I've been going 3 weeks and doing great. I only trade $USD - $CAD futures, and only 1 direction - short on the $CAD. Normally trade 3 - 4 times a day...some large gains ($50,000 best day ever) but normally $5,000 - $10,000 daily profits. My net profit in 15 trading days is $200k.
Here's my strategy. I start with a short position of 20 CAD contracts. If the $CAD rises, depending on the strength and volume, I dollar cost average up, then profit on the retraction. No fancy programs, feeds, Meta Ninja stuff..just intuition. In 50 trades, I've never lost once.
My current position is now short 210 CAD contracts (September 2013), with a break even price of .9796. If the volume is light tonight, I will cover at .9792 otherwise set a trailing limit of 10 points and see where she heads.
I got a little greedy last Thursday night and I lost out on an extra $100k Friday morning on the huge $CAD rise and fall but there's always tomorrow.
Can you help answer these questions from other members on futures io?
Awesome! Be sure to transfer your gains to an untouchable account, because there's nothing like a beginner's winning streak to lead to a massive drawdown/blowup.
The following 5 users say Thank You to rubyslippage for this post:
The only thing that could blow up my account is if the $CAD rose 10 cents overnight. The only way I can lose with my strategy is if the $CAD rises out of range to continue averaging up and then the contract expires, with the associated rollover costs. I sold my business and have lots of free capital just waiting to continue averaging up, and with smaller 20 contact shorts, I just keep picking away.
I never thought clearing $2000 a day would feel like nothing was accomplished. I find you quickly lose perspective over the dollars when you think how little effort you put out for $2000 (a few pips) when some ditchdigger is breaking his back all day working for $200.
Just a suggestion. Now that you've accumulated some capital, only risk that accumulated capital or at least put a limit on how much of your base capital that you will risk. I know you outline the only way you can lose, but things can happen that you haven't considered and will take your account. At least with my suggestion, if the worst case happens you still have capital to trade with. I wish you the best. Hope you continue posting.
Mike
The following 2 users say Thank You to MWinfrey for this post:
To the OP: Congratulations, and I hope your winning ways continue.
To everyone else, especially newbies: Averaging down, or adding to a loser, with a leveraged instrument like futures is in general a path to destruction. Pretty much guaranteed. The method might be successful for years, but eventually your luck will run out. If you quit before this happens, you are golden. If you don't, you will be broke.
The following 10 users say Thank You to kevinkdog for this post:
3 weeks ago trader doing exactly this making 20k a day got way wrong in CL -$270k wrong lost account and all profits 1 day. Also this trading style has been my worst mistake bc I want to prove I can ride it out.
OP- good to hear of your success hope it continues
The following user says Thank You to Rad4633 for this post:
That's because he averaged in too early and tapped out his capital by going in too big, too early. I take small short contracts on the $CAD (never long) and only average up after a major move.
It worked great for me with $65K cleared yesterday morning at .9792 and now I'm out of the market until I see a noticeable move upwards on the $CAD. Even if it takes a year of waiting, I'm up 31% for the month and year so I've beat almost every fund's annual rate of return already.
I simply fail to see the risk in what I am doing. I've made money in every single trade (about 40 trades) for 1 month and the dollar has been totally random. Its not like the dollar has been predictable or I've been lucky.
I look at it this way. If I went to Vegas with $5 million and only bet $1 every hand, then doubled my bet on every losing hand until I won, I would make money. That's why they limit the spreads for minimum and maximum.
I had savings in a mutual fund that lost 18% in the past 2 months. I've redeemed that money and adding it to the trading capital.
Maximum amount I can lose is pretty straightforward as the $CAD has a definite ceiling and by going short, I avoid the risk of the bottomless pit to 75 cents it sometimes goes to.
