Set and Forget
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Thread: Set and Forget

  1. #1
    I am sure there were a few people rolling their eyes and with a fantastic laugh at my expense with that name, but I couldn't resist!

    (This thread was originally named The Holy Grail No-Stop-Loss System however I suppose that the Admins did not find that as amusing as I did)

    I have been trying to find a profitable method of trading that truly fit my style. Dare I say it, but after quite a lot of trial and error, I believe I have have developed something which is appropriate for me. It was motivated by a few threads on here, which got me thinking, and that I did quite a bit of manual back-testing, then exchanged it live for a while last year, and since the onset of the year have been applying it with a few good results. I have a set of principles, research certain pairs on Sunday, place my transactions, and check them every evening. Risk is quite manageable, DD thus much has been about 6.5%, and should never reach greater than 10% if that. Expected profitability is all about 0.5percent per week on average, somewhere between 20%-30% per annum. I can live with those figures.

    There are lots of good traders out there, and I am not one of them. I was doing OK with a few divergence trading, but in the long run it just didn't match my style. I had something that could do the job for me.

    No more seeing the charts, no more trying to select entry and exit points, no more getting stopped out only to observe that the transaction bounce right back, or see a commerce in good profit lose it all. It's quite mathematical with only an ounce of feeling for the market. And the last few months has been trading that is relaxing. No volatile returns, but more winners than losers.

    I will trade this manner for quite some time, and that I will require a while to demone its profitability.

    EDIT 05NOV17 according to articles #44 #45, annualised IRR for the previous 9 months is approximately 36%pa. Therefore, I have improved the Take Profit goals per trade for another time, and anticipated profitability a week is currently 0.75percent per week on average, with a revised goal of 30%-40% return on equity per annum. Drawdown has dropped about 5 percent, with a maximum of 10.1percent to date. Together with the revised goals, this could achieve 15%-20%, possibly a little higher. Furthermore, to mitigate broker risk, while I intend to keep on increasing the account size, funds together with the broker will be limited to A$20,000. Once the equity from the account exceeds that amount, sporadic withdrawals will be made and stored in a typical bank account.

    EDIT 23DEC17 All transactions closed out, system reset and I will start again on 08Jan18. Annualised IRR YTD is 33.7%.

  2. #2
    Feline207 does have a point here....

    At the moment, your maximum DD is 6.5percent but that WILL increase over time. The higher you enter DD the harder it'll be for you to recuperate. If you haven't already, you need to make an effort and expand you're plan whenever you do get hit higher DD amounts of 20-30percent or more.

    Trust me, I've been testing no SL egies for over 3 decades. Believe it or not...I made a egy into an EA and the EA backtested for over 22 decades. Since pair behaviors are always changing, my EA/egy wasn't able to adapt to the shift and lost 100% of luckily just my demo account in overdue 2015. The Brexit brought on this. The Brexit situation is merely one instance of a major event that may completely change the behavior of a currency pair. We need to try and get ready for these kinds of events because no SL egies can get hit hard.

    Some advice for you would be to backtest your egy as far back as you can so you are ready for the worst. I didn't do that well enough and my EA lost big. I did understand that over time a SL was what I was missing. Whether large or small it should be implemented as a fail safe for many if not all trading egies. Where this SL should be put is something that you should think of carefully.

    Best of luck.

  3. #3
    Brexit wasn't a Black event. Trump wasn't a Swan event. These were real possibilities we had forewarning of and time to prepare/position ourselves (or outside of) the market. I left some cash. I dropped a little with the US presidential election.

    The earthquake at March 2011 in Japan is something I would class as a Dark Swan event. And that could have taken me to 10 percent DD.

    EurUsd is currently in 1.0550. When the Euro tanks tomorrow, and assuming I stay at the 3 distinct Eur transactions I have in the moment (which is unlikely) my current profit is going to be wiped out around the .9100 mark. When I continue to hold these transactions (again, unlikely), I will find a margin call around 0.4000. I'm not highly leveraged.

    And if the EurUsd drops to 0.4000 overnight or at the area of a couple of days, with no retracements on the way, losing a couple thousand dollars on the FX market is most likely the least of my worries, and no doubt there would be some type of international meltdown with long term impacts, depending on what the cause of this event was.

