Euro Forex Pro weekly, August 30 - September 3, 2010

[Sive Morten]

EUR/USD Daily Update, Thu 02, September

Hello everybody,

market has changed daily trend to bullish and reached strong area of resistance that includes - daily Fib resistance, monthly pivot point and weekly pivot resistance 1, so I think that we should expect short term pull back.

Hourly trend is bearish right now.
If you're bearish - wait for some retracement to the upside, then check for trend. If it will be bearish still - you can make a short-term scalp trade, with target around 1.2713-1.2735 area.

If you are bullish - wait, until this pull back to the down side will end at some of the Fib. supports. Then look for hourly trend - when it will shift to bullish at some fib support, you can enter on the long side at some small retracement. The target of this move - at least previous highs around 1.2860 area

 

[rasto007]

Successful trading

Sive,

if we were talking about a professional trader, who can watch his possitions full time and trades real money, at what percentage of return on his starting equity per year would you call him good? What is exceptional?

Rasto

 

[Sive Morten]

Sive,

if we were talking about a professional trader, who can watch his possitions full time and trades real money, at what percentage of return on his starting equity per year would you call him good? What is exceptional?

Rasto

Hm, personally, I Think that is more important the percentage win/loss trades. If we assume, that he or she never enter the trade with risk/reward<1 at minimum, so, I think that if he/she will have 70% wins, this is good. 80-90% outstanding.
Because the yield on initial assets will depend from lot size, risk management, etc.
If you, for example made 1000 trades with win/loss trades ratio 75 % and risk/reward>1, but with small lot as a percentage if your account -
and somebody makes 5 trades with 30% but huge lot at got the same result in cash, so, I think that the first situation is preferable.

And the second is drawdowns of account. You can receive even 1000% per year, but with drawdowns, for example, 60%.This wil not be good result.
Prof. should show graduallity and stability.

 

[Sive Morten]

EUR/USD Daily Update, Fri 03, September

Good morning,

Market didn't show any price action yesterday, may be because of eve of NFP release.
I do not see any interesting right now, and possibly market will not show any price action till release.
I just want to note one fact. Although I've expected that market should bounce to the downside, it didn't, it just stays under resistance. Further more, current price action on 4-hour chart and hourly chart does not confirm trend shift to bearish. Market stays flat instead of moving to the downside. This kind of price action very often leads to the upper break out, until and at least previous highs will not be taken out by the price. This is a minimum target. It doesn't mean that market has to take out these highs. But odds suggest that this is very probable.

 

[rasto007]

Hm, personally, I Think that is more important the percentage win/loss trades. If we assume, that he or she never enter the trade with risk/reward<1 at minimum, so, I think that if he/she will have 70% wins, this is good. 80-90% outstanding.
Because the yield on initial assets will depend from lot size, risk management, etc.
If you, for example made 1000 trades with win/loss trades ratio 75 % and risk/reward>1, but with small lot as a percentage if your account -
and somebody makes 5 trades with 30% but huge lot at got the same result in cash, so, I think that the first situation is preferable.

And the second is drawdowns of account. You can receive even 1000% per year, but with drawdowns, for example, 60%.This wil not be good result.
Prof. should show graduallity and stability.

Sive,

I understand what you mean. Lets continue along what you said. Lets suppose the trader trades at risk/reward = 1 and has 70% win/loss ratio. Lets say his stoploss is at 2% of his account. Is it realistic to expect a good trader to make 2 trades a day and sustain it long term? It would mean appreciation of his equity of 0.8% daily, i.e. 492% annualy. Is this achievable?

The reason why I am asking is to have reasonable expectations. I read somewhere that real good hedge fund managers achieve 20 - 25 % annually.

Rasto

 

[Pueo]

Thanks Sive! Do you have any comments or opinions about using Renko charts versus time based charts?

 

[Sive Morten]

Sive,

I understand what you mean. Lets continue along what you said. Lets suppose the trader trades at risk/reward = 1 and has 70% win/loss ratio. Lets say his stoploss is at 2% of his account. Is it realistic to expect a good trader to make 2 trades a day and sustain it long term? It would mean appreciation of his equity of 0.8% daily, i.e. 492% annualy. Is this achievable?

The reason why I am asking is to have reasonable expectations. I read somewhere that real good hedge fund managers achieve 20 - 25 % annually.

Rasto

Well, you have touched a very large theme... There is a great difference between HF managers and short-term trading. In general, most HF managers do not trade, like here. They invest somehow. There area numerous different aproaches, but not trading short-term. (If even they do - then only for small part of total assets) And the approach to risk management quite different. If they even use leverage - it's very small. So, the return 20-25 % annually - is very good. Because, try to apply our levelrage- 1:50, for example. And you will receive the same numbers. But - the way is different, the money management is different. They just can't allow default. Drawdown - yes, but not a default. So, their possitions are calculated so, even asset will fall to zero, they will not receive margin call.

 

[Sive Morten]

Thanks Sive! Do you have any comments or opinions about using Renko charts versus time based charts?

Hi Pueo,
Well, sometime ago, I 've tried to apply them, but results, did not impress me.
I've tried Kagi as well. May be you'll done better. This is very personall. The way of trading should match to your character, personality,psyche. If something is bad for one person -not neccesary will be bad for another...
Again, it's very personal

 

[rasto007]

Well, you have touched a very large theme... There is a great difference between HF managers and short-term trading. In general, most HF managers do not trade, like here. They invest somehow. There area numerous different aproaches, but not trading short-term. (If even they do - then only for small part of total assets) And the approach to risk management quite different. If they even use leverage - it's very small. So, the return 20-25 % annually - is very good. Because, try to apply our levelrage- 1:50, for example. And you will receive the same numbers. But - the way is different, the money management is different. They just can't allow default. Drawdown - yes, but not a default. So, their possitions are calculated so, even asset will fall to zero, they will not receive margin call.

Sive, I see that the risk taken by a HF manager (with small or no leverage) is much smaller than by a trader operating on 1:50. However, i do not see how it relates to the final equity appreciation in the example I have given. We assumed his stop loss was at 2% of his account. His TP is also 2%. That is not affected by his leverage. It just means that he does not need as much movement in the instrument to achieve it. Am I missing something here?

Rasto

 

[Pueo]

Thanks for your reply. Well, I'm a rookie and you're a pro - the renko helps me to not get faked out so much. Since I put the 3x3 on them I'm really impressed at how it isolates the trend.

Cheers!