Replies to This Discussion

Permalink Reply by Sundaram on August 12, 2012 at 1:44pm

Anil is history, now.

Permalink Reply by Peter jcp on August 12, 2012 at 2:29pm

Hi guys - firstly - I must say that I am not quite as old as Keith points out ;-)

Secondly - I am sure all who know Keith realize he has been having light hearted banter etc - that seems to have been blown totally out of proportion - so I think its only fair to get back to the main reason we got to this point and reflect on where we are.

My first reply to Anil - was actually to agree with him ;-) ( please check back)

However when his aggressive response was all you need is the rate of return on capital ratio and counting pips is an illusion - that made me realize he was misinformed and not understanding what I was saying.

So to try and explain why just the ROR on its own is an "illusion" in isolation - similar to counting pips is an "illusion" in isolation  ( they need each other) I will explain hopefully in a clearer way .

The key to the ROR is the risk you take with your stake on a trade. We know many advise 2% of you capital as a stake and I am sure if you placed say 30% of your capital - you know you would be taking a very large risk. However to obtain larger ROR you could say need to take large risks as well as have a great system /method / strat etc

The correlation comes in as follows 

If I place 2% of my capital and make 100 pips my profit would be for example "x" 

If I then place the same 2% and make 200 pips on a trade - my profit is "2x" - double - mainly because you have had a lot better risk to reward ratio from more pips 

So for anyone to achieve great ROR's they need to make more pips  - as well as risk more if thats what they also want to do.

The point which is important that counting the pips is still needed to achieve your results - and as Anil pointed out he made 2% return on 20 pips but only 1% on another win of 45 pips. So his ROR would be reduced by lower risk stakes. 

But the main bit he is missing is - take out the different % stake sizes - the more pips you make - more likely - the better you do. ie 200 pips a month - is normally not as profitable as 2000 pips a month - on your own capital account - whether it be just $500 or $500k

Back prior to the start of this year we had a guy in chat - who funny enough was using a Russian broker and leverage over 500:1 making ROR of like 200% per day . 

The trouble was it was like on $20 capital account. So he goes top of the pile on Anil;s ratio "god" - but I would far sooner see the money result of a trader with a $20k account making just 5% per day - simply because its a lot more money .

If I remember correctly - making money is the main objective and $1000 in a day is better than $60 a day - even if the ROR is so much better on the $60 a day - -showing you get can get false readings without taking into consideration all the other factors.

Conclusion - lets resolve this by declaring your pips - as well as your % increase - because I will tell you now - there is a correlations anyway 

Next point and I have the "t shirt" on this one - if you are on a live account and making say 20% per month returns with good pips etc and you are then given a $10 million live account - I will nearly 100% guarantee you will not keep your 20% per month up .

The reasons are the following 

Brokers and placing larger live stakes - are harder to achieve good price entries especially at key times - ie the market is not so easy to you 

Psychological - you might be able to stand 3 losses on the row of say $500 - but if you had 3 losses on the row at say $50k - it would knock your confidence back and do your head in for a start.

I am able to do many trades on less than 5 lots that I just know I would have trouble on if I was trying 500 lots - my entries would be delayed more and my exits would be held 

That is the main reason we dont have many bank professional forex traders with $50 million accounts doubling them every few months - but there are loads of great scalpers doing it in retail on small accounts.

I just hope I have explained myself clearly - and please feel free to comment in any format etc - even if you do want to wind me up - I dont mind ;-)

Retail trading and commercial large fund trading are really like measuring apples with oranges - so is demo and live account normally ;-)

Regards 

Peter

Permalink Reply by Peter jcp on August 12, 2012 at 2:35pm

You are correct Sir Gissa - if I had used a filter on this discussion blog - Anil's second aggressive "wind up" argumentative comment - would have never hit the page and I could have save a 1000 words of typing lol - and life would have been easier for us all ;-)

Permalink Reply by Peter jcp on August 12, 2012 at 3:17pm

Thanks Leon - but as Keith says - no one is right all the while and there will always be " grey areas" and different perspectives etc etc.

I have said many time I am still on a "learning journey " even after nearly 9 yrs of forex trading - so always open to new thoughts and views.

We were saying the other day in a blog - you could have 2 traders at the same time - one takes a sell and the other takes a buy on the same pair - and then end result need not be one winning and one losing - in fact both could win - and even both could lose - thats the unusual nature of this business.

I will say I hope Anil will join us in the live trading sessions etc as always welcome good traders and traders wanting to share ideas etc to help us do even better - that would be great ;-)

Similar Sun, Pixta Jim, Keith FXW Pipo etc etc etc and all in the gate - here's to another cracking week ahead 

Permalink Reply by talisman on August 13, 2012 at 12:43am

hi peter-good blog in the spirit of discussion.  i have often heard the comment from you regarding not being able to replicate results of smaller accounts on very large accounts. i agree with this statement but im curious as to your opinion at what size your account is too large to properly use your methods?

Permalink Reply by Peter jcp on August 13, 2012 at 11:46am

Hi Talisman - sorry for delay in response. - When i hit my "wall" at approximately 20-22 full lots in was over 3 years ago and it was not with a ECN broker.

All trades over £100 per pip they use to manually authorize and it took 20 -50 seconds on average to get an entry.

I hear nowadays no problem with 50+ lot orders with some fairly quick but once you are over 100 full lots - then that can be another stall.

If you are trading for swing or longer term trades - it does not matter so much - even if you had to wait 5 -15 mins for an entry. - but for me scalping - I never want to wait even 30 seconds never mind a few minutes.

