To use chat, please login.
Back to contacts

Why I'm Proud of Myself (Now)

Mario (medisoft)
Jul 20 2011 at 06:21
21 posts
Hi! I was reading all the thread. Very interesting :) I started about 3 months trading with a year previous experience on stocks. I found we all are the same. My first trades were total winners, then I said myself that this is easy and started losing until i loss 80% of my *small* account.

After that I stopped trading, started reading, reading, reading and more reading. I learned MQL4 language and made some EAs. I found that money management in forex is a lot more important than in stocks because leverage, and after total wipe of 3 of my accounts (again, thanks God that they were small accounts) i think i found that my math class in university are useful :)

With statistics I found that is possible to win forex in the long run, without emotions, only a robotic system.

If your system has a defined set of rules, it can be coded into an EA, and that EA will make the job for you without emotions :) If you need help maybe I can help with your system.

My account (small again, it is a nano account, all amounts are in US cents, i will not trade with bigger account until i show myself that my system works) is here: https://www.myfxbook.com/members/medisoft/optical-cube-funds-multirebate/119510/zC7gW2TBWD1KBCwyRwoP

Mario (medisoft)
Jul 20 2011 at 06:26
21 posts
By the way, I forget to tell you that i lose 25% of my account with the past EA, because it didn't manage the money OK. The new one is recovering the loses automatically :) and without emotions! that's the best part. I see the trades and I'm tempted to take profits but I remember myself that the system has very good math principles and statistics, and if I leave it alone it will make better profits. I only need a little more cash to start with full system, my system requires a minimum of 400 USD on a nano account to trade safely, here it is only 150USD so it is in medium risk, but steadly increasing the equity.

I focus more on equity and equity/balance instead of balance. Is easy to make balance grow with a grid system, but maintain a good relation of 99% of equity is harder, but this new system is showing the capacity of doing that and sometimes it gets more than 140% the proportion of equity/balance (equity bigger than balance)

Splexin
Jul 20 2011 at 06:59
202 posts
Thank you for your posts. IMO trading based on equity is 'hold and hope' trading, which can be dangerous. Equity is a nice way to show growth but personally means nothing to me because it doesn't equal real money until it becomes balance. Good luck with your systems, though. Unfortunately mine can't really be coded into a good EA because it requires trader discretion, candlestick pattern recognition, and so forth. Exceptions are also made to the rules, especially during news. I don't know MQL4 but I have software that can code pretty much whatever I want and uses plain-English GUI.

Regardless, I've come to realize my problem is under-capitalization.

When testing my system on a $10,000 account, I gained 40% in 8 days (11 trades, 8 winners) while only risking 2-3% per trade and using 1:10 leverage. That's right.....50 times less leverage than you use on your accounts.

The same amount of gain on a $1,500 account would take roughly 175 trades. It took me 3 months and 100 trades to gain 28%. I have endured incredible frustrations in winning $30 here and there. Almost not even worth my time.

In my mind, the fewer trades the better. Why? Less risk. I discovered in those 8 days of trading on $10,000 that I was much more picky at choosing trades, and I would only select the ones that I decided were 'no-brainers.' When I traded more often, I would lose more often. Trade less, profit more. It is a correlation that I think can be proved statistically.

My problem is I have a $1,500 account. The solution (obviously) is more capital. My system isn't perfect but when capitalized properly and guided by solid money management it can do amazing things. I hope to raise more capital in the next few weeks, as I am selling my luxury sedan and opting to downgrade to a motorcycle. I am seeing the bigger picture. I have a 12-month trading plan that, if followed properly, will net $100,000. My family doesn't believe me but according to my calculations (I too have college statistics), it very much is. And the best part is you only have to net 12 winning trades per month.

I am into month #2 of the trading plan. Month #1 goal was met and exceeded. I have been distracted as of late by all the trading contests, so it will likely delay my trading plan. But by selling my car and getting something 80-90% cheaper, I can leap forward to month #6 of the trading plan...which, in turn, means I can complete my $100K goal by February rather than May.

Anyway, did not intend for this to turn into a speech 😁

James_Bond
Jul 25 2011 at 16:18
556 posts
Well, you can't make profits without using your equity to absorb the floating losses. Obviously a system where the balance diverges from the equity curve on a constant basis is bound to margin call, however if the equity doesn't diverge, it should be a viable trading system.

