....and Tunafish. Okay skip the fish.
I'd like to bring up some things that have been floating around out there for ages.
It deals with the idea that much of a market's movement is akin to a bouncing ball.
Up and down, back and forth until it picks a direction and moves there.
To make that point a true statement, I'd offer a 24 hour period of Time-and-Sales
or tick data for let's say the Euro where the daily range was less than 100 pips
and over 25,000 bids and offers were recorded. Quiet periods maybe only a couple hundred
ticks or so in one hour and during highly active times as many as 2000 prices in an hour.
Okay, so if the market is at range most of the time, bouncing around between
price points, the idea to capture some of that movement gave way to Grids.
The grid discussion has been ongoing on for years. Nothing new there.
When the market finally breaks out, nothing goes straight up or down either.
Martingaling against the trend until a correction/retrace of x # of pips
has been all over the discussion boards for years. All been done before,
Then awhile back, Nip the Pips came up with what I thought was a most excellent
demonstration of how the concept could be put to work employing a fixed method of entry.
With the help of Mr. Jones, an EA was scripted to Boomerang on your MT4
with a fixed lot size, a fixed SL and an expanding TP to capture the eventual break.
I understand Nip is still Boomeranging these days, but is doing some other stuff too.
Then last Fall, FxTraderPro offered another variation of the concept, although not
an automated entry system, it allowed for discretion as to entry, a fixed SL and fixed TP,
but with a Martingale-type lot size progeression. Another useful demonstration of how
your PC (or Mac if you're so inclined) can take alot of the "manual labor" out of trading.
I understand he's doing some other cool things these days too with other systems & methods.
So, here's the deal:
It is entirely possible to tweak some of these methods to a point of profitability
with an extremely minimized (although still existent) chance of ruin.
If you can take 10 or 16 or even 24 "double down" passes without going bust,
you'll probably make a few pips. The heart of the matter seems to be that
however you do it you'll need a considerable sum of capital to either withstand
drawdowns or to post margin with for progressively larger positions.
Considerable only in contrast to the return on investment, not necessarily the actual size of
the bankroll, just the relative size of the capital required to return what these methods typically return.
20~60 dollars per day is not uncommon whereby one might be holding several hundred grand in exposure
waiting for the laws of averages to pan out.
Now I understand that the above equation equals out to a fairly good annualized return.
And you'd have to think in those terms because some of these methods
can take the longest time to show solid results one way or the other
But, these are not returns without risk. What if it bounces too many times
one of these days ? You'd have to "finesse" your way out of the series and
that can be more difficult than picking a market direction in the first place.
Even if it always stayed within a few bounces, say 7, if your Lucky
To keep the risk in check you can't bet very large because of the
compounding/martingaling/progressive sizing. Or, if the size is fixed, then
absorbing drawdown also must keep the trade size small.
Still, it could be tweaked to show the positive return.
Or, if you cut it off after so many passes to preserve capital, then you'll have to
recoup the losses with whatever the market gives you in future passes.
Not sure that this way would even show a positive expectancy over time.
So my point is, How can you make any money like this ?
Would it be wise to tie up 100 Thousand Dollars all year making $50/day
or like 1/2 a pip a day, even though at the end of the year, if you didn't
have a blow up, you'd register a double digit return ??
It's forex after all, and alot can happen in a few months.
And you have to have very few errors with execution and server being up
and never, ever monkey with the system while it's buying and selling.
Shit ! get real.
If it were proposed that it could work out much better on a larger scale,
well, Good God ! You're already trading 1000 lots at a time with IBFX or FXDD
or MT4 whoever using OrderSend() 20 times per iteration(x50 lot max) on an EA,
how much larger is the scale gonna get folks ?
I want to believe that there's more here than just that.
What can be offered to support these type methods that hasn't been
detailed already? Does anyone have any ideas ? Does anybody care ?
Remember, Trade like someone's watching you, because they are ....
