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Author Topic: TradeTheForexMarket.com  (Read 5434 times)

Offline Tripper

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Re: TradeTheForexMarket.com
« Reply #45 on: September 04, 2018, 09:12:08 AM »
Hi

Can you explain the difference betwen the Forex EOD results on the old site and the Forex results on this new site.

You seem to be claiming great success trading EOD with this new site whilst at the same time losing a lot of points with the same strategy on that site.

Surely if you had developed this sucessful EOD stategy two years ago you would have been using it rather than continuing to use the losing strategy you are reporting results for this year over on your old site.

Thanks
JOHN
« Last Edit: September 04, 2018, 01:38:57 PM by Tripper »

Offline edlomax

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Re: TradeTheForexMarket.com
« Reply #46 on: September 04, 2018, 03:36:28 PM »
Hi

Can you explain the difference betwen the Forex EOD results on the old site and the Forex results on this new site.

You seem to be claiming great success trading EOD with this new site whilst at the same time losing a lot of points with the same strategy on that site.

Surely if you had developed this sucessful EOD stategy two years ago you would have been using it rather than continuing to use the losing strategy you are reporting results for this year over on your old site.

Thanks
JOHN

I'll be happy to explain.

I touched on this in my very opening post where I stated:

"From 2015 to present I have been running a different signals service, which still has subscribers.  Over that time one of my core strategies has accumulated +11,392 pips and the other core strategy accumulated +13,211 pips.  While I believe these numbers are still good, the truth is both these core strategies peaked around 15 months ago, and have been in a slight drawdown or consolidation phase ever since.

Due to this slump in performance, I started looking for tweaks that would make my core strategy more robust."

I think one of the big problems a lot of traders have is changing their trading strategy too often.  By that I mean, making changes or switching strategies after a few losses, or a losing month.  In my experience, some months will be better than others, there are losing months and a few months a year will result in the bulk of the profits.

Therefore, it is my approach to take a long term view of trading.  And that means I am very slow to make changes.

However, as you can see from the results of EOD, the strategy has been struggling for some time.  This is what prompted me to take a look at my trading strategy and look for improvements.  But I could not just switch what I was doing at the site as any changes to the strategy means the strategy is completely different.  So, I was trading the new strategy in the background to see if it really worked.

When I decided I liked the changes I made, I had a decision to make.  I could start trading this way at the old site, basically resetting everything and making all past performance irrelevant, or I could start a new site.  I decided to start a new site.

While a lot of the core strategy has remained the same, there are some things that have changed.

Here are 3 main changes compared to how I was trading before:

I now use dynamic stops based on Average Daily Range and current market movement compared to using a set stop loss value. (Previously I used a flat 200 pip stop).
I now set a target at 1:2 risk to reward levels compared to letting trades run until manually closed or a trailing stop hit.
I now have added an extra filter compared to trying to get into the trade at the earliest possible moment.

Since making these trading tweaks, I also decided to diversify my trading over a larger amount of instruments.  Basically, since I was filtering trades to take stronger setups only, and limiting profits to 1:2 risk to reward, I wanted to trade more instruments so I would have enough trading setups over the year to meet my profit goals.

Here is how I see things moving forward:

1. I will provide signals at Trade The Forex Market using the "new" strategy with smaller stops and 1:2 risk to reward targets.

2. I have closed down new subscriptions at Forex Investing Live for the time being while still continuing to trade for current members.  I am making some changes to the service in respect to what I offer, mainly focusing on End Of Day and Set and Forget signals and widening the currency pairs traded for these strategies.

If the strategies start to produce profits and break previous highs in terms of pip numbers, I will consider opening the service again for  new subscribers.

So, to be clear, I am not using the same strategy for each service.  While there are some similarities in the strategy, the changes made mean the strategy used at Trade The Forex Market should be looked at as a completely new strategy.

Hope this clears things up.

Offline Tripper

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Re: TradeTheForexMarket.com
« Reply #47 on: September 04, 2018, 07:32:36 PM »
Thanks for the clarification, at least you're prepared to answer questions comprehensively which is a bonus.

I'll continue to follow closely and hope your service can deliver.

Thanks Again
JOHN

Offline primi

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Re: TradeTheForexMarket.com
« Reply #48 on: September 28, 2018, 07:51:44 PM »
That's it for september and looking at Donna's account it doesn't exactly look pretty. Not sure if all trades were taken and if there was a difference in trade management but I see 3 full losses, 4 breakevens and one partial profit. So that makes it -2R on her account.

Offline donnaforex

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Re: TradeTheForexMarket.com
« Reply #49 on: September 29, 2018, 10:10:02 AM »
I didn't change any trade management, i just set the SL and TP (and moved to BE when necessary) and walked away.

