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  • #581
  • Dec 8, 2006 10:19am Dec 8, 2006 10:19am
Quoting permanentjaun
Feel free to tell me why you think ROI is going to suck.
The ROI of a martingale is always lousy and sucks. You want to risk 1-3-9-27 just to win 1?
  • #582
  • Dec 8, 2006 10:34am Dec 8, 2006 10:34am
Quoting Geldschlucker
The ROI of a martingale is always lousy and sucks. You want to risk 1-3-9-27 just to win 1?
It's not technically martingale. Martingale is when you add to your already losing position and expect price to turn. Your lowering/raising your average price so it's easier to make a profit on the retrace that you are hoping for. My strategy involves exiting the market to double up on the next trade knowing that my strategy is more than 50% correct. I'd rather give myself a shot at being right on another trade rather than try to turn a losing trade around.

For a 100 SL and 50 TP I would need to triple up on the investment to make it seem as if I was profiting even in the losing trades. I'm only looking to break even right now so my losers don't eat into my profits. So really my risk would be 1-2-4-8 to break even on the losing trades. It's not to win just one either. If on a 3 consecutive loss series where I would risk 1-2-4 and then win on the fourth trade I would actually be winning 6.

(-100) + (-100) + (-100) = -300. To break even I'd need to win 6 trades that profit +50 pips each. So in one trade I'm really winning 6 trades. Like I said, this strategy isn't for everyone and will not survive if you're not managing your money correctly. This is where a highly leveraged account can be a plus. With less margin required you can put more trades towards a certain goal. If you know your strategy is more than 50% successful then you can rest assured that eventually you'll be at breakeven, if not profit.

Eventually when my account grows large enough I will triple up on each losing trade to make it 1-3-9-27. Those are lot sizes, not percentage of account. This way when I know I'll be winning eventually then it'll be like profiting on every trade. 20 trades in 2 months = 300 pips a month irregardless if 5 or 6 of those 20 are losers. A large account will be necessary for this.

Anyways, ROI. Even if the strategy only gives you 100 pips a month it is still a good ROI when compared to typical investments. If you put 2% of your account towards each trade then 100 pips a month is 2% ROI I believe; 24% in a year. There aren't many investments offering that kind of ROI. I've already shown that 100 pips a month seems to be a lowball number for when the market isn't trending well.

Is there something I'm missing? Matt
  • #583
  • Dec 8, 2006 11:31am Dec 8, 2006 11:31am
Hardly into testing Previous week H/L breakouts to realise that there are not enough breaks to make a profitable strategy.

Still working on other strategy.


BabeFX.
  • #584
  • Dec 8, 2006 3:13pm Dec 8, 2006 3:13pm
Quoting permanentjaun
For a 100 SL and 50 TP..

(-100) + (-100) + (-100) = -300. To break even I'd need to win 6 trades that profit +50 pips each. So in one trade I'm really winning 6 trades. Like I said, this strategy isn't for everyone and will not survive if you're not managing your money correctly. This is where a highly leveraged account can be a plus. With less margin required you can put more trades towards a certain goal. If you know your strategy is more than 50% successful then you can rest assured that eventually you'll be at breakeven, if not profit.
Wouldn't that be (-100) + (-200) + (-400) on three losing trades? If you are doubling up, you need to keep doubling up your loses too. You'd also have to go for the same profit/loss targets, at a bare minimum..

If you are onto your fourth loss, and you do "win", you would have gained 50 pips x 8, or 400 total pips. By this time, you have lost 700 pips.

A very high risk way of trading. Even if you have a strategy that is 100tp/100sl, and wins 55% of the time. Who says you can't lose 10 times in a row? It is _unlikely_, but it is _possible_.

I use to use the same concept while playing Black Jack. As I lost, double the bet. You'd think you couldn't lose more than 5 or 6 times in a row. It happens all the time though.

The better way to play Black Jack is to do progressive winning. As you win, every other time, increase your bet. 1 1, 2 2, 4 4, etc... Would I ever use this method in trading? Never. Take the bumps with the bruises.... Once a trade takes profit or a loss, that trade is done, onto the next one... That is where your money management comes into play. As long as your risk to reward ratio is good (1.5 at least, better in the 2.0 or 3.0 range), then it doesn't really matter what happened the last trade.

