Trading Equity Millipede Concept by Concept
About 6 years or so ago I came across a thread here about position trading. The name of the thread is Building an Equity Millipede. The originator of the thread is pipeasy.
I assume his name was Graeme since that is what he signed his posts as. You cannot be too sure about anything on a public forum as you are well aware.
I started reading the thread while pipeasy was still around, by the time I finished reading it he was gone. And thus far has not returned. I was rather upset at the timing was looking forward to participating in the thread.
I read the thread many times, I did not keep count of how many times I read it. It was definitely more that ten. I tried to implement this method at the time and failed. I say fail, it was more like became dismayed and got tired of trying. His method is difficult to implement. I remember thinking at the time I wish he had laid out a simple step by step plan for us newbies to his method.
I left trading and forex factory for a while, years passed by. I decided to start back trading and it was not long before this thread came back to mind. So, of course, I started reading it again....
This time though I noticed something I had missed all the other times reading his thread....
He actually did lay out a simple way to get started.. How could I have overlooked this before.
In the next post I will explain the purpose of this journal. And then I will lay out the method that I plan to follow.
The simple method is explained in post 11 mainly, there are also details in post 4 and 12 in the aforementioned thread.
Before I show the rules I plan on trading, I wanted to touch on the purpose of this journal.
As I mentioned before the equity millipede thread has been on my mind for years.
It makes perfect sense to me, and looks as though it may be an incredibly profitable way to trade.
All these years and I realized I have not given his concepts a proper test. This thread will start with a very simple trading plan that was explained by pipeasy in the first few posts.
From there, if successful, will add another concept or two from the millipede. Trade that for a while, rinse and repeat until the whole method is understood and implemented.
I believe a lot of people failed because of information overload. They tried to implement too many things at once without full understanding of the concepts.
I know that was one of the main reasons I quit. I learn mainly by doing, I am familiar with the concepts he is trading. But until you trade something for some time you will not fully understand.
I will trade each concept until I fully understand what to expect, and then add another piece. This will take quite some time.
Discussion is welcome here, but please keep discussions on topic to what we are currently trading.
No other subjects from the equity millipede thread until it is time to implement that part.
No negativity, if you traded this and it did not work. I do not want to hear about it. No posts about how this system does not work, cannot work etc..
Honestly, even if I prove to myself that this method will not or cannot work this journal and the time trading it will still be worth it.
Even if I fail miserably, I am positive of one thing....
I will learn quite a bit about position trading and trend trading in general.
So to sum it all up, the purpose of this journal is to forward test the individual parts of the equity millipede. And to piece them together bit by bit into a viable trading strategy.
Starting with the simple trading plan as explained by pipeasy in the first few posts of the equity millipede which I will show in the next post.
Here is the method I will trade.
2:1 Margin. $5000 $1 pip. (Will not be trading $5000 account.)
Find a pair that is trending on monthly. Last 10-15 candles (or less).
Price should be somewhat near the 200 SMA on weekly.
Enter with hard stop loss at open of daily candle. 30/40 pip for majors. 70 pip for crosses.
Move stop to break even next day if it survives.
Keep going until I have 6 positions.
Wait 6 months.
After that will reevaluate and add another concept to the strategy. Will keep doing this until I implement and understand every concept that Graeme introduced.
Will add a trade explorer before I start trading this method.
The trading method above was from post 4, 11, and 12 from Building an Equity Millipede.
In the example pipeasy gave, we should expect 30% draw down. Example showed 1500 loss on 5000 account.
20 in a row losers and break even trades.
Account close to doubled when trades closed.
Those were his expectations.
My only expectations are to follow the plan wherever that may lead. The account will be a $50 account, doing this to learn and understand the methods better. Not expecting to make a bunch of money by any means. And if the account busts its only $50. No big deal. Will trade a nano lot, a penny per pip. Which is the same risk he recommended just on a much smaller scale.
Have started and attached trade explorer for this method. Will be looking for a pair that fits the criteria listed earlier, over the weekend. If I find a pair that looks decent, I will begin trading next week. If not, I will wait till something lines up.
Looking only at majors atm, simply because of smaller risk per trade. A 30 pip stop loss will be .6% risk per trade. Whereas a 70 pip stop loss would be closer to 1.5% risk per trade at a 2:1 margin gearing.
None of the pairs look very good, most are ranging atm. The best looking pair in my opinion at the moment is EUR/USD. Trend is still not certain, may be in a range. Just made a triple bottom on daily Started an uptrend in Nov, 2016, after putting in a triple bottom. Has been down for the last couple of months, but has recently rejected the 1.1600 support area, which is the top of the range/triple bottom that broke during the recent uptrend. One could also argue that price is currently forming a head and shoulders pattern on the monthly, which would signify a short. On the weekly, price has rejected the 1.1600 area 5 times. Is sitting very close to 200 SMA as well. All in all, leaning more towards a long on this than a short.
So will be looking for buys on Eur/USD next week. Will reevaluate next weekend and see if it still is looking valid or if anything else is looking better.
Bought EUR/USD 1.1749 SL 1.1719
Trade 1 Stop Loss moved to B/E
Will probably be taken out soon was only 3 pips away.
Will not be trading today, pinnish looking bar on daily, probably the beginning of a retrace. Will see what tomorrow brings.
Trade 1: Out at BE
Open positions 0
Total trades 1
EUR/USD Buy 1.1749 SL 1.1719
Bullish pin bar, not liking the looks of it really due to the bearish pin bar previously. Looks a little better on the 4 hour. All in all thinking it will go up and can get my stop to BE tomorrow. That is pretty much all I can do. It is up to the market at that point.
Trade 2 hit my stop for a loss of 30 pips.
Loss 1 - 30 pips
Open positions 0
Total trades 2
Nothing about daily makes me want to buy. Will not be buying today, long bear candle. Will wait and see what next candle looks like.
EUR/USD Buy 1.1672 SL 1.1642
Trade 3 stopped out -30. Will be reevaluating over the weekend. Hopefully there is a better looking pair this week.
Loss 2- 60 pips
Open positions 0
Total trades 3
USD/JPY is best looking pair at the moment. Will be buying U/J next week.
Buy USD/JPY 112.42 SL 112.12
Accidentally bought eur/USD and closed it when I realized my error.
Did not realize there is a pin bar that is bearish on daily of USD/JPY. Probably should have waited, price will probably at least retrace before it goes higher. Then again we never know for sure what the market is going to do.
Trade 4 still open, at -15 pips currently. Not opening another trade until I can get this one to BE or until it stops out.
Trade 4 still open currently at +45
Stop Loss moved to B/E.
Loss 2- 60 pips
Open positions 1
Total trades 4
If this bar closes without a long rejection wick, will be buying again today at open of daily.
good luck brah
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