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2.5 years and 145 backtested trades later
I have a habit of backtesting every strategy I find as long as it makes sense. I find it fun, and even if the strategy ends up being underperforming, it gives me a good excuse to gain valuable chart experience that would normally take years to gather. After I backtest something, I compare it to my current methodology, and usually conclude that mine is better either because it has a better performance or the new method requires too much time to manage (Spoiler: until now, I like this better) During the last two days, I have worked on backtesting ParallaxFx strategy, as it seemed promising and it seemed to fit my personality (a lazy fuck who will happily halve his yearly return if it means he can spend 10% less time in front of the screens). My backtesting is preliminary, and I didn't delve very deep in the data gathering. I usually track all sort of stuff, but for this first pass, I sticked to the main indicators of performance over a restricted sample size of markets. Before I share my results with you, I always feel the need to make a preface that I know most people will ignore.
I am words on your screen. You cannot trust me. I could have edited this or literally just typed random numbers on a spreadsheet. Do your own research if you want to trust my conclusion.
Even if you trust me, you need to do backtesting for yourself. The goal of backtesting isn't simply to figure out whether a strategy has an edge: it's a way to get used to how the market flows (valuable experience you will bring on to any other strategy) and how the strategy behaves. You need to see it with your own eyes to allow your subconscious mind to be at ease when it comes time to trade it live: the only way to truly trust your strategy during a period of drawdown, is to have seen it work over hundreds of trades in the past.
Strategy I am not going to go into the strategy in this thread. If you haven't read the series of threads by the guy who shared it, go here. As suggested by my mentioned personality type, I went with the passive management options of ParallaxFx's strategy. After a valid setup forms, I place two orders of half my risk. I add or remove 1 pip from each level to account for spread.
The first at the 23.6 retracement.
The second at the 38.2 retracement.
Both orders have a stop loss at the 78.6 retracement.
Both orders have the same target at the -100.0 extension.
If price moves to the -38.2 extension, I delete any unfilled orders.
I do not scale out, I do not move to breakeven, I place my orders and walk away.
Sample I tested this strategy over the seven major currency pairs: AUDUSD, USDCAD, NZDUSD, GBPUSD, USDJPY, EURUSD, USDCHF. The time period started on January 1th 2018 and ended on July 1th 2020, so a 2.5 years backtest. I tested over the D1 timeframe, and I plan on testing other timeframes. My "protocol" for backtesting is that, if I like what I see during this phase, I will move to the second phase where I'll backtest over 5 years and 28 currency pairs. Units of measure I used R multiples to track my performance. If you don't know what they are, I'm too sleepy to explain right now. This article explains what they are. The gist is that the results you'll see do not take into consideration compounding and they normalize volatility (something pips don't do, and why pips are in my opinion a terrible unit of measure for performance) as well as percentage risk (you can attach variable risk profiles on your R values to optimize position sizing in order to maximize returns and minimize drawdowns, but I won't get into that). Results I am not going to link the spreadsheet directly, because it is in my GDrive folder and that would allow you to see my personal information. I will attach screenshots of both the results and the list of trades. In the latter, I have included the day of entry for each trade, so if you're up to the task, you can cross-reference all the trades I have placed to make sure I am not making things up. Overall results: R Curve and Segmented performance. List of trades: 1, 2, 3, 4, 5, 6, 7. Something to note: I treated every half position as an individual trade for the sake of simplicity. It should not mess with the results, but it simply means you will see huge streaks of wins and losses. This does not matter because I'm half risk in each of them, so a winstreak of 6 trades is just a winstreak of 3 trades. For reference:
Profit Factor: 2.34
Return: 100.47 R
Strike rate: 48.28%
Average win: 2.51 R
Average loss: -1.00 R
Thoughts Nice. I'll keep testing. As of now it is vastly better than my current strategy.
Disclaimer: None of this is financial advice. I have no idea what I'm doing. Please do your own research or you will certainly lose money. I'm not a statistician, data scientist, well-seasoned trader, or anything else that would qualify me to make statements such as the below with any weight behind them. Take them for the incoherent ramblings that they are. TL;DR at the bottom for those not interested in the details. This is a bit of a novel, sorry about that. It was mostly for getting my own thoughts organized, but if even one person reads the whole thing I will feel incredibly accomplished.
For those of you not familiar, please see the various threads on this trading system here. I can't take credit for this system, all glory goes to ParallaxFX! I wanted to see how effective this system was at H1 for a couple of reasons: 1) My current broker is TD Ameritrade - their Forex minimum is a mini lot, and I don't feel comfortable enough yet with the risk to trade mini lots on the higher timeframes(i.e. wider pip swings) that ParallaxFX's system uses, so I wanted to see if I could scale it down. 2) I'm fairly impatient, so I don't like to wait days and days with my capital tied up just to see if a trade is going to win or lose. This does mean it requires more active attention since you are checking for setups once an hour instead of once a day or every 4-6 hours, but the upside is that you trade more often this way so you end up winning or losing faster and moving onto the next trade. Spread does eat more of the trade this way, but I'll cover this in my data below - it ends up not being a problem. I looked at data from 6/11 to 7/3 on all pairs with a reasonable spread(pairs listed at bottom above the TL;DR). So this represents about 3-4 weeks' worth of trading. I used mark(mid) price charts. Spreadsheet link is below for anyone that's interested.
I'm pretty much using ParallaxFX's system textbook, but since there are a few options in his writeups, I'll include all the discretionary points here:
I'm using the stop entry version - so I wait for the price to trade beyond the confirmation candle(in the direction of my trade) before entering. I don't have any data to support this decision, but I've always preferred this method over retracement-limit entries. Maybe I just like the feeling of a higher winrate even though there can be greater R:R using a limit entry. Variety is the spice of life.
I put my stop loss right at the opposite edge of the confirmation candle. NOT at the edge of the 2-candle pattern that makes up the system. I'll get into this more below - not enough trades are saved to justify the wider stops. (Wider stop means less $ per pip won, assuming you still only risk 1%).
All my profit/loss statistics are based on a 1% risk per trade. Because 1 is real easy to multiply.
There are definitely some questionable trades in here, but I tried to make it as mechanical as possible for evaluation purposes. They do fit the definitions of the system, which is why I included them. You could probably improve the winrate by being more discretionary about your trades by looking at support/resistance or other techniques.
I didn't use MBB much for either entering trades, or as support/resistance indicators. Again, trying to be pretty mechanical here just for data collection purposes. Plus, we all make bad trading decisions now and then, so let's call it even.
As stated in the title, this is for H1 only. These results may very well not play out for other time frames - who knows, it may not even work on H1 starting this Monday. Forex is an unpredictable place.
I collected data to show efficacy of taking profit at three different levels: -61.8%, -100% and -161.8% fib levels described in the system using the passive trade management method(set it and forget it). I'll have more below about moving up stops and taking off portions of a position.
And now for the fun. Results!
Total Trades: 241
TP at -61.8%: 177 out of 241: 73.44%
TP at -100%: 156 out of 241: 64.73%
TP at -161.8%: 121 out of 241: 50.20%
Adjusted Proft % (takes spread into account):
TP at -61.8%: 5.22%
TP at -100%: 23.55%
TP at -161.8%: 29.14%
As you can see, a higher target ended up with higher profit despite a much lower winrate. This is partially just how things work out with profit targets in general, but there's an additional point to consider in our case: the spread. Since we are trading on a lower timeframe, there is less overall price movement and thus the spread takes up a much larger percentage of the trade than it would if you were trading H4, Daily or Weekly charts. You can see exactly how much it accounts for each trade in my spreadsheet if you're interested. TDA does not have the best spreads, so you could probably improve these results with another broker. EDIT: I grabbed typical spreads from other brokers, and turns out while TDA is pretty competitive on majors, their minors/crosses are awful! IG beats them by 20-40% and Oanda beats them 30-60%! Using IG spreads for calculations increased profits considerably (another 5% on top) and Oanda spreads increased profits massively (another 15%!). Definitely going to be considering another broker than TDA for this strategy. Plus that'll allow me to trade micro-lots, so I can be more granular(and thus accurate) with my position sizing and compounding.
A Note on Spread
As you can see in the data, there were scenarios where the spread was 80% of the overall size of the trade(the size of the confirmation candle that you draw your fibonacci retracements over), which would obviously cut heavily into your profits. Removing any trades where the spread is more than 50% of the trade width improved profits slightly without removing many trades, but this is almost certainly just coincidence on a small sample size. Going below 40% and even down to 30% starts to cut out a lot of trades for the less-common pairs, but doesn't actually change overall profits at all(~1% either way). However, digging all the way down to 25% starts to really make some movement. Profit at the -161.8% TP level jumps up to 37.94% if you filter out anything with a spread that is more than 25% of the trade width! And this even keeps the sample size fairly large at 187 total trades. You can get your profits all the way up to 48.43% at the -161.8% TP level if you filter all the way down to only trades where spread is less than 15% of the trade width, however your sample size gets much smaller at that point(108 trades) so I'm not sure I would trust that as being accurate in the long term. Overall based on this data, I'm going to only take trades where the spread is less than 25% of the trade width. This may bias my trades more towards the majors, which would mean a lot more correlated trades as well(more on correlation below), but I think it is a reasonable precaution regardless.
Time of Day
Time of day had an interesting effect on trades. In a totally predictable fashion, a vast majority of setups occurred during the London and New York sessions: 5am-12pm Eastern. However, there was one outlier where there were many setups on the 11PM bar - and the winrate was about the same as the big hours in the London session. No idea why this hour in particular - anyone have any insight? That's smack in the middle of the Tokyo/Sydney overlap, not at the open or close of either. On many of the hour slices I have a feeling I'm just dealing with small number statistics here since I didn't have a lot of data when breaking it down by individual hours. But here it is anyway - for all TP levels, these three things showed up(all in Eastern time):
7pm-4am: Fewer setups, but winrate high.
5am-6am: Lots of setups, but but winrate low.
12pm-3pm Medium number of setups, but winrate low.
I don't have any reason to think these timeframes would maintain this behavior over the long term. They're almost certainly meaningless. EDIT: When you de-dup highly correlated trades, the number of trades in these timeframes really drops, so from this data there is no reason to think these timeframes would be any different than any others in terms of winrate. That being said, these time frames work out for me pretty well because I typically sleep 12am-7am Eastern time. So I automatically avoid the 5am-6am timeframe, and I'm awake for the majority of this system's setups.
Moving stops up to breakeven
This section goes against everything I know and have ever heard about trade management. Please someone find something wrong with my data. I'd love for someone to check my formulas, but I realize that's a pretty insane time commitment to ask of a bunch of strangers. Anyways. What I found was that for these trades moving stops up...basically at all...actually reduced the overall profitability. One of the data points I collected while charting was where the price retraced back to after hitting a certain milestone. i.e. once the price hit the -61.8% profit level, how far back did it retrace before hitting the -100% profit level(if at all)? And same goes for the -100% profit level - how far back did it retrace before hitting the -161.8% profit level(if at all)? Well, some complex excel formulas later and here's what the results appear to be. Emphasis on appears because I honestly don't believe it. I must have done something wrong here, but I've gone over it a hundred times and I can't find anything out of place.
Moving SL up to 0% when the price hits -61.8%, TP at -100%
Adjusted Proft % (takes spread into account): 5.36%
Taking half position off at -61.8%, moving SL up to 0%, TP remaining half at -100%
Adjusted Proft % (takes spread into account): -1.01% (yes, a net loss)
Now, you might think exactly what I did when looking at these numbers: oof, the spread killed us there right? Because even when you move your SL to 0%, you still end up paying the spread, so it's not truly "breakeven". And because we are trading on a lower timeframe, the spread can be pretty hefty right? Well even when I manually modified the data so that the spread wasn't subtracted(i.e. "Breakeven" was truly +/- 0), things don't look a whole lot better, and still way worse than the passive trade management method of leaving your stops in place and letting it run. And that isn't even a realistic scenario because to adjust out the spread you'd have to move your stoploss inside the candle edge by at least the spread amount, meaning it would almost certainly be triggered more often than in the data I collected(which was purely based on the fib levels and mark price). Regardless, here are the numbers for that scenario:
Moving SL up to 0% when the price hits -61.8%, TP at -100%
Winrate(breakeven doesn't count as a win): 46.4%
Adjusted Proft % (takes spread into account): 17.97%
Taking half position off at -61.8%, moving SL up to 0%, TP remaining half at -100%
Winrate(breakeven doesn't count as a win): 65.97%
Adjusted Proft % (takes spread into account): 11.60%
From a literal standpoint, what I see behind this behavior is that 44 of the 69 breakeven trades(65%!) ended up being profitable to -100% after retracing deeply(but not to the original SL level), which greatly helped offset the purely losing trades better than the partial profit taken at -61.8%. And 36 went all the way back to -161.8% after a deep retracement without hitting the original SL. Anyone have any insight into this? Is this a problem with just not enough data? It seems like enough trades that a pattern should emerge, but again I'm no expert. I also briefly looked at moving stops to other lower levels (78.6%, 61.8%, 50%, 38.2%, 23.6%), but that didn't improve things any. No hard data to share as I only took a quick look - and I still might have done something wrong overall. The data is there to infer other strategies if anyone would like to dig in deep(more explanation on the spreadsheet below). I didn't do other combinations because the formulas got pretty complicated and I had already answered all the questions I was looking to answer.