I personally watched this thread much closer in the beginning. The original methods posted do work (I personally like the 20/-20 straddle of London open). Sure, they have their bad days, but they have good days in return. Lately, too many untested _theories_ have been thrown out, many off track from a "daily break-out" approach... Be nice to see the thread get back on that track daily break-out strategies.
  • #585
  • Dec 8, 2006 4:33pm Dec 8, 2006 4:33pm
Quoting DavidH
Wouldn't that be (-100) + (-200) + (-400) on three losing trades? If you are doubling up, you need to keep doubling up your loses too. You'd also have to go for the same profit/loss targets, at a bare minimum..

If you are onto your fourth loss, and you do "win", you would have gained 50 pips x 8, or 400 total pips. By this time, you have lost 700 pips.

A very high risk way of trading. Even if you have a strategy that is 100tp/100sl, and wins 55% of the time. Who says you can't lose 10 times in a row? It is _unlikely_, but it is _possible_.

I use to use the same concept while playing Black Jack. As I lost, double the bet. You'd think you couldn't lose more than 5 or 6 times in a row. It happens all the time though.

The better way to play Black Jack is to do progressive winning. As you win, every other time, increase your bet. 1 1, 2 2, 4 4, etc... Would I ever use this method in trading? Never. Take the bumps with the bruises.... Once a trade takes profit or a loss, that trade is done, onto the next one... That is where your money management comes into play. As long as your risk to reward ratio is good (1.5 at least, better in the 2.0 or 3.0 range), then it doesn't really matter what happened the last trade.

I personally watched this thread much closer in the beginning. The original methods posted do work (I personally like the 20/-20 straddle of London open). Sure, they have their bad days, but they have good days in return. Lately, too many untested _theories_ have been thrown out, many off track from a "daily break-out" approach... Be nice to see the thread get back on that track daily break-out strategies.
You are correct. Can't believe I was so stupid. I was concentrating so much on the last loss that I forgot about incorporating the previous losses as well. Sometimes a little common sense can go a long way.

The steps per losing trade would then actually require the risk per trade to be: 1 - 2 - 6- 18 - 27 - 54 - 108 - 216. It starts doubling after 27. That is to just breakeven when using a 100 SL and 50 TP. Thanks for essentially slapping me in the face though. I needed that. Here I was thinking everything was as simple as that, but I had forgotten the most important piece of the puzzle.

I will state though. Is trading this way still possible? Yes, very much so. It depends on how much you trade with. If you trade 1 standard lot per typical trade you better have at least $500,000 in your account if you expect to lose up to 8 times in a row and still have a chance. Like I've said though, with proper money management it's possible. Even if it means starting with an account that is .01 per pip, then do it to make sure you're safe if you use this strategy. High leverage also helps out in this situation to keep margin calls down. You just have to be smart with it.

Are 8 losing trades in a row possible? Very much so. What are the chances though? Should we be so afraid of such a chance? If a system is even just 50% successful what are the chances of 8 trades in a row losing? If I remember my college classes correctly, although the chance of the trade losing is 50% on each trade independently, once we try to string them together the chance of such an occurance actually becomes the following:
.5 X .5 X .5 X .5 X .5 X .5 X .5 X .5 = .00390625. Correct me if I'm wrong. The chance of 8 losing trades in a row on a 50% system is just .3%.

If I think the system is 60% successful, or 40% wrong, the chances of consecutive losing trades is:
2- .16
3- .064
4- .0256
5- .01024
6- .004096
7- .0016384
8- A really small number.