I did miss two trades because i was unable to check one night. When i checked yesterday these trades would have been around break even so far, i was tempted to enter them since price was at the same point and hadn't already reached TP or SL but i decided not to.

This strategy is going to be appealing to people because it has a very high reward:risk. If you look at the trade setups on a long term chart (and have had a bit of manual trading experience) it is clear what strategy is being used.

Personally, I have a problem with the stop losses (in relation to the strategy type that is being used). The risk reward ratios are very appealing but i wonder if this is the best strategy to apply this particular stop to. I wonder if they'd benefit from either a much closer stop that chops the trade out sooner and says that the 'thing we are looking for' didn't happen, or making it bigger for equal risk:reward (to allow more time and space for the longer term movements they are looking for to develop).  Both of those options would be less appealing to customers but i feel is more realistic.

This is a different subject and i'm not talking about this product, it's just an aside about the subject of R:R. Something i have noticed is that in pursuit of the perfect R:R many people end up not noticing that they have altered their strategy to the point where their TP is trading off one timeframe, and their SL is trading off another, they are hoping to catch long term swings with a 5 minute SL. R:R seems to be everyone's holy grail, but the focus is incorrect and no one takes into account win rate % which goes hand in hand with R:R, and the fact that we're dealing with a wild beast here. We can't mould the markets to fit our ideal strategy, we have to fit our strategy around the markets. Trading attracts people who are logical, intelligent, and like to plan and be in control - all fantastic attributes that work against us right when it counts. In almost every other area of life you can apply a rigid set of rules of your own making, follow them and measure success to some degree. Not so much in forex.

I'm not saying that we shouldn't trade with a stoploss, not at all, it is important. But equal attention needs to be paid to exit as to entry. We create backtests and strategies that focus on the entries..... why?! It's the wrong way round, really.
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Offline primi

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Re: TradeTheForexMarket.com
« Reply #50 on: September 30, 2018, 06:03:43 PM »
I think I mentioned SL size before as well. Having a set SL size for a certain pair is certainly not ideal. You want one that makes sense. Not to tight because you have to have some room and not to wide because at certain point the likelihood of trade working out goes down substantionally and then you don't really want to be in the trade anymore. And that can never just be 125 pips or whatever. It depends on the situation at hand.

On your last point, I'm actually of the opinion that exits are even more important than entries. You could enter a trade depending on which way the wind is blowing and still come out on top. But it's probably not a topic for this particular thread.

Offline edlomax

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Re: TradeTheForexMarket.com
« Reply #51 on: October 01, 2018, 10:46:19 PM »
I didn't change any trade management, i just set the SL and TP (and moved to BE when necessary) and walked away.

I did miss two trades because i was unable to check one night. When i checked yesterday these trades would have been around break even so far, i was tempted to enter them since price was at the same point and hadn't already reached TP or SL but i decided not to.

This strategy is going to be appealing to people because it has a very high reward:risk. If you look at the trade setups on a long term chart (and have had a bit of manual trading experience) it is clear what strategy is being used.

Personally, I have a problem with the stop losses (in relation to the strategy type that is being used). The risk reward ratios are very appealing but i wonder if this is the best strategy to apply this particular stop to. I wonder if they'd benefit from either a much closer stop that chops the trade out sooner and says that the 'thing we are looking for' didn't happen, or making it bigger for equal risk:reward (to allow more time and space for the longer term movements they are looking for to develop).  Both of those options would be less appealing to customers but i feel is more realistic.

This is a different subject and i'm not talking about this product, it's just an aside about the subject of R:R. Something i have noticed is that in pursuit of the perfect R:R many people end up not noticing that they have altered their strategy to the point where their TP is trading off one timeframe, and their SL is trading off another, they are hoping to catch long term swings with a 5 minute SL. R:R seems to be everyone's holy grail, but the focus is incorrect and no one takes into account win rate % which goes hand in hand with R:R, and the fact that we're dealing with a wild beast here. We can't mould the markets to fit our ideal strategy, we have to fit our strategy around the markets. Trading attracts people who are logical, intelligent, and like to plan and be in control - all fantastic attributes that work against us right when it counts. In almost every other area of life you can apply a rigid set of rules of your own making, follow them and measure success to some degree. Not so much in forex.

I'm not saying that we shouldn't trade with a stoploss, not at all, it is important. But equal attention needs to be paid to exit as to entry. We create backtests and strategies that focus on the entries..... why?! It's the wrong way round, really.

Hey Donna.

Thanks for you comments.

I just want to say a few things based on your discussion.

As far as the stop losses are concerned, I only look at one time frame when making my stop loss decisions, The Daily chart.  Also, there is not a set stop loss value I use for all trades.

