Hi

Ive been trading for about 10 months and have recently had my account devestated using the CSR robot (Henry Lui) - but thats another story.

I want to put together my own trading system and have been going through the learning curve. It seems that the MTF (3 ducks etc) approach seems right so that your with the trend and so I want to use this as the basis of my system.

I find myself using less and less indicators in favour of price action, but am wondering if the MTF approach would benefit from 2 further indicators as follows:

1. RSI to make sure the market isn't overbought / sold at the time you enter it.

2. CCI to try and avoid entering the market when its about to retrace / consolidate but going in the right direction (price could be above 60ma on 4hr but on its way back towards the ma).

Would be interested in knowing what anyone thinks? My plan would then be to use this with support and resistance, and limit trading to high volatility times.

I have some time to put this together and test it while I restore / build up my account again :-(

Thanks.

Hi,

Henry Lui - Unfortunately you are the only one to mention this to us - We guess "if it sounds too good to be true ...." has some merits here.

3 Ducks is in our opinion a worthwhile base, as is the "advanced" 1 On 1 session, here is is link to our 3 Ducks 1 On 1 Review. Sarn, another member, is we believe experimenting with adding MACD to 3 Ducks 1 On 1 settings - No update as yet (holidays we believe).

Lastly, you may find the Trading Systems: A New Approach To System Development & Portfolio Optimisation a worthwhile read, thats a link to BookWorms review, we certainly found it a worth while read.

Look forward to hearing future updates.

Hi

Thanks for the reply, very helpful.

In terms of the Currency Strength robot, I do feel a bit grieved by the whole thing, but it has been a learning experience in trust, unfortunately. I am a new'ish trader but was making 20% a month using Forex Gold Trader, and a couple of morning breakout systems. I wanted to add a safe additonal system so that the risk was spread.

Henry Lui sold CSR as something that 'sat on top of the market' picking up pips as it monitored the strength of currencies. He said it was a safe 5% + a month and to think of it like a retirement fund. He also said that no more than 0.5% would be risked on any one trade.

The reality was that I have had more than 15% drawdown on 1 trade, and another 5 trades entered to try and recover the first, all losing. Nothing has been as promised and I still have open losing trades, a floating drawdown of 30% of my remaining account. Other trades hit stop loss for hundrerds of pips. I do not know whether to just close them and take another big hit or wait to see if they come good. They are shorts on AUD/USD, AUD/CAD and long on GBP/NZD :-(

On the positive side (being an optimist an all) its been valuable to see what it feels like to lose lots of my account. I had an unhealthy fear of losing which this experience has helped with. I still respect the trade with a healthy fear, I think but not an imobilising one. Expensive lesson though.

Jeez - What a horror story - Noble of you to be so open and honest with your experiences.

We have all learnt the lesson and we have all learnt the hard way - It is a tough call as to whether someone new to trading can be "taught" enough to prevent them going through at least one horror - Perhaps it's the case that everyone has been through something similar but not everyone is willingly open about it.

Diversification, as you have already mentioned is of course key. We had a system up around 50% in the 1st 5 months of the year (last year) only to end up in negative territory at the end of it. Overall, our SFT account made a profit though, because we were diversified across a number of systems/services. So far this year, having restructured at the end of last year, we are not (which is not so good) - But, the reason for this is that we have yet to find anything else to justify a "System/Service We Use" tag.

We see this oh so often - So called experts, who those new to trading trust and believe, end up not making them a penny (quite the opposite). Perhaps it is the Henry Lui's of this world - Who claim to help newbies - Who actually contribute greatly to their demise and the 80% (or whatever it is) of traders fail statistic.

Be careful out there!

Final update on CSR as I have now manually closed all trades.

I started trading live in January with £1600. By the beginning of April I was up to £2600. I now have £1200. I would like to blame Henry Lui, but I can only do that partially as I was naeive putting CSR live without demoing it for a month or two. Expensive lesson learnt.

Hello Slowbutsure,

Firstly, I don't know what you mean by MTF (Manual Trade ???? ?)

Regarding indicators such as RSI, there is no such thing as overbought and oversold. So often when an indicator shows that the price has gone too far in on direction, you will find that it will still manage to keep going.
They may be useful as part of your strategy, but you shouldn't rely on them as the major consideration.
I would also add that, in my experience, the lower the timeframe the less reliable they are.
We all have different opinions of the effectiveness of the different indicators and one person can incorporate an indicator into their strategy with good success, whereas another trader will struggle.

Keep the amount of indicators on your chart to the minimum and practice practice practice until you are happy that the strategy suits your style of trading and you feel comfortable with it.

Eventually you will find your accrued experience will be the best indicator of all.

MTF = multiple time frames, i think

Hi

Thanks for the advice. The main time frame I'm trading is the 1h.

Another question. I have been look at "scaling out" of a trade. So in the book trading in the zone he recommends taking part of your trade out early on and then another part later and letting the last run. I have been doing the maths on a spread sheet, doesnt this really mess with your risk to reward ratio and lower overall profits? Although it would smooth the losses I guess. Any thoughts if doing this is a good idea?

Thanks

Originally Posted by slowbutsure

Hi

Thanks for the advice. The main time frame I'm trading is the 1h.

Another question. I have been look at "scaling out" of a trade. So in the book trading in the zone he recommends taking part of your trade out early on and then another part later and letting the last run. I have been doing the maths on a spread sheet, doesnt this really mess with your risk to reward ratio and lower overall profits? Although it would smooth the losses I guess. Any thoughts if doing this is a good idea?

Thanks

Whether to scale out or not is really a question that only the individual trader can answer.
When the market is ranging and you watch a trade continuously alternating between profit and loss it can really mess with your head. You start thinking that you should have taken profit at a certain level and avoided the rollercoaster of emotions that you are feeling.
Taking partial profit can be very helpful with some traders as knowing that you have at least taken something off the table can stop you from making rash decisions based on your emotions.
If you have confidence in your strategy and hit full target consistently, then there is really no need to scale out. As long as you can take it on the chin when a trade moves against you after having been in profit.

Hi

Yeah I can certainly see the psychological benefit of that. I guess it doesnt mess too much with the r/r ratio as your loosers would be smaller as well as your winners being smaller.

The other issue im thinking about is adding to a losing trade. I read everywhere that its a bad idea. Im just thinking about a situation that it may be a good idea, example:

You enter a trade with the main trend from a higher time frame and your current time frame. As you enter the price retraces and your losing, it retraces to a support / resistance level and stalls and your indicators suggest the price will go back in the direction of the trade and you wait for price to turn. Wouldn't that be a good use of adding to a losing trade? Assuming that your initial risk was conservative, say 2% and your only going to risk 1% on the 2nd trade. And assuming the trend on your current and upper time frames havent been broken (price still right side of an MA on 1h and 4h).

What does anyone think? Just wondering if its a case where a general rule doesnt cover all situations and needs to be broken!

Thanks.