Advanced Forex Blog

Find a Strategy That Gives You a Statistical Edge in the Market With Positive Expectancy

December 10, 2020 | 1:01 pm | Advanced Forex Blog
December 10, 2020 | 1:01 pm
Advanced Forex Blog
Find a Strategy That Gives You a Statistical Edge in the Market With Positive Expectancy

Learn to think in terms of probabilities and statistics which enable you to trade with an objective state of mind with little emotions, That’s Edmund Advice

Edmund. L, 21 years old, Singapore.

“Find a strategy that gives you a statistical edge in the market with positive expectancy”.

Edmund has just successfully passed our Level 1 with a great trading plan and has become a forex funded trader.

He is now one of our funded traders and is trading with a 52K forex funded account on our platform.

His next mission is to reach 10% of profit and double his funds to 104K.

We spoke with Edmund about his trading plan, insights, and lessons gained while trading in the Forex market and on our platform as a funded trader.

Click here for more Inspirations lessons and interviews from our professional funded traders

 

 

  • How were you introduced to trading?
    When I was in the army, I was finding something valuable to learn. I then came across a Youtube video on stock trading by Adam Khoo and started reading and researching more about it. A friend of mine then convinced me to venture into Forex instead of stocks.

 

  • After how much time did you become a consistent trader?
    I became a consistent trader after over 1year of trial and error. I only became consistent after I found a statistical edge in the market and had a paradigm shift in my psychology and mindset towards trading.

 

  • Do you have a specific trading plan?
    I look for currencies that are on a strong trend indicated by perfectly aligned EMAs on multiple timeframes. To look for high probability setups, I want to see a retracement back to one of the EMAs followed by other confluences such as Fibonacci level or support and resistance level and I will anticipate it to bounce off that level and continue the trend.

 

  • Please describe your trading routine?
    First thing in the morning, I look out for strong and weak currencies using the currency strength meter and mark out the pairs that I am going to be tracking for the day, and place alerts on them. Afterward, I will take a look at the news calendar to see if there is any upcoming major news. I always avoid trading 2 hours before any major news release. When I get an alert, I will then see if its a high probability set up. If there is one or more confluence, I will enter the trade and I adopt a fire and forget approach which means I will let my trade either hit my stop loss or hit my take profit.

 

  • Do you have any risk management techniques? If so, please, elaborate?
    1) Always have a Risk to Reward ratio of at least 1.33.
    2) My stop loss is always between 1ATR and 1.5 ATR.
    3) I adopt the 1% rule so I don’t risk more than 1% per trade per currency.
    4) Do not overexpose your account by having more than one position of the same currency (eg. USD/CAD & USD/CHF). If you really want to trade both then go half the risk on each pair.
    5) I shift my stop loss to breakeven after my trade goes 1:1 in my favor.

 

  • What was your biggest challenge in trading, and how did you overcome it?
    Coping with losses has been my biggest challenge. In the past, every time I encounter a losing streak, I would start to doubt my trading system and seek to learn new systems. I would jump from strategy to strategy and not seeing success in any. I have lost so much money throughout my 1 year of trial and error to the point where I was about to give up trading for good. But I told myself since I have already lost so much, I have to make this work no matter what and I really have got nothing to lose. I settled on one system and made a commitment to trade that system consistently without any deviation and doubt.

 

  • What was the key moment of your trading career?
    The key moment was when I had a paradigm shift in my trading psychology. I learnt that trading success is 20% technical analysis, 30% money management and 50% trading psychology. I learned to think in terms of probabilities and statistics which enabled me to trade with an objective state of mind with little emotions. I used to look at trading in the perspective of a gambler. Now, I see myself as the casino.

 

 

 

  • What do you think are the most important characteristics for maintaining a stable trading career?
    1) Find a strategy that gives you a statistical edge in the market with positive expectancy.
    2) Practise good money management and position sizing.
    3) Master trading psychology to have the discipline and confidence to execute steps 1 and 2 consistently without deviation day after day.
    4) Adopt a fire and forget approach. Do not constantly monitor your trade or the chart once you execute the trade, go do something else.

 

  • Do you apply any mental/psychological routines while trading? Please elaborate.
    Every morning when I wake up, I meditate to have a clear state of mind for the day. I also wrote down 12 trading psychology mantras inspired by Mark Douglas on a whiteboard and I read all of them before I place any trade.

 

  • What was your strategy for successfully passing The 5%ers’ Evaluation Program?
    Risk management was the key to my success. My strategy was to risk 0.3% per trade in the beginning in order to avoid the maximum drawdown. Then after I was positive in the account, I then increased my risk to 0.5%. Because 5%ers is so generous with the dateline, you can be patient and not rush the evaluation.

 

  • Please share your recommendations for online resources that were/are significant in your trading development.
    Trading podcast: Desire To Trade by Etienne Crete, Chat With Traders Trading psychology: Mark Douglas, Adam Khoo Trading books: Trading in the zone, The Disciplined Trader, TurtleTrader

 

  • Would you like to share anything else with us?
    Thank you 5%ers for the opportunity. Looking forward to working together.

 

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