The Black Swan Experiment -
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thread: The Black Swan Experiment

  1. #21
    Fourth option, Take your 400 dollars and run. Highly recommended
    Surely the only reasonable option.... You completly discount that you can lose far more than your balance with CFD contracts.

    If you're in the market with 500 leverage in the event of a significant market event p.e. such as the SNB occasion on Jan 2015 you have destroyed not only your account, you will owe the broker a lot of money, because you will have a hudge unfavorable balance. Forget your stop loss, it won't function in this case.

    Forget about garanteed stop loss or adverse balance protection. No critical broker would offer anything at 500:1 Leverage, and if so, he will be bankrupt soon or is anyhow such an extrem bucket shop your money is already gone by the moment you move it on your brokerage account.

    Betting with 500:1 leverage is simply plain stupid in every possible aspect and a sure way to lose and get destroyed hard and fast.
    There's nothing more to say about it.

  2. #22
    Junior Member Loox's Avatar
    21
    quote I am still learning as we speak, but I am glad that I've realized this very simple truth - RR matters!!! Keep your TP open and SL adjusted move your SL to BE and keep your commerce running until there is a sign that price will reverse - price leaves marks if it wants to reverse, arbitrary movements against your position wiping your SL rarely happens when you're trading with all the momentum and have placed your SL at an optimum point.
    Hi Piquant,
    you're completely right and the experience you have gained is really invaluable, a fundamental truth of trading, I think.
    You may be profitable with average profit significantly less than average reduction but it puts a tremendous strain on maintaining the commerce success rate; and some other winning series hits extremely hard simply because the average losses are larger than the winners.

    The dilemma is it is so comfortable to take little profit after little profit, generally ending the afternoon net up. Equally, it is really difficult to forego small profits over and over, then see them vanish. If I had taken them! But you just have to express yourself to try it, to allow the winners really pay for you. Then the strain is off your required success rate and any losing streak is more readily recovered. On the other side of this equation, you also have to be very edued on the stop loss, keep the winners small and manageable.

    I do believe it is this basic challenge which makes trading so hard for so many, and it is a lot more emotional/plogical compared to the detail of this trading system you employ. It is why the plogical side of gambling is so important.

  3. #23
    I really do strongly believe whatever egy you employ it must embody this concept in some way if you want to win long term.
    I have been tempted to shut transactions at 10pips and less presuming that I am still ending the day profitable, but few poor transactions readily wiped out all of the gains. I have done this over and over again on a live account before my acc balance stood at 5$ from 200$ and I had been trading with 0.01lot mostly sometimes 0.05lot. So I have seen it first hand.

    And I struggle holding transactions, but because I have experienced it all with with real cash I know with 100% if I do not keep my winners larger than my losers I will never come out on top.

    The thing that we as traders need to see is that, cash could be made trading (lot of it) but are you ready to sit through the waves? Price doesn't always go up or down continuously in a smooth trajectory there will be rejection amounts either support or resistance, however in case you are trading along with the momentum FEAR NOT! Your position will endure the minor waves, but if you are trading against the momentum my advice is to halt trading real cash and revert back to demonion until you have learnt to trade together with the momentum.

    I'm still learning as we speak, but I am glad that I have realized this simple fact - RR matters!!! Maintain your TP open and SL fixed move your SL to BE and keep your trade running until there is a sign that price is going to reverse - price leaves marks if it needs to reverse, arbitrary moves against your position wiping your SL infrequently happens when you are trading with all the momentum and have placed your SL for an optimal point.

  4. #24
    Junior Member Loox's Avatar
    21
    Hi, Your experimentation reminds me of something I tried some time ago. My basic method operates intraday on a 10pt cease with a 10 pt goal but I was constantly tempted to take the seemingly easy 3-5pts that the market appeared very frequently to offer at a certain point on every trade. So I ran two parallel accounts taking the very same trades but with one taking 3-5pts whenever offered along with another holding out to close on any expansion move netting at least 10pts. In both scenarios the stop was fixed at -10pts.

    The results were interesting. I could frequently achieve 15 successive winning trades on the 3-5pt method yet at the end of the day the original 10 pt method won hands down. The basic problem was the 3-5pt method necessitated a win rate of 70 percent simply to break even and long winning streaks were wiped out by a short string of losses - something the equivalent of the black swan events within this circumstance. The 10 pt method didn't have this issue.

