Sackie's live trading experiment

OK, first up to save you time, this will be about trading and currency. If you have no interest, you can stop here to save time.

Let me start off by saying anyone wanting to copy what I'm about to post, DONT! You will lose money. Don't. Don't. Don't! I can't be any clearer than that. DONT! I am a newbie. Don't follow me. If you still don't listen, it's on you.



I've been trading currencies for the last few years with good success (for a newbie). Yes, compared to long time successful traders, I'm a newbie. But still profitable. Enough to make it worth my while to continue when I see an opportunity. Basically I've developed a 'play book' of set-ups where once back testing shows an edge, (limited usefulness imho but I start there) I then test the setup with real money/psychology using a small amount of money over 50 trades to see if the set-up actually has any edge when traded live. If after 50 trades, theres a positive expectancy, ill extend it to 100. And If after 100 trades (assuming the capital survives) of the same setup (as much as possible) the edge remains, I add a significant sum to the account to trade that strategy as an addition to my playbook of set-ups.

I've done this many times over the years and many live trading experiments of a set-ups don't show edge after 50 trades and the capital is lost. Some do for 50 and 100 trades. And it's those setups which become my ' bread and butter' .

So I've just finished back testing a setup which shows some promise. I will now start to trade it live for 50 trades then assess if there is any edge. Then do 50 more and see the results.

I've decided to publicly document the journey of this setup partly to pass the time in isolation but also to help me with my own trading. Starting capital is $300. It's likey it will be lost. Which is fine. This is not demo. That would defeat the point of testing my psychology factor. It's a live account of just over $300. My trading style is quite discretionary at times which poses its own challenges but i try my best not to deviate too much from the essence of a setup that I'm trading.

I'll post every single trade of this setup and the outcome, in real time as much as possible. So the trade is taken, photo posted, then when it closes, another screenshot. Then after 50 trades, I'll assess to see primarily 2 things.

1. What is my win/loss ratio
2. What is my risk to reward on average.


The first trade I entered was actually Friday night. Still in the trade. Market opens again in the morning. Current balance is just over $300. The dollar amount isn't important. It's the results after 50 and 100 trades, assuming the setup survives it. Mainly wanting to see what my win/loss and risk/ ratios will be. The equity traded can always be increased if there's a decent edge for the setup.


The setup: engulfing a pinpar during the beginning or continuation of a trend. I will take the same setup on a reversal as well but less often. More wanting to test this on a trend basis. There's more to the setup but I'll keep it simple in explanation and leave it at that.

I'll start from here. Happy to try and answer questions along the way.


When a new trade is entered I'll put trade number, open, update and close. 'Open' for new trade, 'update' for my comments during the trade and 'close' when the trade is closed and some comments.

See starting equity below:

 

Trade: 1 (open)
Pair: USD/CAD
Time frame: 4h chart
Trading direction: Long.
Comments: not the clearest price action of engulfing wick (EW) but close enough. Preceding price action (PA) of trend is good. Confluence of Bollinger Band (BB) volatility expanding which is positive. However be more patient next time for better quality EW.

The circled candles is my setup. The EW is medium quality. Buy in point and stop loss is indicated on the chart. I'll use the middle moving average in the Bollinger Band for exit once price closes below unless SL gets triggered first.

Will post screenshot when I exit. I'll use geometry and sometimes price action to guide my exit. (Still trying to maximise best exit strategy to capture as much gains as possible.

 

Have been thinking about of testing a small amount on money on forex, which broker do you use / recommend ?

 

Hi,

I have a few accounts i use with 3 main brokers, Oanda, pepperstone and global prime. I recommend which ever one you go with, do your thorough due diligence on the broker, platform, fees etc.

 

Thx for sharing. Way over my head, but will follow this and hopefully learn something

 

Hey @MTR , the concepts are actually simple, it's just some of the jargon is impossible to know unless you spend a few minutes to google it. But honestly nothing complicated to understand. But far from easy to execute with consistency.

 

I think Oanda is best for first time traders.
You can trade as small as a dollar. But it's real money.
I haven't used a demo account for over 20 yrs. I think it's useless for learning, gotta have real money on the table.

It's simple, not easy.
Only 3 things can happen: Goes up, down or stays the same.
All you need is a time frame and an action plan.

 

What pairs are you trading?

 

Thanks so much for sharing. It's something I thought about dabbling in but never got around to it. Will be watching with interest. And will do some research.

 

For this setup, most of the major and minors. I'll post every one of the 50 trades taken (or until capital ends). So I've posted the first trade already and still going. If I enter another trade (trade 2) , I will post it here after entered, or soon after.

 

It's by far been the most challenging financial endeavour I've undertaken. More than renovating, developing and everything in between.

In the past, I've blown up multiple accounts probably around 50k. Made it all back and a lot more now but it's definitely not easy and I've learnt a lot. I do it because I enjoy the markets, the challenge and its financially worthwhile too for me.

 

But why currency?

how far up are you, if you care to share

How many hours a day spent on this?

Could this be a nice hobby??

 

Could also just trade stocks...like today. If you believe the AMP is a going concern, you could buy in today where its dipped more than 5-6% and sell it tomorrow (or the next day).

$300 wouldn't make it worth your while though - but IMHO, even buying $3,000 worth, is a less riskier, more predictable play.

