Performance & MM Mentoring

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scratty
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Performance & MM Mentoring

Postby scratty » Thu Aug 26, 2010 10:40 pm

Hello out there

Im not able to sleep and thought to just try to give my thoughts about MM and Performance to everyone who is interessted in it.

I like to help traders with problems related to MM and their performance. Im not a trading guru at all but this should just be a platform to give help and receive input for your own trading.

I just like to go back to the basics. The only reason why you should be trading is because you want to make money. What does it mean to make money in trading? It just means that the trader is able to increase the amount of money on his account. It may sound stupid but i didnt understand whats behind this for a long time.

Before thinking of all the details involved in trading you should know what making money is. You are making money not only when your account is bigger than at a previous time in the past. It means that your amount of money is increasing on a consistant way over a long time period.

continued...
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Postby scratty » Thu Aug 26, 2010 10:48 pm

I like to look at the account development as a line of performance on a historical basis. This represents the booked in amount of money in your trading account (analog equity curve in mt4 DetailedStatement) over time/trades.

When im trading i always look at my performance/equity line. This is the most important feedback for the trader if his work is sucessfull or not. It is also a great opportunity to find problems in psychological or mechanical areas.
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Postby scratty » Thu Aug 26, 2010 11:01 pm

Step1:Find your edge
==============
The first thing is to find an "edge". Something that increases the propability of winning over time. Without this edge you are lost. I think there is a lot of great input in other topics on kreslik about this and not what i want to dig into too much.

My message here is that it will be hard to make money without it and you should try to find it the cheapest way possible. Just try things out and increase your equity curve constantly with the smallest possible lot-size. Only when your curve is showing new highs on regular base you found your edge. Dont even think about MM and other Performance stimulators bevore you can tell that you are confident with your edge...
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Postby scratty » Thu Aug 26, 2010 11:08 pm

Step2: Add standard MM
================

By standard i mean the usual approach you all know by risking not more than a predefined percentage of your equity on every trade. I suggest the 1%- Rule is a very good one to start after you found your edge and profed it. Now you continue just doing the same you did with the edge finding (smallest lot-size) just changeing to the 1% Risk/trade mode.

Go on trading like that and see how it develops over a reasonable amount of time that you think is enough to test it. Where you able to make constantly new highs on equity curve? If yes, congratulation you are very close to what i think is the most important stem to become a big trader...
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Postby scratty » Thu Aug 26, 2010 11:11 pm

As for now we archived a level of MM which enables us to increase the lot-size when we are doing good an decrease it when bad. Thats a good start and it prevents you from blowing out of the business to fast and go on making your important experiences...
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Postby scratty » Thu Aug 26, 2010 11:18 pm

Step3: Performance tuning
==================
For now i just wana say that here we try to get the max out of makete with reasonable risk. But honestly i think with the standard MM and the 1% risk mode it takes too much time to increase the equity by what makes it worth the time you are spending on trading...

The tuning is archived by increasing the risk depending on the winning amount of money in the last predefinde period (for ex. a day) but only (thats important!) when it is on a equity high of your curve. This way you should be able to get out much more than with the standard MM.

Rule: Increasing risk >1% of equity only on equity highs!
The basic rule about the tuning method
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Postby scratty » Thu Aug 26, 2010 11:23 pm

sorry for the long post. But i think we have a good point to start the discussions. But please keep it on a general level for the beginning... ok lets see where the journey takes us.

So thats enough for now. Its your turn. What do you think? Whats your view/input?
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Postby scratty » Thu Aug 26, 2010 11:45 pm

Here we see a first view of my equity curve... Wow it is like leting the pants down in public :oops:

My trades have a SL around 10-13 Pips. Risking 1% means i trade at the size of 0.01 lots atm.

lets see how it developes if there is interest in it...
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Help needed!

Postby scratty » Tue Aug 31, 2010 9:00 pm

Hi traders out there. I need help from the pros.

First the good things:
1. Im still in business
2. Im still positive

The bad things:
1. I didnt followed my rules (trading and MM related)
2. My drawdowns of my equity curve are too big.

How can i improve the equity curve? Thanks for your advises...
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Postby scratty » Tue Aug 31, 2010 9:12 pm

I think MOs "never risk more than 4.5 % per week" would be a good start for me...
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