  4. #4
    Quote Originally Posted by ;
    Feline207 does have a point here.... At the moment, your maximum DD is 6.5% but that WILL increase over time. The higher you enter DD the tougher it will be for you to recuperate. If you haven't already, you need to try to enlarge you are plan when you do get hit higher DD amounts of 20-30% or more. Trust me, I have been analyzing no SL egies for over 3 decades. Believe it or not...I left a egy into an EA and the EA backtested for over 22 decades. Because pair behaviors are constantly shing, my EA/egy was not able to adapt to the change and lost...
    We should have in mind that there are unique drawdowns and he has not specified what exactly he's talking about so I am blindly speaking about this. But. . In any case - if someone trades in such way, he has to know just what is the edge, from what it comes, why and how is it renewable despite the very poor risk to benefit. If it does not happen, market provides a lesson during the tough way and until you have the time to realize, you are already digging a pit in your account erasing barely earned money, a painful experience.

  5. #5
    Quote Originally Posted by ;
    In any case - when someone trades in this way, he's got to know exactly what's the advantage, in what it comes, why and how can it be sustainable despite the very poor risk to reward. If it doesn't happen, market provides a lesson through the hard way and before you have time to realize, you are already digging a pit into your account erasing barely earned cash, a painful experience.
    Hi Feline,

    I believe you have taken the original title a little too literally - that the risk to benefit is actually not too bad at all. The risk on every trade is actually minimal, and like I said above it would take a huge move OVERNIGHT - I'm talking 5000, 8000, or 10000 pips to carry me anywhere near a margin call. And when this occurred a lot of those stop-losses others and you needed may prove to be all but useless anyhow. And a greater concern for me personally (and also for everyone) are my own brokers liquidity and actually getting any funds back.

    I consider losses. I just don't place a definite stop loss at a specified point, S/R lineup, pip amount etc. at the time of entering a transaction anymore.

    The simple fact that you can find 50-70pip moves is precisely what I'm am hoping to benefit from. I am not flipping a coin and taking random trades. Below is my equity growth line. As much as Xmas I was playing with a few thoughts, some worked, some didn't, some had good luck, some'd dollar fortune - you can see it was rather choppy at times. By the start of this season it's been my set and forget trading, which showed consistent returns annually (albeit not large, as mentioned before ), but more significantly this style of trading suits me, and works for me. That is all I'm saying.

    Good luck with your trading

  6. #6
    Quote Originally Posted by ;
    I consider losses.
    Fine then taking losses is the hardest role in trading (I believe for everybody ).

  7. #7
    Start of March, current DD in 3.53 percent, last 2 weeks have gone very well, although the past 2 days has seen that the equity fall back a little. Still in a couple of transactions, so there might not be too many new trades able to be entered next week.

  8. #8
    The past two weeks have gone reasonably well, with 5 TPs success week end 12Mar and 9 TPs hit this last week (target per week is 5). DD was 6.5percent last weekend, now at 3 percent, which can be somewhat under the average. I currently have 10 positions available, and I have placed 12 new orders today. I have most exposure to GBP (long), and that's about 31 percent of total exposure, which may be a bit on the large side.

    I've made another $500 deposit today and the new orders placed have been taken based on the new balance. Of course, this affects the stats/percentages in FF, but my IRR since account creation is currently 30.27percent (still exceeding target of 25%)

  9. #9
    Combined effects this week, together with 16 TPs hit, and 1 SL, therefore in that regard a very good week. Equity dropped 1 percent this week although despite all those TPs, and I am currently sitting on roughly 4? (so thats roughly average). I currently have 11 Positions open, with 13 orders placed today. Highest vulnerability is still GPB (extended ), but down to approximately 20%.

    Equity profit MTD has dropped to about 0.8%, therefore below the 2% monthly target, but annual IRR is still over the 25 percent mark in 29.4% so things are still coming along nicely.

  10. #10
    Hello Xeniz

    I find this Intriguing. I'd love to hear proceed how you approach trading, how would you give a couple examples? Maybe of a good and bad trade and you chose them?

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