Dion's Pyramid

I made my own system from scratch. It does not tell you when to buy and sell and there are no signals. Instead of being predictive (such as head and shoulders, neural nets, etc.) it capitalizes on a particular pattern in the chart. When the chart appears and you are in, you make $.

The way it works is you are always in the market with $1000 leveraged 400:1. I prefer the NZD/JPY pair because margin is only 1.67 per minicontract.

What you do is go long with 83 contracts. Margin call with 83 contracts is -100 (-109 w/ spread). After you gained 100 pips (91 w/ spread) you go long an additional 68 contracts.

What is nice is that you can buy more contracts with the profit from the first trade, and not close it. The first "leg" stays open to continue profiting.

The effect of buying more contracts puts your margin call at -109 again, and at the most you can sustain a 199 pip swing because you will buy more contracts at +91. That is to say, after buying 68 contracts, the price can rise 90 pips and then fall 180 pips and your trade will still be alive.

If you can compound repeatedly (as in Q1 NZD/JPY) you can turn $1,000 into $1,000,000 on a single trade. It takes about 1100 pips to do this with no more than 200 pip reversal at any time.

The down side is that you will lose $800 on a margin call in the first leg. After 4 legs, the margin holding the position is greater than $1000 so a margin call is a profitable trade. Max Risk: $800.

Tom

PS) I like the potential of this idea but there needs to be better risk management. All ideas are welcome.

Why are you so eager to belong to the 95% of people who fail? This so called 'system' is highly hazardous. That's pure gambling, not trading.

Thanks for the response. What trading is not gambling? I think trading the news with a straddle is the only sure way to catch a move, which is often not possible.

That being said, I don't believe in charting, Elliott Wave, etc. Why? Economics move the markets.... not chart patterns. The banks are trading based on the fundamental value of the two countries.... would it make sense any other way?

Friends, I didn't say I had a completed system. I KNOW there was a million dollar trade on the NZD/JPY with this pyramid in 2006. What I'd like to do is mitigate the risk of this system somehow and hope that there might be some constructive suggestions from the crowd.

Benefits of this system: Check charts only once or twice a day, on daily bars. Collect interest (when applicable) for several weeks with high exposure. Excel chart is of NZD/USD after a 1000 pip gain. Margin call results in a profit of tens of thousands of dollars.

You looked at where this "strategy" worked. Not where it didn't. Good luck. You will need lots of it. Plus hope and praying.

I guess that traders making a living out of this are just virtual people then...
Don't wanna be rude but i think you would do a lot better if you believe in that. It's real, it's fact!
I hope you do well in this experience, i really do hope you reach the goal!

OK, here's my advice. Divide your 800 USD and only risk 8 USD for each pyramid. This way you can try it 100 times instead of just one time. Diversify your risk.

If you don't believe in Elliots & Fibos & stuff like this I would like to tell you that the problem is not with the tools, the problem is with the traders themselves...It how you use the tools & how you manage the risks of every trade that appears based on the analysis made by those tools...

Personally, I use Elliots, Fibos & gaps trading...With a max drawdown of 20% I am up 41% in 6 months...I trade a variety of markets, mainly futures, future options, stock options & forex....Inside this variety there are instruments which are risky and others who have less risk...For example I don't use gap trading except with the indices futures...On the other hand I use the grains futures for more rewarding trades...

Excuse me but I don't want even to try to lose 80% of my account in order to gain $1M because I am sure that I will try for 5 or 6 times before I run out of money completely...

Instead, compounding 60% per year (Which I expect) for 6 continous years will yield ove $1M...


Thanks,

Nader

The more I think about the pyramid, the more I want to cheat and try to send 5K across 5 levels (the blue dots in the graph)....

At 5 levels, I would close 1K and open the same number of contracts in the opposite direction. If the price reversed, I would continue pyramiding in the opposite direction.

Each new level, I would close one of the 1K legs and do the same described in the previous paragraph. This allows me to keep the trade alive, even after a stop and reverse.

I could do this with 10K, giving me 10 legs to reverse a leg after every new level is reached.

More to come....

sounds like a pyramid scheme to me. do i need to recruit ten new people?

Look at the chart. The goal is to keep the trade alive and continue the compounding process.

All we really care about is how far the price moves. For example, the 6 level move before the collapse in Q3.... how can we keep the trade alive after the collapse as it moved another 550 pips upward (for a net gain of over 1000 pips)

If we find a way to survive the dips (which I call false positives) then the pyramid will make us wealthy.

Thanks everyone for your participation,
Tom

dude,

my broker does not have nzd/jpy, so i can't see their chart pattern, my aud/jpy from my broker goes back only to dec05.

i'm thinking and tried doing this for 3 days now, you might want to consider.

it's only trial with my own small money to earn big $$, no harm done to others, .

idea is this:
10 days, everyday buy 1 lot size at same time of the day.
11th day onwards, everyday sell 1 lot and buy 1 new lot.
we'll see if my heart can follow what my mind sets out.

hahaha.

if you're interested in the result, i'll pm you.

good luck to your pyr strategy.