So thats why I think the strategy is still viable. With good money management, i.e. - not using lots too large for your account, you can still survive a string of many losses. After 5 losses you can see just how unlikely that gets to be. Are you afraid of losing 100 trades in a row just like you are of losing 2? No, because losing 100 in a row is severely unlikely. Even if you were trying to be wrong you'd still probably win since the market wouldn't let you be 100% right about being wrong. (LOL)

ANYWAYS -

To get off that since you just woke me from my disillusionment, although its still possible, I would like to still challenge the idea that we don't need to look at time frames for our trigger points. I gave the example from before that when we reset the time frame and our points we miss out on the consistent movement. I dont know. A lots going through my head now. Kinda depressed I was so stupid to think it was that simple to overcome losses. Oiy. Matt
  • #586
  • Dec 8, 2006 4:35pm Dec 8, 2006 4:35pm
Quoting DavidH

I personally watched this thread much closer in the beginning. The original methods posted do work (I personally like the 20/-20 straddle of London open). Sure, they have their bad days, but they have good days in return. Lately, too many untested _theories_ have been thrown out, many off track from a "daily break-out" approach... Be nice to see the thread get back on that track daily break-out strategies.
I quote this part to ask the question; was it using the opening price that made the system successful or the straddle? Why can't we straddle from any point in time to take profit?
  • #587
  • Edited 7:49pm Dec 9, 2006 1:18am | Edited 7:49pm
Just letting you all know I've started a new thread titled Probability System Theory and Money Management discussing the topic of doubling down after losing trades and probabilities of consecutive losers. Just as DavidH mentioned, it was a little off topic.

I'd still like to talk about the random entry idea on here though. Matt
  • #588
  • Dec 9, 2006 7:42am Dec 9, 2006 7:42am
Hi Traderone,

I'm just wondering how your Karamba system has been doing until now?

Thanks,
Eric
  • #589
  • Dec 9, 2006 10:58am Dec 9, 2006 10:58am
Karamba had a bad week.

One day was a winner for 25 +50.

But two other days were losers at -40 and -40.

I didn't trade on Friday (NFP).

So for the week, -85 pips.

I think for the last 4 weeks the total would be around a positive 210 pips. I am not around my trading machine right now but will be glad to post the statement later. (My version of Micardo was postitive however.)
Don Life is expensive, but includes a free trip around the sun.
  • #590
  • Dec 9, 2006 11:41am Dec 9, 2006 11:41am
Hi traderone,
I just want to clarify your modified system, it looks good and i'm going ot give it a shot,
Pound, example, price at open is 1.9150 we put a buy order at 1.9204
and a sell order at 1.9110.

Which broker are you using for this method?

Thanks


Quoting traderone
Just wanted to post a further update on my modified Kamanda system.

Been trading this since Nov7.

I trade two units. Take profit at 25 pips on the first and 50 on the second. If the second hasn't closed by around 9 AM EST I close it whatever.

Trigger is now 54 long and 40 short. SL is 50 long and 40 short. Using the 5 PM EST open (or close however you look at it). I deleted all of the cancelled trades that weren't triggered.

I call it karamba just for fun.
  • #591
  • Dec 9, 2006 2:27pm Dec 9, 2006 2:27pm
Traderone,

Thanks for the Karama results.
Is Mircado manual or with an EA? and if with an EA can you post the one you are using.

Thanks,
Eric

Quoting traderone
Karamba had a bad week.

One day was a winner for 25 +50.

But two other days were losers at -40 and -40.

I didn't trade on Friday (NFP).

So for the week, -85 pips.

I think for the last 4 weeks the total would be around a positive 210 pips. I am not around my trading machine right now but will be glad to post the statement later. (My version of Micardo was postitive however.)
  • #592
  • Dec 9, 2006 5:07pm Dec 9, 2006 5:07pm
Quoting permanentjaun
I quote this part to ask the question; was it using the opening price that made the system successful or the straddle? Why can't we straddle from any point in time to take profit?
The idea of going off the Londen open is because that is the first "major" movement of the trading session after the NY session closes. There is some movement with Asia open, but the bigger movements happen shortly after London open. Hence the orginal concepts presented.

Is it possible to just pick some random point and enter? Sure, depends on what you are willing to risk, I guess. I guess without any way to show a system like that works, it is tough to say. You can always curve fit a system like that (any system), it would really depend forward testing in a demo account. With the above London open idea, you can go back everyday to check it out.