2-Candle vs Confirmation Candle Stops
Another interesting point is that the original system has the SL level(for stop entries) just at the outer edge of the 2-candle pattern that makes up the system. Out of pure laziness, I set up my stops just based on the confirmation candle. And as it turns out, that is much a much better way to go about it. Of the 60 purely losing trades, only 9 of them(15%) would go on to be winners with stops on the 2-candle formation. Certainly not enough to justify the extra loss and/or reduced profits you are exposing yourself to in every single other trade by setting a wider SL. Oddly, in every single scenario where the wider stop did save the trade, it ended up going all the way to the -161.8% profit level. Still, not nearly worth it.
As I've said many times now, I'm really not qualified to be doing an analysis like this. This section in particular. Looking at shared currency among the pairs traded, 74 of the trades are correlated. Quite a large group, but it makes sense considering the sort of moves we're looking for with this system. This means you are opening yourself up to more risk if you were to trade on every signal since you are technically trading with the same underlying sentiment on each different pair. For example, GBP/USD and AUD/USD moving together almost certainly means it's due to USD moving both pairs, rather than GBP and AUD both moving the same size and direction coincidentally at the same time. So if you were to trade both signals, you would very likely win or lose both trades - meaning you are actually risking double what you'd normally risk(unless you halve both positions which can be a good option, and is discussed in ParallaxFX's posts and in various other places that go over pair correlation. I won't go into detail about those strategies here). Interestingly though, 17 of those apparently correlated trades ended up with different wins/losses. Also, looking only at trades that were correlated, winrate is 83%/70%/55% (for the three TP levels). Does this give some indication that the same signal on multiple pairs means the signal is stronger? That there's some strong underlying sentiment driving it? Or is it just a matter of too small a sample size? The winrate isn't really much higher than the overall winrates, so that makes me doubt it is statistically significant. One more funny tidbit: EUCAD netted the lowest overall winrate: 30% to even the -61.8% TP level on 10 trades. Seems like that is just a coincidence and not enough data, but dang that's a sucky losing streak. EDIT: WOW I spent some time removing correlated trades manually and it changed the results quite a bit. Some thoughts on this below the results. These numbers also include the other "What I will trade" filters. I added a new worksheet to my data to show what I ended up picking.
Total Trades: 75
TP at -61.8%: 84.00%
TP at -100%: 73.33%
TP at -161.8%: 60.00%
Moving SL up to 0% when the price hits -61.8%, TP at -100%: 53.33%
Taking half position off at -61.8%, moving SL up to 0%, TP remaining half at -100%: 53.33% (yes, oddly the exact same winrate. but different trades/profits)
Adjusted Proft % (takes spread into account):
TP at -61.8%: 18.13%
TP at -100%: 26.20%
TP at -161.8%: 34.01%
Moving SL up to 0% when the price hits -61.8%, TP at -100%: 19.20%
Taking half position off at -61.8%, moving SL up to 0%, TP remaining half at -100%: 17.29%
To do this, I removed correlated trades - typically by choosing those whose spread had a lower % of the trade width since that's objective and something I can see ahead of time. Obviously I'd like to only keep the winning trades, but I won't know that during the trade. This did reduce the overall sample size down to a level that I wouldn't otherwise consider to be big enough, but since the results are generally consistent with the overall dataset, I'm not going to worry about it too much. I may also use more discretionary methods(support/resistance, quality of indecision/confirmation candles, news/sentiment for the pairs involved, etc) to filter out correlated trades in the future. But as I've said before I'm going for a pretty mechanical system. This brought the 3 TP levels and even the breakeven strategies much closer together in overall profit. It muted the profit from the high R:R strategies and boosted the profit from the low R:R strategies. This tells me pair correlation was skewing my data quite a bit, so I'm glad I dug in a little deeper. Fortunately my original conclusion to use the -161.8 TP level with static stops is still the winner by a good bit, so it doesn't end up changing my actions. There were a few times where MANY (6-8) correlated pairs all came up at the same time, so it'd be a crapshoot to an extent. And the data showed this - often then won/lost together, but sometimes they did not. As an arbitrary rule, the more correlations, the more trades I did end up taking(and thus risking). For example if there were 3-5 correlations, I might take the 2 "best" trades given my criteria above. 5+ setups and I might take the best 3 trades, even if the pairs are somewhat correlated. I have no true data to back this up, but to illustrate using one example: if AUD/JPY, AUD/USD, CAD/JPY, USD/CAD all set up at the same time (as they did, along with a few other pairs on 6/19/20 9:00 AM), can you really say that those are all the same underlying movement? There are correlations between the different correlations, and trying to filter for that seems rough. Although maybe this is a known thing, I'm still pretty green to Forex - someone please enlighten me if so! I might have to look into this more statistically, but it would be pretty complex to analyze quantitatively, so for now I'm going with my gut and just taking a few of the "best" trades out of the handful. Overall, I'm really glad I went further on this. The boosting of the B/E strategies makes me trust my calculations on those more since they aren't so far from the passive management like they were with the raw data, and that really had me wondering what I did wrong.
What I will trade
Putting all this together, I am going to attempt to trade the following(demo for a bit to make sure I have the hang of it, then for keeps):
"System Details" I described above.
TP at -161.8%
Static SL at opposite side of confirmation candle - I won't move stops up to breakeven.
Trade only 7am-11am and 4pm-11pm signals.
Nothing where spread is more than 25% of trade width.
Looking at the data for these rules, test results are:
Adjusted Proft % (takes spread into account): 47.43%
I'll be sure to let everyone know how it goes!
Other Technical Details
ATR is only slightly elevated in this date range from historical levels, so this should fairly closely represent reality even after the COVID volatility leaves the scalpers sad and alone.
The sample size is much too small for anything really meaningful when you slice by hour or pair. I wasn't particularly looking to test a specific pair here - just the system overall as if you were going to trade it on all pairs with a reasonable spread.
Here's the spreadsheet for anyone that'd like it. (EDIT: Updated some of the setups from the last few days that have fully played out now. I also noticed a few typos, but nothing major that would change the overall outcomes. Regardless, I am currently reviewing every trade to ensure they are accurate.UPDATE: Finally all done. Very few corrections, no change to results.) I have some explanatory notes below to help everyone else understand the spiraled labyrinth of a mind that put the spreadsheet together.
I'm on the East Coast in the US, so the timestamps are Eastern time.
Time stamp is from the confirmation candle, not the indecision candle. So 7am would mean the indecision candle was 6:00-6:59 and the confirmation candle is 7:00-7:59 and you'd put in your order at 8:00.
I found a couple AM/PM typos as I was reviewing the data, so let me know if a trade doesn't make sense and I'll correct it.
Insanely detailed spreadsheet notes
For you real nerds out there. Here's an explanation of what each column means:
Pair - duh
Date/Time - Eastern time, confirmation candle as stated above
Win to -61.8%? - whether the trade made it to the -61.8% TP level before it hit the original SL.
Win to -100%? - whether the trade made it to the -100% TP level before it hit the original SL.
Win to -161.8%? - whether the trade made it to the -161.8% TP level before it hit the original SL.
Retracement level between -61.8% and -100% - how deep the price retraced after hitting -61.8%, but before hitting -100%. Be careful to look for the negative signs, it's easy to mix them up. Using the fib% levels defined in ParallaxFX's original thread. A plain hyphen "-" means it did not retrace, but rather went straight through -61.8% to -100%. Positive 100 means it hit the original SL.
Retracement level between -100% and -161.8% - how deep the price retraced after hitting -100%, but before hitting -161.8%. Be careful to look for the negative signs, it's easy to mix them up. Using the fib% levels defined in ParallaxFX's original thread. A plain hyphen "-" means it did not retrace, but rather went straight through -100% to -161.8%. Positive 100 means it hit the original SL.
Trade Width(Pips) - the size of the confirmation candle, and thus the "width" of your trade on which to determine position size, draw fib levels, etc.
Loser saved by 2 candle stop? - for all losing trades, whether or not the 2-candle stop loss would have saved the trade and how far it ended up getting if so. "No" means it didn't save it, N/A means it wasn't a losing trade so it's not relevant.
Spread(ThinkorSwim) - these are typical spreads for these pairs on ToS.
Spread % of Width - How big is the spread compared to the trade width? Not used in any calculations, but interesting nonetheless.
True Risk(Trade Width + Spread) - I set my SL at the opposite side of the confirmation candle knowing that I'm actually exposing myself to slightly more risk because of the spread(stop order = market order when submitted, so you pay the spread). So this tells you how many pips you are actually risking despite the Trade Width. I prefer this over setting the stop inside from the edge of the candle because some pairs have a wide spread that would mess with the system overall. But also many, many of these trades retraced very nearly to the edge of the confirmation candle, before ending up nicely profitable. If you keep your risk per trade at 1%, you're talking a true risk of, at most, 1.25% (in worst-case scenarios with the spread being 25% of the trade width as I am going with above).
Win or Loss in %(1% risk) including spread TP -61.8% - not going to go into huge detail, see the spreadsheet for calculations if you want. But, in a nutshell, if the trade was a win to 61.8%, it returns a positive # based on 61.8% of the trade width, minus the spread. Otherwise, it returns the True Risk as a negative. Both normalized to the 1% risk you started with.
Win or Loss in %(1% risk) including spread TP -100% - same as the last, but 100% of Trade Width.
Win or Loss in %(1% risk) including spread TP -161.8% - same as the last, but 161.8% of Trade Width.
Win or Loss in %(1% risk) including spread TP -100%, and move SL to breakeven at 61.8% - uses the retracement level columns to calculate profit/loss the same as the last few columns, but assuming you moved SL to 0% fib level after price hit -61.8%. Then full TP at 100%.
Win or Loss in %(1% risk) including spread take off half of position at -61.8%, move SL to breakeven, TP 100% - uses the retracement level columns to calculate profit/loss the same as the last few columns, but assuming you took of half the position and moved SL to 0% fib level after price hit -61.8%. Then TP the remaining half at 100%.
Overall Growth(-161.8% TP, 1% Risk) - pretty straightforward. Assuming you risked 1% on each trade, what the overall growth level would be chronologically(spreadsheet is sorted by date).
Based on the reasonable rules I discovered in this backtest:
Date range: 6/11-7/3
Adjusted Proft % (takes spread into account): 47.43%
Demo Trading Results
Since this post, I started demo trading this system assuming a 5k capital base and risking ~1% per trade. I've added the details to my spreadsheet for anyone interested. The results are pretty similar to the backtest when you consider real-life conditions/timing are a bit different. I missed some trades due to life(work, out of the house, etc), so that brought my total # of trades and thus overall profit down, but the winrate is nearly identical. I also closed a few trades early due to various reasons(not liking the price action, seeing support/resistance emerge, etc). A quick note is that TD's paper trade system fills at the mid price for both stop and limit orders, so I had to subtract the spread from the raw trade values to get the true profit/loss amount for each trade. I'm heading out of town next week, then after that it'll be time to take this sucker live!
Date range: 7/9-7/30
Adjusted Proft % (takes spread into account): 20.73%
Starting Balance: $5,000
Ending Balance: $6,036.51
Live Trading Results
I started live-trading this system on 8/10, and almost immediately had a string of losses much longer than either my backtest or demo period. Murphy's law huh? Anyways, that has me spooked so I'm doing a longer backtest before I start risking more real money. It's going to take me a little while due to the volume of trades, but I'll likely make a new post once I feel comfortable with that and start live trading again.
Hello traders. I am kinda new with forex. Still studying baby pips and have watched some YT. I tried backtesting GBPUSD with a plan I come up with which I though not really that promising because of some flaw in it. I am backtesting with 200 USD just to make sure that the system works, and when I start with a live account I can re-create the plan with 200 USD and start compounding. This is my plan for now:
1 hr chart
ATR 14, for SL and lot size
2% risk per trade
2 trade (1 with 1:1 RR, 1 w/o TP but close when Aroon crossed)
Let the trade (1:1 RR) run until it hits SL or TP
If the trade (1:1 RR) hit TP, the trade w/o tp should close on the next Aroon cross
Crosspost: My first trading bot, now 4 months in development, started trading live last week and already gained 10%!