I'd like to bring up some things that have been floating around out there for ages.
It deals with the idea that much of a market's movement is akin to a bouncing ball.
Up and down, back and forth until it picks a direction and moves there.
To make that point a true statement, I'd offer a 24 hour period of Time-and-Sales
or tick data for let's say the Euro where the daily range was less than 100 pips
and over 25,000 bids and offers were recorded. Quiet periods maybe only a couple hundred
ticks or so in one hour and during highly active times as many as 2000 prices in an hour.
Okay, so if the market is at range most of the time, bouncing around between
price points, the idea to capture some of that movement gave way to Grids.
The grid discussion has been ongoing on for years. Nothing new there.
When the market finally breaks out, nothing goes straight up or down either.
Martingaling against the trend until a correction/retrace of x # of pips
has been all over the discussion boards for years. All been done before,
Then awhile back, Nip the Pips came up with what I thought was a most excellent
demonstration of how the concept could be put to work employing a fixed method of entry.
With the help of Mr. Jones, an EA was scripted to Boomerang on your MT4
with a fixed lot size, a fixed SL and an expanding TP to capture the eventual break.
I understand Nip is still Boomeranging these days, but is doing some other stuff too.
Then last Fall, FxTraderPro offered another variation of the concept, although not
an automated entry system, it allowed for discretion as to entry, a fixed SL and fixed TP,
but with a Martingale-type lot size progeression. Another useful demonstration of how
your PC (or Mac if you're so inclined) can take alot of the "manual labor" out of trading.
I understand he's doing some other cool things these days too with other systems & methods.
So, here's the deal:
It is entirely possible to tweak some of these methods to a point of profitability
with an extremely minimized (although still existent) chance of ruin.
If you can take 10 or 16 or even 24 "double down" passes without going bust,
you'll probably make a few pips. The heart of the matter seems to be that
however you do it you'll need a considerable sum of capital to either withstand
drawdowns or to post margin with for progressively larger positions.
Considerable only in contrast to the return on investment, not necessarily the actual size of
the bankroll, just the relative size of the capital required to return what these methods typically return.
20~60 dollars per day is not uncommon whereby one might be holding several hundred grand in exposure
waiting for the laws of averages to pan out.
Now I understand that the above equation equals out to a fairly good annualized return.
And you'd have to think in those terms because some of these methods
can take the longest time to show solid results one way or the other
But, these are not returns without risk. What if it bounces too many times
one of these days ? You'd have to "finesse" your way out of the series and
that can be more difficult than picking a market direction in the first place.
Even if it always stayed within a few bounces, say 7, if your Lucky
To keep the risk in check you can't bet very large because of the
compounding/martingaling/progressive sizing. Or, if the size is fixed, then
absorbing drawdown also must keep the trade size small.
Still, it could be tweaked to show the positive return.
Or, if you cut it off after so many passes to preserve capital, then you'll have to
recoup the losses with whatever the market gives you in future passes.
Not sure that this way would even show a positive expectancy over time.
So my point is, How can you make any money like this ?
Would it be wise to tie up 100 Thousand Dollars all year making $50/day
or like 1/2 a pip a day, even though at the end of the year, if you didn't
have a blow up, you'd register a double digit return ??
It's forex after all, and alot can happen in a few months.
And you have to have very few errors with execution and server being up
and never, ever monkey with the system while it's buying and selling.
Shit ! get real.
If it were proposed that it could work out much better on a larger scale,
well, Good God ! You're already trading 1000 lots at a time with IBFX or FXDD
or MT4 whoever using OrderSend() 20 times per iteration(x50 lot max) on an EA,
how much larger is the scale gonna get folks ?
I want to believe that there's more here than just that.
What can be offered to support these type methods that hasn't been
detailed already? Does anyone have any ideas ? Does anybody care ?
Remember, Trade like someone's watching you, because they are ....
