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Part Time Wealth Building Trading System

Quoting tkimble
Yes. Valid entry for you first question.

No. Always obey the indicators. In the case above, when the RSI goes equates to less than 50 and the price is 5 PIPs below the 5 SMA, take the short signal. In rare cases this can happen several times during the 30 min bar but very seldom and your subsequent losses would be minimized...

Hope this helps...

Tkimble
Thanks again for your time!!
Quoting Achilles heel
Hi Tkimble,

Also do you put any merit into the slope/steepness of the RSI or additional distance the price might exeed/fall below the 5SMA when you make your decision to enter?

Thanks again,
Ah.
No. I am not concerned about the amplitude or steepness of the curve. But of course, the steeper the curve in a profitable trend, the more enjoyable the ride...
Quoting tkimble
No. I am not concerned about the amplitude or steepness of the curve. But of course, the steeper the curve in a profitable trend, the more enjoyable the ride...
Thanks for taking the time to answer my questions. I really apprecate your help.

Forex factory is a great place to learn. You've already made a great contribution and I hope you find interesting stuff to help you on your forex adventure!

Best Regards,
Ah.
Quoting Achilles heel
Thanks for taking the time to answer my questions. I really apprecate your help.

Forex factory is a great place to learn. You've already made a great contribution and I hope you find interesting stuff to help you on your forex adventure!

Best Regards,
Ah.
AH:

No problem. I receive more emotional reward by sharing and learning than I do from trading. Trading pays the bills but sharing and learning eases the sole....

Tkimble
Quoting tkimble
This can be tricky and requires close attention. The RSI is updated real time time as the market moves. When the RSI is greater than 50 on a real time basis and the price moves higher than 5 pips above the 5 min SMA, I go long. When the RSI is below 50 on a real-time basis and the price is 5 pips below the 5 min SMA, I enter a sell order with 50 PIP stops in both cases. You can sometimes get banged around but not that often before you will catch the trend.

Hope this helps...

Tkimble
By 5 min SMA, I presume you mean the 5 period SMA. The price movement above/below the 5 period SMA, are you talking about the current price candle, and not the next 30M candle? SO one should not wait until the current candle completes...
Quoting tkimble
AH:

No problem. I receive more emotional reward by sharing and learning than I do from trading. Trading pays the bills but sharing and learning eases the sole....

Tkimble
What a great attitude! Refreshing!

I've taken a look at your ATR calculation and I've got three questions:

1. Am I correct in assuming that the number of lots is expressed as number of mini lots; so an answer of 18 lots would be 18000 units, or 1.8 mini lots?

2. I'm not quite sure what "desired $ per pip" means. If I put it $2 and the calculation gives a postion size of 12 that would be $1.20 per pip. So what does "desired" mean in this context?

3. Does the constant of 1000 in your calculation have anything to do with the Yearn to Earn portion of your MM?

As you can tell, I have an interest in advanced or unusual MM techniques since I know that is where the real power of trading lies.

Thank you

Dial
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  • Post #27
  • Quote
  • Edited 10:53pm Nov 22, 2006 5:25pm | Edited 10:53pm
I have chosen to expose my ideas for the purpose of sharing and learning. If others in the forum feel the idea is not worthy of review, that is fine. Again, I am not trying to pontificate but simply sharing some ideas that have been profitable for me and are yielding profits as I type. If these ideas help you become profitable, great.

But I must emphasize that there is a tendency amongst traders to backtest everything. I refer to it as "Backtestitiz". While I likewise believe this is a good idea, I place more emphasis on results.

It would be somewhat challenging to achieve precise results with backtesting this particular idea becuase of real-time entry signals. Impossible to simulate the emotional roller coaster that one must endure during choppy entry patterns.

I have seen many backtest results that produce what seem to be sterling predicted outcomes but crash and burn when implemented because of the violation of our personal emotional trading thresholds which, together with money management, is the most important trading componet from my perspective. It is somewhat equivalent to legislating an earthquake...

Regards,

Tkimble
Quoting tkimble
I have chosen to expose my ideas for the purpose of sharing and learning. If others in the forum feel the idea is not worthy of review, that is fine. Again, I am not trying to pontificate but simply sharing some ideas that have been profitable for me and are yielding profits as I type. If these ideas help you become profitable, great.

But I must emphasize that there is a tendency amongst traders to backtest everything. I refer to it as "Backtestitiz". While I likewise believe this is a good idea, I place more emphasis on results.