Backtest screenshot: https://solrac.prodibi.com/a/1jwk24gd54qyqxv/i/jdydmjj8wrrm725 Here's my original post: https://www.reddit.com/algotrading/comments/hd7e6c/my_first_algo_trading_bot_in_python_is_getting/?utm_source=share&utm_medium=ios_app&utm_name=iossmf Since then we've grown to a team of five people. We started trading live last week with a $100 test account on Binance Futures and gained 10% in our first week! Some amazing updates in the works: we are building this bot to connect to multiple exchanges via websocket in order to execute commands as fast as possible, and control them all through one web interface. This is a high velocity leveraged trading bot that uses 50x leverage and risks 5% of the wallet per trade. Soon we will implement dynamic leverage and position sizes based on key risk factors, like trading during range highs and lows. Beyond that, we also want to add different crypto markets, and maybe even forex eventually. Our very next target is Digitex Futures, the first totally commission free zero fee crypto exchange! We think this will be a game changer as fees make a huge impact on profitability. The current backtest, which is returning 900x over a 1 year 7 month period (with 100% of profits compounded) is viewable at cryptoravager dot com. I still need help to add Sharpe, equity, & drawdown indicators to the chart. Anyone have experience with the tradingview library? Please give me any feedback or advice! I'm one of those developers turned algo traders. I have 20 years experience in web application development, and only 1 year in trading and markets. Back in January I paid a pro trader good money to learn the strategy my bot is now using, which I used successfully by hand in March / April. That personal history plus the stellar backtest is what spurred us on to reach this point today.
The Next Crypto Wave: The Rise of Stablecoins and its Entry to the U.S. Dollar Market
Author: Christian Hsieh, CEO of Tokenomy This paper examines some explanations for the continual global market demand for the U.S. dollar, the rise of stablecoins, and the utility and opportunities that crypto dollars can offer to both the cryptocurrency and traditional markets. The U.S. dollar, dominant in world trade since the establishment of the 1944 Bretton Woods System, is unequivocally the world’s most demanded reserve currency. Today, more than 61% of foreign bank reserves and nearly 40% of the entire world’s debt is denominated in U.S. dollars1. However, there is a massive supply and demand imbalance in the U.S. dollar market. On the supply side, central banks throughout the world have implemented more than a decade-long accommodative monetary policy since the 2008 global financial crisis. The COVID-19 pandemic further exacerbated the need for central banks to provide necessary liquidity and keep staggering economies moving. While the Federal Reserve leads the effort of “money printing” and stimulus programs, the current money supply still cannot meet the constant high demand for the U.S. dollar2. Let us review some of the reasons for this constant dollar demand from a few economic fundamentals.
Demand for U.S. Dollars
Firstly, most of the world’s trade is denominated in U.S. dollars. Chief Economist of the IMF, Gita Gopinath, has compiled data reflecting that the U.S. dollar’s share of invoicing was 4.7 times larger than America’s share of the value of imports, and 3.1 times its share of world exports3. The U.S. dollar is the dominant “invoicing currency” in most developing countries4. https://preview.redd.it/d4xalwdyz8p51.png?width=535&format=png&auto=webp&s=9f0556c6aa6b29016c9b135f3279e8337dfee2a6 https://preview.redd.it/wucg40kzz8p51.png?width=653&format=png&auto=webp&s=71257fec29b43e0fc0df1bf04363717e3b52478f This U.S. dollar preference also directly impacts the world’s debt. According to the Bank of International Settlements, there is over $67 trillion in U.S. dollar denominated debt globally, and borrowing outside of the U.S. accounted for $12.5 trillion in Q1 20205. There is an immense demand for U.S. dollars every year just to service these dollar debts. The annual U.S. dollar buying demand is easily over $1 trillion assuming the borrowing cost is at 1.5% (1 year LIBOR + 1%) per year, a conservative estimate. https://preview.redd.it/6956j6f109p51.png?width=487&format=png&auto=webp&s=ccea257a4e9524c11df25737cac961308b542b69 Secondly, since the U.S. has a much stronger economy compared to its global peers, a higher return on investments draws U.S. dollar demand from everywhere in the world, to invest in companies both in the public and private markets. The U.S. hosts the largest stock markets in the world with more than $33 trillion in public market capitalization (combined both NYSE and NASDAQ)6. For the private market, North America’s total share is well over 60% of the $6.5 trillion global assets under management across private equity, real assets, and private debt investments7. The demand for higher quality investments extends to the fixed income market as well. As countries like Japan and Switzerland currently have negative-yielding interest rates8, fixed income investors’ quest for yield in the developed economies leads them back to the U.S. debt market. As of July 2020, there are $15 trillion worth of negative-yielding debt securities globally (see chart). In comparison, the positive, low-yielding U.S. debt remains a sound fixed income strategy for conservative investors in uncertain market conditions. Source: Bloomberg Last, but not least, there are many developing economies experiencing failing monetary policies, where hyperinflation has become a real national disaster. A classic example is Venezuela, where the currency Bolivar became practically worthless as the inflation rate skyrocketed to 10,000,000% in 20199. The recent Beirut port explosion in Lebanon caused a sudden economic meltdown and compounded its already troubled financial market, where inflation has soared to over 112% year on year10. For citizens living in unstable regions such as these, the only reliable store of value is the U.S. dollar. According to the Chainalysis 2020 Geography of Cryptocurrency Report, Venezuela has become one of the most active cryptocurrency trading countries11. The demand for cryptocurrency surges as a flight to safety mentality drives Venezuelans to acquire U.S. dollars to preserve savings that they might otherwise lose. The growth for cryptocurrency activities in those regions is fueled by these desperate citizens using cryptocurrencies as rails to access the U.S. dollar, on top of acquiring actual Bitcoin or other underlying crypto assets.
The Rise of Crypto Dollars
Due to the highly volatile nature of cryptocurrencies, USD stablecoin, a crypto-powered blockchain token that pegs its value to the U.S. dollar, was introduced to provide stable dollar exposure in the crypto trading sphere. Tether is the first of its kind. Issued in 2014 on the bitcoin blockchain (Omni layer protocol), under the token symbol USDT, it attempts to provide crypto traders with a stable settlement currency while they trade in and out of various crypto assets. The reason behind the stablecoin creation was to address the inefficient and burdensome aspects of having to move fiat U.S. dollars between the legacy banking system and crypto exchanges. Because one USDT is theoretically backed by one U.S. dollar, traders can use USDT to trade and settle to fiat dollars. It was not until 2017 that the majority of traders seemed to realize Tether’s intended utility and started using it widely. As of April 2019, USDT trading volume started exceeding the trading volume of bitcoina12, and it now dominates the crypto trading sphere with over $50 billion average daily trading volume13. https://preview.redd.it/3vq7v1jg09p51.png?width=700&format=png&auto=webp&s=46f11b5f5245a8c335ccc60432873e9bad2eb1e1 An interesting aspect of USDT is that although the claimed 1:1 backing with U.S. dollar collateral is in question, and the Tether company is in reality running fractional reserves through a loose offshore corporate structure, Tether’s trading volume and adoption continues to grow rapidly14. Perhaps in comparison to fiat U.S. dollars, which is not really backed by anything, Tether still has cash equivalents in reserves and crypto traders favor its liquidity and convenience over its lack of legitimacy. For those who are concerned about Tether’s solvency, they can now purchase credit default swaps for downside protection15. On the other hand, USDC, the more compliant contender, takes a distant second spot with total coin circulation of $1.8 billion, versus USDT at $14.5 billion (at the time of publication). It is still too early to tell who is the ultimate leader in the stablecoin arena, as more and more stablecoins are launching to offer various functions and supporting mechanisms. There are three main categories of stablecoin: fiat-backed, crypto-collateralized, and non-collateralized algorithm based stablecoins. Most of these are still at an experimental phase, and readers can learn more about them here. With the continuous innovation of stablecoin development, the utility stablecoins provide in the overall crypto market will become more apparent.
In addition to trade settlement, stablecoins can be applied in many other areas. Cross-border payments and remittances is an inefficient market that desperately needs innovation. In 2020, the average cost of sending money across the world is around 7%16, and it takes days to settle. The World Bank aims to reduce remittance fees to 3% by 2030. With the implementation of blockchain technology, this cost could be further reduced close to zero. J.P. Morgan, the largest bank in the U.S., has created an Interbank Information Network (IIN) with 416 global Institutions to transform the speed of payment flows through its own JPM Coin, another type of crypto dollar17. Although people argue that JPM Coin is not considered a cryptocurrency as it cannot trade openly on a public blockchain, it is by far the largest scale experiment with all the institutional participants trading within the “permissioned” blockchain. It might be more accurate to refer to it as the use of distributed ledger technology (DLT) instead of “blockchain” in this context. Nevertheless, we should keep in mind that as J.P. Morgan currently moves $6 trillion U.S. dollars per day18, the scale of this experiment would create a considerable impact in the international payment and remittance market if it were successful. Potentially the day will come when regulated crypto exchanges become participants of IIN, and the link between public and private crypto assets can be instantly connected, unlocking greater possibilities in blockchain applications. Many central banks are also in talks about developing their own central bank digital currency (CBDC). Although this idea was not new, the discussion was brought to the forefront due to Facebook’s aggressive Libra project announcement in June 2019 and the public attention that followed. As of July 2020, at least 36 central banks have published some sort of CBDC framework. While each nation has a slightly different motivation behind its currency digitization initiative, ranging from payment safety, transaction efficiency, easy monetary implementation, or financial inclusion, these central banks are committed to deploying a new digital payment infrastructure. When it comes to the technical architectures, research from BIS indicates that most of the current proofs-of-concept tend to be based upon distributed ledger technology (permissioned blockchain)19. https://preview.redd.it/lgb1f2rw19p51.png?width=700&format=png&auto=webp&s=040bb0deed0499df6bf08a072fd7c4a442a826a0 These institutional experiments are laying an essential foundation for an improved global payment infrastructure, where instant and frictionless cross-border settlements can take place with minimal costs. Of course, the interoperability of private DLT tokens and public blockchain stablecoins has yet to be explored, but the innovation with both public and private blockchain efforts could eventually merge. This was highlighted recently by the Governor of the Bank of England who stated that “stablecoins and CBDC could sit alongside each other20”. One thing for certain is that crypto dollars (or other fiat-linked digital currencies) are going to play a significant role in our future economy.
There is never a dull moment in the crypto sector. The industry narratives constantly shift as innovation continues to evolve. Twelve years since its inception, Bitcoin has evolved from an abstract subject to a familiar concept. Its role as a secured, scarce, decentralized digital store of value has continued to gain acceptance, and it is well on its way to becoming an investable asset class as a portfolio hedge against asset price inflation and fiat currency depreciation.Stablecoins have proven to be useful as proxy dollars in the crypto world, similar to how dollars are essential in the traditional world. It is only a matter of time before stablecoins or private digital tokens dominate the cross-border payments and global remittances industry. There are no shortages of hypes and experiments that draw new participants into the crypto space, such as smart contracts, new blockchains, ICOs, tokenization of things, or the most recent trends on DeFi tokens. These projects highlight the possibilities for a much more robust digital future, but the market also needs time to test and adopt. A reliable digital payment infrastructure must be built first in order to allow these experiments to flourish. In this paper we examined the historical background and economic reasons for the U.S. dollar’s dominance in the world, and the probable conclusion is that the demand for U.S. dollars will likely continue, especially in the middle of a global pandemic, accompanied by a worldwide economic slowdown. The current monetary system is far from perfect, but there are no better alternatives for replacement at least in the near term. Incremental improvements are being made in both the public and private sectors, and stablecoins have a definite role to play in both the traditional and the new crypto world. Thank you. Reference:  How the US dollar became the world’s reserve currency, Investopedia  The dollar is in high demand, prone to dangerous appreciation, The Economist  Dollar dominance in trade and finance, Gita Gopinath  Global trades dependence on dollars, The Economist & IMF working papers  Total credit to non-bank borrowers by currency of denomination, BIS  Biggest stock exchanges in the world, Business Insider  McKinsey Global Private Market Review 2020, McKinsey & Company  Central banks current interest rates, Global Rates  Venezuela hyperinflation hits 10 million percent, CNBC  Lebanon inflation crisis, Reuters  Venezuela cryptocurrency market, Chainalysis  The most used cryptocurrency isn’t Bitcoin, Bloomberg  Trading volume of all crypto assets, coinmarketcap.com  Tether US dollar peg is no longer credible, Forbes  New crypto derivatives let you bet on (or against) Tether’s solvency, Coindesk  Remittance Price Worldwide, The World Bank  Interbank Information Network, J.P. Morgan  Jamie Dimon interview, CBS News  Rise of the central bank digital currency, BIS  Speech by Andrew Bailey, 3 September 2020, Bank of England
Today, Let's dive in what matters 70% percent of the time in the market. That is market psychology
ABSOLUTE DISCIPLINE Only buy / sell on predetermined rules (technical or fundamental). Have a checklist to check against the conditions in the market. ONLY enter the market after irreducible minimums
FLEXIBILITY Talking about flexibility , you should have in mind that facts in the market sometimes changes and that should align well with your mind. For example never STUBBORNLY HOLD ONTO A LOSING POSITION. That is why I advocate for a fixed stop loss. You should always look forward to the amount you will be losing rather than the one you will win. Rem HOPE IS FOR THE HOPELESS IN THE MARKET, Never hold a losing position with hopes.
