Last few months blow up most Forex accounts

Hi fellow traders,

Feel free to follow my PAMM account: https://www.myfxbook.com/members/hlau/delta-capital/1001143
I am using minimal leverage each trade. Trading style is swing trading, not scalping.

Cheers.

@steveh2014 there's no data on your page that may suggest how you could improve trading. Many of us believe that forex is easy money and in the hope lose everything. Years ago, I was in the same boat. However, I didn't give up and studied the market thoroughly before starting it from a scratch again. I'm trading (and not copying) based on my own analysis of fundamentals. I don't buy any of the news, technical analysis or other predictions. You would see hundreds of experts predicting currencies trends and directions but it rarely materializes. If it was so easy the big banks, hedge funds and these traders would be earning billions and trillions without much effort just by buying or selling currencies. However, you'll be surprised that only the top few hedge funds dealing in forex reach a 30% earning per annum. The mere fact that more than 95% people lose money in the long run should give you an idea how tough it is to make money in forex.

 I, myself, have previously lost significant sum in the forex and for that reason I advise my fellows here (especially those new to forex) to be extremely careful. I can't teach them forex trading but if they follow one simple advice they could do well - CONTROL YOUR RISK & YOUR GREED. Don't use more than 1:50 leverage (though I actually use much lower); Don't use more than 10% of your account in active trading at any time; Don't allow more than 10% of floating drawdown.

steveh2014 posted:
@VN:

Concerning your comment:

'Yes .
That is what I am talking about .
I understand Forex is zero sum game .
But my side I am talking about is not zero sum game .I am talking about those professional traders I know with track record for more than 1 year and they trade for living .Most of them lost in last 2 months .'

This is exactly what i am trying to understand...do you really think the strong usd is/was the only reason these good traders lost in last 2 months??

Also why has usd become strong recently?

Like I said , most of traders buy low ,sell high .Ofcourse many traders out there follow the trend or trade break out but no one hold position for 700 pip to be honest .As human normal reaction everybody would take profit for less than 100 pips .
Look at EURUSD % GBPUSD 700 - 800 pips one way without correction .How can you survive in that environment ?
Even you cut loss and reserve the trade but you still can TP early and jump back again , it would not enough to cover the loss .
The slow trend make it much harder to trade too .
USD become stronger because the stock market go up like crazy , people think central bank will raise interest rate soon so attract more people keep dollar .Many investors in the past borrow cheap dollars to invest outside US in past 5 years ,now they think if interest rate raise USD will become more expensive so they are hurry up buy back USD .So it kind of crow to buy USD right now I guess .

hlau posted:
Hi fellow traders,

Feel free to follow my PAMM account: https://www.myfxbook.com/members/hlau/delta-capital/1001143
I am using minimal leverage each trade. Trading style is swing trading, not scalping.

Cheers.

Please don't post scam like this when you don't have more than 1 year record to show .
Forex is hard .It is not easy as you think .

vinabao posted:
Please don't post scam like this when you don't have more than 1 year record to show .
Forex is hard .It is not easy as you think .

I am not posting scam. You don't need to follow if you are very bitter.
I've been trading for 8 years and just never join myfxbook. I know forex is not easy, i am not a newbie.

@steveh2014

It's not a theory. It's the facts. If you open any half-decent news you would see that they are talking about the major central banks and how they (at least some) are planning to get out from the uncharted territory of this unprecedented QE. You have the Fed talking about raising interest rates, the same is happening at the BoE and Carney that, BoE that has moved the GBP massively, just look at the cable and how it moved up above and then fell from the historically important psychological 1.7 level. You obviously have major central banks moving the market, that's far beyond what the regular technical trader factors in. Look at what happened last September when Ben Bernanke started talking about tapering of the Fed QE.

As someone mentioned, you have to learn at least something about the market. You can copy trades, but you should have your own idea, have your own strategy.

Every trader can have losing period. it is how he controls his losses and himself during losing period that matters.

steveh2014 posted:
Just to add to my last post I still do not understand why so many in last 2 months have blown their accounts for if they buy low and sell high as VN says then when USD is strong buy USDJPY?

All the traders I follow have good track records and are in the top 10 or 20 of myfxbook - yet almost all of them every day for last month and a half continuing to this day are losing...

takechance posted:
I was quite surprised too to see Johnpaul's debacle on a few unguarded EUR/USd trades. He didn't use any SL and let the losses mount. I dont know what went wrong with his discipline.

A Letter from Johnpaul77 - Retrospection

Hi everyone, it's me JP...

