My philosophy of Trading

Post by **nanningbob** » Sun Feb 15, 2015 10:48 pm

matt_32 » Wed Feb 11, 2015 2:30 pm wrote:I read a very interesting article the other day and though I would share it with you guys ...

http://www.zerohedge.com/news/2015-02-1 ... ult-lehman

Matt

Thanks interesting read. I would have to agree that fundamental traders are having a rough time.

Post by **nanningbob** » Tue Mar 10, 2015 5:37 pm

A trader sent me an email about trading. Here is the answer from a professional trader and then my answer will be the next post. I thought they were similar.

What do you mean by money cant be made from trading constantly,i.e....cant trust it to put money on the table....if so why trade at all?

Trading is not a dependable source of putting food on the table i.e. it's not reliable as "regular" income like a salary. (to the naysayers, don't bother trying to convince me otherwise because you will NEVER be able to convince me otherwise.)

The main reason institutional traders can introduce any "regularity" in their trading income is because they can be market makers as well i.e. they can make money from the spread. Retail traders do not have that luxury and, as such, should not entertain any fantasy that they will ever have that luxury for any meaningful length of time.

The only proper reason for a retail trader to trade is to build equity i.e. to grow your account. It doesn't matter to me if you don't believe me. Read my sig below.

Post by **nanningbob** » Tue Mar 10, 2015 5:40 pm

Here was my reply to a similar question last week.

My experience with Forex is profits come in spurts and not as a steady flow. If you can hold even until the spurt comes then you are already a good trader. Making profit is one thing, keeping it is another. As a day trader that is your long term goal. Making your profits and then not losing them by holding even. The guys who trade 100'sK to millions in dollars that is what they do. They know over a years time they will have losing months, breakeven months and then the profit months when they catch the wave. Very difficult to look at trading as a constant income. So that is normal.

Post by **nanningbob** » Tue Mar 10, 2015 5:47 pm

I have traded other people's accounts but they drop me as soon as I have a bad streak. AKA losing month or back to back losing months. However, over a years time I will show a profit. Sometimes not so hot sometimes looks good. The key is trading in a way that allows you to trade another day. If you constantly risk your entire account you will eventually lose it because sooner or later you will be wrong, you will be on the wrong side and you have too much money on the board to save your account. I just learned that the plunging price of oil trumps the doubling down on JPY weakness. So even though JPY is selling more and more bonds to weaken the currency, the plunging price of oil causes the JPY to rise and AUD, NZD, CAD to go down. Oh well.

Post by **astral77** » Thu Mar 12, 2015 2:54 am

IMHO we should study the way professionals (e.g. hedge funds) trade. Their results shows that they have losing month, moths or seasons. The goal is to be profitable over a 12 month period. We have established that successful traders treat trading as a business. Any business person knows that you can not be profitable every day. For example if you have a shop you may have days that you have no sales, there are weeks or months that you barely break even or make a loss and there are periods that business is booming and you make a killing. Most business people use the bumper periods to subsidize the lean periods.

Forex is a very volatile market and it is not surprising that there may be periods of loss making. As retail forex traders we are well aware that there are numerous obstacles on our path which does not apply to the professionals. These topics have been comprehensively discussed by us many times. IMHO due to the limited funds available to us it would be futile to expect a steady income stream from our trading. However, we should treat our forex trading the same way as our stock and equity holdings. The logical option would be to trade for a year and at the end of that year depending on the position of our account decide on withdrawing some or all of the profits (if there are any profits to be had).

Kind regards

Post by **Jonathan2FI** » Fri Jun 05, 2015 5:09 am

Try the attached one..

Cheers

Tommaso

Hi Tommaso,
Have been developing an EA on Price Action that calls a trend filter using TMA True Slope on the daily / weekly. i understand the calc and slope thresholds I am just a bit rusty on prog.
The above works well with 10.2tma entries or would you recommend other tma indi.

Jonathan

Post by **milanese** » Fri Jun 05, 2015 6:29 am

Jonathan2FI » Fri Jun 05, 2015 5:09 am wrote: Hi Tommaso,
Have been developing an EA on Price Action that calls a trend filter using TMA True Slope on the daily / weekly. i understand the calc and slope thresholds I am just a bit rusty on prog.
The above works well with 10.2tma entries or would you recommend other tma indi.