Have a look with you broker see what is maximum stake is ? In UK many spread betting platforms limited to 50 -300 lots I believe - but obviously you need a very large account to carry those trades out.

I had a friend 2 -3 yrs ago put a £1200 per pip stake on the pound on the election day and he made nearly half a million - but it took him over 30 mins to get a price entry through his broker and he could not come out when he wanted and his spread was 6 pips - what a rip off ;-) but still he was nor bothered as he did extremely well 

If you can find out more on this subject etc - would be interested 

Regards 

Peter

Permalink Reply by Peter jcp on August 13, 2012 at 11:56am

Hi Honest - I look forward to seeing further results on your inverse correlation set up.

I agree semi automated can assist your trading - but I have not got the faith to believe in full automation - as my robots do not know half as much as I do through experience and with time and with news etc and to try and build all those factors in to an automated system would cost a bomb. Even the systems the banks use that cost millions to develop - go wrong - therefore does not give me a lot of faith still ;-)

Still semi auto can certainly assist and good luck with your development 

Regards 

Peter

Permalink Reply by Honest Sarjono on August 13, 2012 at 1:01pm

Hi Peter,

Yes, sure you pleased to look forward,

btw, my weekly setup you saw the pips grow now :)

I differ with all those who gave an opinion, because I really have open trading positions according to what I have said with screenshot evidence.
You know, then I will incur a loss if my method was wrong.

Please only reply about this into here.

Happy trading :)

Regards,

Honest

Permalink Reply by Peter jcp on August 18, 2012 at 1:49pm

Hi All - Approximately half way through the month of August and I thought its a good time to update traders on how the ForeXmosgate's "live trading" groups been going.

Up to recently we had been concentrating mainly on taking short term intraday trades on the EU throughout the European or London session. We have added a few other key pairs to the list and will be continually updating and trying to assist other like minded traders.

Atm - I can only give you my own results - and whereas I know some days many of the group may achieve more than me by holding trades and trading more pairs - I have kept at least 85% of my trades to purely the EU.

OK - lets do it like the market does and "tease" you first.

In the 12 days of August I have traded - my average trade is just 8 pips  ( first laugh) 

Next I have been wrong on 33 trades ( another laugh - hardly an expert lol)

I have taken 192 trades and averaged 16 trades a day ( must be making hard work of it )

I have not had any winning trade above 47 pips ( he needs more training lol)

My largest loss was 8 pips ( oh well not too bad ;-)

I did not have a losing day  ( oh consistent as well - interesting )

My win ratio was 82%  ( he must be lucky then - that will soon run out ) 

My average RR was 1.7 and best 9 ( still lucky then )

Net pips after deducting spreads and losses - over half a month with an average win trade of only 8 pips  - 1505 pips ( not on lot size counts)

Result - happiness so far ;-)

Please let me know your predictions on what amount of pips I should make my the end of the month - bearing in mind I will only be trading another 7 or 8 days due to time off etc ?? 

PS join the gate group and help us achieve even more ;-)))

Permalink Reply by Peter jcp on August 20, 2012 at 7:03pm

Monday 20th August - I will remember this trading day until at least the end of the month ;-) It was my worst trading performance for many weeks.In fact I will interested to hear from other traders on how their day went.

Being a Monday - with no real major news it was going to be slow. Add in the holidays and uncertainty - then it becomes even more concerning.

Although i still ended up with a profitable day - making at the end 84 pips mainly off the EU but 2 trades on the GU and AU - the amount of effort to reward was disappointing.

For a start I got 5 scalps wrong - yes 5 - only 2 consecutively  and the rest over the total of 20 trades i ended up taking. That is far too many trades to end up with less than 100 pips - but it was just too slow and uncertain

I count a wrong trade if I make a loss -whether half a pip or 4 pips - its a loss. Average wins were bad - under 7 pips and only a couple of trades over 15 pips.

All in all a day i want to forget. I just hope we can start to see a little more volume this week along with less market maker manipulation by balancing the order flows etc. I should not moan - because i made a profit - but too me it was a frustrating day - especially when you see a scalp moving up at 1 pip every 10 minutes ;-) 

Talk about High Frequency quick trading - today was slower than paint drying ;-)))

Permalink Reply by Edgar Forex on August 21, 2012 at 12:16pm

This thread got a little out of hand.

I Agree with your toughts. Pips is not indicative of profits or good trading due to the fact that there are other factors, like diferent lot sizes in trading, drawdown and demo/live account type.

I prefer to trade using a good risk ratio on my trades using good MM to make sure I'm on the right track.

Btw I made some good profits after my previous post, if anyone is interested just read page 2. It's been a GREAT august so far :)

live account made more than 2000 pips (PAMM account) with more than 10% gain for this month :)

I'm done for the month :) And i'm preparing for september :) Happy trading guys.

Permalink Reply by Sir Gissachance on August 24, 2012 at 10:06pm

Hi Peter, Thanks for this post but I dont normally/quit pip posting due to other reasons *wink wink* a while ago but suffice it to say, just this week between running over to Westminster, The Aldwych then over to Hever Castle for a spot of lunch (not all in one day btw : 0 ) ) I have ended the week on 19,000 pip count. Now then, the best part of the week was actually a punt on the lakes of Hever, a walk in the ancient gardens of Anne B as well as a jolly good evening meal at the Kings. Anyhow, well done to you and the chaps at ForeXmosgate and keep it tight.

Sir Gissa ........ Out  !!!!!!!!!!!!!!

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