Items Tagged With April 2006

I am attaching a PDF file that includes all of my trades this week with date/time, P/L, max drawdown, max run-up, and important commentary about the trade including whether I followed the rules.

While I was putting this together, I realized that I failed to follow the rules 50% of the time.  Do you know how many pips I lost because I didn't FOLLOW THE RULES?

113 

How many pips did it cost me for following the rules?

43

This doesn't count the fact that I failed to follow the rules today in my GBP/USD trade that cost me 30 pips or more!  

If I would have followed the rules 100% of the time, I would be about even. 

I take full responsibility for my trades and blame only myself.  I should also note that though this trading system has rules, it is discretionary.

Here is the file:

 Forex Trade Report 28/04/2006,00:08 11.74 Kb   

I was pretty busy at work yesterday so I only had a little bit of time to go through the MACD training lesson.  Not much to report with this lesson.

I have made a decision to start waking up at 3:50 a.m. EST 3-4 days a week to see what this does for my trading.  Rob has told me to apply New York Session rules during this time frame which requires boxing in the price action.  Instead of using the NY time period, the box in will occur between 00:00 GMT and 07:00 GMT which is 8:00 p.m. EST - 3:00 a.m. EST.  

Rob has said that it is important to do the audio/video stuff daily.  At the end of the NY trading session, Rob posts multiple videos for multiple pairs with his trading commentary which I find very beneficial.  He calls this Charting School.  Since he will be back at his home base next week, I believe he posts charting school before the session also which may give me some ideas on setups.

During the first few days of 1 on 1 trading, I am already very satisfied with the direction.  Though Rob has some generic trading strategies and rules that he wants you to learn, he is responsive to your emails and tries to work his strategies around your interests and style.  He even told me that as soon as next week, he will start to post some Euro review session like he does for the New York session.  Now I don't know if this is just for me or if others have requested this but since I will be trading the Euro session in the upcoming weeks, this can only help my trading.

Rob was away this week writing his book which I think we will be getting a pre-release preview of.  

I will try to post as much as possible regarding my 1 on 1 trading going forward.  My posts in the upcoming weeks will give you a pretty good idea of what I've been learning so keep tuned.   

Well, the bottom line is that since my first winning trade, I have had all losers.  It is quite discouraging but part of trading and training.  Rob really recommends using a demo account or a mini-account but I'm going to continue to chug along here.  I am using a lot of Rob Booker's methods with a touch of emotion so my results are in no way related to his performance.  I'll be entering my trades later today so everyone can view my performance so far.  They will be listed to the left menu in, My Trading History or the My Goal & Performance links.

I'm going to put together a spreadsheet for this week to more closely analyze my losses.  Rob Booker's methods for trading the 15 minute chart really don't give more than a 1:1 risk/reward ratio and going forward I would like to keep track of maximum drawdown so that I can see if decreasing the stop/loss is possible.   

I have felt totally lost over the last couple of months.  I have books, charting software, a blog where I receive numerous helpful comments from all of you and yet I don't really have a trading strategy.  I've dedicated a lot of my time to this and though I'm in the early stages, I feel like I need to head off any of the "giving up" feeling that may be entering my mind.  I know that going forward if I don't do something to stimulate my learning process, my blog will be yet another sitting around with stale content because I'm off working for the man again with no thoughts of being free.

So what did I do?  I signed up for 1 on 1 training with Rob Booker.  The training will officially last 5 weeks.  I trust Rob Booker and have been exposed to his recommendations and articles in the past. Here is a quick course overview.  I will keep everyone updated on the training.

Anyone interested in reading more about it can visit: https://www.robbooker.com/training.html 

Course Overview: 

1 on 1 training is exactly what it sounds like: it's where you and I work every day, by instant message, phone, videoconference, and email, and we turn you into the kind of trader that your mother (or spouse) would be proud of. We work together officially for 5 weeks -- following the course outline below -- but I will work with you for as long as it takes for you to be a consistently profitable trader. I guarantee it.

This is not some ridiculous course that you buy and read and then find impossible to profit from. It makes me sick to my stomach when I hear that someone has spent $2,000 or $3,000 for a book-based system. You don't need a book. You need a mentor.

During the training, I become your mentor and your coach with one mission: to dramatically improve your trading results.

Training officially lasts 5 weeks. But we will not stop working until you are successful, or we're both dead. Note: no one has ever died. Every one I've trained has been successful.

You will have my phone number. This is about getting personal advice from someone who has been in the market. I can help you correct your mistakes and speed up your path to trading success.

You will receive course materials, 30-40 assignments, and at least 80 hours of total instruction.

I worked with 41 traders in 2003. All of them are still going strong.

You will always be able to contact me, even after the training is complete. You will be part of a growing network of people I've trained, all across the world.

I have training references. You can request them from me if you are thinking of signing up.

My first day of 1 on 1 training was consumed by just getting acclimated to the program.  I received a couple of generic welcome messages from Rob just to get me on track and then later, we were able to exchange some real messages back and forth.  Rob is on a trip in Washington D.C. writing his book so for him to respond quickly away from his home base is positive.

I went through the first 3 days of the course work which includes PDF and video tutorials.  At the end of each day, you have some real world exercises to perform that are submitted to Rob for review.  Day 1 consisted of the Course Introduction which included some of Rob's trading techniques, information on trading multiple time frames, when to trade, and trading the NY session.  Rob seems to be stressing the fact that if you are a short term trader, trading the NY session is your best option (and maybe only option.)  He has provided steps to trading the NY session.

