Profits and Losses

[Llamedos]

Hi Neal

While I reckon there is a possibility that you’ve already covered this topic in another video elsewhere. But if you have, I’ve never seen it. And I’m sure you didn’t do anything on it in any of your training courses so I am suggesting that it would be a really useful area to cover in one of your videos if you find 10 minutes spare sometime. The subject I am referring to is that of loss management.

We have all seen quite a few of your presentations on trade set ups and how to manage trades when they are in profit but, I for one, would find it very useful to watch a video and have you talk us through the way you think and react to the market when it takes you into a loss making situation. As you say yourself – there will always be losses – and I am sure we would all benefit from learning a bit more on how to handle them.

And the second subject is one that, again, I have never seen discussed openly by any trader of your calibre and that is the matter of profits.

While I wouldn’t expect you to post up specifics or dollar amounts, I (and I’m sure most of the other aspiring and some successful traders on here) would be really interested to learn what sort of profit percentage you would expect to make during an average trading year. Say, if you had a $10,000 account, what amount would you expect to see in that account at the end of the year without having withdrawn any funds from it.

I know the answer to this really does depend upon the markets and the type of trading year you have had but to have some sort of average benchmark would be useful to many of us I’m sure. I am also aware that this may be one of those questions where you’d prefer to keep the answer to yourself but, hey, if you ask – you might get. If you don’t ask then you certainly won’t!

[FibMaster]

We have all seen quite a few of your presentations on trade set ups and how to manage trades when they are in profit but, I for one, would find it very useful to watch a video and have you talk us through the way you think and react to the market when it takes you into a loss making situation. As you say yourself – there will always be losses – and I am sure we would all benefit from learning a bit more on how to handle them.

This is an important part of trading. Too much emphasis is placed on entry and exit. Trade management is a very important component.

We discuss this type of question in our chat workshops. We use real charts, actual examples etc. This week we had two workshop/chat sessions, I will schedule more. Please watch this web page for workshop opportunities;
http://www.dailyforexcharts.com/chat.html

[FibMaster]

While I wouldn’t expect you to post up specifics or dollar amounts, I (and I’m sure most of the other aspiring and some successful traders on here) would be really interested to learn what sort of profit percentage you would expect to make during an average trading year. Say, if you had a $10,000 account, what amount would you expect to see in that account at the end of the year without having withdrawn any funds from it.

I know the answer to this really does depend upon the markets and the type of trading year you have had but to have some sort of average benchmark would be useful to many of us I’m sure. I am also aware that this may be one of those questions where you’d prefer to keep the answer to yourself but, hey, if you ask – you might get. If you don’t ask then you certainly won’t!

I really understand and appreciate your question. However, there are many reasons not to get into specifics of performance. I doubt you will get professionals to announce specifics in a public forum, except (perhaps, and rarely) to highlight a particularly good week/year etc.

Since I'm registered with the NFA as a CTA, I have significant restrictions on what I'm allowed to say and not say. There are legal ramifications, beyond losing my registration. Whenever you see someone hyping their performance, you can be sure they are not registered, and there is a huge legal risk involved. Beyond that, real people get hurt losing real money, because they are sucked into inappropriate situations.

Another issue is competition. If one person posts his/her personal numbers, for ever there will be websites saying they can do better. There is not much positive that would come out of that situation.

In reality, the answer to your question is "it depends". It depends on so many things that any number you receive in reply is quite meaningless. The performance numbers of one person are not going to be the same as yours. Those numbers change from day to day, week to week, month to month, it depends on so many things. The more time I spend posting answer on the Internet, the less time I can work, the worse my numbers... The more time I go sailing in summer.. The more aggressive you trade, the more risk and the more exhaustion you have, the worse your relationship is with your wife and kids.. My tolerance for risk and exhaustion are not the same as yours, etc. Balance is important.

The only numbers that really matter are your own. You need to track those, be satisfied or work to improve them. If you see another trader's numbers, you can say "wow", but it doesn't really help you. That trader may be about to enter his/her worst year of trading ever.

In short I can say this; December was a month of intense goofing off. I was itching to get going in early January, which caused some mistakes. In contrast, we had some great trends in the last 14 days, so I'm spending more time on the internet today. I deserve a break, it's Friday after all!

I hope you can understand and appreciate where I'm coming from.

[toyogo00]

Hi,

I would like to add few comments:

a. I think over here we are trying to learn the Fib trading method especially for beginners who are still searching for a right method that suit their personality and to build the confidence on using this method. In fact, even with the same method, there are short term, mid term and long term traders which may produce different result by pips. Thus the important point here is to ensure Fib method works for you.

b. Once we have learnt the basic of the Fib method, it all depends on individual's money management including capital size, risk reward ratio, stop loss, profit target, number of winning/losing trades etc. The actual result again is so much different for everyone. I know someone who trades only few mini lots or even micro lots. I also know someone who trades 200 std lots ($2000/pip) and targeting 100-300pips on each trade. As Neal said "If you see another trader's numbers, you can say "wow", but it doesn't really help you."

c. Some websites like to post a good result on each trades are only for marketing. Indeed, I’ve asked Neal to do so (hypothetical trades) to act as a marketing tool on the front page so as to attract more customers.

d. Thus we shall only concentrate on the trading method and the psychological part. We shall trade based on dailyforexcharts video update from Fibmaster, ask Neal for help on analyzing your trade based on your time frame (long, mid or short term), how to refine your SL and profit target; how to apply Fib method in various market conditions (fast thrusting / slow moving) etc. Hopefully, we can build our own trading capability based on Fib method that we feel comfortable. With that capability, you should have positive results in turn of $$$$$$$$$ – the ultimate objectives for every trader!

e. To be frank, I’m not interested to know how much is he earning as it is his trade (not mine and knowing it doesn’t help me at all). But I do know his result is definitely positive otherwise he will be too busy in trading rather than helping us! AND we shall all wish him that his trades are very positive so that he has more time on us! LOL

Regards,
Toyogo

[Llamedos]

Thanks for the replies Neal.

We discuss this type of question in our chat workshops. We use real charts, actual examples etc. This week we had two workshop/chat sessions, I will schedule more. Please watch this web page for workshop opportunities;
http://www.dailyforexcharts.com/chat.html

As you may recall from previous emails, I am not in a positions at the moment to take advantage of your workshops. Maybe at a later stage you'll consider posting one or two of the discussions on the forum for me and any one else in a similar position to research in an 'after the fact' mode?

Since I'm registered with the NFA as a CTA, I have significant restrictions on what I'm allowed to say and not say. There are legal ramifications, beyond losing my registration.

Sorry I didn't know that by answering my question that you would be contravening any rules or regulations or I wouldn't have asked. Nevertheless the other comments were useful.

[FibMaster]

I made recordings of the last two workshop/chat sessions. Unfortunately have not had time to edit them. I may get to it, just so much else to do! Tax season is approaching too, ouch.