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Prove your trading worth... 100% weekly on a consistent basis - long-term?

Bob LLewellyn (ForexAssistant)
Jan 31 2015 at 19:44
465 posts
Question about
'Whatever your strategy is, 90% of time, a system will crash one day because the way it trades is wrong.'

Is what you are saying is that only 10% of the available systems are relativily safe? Briefly had a little trouble following your thread of thought. It's because for one, RISE's equity is always below the profit curve, it was designed that way. It works just fine and is safer than most. Anyway, please clear that up for me, if you will.

Bob

where research touches lives.
CrazyTraderfx (CrazyTrader)
Jan 31 2015 at 19:59
1718 posts
If I had to pick up in between 2 swing traders to manage my account, then the first thing I would look at is equity from both accounts.*

It tells how your money will be managed... which is the most important.
I would prefer to invest with the one who gets Equity above Growth with growth = -10% rather than the other account with +30% where Equity = +10%

Sometimes I wonder why Myfxbook stats doesn't care about Equity rather than Growth.... At least ForexFactory isn't wrong and include it into account.
=> Probably because people enjoy watching green figures rather than looking to real red figures?

*
Equity is valuable data only for swing trading style, as you can't find difference in between Equity & Growth for scalping or day trading strategy.




Cholipop
Jan 31 2015 at 20:01
406 posts
CrazyTrader posted:
- x%/day
- pip drawdown
- or any other criterias like this aren't the key and can't garantee success for the long term

Whatever your strategy is, 90% of time, a system will crash one day because the way it trades is wrong.

No one talks about equity curve that must be always (as much as possible) above growth.
The most important thing is the way it trades...

Any system trading this way will have much more chance to survive into this jungle rather than the way 90% traders trade... cutting profit too quickly and running looser trader.




 VS




What kind of curve do you fancy?
When Equity is above Growth, system tends to go up and vice versa


 That is where you are 100% wrong, and the equity curve has to do with pip-drawdown 100% Here is why....

 The only key factor in forex is PIPs would't you agree? Pips is what allows your p/l to fluctuate. In turn, the Pip-drawdown is what creates the equity curve which you deem to be important. For those of you who have no clue about how the equity curve is calculated please read the following post. https://www.investopedia.com/terms/e/equity-curve.asp

 What everyone should focus on is Pip-drawdown as it is the only REAL statistic which reveals how accurate a system's entry is. The lower the pip-drawdown, then the less time you spend in red, which of course would mean you have free equity to place new trades should you decide to do so.

  Say a person trades with 0 stop loss. A person could have a 99.99% rate, but that .01% chance of loss could spell doom to the account, so looking at win% isn't at all a good stat to follow. Should a person decide to focus on an accurate entry, instead of those stupid R:R which ever deems important, then you have a much better chance of winning in forex during the 'long term' as your primary objective in taking a position is gaining an accurate entry, instead of the profit you make.

   The higher the accuracy (lower pip-drawdown) then the more leverage a person can use, as it would be much harder for any one order to be margin called, since the person doesn't normally give to the market x amount of pips.

   I believe myfxbook should add a 'pip-drawdown' counter, which allows us to see the person's avg pip-drawdown within a certain lot size range. Example. Say a person has a 25kusd account. And takes wagers from .01 lots to 10.00 lots. The avg pip-drawdown for lots say 5.00 lots or higher is much more important then the avg pip - drawdown between .01 to 1.00 lot size with that account size.

 Pip - drawdown is used to caluculate your equity curve and even your DD%. Those who ignore accuracy are the ones who end up blowing up the accounts 'sooner or later', but even if I end up blowing an account, and I am able to earn 3% a day for 3 months straight, then margin calling the account isn't a key factor as long as I am withdrawing my profits.

CrazyTraderfx (CrazyTrader)
Jan 31 2015 at 20:21
1718 posts
Cholipop posted:
 That is where you are 100% wrong, and the equity curve has to do with pip-drawdown 100% Here is why....


you are right but wrong... and I will tell you why.