I think the bigger picture is is that you have to come up with yourself, or follow a system exactly as presented. If you get off track with a system, then you are not giving the original system its fair chance.

I don't trade forex all that much, I don't like the spreads. I trade futures mostly, which you pay commissions on (less than 1/2 pip value). The futures move in the same fashion as forex does (EURUSD for Forex, Euro FX for Futures).

David
  • #593
  • Dec 9, 2006 5:21pm Dec 9, 2006 5:21pm
Quoting permanentjaun
The steps per losing trade would then actually require the risk per trade to be: 1 - 2 - 6- 18 - 27 - 54 - 108 - 216. It starts doubling after 27. That is to just breakeven when using a 100 SL and 50 TP. Thanks for essentially slapping me in the face though. I needed that. Here I was thinking everything was as simple as that, but I had forgotten the most important piece of the puzzle.
Yea, those would be the numbers more in line. That would be just to break even on your first lost. Then you need to win two times in a row to make money eventually. ie: loss loss loss win (your at break even) loss win (back to break even) win (made profit)

This would take a huge account just to break-even. Your initial trade can't be your typical 1% - 3% of your account, that is for sure. 2 or 3 loses in a row, you just put a large chunk of your account at risk. If you happen to have 6 loses loses in a row, you can't go any further as you are over the 100% mark.

Trading a system like this to make under 1% of your account is where the ROI comes into play that was mentioned earlier. Is it worth the possible risk for such a small ROI? Dunno, that is up to the individual trader I guess. This would break most money management theories/ideas, but it comes back to what risk the trader is willing to assume while trading.

David
  • #594
  • Dec 9, 2006 5:22pm Dec 9, 2006 5:22pm
Quoting permanentjaun
Just letting you all know I've started a new thread titled Probability System Theory and Money Management discussing the topic of doubling down after losing trades and probabilities of consecutive losers. Just as DavidH mentioned, it was a little off topic.

I'd still like to talk about the random entry idea on here though. Matt
Just an FYI, this link doesn't work. It has a double http://http://

David
  • #595
  • Dec 10, 2006 1:13pm Dec 10, 2006 1:13pm
Quoting drlc01
Traderone,

Thanks for the Karama results.
Is Mircado manual or with an EA? and if with an EA can you post the one you are using.

Thanks,
Eric
I don't use an EA with any of these daily strategies. It only takes about 10 minutes to set up the orders for both the Karamba and the Micardo methods. And frankly, I am also paying attention to the Fozzy on 4 major pairs. This is an attractive way to trade timewise and I think probably profit wise also.

Frankly I lost my *&% on the Firebird EAs recently and I am now manually trading and studying daily methodologies.
Don Life is expensive, but includes a free trip around the sun.
  • #596
  • Edited 3:57pm Dec 10, 2006 3:42pm | Edited 3:57pm
A little adaptation to the Daily Strategy that this thread has been discussing. It does require an account that allows hedging (I use interbankfx). At 00:00 GMT buy and sell the EUR/USD with a 50 pip stop loss and 15 trailing stop. Close out all open orders between 23:30 and 24:00 GMT.

The premise of this trade is to capitalize on the interday price activity. If you look at a candle chart most days will have shadows of at least 17 pips on the bottom if an up day and on the top if a down day. In these cases you'll have a profitable trade on BOTH trades. However, days when there are shawdows of less than 17 pips you lose (most of the times it is the whole 50 but somedays it will only be in the 30-40 range).


You will incur some days of losing 50 pips but the gains definitely offset those times. Here are the results from April to October:

April +458
May +184
June -3
July +333
August +573
September -35
October +140

Total Gain +1650

I'm currently running Novembers numbers. As for December it is currently up +175 pips.

Q
  • #597
  • Dec 10, 2006 4:34pm Dec 10, 2006 4:34pm
I have spent the last 3 days testing weekly breakout strategies.

I will have to go through the tests again next week end to double check & fine tune stops & take profit targets.

One of the strategies would appear to give 41 winning trades out of a total of 49 with a R/R ratio in the order of 1:2 , this appears to good to be true.