I skipped Day 2 coursework because it was really for beginners like definitions of pips, currency pairs, etc. 

Day 3 was an overview of moving averages.  I don't think I'm giving anything away if I told you that Rob really likes the 5, 30, 62 EMA's.  This has been well documented on the web.  Just from my own experimentation on 15-minute and hourly charts, I can see why he likes them.

Rob stressed to go directly to the Support/Resistance training which I have started but not yet completed.

I'm guessing that initially I'll be going over a lot of the videos and PDF lessons keeping an open mind on the content that is presented.   

An exciting feature of the 1 on 1 training is group trading.  Rob will partner me up with a group of 4-5 other traders in the world and together, you will determine setup opportunities.  Together we will trade a demo account.  He just asked me what hours I could trade so he can partner me up with a group that can cover the entire 24 hours of trading action.  I can share more with you when I know more.

1 question I asked Rob was how he found the time to trade while he was working full-time.  His answer?  It was brutal because he was waking up at 2am to 3am every day for a long time to trade.  (No pain, no gain)  I'm trying to figure out when I'm going to dedicate time to trading during the 2am-11am EST time frame.  Rob states that getting up to trade at 4am EST will give me many trading opportunities.

Rob is currently working to help me develop a trading strategy and I've made it known to him what I'm interested in (technical indicators.)  He should have some concrete rules that I can tune in a couple of days.

I've received a lot of responses from you with praises of good luck and curiousity.  Thanks for the thoughts.  I feel that this training will not only be beneficial for me but also for all of you.  It has already single handedly increased my motivation and confidence and if I can be successful after training, some of you may decide to go that route also.  I will try hard to give daily updates on my progress.   

During my workout today, I crunched some numbers in my head to see what it would take for me to be able to trade full-time.  I've tried to find these answers on forums like Moneytec.  I know a lot of you may visit forex forums but I don't find them beneficial one bit.  There is too much garbage to sift through.  Someone on Moneytec asked if it is possible to trade Forex full-time and it wound up being a very long thread with no real answers.  It was full of people stating that it was possible, others stating that you needed a million dollars in initial capital to do it, and pessimists stating that it was not at all possible.  Now it may be that this is not an easy question to answer.  I will attempt to run something by all of you and you are free to bash it at will.  My assumptions may be conservative or even unrealistic.  How would I know the real answer to this question because I have not experienced it yet.  

Here are my assumptions:

1. You are consistently profitable now
2. You have a trading system that wins 60% of the time
3. You make 10 trades a week
4. Each winning trade averages a profit of 30 pips
5. Each losing trade average a loss of 30 pips  (Yes, this is a 1:1 risk/reward)
6. You start with $10,000 in trading capital
7. You do not risk more than 3% on any trade
8. You are trading a standard 100K lots
9. You will not pull any capital out of your trading account until you reach your full-time goal
   

The first thing you have to ask yourself is how many lots do I need to trade to make a standard of living that I am accustomed to?  I live in the New York City area and for me to maintain my standard of living, I would really need to make $2400 a week.  If I make $600 a week trading 1 lot, then I really need to be trading 4 lots at a time to do this full-time.

• 1 lot = $600 per week
• 2 lot = $1200 per week
• 3 lot = $1800 per week
• 4 lot = $2400 per week
• 5 lot = $3200 per week
  

You are starting with $10,000 in capital, can only risk 3% on each trade, therefore you can only trade 1 lot initially.  Based on my assumptions, you are making $600 a week.  How long will it take to be able to trade 2 lots?

You will need $20,000 to start trading 2 lots so you must continue to trade 1 lot until you make $10,000 more.  Making $600 a week, it will take 17 weeks or roughly 4 months to reach your 2 pip allowance.

Now you have $20,000 and you're trading 2 lots per trade.   I need to trade 4 lots and preferably 5 lots a trade to make a living doing this full-time.  Trading 2 lots at a time, I'm now making $1200 per week.  How long will it take until I can trade 3 lots?

You will need $30,000 to start trading 3 lots so you must continue to trade 2 lots until you make $10,000 more.  Making $1200 a week, it will take roughly 8 weeks or 2 months to reach your 3 pip allowance.

Now you have $30,000 and your trading 3 lots per trade.  How long will it take until I can trade 4 lots?

You will need $40,000 to start trading 4 lots so you must continue to trade 3 lots until you make $10,000 more. Making $1800 a week, it will take roughly 5 1/2 weeks or a little over a month to reach your 4 pip allowance.

So now you have $40,000 in your account and your trading 4 lots at a time.  You are averaging a profit of $2400 a week.  How long did it take you to trade full-time?

About 30.5 weeks, a couple of weeks more than a 1/2 a year. 

Is this correct?  I want anyone and everyone to rip this theory apart!!!  

Obviously the key here is you have to be profitable before embarking on this journey.  Just being able to do that could take years and years.

The traffic to the site has increased quite a bit since I announced that I will be training with Rob Booker.  Therefore, to make it easier for those of you interested in keeping up with my training, I've added a link to the left menu titled, Rob Booker Posts.  You can also visit http://www.forexproject.com/Rob_Booker_Training/

The posts are neatly categorized by Week so if you click now you will see only the category, Week 1.   You can always go to the above link when you want to just view anything related to my training.