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My philosophy of Trading
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Author:  astral77 [ Sun Jun 15, 2014 12:21 am ]
Post subject:  My philosophy of Trading
Hi
For the sake of accuracy the volume of forex trading is $5.3 TRILLION Dollars PER DAY (http://www.reuters.com/article/2013/09/ ... 4R20130905) and 40% of that is traded in London! Retail forex trade is a drop in the ocean,
Kind regards
Author:  tommiho [ Wed Jul 02, 2014 6:43 pm ]
Post subject:  My philosophy of Trading
Bob, guys very nice reading, highly recommended.
Thank you for that.
Author:  James Roscoe [ Sat Jul 05, 2014 10:07 am ]
Post subject:  My philosophy of Trading
Hi Bob, I have a video that applies directly to you. You are a very good man, and are trying to uplift this world.

I hope that other aspiring traders will see the crux of this interview.

[youtube]http://www.youtube.com/watch?v=apOUbIDOu0A[/youtube]
Author:  astral77 [ Mon Jul 07, 2014 10:45 pm ]
Post subject:  My philosophy of Trading
Thank you James for an interesting post. Few years ago this chap was involved in a 3 part BBC TV series. You can view it by searching the term "Million Dollar Traders" in youtube. I strongly urge everyone to watch these 3 videos (they are free of charge). We as retail traders make the big recurrent mistake of not hedging our trades adequately and over exposing ourselves to one direction. That is the big difference between us and the professionals.

Kind regards
Author:  nanningbob [ Wed Jul 09, 2014 4:41 am ]
Post subject:  My philosophy of Trading
James Roscoe » Sat Jul 05, 2014 6:07 pm wrote:Hi Bob, I have a video that applies directly to you. You are a very good man, and are trying to uplift this world.

I hope that other aspiring traders will see the crux of this interview.

[youtube]http://www.youtube.com/watch?v=apOUbIDOu0A[/youtube]
Well that was interesting. Imagine professional traders trade Forex at 6-8:1. Post that at FF and you would get fried. LOL. I am thinking of tripling my account and going with 10:1 or 20:1 max. on leverage. Its funny the bigger my account the more conservative I get with it but the closer I get to making a full time income.
Author:  astral77 [ Wed Jul 09, 2014 2:18 pm ]
Post subject:  My philosophy of Trading
It is always useful to know how the professionals trade and try to emulate them. The beauty of NB system is many of these aspects has already been incorporated. For instance you trade around 5cents pips per $1000 a/c balance. I am a bit more adventurous and use 10cents pips per $1000 a/c balance and start closing trades if the floating DD exceeds 10% of account balance (i.e. for a $1000 a/c start closing some trades if DD exceeds $100).

However, it is interesting how this chap calculates earnings expectations. For instance I set a target of 2% per month and or 20% per year as being a conservative expectation based on account balance (i.e. $200 profit per year for a $1000 account balance). But the way he calculates it is based on a/c balance PLUS the margin used (i.e. if using margin of 5:1 with a/c balance of $1000 the 20% return is $1000X5=$5000 x20%= $1000).

As for the increasing conservatism with the growth of the account, this is natural and to be expected. When the account is $1k or $5k it is speculation money and we can absorb the loss by making a small sacrifice, for instance the cost of a overseas holiday in the UK for a family of 4 is around $5k. However, when the account is $50K or $100K then things are more serious.

Finally, a crucial point which this chap emphasizes in his lectures is the fact that trading money is trading money and should not be counted as income money. What I mean is you can not expect to be taking out X% out of trading account each month as income. Trading account should be treated separately. It is a different matter if you occasionally take out your profits for use elsewhere as long as this is arbitrary and subject to a profitable account. But if you say OK I am going to pen a $100K account and take out $2K per month regardless of if I have made a profit or not then that is a recipe for disaster. IMHO trading account should be treated as a corporation and dividends taken out every year or six months and loss=no dividend. These things maybe blatantly obvious to most people but it is useful to remind ourselves from time to time.

Kind regards
Author:  James Roscoe [ Thu Jul 10, 2014 12:37 am ]
Post subject:  My philosophy of Trading
astral77 » Wed Jul 09, 2014 8:18 am wrote:It is always useful to know how the professionals trade and try to emulate them. The beauty of NB system is many of these aspects has already been incorporated. For instance you trade around 5cents pips per $1000 a/c balance. I am a bit more adventurous and use 10cents pips per $1000 a/c balance and start closing trades if the floating DD exceeds 10% of account balance (i.e. for a $1000 a/c start closing some trades if DD exceeds $100).

However, it is interesting how this chap calculates earnings expectations. For instance I set a target of 2% per month and or 20% per year as being a conservative expectation based on account balance (i.e. $200 profit per year for a $1000 account balance). But the way he calculates it is based on a/c balance PLUS the margin used (i.e. if using margin of 5:1 with a/c balance of $1000 the 20% return is $1000X5=$5000 x20%= $1000).

As for the increasing conservatism with the growth of the account, this is natural and to be expected. When the account is $1k or $5k it is speculation money and we can absorb the loss by making a small sacrifice, for instance the cost of a overseas holiday in the UK for a family of 4 is around $5k. However, when the account is $50K or $100K then things are more serious.

