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Part Time Wealth Building Trading System - Weekly Scalping

  • #1,321
  • Jun 22, 2007 4:34pm Jun 22, 2007 4:34pm
Quoting TheRealThing
This week, I bought the GBP/USD @ 1.9821 and currently have over 120 pips in the trade. This is the first decent profit the weekly system has been in for a couple of months. (Note: this refers to trading the GBP/USD.)

And the week isn't over yet....

It may get stopped out for another loss or end up with even a bigger profit.
Well, it ended up making a little more.

Ended up with 171 pips in GBP/USD, and 280 pips in GBP/JPY, my favorite because of the extra money from the swap. With very little initial risk.

Helps make up for some of the less wonderful weeks recently.

Have a profitable weekend.

TRT
  • #1,322
  • Jun 24, 2007 2:45pm Jun 24, 2007 2:45pm
Quoting toti1972
..., what is curious is that it is really hard to find any discussion about this topic (MM) Everybody talks about methods, but nobody says a word about money management systems, just one or two in the beginners section. I dont understand why.

Definitely, I need some help on this.

Do you mind to share any MM system you use for this method.
Thank for your contribution.

Regards
To know what money management method to use on your chosen method, you must first know the expectation of your method.

My version of the weekly system has an edge (expectation) of approximately 8 - 9 %. (For every $1000 risked, the expectation is $1090 returned on average per trade)

Some of you are thinking this is small and others thinking this is huge; the latter group is correct. It is going to be very difficult for anyone without perfect knowledge of the future to exceed this size expectation trading forex.

I use a fixed fractional approach and risk 2.7% of my equity in my weekly system account. Annual return has averaged 57% annually for more than 15 years, with some extremely sizeable equity swings and spectacular drawdowns. This is in actual trading of the futures and forex markets.

Your version my vary.

With an edge like that in any casino game, the average wagerer would be able to own the casino within a day. The benefit of wagering on a casino game with that edge would be the ability to compound this edge over and over hundreds of times in the space of a day.

This isn't practical or very possible in a market like forex. With this weekly trade, I get just so many trades per year.

In this situation, while the expectation per trade is great you have to be very careful with your money management to be 'certain' that you will gain over a long period of time. In any trading series, you will have runs of losses that will debilitate the lightly conceived money management scheme.

To begin to learn what working traders use for money management methods, consult books by William Poundstone and Ralph Vince to learn the realities of drawdowns and expectation. Google works well for a search of this type.

If you do not have a positive expectation for your trading system, there is no way money management will enable you to profits.

For this reasons I encourage any who have investigated "guaranteed" methods currently being promoted which involve increasing of trade size after losers, to understand that if any given system has an edge, there are more powerful and certain ways of extracting the profits from it than progression schemes.

TheRealThing
  • #1,323
  • Jul 15, 2007 3:57pm Jul 15, 2007 3:57pm
So what is the final verdict on the Part Time Wealth Building Trading System? Is the original version of this system (from the first post of this thread) really successful? Are there any alterations to the original system that have been proven to make it better? It's been 3 weeks since anyone has posted on this thread, so I'm having some doubts about it. Is anyone having any success with it?
"Trading is a mental sport." - Ziad Masri
  • #1,324
  • Jul 25, 2007 8:57pm Jul 25, 2007 8:57pm
Quoting tkimble
Well said...
Hi tkimble.

Thanks again for sharing this system with us.
I have been experimenting with the idea that Pip Rage has shared of waiting till after the first 18hrs of the week before placing the straddle in order to try to avoid whipsawing before the weekly trend is established.
Have you compared this approach of a delayed entry with your approach of placing the straddle at the start of the week ? By the way, do you place the straddle on Sunday or Monday ?
I fully subscribe to the risk:reward ratio of risking only 30pips(or 60pips if 2 entries are stopped out) for an upside profit of potentially 100pips+. Compared with risking 30pips to make 30pips profit using the Big Ben daily strategy which I'm considering using to hedge the weekly scalping system, it looks very promising.
mike
  • #1,325
  • Jul 25, 2007 9:02pm Jul 25, 2007 9:02pm
Quoting tkimble
I place entry orders using the FXCM platform. Enter order within 10 minutes of market open on Monday. Close trade during the last 30 minutes of the market on Friday.

