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EURUSD Scapling

  #8 (permalink)

San Diego, Calif. USA
Trading Experience: Intermediate
Platform: ninja trader
Favorite Futures: EUR/USD
Posts: 33 since Oct 2011
Thanks: 10 given, 19 received

good enough

Since May of this year (I took a break from trading about a month prior to May while I switched brokers) my strategy is 47 percent profitable... I had 305 losing trades and 275 winning trades (that's what trade management can do for you I guess ). The problem I have with my strategy is that it "isn't" consistent. It's very sporadic. Most (if not all) of my profit these past several months came from one three week period!

Okay Arich,
the question I have for you now is how much do you win when you win and how much do you lose when you don't?

Are you trading standard lots (100k) mini lots (10k) or micro lots (1k)? Or do you bounce between all three? What's your margin (average) on each trade you've placed?

I once read a long time ago that when you put on a trade there are only 1 of 4 possible outcomes: Win Small..Win Big...Lose Small...Lose Big. Guess which one of the 4 is responsible for traders NOT being successful?

One of my other trading mentors, Bill Williams (author of Trading Chaos) said he only wins about 40% of the time. 47% is good enough if they are good sized winners and the other 53% are small losers.

So for example, let's say over the last 100 trades you won a dollar when you won and lost 50 cents when you lost...

the math looks like this:
100 trades:
47 winners x $1.00 = $47 minus
53 losers @ x .50 = $26.5 for a net of
$20.5 per 100 trades or $2.05 for every trade you place.

This is just an example, and this could be a winning strategy IF the winners are fairly evenly spaced... OR the losers are tiny... OR you are only risking a tiny fraction of your working capital... you may want to plug your own numbers in, if you have them. If these were MY numbers I would only worry about how could I place MORE trades...keep those $2 bills rolling in!

My strategy has three targets, so that helps keep me from giving too much of my profits back. The issue is reaching the targets and breakeven. Since my goals are so lofty, I can go several trades without seeing a profitable one (that bothers me...).

That would bother me too. But your own numbers will answer your questions. Since your losers are bothering you (assuming your strategy is sound) it sounds like you may be betting too large... What % of your capital do you put at risk on a trade? How much margin do you have on any one position?

I use Interactive Brokers, and their spreads average between .5 and 1 pip which seems very reasonable (even in a scalping strategy). But my idea of what scalping is seems to differ from what I've been hearing. Is 10 pips too lofty a goal when scalping?

Whether or not the spreads are reasonable depends entirely on your numbers. For example, in my case, a 1 pip spread would greatly impact my profitability because although I am extremely accurate, my gains are TINY. I may scratch a trade before it moves against me 2/10th of a pip... A one pip spread means I am increasing my "overhead" by a factor of 5!

...Sometimes... I feel the way I trade is like running in front of a bulldozer collecting pennies. lol.

But in your case, you may be able to hold out for the big paycheck and collect 10--20 pips at a pop. More power to you. But the straight answer to whether or not 10 pips is too lofty a goal depends on how often you reach the goal. That is the only way to know.

Are 20-60-and 180 "range no gap" bars available for EasyLanguage?

That I don't know; but I am certain one of the many talented coders here on Big Mike's could probably do it up for you. Hope this helps.

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