HARDWORK Yes, you have probably heard that Fx is an easy way of making millions out of the market. Now more than ever Forex could be the most challenging and cumbersome field. Remember there is no free lunch, you should spend timeless time studying and analyzing charts. Take your time in practicing demo so as to device your own strategy based on your personality. Remember to keep records, I personally use EDGEWonk, it is a good software. You can create a flashcard for that matter.
BE PATIENT AND THINK LONG TERM I need not to emphasize on this. But you should learn the magic of compounding.
5.THINK INDEPENDENTLY There is nothing like market gurus. No one knows where the market will go next. Market is based on random emotions of investors. The emotions are basically two; fear and greed and this random motions was well captured by wave theorists , wykloft and Elliot. Therefore most of the time it is advised that you be opposite of the masses.
RISK MANAGEMENT AND CAPITAL MANAGEMENT Always risk 1% of your account. Before you enter a trade ensure you use the position calculator tool, it is an utility tool that helps in choosing the perfect lot size.
TAKE RESPONSIBILITY AND LEARN FROM MISTAKES Never blame the market , learn from your mistakes for you to become a professional trader.
NEVER ATTEMPT TO PREDICT THE MARKET Any attempt to predict the market leads to bad performance. Just follow your rules and stick to the game plan
Guys that is all I had today . I have been trading for the past 5 yrs and I have learnt that for you to be in the market and profitable it takes your psychology. How you control your emotions. You see consistency is all that matters in this game. And with consistency comes long-term profitability. Happy 'piping' and may the market be with you . :)
Finding Trading Edges: Where to Get High R:R trades and Profit Potential of Them.
TL;DR - I will try and flip an account from $50 or less to $1,000 over 2019. I will post all my account details so my strategy can be seen/copied. I will do this using only three or four trading setups. All of which are simple enough to learn. I will start trading on 10th January. ---- As I see it there are two mains ways to understand how to make money in the markets. The first is to know what the biggest winners in the markets are doing and duplicating what they do. This is hard. Most of the biggest players will not publicly tell people what they are doing. You need to be able to kinda slide in with them and see if you can pick up some info. Not suitable for most people, takes a lot of networking and even then you have to be able to make the correct inferences. Another way is to know the most common trades of losing traders and then be on the other side of their common mistakes. This is usually far easier, usually everyone knows the mind of a losing trader. I learned about what losing traders do every day by being one of them for many years. I noticed I had an some sort of affinity for buying at the very top of moves and selling at the very bottom. This sucked, however, is was obvious there was winning trades on the other side of what I was doing and the adjustments to be a good trader were small (albeit, tricky). Thus began the study for entries and maximum risk:reward. See, there have been times I have bought aiming for a 10 pip scalps and hit 100 pips stops loss. Hell, there have been times I was going for 5 pips and hit 100 stop out. This can seem discouraging, but it does mean there must be 1:10 risk:reward pay-off on the other side of these mistakes, and they were mistakes. If you repeatedly enter and exit at the wrong times, you are making mistakes and probably the same ones over and over again. The market is tricking you! There are specific ways in which price moves that compel people to make these mistakes (I won’t go into this in this post, because it takes too long and this is going to be a long post anyway, but a lot of this is FOMO). Making mistakes is okay. In fact, as I see it, making mistakes is an essential part of becoming an expert. Making a mistake enough times to understand intrinsically why it is a mistake and then make the required adjustments. Understanding at a deep level why you trade the way you do and why others make the mistakes they do, is an important part of becoming an expert in your chosen area of focus. I could talk more on these concepts, but to keep the length of the post down, I will crack on to actual examples of trades I look for. Here are my three main criteria. I am looking for tops/bottoms of moves (edge entries). I am looking for 1:3 RR or more potential pay-offs. My strategy assumes that retail trades will lose most of the time. This seems a fair enough assumption. Without meaning to sound too crass about it, smart money will beat dumb money most of the time if the game is base on money. They just will. So to summarize, I am looking for the points newbies get trapped in bad positions entering into moves too late. From these areas, I am looking for high RR entries. Setup Examples. I call this one the “Lightning Bolt correction”, but it is most commonly referred to as a “two leg correction”. I call it a “Lightning Bolt correction” because it looks a bit like one, and it zaps you. If you get it wrong. https://preview.redd.it/t4whwijse2721.png?width=1326&format=png&auto=webp&s=c9050529c6e2472a3ff9f8e7137bd4a3ee5554cc Once I see price making the first sell-off move and then begin to rally towards the highs again, I am waiting for a washout spike low. The common trades mistakes I am trading against here is them being too eager to buy into the trend too early and for the to get stopped out/reverse position when it looks like it is making another bearish breakout. Right at that point they panic … literally one candle under there is where I want to be getting in. I want to be buying their stop loss, essentially. “Oh, you don’t want that ...okay, I will have that!” I need a precise entry. I want to use tiny stops (for big RR) so I need to be cute with entries. For this, I need entry rules. Not just arbitrarily buying the spike out. There are a few moving parts to this that are outside the scope of this post but one of my mains ways is using a fibs extension and looking for reversals just after the 1.61% level. How to draw the fibs is something else that is outside the scope of this but for one simple rule, they can be drawn on the failed new high leg. https://preview.redd.it/2cd682kve2721.png?width=536&format=png&auto=webp&s=f4d081c9faff49d0976f9ffab260aaed2b570309 I am looking for a few specific things for a prime setup. Firstly, I am looking for the false hope candles, the ones that look like they will reverse the market and let those buying too early get out break-even or even at profit. In this case, you can see the hammer and engulfing candle off the 127 level, then it spikes low in that “stop-hunt” sort of style. Secondly I want to see it trading just past my entry level (161 ext). This rule has come from nothing other than sheer volume. The amount of times I’ve been stopped out by 1 pip by that little sly final low has gave birth to this rule. I am looking for the market to trade under support in a manner that looks like a new strong breakout. When I see this, I am looking to get in with tiny stops, right under the lows. I will also be using smaller charts at this time and looking for reversal clusters of candles. Things like dojis, inverted hammers etc. These are great for sticking stops under. Important note, when the lightning bolt correction fails to be a good entry, I expect to see another two legs down. I may look to sell into this area sometimes, and also be looking for buying on another couple legs down. It is important to note, though, when this does not work out, I expect there to be continued momentum that is enough to stop out and reasonable stop level for my entry. Which is why I want to cut quick. If a 10 pips stop will hit, usually a 30 pips stop will too. Bin it and look for the next opportunity at better RR. https://preview.redd.it/mhkgy35ze2721.png?width=1155&format=png&auto=webp&s=a18278b85b10278603e5c9c80eb98df3e6878232 Another setup I am watching for is harmonic patterns, and I am using these as a multi-purpose indicator. When I see potentially harmonic patterns forming, I am using their completion level as take profits, I do not want to try and run though reversal patterns I can see forming hours ahead of time. I also use them for entering (similar rules of looking for specific entry criteria for small stops). Finally, I use them as a continuation pattern. If the harmonic pattern runs past the area it may have reversed from, there is a high probability that the market will continue to trend and very basic trend following strategies work well. I learned this from being too stubborn sticking with what I thought were harmonic reversals only to be ran over by a trend (seriously, everything I know I know from how it used to make me lose). https://preview.redd.it/1ytz2431f2721.png?width=1322&format=png&auto=webp&s=983a7f2a91f9195004ad8a2aa2bb9d4d6f128937 A method of spotting these sorts of M/W harmonics is they tend to form after a second spike out leg never formed. When this happens, it gives me a really good idea of where my profit targets should be and where my next big breakout level is. It is worth noting, larger harmonics using have small harmonics inside them (on lower time-frames) and this can be used for dialling in optimum entries. I also use harmonics far more extensively in ranging markets. Where they tend to have higher win rates. Next setup is the good old fashioned double bottoms/double top/one tick trap sort of setup. This comes in when the market is highly over extended. It has a small sell-off and rallies back to the highs before having a much larger sell-off. This is a more risky trade in that it sells into what looks like trending momentum and can be stopped out more. However, it also pays a high RR when it works, allowing for it to be ran at reduced risk and still be highly profitable when it comes through. https://preview.redd.it/1bx83776f2721.png?width=587&format=png&auto=webp&s=2c76c3085598ae70f4142d26c46c8d6e9b1c2881 From these sorts of moves, I am always looking for a follow up buy if it forms a lightning bolt sort of setup. All of these setups always offer 1:3 or better RR. If they do not, you are doing it wrong (and it will be your stop placement that is wrong). This is not to say the target is always 1:3+, sometimes it is best to lock in profits with training stops. It just means that every time you enter, you can potentially have a trade that runs for many times more than you risked. 1:10 RR can be hit in these sorts of setups sometimes. Paying you 20% for 2% risked. I want to really stress here that what I am doing is trading against small traders mistakes. I am not trying to “beat the market maker”. I am not trying to reverse engineer J.P Morgan’s black boxes. I do not think I am smart enough to gain a worthwhile edge over these traders. They have more money, they have more data, they have better softwares … they are stronger. Me trying to “beat the market maker” is like me trying to beat up Mike Tyson. I might be able to kick him in the balls and feel smug for a few seconds. However, when he gets up, he is still Tyson and I am still me. I am still going to be pummeled. I’ve seen some people that were fairly bright people going into training courses and coming out dumb as shit. Thinking they somehow are now going to dominate Goldman Sachs because they learned a chart pattern. Get a grip. For real, get a fucking grip. These buzz phrases are marketeering. Realististically, if you want to win in the markets, you need to have an edge over somebody. I don’t have edges on the banks. If I could find one, they’d take it away from me. Edges work on inefficiencies in what others do that you can spot and they can not. I do not expect to out-think a banks analysis team. I know for damn sure I can out-think a version of me from 5 years ago … and I know there are enough of them in the markets. I look to trade against them. I just look to protect myself from the larger players so they can only hurt me in limited ways. Rather than letting them corner me and beat me to a pulp (in the form of me watching $1,000 drop off my equity because I moved a stop or something), I just let them kick me in the butt as I run away. It hurts a little, but I will be over it soon. I believe using these principles, these three simple enough edge entry setups, selectiveness (remembering you are trading against the areas people make mistakes, wait for they areas) and measured aggression a person can make impressive compounded gains over a year. I will attempt to demonstrate this by taking an account of under $100 to over $1,000 in a year. I will use max 10% on risk on a position, the risk will scale down as the account size increases. In most cases, 5% risk per trade will be used, so I will be going for 10-20% or so profits. I will be looking only for prime opportunities, so few trades but hard hitting ones when I take them. I will start trading around the 10th January. Set remind me if you want to follow along. I will also post my investor login details, so you can see the trades in my account in real time. Letting you see when I place my orders and how I manage running positions. I also think these same principles can be tweaked in such a way it is possible to flip $50 or so into $1,000 in under a month. I’ve done $10 to $1,000 in three days before. This is far more complex in trade management, though. Making it hard to explain/understand and un-viable for many people to copy (it hedges, does not comply with FIFO, needs 1:500 leverage and also needs spreads under half a pip on EURUSD - not everyone can access all they things). I see all too often people act as if this can’t be done and everyone saying it is lying to sell you something. I do not sell signals. I do not sell training. I have no dog in this fight, I am just saying it can be done. There are people who do it. If you dismiss it as impossible; you will never be one of them. If I try this 10 times with $50, I probably am more likely to make $1,000 ($500 profit) in a couple months than standard ideas would double $500 - I think I have better RR, even though I may go bust 5 or more times. I may also try to demonstrate this, but it is kinda just show-boating, quite honestly. When it works, it looks cool. When it does not, I can go bust in a single day (see example https://www.fxblue.com/users/redditmicroflip). So I may or may not try and demonstrate this. All this is, is just taking good basic concepts and applying accelerated risk tactics to them and hitting a winning streak (of far less trades than you may think). Once you have good entries and RR optimization in place - there really is no reason why you can not scale these up to do what may people call impossible (without even trying it). I know there are a lot of people who do not think these things are possible and tend to just troll whenever people talk about these things. There used to be a time when I’d try to explain why I thought the way I did … before I noticed they only cared about telling me why they were right and discussion was pointless. Therefore, when it comes to replies, I will