 

Some people take to it more than others, generally some ocd is required i think.

It moves fast as there's lots of leverage and small capital to start.
A lot less moves with the new asic rules from march though.

Too many. It's easy to get lost in small moves and time frames and thinking that you need to watch every bar just to see what happens.
But if you only trade daily and a big move against you mean you're down $10 or 0.2% of your account, it's not a big deal.

Sure, as long as you're profitable.

 

Why currency? Tbh i started in currency many years ago and just got used to it. It also has much greater flexibility with leverage, as long as you act responsibly. I used to trade the 15 min chart and i would spend too many hours in front of the screen. I experimented with different timeframes and I find the 4h and daily works best for me and my lifestyle. I probably now spend only around 5-10 hours a week max on screen time,

Could it be a hobby? Sure, I know a few traders who do it on a hobby basis rather than their full time work. There is a steep learning curve with no guarantee you'll do well. Ever. Failure rate for people who try it out is probably 90-95%. The hardest part, hands down, is the psychology. At least imo it is.

How far up am i? Tbh I'd rather not publicly disclose, but my main trading account has quite a few hundred thousand equity to trade with, spread over 3 brokers. But so far its been financially worth the time and effort I have put it otherwise I wouldn't do it. But if someone is just doing it for the money alone, its unlikely they'll stick with it when all the million challenges arise. Most of the successful traders I know have a passion for it or at least enjoy the challenge too. I have learnt over the years to focus on the process, not the money. If the process is mastered, the money will come.

 

That was me a few years ago. It was PAINFUL. Eventually i realized you can do even better with less time and fuss spent if you just increased the time frame. Its worked for me so far. I used to trade 15mins.. at night! Starting at 11pm to 5am in the morning because as you know the cross over of London/US starts when its our night time. RedBull helped me out lol. But since trading the 4h and daily, i got my sanity back, mostly. I'll still trade smaller time frames once in a while, but not every day.

 

I've never traded stocks with leverage so I can't comment.

 

Beginner question here, I’ve recently started to try learn this myself and find I enjoy the challenge of it all. I am about to start a demo with MetaTrader 4. Is there a way (on this type of system or another) that you can preset the parameters for your SL and TP amounts? At the moment it seems like all in an instant I need to set the exact amount of both as well as the buy price and by then the price has moved to far.

for example I were to try a strategy with a SL of 10 pips and TP of 15 pips, that can just be auto filled when I set my buy price?


Thanks guys/girls, going to be watching this thread closely

 

Glad to see there are people interested in this somewhat crazy endeavour just like me.
I started trading about 4 years ago with the idea this would be a partial hedge for USD denominated bonds I have. Like yourself (and I think most traders) I started in the small timeframes glued to a screen. Actually, I was on the 1 minute, which chewed up my money and sanity and unceremoniously spat it out. I also blew up my account a few times but have now made it back. It has taken a few years but I love the markets and learning.
I also agree the psychological aspect is the most important to master in trading. After I blew up my account I went back to the drawing board and created a manual strict rules based trading algorithm that suited me. With a lot of backtesting, demo trading, it seemed to work and I thought I was confident enough in it to trade live again. I then tried with real money and my mind started playing tricks on me and the fear of loss from before often overwhelmed my decision making, leading me to being scared of taking trades my system was telling me to take. This feeling was odd for me because I thought I was good at taking risks and an odd loss due to being in business all my life. Apparently, I was not as comfortable as I thought! Well not being wrong a third of the time with crappy risk management, anyway.
The trades I chickened out of would end up mostly being winners and this ended up diluting my performance as 65% are winners in my system, but by not taking them all, my win rate dropped to under 50%. I was still making money because my risk/reward was 2:1 so technically 33% is break even without spreads. But it was slow going.
I then decided to learn coding language and alot of maths to make my strategy automated so as to take my indecision out of it. A year in now and I am trading 5 mins a day (maintenance) and spending most of my time on coding new strategies and optimising them to suit different markets and timeframes. I have learnt how to code money and risk management as well. I make sure I haven't curve fitted the strategy and then demo test before going live. I also love keeping abreast of macro economic themes. This really ticks alot of boxes for me.
My aim is to be diversified in trading just like any other investment asset class. I have realised the learning aspect is what I really love doing, and it fills in my time nicely between looking after other investments and having a relaxing, yet fulfilling life.
I don't need to make money from this. That is not my motivation. But it does pay a few bills now. I can spend as much time on it as I want and it is portable.
I use IG as the broker and the platform ProRealTime. I trade a few currencies, only ozzie crosses and mainly USD as it moves very nicely. I also trade ASX, HangSeng, Dax, FTSE, US100, Tech100, Dow, Russel, gold and US oil. Both long and short. In the future I plan to add a few local shares that move like Zip,BHP, CSL, CBA but I haven't nailed that down yet. That will be about it. Maybe something fancy like lumber,pigs or coffee because I like building,bacon and.....coffee?!
Good luck with your trading. It seems like you are in control, enjoying the experience and making some cash as a bonus. That's what it is all about in the end.

 

I am not familiar with MT4 but I can with my platform. It remembers your last choice. I would think this is pretty standard. Limit,SL and TrailingSL can be set when you place the order. A stop is essential. You never know. Check the manual.