TraderFX65

[Turtle Forex]

Hi all!

I've just recently become part of the LFT.info family so I thought it would be good to introduce myself. My name is Joe and I have been trading as a hobby for about 14 years. I started day trading during the "dot com" boom in 1999 trading stocks. I developed a system for finding and executing high percentage trades at the market open and started a trading room on Yahoo called Joe Traders Morning Plays. In about 3 months time it developed into the largest active day trading room on Yahoo with and average of 200-250 members every morning waiting for my "calls". Most of my members were small time traders like myself (I had a few that claimed I was making the thousands per day), but we were bagging between $100 and $200 consistently in about 15-30 minutes of trading! It was a great time. Sadly, between Sept 11, 2001 and the SEC enacting a law that you had to have $25K to day trade stocks, the room fell apart. I tried my hand at trading ES and YM futures but I did not do well at it so I gave up on day trading and went about my life.

In late 2002 I saw an ad for FOREX, which caught my interest. I opened my first FX account with a company called CMS Forex. Long story short, I turned a $500 account into $5000 in about 45 days, only to give it all back in 3 days....lol. I got a taste of the good and bad of leverage! I traded off and on, when time would allow, for the next 10 years. I honed my skills in technical analysis, learned a bit about macro economics and was up and down, mostly up but very inconsistent. However for me it was a hobby and I really didn't care about the money. I just enjoyed trading. In November 2011 I took a nasty DD and decided to pull out what was left and leave $100 to keep the account active.

I really felt that I could do well trading if I put my mind to it so for a fun exercise I made a deal with my best friend of 40+ years to turn that $100 into an amount the he and I could each withdraw 3K a month from consistently...he gave me $50, which made the account officially half his...(I would have gave him the $50, but that's between us...hehehe) and I started trading in late November 2011. (I changed my FXCM to a micro account in March 2012 which is why you see the starting balance of $144 on myfxbook.com).

In a little over 8 months the account was up over 700%..I was pretty much staying disciplined (and getting away with some mistakes too). My friend started to run numbers and we both got greedy...I started to over leverage, break my rules and the result was a 60% DD in September 2012, which came from a margin call. To rub salt in my wound the market only went another 30 pips, then dropped 400...right where I thought it would go (I was mostly short AU at the time). I was so frazzled by this that I stopped trading until just last month. I tweaked my rules a bit and quickly took the account from $328 to about $570 in under a month..about 73%. (I just had a 10% DD, but still very happy overall right now).

I've learned a lot over the last 14 years and enjoy sharing what I have learned. I'll be contributing here on the LFT.info forum and Live Trading Room as time allows. Nick and Will have done a great job with the site and I wish them, and all the traders here at LFT.info much success!

Happy Trading!

[Turtle Forex]

Holy Grails

Hi all! This is the first of a series of posts about trading. I'll be getting into the fun stuff with charts, trade set-up an such, but I'd like to start with some of my personal thoughts on trading and what better place to start than with the "Holy Grail"!

We have all at one time or another dreamed of discovering a method of trading that leads us to unimaginable wealth with little risk. Sadly this "Holy Grail" does not, and never will exist. Reward will always be in direct proportion to risk. Consistent returns of say 50% per month are not realistic. Consider this, 50% compounded monthly returns on a 10K starting account would make you a TRILLIONAIRE...not billionaire, in under 5 years. Imagine Bill Gates and Warren Buffet asking if you could spare a few bucks! 10K starting at just 20% per month compounded makes you the wealthiest person on earth in under 7 years. Last I checked nobody has pulled that off. So what is "realistic"?

I personally feel that 10-15% per month is achievable and sustainable, with some DD in between. 200-300% annual returns on small accounts (Say under $5M) are rare but doable even with DD's. My "model" account is currently +256% in about 10 months trading, with "major" DD's of 60, 20 and 10% along the way and I feel I have much room for improvement in my trading. I can realistically grab 500+ pips on a good month using only 2:1 leverage on any single position using my current trading method. That translates to about 10% monthly return. If I want to pump up the leverage then I can do better, but I risk more as well.