reply to all comments that ask me a question regarding why I think this can be done, or why I done something that I done. If you are commenting just to tell me all the reasons you think I am wrong and you are right, I will probably not reply. I may well consider your points if they are good ones. I just do not entering into discussions with people who already know everything; it serves no purpose. Edit: Addition. I want to talk a bit more about using higher percentage of risk than usual. Firstly, let me say that there are good reasons for risk caps that people often cite as “musts”. There are reasons why 2% is considered optimum for a lot of strategies and there are reasons drawing down too much is a really bad thing. Please do not be ignorant of this. Please do not assume I am, either. In previous work I done, I was selecting trading strategies that could be used for investment. When doing this, my only concern was drawdown metrics. These are essential for professional money management and they are also essential for personal long-term success in trading. So please do not think I have not thought of these sorts of things Many of the reasons people say these things can’t work are basic 101 stuff anyone even remotely committed to learning about trading learns in their first 6 months. Trust me, I have thought about these concepts. I just never stopped thinking when I found out what public consensus was. While these 101 rules make a lot of sense, it does not take away from the fact there are other betting strategies, and if you can know the approximate win rate and pay-off of trades, you can have other ways of deriving optimal bet sizes (risk per trade). Using Kelly Criterion, for example, if the pay-off is 1:3 and there is a 75% chance of winning, the optimal bet size is 62.5%. It would be a viable (high risk) strategy to have extremely filtered conditions that looked for just one perfect set up a month, makingover 150% if it was successful. Let’s do some math on if you can pull that off three months in a row (using 150% gain, for easy math). Start $100. Month two starts $250. Month three $625. Month three ends $1,562. You have won three trades. Can you win three trades in a row under these conditions? I don’t know … but don’t assume no-one can. This is extremely high risk, let’s scale it down to meet somewhere in the middle of the extremes. Let’s look at 10%. Same thing, 10% risk looking for ideal opportunities. Maybe trading once every week or so. 30% pay-off is you win. Let’s be realistic here, a lot of strategies can drawdown 10% using low risk without actually having had that good a chance to generate 30% gains in the trades it took to do so. It could be argued that trading seldomly but taking 5* the risk your “supposed” to take can be more risk efficient than many strategies people are using. I am not saying that you should be doing these things with tens of thousands of dollars. I am not saying you should do these things as long term strategies. What I am saying is do not dismiss things out of hand just because they buck the “common knowns”. There are ways you can use more aggressive trading tactics to turn small sums of money into they $1,000s of dollars accounts that you exercise they stringent money management tactics on. With all the above being said, you do have to actually understand to what extent you have an edge doing what you are doing. To do this, you should be using standard sorts of risks. Get the basics in place, just do not think you have to always be basic. Once you have good basics in place and actually make a bit of money, you can section off profits for higher risk versions of strategies. The basic concepts of money management are golden. For longevity and large funds; learned them and use them! Just don’t forget to think for yourself once you have done that. Update - Okay, I have thought this through a bit more and decided I don't want to post my live account investor login, because it has my full name and I do not know who any of you are. Instead, for copying/observing, I will give demo account login (since I can choose any name for a demo). I will also copy onto a live account and have that tracked via Myfxbook. I will do two versions. One will be FIFO compliant. It will trade only single trade positions. The other will not be FIFO compliant, it will open trades in batches. I will link up live account in a week or so. For now, if anyone wants to do BETA testing with the copy trader, you can do so with the following details (this is the non-FIFO compliant version). Account tracking/copying details. Low-Medium risk. IC Markets MT4 Account number: 10307003 Investor PW:lGdMaRe6 Server: Demo:01 (Not FIFO compliant) Valid and Invalid Complaints. There are a few things that can pop up in copy trading. I am not a n00b when it comes to this, so I can somewhat forecast what these will be. I can kinda predict what sort of comments there may be. Some of these are valid points that if you raise I should (and will) reply to. Some are things outside of the scope of things I can influence, and as such, there is no point in me replying to. I will just cover them all here the one time. Valid complains are if I do something dumb or dramatically outside of the strategy I have laid out here. won't do these, if I do, you can pitchfork ----E Examples; “Oi, idiot! You opened a trade randomly on a news spike. I got slipped 20 pips and it was a shit entry”. Perfectly valid complaint. “Why did you open a trade during swaps hours when the spread was 30 pips?” Also valid. “You left huge trades open running into the weekend and now I have serious gap paranoia!” Definitely valid. These are examples of me doing dumb stuff. If I do dumb stuff, it is fair enough people say things amounting to “Yo, that was dumb stuff”. Invalid Complains; “You bought EURUSD when it was clearly a sell!!!!” Okay … you sell. No-one is asking you to copy my trades. I am not trading your strategy. Different positions make a market. “You opened a position too big and I lost X%”. No. Na uh. You copied a position too big. If you are using a trade copier, you can set maximum risk. If you neglect to do this, you are taking 100% risk. You have no valid compliant for losing. The act of copying and setting the risk settings is you selecting your risk. I am not responsible for your risk. I accept absolutely no liability for any losses. *Suggested fix. Refer to risk control in copy trading software “You lost X trades in a row at X% so I lost too much”. Nope. You copied. See above. Anything relating to losing too much in trades (placed in liquid/standard market conditions) is entirely you. I can lose my money. Only you can set it up so you can lose yours. I do not have access to your account. Only mine. *Suggested fix. Refer to risk control in copy trading software “Price keeps trading close to the pending limit orders but not filling. Your account shows profits, but mine is not getting them”. This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours. * Suggested fix. Compare the spread on your broker with the spread on mine. Adjust your orders accordingly. Buy limit orders will need to move up a little. Sell limit orders should not need adjusted. “I got stopped out right before the market turned, I have a loss but your account shows a profit”. This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there differences in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours. ** Suggested fix. Compare the spread on your broker with the spread on mine. Adjust your orders accordingly. Stop losses on sell orders will need to move up a bit. Stops on buy orders will be fine. “Your trade got stopped out right before the market turned, if it was one more pip in the stop, it would have been a winner!!!” Yeah. This happens. This is where the “risk” part of “risk:reward” comes in. “Price traded close to take profit, yours filled but mines never”. This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there differences in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours. (Side note, this should not be an issue since when my trade closes, it should ping your account to close, too. You might get a couple less pips). *** Suggested fix. Compare the spread on your broker with the spread on mine. Adjust your orders accordingly. Take profits on buys will need to move up a bit. Sell take profits will be fine. “My brokers spread jumped to 20 during the New York session so the open trade made a bigger loss than it should”. Your broker might just suck if this happens. This is brokerage. I have no control over this. My trades are placed to profit from my brokerage conditions. I do not know, so can not account for yours. Also, if accounting for random spread spikes like this was something I had to do, this strategy would not be a thing. It only works with fair brokerage conditions. *Suggested fix. Do a bit of Googling and find out if you have a horrific broker. If so, fix that! A good search phrase is; “(Broker name) FPA reviews”. “Price hit the stop loss but was going really fast and my stop got slipped X pips”. This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there differences in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours. If my trade also got slipped on the stop, I was slipped using ECN conditions with excellent execution; sometimes slips just happen. I am doing the most I can to prevent them, but it is a fact of liquidity that sometimes we get slipped (slippage can also work in our favor, paying us more than the take profit would have been). “Orders you placed failed to execute on my account because they were too large”. This is brokerage. I have no control over this. Margin requirements vary. I have 1:500 leverage available. I will not always be using it, but I can. If you can’t, this will make a difference. “Your account is making profits trading things my broker does not have” I have a full range of assets to trade with the broker I use. Included Forex, indices, commodities and cryptocurrencies. I may or may not use the extent of these options. I can not account for your brokerage conditions. I think I have covered most of the common ones here. There are some general rules of thumb, though. Basically, if I do something that is dumb and would have a high probability of losing on any broker traded on, this is a valid complain. Anything that pertains to risk taken in standard trading conditions is under your control. Also, anything at all that pertains to brokerage variance there is nothing I can do, other than fully brief you on what to expect up-front. Since I am taking the time to do this, I won’t be a punchbag for anything that happens later pertaining to this. I am not using an elitist broker. You don’t need $50,000 to open an account, it is only $200. It is accessible to most people - brokerage conditions akin to what I am using are absolutely available to anyone in the UK/Europe/Asia (North America, I am not so up on, so can’t say). With the broker I use, and with others. If you do not take the time to make sure you are trading with a good broker, there is nothing I can do about how that affects your trades. I am using an A book broker, if you are using B book; it will almost certainly be worse results. You have bad costs. You are essentially buying from reseller and paying a mark-up. (A/B book AKA ECN/Market maker; learn about this here). My EURUSD spread will typically be 0.02 pips or so, if yours is 1 pip, this is a huge difference. These are typical spreads I am working on. https://preview.redd.it/yc2c4jfpab721.png?width=597&format=png&auto=webp&s=c377686b2485e13171318c9861f42faf325437e1 Check the full range of spreads on Forex, commodities, indices and crypto. Please understand I want nothing from you if you benefit from this, but I am also due you nothing if you lose. My only term of offering this is that people do not moan at me if they lose money. I have been fully upfront saying this is geared towards higher risk. I have provided information and tools for you to take control over this. If I do lose people’s money and I know that, I honestly will feel a bit sad about it. However, if you complain about it, all I will say is “I told you that might happen”, because, I am telling you that might happen. Make clear headed assessments of how much money you can afford to risk, and use these when making your decisions. They are yours to make, and not my responsibility. Update. Crazy Kelly Compounding: $100 - $11,000 in 6 Trades. $100 to $11,000 in 6 trades? Is it a scam? Is it a gamble? … No, it’s maths. Common sense risk disclaimer: Don’t be a dick! Don’t risk money you can’t afford to lose. Do not risk money doing these things until you can show a regular profit on low risk. Let’s talk about Crazy Kelly Compounding (CKC). Kelly criterion is a method for selecting optimal bet sizes if the odds and win rate are known (in other words, once you have worked out how to create and assess your edge). You can Google to learn about it in detail. The formula for Kelly criterion is; ((odds-1) * (percentage estimate)) - (1-percent estimate) / (odds-1) X 100 Now let’s say you can filter down a strategy to have a 80% win rate. It trades very rarely, but it had a very high success rate when it does. Let’s say you get 1:2 RR on that trade. Kelly would give you an optimum bet size of about 60% here. So if you win, you win 120%. Losing three trades in a row will bust you. You can still recover from anything less than that, fairly easily with a couple winning trades. This is where CKC comes in. What if you could string some of these wins together, compounding the gains (so you were risking 60% each time)? What if you could pull off 6 trades in a row doing this? Here is the math; https://preview.redd.it/u3u6teqd7c721.png?width=606&format=png&auto=webp&s=3b958747b37b68ec2a769a8368b5cbebfe0e97ff This shows years, substitute years for trades. 6 trades returns $11,338! This can be done. The question really is if you are able to dial in good enough entries, filter out enough sub-par trades and have the guts to pull the trigger when the time is right. Obviously you need to be willing to take the hit, obviously that hit gets bigger each time you go for it, but the reward to risk ratio is pretty decent if you can afford to lose the money. We could maybe set something up to do this on cent brokers. So people can do it literally risking a couple dollars. I’d have to check to see if there was suitable spreads etc offered on them, though. They can be kinda icky. Now listen, I am serious … don’t be a dick. Don’t rush out next week trying to retire by the weekend. What I am showing you is the EXTRA rewards that come with being able to produce good solid results and being able to section off some money for high risk “all or nothing” attempts; using your proven strategies. I am not saying anyone can open 6 trades and make $11,000 … that is rather improbable. What I am saying is once you can get the strategy side right, and you can know your numbers; then you can use the numbers to see where the limits actually are, how fast your strategy can really go. This CKC concept is not intended to inspire you to be reckless in trading, it is intended to inspire you to put focus on learning the core skills I am telling you that are behind being able to do this.
