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Trading an Equity Millipede

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  • Post #1
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  • First Post: Nov 16, 2014 3:30pm Nov 16, 2014 3:30pm
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
The purpose of this threat is pure journal about trading equity millipede, to track my trades, preparations and results
  • Post #2
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  • Nov 17, 2014 4:19am Nov 17, 2014 4:19am
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
First trade for today
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  • Post #3
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  • Nov 22, 2014 5:19am Nov 22, 2014 5:19am
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
Fundamental principles of my trading method:

Entries

I am looking for low risk entries. Entry method is based on springs and upthrusts (fake breakouts from the range). Entry is done from 5 min. chart.
Entry is done only in the direction of daily trend (buy if the market is above daily open, sell if the market is below daily open).
I want to be in the direction of long term trend.

Some examples below:
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  • Post #4
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  • Nov 23, 2014 5:31am Nov 23, 2014 5:31am
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
Preparation for the next week
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  • Post #5
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  • Nov 30, 2014 3:28pm Nov 30, 2014 3:28pm
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
Result of the last week hindsights:

- none of the hindsights were proven right
- high corelation in XXX/CAD and XXX/JPY pairs
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  • Post #6
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  • Dec 4, 2014 1:58pm Dec 4, 2014 1:58pm
  •  ProsteJa
  • | Commercial Member | Joined Jan 2012 | 388 Posts
Subscribed.
Lose small, win BIG
  • Post #7
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  • Dec 7, 2014 1:49pm Dec 7, 2014 1:49pm
  •  nevie2
  • | Joined Mar 2013 | Status: Member | 71 Posts
How long would you keep your positions if they go positive? 5 minute time frame seems way to short for opening positions you want to keep multiple months...
  • Post #8
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  • Feb 13, 2015 11:00am Feb 13, 2015 11:00am
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
Quoting nevie2
Disliked
How long would you keep your positions if they go positive? 5 minute time frame seems way to short for opening positions you want to keep multiple months...
Ignored
Hi there,

sorry for the late answer, I didnt notice your comment. You are right in some sense. You cannot expect long term growth just from 5 min. price action ( I had to learn really hard way :-) You have to use hindsights from the higher timeframes (Daily, 4H, 1H) and expect the continuation of the trend. In the next post, I will share one of the examples....
  • Post #9
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  • Feb 13, 2015 11:04am Feb 13, 2015 11:04am
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
In this post I will share my first real stacking of positions according to 4H timeframe hindsight on USDCAD. Comments attached directly in the jpg. file. Hope some people are still trying to adapt Graeme approach. This is the first time I get the correst top down approach necessary for this strategy - Hindsight from the higher timeframe and than adding more positions, especially when the candle already formed its wick (on 4H) and is below its open price). Really powerfull concept.
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  • Post #10
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  • Mar 28, 2015 1:47pm Mar 28, 2015 1:47pm
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
Ideas for next week
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  • Post #11
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  • May 29, 2015 3:51pm May 29, 2015 3:51pm
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
Couple of my obsevations regarding this method so far:
- strategy requies a lot of patience, much more than one might think
- curicial is to practice low risk entries, ideally probably try the 3 x 20 excercise Graeme adviced, I am still in progress with this, but it is necessary to be proficient in this area.
- Graeme introduces a lot of great concepts, but it is probably more effective to select just couple of them and try to find the 1 thing for you in the markets
- hindsights are one of the most powerful concepts
- stacking of positions is also very powerful, but must go inline with hindsights, as Graeme said, you have to know WHEN to stack

My current discoveries related to 3 x 20 excercise (I used similiar training):
- if you want to make 20 pips, it is easier done from 1H of 1min timeframe? One 1 minut candle is roughly 3 pips, one 1H candle is roughly 30 pips, so it is easier to predict some 7 1 minut candles to make 20 pips, or to predict just ONE 1H candle? I had far more success with the 1H :-)
- so I am currently entering from 1H, based on "confirmed" breakout" (close outside of range), volatile candles or mainly engulfing pattern and then if I have time, I try to zoom in to 5min/1 min timeframe to stack more position (with very varied results)
- diversification seems harder that one might thing - especially if your balance goes negative for prolonged period of time and your equity is highly volative in range periods with a lot of breakevens.
  • Post #12
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  • Oct 23, 2015 10:47am Oct 23, 2015 10:47am
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
My strategy evolved. I am still trying to implement the original concept in the most clean way possible. I am currently entering mostly from 1H timeframe, based on 1D hindsight. Looking for clear 1D setup and then entering low risk from 1H timeframe.
  • Post #13
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  • Oct 23, 2015 12:10pm Oct 23, 2015 12:10pm
  •  Atokys
  • Joined Aug 2015 | Status: Member | 745 Posts
If by equity milipede you refer to a pyramiding strategy (i.e one that adds to a position as it is profitable) then I have a piece of advice for you that could save you a lot of analysis: Think of pyramiding as building up to an optimal position size. Think of the maximum amount you would want to risk on a single trade from inception and do not pyramid above this amount.
  • Post #14
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  • Oct 23, 2015 5:09pm Oct 23, 2015 5:09pm
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
Hi Atokys,