Finally, a crucial point which this chap emphasizes in his lectures is the fact that trading money is trading money and should not be counted as income money. What I mean is you can not expect to be taking out X% out of trading account each month as income. Trading account should be treated separately. It is a different matter if you occasionally take out your profits for use elsewhere as long as this is arbitrary and subject to a profitable account. But if you say OK I am going to pen a $100K account and take out $2K per month regardless of if I have made a profit or not then that is a recipe for disaster. IMHO trading account should be treated as a corporation and dividends taken out every year or six months and loss=no dividend. These things maybe blatantly obvious to most people but it is useful to remind ourselves from time to time.

Kind regards
I found this in his difference between retail traders and professional traders lectures, very good stuff. It vindicates what bob's MM strategies are.
Author:  nanningbob [ Fri Jul 11, 2014 6:45 am ]
Post subject:  My philosophy of Trading
You make a good point about income trading. What I would look at is more of a supplement where I may make 10K or 5K or ???????? and you take that out and spread it over number of weeks or months. So I wouldnt be taking out every week instead a lump sum and use it as income, or purchases, vacation or ???? That would be a much better route rather than a monthly or weekly check.
Author:  nanningbob [ Fri Jul 18, 2014 1:14 am ]
Post subject:  My philosophy of Trading
A post from a trader who has used some of my philosophy and how it changed their trading style.

Hi Bob

As a long time lurker of the forum, I'd like to report (finally) on my progress, and to to thank you for your teaching, and sharing of your methods.
I had been trying to learn the art of currency trading for almost two years with little success, I somehow stumbled on Steve's forum, and Bob's methods - I think it was 10.2 then, but it all looked a bit complicated, so I persisted with my one trade at a time - looking for the home run, let the profit run mentality, as widely taught. I'm sure if applied correctly, these trading methods can work, but they did not for me :arrrg:.

I kept receiving the weekly "Good Luck" email from Steve (thank you Steve), so about a year later decided to have another look. It has taken me some time to get my head around everything (not helped by moving from New Zealand to Ireland!) however, as I began trading again, following Bob's advice, gradually I am beginning to recoup my losses - making more (still on penny lots here) in a few months than I did in years, and not having the losses. I think reading Bob's Philosophy of Trading was crucial for me - a real change of trading mindset. I don't obssess over one trade - I have lots of tiny ones running, if they are negative for a while that's fine (I'm mainly taking +ve swaps trades, so that mounts up too) when I see profit, I take it, and if the move continues, I just get in again.
I watch CSS, use 10.7 on 4hr & 30m - I still like Dummy Lights, and use TMA. I accept a 10% drawdown, but try to stay under that. My trading is now relaxed, routine, and satisfying as those little trades mount up. I used to be taught to aim for a "home run" every week (100 pips) Now I can achieve that most days (on average). This is not to boast - but to encourage others.

So, for lurkers like me, please keep trying, it takes time, but with perseverance it can happen :clap:

Thank you Bob for your kindness & patience

Vivienne
Author:  nanningbob [ Sun Jul 20, 2014 2:33 pm ]
Post subject:  My philosophy of Trading
The one thing I like about Steve's Forum is the overall intelligence of traders here. We may not agree on methodology or other factors but each position is usually intelligently debated and respected. I had posted a concept about brokers at FF and got this response (it is in blue):

To run a successful business in anything you need two major things. Be profitable and help someone succeed in a venture or provide a service someone needs. Brokers can only succeed if they have successful traders to keep their business going. Without successful traders who are profitable trading a brokerage will go out of business quickly. So if you are not successful trading quick blaming your broker and go look in a mirror.

As far as the tools given you by a broker a successful trader can trade successfully using any tool. I find some more useful than others but basically I could use any tool and make it profitable.

A business cannot survive without customers. In Forex you only keep customers that are successful over the long term. Basic Business 101. Blaming brokers for your failure is just a cop out and a very weak argument.

[quote=;7614968]I am certainly not blaming brokers for anything. I am stating the fact and reality about their business model. You are very naïve if you believe they don't have a strategy to turn customer accounts into their revenue. What is so profitable about forex is that the average account will be turned over to them in a very short time.
90 / 90 / 90.
90 % of the customers will lose 90 % of their accounts within 90 days. All they need to do is to take the other side of the trade on the 90%.
Accounts that are profitable and long term are a nuisance because the broker can only make the spread on these accounts. The perfect customer is the long term and losing account; and not the successful long term like you stated. For the majority that are short term losing (the fx broker main income), the forex broker worth his salt will spend a good % of their revenue on marketing to attract new cannon fodder to replace the fallen. (New features, new tools, "innovation" ... etc)[/quote]

Sorry you are wrong especially with your stats. USA brokerages are required to post the %number of profitable traders every quarter. The worst ones come in around 20-25% and the best ones come in around 40%. So the 90% quote is one of the most falsely stated statements in Forex. No business model would be profitable or successful if it had a 90% failure rate. Brokers need successful traders and as many as they can get to be a successful business. The other thing you also are missing is successful traders will trade larger amounts of money while beginners and losers will trade with smaller funds. I would be interested in a stat that showed the amount of money traded that showed increase over percentage of traders that made money. I believe that number would be much higher. In fact I could bet the amount of money that was increased would be far greater than the amount that was lost. Big accounts that win would cover dozens or even hundreds of accounts that lost money. So your stating of a fact is not a stating of a fact. It is the typical loser mentality of traders who lose their money or are not successful traders month in month out year in and year out.
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