https://preview.redd.it/nrbrb96i6in21.png?width=240&format=png&auto=webp&s=2792d16cbb58e45bf8d947cbde8b810b6e641534 Genesis Vision Just one of those days… Hmm, this looks like an interesting project. Chart looks good plus it didn’t really go up a lot the last couple of days, unlike the other coins. Or maybe it didn’t go up because there is something that I don’t know yet? Let’s look online a bit longer to see if something fishy is going on before I buy some. The chart does look really good! No, nothing out of the ordinary here, I think it might just not have gone up yet but it probably will. If Bitcoin manages to not drop double digit percentages out of nowhere today that is… Seems to be close to resistance, and there are a couple BTC worth of sell orders at 140 sats, I’ll wait for that to break, and buy when it shows some strength. Getting close now, let’s wait for it to break by gluing my face to the screen to watch the 1 minute chart. There it goes! Ok, I’ll start with a small buy - Oh man It’s really going! Buy a little more - Market buy ALL the things! What, no wait. No not again! Please, please no not again… Argh… https://preview.redd.it/cup9237n6in21.png?width=256&format=png&auto=webp&s=91264c3cbfe10a0d9e699b1774a2e74b7d79bb49 Guess I will hold for a couple of days, don’t feel like taking a loss. It will probably rebound on the ‘resistance turned into support’ zone, right? I am already watching this chart for 2 hours.. I should really go do something productive. Lets just set some sell orders here and here. That market buy order really got my buy-In high, close to a 2% loss at present. I Totally wasted this evening, and I am still in the red. How is that even possible? Next morning Let’s check my portfolio. Ah man the support didn’t hold, now what? Actually, it looks like this might even go lower now. This 130 sats support is really strong so I guess I’ll use that as a stop-loss. - Stop loss triggered Oh my god man, why am I always so unlucky? Close to a 5% BTC loss, besides the loss of time. Talking about Bitcoin, how’s the big guy holding up? Hmm also looks weak to be honest. It’s dropping as we speak. Should I sell and rebuy lower? That could at least get me a bit of Bitcoin back. Yeah it’s really dropping now. The entire market is going down. Sell volume is increasing as well. I should really sell some. Whatever just sell it all. Yeah, like I thought, it’s going lower. I’ll rebuy when it goes a little bit lower. There she goes! Just a little bit lower before I buy in, might just get me back all my lost BTC at least! Bit of buying pressure going in now but that’s normal, nothing goes down, or up for that matter, the entire time. I will wait it out, got my buy-in set anyway. Please stop going up. Please STOP going up. Oh my frikkin god, got to buy back higher now. No way, I won’t do that. I’ll wait for it to drop. This is unreal! It won’t go back down. Why won’t it go back down?! Fine I’ll buy it back. Can’t believe it, I always lose, forget it, at least I will get some USD profits when I buy now – Market buy all the things! https://preview.redd.it/vc5eg4vv6in21.png?width=259&format=png&auto=webp&s=5185cc6498524de856db27b2f4bfcb2568ae4ccb NO WAY, IT’S GOING DOWN THE SECOND I BUY? HOW, WHY, WHAT THE HELL IS GOING ON? The above is probably an experience that a lot of (retail) traders can relate to, and have probably gone through somewhere in their trading career, be it crypto or any stock, commodity, index or whatever else is possible to trade online. It’s a common problem, and it is the reason why only a small percentage of people manage to ‘beat the market’. People simply have the internal emotional trigger to buy something when gains are in line of sight, and sell something when losses are made. The bars being green (good) and red (bad) also don’t really help with trying to shake off that feeling. Genesis vision tries to solve this problem, giving people willing to invest in cryptocurrencies, forex and in the future probably commodities and indices, the possibility to invest in experienced, successful and hardened traders that have a solid track record, instead of taking the time and trading education (which some of those experienced traders say to be just as expensive in the end as a regular college degree, with all the losses and all) to get solid results themselves. Obviously this already exists. You can give your money to for example hedge funds, private equity funds and nowadays even robo-advisors. But do they really get the biggest return on investment? Are you important enough to have the best trader in the company actually managing your account? Are you leaving your hard earned money at the company that hired the best traders at all? Or do they squander and play the above mentioned game themselves? Who knows really. In the end, you give your money to a company that says it could, possibly, get you a whopping 7% return after a year. But only if everything goes right, the economy doesn’t implode or a stock they are too heavily invested in doesn’t go belly-up. Scrap that, they will make a whopping 7% return, but they obviously need to take some of those profits for their fees. A entry fee, a profit-fee, some unforeseen fees, and the list goes on and on. When you want to invest some of that money you earned after a long 40 hour workweek, it better be handled by the best, giving you the highest return on investment without any catch. Transparency and clarity Again, Genesis vision tries to solve this. How? By putting EVERY trade on the blockchain, giving extreme clarity in the trades made, and more importantly, the results of the trader or company (called Genesis Vision Manager). This means that people that want to invest their cash can decide for themselves who will handle their funds. No more excuses why the expected return on investment wasn’t accomplished, or uncertainty if any of these companies are actually telling you the truth when it comes to the results they have had with your funds. No more sweeping the bad trades under the rug. We. Can. See. Your. Mistakes. And successes of course! It creates extreme openness, and it gives a lot of power back to the consumer that wants to invest. Most financial instruments are (deliberately made) so hard to grasp and confusing that most general investors don’t even want to bother, and just believe the suit with the impressive building and the nice car. But now you don’t even have to look up the terms collateralized mortgage obligation or the exotic inflation derivative. They have the option to simply look up the manager, his results, and his requirements to invest with (in) him or her. https://preview.redd.it/ghu8t5p17in21.png?width=245&format=png&auto=webp&s=566cff3b153c97ead5c122ba7d775b2fabecd778 Genesis Vision gives the possibility to invest in both Funds and programs. The biggest difference being that investors can withdraw their profits from a fund at any time, while their funds are locked in a program until it ends, receiving a part of the profits made directly linked to the share of the pool they invested in. However, if you are satisfied with your current manager, the program and the results so far, you can select the option to auto-invest your stake into the next program, getting that compounding interest effect rolling. Of course only when you have found the right manager to handle your funds! A loss is obviously still a loss, and although Genesis Vision tries to limit the risk by implementing a tier system to filter managers by their previous results, you can never be sure you actually make gains on your investment. The same rules apply as to investing wherever else. Don’t put it all in one basket, only invest what you are willing to lose, do NOT take out loans or credit to invest and above all do your research before you enter into any program or fund! The dashboard https://preview.redd.it/j8k03ht37in21.png?width=550&format=png&auto=webp&s=9ef4f590ffb25518a293b87993afc205075da288 The Genesis Vision dashboard looks very appealing, going for a futuristic style that resonates with the entire crypto and financial sector. Investors are first shown a couple of filters to make the search for the right vehicle to invest in easy to accomplish. Below the first general filters investors can find the different programs with a vast array of stats available to make the right decision. However, there is a lot going on here, and it would be smart for Genesis to implement some kind of tutorial showing new investors what everything shown on the screen actually means. After finding a program that matches your personal investing style regarding buy-in, duration of the program, entry fee and generally your risk tolerance, the people behind the program can be examined. Managers are able to tell a little bit about themselves and their investment style. Statistics and graphs of previous results are shown and this helps to get some reassurance, or lets you ignore a certain investment possibility. If everything seems to fit, and people are willing to pull the final trigger, they can invest with Bitcoin, Ethereum, Tether or their own Genesis Vision token. The bottom line Genesis Vision could be the instrument for (crypto)investors to try and maximize their profits, but for the regular amateur trader it will mostly help with erasing their beginner mistakes and trading losses. It gives back the power to the consumer and the client. Where normally the investing is done by traders on for example Wall Street, using complicated schemes to grab as much as possible of the retail investor who is taking all of the risk, Genesis Vision creates transparency, brutally rejects losing managers and lets investors get a honest and deserved piece of the pie. It is yet another example of the power of cryptocurrencies and blockchain technology, disrupting one of the largest sectors worldwide. That concludes this review! If you want to add anything or have questions, please feel free to comment below. Are you feeling generous, and did you enjoy this article? I accept donations! BTC: 369AyfgLtZ349omHgafUGkrNCGHLuhPGtx ETH: 0xd74635002Af9e191665D2AaDD03921E7f1201387 LTC: MEvKQ1d4GYsyMjqYwizVb6RZmEUjDXj5ty GVT: 0x9450d2c145a7758c1d2bcfd03a1374de90fea028 Connect with me on twitter: @BullishOnCrypts
Quick background for those new here. This started with me saying that if a person gets suitable good at entering the market and finding places to get high RR trades, it is entirely possible to flip small amounts of money into larger ones relatively quickly. To demonstrate this, I said Id flip $40-50 into over $1,000 over a year and link up Myfxbook to track all my trades. I’d also run versions of the strategy with the info posted for people to log into the accounts, see the trades and copy them if they want (see ForexCopy). The first one I bust on day one. I tried to do it really quickly ($1,000 in a week or so from $40). I got up around 200% - 250% and then zero’d it. The trades I lost in where not really good opportunities, and I as overly aggressive with them. Was dumb. The second one I tried running via a copy trader, it messed up early trades and vitaly went bust in the opening hours (I do not think it ever went into profit). The “I can flip $40 to $1,000 as long as I can keep reloading $40s” challenge is far less impressive. So, I have been reloading that account with tiny amounts, trying to get from $2 or so up to a more useful equity figure. I have failed doing this various times, but it has been down to accuracy being less sharp that it may have been rather than this not being viable. This is viable. It is fucking hard. Don’t get me wrong. Entering the market when you have 5 - 7 pips before you get margin called is tricky. Kinda fun, too. Good training in getting entries. With a couple good entries, though, entirely viable. $2 can get to $5, $5 can get to $15 and that is enough pips at 0.01 to have a damn good cracking at catching some big moves. Realistically, I think it only takes 10 really good trades to have a fairly useful bankroll. So let’s just write the $40 - $1,000 thing off. I bombed that. I am willing to up the ante. Rather than $40 - $1,000 over 12 months, I think I can do $2 or $3 to $5,000 in 18 months. This is contingent upon a couple things;
I may need to rebuy a few more times (although, maybe not).
I need the markets to trend in the nice structured way that currently are through the next year (or be super volatile and be well positioned for that).