Mario (medisoft)
Jul 25 2011 at 17:02
21 posts
I agree with James Bond. I used to trade looking at balance, and some day a big move in the markets caused my account to get a stop out call, losing almost all money there.

Then I realized that its good to have balance growing, but its better when the balance grows and the equity is convergent with balance.

Also I think a system that needs trader's discretion is not really a system, and can be subject to emotions. If there is no emotions, and only facts, then the system can be coded, no mater if it uses candlesticks (there are good EAs that recognizes almost all candle stick patterns) or news. For news there are a good set of rules that determine if the news is good for a pair or not. If the news is 'gold is up again' then it is good for AUD, if is 'oil sold off' then is good for JPY, EUR and other currencies, and bad for producers like MXN and CAD.

I'm developing a system that uses trend and long term view. At this point it is working pretty nice, with a equity/balance relation between 78% and 113%, and I found that long term works pretty good for small capital. My starting capital is 20 dollars and it is working good :)

Just take care of your relation of balance/equity, if margin level in your MT4 is less than 300% you are trading risky, if your equity/balance falls bellow 50% then if you are stopped out you will have a loss of more than 50% of your capital.

Maintaining a good and convergent relationship with equity and balance and growing both of them generates a smooth capital gains and a confident system that in some point in the future can be your only source of income :)

My account where I'm testing the trend following system can be viewed here: https://www.myfxbook.com/members/medisoft/bulletprooftrend/136034/eIUANJJHn3O3TfO5YT8c

LKP (caalador)
Aug 01 2011 at 10:55
14 posts
Quite obviously equity > balance. We're talking true value here, balance says nothing.

Carpe diem would be an extremely lame motto in currency trading...
Splexin
Aug 01 2011 at 12:53
202 posts
I can tell from reading you three individuals' posts that you are EA fans, so obviously your debate will be that equity is king. Every trader is different and has different preferences. Quite frankly at the end of the day, as long as I'm making money one way or the other then that's all that matters. 😎

In live trading I never open more than 2 trades at once and leave them open for less than a few days. Now if I was a heavy long-term trader or one who trades multiple positions at the same time, then, yeah, equity might be significant. But all that matters to me is the balance after closing the trade. Why would I open another position based on what my equity says? You are immediately raising your risk. What happens when the position (which got your equity high enough to open another) goes the opposite direction...yeah, that's right, you get closed out. Balance says nothing? Tell that to any liquid millionaire or billionaire. I've met a few, sadly none of them gave me a handout 😝. You can read in interviews about how certain individuals are 'worth' so much $$$$, but more often than not, they respond in saying they don't really have that much money. Equity can change at any time without your consent (i.e. stock values, real estate), whereas balance only changes when you allow it to (deposit, withdrawals) with exception to trade losses and profits (but even then you choose whether a trade will hit hard or reward big). You can't withdraw equity.

Mario, I'm curious. Why is it that most of your demo accounts are performing great but your real accounts very poorly? (That was a rhetorical question, I'm just wondering why you aren't using the successful bots on your real accounts...or are you?) If one 'big move' in the markets is causing your account to get stop out calls, then you are risking too much.

My motto is 'You can't lose what you don't risk.' If I'm only risking $100 then that's the most I can lose.

I didn't say my system relied solely on trader discretion, it only needs my discretion for a confirmation. And that doesn't only apply to candlesticks. There are other things, such as where the price is in correlation to the Bollinger bands, MAs, stochs, etc. Not as simple as saying, 'If price closed below MA previously but above now, trade.' No, it doesn't work like that. I have tried numerous candlestick recognition software, my favorite and most accurate being the Nison scanner (so expensive I've only demoed), but that is not an EA.

If you think taking the human trader out of the picture solves the problem, go talk to ANY big institution (i.e. UBS, BNP Parabas, etc). They still have a floor full of traders, so the 'magical robots' that everyone claims they have must not work all that great. Just some food for thought. Maybe I'm just pessimistic, but all my experiences with trading robots have been bad ones.

I'm only a few days away from raising my capital, then I will make a deposit into that $5K account listed on my profile! :)

LKP (caalador)
Aug 01 2011 at 21:00
14 posts
Hmm, to be honest, I traded manual for 3,5 years, then decided to learn how to program and made my first terrible attempt at an EA. Why? Emotions. Manually I won, but I also lost, I won more than I lost, but not enough to really justify the amount of time I spent on it.

