JANUARY 2018
The plan is to open a live account and commence trading from the week beginning Monday January 8, 2018.
Only the D1 Quad Candle System will be traded.
Over the next few posts I will give a few refresher notes about how to trade the method.
The following are the basics:
1) TF = D1 only
2) Template uses MML indicator settings of P=64, MMP=0 and StepBack=0
3) Entry considered after Quad Pattern forms in the extreme MML zones (0/8 to -2/8 for a long; 8/8 to +2/8 for a short)
4) Entry considered in the MML extreme zone without a Quad Pattern
5) Reward to Risk is a minimum of 1 to 1 (preferably 2:1, 3:1 or 4:1)
6) SL is minimum 1 octave gap with 1.5 to 2 octave gaps preferred
7) TP is set as multiples of the SL (min. 1 to 1) and not greater than the upper or lower MML's (-2/8 MML for a short TP or +2/8 MML for a long TP)
8) Additional trades can be applied in a Quad Cycle via trader discretion (octaves, S+R, Fibs, psych levels etc etc)
9) Risk% total limit must be assigned and adhered too (do not exceed the risk% limit assigned to the trading account; be it 1%, 2%, 5%, 10% etc)
10) Manage all the trades within the MML Grid boundaries (upper and lower extreme MML's)
11) After a Quad Cycle is completed, look for opportunities to repeat the process.
This is longer term D1 TF trading which means plenty of patience is needed to be successful in this method.
If total risk assigned is 5%, then consider using half of this limit in the earlier stages such as 2.5% because this allows you to add in more trades later if desired including adding into the Quad Cycle after favorable progress such as when the cycle is net positive.
Ofcourse, if price pulls back against your positions and you have some risk buffer then it also allows for adding in a few more trades at higher prices in the case of shorts or lower prices in the case of longs.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Challenge 2
Start Date: January 8, 2018
Monthly Review: end of each month, ongoing
Yearly Review: December 2018 (last trading day) then annually
Finish Date: open at this stage but will be as per FXBlue competition listed end date (please refer to upcoming link for more information)
Trading Platform: MT4 or MT5
Account Type: Live only for FXBlue; Live or demo for myfxbook or TE
Start Equity: US$ any
Deposit Currency: USD only
Risk Limits applied: Max Drawdown % = 29 (exceeding this limit will result in disqualification)
External conditions:
1. A competitor must post their FXBlue user name to this thread asap (so I know which FXBlue account belongs to which FF Forum member)
2. Multiple attempts are allowed subject to satisfying any FXBlue conditions and each numbered attempt noted via posting to the thread.
3. Live accounts may have withdrawals or deposits made at any time throughout the competition without limitation.
4. Leverage must not exceed 500:1 for Live accounts (any leverage is permissable for demo accounts).
5. Only Live traded accounts are eligible for inclusion into the
Quad Candle System Hall of Fame conditions:
(i) Live trading account only (verified)
(ii) Satisfy all competition conditions and have not been disqualified (separate and additional attempts on a live account are acceptable)
(iii) Top 10 traders will be listed in Post 1 on a month by month period based on ranking of E%/DD% ratio,
(iv) Highest Equity%gain:Max DD% ratio,
Note 1: myfxbook data may be used for equity and DD values.
Note 2: FXBlue will determine if an account is to be disqualified.
Example calculation:
Trader A starts with US$1000 in equity in January 2018.
End of the first month (January 31, 2018) equity hits US$1250.
Max DD throughout the life of the account hits 10%.
E%/DD%
E% = ((US$1250/US$1000) - 1)*100 = 25 and DD% = 10
E%/DD% = 25/10 = 2.50
Trader B starts with US$500 in equity in January 2018.
End of the first month (January 31, 2018) equity is US$750
Max DD throughout the life of the account hits 21%.
E%/DD%
E% = ((US$750/US$500) - 1)*100 = 50 and DD% = 21
E%/DD% = 50/ = 2.38
Rankings
Number 1. Trader A @ E%/DD% = 2.50
Number 2. Trader B @ E%/DD% = 2.38
Number 3. ...................................
..........
..........
Number 10. ..................................
Note 1: Additional trade analytics may be applied in the future when determining the rankings.
Note 2: The thread operator reserves the right to vary any of the competition rules or calculations at any time.
Further commentary
The competition should be viewed as a positive learning experience where slow and steady wins the race.
Although I will post month by month trader rankings to Post 1 it is the year end results which are more important.
There is little point in being ranked number 1 for multiple months only to be disqualified before year end due to exceeding the Max DD% limit.
Provided that your DD% remains under the limit and your equity continues to grow over time then your Trading Ratio will continue to increase.
Simple math ...