It would be somewhat challenging to achieve precise results with backtesting this particular idea becuase of real-time entry signals. Impossible to simulate the emotional roller coaster that one must endure during choppy entry patterns.

I have seen many backtest results that produce what seem to be sterling predicted outcomes but crash and burn when implemented because of the violation of our personal emotional trading thresholds which, together with money management, is the most important trading componet from my perspective. It is somewhat equivalent to legislating an earthquake...

Regards,

Tkimble
Well said kind sir/madam! Backtesting has it's place and value, but it also has it's flaws. So, please proceed with your kind sharing. I'm 'bout to bust a gut waiting to hear about the other part of your MM method.

Forward test.....Engage!!

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
Quoting diallist
What a great attitude! Refreshing!

I've taken a look at your ATR calculation and I've got three questions:

1. Am I correct in assuming that the number of lots is expressed as number of mini lots; so an answer of 18 lots would be 18000 units, or 1.8 mini lots?

2. I'm not quite sure what "desired $ per pip" means. If I put it $2 and the calculation gives a postion size of 12 that would be $1.20 per pip. So what does "desired" mean in this context?

3. Does the constant of 1000 in your calculation have anything to do with the Yearn to Earn portion of your MM?

As you can tell, I have an interest in advanced or unusual MM techniques since I know that is where the real power of trading lies.

Thank you

Dial
Answers below:

1. Yes

2. The reason for this flexibility is to allow a trader to arbitrarily change the amount of risk that is willing to be assumed.

3. No. "Year to Earn" is completely different but similar to standard "build as your earn" money management systems...

Tkimble
tkimble,

Thanks very much for sharing your system on this forum


Can you please post details of some previous winning and loosing trades using this system?

Regards,

Noel.
Quoting Noel
tkimble,

Thanks very much for sharing your system on this forum


Can you please post details of some previous winning and loosing trades using this system?

Regards,

Noel.
I never post results for fear of dampening your desire and motivation to continue the quest. That is why I only post the system. Ultimately, I am hoping to wean some traders away from testing and into actual trading. But I will share another example.

Look at the current USD/CHF 30 min chart using the 5 SMA and 45 RSI. You would have been short at 1.2501 on 17 Nov 06, same day as my current live GBP/USA trade. Market turned choppy on the 20 and 21 Nov with minimal loss. Then you would have proceeded with the down trend at 1.2427 on 21 Nov and continued to enjoy the ride down to the as I type price of 1.2231. This is only 4 PIPS shy of the 200 PIP target which you would have achieved sometime earlier this morning. Again, the goal is 200 PIPs per trade.

This system works very well in volatile markets (GBP/USD, USD/CHF, etc.).

Hope this helps...

Tkimble
Took profit on this trade which opened on 17 Nov at 1.8876 and closed on 23 Nov at 1.9154. 278 PIPS total profit. Will be waiting for next trade. Took the profit becuase the ATR has dropped off sharply which dampens the volatility and I also achieved my target of 200 PIPS.

Since I use 50 PIP stops I would have to have 5 + consecutive 50 PIP losses to break even on this trade. Very remote probability of this happening...

Tkimble
Hi,
thanks for your post and welcome to the forum.

You say "Long when the price exceeds the SMA by 5 PIPS for the first time and the RSI is greater than 50."
If you wait long enough, price almost aways exceeds sma by 5 pips whilst rsi>50. How long do you wait until u forget the trade?

Thanks
Quoting tkimble
Answers below:

1. Yes

2. The reason for this flexibility is to allow a trader to arbitrarily change the amount of risk that is willing to be assumed.

3. No. "Year to Earn" is completely different but similar to standard "build as your earn" money management systems...

Tkimble
What exactly do you mean by "The reason for this flexibility is to allow a trader to arbitrarily change the amount of risk that is willing to be assumed. ". lol.
Quoting tkimble
I never post results for fear of dampening your desire and motivation to continue the quest. That is why I only post the system. Ultimately, I am hoping to wean some traders away from testing and into actual trading. But I will share another example.

Look at the current USD/CHF 30 min chart using the 5 SMA and 45 RSI. You would have been short at 1.2501 on 17 Nov 06, same day as my current live GBP/USA trade. Market turned choppy on the 20 and 21 Nov with minimal loss. Then you would have proceeded with the down trend at 1.2427 on 21 Nov and continued to enjoy the ride down to the as I type price of 1.2231. This is only 4 PIPS shy of the 200 PIP target which you would have achieved sometime earlier this morning. Again, the goal is 200 PIPs per trade.