As we all know, the past 2 months were the worst months ever for our career as a signal provider and also the biggest losing months after 3 years. It became the worst not because of the result, but it's because we broke our own rules hence affected the result. Here are some rules that we broke :

    Didn't use stop loss
    Hold position(s) for too long
    Believing/loving too much to one theory (in this case – chart pattern)
    Exceed our loss tolerance level
    More than one average position in one pair
    Force ourselves to trade during bad markets
    Put ourselves on hoping instead of counting (read: gambling)

But somehow it's also the most valuable lesson for all of us especially me. So, let me tell you about what really happened in those months.

Yes, this was my fault. I lose my focus on trading and the biggest distraction was because I got too excited on the business side. There are so many business opportunities approaching us and keep coming in. I rarely came to the office and spent most of my time meeting new people for the business purposes.

Until one day when I had a full team meeting, I heard a lot of complaints and issues, most of them were because of the trades.

First, the gold trades, this was when all 'the bad lucks' began... Many subscribers were complaining about the gold trades and having a serious problem with it. I decided not to trade on gold unless it's showing a strong confirmation. It turned out to be straight gold losses.

We scared people away and ourselves as well without realized that gold has contributed a quite big gain of our entire portfolio.

Many of our clients and partners were following us through MQL5 and FXJunction by reading its comments and reviews. Subscriber's argument becomes their argument and their argument becomes our headache.

Now I understand why fund managers don't show their trades or speak directly to their clients, it's simply because of this psychological thing.

We feel like we owe them trades, profit trades. It's like we must prove that we can beat the market no matter what and it has to be 'now'. We forced ourselves to trade and have to be profit trades in order to cover the losses. The more we try, the more we lose, and this is what the theory called the revenge.

The most annoying part is when someone asks me, 'any trades for today John?' or 'how do you see the market today John?' and so on... Wait, that's not the worst, 'I'm paying for your signal so why don't you make any trades', that's the worst!

I mean, don't you people learn about what makes people lose so much money in forex? It's when they try to make money everyday or in every single trade. And what makes them lose deeper? It's when they seek for revenge.

Trading is about waiting for the moment, not seeking for the moment. How about the risk? I think each of us really should take a review on how we manage our risk. But yes, we finally fell into the same hole, broke our own rules, just like everybody else.

In short, we were no longer trade for ourselves without burden as how we used to be, instead, we trade for the sake of clients, subscribers, and partners. We trade for our faces - reputation.

Well, this is what social trading taught us and I guess this is the bad side of social trading for signal providers. I personally prefer Myfxbook or FXJunction system. It's because we only get commissions based on per lot traded. This way, we don't feel like owe any trades to our copiers even just to cover the subscription fee. But it's just my personal opinion.

There will always be some bad months for traders. Every trader has their own method, and every method has its own bad months. Take a closer look at our portfolio, there are months when we didn't trade at all.

Anyway, I'm not blaming social trading or subscribers or anything at all. Again, it's my own fault. I should have known how to handle things like this. I believe it's a part of learning curves that everybody must been through and that's so we remember it. The rest, only time can answer.

One thing for sure, we won't stop, we will keep trading. This is how we make a living and this is what we are good at, because we are traders!

JP

Some currency pairs showed nice and very stable trends during the last months. So, I would say, trading was not very difficult. At least not for traders who follow the trend.

Regards, Alex

Hi Forex21/Alex,


I agree with what you just said and also am disappointed that the myfxbook traders often have done very badly in last 2 months...I was told that the markets recently had changed from ranging to trending - looking at eur-usd and a few others over the last few months this is not true...many as you say have been trending.

I see JP has just posted and I will read it again in detail all I can say right now is to comment on JP's last line in his post:

'One thing for sure, we won't stop, we will keep trading. This is how we make a living and this is what we are good at, because we are traders!'

Well JP I started following in June 2014 - I made a 3% roi with you then a 15% loss then you left myfxbook...so my experience is not in line with your overall abilities which are amazing - 16% on average a month as of June - I think it was that.

Quanthero also made a 10% nosedive....Profundfx also right now biggest DD ever...

My account has had a 40% loss in about 1.5 months after following people who have amazing track records but which all at the same time traded VERY badly...My risk settings were tight also.

There has been something odd going on in the last 2 months (in addition to JP taking his eye off the ball) as people who have had good track records have done very very very badly...

Zoom seems certain he knows why this is so in a recent post on this thread - I note no one has commented on what he said but would be interested to know what others think about what he said.

None of this compensates for the immense disappointment I have with myfxbook right now - I was only looking for a few % roi...seeing as the banks can't give you anything in savings...

