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Can you consistently make a profit of USD2000 on a USD5000 account?

FxMasterGuru (FxMasterGuru)
Jan 30 2013 at 05:13
1607 posts
The mentioned strategy has LESS THAN A MONTH history!

The question again:
Can anybody show a VERIFIED LIVE account on MyFxBook with at least 5% average monthly profit for AT LEAST 2 YEARS (!) and with less than -25% max. DD...?

Anybody...???

Please click "Vouch" if you liked my post. If not, just put me on your Blocked list. :o)
Splexin
Jan 30 2013 at 06:28
202 posts
2 years with no losing months? Or just 2 years average profit? Most people here are just gamblers.

Did you know that because of arcsine law it is literally impossible to win every month over a certain period of time (i.e. 2 years, 3 years, etc). You can win 11/12 months a year or 1/12 months a year but over time it will never be 12/12 months a year or even 6/12 a year. The probability of winning 12 months straight is 0.64%, and 5 years straight? Only 0.13%. Really puts things into perspective. You can read about it in Taleb's book and also Baz & Chacko's book.

Before I joined MyFXBook I was in stocks for about 3 years with returns of 400-600%/trade at times, yet in the end only had cumulative cost-adjusted returns of about 35% per year because I didn't win every month, some trades I held for several months. Of course, 35% is better than some Wall Street but not the figures people here want.

If you look at one of my contest accounts I had like 56 trades in a row all winners no losers. Real life? HA. I only win about 51% of all trades.

Recently I have started researching quantitative strategies because there's really no other way of knowing if your strategy is just luck, randomness, a minor inefficiency that will be dry after a few trades, or what not.

klaabukosmos
Jan 30 2013 at 07:48
35 posts
FxMasterGuru posted:
The mentioned strategy has LESS THAN A MONTH history!

The question again:
Can anybody show a VERIFIED LIVE account on MyFxBook with at least 5% average monthly profit for AT LEAST 2 YEARS (!) and with less than -25% max. DD...?

Anybody...???


Im not so good.

https://www.myfxbook.com/members/klaabukosmos/suetgold-zulutrader/246414

FxMasterGuru (FxMasterGuru)
Jan 30 2013 at 07:57
1607 posts
Splexin posted:
2 years with no losing months? Or just 2 years average profit? Most people here are just gamblers.

Did you know that because of arcsine law it is literally impossible to win every month over a certain period of time (i.e. 2 years, 3 years, etc). You can win 11/12 months a year or 1/12 months a year but over time it will never be 12/12 months a year or even 6/12 a year. The probability of winning 12 months straight is 0.64%, and 5 years straight? Only 0.13%. Really puts things into perspective. You can read about it in Taleb's book and also Baz & Chacko's book.

Before I joined MyFXBook I was in stocks for about 3 years with returns of 400-600%/trade at times, yet in the end only had cumulative cost-adjusted returns of about 35% per year because I didn't win every month, some trades I held for several months. Of course, 35% is better than some Wall Street but not the figures people here want.

If you look at one of my contest accounts I had like 56 trades in a row all winners no losers. Real life? HA. I only win about 51% of all trades.

Recently I have started researching quantitative strategies because there's really no other way of knowing if your strategy is just luck, randomness, a minor inefficiency that will be dry after a few trades, or what not.


I was referring to AVERAGE monthly profit of 5%. It would be unreal not to have a losing month for 2 straight years while achieving an average of 5% monthly profit with less than -25% max. DD (incl. intratrade DD).

I guess there is no one verified LIVE strategy on MyFxBook which would fulfill the above mentioned - and not too ambitious - criteria, which tells a lot about the chances of an 'Average Trader Joe' to make a decent living by trading Fx.

Please click "Vouch" if you liked my post. If not, just put me on your Blocked list. :o)
Chisha Sinyangwe (chisha)
Jan 30 2013 at 08:45
20 posts
Thank you Fx Master Guru and Splexin for your insights. It bothers me to hear that it's almost impossible to not have a losing month for 2 straight years and earn an average monthly profit of 5%. It just goes to show how important money management is in the Forex Market. This begs the question is it really possible to earn a living off forex alone and can you survive the market for very long trading USD5000?