This may sound outlandish and crazy, but the maths behind this are fairly solid. All it takes is catching a few 50 - 100 pip trades. A few of these can take $2 to $30, a few more and it is over $100. I can get 1:10 - 1:15 risk reward trades, and can increase risk:reward with in-trade management and adding positions (or hedging positions in profit). So using 5 - 10% risk in really prime opportunities, and it does not take many of them in a row to make some decent money compounding an account from $100. Technical Details on Margin Requirements You may be wondering how this can even be feasible. It may seem logical that even the best trader in the world could not get started from $2, but actually with the right brokerage conditions and pair selection, this can be done. I am using IC Markets. I have 1:500 leverage. Commission per trade is 0.6 of a lot (so, about $0.04-0.06 per trade with my position sizes). My spreads are usually under a pip. They sometimes go to zero spread. Pair selection. NZD and JPY are the lowest margin requirement currencies, and these can trend well. So I focus on these for starting out. I am trading NZDJPY, I require $1.33 margin to open 0.01 lots. So this means if I close all my trades and have under $1.33 I can not open any more trades. However, my stop out level is 50% of my margin requirements. So I get stopped out when I have $0.65 equity. This gives me about 15 pips from $2. I can also hedge this, and can use ways to manipulate margin requirements to get the most bang for my buck (which can be good or bad, it goes both ways, but it gives me more options). So with these settings, to take $2 to $10 is not all that hard. Catch 50 pips or so a couple times without the first trade drawing down 10+ pips. With $10, I have 100 pips at 0.01 (or the option of far more creative positioning), I think 100 pips is plenty margin for error to get into a few good trades and get going. I’ve pinned the Myfxbook for this to start from today (16th January 2019) since this is the first day I am taking this seriously. https://www.myfxbook.com/members/inweedwetrust/40-1000/2893650 Deposit $1.50 + account balance $0.65 = Slightly over $2 to start. The net deposit on this account is now around $66. Update. I want to quash this idea that the only way someone can make large returns in FX is using reckless risk and gambling. Obviously many people do this ,but some just know ways to get far more reward for their risks. Here is a trade I am. I had about $3.50 equity when opening the first two trades. 5 pips and 2 pips stops. I was risking about $0.50. https://preview.redd.it/ljohtjwqdwa21.png?width=1366&format=png&auto=webp&s=24d62c7296c8afdc15907dbe42a18a37f389e1fd Then as the move has developed, I have adjusted my stops and added to the position. I am targeting 60 pips or so here, about $20 pay off. I have nothing at risk now. I will end the trade really close to breakeven, if not slightly up. I have turned $0.50 risk into potentially $20 profit, and done this in the space of 10 pips. **I am not saying this is easy**. It has taken me years of studying price moves to know how, and far more importantly when to do this. I am saying it something that can be learned, and when applied well ... can be surprisingly profitable. Update. https://preview.redd.it/1jptz02cfwa21.png?width=1366&format=png&auto=webp&s=a8af8bd06a16058ae2369fe634215116d806fc31 Now I have set hedging orders on an area I know price often pulls back from. If it pulls back to the level I expect, I can exit the hedges and have the buy stops under there. If it then goes higher, I banked an extra X% on the gain with the hedges. I have set a hedging order above the high for if price blows through the take profits (making me short) and continues upwards. The worse case scenario sees me lose rather little, the best case (price filling take profits and then coming down to make the sells profitable, or the price retracing so the sells are profitable then it making a high) yield substantial profit potential. Piling up potential profit, without adding on much potential risk. Update. https://preview.redd.it/v70pqc9qiwa21.png?width=1362&format=png&auto=webp&s=a252499e2dc4f5ffc782fb6e44ffc5d8b8fb0fa6 Then I use the rules of the Extreme Edge strategy to trail stops. To get my line in the sand. I now have locked in a profti (albeit small) and can potentially make somewhere in the $25 - $30 range or perhaps more from my $0.50 risk. https://www.reddit.com/Forexnoobs/comments/af15l9/extreme_edge_strategy_detailed/ Update. This never worked out (I screwed it up). It is a lot harder with $2 on a 1 minute chart whilst posting live updates. However later you will see how I can take these same principles that can make $0.50 risk into $20 and use them to get into positions where $10 risk can be $300. Or where $100 can be several thousand. Update. So I was a bit early on that move, but this is what it looks like when it works. Occasions to position like this happen fairly frequently. I can get myself into these positions where I am risking a nominal amount for much larger gains many times in a day. I can take the same principles and apply them to weekly charts and position for "flash crashes", and other volatile moves. This is obviously on an account with more equity, I got margin called on the small one, will try again tomorrow. I was probably 2 pips away from going to $2 to close to $100 today (assuming the trades come through as I think). Will be abl to check what it could have been. If I'd hit the first trade, it would have mirrored the trades in the account that is copying my account *2 risk. If these swings hit, this account may make about $50 in them. Which will put it up about 100% (trading only 2x 0.01 at any time) since we fixed the margin/FIFO copying issues. Bit early to be counting chickens, but we'll see. https://www.myfxbook.com/members/drcherrypoppemt4-9084923/2910254 https://preview.redd.it/xhqv5tf55za21.png?width=1359&format=png&auto=webp&s=e63d97b4d7ef32573071afff3c31f67a98f725e6
Desperate: How long to hold out / What would you do in my situation
Hey guys, Throwaway, for obvious reasons. I'm a regular in /pf, /bitcoin and /bitcoinmarkets but I chose to make this account because my girlfriend is a redditor too and I don't want to get any backlash by posting this on my main account. For that reason I need to obfuscate some details of my story but I think you guys will understand. I'm in a pretty bad situation and I need some advice on how to proceed. A few years ago I became in charge of my family's finances. One of my parents passed much earlier than expected. My remaining parent didn't understand anything about finance or investing so I naturally stepped in to take over things and try to plan something for our family so that we could be financially secure for at least 10 or 15 years, enough time for me to get to a position in my career where I could take care of everyone with my own income stream. I started learning about trading, first with Forex. I was trading EURUSD and USDJPY primarily just with small amounts at first. Spent a lot of time on babypips.com learning technical analysis and how to extract as much value as possible from chart patterns. When I started I just used small amounts of money. My initial bankroll was $500. I ended up using too much leverage and blowing through my whole account because of some poorly time trades. Yes I know I should have used some common sense and not taken gigantic risks but I was just learning at the time. I worked at it a bit and started getting profitable. I would usually do my work late at night watching charts and drinking espressos, and there were several times that I took positions that netted me large profits so I'm confident that I've learned from my early mistakes. Then about a year and a half ago I started hearing about bitcoin, and how it was getting more valuable. I started reading about the blockchain, and this technology that is going to revolutionize the way the world thinks about money. I was excited about it, truly. I knew in my heart that this was going to be gigantic. So I took a leap. I took about half of all the cash I had in my checking account and deposited it at Mt.Gox. I didn't use any of the inheritance money, just my own from my part time job while I was a college student. Yeah. I know. Terrible idea in hindsight. I never got the money out before the whole thing collapsed. I wish I hadn't done it, but at the same time it wasn't a great deal of money to learn a lesson. That we can't just trust individual exchanges. Anyway, I learned a lot during that experience. I spent a lot of time analyzing charts. I learned how to use MACD and RSI indicators. I started getting good at being able to time things and on paper (of course) I was making very good profits. It's a shame that I didn't cash out before the whole thing went to shit because I probably would have enough money to last atleast a few years. Anyway, after Gox, I became really depressed but I still believed in bitcoin. I still thought it was going to be around for a very long time so I started looking for some more honest exchanges. I knew that what happened to me was just an unfortunate event that was unlikely to happen again. After all, Gox was being run by a pretty shady group. After I picked myself back up, I decided to deposit some of the inheritance money in some legitimate exchanges. In total we had about $300k after medical bills and other issues from the settlement of the estate. It was sitting in a checking account until about April of this year. I decided to put in $50k into two exchanges to diversify my risk exposure. Half I put into bitfinex and the other half I put into bitstamp. I spent 7 to 10 hours a day trading. The problem is that I've been taking mostly long positions. Every time the price drops 30 to 40 dollars I have been telling myself this is it -- this is the bottom and will take a position to make up for previous losses. I cannot understand why this is happening. I made some serious money several times but for the past 6 months or so I have taken huge losses. After the initial 50k I deposited another 50k, and then after losing much of that, and determining (wrongly, I might add, but I don't think my analysis was wrong) that we were definitely at the bottom, I went on to deposit another 125k. So far I am down a lot. My average cost per bitcoin is around $623. The losses just keep compounding. I don't know what to do. I'm getting incredibly desperate and sallow. I don't know how I'm going to explain this to my family. They know very little about bitcoin, but I have mentioned it on occasion and how I'm an enthusiast. I've even sent my sister and cousins some bitcoin to get them started. But now I'm worried that maybe this isn't going to work out. Every day I get out of bed and dread looking at the price of bitcoin. Because I know its going to translate into losses on the positions I've taken. I have tried really hard to avoid looking at the price but at this point I cannot take it any more. I'm just looking for a reason, any reason, to believe that things are going to get better. So far I've lost a lot of the estate money and I'll do anything to get it back. But I'm getting to the point where I feel like I might need to get to grips with reality and just cut my losses, admit to my family what I did and try to make it up to them. So I ask of you, please convince me one way or another (with some solid reasoning) to either sell all the coins I have on margin right now or just hold fast and weather this storm. Thanks
Sitting at a bar in my hometown over the holidays, i struck up a conversation with the young bartender who was having a slow night. We talked of life, love, boobies, and...forex. When the conversation turned to future ambitions he dropped the "F bomb" and his eyes lit up green as he passionately explained what forex was. To be honest, i didn't understand half the lingo he was spewing and my interest in the subject was dwindling. Then he brought out the numbers. Holy shit the numbers. On a bar order he showed me how he was going to go from $2000 to $9999999999999 in a number of years. I was getting pretty drunk at this point as the service was lag free when talking to the man. "If it was this easy" i slurred, "why isn't everyone doing this?" He explained to me that everyone in European Land was doing it. He explained he learned the Secrets from a prison Bazillionare who didn't pay his taxes. He told me about his 15 pip system (what is a pip?) and the magic of compounding profits. The bar was getting vibrant again and our conversation got choppy. Between the shots of fireball my buddies were buying me and the game of pool i was crushing at the conversation stopped. I don't remember when we left but i never said goodbye before stumbling out the door. I woke up feeling FANTASTIC the next day...ughhhh....and had to entertain my girl. In fact I had to visit with family and a few more friends. I did not even have time to think about Forex and went back to my holiday, delusion free. When i returned home i realized i spent WAY too much money on my holiday. Money, money, money. I wish i was rich. I need to be rich. Rich. Forex. What was that guy talking about? Billions? I could use some bilions. I tapped my IPhone and searched "4X" and eventually found a broker. Woahhhhh slow down, buddy. It's called forex and i bet there is a subreddit for this. Yep! I mean there is a subreddit for dragons banging cars. I didn't understand half the posts until i came across a post promoting babypips. I was going to need a computer and a couple beers for this one. I read ALL of babypips in one sitting. Granted throughout i was becoming aware of how much studying i was going to need to understand everything but i was getting my feet wet. I learned what a pip, candlestick, R and S levels, money management, and all that fun was. A WORLD was opening up to me and it was COMPLICATED. I was fascinated. I was impatient. I wanted to trade now! I mean, i just had to beat the spread, right? I opened a demo account on Fxtrade and watched as the charts loaded up. I had a full blown erection at this point. THIS IS SO COOL. Everything was moving so fast. I KNOW WHAT THAT IS. OOOO A DOJI! LOOK AT ALL THE PIPS!!!!!! At this point you are probably asking how much REAL money i lost. I'm sorry to disappoint you, you sad sad sadistic man. I are smart. At this point i realized mid boner how little i knew. I wanted to read charts, learn the candles, and check out the news. I felt the need to wear a suit as looked at Bloomberg and tickers. THIS WORLD IS AWESOME. I <3 FOREX! I decided to reward myself for the HOURS of studying i put in. Hours, ha. I was going to take my demo account and guess the market. I wanted to trade so bad and its just pretend money so yea, it's just pretend money. The next 4 hours of my life I got VERY possessive about that pretend money. I was yelling, biting my nails, jumping up and down. Oh, this was the fear and greed aspect people were talking about. WHY DOES IT KEEP GOING DOWN! My pips! My babies!!! At the end of 4 hours i was down 400 dollars!! I slammed my laptop shut and buried my head in my hands. I am such a shitty trader! Why couldn't i guess the market! Oh....that is right, i was gambling and you know what? I bet with a thousand more hours of studying i would still be gambling. I bet the gambling never stops. I have so much to learn and so much chart time ahead of me. This is not a get rich quick scheme. Hell, i am convinced you can't get rich without rainman powers and a zillion dollars of starting capital. It's fun, it's exciting, and it's a whole new world that has just opened up to me. So, if you are brand new like me to this world like me take heed to what i learned in my whirlwind introduction and don't be delusional.
You are gambling, even with a strategy
There is a 99.9999999999% chance you won't get rich
You are not rainman
Learn Forex because it's fun and exciting, not to get rich (see #2)
I look forward to learning from this community and i'm beyond excited to dive deeper into this world.Thanks for all the posts that are already here and thanks for the ones you have yet to write. People like me NEED to read them. Bring on the (demo) pips!
Hi guys, I'm currently pursuing a bachelor in math. Took some economics classes and really enjoyed them. Have been searching for a career that combines math and finance and found trading. One of the courses I took was Corporate Finance (Berk and DeMarzo). I learned:
What income statements, balance sheets and statements of cash flows are and how to read them
About the time value of money, compounding & discounting, NPV, annuities, perpetuities and the IRR
About bonds, stocks, capital budgeting and FCF
Types of risk, beta, modern portfolio theory, CAPM.
Cost of capital, interest tax shield, leveraged financing
Again, I really enjoyed learning about all this and am kinda asking myself what's next? How do I learn how (Sales &) Trading works? Which books teach me:
What ask, bid, spread prices are.
Meaning of terminology like forex, broker, commodities, derivatives, options and indices and the technical aspects behind them.
What to look for when looking at the chart of a stock?
Any tips on how to "study trading". I'm not talking about new investment ideas, but about how does trading work in practice.
Round Ups and Updates: Trades, Strategies and Results.