Consider examples where the denominator (bottom part of fraction ie DD% is fixed as a max constant such as 29%) then since the numerator (the top part of the fraction namely the equity%) has no upper limit the value of fraction must necessarily increase if Equity% increases.
10/29 = 0.34
12/29 = 0.41
13.5/29 = 0.47
15.5/29 = 0.53
32/29 = 1.10
50/29 = 1.72
You get the point I'm sure.
Ideally a trader should seek to minimize DD% and maximize Equity% over the longer term.
After 3 months of trading data a trader can start to look at the Sharpe ratio and the Sortino ratio and other key ratios which I will outline in this thread at a later time.
IMPORTANT:
The disqualification criteria has been set at 29% maximum DD as per FXBlue criteria.
The max DD% means the following as per FXBlue:
"
Maximum drawdown %
If you choose a value for maximum drawdown percentage, competitors are disqualified if they lose more than this amount at any time during the competition.
For example,
a competitor starts with $1000 and increases to $5000. They then lose $2000 from there (leaving them with $3000) - i.e. drawdown of 40%. You have set the maximum drawdown to 30%. The competitor is disqualfied, despite the fact that they are still in profit ($3000 equity versus a starting value of $1000).
"
Source: https://www.fxblue.com/competitions/NewCompetition.aspx
This challenge should be viewed as a trader friendly environment where we all learn to control out emotions and learn from our mistakes and also from the mistakes of others and grow as traders.
Trading the FX retail market with leverage was never meant to be easy but it does offer plenty of opportunity.
At the end of the day it is the trader who makes or breaks the system not the system itself.
I will be anticipating at least a few traders to join Challenge 2 in the early stages followed by others at a later time.
Traders are free to trade any instrument(s) offered by their brokers on either MT4 or MT5.
Note that in general there are more instrument offerings on MT5 than MT4 for example stock CFD's.
As trading progresses over the months ahead I will also be introducing a number of benchmarks to track our trading performance against.
Afterall, if we cannot beat a relevant market benchmark then perhaps we are better off parking our money in an index of some description or a managed fund and let a professional money manager take care of it for us.
If we were trading stocks in the US market we might want to track our performance with the S&P 500 over at least a year with the aim of beating it.
There are several FX benchmarks which I will post at a later time too.
Looking forward to plenty of participation as this makes my time here all the worthwhile.
Good trading,
Masterrmind...........
The plan is to open a live account and commence trading from the week beginning Monday January 8, 2018.
Only the D1 Quad Candle System will be traded.
Over the next few posts I will give a few refresher notes about how to trade the method.
The following are the basics:
1) TF = D1 only
2) Template uses MML indicator settings of P=64, MMP=0 and StepBack=0
3) Entry considered after Quad Pattern forms in the extreme MML zones (0/8 to -2/8 for a long; 8/8 to +2/8 for a short)
4) Entry considered in the MML extreme zone without a Quad Pattern
5) Reward to Risk is a minimum of 1 to 1 (preferably 2:1, 3:1 or 4:1)
6) SL is minimum 1 octave gap with 1.5 to 2 octave gaps preferred
7) TP is set as multiples of the SL (min. 1 to 1) and not greater than the upper or lower MML's (-2/8 MML for a short TP or +2/8 MML for a long TP)
8) Additional trades can be applied in a Quad Cycle via trader discretion (octaves, S+R, Fibs, psych levels etc etc)
9) Risk% total limit must be assigned and adhered too (do not exceed the risk% limit assigned to the trading account; be it 1%, 2%, 5%, 10% etc)
10) Manage all the trades within the MML Grid boundaries (upper and lower extreme MML's)
11) After a Quad Cycle is completed, look for opportunities to repeat the process.
This is longer term D1 TF trading which means plenty of patience is needed to be successful in this method.
If total risk assigned is 5%, then consider using half of this limit in the earlier stages such as 2.5% because this allows you to add in more trades later if desired including adding into the Quad Cycle after favorable progress such as when the cycle is net positive.
Ofcourse, if price pulls back against your positions and you have some risk buffer then it also allows for adding in a few more trades at higher prices in the case of shorts or lower prices in the case of longs.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Challenge 2
Start Date: January 8, 2018
Monthly Review: end of each month, ongoing
Yearly Review: December 2018 (last trading day) then annually
Finish Date: open at this stage but will be as per FXBlue competition listed end date (please refer to upcoming link for more information)
Trading Platform: MT4 or MT5
Account Type: Live only for FXBlue; Live or demo for myfxbook or TE
Start Equity: US$ any
Deposit Currency: USD only
Risk Limits applied: Max Drawdown % = 29 (exceeding this limit will result in disqualification)
External conditions:
1. A competitor must post their FXBlue user name to this thread asap (so I know which FXBlue account belongs to which FF Forum member)
2. Multiple attempts are allowed subject to satisfying any FXBlue conditions and each numbered attempt noted via posting to the thread.