Tkimble
ooops...just discovered one answer regarding entry time from last post has already been answered..
mike
  • #1,326
  • Jul 25, 2007 9:54pm Jul 25, 2007 9:54pm
Quoting tkimble
Your sentiments are the key to successful trading. Adapt your own ideas. Make it work for you.

Excellent contribution...

Tkimble
Interesting....using Monday's open can eliminate the possible though unlikely implications of gapping over the weekend.

mike
  • #1,327
  • Jul 25, 2007 11:41pm Jul 25, 2007 11:41pm
A few weeks ago someone from Italy posted his trading technique "Vella's approach" and it may be worth considering his method.He states that 70-80% of the time the high or low of the week is made in the first two days of the week so you could eliminate some of the initial noise by waiting a day or two.His method certainly looks good on a monthly basis if you look back for the last 3yrs.
  • #1,328
  • Jul 26, 2007 12:45am Jul 26, 2007 12:45am
Hi tkimble and all those participating in this thread.
Please disregard the above posts as I've now scanned thru the entire thread (phew!)
I'd just like to get more clarity on the revised WEEKLY system for both
GBPUSD and GBPJPY before getting into the other systems so magnanimously shared by tkimble.
My understanding is that the weekly system is now based on the daily system as follows (and I will ask questions as we go along):

1).Enter Buy/Sell order upon Sunday or Monday open at 2400 GMT. Order should be consistent with previous days trend (i.e; Previous day up, Place "Buy" market order, Previous day down, enter "Sell" market order at open)
Q). - Based on some posts, orders may be placed on Tuesday open in an attempt to avoid Monday whipsaws..right ?
- When we speak of the previous days trend, does price need to be above or below the previous days high or low in order to establish whether the days trend has been up or down, or is it solely based on the previous days high and low? (please excuse my ignorance, though my doubts must be dispelled...)
2). Place opposite side trade 40 PIPS aways from initial market order (i.e.; if initial order was a Buy Place immediate Sell side order 40 PIP away from initial market entry)
Q). - 40pips for GBPUSD and 50pips for GBPJPY..correct ?
- Using this stop and reverse approach, is the opposite side trade effectively acting as the stop for the initial trade ? If so, would the following GBPUSD example be correct (assuming the previous days trend is down)?
Sell GBPUSD @ open 2.0450 ( 10,000 units in Oanda)
Opposite trade/stop @ 2.0490 ( 20,000 units in Oanda)
- I'm not sure about other platforms however in Oanda placing double the units on the opposite trade will automatically stop out the initial trade and open a new trade of the same number of units in the opposite direction....correct ?

So, depending on how many times we are stopped out, the rest is simply to let the trade run for the remainder of the week and close on Friday night...right ?

Thanks in advance for the patience of those who know this system inside out and don't mind explaining it to me.
mike






Quoting tkimble
GBP/USD

Expanded stop to 30 PIPs. Always use 40 PIP SAR...

JPY/USD

Currently experimenting with weekly system "instant entry". Is working very well. With recent changes that I have suggested, basically the weekly and daily system are identical with the exception of the charts. The daily chart is more profitable.

I am currently trading daily and weekly in tandem which allows me to hedge the weekly with the daily price action.

