I experienced it dozens of time until I didn't remember it again. Have you ever regretted putting SL there? Even regretted Putting SL at all?
Now, the safest trading metod IMO is not a method that gives you 90% winning ratio but didn't define where you put your SL. The safest trading method is a method that have a tight SL preferably less than 1% of your account and lower winning ratio with minimum 2:1 Risk Reward Ratio.
Let me explain that:
Assuming you have a 90% winning method above. You made 9 winning trade each $1000. Now the last trade is a losing trade. Since it didn't define the SL, the losses you triggered : $5000. This is better. Lot of othe traders wiped out in just 1 losses after 9 winning.
Here I have 60% winning ratio. Every win I made $2000, every losses $1000. After 10 trades I made $8000.
You may say I will keep discipline and using a tight SL with the 1st method. Well, Rest assured since the SL exist, the winning rate may drop significantly.
Today's Result, not a good one...
I kept buying EUR and selling too soon. Then the CL goddes came. One Strike...BAM! 25 cents in 3 minutes made my day :) Fighting the EUR almost 5 hours -$95, Embrace the CL in just 3 minutes, +$250. What a job...!
it's hard to find a system that give you 60% winning ratio together with 2:1 reward:risk.
ReplyDeleteMost of the systems are just 50/50 and the winning system need to be changed time to time as well.
In your comparison, one thing for sure is, the 90%-system has a much better chance get wiped out than 60%-system. As traders get emotionally involved when the 10% hudge lost hit.
Yes I agree with that. Once trader can embrace the small losses and live with it, the path is become easier.
ReplyDeleteOne thing I learn so far is that's a possibility for consistent profit each day. All I need a good system, discipline to execute, and stopped when the daily goal reached. Also an routine updating setup is neccesary.
Then go trade all world session. For me, start with Asia, Europe, and lastly US.
If I have reached my daily goal at Asia. I'll stop. If not I go to Europe and so on. Combine with a tight SL and Good System plus 4 Currency Watched, It prevent burnout from trading and good for the mental state.
What do you think about this?
I think it make sense on the stop / discipline part. I'm struggling on the part that " stopped when the daily goal reached". Let's say you target 400 pips a month so it's 20 pips daily. But that comes from some winning days and some losing days, so u may have a 50 or 100 pips day and another -30 or -40 pips day, and most of the day is just between 10 to 20 pips. With a strict line of daily goal limits the potential of a long running winner. Or on some day, you can just trade very well or your system works very well couple days. Then we should squeeze as much as possible from there, in the same time, protect our profit that's already in the pocket.
ReplyDeleteAlso, trading 4 sessions is tough, you have a life and other things to enough, not just trading, though trading is the fun part, might be the most fun part.
Just my 2 cents.
I know what you're talking. Limited profit may not covered the losing day. That's why I have weekly goal also. And actually trading is no fun for me. Playing video game is fun. But I have obligation to profit every day. There's some private motivation. I just confidence if I follow the rules religiously, sooner or later I will get the profit. There must be at least one trending currency out of four, (is it?)
ReplyDeleteI think the rules erased the fun part from trading :)
Tks for your words, appreciate it so much