TRADING AS IF PLAYING NINTENDO GAMES
“I’ve got plenty of losers, believe me, but I go out of my way to keep them on the small side.” – Tim Knight
The good news for an individual trader is, today, you got easy access to investment education and tools that used to be available only to large financial institutions just a little over one decade ago. When I introduced the Sure-fire strategy many months ago, I gave its parameters to any reader who personally sent me a request. Some time later, the strategy was studies more closely and some of its rules were modified in order to bring more effective results. One of my past trainees has suggested that the name for the strategy should be changed to ‘Sure Profits.” You can’t go broke taking a profit.
The screenshots showing how the strategy looks like on charts are attached with this article. This strategy is useful for gaining some pips during trending and volatile markets. It can take advantage of breakouts, while sustaining easily tolerable drawdowns in very bad and choppy sideways markets. My worst drawdown so far was 4% (despite many losses in a row), and this is easily recoverable. The ability to survive has been proven, especially considering the recent difficult market conditions. Losses are limited in that they aren’t allowed to run. Good traders would always give back some part of their profit. However, the point is to give back as little as possible. This strategy is NFA-compliant. It has the problem of generating ‘too many signals’’ per week, since more trades don’t necessarily mean more profits. Good signals can also be missed quickly, but other signals would easily form. Certain signals would therefore need to be cherry-picked.
Often, some traders would want to trade everything they come across in the market, but as the reality points out, it’s far better to develop a system to identify a particular behavior and then wait until that behavior is identified in the market before making a trade. To take advantage of a momentum breakout of a demand level, pending orders could be placed around these levels. Pending orders, apart from filtering potentially bad trades, prevent the intraday trader from chasing the markets. There’s also a benefit of allowing beneficiaries enough time to enter orders before live trading takes place.
This is my report. A valiant soldier came back alive from a terrible battle. He told his family members his own exploits on the battlefield. But he saw on his folks’ faces that they didn’t believe him and he became angrily disappointed. He took 6 sleeping pills, but slept for only 6 hours. He ate 6 plates of rice and smashed the 6 plates. He took his gun and shot 6 chickens. When someone tried to query him, he gave the person 6 dirty slaps. He then told people that his family members didn’t believe his exploits on the battlefield, and that was why he did all he did. If they didn’t believe what he did at war, at least they’d believe his exploits at home since they witnessed them. This is my report.
Details of the Sure-fire Strategy
Timeframe: 30-minute charts
Trading style: Short term
Indicators: ADX and EMA
Indicators parameters: See the attached charts
Entry criteria: As explained in an earlier article, but with some precision modifications
Position sizing: 0.01 lots for each $500
Stop loss: 30 pips
Take profit: 50 pips
Risk per trade: 0.6%
Potential reward per trade: 1%
Maximum weekly drawdown: 3%
Safety rule: Trading is stopped for the week if drawdown reaches 3%
Instruments number: 8
Instruments names: AUDUSD, EURUSD, GBPUSD, USDCHF, USDCAD, GBPUSD, EURJPY and EURGBP
Average orders per week: 10 – 25
Orders type: Pending orders
Signals generation periods: 4 – 9 am GMT, 12 – 3 pm GMT, and 10 pm – 12 am GMT
The purpose of the account below is to enable beneficiaries to see how I set various pending orders, cancel some of them, and close trades; while doing something similar if they wish.
Account name: Sure-fire
Initial deposit: $10,000
Investor’s password: obtainable free through http://www.fxinstructor.com/en/analytics/ituglobal
NB: Please note that the login details have already been sent to my past trainees and subscribers to my trading signals.
Despite the difficult markets, I’ve had over 350 pips with this strategy – in 10 weeks. I need to tell you the truth, I don’t target more than 3% returns per month with this strategy. I’m happy with even consistent 100 pips per month, and if I make far more than that, there’s no problem (as would surely happen in a trending market). Survival on the markets needs more than fluke! I risk very small and get small returns; yet I’m happy. Tall oaks from little acorns grow. Trading is truly a game of longevity, and the best way to stay in the game is to not lose one’s account. If you try to gain $500 per day, you also stand the chance of losing the same amount per day, even more. Please appreciate the existence of your account. The safety of your account is more important than the profit you want to make. Money is a scarce commodity. You mayn’t win a trading competition, yet you can still keep you personal portfolio safe. Many people appreciate the blessings they have only after they’ve lost them. If you suffered a very huge drawdown, then you’d know that moving ahead by 1% per month is a REAL mercy. There are dangerous marketers out there who would often show you huge profits. If you think that small profit is against your mind, you might want to give your retirement fund to money-doublers and then later cherish the experience.
As far as survival on the markets is concerned, I’m beholden to my subscribers. This isn’t by giving them jejune tidbits, but by driving home the importance of risk management (whether they’d take it serious or not). I have proven that the less you trade in and out during the course of a day, the more money you will make. How do you envision the markets overall? More importantly, how do you conceive of your role in the market? Do you see the markets as potentially hazardous arenas in which you must be very, very careful? Do you see them as though everyone in them is out to take your money? Or do you view them as a place in which there is dynamic profit opportunity?
PS: You’d always be updated about the future results of this strategy. Another trading system would be introduced next Sunday. The login details of an account showcasing how trades are taken on it would also follow later.
More nuggets of trading wisdom from awesome Tim Knight end this article:
1. “I’ve been at it this twenty years, and I’m still learning! I think the most important thing I’ve learned is this – - the synopsis of what it takes to be a good trader can easily fit on one page, if not one paragraph. But actually executing those principles consistently is something which runs completely against basic human nature, so it is a tremendous challenge for most people to actually adhere to those principles. The paradox of trading is that what feels right is usually the wrong decision.”
2. “I really want the risk/reward to be in my favor, so the most important thing to me is that the stop price is relatively close and the potential profit is relatively far away (in other words, the potential profit dwarfs the potential loss, because I like operating from the assumption that the trade will probably go wrong). One really great position can make up for a lot of trading “sins” in the past.”
3. “The most difficult rule to follow is to let your profits run. That one, for me, has been atrociously difficult. I can’t tell you how many times I’ve taken a profit, patted myself on the back, and watched the same position continue to move dramatically higher (or lower, in the case of shorts).”
Your questions and opinions are highly welcome.
With best regards,
Forex Signals Strategist, Funds Manager &Coach
Yahoo! Messenger ID: saazalmu
Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal
And my past articles are also available at: www.ituglobalforex.blogspot.com
NB: There is risk of loss in trading, but it is possible to be a successful trader.
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