Hello.


I haven't studied your system in detail, since I'm at work just browsing a little. But on the first look it seems to me, that you are basically scaling into a trade, which is in my opinion a good strategy. However your initial risk is HUGE.

If you put in 1000 USD at 400:1 leverage, this is (if you would have a 10k account) 10% of your whole capital, if the trade moves against you, where is the stop loss, or when will you sell, when will your confidence in your system drop to where you will just want to get out and protect your account. Sure if you went in at the yearly low, it would be a great trade, but how will you know that the currency pair is at it's low? If you would be able to predict that with certanty, a good idea would be to invest as much as possible into the trade, as huge gains would be imminent .

But watch out. When you scale into a trade, your total lots is increased. If before you could cover for a 100 pips loss on the first position, now (if you doubled), your first position would sustain only a 50 pip loss (if you bought at the same price). You need to protect your positions with previous gains, and set stop losses so that you will not be losing money if your new positions turn against you.

I'll take more time to check your idea this weekend, this is just my opinion after a glance.

Regards,
Jan

Hi tom,

thanks for replying and taking time to read.

i experiment with my monthly surplus, hence i am allocating a higher risk here. while this idea is to build up a capital over a short period of time, the lot sizes will not increase 1:1 every 10 days. If it works well, when the acc grows to 100% in maybe, just a rough estimate 1 month, lot size will only be 1.5 times more.

i'm trying to do a (haha) dollar cost averaging to forex... on a cross that appreciates slowly but gradually. No stop loss or profit take level as the buy order will be closed in 10 more trading days. Worse case scenario is i lost my last months surplus wage.

will be nice to see your analysis over the weekend.

Merry Christmas!

Barakah,

Please PM me with exact details of your idea. Explain it to me as if I were a child.

Thanks,
Tom

Instead of being in with $1000, you could be in with $100. Max risk=$80. That Q1 trade would have turned $100 into $100,000. Not bad.

Anyway, I agree with SunTrader, Nader, etc. that the LIKELYHOOD of a trade like this is very low. The point of this thread is to show that $1000 could indeed be turned into $1,000,000 in 2 months.

The next step of the strategy is to find a way to "suspend" the price action against the account when it reverses, as in Q3. One way of doing this is to open a full hedge in the opposite direction. For example, 150 contracts long would need 150 contracts opened short to neutralize all price action.

A second way of offsetting the reversal is described in my "Trojan Warfare" post above. The thing about this strategy is that it is extremely clever... it capitalizes on the fact that you do not need to close a trade to reinvest profit from it, as you would have to do with stocks.

These are just thoughts and of course, at some point, I must be willing to concede that the strategy may not have practical application.

Thanks again everyone.

I'd like to point out that a $1000 investment in the pyramid on 11/28/06 would be worth $18,000 today (3 weeks, not too shabby.) This does not include interest gained.

I am not advocating that anyone use my strategy, but it begs the question.... how high will the current pyramid climb? It's already at 5 levels, and needs 6 more to hit the magic million.

The only thing I get and agree with is that adding positions on an established trend will make make you MONEY

I am leaning more toward a Martingale type mentality for risk management, opposed to setting up a full hedge. For example, let's say I want to turn $1,000 into $300,000 with my pyramid....

I put my $1,000 in and hope that it moves 5 levels, such as over the last 3 weeks. Then maybe I split my $18,000 three ways, and try for the remaining 6 levels needed. That gives me three chances.

By no means a prudent solution, but better than trying to get it all at once.

I'd like to point out that this "system" is really a slam dunk attempt.... not something you'd trade everyday. In fact, if it worked out, I doubt I'd ever trade again based on the law of averages.

Suppose you had $800 to put into a high risk venture. Is it worth losing $800 once a year in attempt to make $1,000,000. In SC, that's about 400 lottery tickets. The difference is that you could have made the million earlier this year with the pyramid. How often can you say your lotto tickets matched in hindsite? It's a weak argument, but enough of a reason for me to keep this thread going and continue exploring.

look every one talks about risk reward. all day all the time 2:1 or better this is 1000:1 what does your winning percentage have to be to for something like that to be profitable. Now I a think the thing to do is break up smaller amounts of money such as 30 to make 300,000 using nano lots or something similar that is something you could spread out over various pairs all at the same time giving you the chance to catch trends on more than one pair thus increasing your chances to catch the move.

Great Idea Some people would say your nuts. But I personally think it has some merit. You definetley have my mind ticking.

If a group of people can create a pool of money to buy loterry tickets and then share in the winnings..........?