nanningbob » Mon Mar 31, 2014 11:50 pm wrote:Two years WOW!!! However there are guys that run hedge funds and they have gridded the entire distance of a currency. In other words if price goes up they win and price goes down they win and they basically have a permanent fixed DD. Since they dont leverage or leverage is small their swap costs are nothing. Their bottom line just keeps going up slowly year after year. I had an account set up using one penny lots trading both ways and setting profit at 100 pips. That means 1.00 profit every time price move 100 pips in any direction. You take a pair like aud/nzd or something with almost no swap cost and has had a range of 3000 pips over its history and you have 30 trades going both directions. You are always hedged so the DD becomes permanently set. Then its nothing but winners from then on out. Every time a broker or bank spikes price you win. 100 up 100 down two winners. It is an interesting way to trade. I tried it once and was getting my grid going and my balance almost kept up with the growing DD. Then when the DD was set it was all profit. However, hedging was banned in the USA and that was that. I hadnt done it long enough to finish the test but I could see it would work. chf/jpy and eur/chf between each other has a very minumum swap.
The most important thing I have learned from hanging onto trades for a long time is I got to see how the market breathes in and out. It gave me a sense of market movement across the board. It also allowed me to lose my fear of market moves. I dont fear the market anymore or a loss. Most people dont want to take the time to take a 1000 bucks and trade one penny and learn. You would have to lose 100,000 pips to blow the account and if you are that bad you need to get out anyway. My best recovery was -1300 pips on the aud/chf over a 3 month period and I ended up making a profit by the time I was done. My biggest hold was 6 months on an aud/usd and I finally gave up and the next week it dropped like a rock and I would have succeeded.
The problem with discussing these things is idiots think we didnt take other trades and actually were profiting during these times but thats their problem. I dont like talking about it because the one in one out crowd just doesnt understand the concept that DD does not compound but constant winners banked does. DD does compound if you constantly take losers but it does not if you hang onto them and arent fighting a major trend in the wrong direction. Something I have finally learned to stay out of. I havent bombed an account now in 4 or 5 years.
Anyway I said all that to say this. Holding onto bad trades is not good trading but I learned how the market breathes and move together by doing it. It is how I developed insight into the market. Now its like I look at a chart and go ............ oohh that looks good and later YEAH or ooohh that looks really bad and I get out. Its also how I learned to trade and counter trade and range trade. I can do all three comfortably and profitably. I even once did the AUD/USD as it moved down 120 pips one day and made 60 pips buying it just to see if I could do it. So now I do crazy things once in a while just to see if I can.
Anyway, now the goal is not to have DD or as little as possible. Because of these experiences I think I can get good at it. Milanese and I were working on an improvement of an indi when we found a bug in it. Then we discovered something that if it proves true will dramatically change my trading and hopefully everyone elses. We will see how it goes but I cant help teasing you some over it. None of this however would have been possible if I hadnt done years of all these different styles of trading. Now ............... well lets see how it goes. 175 pips before the USA session alone yesterday.
You know I think there might be such as thing as too much screen time.
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