So even though the Holy Grail will forever be elusive, there is still opportunity to build significant wealth trading!

[Turtle Forex]

Setting Goals

One of the biggest mistakes I feel traders make is to set weekly, monthly or yearly profit goals. We all do it or have done it. So you might say "Joe, you have to set a goal. If you don't know where you want to go, how can you get there". To that I agree, you should set a goal. But your goal should be this: To plan your trade and trade your plan on each and every trade. That's it. Do that and the market will give you what it wants to give you. Planning your trade and trading your plan IS THE ONLY THING YOU HAVE TOTAL CONTROL OVER. You cannot will the market to do what you want it to do. In Mark Douglas' book "Trading in the Zone", Mark states that in trading, there are 5 fundamental "truths":

1) Anything can happen
2) You don't need to know what will happen to make money
3) There is a random distribution between wins and losses for any given set of variable that define an edge
4) An edge is nothing more than an indication of a higher probability of one thing happing over another
5) Every moment in the market is unique

Given the fact that (1) anything can happen and (2) there is a random distribution between wins and losses, how can we possibly expect to know what we may be able to earn in a week, month or year? Setting goals leads to trading errors, at least for me. When you fall short of your "goal", it causes you to feel like you failed, which in turn causes you to "push" to earn profit. More often than not, this will lead to holding onto losing trades or cutting winners short...or worse, letting a winner become a looser.

I strongly recommend Trading in the Zone to anyone that is serious about being a self-directed trader. This is the one book I keep on my desk and pick up a read every single day. I actually have a "back up" copy of this book...it's that important to my trading!

Set a goal to plan your trade and trade your plan. The pips will take care of themselves...:-)

[Turtle Forex]

Market Bias

Having a bias for market direction can be very useful, but it can also hurt you if you don't use your bias wisely. Let's think about how a market bias can help:

1) It can help you pick safer trades (The trend is your friend)
2) It can help you determine potential pullback and profit levels. I often use fib retracement and projections when analyzing a currency pair.

How can bias hurt you?

1) It can give you "tunnel vision". You can become so fixed on your bias that you miss other opportunities that are out there.
2) It can cause you to break your rules. How many times have you held onto a losing trade because you felt the market "had" to come back to you?
3) It can cause trading errors. How many time have you thought "This can't go any higher" or "This had to have hit bottom because it has been so strong for the last 3 days" and entered a trade only to see it continue to go "against" you?
4) It puts you in a position where you could be "wrong" and we all hate to be wrong and sometime make mistakes to try to prove we were right.

There is nothing wrong with having a bias. But control your bias, don't let your bias control you!

[Turtle Forex]

Fundamentals and news

Fundamentals and news are another two-edged sword when it comes to trading. My thoughts are that fundys and news are relevant if you're planning to hold a trade for over 4 hours or looking for 100+ pips on a single trade. Beyond that the information is of little to no use. I know many will disagree with that. Now that is not to say that I do not respect fundys and news. I would be a fool to trade ahead of or just after a market moving news event blindly. I respect that news can effect an open position to my advantage or disadvantage and need to be ready to respond, either by cutting, adding to or holding a position.

I look at it like this. I typically look for anywhere between 10 and 50 pips profit on any single position. In reality 10-50 pips is little more than market "noise". Fundys and news will never stop this noise. The most crazy up or down moves have at least a few 10-15 pip retracements throughout any single trading day. News/fundys simply do not matter...but it can create a bias that could lead to trading errors. See my post on Market Bias.

Now if you are "swing" or "position" trading that's a whole different ball game. Fundys and news play a more significant role in those trades and need to be taken into consideration along with technical's like support, resistance and range.

News and fundys can be useful. When planning a trade, take them into consideration but don't let them change your plan. In other words, plan ahead!