NipThePips' Boomerang

Quoting NipthePips

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I posted earlier that you can simply add your spread to the take profit and the stop loss, its no problem. If you want, I can program the excel sheet to include the spread. Ill do that when I get back home today.

Nip

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Quoting NipthePips

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I posted earlier that you can simply add your spread to the take profit and the stop loss, its no problem. If you want, I can program the excel sheet to include the spread. Ill do that when I get back home today.

Nip

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Quoting Pip Rage

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Nip, This is a great concept you've got here. It looks like it should work in thin markets as well as thick.

Thank you .


I'm looking at adapting it to suit my own hours and broker constraints. I was wondering how it works with brokers who haven't got a "stop and reverse" function on their platform. Would you just have to monitor it until you get your profit or is there another (possibly less profitable)set-and-forget option?


The trade shouldnt last that long. Unfortunately I never tested a way you can set it and forget it. other than with an EA. You will have to watch your screen from trade execution to trade ending. This shouldnt take long, as long as you can devote an hour or two to the trade. If you dont have a stop and reverse function...you can either set a stop loss an a pending order, or set the opposite order for double the lots. For example, if you long 1 lot and you got stopped out...instead of having a stop, just have a pending order of short 2 lots, etc etc. When you close all the trades it should still equal out. But test your ideas, if you think you have a way to set it and forget I feel it should benefit many members


For instance, is it practical to just absorb the 10 pip loss from a double stop-out and maybe reload at the start of the next candle with a 20 TP?

I have a similar method where the Initial TP is 30, and the initial SL is 15...I use it on the daily chart...similar techinique, just a few tweaks here and there...and the SL changes as the price bounces. It is profitiable, but sometimes you will have some big drawdowns...But test out your theory and see, make sure you share your findings

I was also wondering if there is a point beyond which you know longer attempt to re-coup ALL the losses. The reason I ask is occasionally I've even seen the pound(which is the a very reliable mover) bounce back across a 15 pip range for many hours.


If it bounces for 15 pips...lets see, 10 pips profit, 2-3 pip spread...your trade should close. Also not all those range bounces will be a valid signal for the trade. Find me one of those 15 pip range bounces on the H4 chart, and I will run a test and see what happens, I will post here when I finish. But yes, I do stop eventually...I have it set to 10 bounces, because that was the most I ever had in testing..Yours can be more or less, depending on YOUR RISK TOLERANCE. I only had it bounce 10 times (with a 10 pip TP) one time...and that was before i re-did the system. Also, if you feel like 10 pips is too much to go for...change the method to a 5 pip profit and 3 pip stop....thats real easy...real real easy. May seem small...but that profit would come in no time.

Do you avoid news releases?

I try to keep it as mechanical as possible...and why avoid news releases...they provide movement in the currency, and movement is what we need in order to make a successful trade.

How many currencies have you tested this on?

Significant test....GBPJPY, GBPUSD, EURUSD, and USDJPY....Significan as in 11+months. I have tested it on others though

Also, would it still be profitable without trailing stop on 50% of the position or is that integral part of this system?

Honestly, all my test assumed that you closed your posistion after the intitial TP without any trailing stop. But some people like to catch trends, so I was trying to open up the oppurtunity to catch the trend and still have safe profits. If you notice, even with the trailing stop system, it is still geared to closing most of your posistion at the initial take profit...you dont need that many pips a day to be profitiable...and no, I am not saying you have to over leverage either...compounding works! But most of the time I still trade it without the trailing stop..especially if I dont feel like waiting for it, and happy with my 5-10 positive pips for the day

Please forgive my interrogative style. Its just that I have rarely come across such an original idea and I think this one has a lot of potential applications
I'm also quite impressed that you mentioned Gratitude in your book.
It's an under-utilised resource in trading circles.

Oh no problem at all! I ask a lot of questions myself. How can one learn anything if one doesnt ask questions. Thank you for your interest in my system. And Gratitude is the key, be thankful for what you have, and what you are GOING TO ACHIEVE. Read this book...The Science of Getting Rich, it is what change my thinking, and it will change yours too. They have it free online now at http://www.scienceofgettingrich.net/


I have a theory about trading and why most people fail at it. I think its because trading has the power to free people from the rat-race and most people are raised to be financially and psychologically dependant on the rat-race. This is where they derive not only their income but also their identity. The two things you need to understand in order to succeed at trading is your edge and yourself. Its sad but a lack of Gratitude normally prevents people from understanding either. It keeps them in their 9-5 forever.
Anyway that's my theory.