    It taught me constantly to continue to the winners since squeezing the complete profit potential from these is what pays for your losers and leaves you a net profit. The cost of doing so, though, is largely emotional - seeing little profits evaporate into a reduction. It hurts! But you only need to harden yourself to accept this is how the game needs to be played if you would like to come out on top over the long haul.

    Essentially, cut the losers, run the winners is not incorrect and I really do strongly believe whatever method you employ it has to embody this theory in some manner if you would like to win out long term.

  5. #25
    Ya know... Once I began this, I said to myself, #8220;A big plus for this is restricted exposure in the market - after allyou#8217;re only going to get a couple pips 2 to 3 times every day. The likelihood of getting caught up in a large unexpected news event will be pretty slim. #8221;

    The USD starts rocking , I spot a sign to go long USD/CHF, and immediately after the news breaks about Flynn.

    I left the call to get out after about -30 pips as this was going to be the Black Swan - no 2 ways about it. And seeing that there was still momentum, I got back in shorting the USD to attempt to find a little back.

    Overall, I ended up fairly close to where I began two weeks ago. Not much to say. You run good, you run bad.

    But maybe not discouraged. I#8217;ll pick up it next week.

  6. #26
    Why not fall down to 1m charts for much more exact entries and tighter SL of say 10 pips. No demand for 15m candles when targeting 1 or 2 pips. When account dropped, withdraw half your winnings and replie. This will grow trading account and bonuses steadily but fast as you raise lot size to 2% each pip of new balance, Keep going I presume you have a good chance of preventing the Black Swan
    I'm just not a fan of trading on ultra low timeframes, even when trading. Plus I back tested my approach on 15M and was pleased with it.

  7. #27
    Junior Member Loox's Avatar
    21
    Hello Nico1359,

    Nice experiment. If you are going to be accurate to analyzing an ultra-high risk leverage egy I think you owe it to yourself to keep going full tilt and find out how large the account gets before you - as you have already properly identified - necessarily blow the account. It is going to be a great test of your nerve and that way you will not hesitate to test it for real!
    Good luck!

  8. #28
    Why don't you drop down to 1m charts for more precise entrances and tighter SL of say 10 pips. No need for 15m candles when targeting 1 or 2 pips.

    When account dropped, draw half your winnings and repeat. This will grow trading account and winnings but quickly as you raise lot size to 2% per pip of new balance,

    Keep going I think you have a good Prospect of preventing the Black Swan

  9. #29
    Member niko's Avatar
    56
    quote Honestly, I'm not quite certain exactly what I wish to achieve here either. A huge part of this is trying to ascertain whether my entry egy is legally large winrate or not. It's difficult to backtest because although it does have clearly defined principles, there are times where I will not require a signal for a variety of factors. What I'd love to reach is 100 straight wins for $10K, draw half and then use the remainder to make ~$10K a month. But that seems a little delusional
    Winrate its directly connected to SL/TP and those two are directly joined to the entry point; play with those and you can boost your winrate, you may even turn a mean egy into a wining combo =-RRB-

    Possibly attempt to refine or play with that: SL/TP levels (you dont need a large trend either) and the entry point. . See how much it can boost the strike rate


    also you dont NEED 100 Straight wins to get 10K$. . Consider it, the higher the triumph rate the higher the lot it's possible to put each trade, the higher the return and compound, etc . Trust me; I can certainly hit 1:1 anyday/time like nothing BUT if I try to go to a higher return (1:2 or greater ) the triumph rate goes down a bit AND then I must lower the lot size, wich in turn lower my profit, wich in turn lower my compound, then I must trade more, etc wich its EXACTLY what noobs do: they want to put max 1 percent per trade then target for 1:5436 risk return ratio in order that they require a massive move evey period in order to earn any sort of cash, and conquer the 3 million small loses they purchase, etc .

    Think like a trading championship

    BUT to accomplish that you will need SKILLS wich it appears like you've , you just need a little shift in perception of risk vs return

  10. #30
    Junior Member Ticki's Avatar
    22
    quote Frankly, I am not quite sure exactly what I wish to achieve here either. A huge part of this is attempting to ascertain whether my entrance egy is legitimately large winrate or not. It is hard to backtest because although it will have clearly defined principles, there are instances where I will not require a signal for various factors. What I'd love to reach is 100 straight wins for $10K, draw half and use the remainder to make ~$10K per month. But that feels a little delusional
    Not delusional at all, I am doing it with several degrees of success and mostly failures
    I would suggest going with many accounts or raising the lot size, this way, you'll get profit enough to realize your goal(s) with less number of transactions.

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