Hence the EA. After another 3 years of falling and standing up I'm there, and it works. But that doesn't stop anything, cuz it can always get better.

Anyway, if you like balance, here's one of the test versions of my EA on a demo account that really likes balance over equity (a failed experiment actually, but I'm letting it run for statistical learning purposes:

https://www.myfxbook.com/members/caalador/l26/140557

Carpe diem would be an extremely lame motto in currency trading...
Mario (medisoft)
Aug 02 2011 at 05:04
21 posts
You are right, my demo accounts was performing great, but that's just because I made the mistake of trading without knowing anything with real money :( Now I know that was a mistake (after losing 2 hundred dollars), and I'm working on demo accounts first to test strategies, the latest one, I called bullet proof trend, is the one that is running on my real accounts, and it is working pretty good.

I used bots on all my accounts but I was greedy and oversized my positions. In demo accounts the equity was a lot bigger, so nothing wrong happened, but with very small equity, the real accounts rapidly went empty. As I said, on my current real accounts I'm using a robot that is working very good. The lesson here for me was to not be greedy, not oversize the positions, and let my winning trades run and close early the loser positions.

I think is very good to do trading manually :) for me is good to do both, with robots and manually, because I love to trade, but based on my past experience with emotions I will only trade manually with demo accounts until I'm able to control my emotions. Meanwhile I place my knowledge on a robot that trade a lot better than me, using the same rules I should be using hehehe, but because greed and fear I finish not following well.

I hope in a couple of months my real accounts will have closed trades, don't know how long the trend will last, but when it gives signals of weakening my robot will close and take profits. At this point you can check the equity, in two of my three real accounts equity is bigger than initial deposit right now and growing, that's a good sign, I think :)

Splexin posted:
    I can tell from reading you three individuals' posts that you are EA fans, so obviously your debate will be that equity is king. Every trader is different and has different preferences. Quite frankly at the end of the day, as long as I'm making money one way or the other then that's all that matters. 😎

In live trading I never open more than 2 trades at once and leave them open for less than a few days. Now if I was a heavy long-term trader or one who trades multiple positions at the same time, then, yeah, equity might be significant. But all that matters to me is the balance after closing the trade. Why would I open another position based on what my equity says? You are immediately raising your risk. What happens when the position (which got your equity high enough to open another) goes the opposite direction...yeah, that's right, you get closed out. Balance says nothing? Tell that to any liquid millionaire or billionaire. I've met a few, sadly none of them gave me a handout 😝. You can read in interviews about how certain individuals are 'worth' so much $$$$, but more often than not, they respond in saying they don't really have that much money. Equity can change at any time without your consent (i.e. stock values, real estate), whereas balance only changes when you allow it to (deposit, withdrawals) with exception to trade losses and profits (but even then you choose whether a trade will hit hard or reward big). You can't withdraw equity.

Mario, I'm curious. Why is it that most of your demo accounts are performing great but your real accounts very poorly? (That was a rhetorical question, I'm just wondering why you aren't using the successful bots on your real accounts...or are you?) If one 'big move' in the markets is causing your account to get stop out calls, then you are risking too much.

My motto is 'You can't lose what you don't risk.' If I'm only risking $100 then that's the most I can lose.

I didn't say my system relied solely on trader discretion, it only needs my discretion for a confirmation. And that doesn't only apply to candlesticks. There are other things, such as where the price is in correlation to the Bollinger bands, MAs, stochs, etc. Not as simple as saying, 'If price closed below MA previously but above now, trade.' No, it doesn't work like that. I have tried numerous candlestick recognition software, my favorite and most accurate being the Nison scanner (so expensive I've only demoed), but that is not an EA.

If you think taking the human trader out of the picture solves the problem, go talk to ANY big institution (i.e. UBS, BNP Parabas, etc). They still have a floor full of traders, so the 'magical robots' that everyone claims they have must not work all that great. Just some food for thought. Maybe I'm just pessimistic, but all my experiences with trading robots have been bad ones.

I'm only a few days away from raising my capital, then I will make a deposit into that $5K account listed on my profile! :)

Topic is locked