WISE WORDS MY FRIEND WISE WORDS INDEED! That frame of mind is what Robert Kiyosaki calls the "E Qudrant", Forex trading is in the "I Quandrant" it is a hard jump to go from the "E Quadrant to the I Quadrant", thats why most people cant grasp it.


I appreciate you sharing The Boomerang with me and good luck with your trading.

No problems at all, thank you!

Ken

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Quoting gnllr

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Nip,

Thank you for your sharing your method and for the outstanding documentation.

Glen

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Quoting billbss

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I don't think it will be that simple.

If the spread is 4 pips, for example, adding 4 pips to both the SL and TP means price will have to move 18 pips to hit the TP and only 5 pips to hit the SL.

I think that will gut any backtesting you've done.

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Quoting NipthePips

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If the spread was 4 pips, that would mean your original TP would be 14 pips, and your stop loss would be 9...not 18 and 5. No it wouldnt gut it, because I have done quick backtesting while considering spread...it was a 2-3 pip spread though. Also, if you find that the spread throws off your trades THAT MUCH, then alter your initial profit goals....change it to 5 pips, and a 3 pip stop...same rules, smaller profit...you can still get rich with 5 pips a day, TRUST ME! That would make your profit goal 9 pips, with a 7 pip stop loss

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Quoting billbss

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If your spread is 4 pips.

You are already down 4 pips when you enter.

In order to make 10 pips price must move 14 pips.

If you raise the TP 4 pips to 14 pips then price must move 18 pips to hit it.


As to the SL. It depends on what you mean by adding 4 to it.

Again, you're - 4 as soon as you enter.

If you set the SL at 5, price must only move 1 pip against you- you've lost 5 pips.

If you add 4- price must move 5 pips against you- you've lost 9 pips.

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Quoting Pip Rage

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Your responses would have taken some time, Nip. Thanks very much. I'll have a bit of play around with some set-and-forget options including your daily time frame.
And thanks for the wonderful link http://www.scienceofgettingrich.net/
More people should be reading this classic. I almost 100 years old and its as powerful now as it was when it was written.


Ken

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Quoting NipthePips

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Dude, your profit goal is only 10 pips. if your spread is 4 pips, you are down 4 pips, then you must get another 10 pips in order to be in 10 pips profit...what does 10+4 equal? It equals 14, so that means you only need to get 14 pips in order to get 10 pips profit...or in other words, add 4 to the TP. meaning a TP of 14. A TP of 18 would mean a net profit of 14 pips. I no where said I was trying to compensate for paying the spread. The one and only goal is to end in profit...that profit i choosen was 10 pips. No matter if i have to enter the trade 450 times...and pay 1,800 pips in spread, as long as I end my day in profit, I can proceed to the next level.


Adding 4 to stop loss means, if you are down 4 pips, you must go down another 5 in order to be stopped out...or in other words, a 9 pip stop loss

This shouldnt be a difficult concept to grasp

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Quoting billbss

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You don't understand bid and ask prices.

For a long you would set a 10 pip TP. You would not add anything to it. 10 pips- period.

Price would have to go up 14 pips to hit the 10pip TP. Not because you have added 4 pips to it, because of the 4 pip difference in bid and ask.

You said to add 4 pips.

If you did that you would now have a 14pip TP.

Price must move 18 pips to hit it.


We're saying the same thing on the SL.

You would set a 9 pip SL. Price would have to fall 5 pips to hit it. When price falls 5 pips, you have lost 9 pips.

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Quoting carmel

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NipThePips,

Thanks for sharing a great system! Since I only trade daily candles, would you be so kind as to share how to apply your system to this timeframe? Thanks...

I have a similar method where the Initial TP is 30, and the initial SL is 15...I use it on the daily chart...similar techinique, just a few tweaks here and there...and the SL changes as the price bounces. It is profitiable, but sometimes you will have some big drawdowns...

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Quote

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Do you avoid news releases?

I try to keep it as mechanical as possible...and why avoid news releases...they provide movement in the currency, and movement is what we need in order to make a successful trade.