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Old 01-11-2009, 05:59
MusicMan MusicMan is offline
Level 1 Lasers Member
Join Date: Oct 2009
Posts: 10

Yep, same problem here. Worse, I happened to start FX trading during the summer, when the A team was on vacation. With a few indicators and some focus, I was minting (virtual) money! It seemed so easy... 90% accuracy was not uncommon for me in those heady days.

Then, the real traders got back from vacation and boom -- nothing was easy anymore. Oops!

It took me a while to adjust, but I have completely changed my strategy. Instead of manual trading, I now use EAs I have written based on systems gleaned from various FX forums. Sometimes I step in, but only when the EAs need a little help. It's working pretty well for now (knock on wood).

Overall, I think the hardest thing about trading is learning when NOT to trade. When volatility is high, you need more margin to survive the draw down, as SLs must be set further in the red. Otherwise, you just get stopped out on transient spikes, even if your basic trade is sound. My approach to that is to observe several pairs and select the ones that have a certain "Goldilocks" look -- not too quiet, but not too volatile. Then, the EAs (and even I) have a better chance to trade in the black.

The other thing I do is have EAs trading multiple currencies at once. This minimizes the effect of price patterns the EAs don't do well with. Every EA seems to have its Achilles heel market, but it is less likely that several currency pairs will exhibit this behavior at the same time.

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