This system works very well in volatile markets (GBP/USD, USD/CHF, etc.).

Hope this helps...

Tkimble

You said "I never post results for fear of dampening your desire and motivation to continue the quest."

So your saying the result has not been good? Otherwise it would not dampen my desire to continue.
Quoting FxBabe
You said "I never post results for fear of dampening your desire and motivation to continue the quest."

So your saying the result has not been good? Otherwise it would not dampen my desire to continue.
Again, I do not post long term results. I will share results of existing trades and have provided the system in detail. If you are interested backtesting, go for it. I am trying to get people to believe in a system that works for my and my trading style. There is no gurantee that this system will work for everyone becuase everyone has different trading styles. So, if I post results, some may conclude that it works when in fact the system may not work for a particular persons emotional filters and levels of commitment. Personally, I live, eat and breath the markets. It takes this kind of commitment to make this system work...

Not tyring to be coy but likewise do not want to falsely reinforce someones belief that this system will work for them...

Hope this helps,

Tkimble
  • Post #37
  • Quote
  • Edited 5:20pm Nov 23, 2006 5:09pm | Edited 5:20pm
Hello TKimble,

Questions so I understand clearly:

1) Say you get a valid Buy entry signal and you open a Long trade. However, 200 pips have not been reached and suddenly RSI < 50, 5 pips < SMA (a valid Sell entry signal), what do you do in this case? Do you close the Buy position and open the Sell position immediately even though 200 pips target have not met?

2) When you use 50 pips stoploss, is it a fixed stop or a trailing stop?

3) According to your experience, how many times your 50 pips stoploss have been hit? How many consecutive losses?

4) When waiting for the signal, how do you set sound alert to let you know so that you don't watch the chart all the time since the signal can happen during the time that you sleep?

5) I'm not clear about "$ Per Point" in your ATR spreadsheet. You said "this is the $ per point you would like to gain." I have a Mini account with balance $5K and I'd like to gain $200 so I put 200 in the "$ Per Point" column, and hence the Lot Size would be 1. Correct? But since we use 200 pips target profit, what do I put for $ Per Point?

Thank you for your help.
Quoting EATrader
Hello TKimble,

Questions so I understand clearly:

1) Say you get a valid Buy entry signal and you open a Long trade. However, 200 pips have not been reached and suddenly RSI < 50, 5 pips < SMA (a valid Sell entry signal), what do you do in this case? Do you close the Buy position and open the Sell position immediately even though 200 pips target have not met?

2) When you use 50 pips stoploss, is it a fixed stop or a trailing stop?

3) According to your experience, how many times your 50 pips stoploss have been hit? How many consecutive losses?

4) When waiting for the signal, how do you set sound alert to let you know so that you don't watch the chart all the time since the signal can happen during the time that you sleep?

5) I'm not clear about "$ Per Point" in your ATR spreadsheet. You said "this is the $ per point you would like to gain." I have a Mini account with balance $5K and I'd like to gain $200 so I put 200 in the "$ Per Point" column, and hence the Lot Size would be 1. Correct? But since we use 200 pips target profit, what do I put for $ Per Point?

Thank you for your help.
1. Yes. You reverse postion with every valid signal. Will not always get the 200 PIPs and will endure moderately lossed from time to time.

2. Trailing...


3. I do not count how many times I have had back to back 50 pip losses because I accept it as a dynamic of trading this particlar system. Over time, the 200 PIP wins certainly eclipse back to back 50 pip losses. Drawdowns are very minimal because not many trades are made providing you stay in volatile markets and allow the trends to run. 100 PIPs should be the target for less volatile markets.

4. Depends on the chart. Most trades occur generally around the 3 - 4 and 8 - 9 EST. The 3 - 4 can be a bit challenging but you can generally eyeball the chart as the RSI and 5 SMA approach each other and make your judgement. Yes, sometimes there will be late nights...

5. No. $ per point is an arbitrary risk component for the entire formula. $2 would equate to .2 lots. $10 would equate to 1 lot. So on and so forth.

Hope this helps...

Tkimble
Quoting FxBabe
What exactly do you mean by "The reason for this flexibility is to allow a trader to arbitrarily change the amount of risk that is willing to be assumed. ". lol.
Some traders want to trade .1 and .2 lots and other want to trade 5 to 10 lots...
Hello TKimble,

Thank you for your helpful answers.

Question:

Do you avoid big news days like Non-Farm Payroll, GDP, FOMC? If the signal happen on one of these news days, do you take it?
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