1.Make pips 2.Keep pips 3.Repeat 1 & 2
Splexin
Jan 30 2013 at 17:18
202 posts
Well, what does average monthly profit do anything to prove a strategy is sound? All you are looking for is something with returns distribution of 5% per month.......you could have something that does great one month (i.e. 90%) but the rest of the year loses. Could you suck on losing 3% per month for 11 months? The psychology will eventually get to you and you will choke. And because of that one great month you will believe in your strategy so much you will either trade more or trade bigger to the point that your losing months wipe you out. Even somebody who does have a system that reaps 5% a month 'on average,' there is no guarantee it will even continue tomorrow, so what's the point? Instead of looking for someone else's system to trade you should invent your own. All I read around here are people with unrealistic expectations and those too lazy to do their own work.

PowerOptions has a simulation Excel spreadsheet which offers insight as to what size account you need to survive (you can find it free with Google). It is for options and stocks but can be modified for Forex. Basically you input the probability of winning (based on your overall historical track record, for example not just one strategy), account size, commissions, trade target/loss etc and it runs 100 random trades to simulate that. From what I've seen any account less than close to $10,000 will eventually fail, even with strict money management. Someone can be the exception of course, but repeat an event many times (thousands of traders) and you're bound to see a rare event. That's the law of probability. A good analogy to this is playing the lottery. You might never win, but the guy who bought a ticket before or after you does. Would you then say it is impossible to never win, even if you do or don't?

The average trader joe's chances of making a decent living in Forex are pretty slim unless he starts out with a sizable sum and doesn't lose a lot money during his training (experience) period. And even then there's no guarantees. If it were that easy then everyone with a few bucks would quit their jobs and play the markets. It's just unrealistic.

Trading is currently my only income and has been for at least 4-5 years. If you want to survive then you have to be able to stomach losing streaks of even up to a year long. Most people can't do this without another job. You also have to learn to live frugally since future returns are never guaranteed (unlike a salary). To people here with <$10,000 I recommend saving up more money while trading paper to learn the ropes. Actually for most people I recommend just getting a good paying job with benefits :)

Financialarts
Jan 30 2013 at 20:38
134 posts
@ Splexin ,
like the way you give probability's nd stuf.
I believe you can use statistical probability to your advantage in trading forex.

I am the change in the market that causes you to lose :p / Watch out before I negative pip you! ^^
Splexin
Jan 30 2013 at 20:46
202 posts
Financialarts posted:
@ Splexin ,
like the way you give probability's nd stuf.
I believe you can use statistical probability to your advantage in trading forex.


Yes you can. There are lots of different statistical properties that you can exploit in Forex, more so with high-frequency trading but the average trader can still find opportunities. Examples include pair trading (if you can find mean-reverting currencies), triangular arbitrage (rare), momentum trading based on currency volatility, modeling interest rates and trading longer term, modeling price, trading certain pairs at certain times (College of William & Mary did an academic paper about that, I believe), and so on.

I've been researching this stuff since last year and haven't even grazed the tip of the iceberg. It just takes a lot of hard work, and that's something not many people are willing to do. But I would rather be winning and know I am winning because of a probabilistic edge-- and not just randomness-- than anything else. If you run a random walk it looks exactly like any forex chart. The first time I did that was a true eye-opener for me.

Anyway, didn't mean to take away from this thread but I don't get on the forum often and thought I would contribute. If anybody is interested in this stuff I recommend searching through the SSRN (Social Science Research Network). They have tons of academic papers from researchers who have already done a lot of work.

Chisha Sinyangwe (chisha)
Jan 30 2013 at 20:51
20 posts
Splexin the door is always open to you, I'm sure everyone here's happy with the contributions you and everyone else here has made. Some of us are here to learn, what's that they say about knowledge being power?? or something like that.

1.Make pips 2.Keep pips 3.Repeat 1 & 2
Financialarts
Jan 30 2013 at 21:04
134 posts
@ Splexin ,

I've worked on an ea which 'bended' probability into a 'wannabe' linear net gain equity curve, Check the results at
https://championship.mql5.com/2012/en/users/Financialarts

It uses channel outbreak and probability to get net gain result.

running a version of this one on a real mt4 account atm.

I am the change in the market that causes you to lose :p / Watch out before I negative pip you! ^^
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