BabeFX
  • #598
  • Dec 10, 2006 4:53pm Dec 10, 2006 4:53pm
Quoting QMG
A little adaptation to the Daily Strategy that this thread has been discussing. It does require an account that allows hedging (I use interbankfx). At 00:00 GMT buy and sell the EUR/USD with a 50 pip stop loss and 15 trailing stop. Close out all open orders between 23:30 and 24:00 GMT.

The premise of this trade is to capitalize on the interday price activity. If you look at a candle chart most days will have shadows of at least 17 pips on the bottom if an up day and on the top if a down day. In these cases you'll have a profitable trade on BOTH trades. However, days when there are shawdows of less than 17 pips you lose (most of the times it is the whole 50 but somedays it will only be in the 30-40 range).


You will incur some days of losing 50 pips but the gains definitely offset those times. Here are the results from April to October:

April +458
May +184
June -3
July +333
August +573
September -35
October +140

Total Gain +1650

I'm currently running Novembers numbers. As for December it is currently up +175 pips.

Q
Very interesting. My broker doesn't allow hedging. Although you do bring up an interesting idea.

"Let runners run, cut the legs of losers..." etc etc. Maybe we should have only looked for an efficient trigger and SL and not a TP? Just let the buggers run, ya know? Have a 30-40 pip trigger then have a 30-40 pip trailing SL or so. We've already done the research to show waiting 30-40 pips eliminates a lot of the losers.

Has anyone heard of a progressive trailing stop loss? Does one exist? I'm not a country boy, but I've been bored enough to watch tractor pulls on ESPN every once in a while. If you've ever seen one then you know what I'm about to describe.

The tractor is hitched to a load which either shifts weight or something that makes it harder and harder for the tractor to pull it. So it's really easy for the tractor to pull and then when it gets to around 300 ft down the track its almost impossible even for a 2000 HP tractor to pull it.

The idea for the SL would be then be that as price moves in a favorable direction it becomes harder and hard for it to not get stopped out. We want those profits locked in. The SL would eventually get very tight once we're 100 pips or more in profit and the only way for it to not get stopped out is if momentum kept going. I'll probably have to explain it again, but let me know if anyone knows of something similar to this that is already out there. Matt
  • #599
  • Dec 10, 2006 8:24pm Dec 10, 2006 8:24pm
Quoting QMG
A little adaptation to the Daily Strategy that this thread has been discussing. It does require an account that allows hedging (I use interbankfx). At 00:00 GMT buy and sell the EUR/USD with a 50 pip stop loss and 15 trailing stop. Close out all open orders between 23:30 and 24:00 GMT.
Interesting idea. I have played with varoius hedging options, but never found a decent one.

Be interesting to see some screen caps of this. When does your trailing stop kick in? After 15 pips of movement? ie: if your long moves up 15 pips, then your SL is moved to -35? Your short remains at -50. Is that correct?

David
  • #600
  • Dec 10, 2006 9:18pm Dec 10, 2006 9:18pm
Hi qmg,
Nice trades there, im wondering if you get a chance if you could
post what other rules you followed to get that amount of pips for those months, like where your tp was etc, trailing stops, or however you dealt with the tp etc.

Thnks



Quoting QMG
A little adaptation to the Daily Strategy that this thread has been discussing. It does require an account that allows hedging (I use interbankfx). At 00:00 GMT buy and sell the EUR/USD with a 50 pip stop loss and 15 trailing stop. Close out all open orders between 23:30 and 24:00 GMT.

The premise of this trade is to capitalize on the interday price activity. If you look at a candle chart most days will have shadows of at least 17 pips on the bottom if an up day and on the top if a down day. In these cases you'll have a profitable trade on BOTH trades. However, days when there are shawdows of less than 17 pips you lose (most of the times it is the whole 50 but somedays it will only be in the 30-40 range).


You will incur some days of losing 50 pips but the gains definitely offset those times. Here are the results from April to October:

April +458
May +184
June -3
July +333
August +573
September -35
October +140

Total Gain +1650

I'm currently running Novembers numbers. As for December it is currently up +175 pips.

Q
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