3. Live accounts may have withdrawals or deposits made at any time throughout the competition without limitation.
4. Leverage must not exceed 500:1 for Live accounts (any leverage is permissable for demo accounts).
5. Only Live traded accounts are eligible for inclusion into the
Quad Candle System Hall of Fame conditions:
(i) Live trading account only (verified)
(ii) Satisfy all competition conditions and have not been disqualified (separate and additional attempts on a live account are acceptable)
(iii) Top 10 traders will be listed in Post 1 on a month by month period based on ranking of E%/DD% ratio,
(iv) Highest Equity%gain:Max DD% ratio,
Note 1: myfxbook data may be used for equity and DD values.
Note 2: FXBlue will determine if an account is to be disqualified.
Example calculation:
Trader A starts with US$1000 in equity in January 2018.
End of the first month (January 31, 2018) equity hits US$1250.
Max DD throughout the life of the account hits 10%.
E%/DD%
E% = ((US$1250/US$1000) - 1)*100 = 25 and DD% = 10
E%/DD% = 25/10 = 2.50
Trader B starts with US$500 in equity in January 2018.
End of the first month (January 31, 2018) equity is US$750
Max DD throughout the life of the account hits 21%.
E%/DD%
E% = ((US$750/US$500) - 1)*100 = 50 and DD% = 21
E%/DD% = 50/ = 2.38
Rankings
Number 1. Trader A @ E%/DD% = 2.50
Number 2. Trader B @ E%/DD% = 2.38
Number 3. ...................................
..........
..........
Number 10. ..................................
Note 1: Additional trade analytics may be applied in the future when determining the rankings.
Note 2: The thread operator reserves the right to vary any of the competition rules or calculations at any time.
Further commentary
The competition should be viewed as a positive learning experience where slow and steady wins the race.
Although I will post month by month trader rankings to Post 1 it is the year end results which are more important.
There is little point in being ranked number 1 for multiple months only to be disqualified before year end due to exceeding the Max DD% limit.
Provided that your DD% remains under the limit and your equity continues to grow over time then your Trading Ratio will continue to increase.
Simple math ...
Consider examples where the denominator (bottom part of fraction ie DD% is fixed as a max constant such as 29%) then since the numerator (the top part of the fraction namely the equity%) has no upper limit the value of fraction must necessarily increase if Equity% increases.
10/29 = 0.34
12/29 = 0.41
13.5/29 = 0.47
15.5/29 = 0.53
32/29 = 1.10
50/29 = 1.72
You get the point I'm sure.
Ideally a trader should seek to minimize DD% and maximize Equity% over the longer term.
After 3 months of trading data a trader can start to look at the Sharpe ratio and the Sortino ratio and other key ratios which I will outline in this thread at a later time.
IMPORTANT:
The disqualification criteria has been set at 29% maximum DD as per FXBlue criteria.
The max DD% means the following as per FXBlue:
"
Maximum drawdown %
If you choose a value for maximum drawdown percentage, competitors are disqualified if they lose more than this amount at any time during the competition.
For example,
a competitor starts with $1000 and increases to $5000. They then lose $2000 from there (leaving them with $3000) - i.e. drawdown of 40%. You have set the maximum drawdown to 30%. The competitor is disqualfied, despite the fact that they are still in profit ($3000 equity versus a starting value of $1000).
"
Source: https://www.fxblue.com/competitions/NewCompetition.aspx
This challenge should be viewed as a trader friendly environment where we all learn to control out emotions and learn from our mistakes and also from the mistakes of others and grow as traders.
Trading the FX retail market with leverage was never meant to be easy but it does offer plenty of opportunity.
At the end of the day it is the trader who makes or breaks the system not the system itself.
I will be anticipating at least a few traders to join Challenge 2 in the early stages followed by others at a later time.
Traders are free to trade any instrument(s) offered by their brokers on either MT4 or MT5.
Note that in general there are more instrument offerings on MT5 than MT4 for example stock CFD's.
As trading progresses over the months ahead I will also be introducing a number of benchmarks to track our trading performance against.
Afterall, if we cannot beat a relevant market benchmark then perhaps we are better off parking our money in an index of some description or a managed fund and let a professional money manager take care of it for us.
If we were trading stocks in the US market we might want to track our performance with the S&P 500 over at least a year with the aim of beating it.
There are several FX benchmarks which I will post at a later time too.
Looking forward to plenty of participation as this makes my time here all the worthwhile.
Good trading,
Masterrmind...........
Master your Mind then Master your Trades