Hi, I want to do a post to sort of round up and bring together everything I have been talking about over the last week(s). I know it may seem I have been jumping from one thing to another, but it is not dumping one idea and moving onto the next. It is plate spinning. I will do them all, just working on getting them all running concurrently. Housekeeping First, a bit of housekeeping. For those of you who are not here because you want to be part of a community that is actively focused on profiting from the Forex market, and talking about the real ways of doing that, based on results; the time really has come for you to leave. I am not booting you. You just will not like it here. That is what this group is going to be about. How to generate profits. There are some "Forex traders" here that seem to think that a dirty word, you will find yourself better company somewhere else. That is going to be the focus of this sub. Secondly, for those of you who seem to be here to tell me my strategies do not work ... I was not asking! Especially if you openly admit you have not tried them. I am sure standing 1,000 miles away from a chart and calling it "tea leafs" this stuff will not work well at all. I have not tried that, personally, but it does seem it would be unprofitable. So I get it does not work, for you. I asses if it works for me by if it makes money or not. If the market starts to tell me it does not work, then I will adjust it. You're like people living in a desert telling an Eskimo there is no usefulness in ice. You have not done the work, and refuse to suspend prejudice to asses results ... of course it does "not work". I am only showing people what I do. Via ForexCopy, you can copy my trades if you want. If you ask me questions about what I do, I will gladly help you understand it. However, this is entirely contingent upon you having tried it out yourself (and me being able to tell that from you asking targeted questions). I can only show you what I do. Until you do it, you can not know it like I do. When you are doing it, I will then help you. Trading Okay, onto more useful and practical things. Let's talk trading. Last week went well. I will do another post rounding up the analysis posts and all that stuff. We sorted out issues we had in week one on live copier testing. From the open of the week to the close the account went from around $50 to about $72. https://preview.redd.it/da3vugz7qcb21.png?width=876&format=png&auto=webp&s=aa73f605b98293fd4e12139b50867fc1767838f7 These stats are fuzzed a bit, since it is starting from a DD point (from last week). The actual gain here was closer to 40% or so. The actual draw-down probably more like 7%. https://preview.redd.it/5vxt50ufqcb21.png?width=852&format=png&auto=webp&s=a2135aa0cf72c6d9792d8a1dbf34d8b6fbf93b09 You can see the trades here. Loses tended to come in couples adding up to about 5%. There was not a strong of losses incurring 16% draw-down. $2 Flip Challenge. See first https://www.reddit.com/Forexnoobs/comments/agsnmm/40_1000_flip_challenge_update/ This is on! I busted a few times. First about $2 deposit. Then $1 twice. Then starting from $2 again I got up to $5, and closed the week at $5. $5 give me several chances to catch a decent trade next week. Depending on market conditions, I may look to scalp small profits to bankroll if it is ranging and not flowing much. However, if it is trending, I will look ofr ways to position and then use equity profits to build a larger position (at the same starting risk) and look to flip $1 risk into $10 to $20 +. From there, things will be much easier. I can then just link this with one of the copier strategies and see how much it can be compounded. If we reach $5,000, I will bank $4,000, and then we can look at doing something far more ambitious. I've re-pinned the Myfxbook to start on Friday (since this is the first day getting above minimum viable margin) http://www.myfxbook.com/members/inweedwetrust/40-1000/2893650 (Myfxbook on it is strange at the moment, showing it floating down in equity, but it is not. All trades are closed. I am sure this will fix itself within a few pings in the starting week). Copy Trading Copy trading is ready for a soft launch. Things are running well on current copying accounts and we can add some more. The first one will be a simple strategy, the main aim of this is for it to be broker flexible. So it can be used by a variety of people. Also to be non tome consuming, and not requiring VPS to run. As well as having the option to copy this strategy, you can also use it just as a signals service. Checking if there are orders placed and then placing the same ones manually, if you want. Please understand any trades taken under any form are entirely your decision to make. I accept no liability for loss. You can read about this strategy in full here https://www.reddit.com/ForexCopy/comments/agrttm/simple_trend_signals_strategy/ For this week, we will stick with just this one. This is easy, and low maintenance and it will give us another week of making sure everything works well in the more complex strategies. If you are copying/using signals from this strategy, it would be very helpful for me if you can set up a Myfxbook for tracking the results. Please let me know if you do that. Send me a message (message, rather than chat. I tend to miss a lot of chats). Or post the link here. Through the next week (maybe even all over the weekend), I will publish the other strategy plans. We will not be using them this week, it is just prep for what we will be using going forward presuming week 3 of live testing goes well. Asset Management Competition See first https://www.reddit.com/Forexnoobs/comments/aezw0t/asset_management_competition/ I will start tracking an account for this starting on Monday. No-one else has said they want to take part in this, which is sad. However, I will still do it and provide the benchmark strategy. If others do start to get involved and they are showing reasonable results, I will start to look for someone to sponsor it. Should be able to get those who do well over a year or so at least $50,000 or so in investment for them to test out their wings in real asset management.
[Shibe Market Analysis] Manipulation & the Resilience of Markets
First off, I'm terribly sorry to have essentially disappeared and stopped publishing the Shibe Market Analysis. I've been "undercover", if you will, studying how the market is manipulated by the actor called "Wukong", and other so-called "whales". Here are my findings - Signs of Whale Activity The first signal of whale activity is a sharp increase in the traded volume, typically volumes will spike as much as 10x the normally traded amounts as the whale rapidly floods the market with orders to push the price in a certain direction. Typically this begins by removing a "wall", a large amount of BTC placed as orders at a certain price, which seemingly resists price movement in a direction. The whale often owns the majority of these orders, and by cancelling them causes regular traders to observe that there is suddenly much less resistance to price movement in a certain direction, and this in conjuction with the whale rapidly filling those orders which were not his causes the price to rapidly jump or fall, which in turn triggers "panic buying/selling" on the part of traders watching the price movement and the removal of this wall, which compounds the rapid price movement and causes the market to enter a state of hysteria. A Historic Case The best example of this is on the night of January 20th and early morning January 21st. You can actually see these bars on Dogemonitor. Throughout the day session on january 20th, volumes were noticeably higher, slowly pushing prices upwards. Following this, the first massive price spike occured at 19:00, and BTC was continually pumped into the market to a price of 242 satoshis - this is the effect of the market hysteria caused by those initial large purchases knocking down "sell walls", while simultaneously publicizing the fact that a mysterious chinese investor has come to "pump" doge. Then, an orchestrated effort on their part quickly causes a massive panic selloff, whereupon a few large sell orders "juke" traders into panic selling as they fear the rapid rise will be followed by a rapid fall, and the whale grabs the panic sells as traders panic in a process known as a "shakeout" or "washing", or zhencang. This allows the whale to recapitalize their investment at a lower price, essentially juking traders into selling their assets out of fear, while the whale knows full well when the dust is settled the price will be higher. With regard to the psychological game Wukong plays, he tells those in the IRC to "hold no matter what", serving two purposes - one, it makes sure he remains in control of the bounce back, namely that no one in the IRC "jumps the gun" and pushes prices up before he has a chance to start buying at the rock bottom, and two - those who do fall for his shakeout, despite his warning, are more inclined to trust him and not themselves, as they were just juked out of gains (without realizing it was Wukong who juked them in the first place). Daily Whale Tactics Nevertheless, such a large investment ("pump") on their part is quite expensive, and to recoup and profit from their antics whales have a more insidious and profitable method of profit-generating manipulation than simply "pumping". Studying the chart over the history from January 20th to today, you will notice that within the overall down trend from the high, there are also periodic cycles downwards, where the price holds for some time, followed by upwards, where the price holds for some time. This is how the whale makes money. The process consists of placing a "wall", a large amount of BTC discouraging traders from betting on price movement in that direction, and encouraging greedy traders to bet in the same direction as the wall - e.g. a sell wall at 165 encourages traders to sell at 164, to try and "undercut" the wall. The whale knows this, and happily will buy up all the sell orders coming in at 164, causing the market to "stall", essentially pausing any movement while the whale quietly accumulates doge. Occasionally a whale will allow prices to fall even further, should the selling ramp up, and then move the sell wall down, allowing the whale to continue racking up doge at cheaper and cheaper prices. Once the whale has accumulated a hefty position in doge, he removes the sell wall and simultaneous places large buy orders at prices higher than market, pushing the market up and inciting traders to quickly buy in, in anticipation of a pump. This causes a rapid escalation in prices, and further large buys placed by the whale allow him to influence the other traders to push the market to whatever price target the whale has in mind. At this point, the whale locks in the price by placing the remaining BTC he has as a "buy order" at a price slightly lower than market, encouraging the traders to place buy orders slightly above his wall. The whale slowly sells the doge he bought earlier when prices were lower to this trickle of buyers, and can then continue to repeat this process by using walls to influence the market before rapidly changing the price, all the while extracting smaller traders' capital. This process is akin to how wolves or predatory whales intentionally herd and then trap their prey, and is very much rooted in influencing the psychology of other traders, particularly by spreading disinformation and by taking advantage of the fact that crypto-traders have less experience with valuations based on fundamentals, and are more akin to rely on technical analysis, the information immediately presented before them on cryptsy, and rumors and hearsay in making their trading decisions. It also makes great use of herd mentality and the tendency of inexperienced traders to panic. Whale Signals You may wonder what happens when two whales are present, and how whales are able to coordinate their efforts - I've found that this is done through the chart, and that before a major price movement, a whale will announce their intent to other whales that may be in the market through a high volume bar, much higher volume than those surrounding it, that will rapidly push the price in the intended direction and then bring it back down immediately, which appears on the chart as an "arrow", marked by high volume and a large extruding wick in the intended direction. Should another whale disagree, they will use the same process to signal in the opposite direction, or if they agree will re-signal the same arrow. I am murky on the details, but through this process they reach an agreement and will move the price in the intended direction once all the whales have finished their transactions at the current price. Whales realize it is to their benefit to work together, and so will swallow their pride and allow the market to move against them in the short-term in order to continue the highly profitable "milking" of smaller traders in the long-term. Extreme Price Manipulation In addition to the usage of walls, I have observed a second, more extreme technique used to move the market when the strength of small traders is not enough, which Wukong refers to as "one hand to the other". The process, when intended to push the market up, has the whale place a sell order at a certain price, and simultaneously place a larger buy order at that price, rapidly causing the price to escalate to that price and consuming all sell orders in between, including the sell order placed by the whale. This causes an even more extreme movement of small traders than simply walling, as traders watching the price rapidly flock to the movement caused by the whale, causing an even more extreme price change. Repeated usage of this technique can cause the price to soar or tumble very rapidly, and is possible because it constantly recycles the holdings of BTC and doge in the whale's portfolio. However, there is a limit set by those orders which have to be eaten in order to move the price, and this places a constraint on how far the whale can move the price with their singular portfolio - it is possible that a group of whales combining their portfolio values to move the market can cause stupendous movements, like the one on January 20th - 21st. Notes about walls It is important to remember that the "walls" that are placed can be seen by everyone, and since a whale does not want you to catch onto their activities, the walls are meant to trick you. I have observed that whales actually place very small, typically 1000-10000 doge orders, repeatedly very quickly through the use of automated "bots", programmed using the cryptsy and other exchanges API. The walls are a distraction to allow their true trades to go undetected, and smart shibes will make it a point to discount the information gleaned from analyzing the dealbook. It is much more informative to instead study the actual market order history, as these are the orders than have been placed and can't simply be removed by pressing a button - often times you will find that even though a large sell is in place, the market order history shows that BTC is flowing in to doge - meaning prices will rise shortly. What it means to you These tactics are not reserved to dogecoin, and while doge may be past the point that a single group can manipulate the price, these same tactics will be used in other crypto-markets until exchanges take it upon themselves or governments mandate that the same rules governing forex and futures markets be applied in crypto-markets. Traders should be wary in the mean time. A small trader can still compete in this environment, especially armed with the above knowledge. In the IRC, I noted one specific small trader using the moniker "WhaleWhisperer", who was able to accurately read the whale signals and profit from their manipulation. Nevertheless, constantly watching the market and playing the psychological warfare game of the whales is taxing, and being wrong without solid risk management can rapidly erase value from a trader's portfolio. Traditional advice and strategies of finance are the most solid protective measure a small trader can take against manipulation, namely portfolio diversification (try to hold a good chunk of your portfolio in BTC, perhaps some LTC or other scrypts, and never more than 50% of your crypto net worth in doge, no matter how strongly you believe in it), re-allocating your portfolio after large price movements, and proper risk management on trading (never trade more than 10% of your portfolio value, and you should aim to only actively trade 2% or less). AFK trading, by which I mean deciding on good entry and exit prices beforehand, placing your orders, and then leaving your computer, is also an excellent strategy to avoid the mind games played by whales on tired and impulsive traders glued to their screens. Finally, having a fundamental valuation method allowing you to create your own "fair value" of DOGE is probably the strongest weapon against market manipulation. If your model is sound and correct in the long-run, prices will converge to your forecast, and your mind will be all the more stronger against manipulative tactics because of your deep-seated faith in your model. Put shortly, a fundamentals-based valuation is the defining line between "trading" and "investing". In subsequent articles I will outline how you can construct and use such a fundamentals based model. Happy trading shibes, and I'm glad to be back to this wonderful community. It's truly the community at /dogecoin and the related subs that instills long-lasting value in doge, and I hope that long after we get past market manipulation and have reached the moon that the same supportive community still exists. Disclaimer: I am not psychic and do not actually know where the market is going; I'm pretty sure the market doesn't know where its going either (except TO THE MOON!). Please do not base your trading decisions solely on the above analysis, and never trade more than you're comfortable losing. Finally, please do not hate/sue me if trades don't go your way, but if they do go your way, it was totally because you read this article :) If you're looking to learn how to trade or just want a quick refresher, check out my ongoing series, or if you just want to subscribe to these market analyses check out DogeTrader.
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