thanks for the input, but the logic behind the millipede is slightly different, in the terms that you never risk more than position or two, because every position should be moved to BE, before adding another one. In that case, you never risk more then one "trade", you never risk more that your "maximum amount". I find this to me one of the hardest concept to apply and I am currently try to implement in only on daily basis, I mean add only one position per one day, if the first one survives and is safely moved to break even....
  • Post #15
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  • Oct 23, 2015 5:15pm Oct 23, 2015 5:15pm
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
This is a documentaton to a couple of trades I took today. Not all documented yet....
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  • Post #16
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  • Oct 23, 2015 9:38pm Oct 23, 2015 9:38pm
  •  Atokys
  • Joined Aug 2015 | Status: Member | 745 Posts
Quoting Solvermode
Disliked
the logic behind the millipede is slightly different, in the terms that you never risk more than position or two, because every position should be moved to BE, before adding another one. In that case, you never risk more then one "trade", you never risk more that your "maximum amount"
Ignored
Yes, that is understood. While on the surface it looks like you are risking a constant amount at all times, you are really paying for it with your position in the trade. Adding more full sized trades has the effect of increasing your correlated risk. This method maximizes the gains from large trends but increases your portfolio heat in their absence.
  • Post #17
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  • Oct 24, 2015 2:44am Oct 24, 2015 2:44am
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
Quoting Atokys
Disliked
{quote} Yes, that is understood. While on the surface it looks like you are risking a constant amount at all times, you are really paying for it with your position in the trade. Adding more full sized trades has the effect of increasing your correlated risk. This method maximizes the gains from large trends but increases your portfolio heat in their absence.
Ignored
Hey,

If by " increases your portfolio heat in their absence" you mean huge fluctuation in unrealized profit, than yes, but the difference is that I do not consider unrealized gains as profit or loss. I tried to do specific example....see attached. Let imagine that market moves 1000 pips and than reverses 100 pips. In this case you add new position every 100 pips and move it to break even. If my optimal risk is 11 Dollars per pip than the optimal risk size woud be achieved in your case at eleventh trade, decreasing the overal profit to 1/10 of the version with constant risk of 10 Dollars per trade. Live example of EURUSD last year....
BTW how do you arrive to the conclusion about optimal starting risk when you do not know how far the market will go??

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  • Post #18
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  • Oct 24, 2015 2:57am Oct 24, 2015 2:57am
  •  Atokys
  • Joined Aug 2015 | Status: Member | 745 Posts
Quoting Solvermode
Disliked
{quote} Hey, If by " increases your portfolio heat in their absence" you mean huge fluctuation in unrealized profit, than yes, but the difference is that I do not consider unrealized gains as profit or loss.
Ignored
Not only this. You may also face more fluctuations in realized profits
Quote
Disliked
BTW how do you arrive to the conclusion about optimal starting risk when you do not know how far the market will go??
Simple. Think of the maximum amount you would risk on a trade and only pyramid to that amount.
  • Post #19
  • Quote
  • Oct 25, 2015 3:55pm Oct 25, 2015 3:55pm
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
Quoting Atokys
Disliked
{quote} Not only this. You may also face more fluctuations in realized profits {quote} Simple. Think of the maximum amount you would risk on a trade and only pyramid to that amount.
Ignored
But in that case you will limit your potential for profit quite significantly, because you never know how far the market can go, and if you decide to pyramid 10 positions you will hardly ever get so far... but of course it depends on your strategy...everybody has different style and risk apetite...it really depends on your own strategy... will you share your trading explorer?
  • Post #20
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  • Oct 25, 2015 4:27pm Oct 25, 2015 4:27pm
  •  Solvermode
  • | Joined May 2014 | Status: Member | 35 Posts
Couple of pairs i will look at during Monday and also during the week as most of them have also interesting weekly setups. I will wait for low risk entry on 1H timeframe.

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