine them,... I am still always improving my skills/knowledge. I like to disscuss about strategies.

The more I stay with this forex thing the clearer everything is and the surer I can be a long term winner. I have managed accounts too.

The market is so dynamic, the price movement has so many parameters and each parameter vary in so wide range.... that is why we have to be flexible. There is no fix trading style that can be a winner all the time. We need to apply different style in diferent market condition and account condition.

This is not easy... if we want to gain big consistently. But to gain consistently small like 2-3% per month is very easy and that is why I am now focus on this approach.

I have also make a lot of Expert Advisors, Custom Indicators and Scripts for MT4 platform. What you ask about 'some shortcut EA, that can change all TP at a single click ...' is very possible/easy to me.

C

So you are a full time trader. How you manage account ? Through PAMM account or base on trust of profit share out?

You have any profitable EA that can run over a years without MC ? You make so many EA to sell as commercial too ?

I am not a full time trader but I spend many hours a day on forex.
I created many EA/Custom Indicators/... for myown. I have never selled one but may be this is a new way to have some snacks and/or helping others or meeting people with the same interest.

C

i know the feeling. small and being consistent is the key and not big for a day. i know a friend who let a guy with no knowledge in forex/stocks whatsoever trade his account. he just follow the signal, that's it.

Continue my thoughts...

How to get 1% gain per month? (We start at a very modest goal first, then we will find a way to improve it later)

It can be one of many combinations of number of trades, pip gain per trade and pip value %, for example:
1/ Pip value %= 0.01%:
 1.1) 1 time x 100 pips x 0.01% per pip. or
 1.2) 2 times x 50 pips x 0.01% per pip, or
 1.3) 5 times x 20 pips x 0.01% per pip, or
 1.4) 10 times x 10 pips x 0.01% per pip, or
 1.5) 20 times x 5 pips x 0.01% per pip,
...

or
2/ Pip value % = 0.05%:
 2.1) 1 time x 20 pips x 0.05% per pip, or
 2.2) 2 times x 10 pips x 0.05 per pip, or
 2.3) 5 times x 2 pips x 0.05 per pip

or
3/ Pip value % = 0.1%:
 3.1) 1 time x 10 pips x 0.1% per pip
 3.2) 2 times x 5 pips x 0.1% per pip

Note that mode (1) can sustain bigger unrealized pip loss, meaning a 1000-pip move against the account only make 10% drawn down, while mode (3), that 1000-pip move can cause 100% DD meaning dead.

But, we have to be right many times in mode (1) to achieve that 1% goal. So what mode or what combination is easier to achieve? I am thinking we have to predict before we start a new cycle (in this case: a month) that 'this month it will be trending' or 'this month it will be ranging'. I think a prediction like trhat is easier than like this: 'to day it will go up' or 'today it will go down' or even smaller time frame and focusing on up or down.

If we think it will be ranging we can have many small win (like (1.4) or (1.5) combination). If we think it we be trending (breakthrough) then we can wait after the break and enter bigger lot size like 0.05% per pip and see if is right. If it is not right, we have to take action fast because with bigger lot the DD grow fast.

I like the idea that we start each cycle with small pip value then when the market reveal itself more, we gradually take action accordingly.

(There are so many thoughts in my head that I need to organize so that I can have a well-developed strategy before I put it in an EA)

hi,

My personal view. In forex investment, 1% per month are too small. with this return not worth the risk.

SIM

pip2cash posted:
    hi,

My personal view. In forex investment, 1% per month are too small. with this return not worth the risk.

SIM

I also think so. The reason I use this small number is to say that you can be a winner longterm. There are so many traders that target on high return and loss loss loss long term. The more they try to win back fast the faster they lose more.

I didn't agree with the second part of your statement: '... with this return not worth the risk' because the risk is very small to almost none with this 1% target, small position size.

I will not base on this 1% only, my target is 5-8% per month consistently but I take a very small return as a goal for my plan first so that I have a plan that work 100% first, then improve it later.