I look at the weekly, monthly and 180 day ADR to get an idea of how the pair has been moving.  I also look at the price action.  From this, I determine a minimum and maximum stop loss value for each pair.  (It could be something like minimum 75 pips and maximum 125 pips, or minimum 100 pips and maximum 150 pips). 

When a trade setup occurs, I plan the trade.  My stop loss needs to fall within the predetermined range I have set for the pair, but I also look at where the take profit lands.  (As you can see on the chart snapshots, I have reworked the Fibo tool for this purpose, and I leave it on the chart for subscribers to see).

So, ideally, I am looking for a stop loss that makes sense and is within my range AND a target that makes sense before I place the trade.  Obviously, I am looking for a starting risk to reward of 1:2.

In my experience, if I try to use smaller stops, the winning percentage goes down.  To compensate for this, you need to increase the risk to reward.  For example, we could use a 50 pips stop and place our take profit at 1:4.  So, we can lose more trades and make up for it when we get winners.

While this can work, and it feels great to get a 1:4 winner, the lowered winning percentage can be hard to stomach.

On the other hand, if you increase the stop loss, the winning percentage can go up.  But the risk to reward suffers.  So you might be getting less losers, but you are making less money on the winners.

The range I use is designed to find a stop loss that makes sense and a take profit that makes sense.  If price does go to the stop loss, it means the logic behind the trade failed, and it is time to look for another opportunity.  If I use a tight stop, it might mean the logic of the trade was correct, but the stop was just too close.  If I use a large stop, we might avoid a loss, but the timing of the trade was off and we could have probably gotten a better setup at a better price.

I hope this sheds some light on the stop loss and take profit choices.

You say you can kind of figure out what I am doing, which I guess is a good thing because you can see some logic to the trading.  But I doubt we are looking at exactly the same things.  And as with any signals service situation, this means there needs to be a leap of faith on the subscribers part.

As for last months performance.  There we 6 losers, 4 breakevens and 1 partial win with +1R.  So, -5R overall for me.

Now I'm sure people here will say that is awful.  But, in my opinion, you really do need to have some perspective here.  We are trading 15 currency pairs off the daily time frame.  There were only 11 closed trades.  In order to give the risk to reward strategy a chance to prove itself, there needs to be a lot more trades than this.  I think you can start getting an idea after 60 trades.

I know traders don't want to hear nasty words like patience and discipline, but it really does take patience and discipline in the beginning to gain confidence in any trading strategy.  Most times things start off dipping below your initial investment, which is painful.  Only after you build what I call a "profit buffer", where you are up on your account and using money you have won, does the stress start to reduce.

We did just win our CADCHF trade for +2R today, so we will see what the rest of this month brings.

Offline edlomax

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Re: TradeTheForexMarket.com
« Reply #52 on: October 01, 2018, 10:49:10 PM »
I think I mentioned SL size before as well. Having a set SL size for a certain pair is certainly not ideal. You want one that makes sense. Not to tight because you have to have some room and not to wide because at certain point the likelihood of trade working out goes down substantionally and then you don't really want to be in the trade anymore. And that can never just be 125 pips or whatever. It depends on the situation at hand.

On your last point, I'm actually of the opinion that exits are even more important than entries. You could enter a trade depending on which way the wind is blowing and still come out on top. But it's probably not a topic for this particular thread.

I just posted on what Donna was saying concerning stop losses.  I am not using a set stop loss for each pair, but rather a minimum and maximum range.  But you can see more by looking at what I responded to Donna. It should shed some light on how I look at the stop loss and take profit levels.

Offline donnaforex

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Re: TradeTheForexMarket.com
« Reply #53 on: October 02, 2018, 10:32:24 AM »
There are two elements at play with a stop loss:

1. The mathematical one which you touched on and which is important. Risk:Reward ratios alone are only to be taken in context along with the percentage win rate, as you mentioned. You can calculate precisely from a mathematical standpoint (and assuming the random walk theory holds).

2. The technical elements. If you believe price reacts to certain levels then all mathematics aside this is an important one. Imagine a breakout from a channel strategy. A typical stoploss suggestion for such a strategy is to place the stop at the other side of the channel. I took a screenshot of the first example i could find on my chart. There's an obvious problem there in that price does often bounce between those very points that are chosen as both entry and stoploss points.

NOTE: THIS IS NOT THIS SELLERS STRATEGY IT'S JUST AN ILLUSTRATION to make a point about something. I think i'll shut up now and create a new topic about this, it's very interesting. When i look at the markets i see collections of stoplosses, not collections of entries, it's really quite fascinating how predictable people are even when they are trying to be 'random and efficient'.

Apologies to the seller for getting way off topic here.
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Offline edlomax

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Re: TradeTheForexMarket.com
« Reply #54 on: October 02, 2018, 03:41:20 PM »
There are two elements at play with a stop loss:

1. The mathematical one which you touched on and which is important. Risk:Reward ratios alone are only to be taken in context along with the percentage win rate, as you mentioned. You can calculate precisely from a mathematical standpoint (and assuming the random walk theory holds).