Obviously having a very good Pip-drawdown is probably the best thing to get in order to maintain an Equity Curve above Growth, but it doesn't mean Pip-drawdown itself is sufficient. You could have the best entry in every single trade, if you close too early, what a shame?
What is described here could be picture 2 if you leave the wrong trade opened despite good Pip Drawdown

Now you would be amazed to see someone not good as you to open trade in the right momentum to get perfect entry accurancy, if he knows which positions to close before it's too late (blowing account) and he runs profit with profitable orders, then his equity is above gorwth despite the awfull pip-drawdown.
what is described here could be Picture 1 despite bad Pip-Drawdown

Cholipop
Jan 31 2015 at 20:36
406 posts
CrazyTrader posted:
Cholipop posted:
 That is where you are 100% wrong, and the equity curve has to do with pip-drawdown 100% Here is why....


you are right but wrong... and I will tell you why.

Obviously having a very good Pip-drawdown is probably the best thing to get in order to maintain an Equity Curve above Growth, but it doesn't mean Pip-drawdown itself is sufficient. You could have the best entry in every single trade, if you close too early, what a shame?
What is described here could be picture 2 if you leave the wrong trade opened despite good Pip Drawdown

Now you would be amazed to see someone not good as you to open trade in the right momentum to get perfect entry accurancy, if he knows which positions to close before it's too late (blowing account) and he runs profit with profitable orders, then his equity is above gorwth despite the awfull pip-drawdown.
what is described here could be Picture 1 despite bad Pip-Drawdown


  It would then appear that the trader has a 'trade management problem' As if a person as an accurate entry, and is in green x amount of pips, why would the trade then allow the trade to go deep in red assuming they are trading with low leverage. Also recall that Pip-drawdown calculates the highest amount of pips you were in red before you closed the position for profit,loss or BE. Which goes back to what I mentioned before about it being important. Most focus on the the expected profit EXPECTED R:R instead of the REAL R:R which has everything to do with the accuracy of the system.

Cholipop
Jan 31 2015 at 20:40
406 posts
Accounts like these https://www.myfxbook.com/members/DrVodka/mt4-1027730/1143844

 In which everything is hidden, I completly ignore. As the stats which he is hiding is key in determining if I want to follow a person or not. I mean Drvodka could easily be a tilt monkey and have gone all in on every trade using an insane amount of leverage, which isn't as important to me as him being a tilt monkey, with insane leverage who focuses on accuracy. That to me is by far the most important thing to me as a trader.

CrazyTraderfx (CrazyTrader)
Jan 31 2015 at 21:13
1718 posts
Cholipop posted:

It would then appear that the trader has a 'trade management problem'


Here we go, call it as you like, but it is symptomatic of 100% retail traders that have experienced blowing account so do I

People blows accounts not because they are bad traders, simply because they run loss instead of the opposite.

Regarding this account:
https://www.myfxbook.com/members/DrVodka/mt4-1027730/1143844

This guy may not be your friend, however 2 days aren't long enough but what we can see is ok to me so far:
Strenght:
No custum date
Equity > Growth
Best trade in Pips > Worst trade in Pips (*6)

Disavantages:
Hidding closed trades

Bob LLewellyn (ForexAssistant)
Feb 01 2015 at 02:12
465 posts
'f I had to pick up in between 2 swing traders to manage my account, then the first thing I would look at is equity from both accounts.*'

Oh, thanks, that's what iwas missing.

Bob

where research touches lives.
Ozzie Matt (aeronthomas)
Feb 01 2015 at 05:57
1557 posts
CrazyTrader posted:
- x%/day
- pip drawdown
- or any other criterias like this aren't the key and can't garantee success for the long term

Whatever your strategy is, 90% of time, a system will crash one day because the way it trades is wrong.

No one talks about equity curve that must be always (as much as possible) above growth.
The most important thing is the way it trades...

Any system trading this way will have much more chance to survive into this jungle rather than the way 90% traders trade... cutting profit too quickly and running looser trader.




 VS




What kind of curve do you fancy?
When Equity is above Growth, system tends to go up and vice versa


good points and great examples:)

captainBob
Feb 01 2015 at 07:19
2 posts
I did not understand where I can find and download this EA, I would like to test it.

Thank you in advance.

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