All these traders HAD good track records and then MOST traded as if they had never traded before....

I do see many not using SL's which I think is ridiculous - for so called pro traders to not use a SL is beyond foolish...it's such a basic trait of good traders that I am amazed so many people I copy do not use them.

Myfxbook has a professional image yet my experience of the traders results is nothing of the sort.

Note I've only been copying people since late July so maybe I have been unlucky...That is not much comfort right now.

I've not been this disappointed with a company's performance in many many many years....The difference between the prediction and the actual results are mirror images of each other - it's not like i made a little or lost a little - my account has been almost destroyed following myfxbook's so called best traders over the last month.

I had such hope for this copy-trading too. Now gone.

Very interesting discussion!

It's very unfortunate that so many people are losing their hard earned money in forex. However, there is very little sympathy shown, for the reason that there's a warning on every forex forum about the risky investment. I think there should be better rules and regulations, clearly informing people of the risk especially in the context of trade leaders. Many people follow the top traders without knowing any specifics. I would recommend few steps to check and assess the riskiness of a trader and then consider their returns if they are worth following. These steps are:

i. Check the LEVERAGE used. leverage higher than 1:50 is very risky.

ii. THE RISK OF RUIN or how many consecutive losing trades will result in loss of a certain percentage of the account. Also, take into account the number of trades per week or month. (A person might need 100 consecutive losing trades to lose 50% of account but he is trading 100 trades per day. Another person with similar risk of ruin is trading 10 trades per month. The second trader is definitely less risky compared to the first one).

iii. Consistency over longer period

iv. Open positions

v. Profit factor and Sharpe ration

vi. Also, any return higher than 10% per month should ring the bell

Write down these factors for all traders you want to follow along with their ROI and than decide which one's are worth following. I'm sure this will give you a better assessment rather than following the flock!

My blow ups don't wait for summer. Guess I have to try smarter, not harder.

From my long experience in this market I have realized that it is very hard if not impossible to design a single mechanical system (probably not true for algo or quant based systems which works on the basis of speed and order flows) which will be profitable in consolidation as well as in trending markets.

That's why the recent long trend has hurt many people who find it easy to range trade, aka 'buy low sell high' systems.

If you are a range trader then the best system for you should not trade during strong trends, i.e should keep you out of market and vice versa for trend traders. If you want to be always in the market and gain from both movements then I personally feel thats the recipe for disaster.

takechance posted:
If you want to be always in the market and gain from both movements then I personally feel thats the recipe for disaster.

That's some wise words!

Have not experienced any problems during the summer months. I guess it all depends on what kind of risk & money management principles you are using. I prefer low risk with the balance and equity curve following each other closely. Take a look at this demo account though the profit so far during the summer months are on the high side. I use it as a testing ground for different RMM strategies.

https://www.myfxbook.com/members/kricka/rmm-robot/1008728

Hi Kricka (RMM Robot)


I was told my risk and MM were conservative! I agree that having equity and balance close together is the way to go...

Please can you share the traders you follow and what settings you are using?

I would be very grateful - you obviously know what you are doing - sure it's a demo but that is very good even for a demo.

Thanks.

Hi steveh2014,

I am not following any other traders. So far I've only done manual trading opening orders. To guard the account and to be sure I lock in profit and minimize the draw down I have the RMM Robot running in cAlgo. I give you here a link where you can get an idea on different RMM strategies. These are just examples and the trader can make his own strategy fitting his own trading style and risk tolerance.

[Link deleted]

Its a matter of realization and I really realized this :)

'If you are more comfortable with realized loss than unrealized loss then you will be a successful trader.'

In other words....if it is painful for you to close losing trades and book realized loss but you are okay to see the same loss as unrealized loss in your account.....then there is some psychological barrier left in you to become a successful trader. :)

@Arup Nag,

Definitely agree. In myfxbook, it's easy to see that from the chart. The equity growth (yellow line) vs the growth (red line) chart will let you know whether someone is holding losses in their books as long as they can praying things move in their way (or if not, they will add more money so they don't get margin call, and hence abs gain is getting smaller and smaller)

For sustainable and better chance to survive in long run (and I mean long run, not just 1 or 2 years), find a trader who has yellow and red line more or less aligned.

Common wisdom says a good trader takes losses quick and hold gains longer. If that proverbial is true, you must see the yellow line actually above the red line, not the other way around. If it's the other way around, it's the amateur way that is take profit quick, and hold losses as long as you can.

A trader that has the yellow line significantly below the red line for a significant period of time is like a Ponzi scheme waiting to get blown up at one point.