2. The technical elements. If you believe price reacts to certain levels then all mathematics aside this is an important one. Imagine a breakout from a channel strategy. A typical stoploss suggestion for such a strategy is to place the stop at the other side of the channel. I took a screenshot of the first example i could find on my chart. There's an obvious problem there in that price does often bounce between those very points that are chosen as both entry and stoploss points.

NOTE: THIS IS NOT THIS SELLERS STRATEGY IT'S JUST AN ILLUSTRATION to make a point about something. I think i'll shut up now and create a new topic about this, it's very interesting. When i look at the markets i see collections of stoplosses, not collections of entries, it's really quite fascinating how predictable people are even when they are trying to be 'random and efficient'.

Apologies to the seller for getting way off topic here.

Interesting topic.

I trade with a stop loss, so we have to put it somewhere.  And when we end up being wrong about the situation, the stop loss is there to do just that... stop further loss.

And no matter what trading strategy we decide to follow, we as traders will be wrong about the situation sometimes.

If we expect a bounce off a support and resistance, sometimes we get a breakout.
If we expect a breakout from a support and resistance, sometimes we get a bounce.
If we expect the trend to continue, sometimes it will reverse.
If we expect the trend to reverse, sometimes it will continue.

As you've mentioned, stop loss has a lot to do with the eventual risk to reward ratio.

We have all taken trades where price immediately goes in our direction for a nice distance.  In cases like these we kick ourselves for not using a very tight stop and getting a great risk to reward ratio.

We have all taken trades where our stop loss was hit and then price goes back in our original direction.  In cases like these we kick ourselves for not using a larger stop and turning a losing trade into a winner.

We have all taken trades where price does not quite reach our take profit, and the reverses on us, ending up in a breakeven or partial profit.  We all kick ourselves because we should have closed the trade earlier with more profit.

The problem is, you do not know what is going to happen before you place the trade.  You cannot decided to pick small stop losses sometimes and large stop losses other times.  So, you just have to have a stop loss strategy in place that makes sense, and stick to it.  And you cannot "know" it is time to cut a trade short instead of letting it run.

I think a lot of what people think about when talking about stop losses and risk to reward is maximizing profits.  Yes, we all want to make as much money as possible.  In using R Multiples, I am switching my thinking to risk when placing the stop, not necessarily how big or small the stop is.

When I enter a trade I am risking 1R with the desire to make 2R.  If I lose, I lose 1R.  If I win, I win 2R.  (Now I know real trading is a lot messier than this, sometimes there are breakeven trades, and sometimes trades are closed anywhere between 0R and 2R).

But think about this:

We are trading 15 currency pairs.  And lets say, after all the losses, breakeven trades and partial profit trades we only end up having 1 winning trade per currency pair at the end of the year.

I mean, we trade for a whole year and after all the ups and downs we only end up +2R per currency pair.

That would end the year at +30R.  And if you were trading 1% per trade, that would be +30%.

Using the S&P 500 as a benchmark, didn't you just do 3-4 times what is expected of the S&P 500? (Assuming a 7%-10% yearly increase in the S&P 500 on average).

And since most Wall Street active traders don't even do as well as the average S&P 500, didn't you just trade way better than a Wall Street trader?

I didn't mean to go off on a tangent, but I am just trying to show the difference between trying to maximize your profits with your stop loss and risk to reward choices, compared to having a logical stop loss and risk to reward strategy that can end up making impressive profits (by real world standards) over the long term.

Offline primi

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Re: TradeTheForexMarket.com
« Reply #55 on: October 28, 2018, 10:08:48 PM »
Donna, you stopped trading this? Your account looks a bit deserted.

Offline edlomax

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Re: TradeTheForexMarket.com
« Reply #56 on: October 31, 2018, 09:20:44 PM »
Hello,

Just finished the month of October with +5R.  The EURUSD trade just missed its 2R target today by a few pips, which would have been nice to add to the month.  Oh well, maybe it will still hit the target soon.

It does seem Donna has stopped trading this.  I don't see a lot of the trades taken in her account.  So, instead of her account showing breakeven results or maybe a little profit since she started it is showing loss.

I do hope her experience has been such that she can tell everyone the results I am showing are really what happened inside the service.  The results on my website show every trade taken this month, how the trade was managed and the outcome.  What you see is what you get, if you followed the trades as instructed.

Since Donna did not take a lot of the trades, I hope she clarifies that the difference between what her account shows and what actually happened at the service is different because she did not follow the trade instructions... and not because I am reporting things that did not happen.

Anyway, +5R for the month.  Let's see what November brings.

 

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