Rants and Trading Philosophy

Johnnykanoo · #1 (**permalink**) 11-02-2012, 11:38

Okay I am starting this thread as a way to talk about my trading philosophy. Anyone with advice or ideas please feel free to pipe in.

Those of you lurking out there here is a chance to be heard

I know I spend a lot of time just talking about ea's and testing but I wanted to talk a little about my thinking and why I test and how I go about having a profitable portfolio.

I'm going to use this thread to discuss these things and please if you have a question or don't understand something please let me know. I enjoy helping people. Actually trading is pretty lonely. My family doesn't care or understand about Forex. My friends don't understand. All they know is they love when I pick up the check at Ruth Chris Steak House. So that is why I post in forums and talk about trading. Without you guys I would have nobody to talk to about trading.

Johnnykanoo · #2 (**permalink**) 11-02-2012, 11:54

Never put all your eggs in one basket is an idiom that basically means diversify. If you put all your eggs in one basket than drop the basket by accident than guess what? All your eggs are broken.

This is also true in trading. If you focus all your efforts or put all your money into one ea or trading method than you risk being unsuccessful. If for example I put all my money into 1 ea and that ea starts to fail than my account will lose value. If I let this go on long enough I will lose my whole account.

What I prefer to do is diversify. As many of you know, I constantly test ea's. To be honest the ea's I have listed here really only scratch the surface of my testing.
More on testing later......

What I like to do is find different ea's that I can run side by side in my account at the same time. This way when one of them isn't doing well the other ea's in my portfolio can pick up the slack. Overall it lends to a smoother equity curve. There is a lot involved in diversifying. You have to make sure that your risk is in order. With ea's this can be tricky. Many ea developers favor eur/usd because they reason that it is the most liquid pair and has the most trade volume so therefore the patterns are more predictable. Here's the thing though if I have 4 ea's trading eur/usd and the are all risking 2% now I have 8% risk running on 1 pair, and this is unacceptable.

Take it from me at the core of successful trading is Money Management

Diversifying your portfolio begins with testing. Forex is a business and you should think like a business man/woman when trading. If you take your trading serious and you want to live off of it, than there is no other way than to treat forex like a business.

Most businesses have on some level "research and development" They spend a certain amount of time and money on developing new ideas and innovations.

I do the same with my portfolio. I take time and effort to test new ea's even when my account is doing great. This way when the markets shift and some of my ea's fail I already have new ea's ready to pick up the slack.

I know it sounds complicated and I'm trying to keep it simple.

In a nutshell say I'm running 5 different ea's and I notice they are not performing well but in the background I have been testing 3 or 4 more ea's and I notice one of them is doing really well. I will take that ea add it to my live account with reduced risk. I would have already reduced risk on poorly performing ea's. And this cycle will continue. If the new ea performs well I take on more risk and at the same time I continue with my testing.

The last thought on this mile long post is I always review my stats. You can't make intelligent decisions without facts.

....till next time....

dantebreath · #3 (**permalink**) 21-03-2012, 04:21

Quote:

My family doesn't care or understand about Forex. My friends don't understand. All they know is they love when I pick up the check at Ruth Chris Steak House. So that is why I post in forums and talk about trading. Without you guys I would have nobody to talk to about trading.

Nice article my friend, I also feel what your feeling, cause forex trading in my country are still new business and does not a lot of people know about this business. The bad thing are some people says thats forex trading are just a gambling game, I really sad when my friend tell me about this.

Johnnykanoo · #4 (**permalink**) 21-03-2012, 10:25

those that think forex is just gambling really just don't understand.

I feel that forex is speculating so in a way it is similar to gambling but the big difference is if it is gambling than we are "the house" because casinos are built to win money. They entice patrons to gamble with the hope of winning but the patrons never realize that the odds are always in favor of the house.

Lets put the odds in our favor my friend this way we can be profitable in the long run and we can show our friends and family that we are not mere gamblers!

Jayden42 · #5 (**permalink**) 02-05-2012, 05:32

Good article. That's always a touchy subject - if FOREX is gambling or not. I suppose people can approach it like it's gambling, and they'll most likely end up losing all their money to the market. However, the tools and techniques to make FOREX "not gambling" are allowed, where techniques to make "gambling" more like FOREX are banned. (Card counting, etc.) I guess it is fair that way

Johnnykanoo · #6 (**permalink**) 08-05-2012, 22:04

The thing about gambling is that it tends to be very emotional. For example where I live tons of people love the Boston Red Socks so maybe they will call there bookie and bet for them but in the process they are completely ignoring the fact that right now they suck!

If you play blackjack maybe you think you have an edge but it is simply not true.

Forex allows us to create an edge and trade with it. As long as we leave our emotions out of it and do proper analysis than we can create, and maintain an edge which will make us profitable in the long run.

Johnnykanoo · #7 (**permalink**) Yesterday, 21:50

hey guys I just hit my 10,000th pip in my test account. It wasn't always easy with automated trading especially with so many people telling me you can't make money with robots lol!!! Anyway I did it.

As many of you know I blew up my test account in August and I had an affiliate commision of $100 deposited in there and from September 1 till now I have earned over 40% including the margin call!! If I filter the margin call out it is actually 84% gain!!!

Anyway here is a screen shot of my 10,000 pips. Anyone can do it and I will be happy to help anyone out if they want. I would be glad to help you set up a balanced portfolio and help you manage your risk so please leave a post a pm or an email and I will get back to you.