Happy trading,

TK
  • #1,329
  • Jul 26, 2007 1:09am Jul 26, 2007 1:09am
Thanks edge540 for the evidence potentially supporting a delayed entry on the weekly trade.
The pro's are that this approach can, as you said, eliminate some of the noise and thus potentially reduce the number of times being stopped out before the weekly trend is established.
The con's, as far as i can see(and already mentioned in previous posts), could be that sometimes the weekly trend IS established during Monday, and thus we could be depriving ourselves of those early pips in the weeks price action?
So, I guess it's a matter of evaluation.
CAN ANYONE WHO HAS TRADED BOTH APPROACHES PLEASE COMMENT?
I know that many of you have been successfully trading the weekly scalping system (or a variation of it) for some time now, so I'm convinced that the basis of this system is profitable provided, as tkimble has mentioned, we simply stick to the system with discipline.
Thanks again for the info.

Quoting edge540
A few weeks ago someone from Italy posted his trading technique "Vella's approach" and it may be worth considering his method.He states that 70-80% of the time the high or low of the week is made in the first two days of the week so you could eliminate some of the initial noise by waiting a day or two.His method certainly looks good on a monthly basis if you look back for the last 3yrs.
  • #1,330
  • Jul 26, 2007 2:01pm Jul 26, 2007 2:01pm
Quoting TheRealThing
The recent markets are a perfect example of why most people still have jobs.

Trading can be simple, but it is not easy.

The patience necessary to keep putting in trades every week and get losses, and then more losses, week after week wears thin on the psyche.

I am trading a methodology similar to this (with different buy/sell points off of the week's open based on market volatility, with robust stop-losses) in three pairs. (Yen, Pound, Swiss vs. USD) In the past I have experienced more than 14 consecutive losses in a row in one pair alone, and a total of 24 losses out of 26 trades in the the 3 pairs before profits started trickling in.

Do I still trade it?

Yes.

Because the losses are relatively small compared to the extremely large profits that accrue when the trends reappear. A few years ago I closed a 1100 pip profit on just one good GBP/USD trade. A few weeks later, another 500 pip profit. Makes up for a number of losses.

I have to admit that money management is critical with this system.

I recently taught the method to a forex trader who in the last 2 months has now racked up seven 50 - 65 pip losses in a row in the GPB/USD alone. He is not amused.

He's sure I just showed him this method to torture him. After a week of profits, he has done nothing but lose.

Here is a question I would love to hear some responses to---

If this system caused you to have 20 losses in a row, what would you do?

Find another system?

Really, I am interested.

TheRealThing
It would all depand on what the losses where, did or would my money management permit 20 losses, if not then I would not even think of trading the system.
  • #1,331
  • Jul 26, 2007 6:59pm Jul 26, 2007 6:59pm
I thought I would include a few comments about the weekly scalping method, as the last few weeks have been spectacularly profitable.

I find it almost amazing that people in this forum are not bouncing off the walls because of the profitable trades-- one after another that have been signaled by this method.

Then again, I believe that it's due to the majority of individuals who started trading-- it running into a long string of losers that came in after the beginning of the year. Most people, especially newer traders, have difficulty with taking numerous sizeable losses at the beginning of a trading sequence. But there is no way to know when the losing sequence will start, if ever.

I have downloaded Figures 1, 2, 3 and 4 for the weekly trade concept traded in this thread-- with these parameters: open +/- 50 pips with a 60 pip stop on each trade, exiting on Friday @ 03:00 EST if you aren't stopped out. You may be trading this slightly different from this demonstration, but if you are being consistent with your entries and exits your results will likely be similar to what follows.

There was a stretch of 8 losers in 11 trades starting in May and a few weeks before the end of last year there was a stretch of 6 straight consecutive losers. Any who started since last year had some pain. The forty trades since the beginning of 2007 have averaged only $58 dollars a trade or 5.8 pips after spread. Not too appealing.

Figure 1 is the performance summary over the last 10 years of following this basic method: in after the week's open and out by Friday's close. 4 pips spread is deducted per trade, 1 single unit traded in this example.

Figure 2 is the hypothetical equity curve of the last ten years and 763 trades.

Figure 3 is the equity curve of the last 40 trades.

Figure 4 is a chart showing the recent entries and exits of the method on a weekly chart.

In no way am I denigrating this method.