Jonathan

Yes, but you can too take a look into Steve's shell as it has has the tma-slope calculations embedded. If you want you too pm me and I will embed the tma-calculations in your EA-project...

Cheers

Tommaso

SniperFX · Post by **SniperFX** » Sat Mar 05, 2016 12:26 pm

Hi Bob and All,

I stumbled across this site after someone in another site said it was the real deal, i joined up and got Steve's introductory email where he talks about Bob, wow! i started reading and couldn't stop, i read the whole 14 pages of this thread in one go and it opened my eyes and confirmed some of the things i have thought myself, so its nice to find like minded people here.....i have been learning to trade for 3 years now and have been through all the standard newbie mistakes, i have been trading a live account now for 6 months trading 0.01 lots on a £1000 account and have managed to show a very small profit (so im proud of that and not blowing it up!), i tried to trade the lower TF's early on and got slaughtered and fed up, so i stopped that and moved to the higher tf's as i know the higher TF's are for me and thats why i loved reading this thread so much, small trades broken down into parts with no SL, that is what i had been doing lately as i got so sick of being stopped out and watching my account slowly drop, now i just need to find the best thread that will help me with a plan to trade this way. I guess i have a lot of reading to do!.

Also thanks to Bob and everyone for this thread, it really is good and tells it like it is.

Cheers
Mike

Post by **RisklessPips** » Thu May 26, 2016 7:03 am

Hey Bob

Thought I'd contribute my 2 cents to your great post on philosophy for two reasons.

Firstly, I put it out there and that commits me to it more so than if I kept it to myself and secondly, because writing it down crystalises my thoughts which will then manifest as the reality I want (Bit of new wave right there

)

Like most people my initial "get rich quick" ideas were put to one side when I realised my small account was NEVER going to help me generate anything like the huge money I fantasized about in the short timeframe I dreamt about. So being realistic I dialed my requirements down, waaaaay down.

The first part of my trading philosophy is PATIENCE.

I know from what I have learnt over time that 1000 pips per month is not unrealistic. That is 250 pips per week or 50 pips per day.

I also know I am likely to make the monthly total much like prices move - in a back and forth motion with two steps forward and several retracements back.

I can strive for the 50 pips a day and get frustrated or do like Desiderata says (Max Ehrmann) and accept things as they are knowing if I have done my bit the market will eventually do its bit. I can now sit on a trade for days and weeks unlike when I started and had to be "in the market" every 15 minutes.

The second part of my trading philosophy - SELF BELIEF

When I started trading I used to place my stop losses and then spend the next minutes, hours and days worrying if it was too close or too far from the market. A I have developed I now trade without stop losses or only put them on when I am unable to monitor my charts for a long period of time.

I do not trade more than I can afford to lose - much as you have taught people here over and over again Bob. If I trade a micro lot and lose 100 pips on a $1K account I'm still in the game. I can sit back evaluate what I did wrong because honestly 100 pips down the hole is wrong stuff. Note I said what I did wrong ! Not what the market or my broker or my tipster did wrong. I accept what happens to me good or bad is down to me.

My third philosophical point is I DONT HAVE TO BE RIGHT.

Finally, and before I bore you to death, I play golf like you do. And old man golf taught me from a very early age don't fight him and he will let you ocassionally win. He almost always wins. Mr Market and old man golf must be family or something because you don't fight Mr Market either.

I now follow where the market leads. Too many times in the past I "knew" cable was going to drop and then it didn't. I "knew" the Yen was going to rise and it fell. Acceptance that when it comes to the market I am but a sheep is core to my philosophy. I follow where the market leads and pick up a few tidbits along the way.

If I lose then going back to self belief, my loss does not invalidate me. Indeed it becomes part of my ongoing tuition fee - I take the hit and move to the next trade because going back to patience it's all just a matter of time

Thanks Bob

Post by **nanningbob** » Fri May 27, 2016 8:48 pm

Thanks for posting. The 50 pips a day is just an average because price tends to jump at market opens and news stories. If you miss those jumps a trade can sit. I did one trade yesterday and walked away with 10 pips yeah.

After a year+ hiatus I feel like trading again. Problem is I am on the road for weeks at a time so looking for more long term trades. Hopefully it will work out for me. Unless you trade many currencies at a time you will have a hard time hitting those averages. Good luck.