In this episode of Truth About FX, Walter talks about the most aggressive trading system — and is there really such thing? He talks about positioning and what makes an aggressive system “aggressive”.

Download (Duration: 04:24 / 5:04 MB)

In This Episode:

00:34 – aggressive and crazy

01:43 – more sophisticated

02:45 – super aggressive

03:56 – pancaking

05:54 – worth a lot

07:16 – it kills you

Tweetables:

Pile onto a winner like a pyramid [Click To Tweet].

Never loose sleep because of a trade  [Click To Tweet].

Adjust your stop loss  [Click To Tweet].

Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter. This question comes quite a bit but what is the most aggressive trading system you’ve ever seen?

Walter: Wow, there’s so many. I mean, you know any kind of a Martingale thing is pretty aggressive and seems crazy to me but I guess if we’re just talking about something that I consider tradable, probably systems where you’re really piling in on a winner.

Like, pyramiding or some sort of pyramiding system where you add to your winners. I used to do this about ten years ago. Now really — nine years ago now — what I used to do is whenever I was giving in a strong trend, I would add positions as it gets closer to my target.

Now, I wouldn’t do it on every position but I did it on those where it looked like the market had a long ways to go. So if it looks like it can move really, really strongly in my favor — if it went — I would add these positions and it would be like for example, you took 3 lots in your first position then it goes 50% on the way to your target, I might add 5 lots.

Then it goes 70% to my target, I might add 6 lots and then when it goes 80% to my target, I might add 9 lots. I’ve got like all of these at the end of the position. You’ve got so many and there wasn’t really any breakeven set. I didn’t have breakeven thing.

I am more sophisticated now. I use sort of a breakeven thing. A lot of traders do this where if it retraces against you, you get popped out breakeven rather than actually risking too much. But, back in those days, I would set an alarm.

So when these got triggered, I would have to wake up usually in the middle of the night when the New York Session starts trading and I’d go in and basically get out of these crazy positions where I had… You know originally I had 3 lots on, now I’ve got 14 or something.

To me, that was probably I guess the most aggressive system. It’s difficult because you had to be really quick to get out of those even if you haven’t necessarily hit your target and you have to be okay with your last position, maybe even losing a little bit of money because there’s risk on that.  

From my point of view, as a tradable system, that’s probably the most aggressive but any of those systems where they have a loser then they double down and take twice the...