I trade a favorite version of it myself, and have suffered some like everyone else. I expect we will see a "reversion-to-mean" effect as the trades should tend to get more profitable to balance out the losers.

Good trading!

TheRealThing
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Weekly Scalp Trade 10 years 763 trades-2.jpg Size: 33 KB
Click to Enlarge Name: Weekly Scalp Trade 01-02-07 to 07-26-07 .3.jpg Size: 30 KB
Attached Images
  • #1,332
  • Jul 29, 2007 9:51am Jul 29, 2007 9:51am
Hello guys,
I have read your thoughts up to the 436th post, but I really don't have much time to continue my reading right now. I am curious how this system worked out for you and are there people who are making really money on this system. I would appreciate all resposnes.

Cheers,
  • #1,333
  • Aug 4, 2007 11:22am Aug 4, 2007 11:22am
Hi all

Thx for this nice system but now i,m really confused i donn know is the stoploss still 30 for GBP/USD or changed and also for GBP/JPY and about the rules of entry +50 from close price for previous week and -50 from close of the previous week or not
so could any one help me by showing me the post of the new rules if it here

or could any one write the new rules for this stratgey in a new post


Cheers
  • #1,334
  • Aug 5, 2007 12:08pm Aug 5, 2007 12:08pm

i need an example with numbers and chart so it will easy to all .

thanks

  • #1,335
  • Aug 5, 2007 1:11pm Aug 5, 2007 1:11pm
haney mohssen....
The rules have changed very little.

elmiligi
Go back to the start of the thread and READ.....
Also quit shouting
Same Whore .... Different Dress
  • #1,336
  • Aug 5, 2007 11:57pm Aug 5, 2007 11:57pm
Quoting johnedoe
haney mohssen....
The rules have changed very little.

elmiligi
Go back to the start of the thread and READ.....
Also quit shouting

Thx Johnedoe

Could you show me the post that include the new rules cos i read aall of the thred and i think i,m haug up now so i,ll be greatfull ti show me the post include the new rules

Thx and good job
  • #1,337
  • Aug 6, 2007 12:38am Aug 6, 2007 12:38am
Like I said the rules really have'nt changed....but here is some reading that might help you.
http://www.forexfactory.com/showpost...24&postcount=6
Same Whore .... Different Dress
  • #1,338
  • Aug 6, 2007 8:48am Aug 6, 2007 8:48am
Quoting johnedoe
Like I said the rules really have'nt changed....but here is some reading that might help you.
http://www.forexfactory.com/showpost...24&postcount=6

OK let's see what happned today

Pair :GBP/USD

Buy @ 2.0462
StopLoss @ 2.0432

Sell@ 2.0362
StopLoss @ 2.0392

Target : Till Friday cloe all opning orders before market close with 30 M


Stop Triggerd for the buy @ 2.0432 -30 Pips

and then order sellstop activated @ 2.0412 stoploss @ 2.0382(we move the sell order to the close of the last week after activation of buy order)

then the sell order go in it,s way with +104 pips till now
should we enter another buy order and if we enter it should we make it
Buy @2.0462
stoploss @ 2.0432
or
we make it
buy @ 2.0412(to the close of the last week cos order sell already activated)
stoploss @ 2.0482


Thx for ur help

Cheers
  • #1,339
  • Aug 6, 2007 3:41pm Aug 6, 2007 3:41pm
HI:
I am new to this system. hopefully someone can answer my question.

I was stopped out today of my buy long position. I re-entered the market with a but stop order that was never exexcuted.

should I re-enter or not when stopped out?


Greg
  • #1,340
  • Aug 14, 2007 6:40pm Aug 14, 2007 6:40pm
Hi everyone,

Itīs been a great start for GBP/USD. On my Plataform last week close was at
2.0231. The pair went south and enter short at 2.0181. As per today the price is at 1.9952, good for 229 pips(less spread). Thinking on closing the position around this number becasue the price is just and support on the 4hr chart.

Remeber not to be ambitious. Money management is the key.

Regards,
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