Dion's Pyramid

Everyone, what we need is to be able to combine shorter gains (such as 6, 2, 3 outlined on the graph.) These are more realistic I think than the 10 and 11 level moves....

Drink your coffee and let's beat this thing!

You are on the right track. I had a similar idea in the "Trojan Warfare Post #8." It's what we call brute force attacking in Computer Science. The idea is to cover every possible scenario the price can move to.

The problem with this is when to enter and when to exit the hedge (not to mention, the commission paid every time the hedge is opened and closed.)

Thank you for actually taking the time to synthesize this thing.

Definitely something VERY REFRESHING, makes u think that dreams DO COME TRUE. Keep up the good work! 800 per year is definitely worth the risk.

Because risk:reward is extreme, perhaps we take the same pyramid principle and tone it down a bit. Instead of setting each new trade up for a stopout of 100, we can set up for a stopout of 400. We buy less contracts at each leg, so our reward is far less than 1000:1. However, we improve our odds substantially.

I only throw this idea out there, just because it is an idea and might help someone else. My goal is to complete the 1000:1 system, but the new idea should be successful far more often than the original, therefore more tradable. If you'd like me to post a revised spreadsheet with 400 pip stopout, just ask.

A second strategy, also less risky, is to add a fixed number of contracts at each leg. The stopout will start at 100 and grow on each successful trade. If you looked at the spreadsheet, you notice you are buying more contracts at the next level than you did at the previous (except leg 2.)

Well, instead just buy 87 contracts at every leg.... Your initial risk is $845 on the initial trade, but your stopout increases the more the trade moves in your favor.

The graph shown would have produced a 15 fold gain over the second half of 2006, not including 6% interest.

In Post #41, we see that 2, 3, and 5 levels moves were common in 2006 before a stop and reverse.

I am leaning toward trading the 1000:1 pyramid with stop and reverses at 2, 3, 4, and 5. I'd close all trades after these levels were met, and reopen in the opposite direction. Maybe I'd pick a combination and repeatedly put my $1000 on it. Example) 4, 4, 3 Example) 3, 4, 4 etc.. etc...

The number of permutations of the pattern the price could form is still pretty large, but we are betting AGAINST 1, 2, 5, 6, 7, 8, 9, 10, and 11 level moves. One would think eventually we should get lucky.

Thoughts anyone?

Well the ideas just keep coming. In this case, we are pyramiding up exactly as in Post #1 with one exception.

For every contract we go long, we also go short. First trade: 83 short, 83 long.... second trade 66 short, 66 long.

What is the point of this, you might ask. Here's the idea. The short contracts protect us from every reversal. The price does not effect our equity. We are pyramiding upward, preparing for an economy that reverses the pair as strongly in the opposite direction as the initial move up.

Let's say GBP/JPY moves 2300 pips up, as it did in 2006. We have honking boatloads of contracts paired against each other.... and we suspect that the GBP/JPY will reverse back down this coming year.

So we close all of our long positions (a gain of let's say $1,000,000 but a net gain of 0 because all short contracts have offset the gain.) Should the price reverse as we speculate, we would eventually make an additional $1,000,000 on the reverse move.

This trading method can be deadly!!! I do not recommend it.... but I do put it on the table as something that could eventually solve the 1000:1 pyramid problem.

Suppose I take $700 and treat it like 7 $100 legs. After 1 level, I exit 4 legs. After 2 levels, I exit 2 legs. After 3 levels, I exit 1 leg.

More money was invested in at least 1 leg being convered, while less went into 2 and 3. So now when I start over, the best case is 4 legs with 9 levels to go, 2 legs with 8 levels to go, and 1 leg with 7 levels to go.

The exact number of legs I exit at each level isn't important. It's the concept.

From Post #8, we are pyramiding up on each protective leg as price moves in our favor. After a 100+ stop and reverse, all remaining "protective" legs are stopped out because we were only protecting a single leg. It gets really expensive to protect against more than one stopout.

Another very interesting aspect to Trojan Warfare.... suppose we had put in a $10,000 Trojan Warefare trade on 11/28/06 on the NZD/JPY. We would have reversed 5 legs that would have stopped out at each level.... but we would still have 5 legs in play right now worth ($18,000 X 5) so our account would show over $90,000 now.

Trojan Warfare is too risky for me in its current form, but you can see the potential of the idea. Should the trade continue upward another 600 pips with no more than 1 100+ pip reversal, it'd be a million bucks.

The best REALISTIC Trojan Warfare trade in 2006, excluding the 10 level trade in Q1: Invest $1,000 (10 $100 legs, goal $100,000) the first day of Q3.... gang moved over 700 pips with a single 100 pip reversal along the way. That $1000 would have reached over $18,000 (3 x $6000) before stopout.

Graph for Post #8:

"Fortune Only favours the brave"

NZDJPY...is fundamentally a carry trade currency.

Since, 1999. The currency has only gone up and in near future there is no major news on interest rate decisions from both sides.

Ineffect, Dion stratgey needs only 3.2 percent of risk duing those 30~90 days of trading, in relation with 7 years of positive trade. That means 96.8 % of success is already behind him from past records.

Now tell me which strategy or EA has so much positive past record and so few risk percentile to go for.

Now looking at the fundamental. No country especially japan has zip-zapped Interest rate in a gap of one year. It would take atleast another year or two for those guys to increase their interest rate to 0.50 percent or keep it same. We have to look only at the first Querter this year, for the effects of interest rate hike on japanese stocks and world economy.

New zealend, would never ever play with its interest rate or risk capital outflow and collapse its economy.

The whole economic fundamentals are in a mess, Its the printing press at play..there is no value behind the currency. Truth is, its the carry trade..which is making the economy alive the world over.

If there is no carry trade, there is no economy. Period.

Only gold is the true currency, but the central banks won't let it up..less they would not have any control on the printing press and the world.

The party is still on folks, there is high inflation everywhere, but the central banks can't help..but print more money and the JP morgans can't help, but circulate more money around the world for carry trade/stocks/bonds.

In real trading, My only suggestion is 100 PIPs buferr stop loss is less compared to past moves. In a month, NZDJPY can go up-down ave. 400 PIPS and the most it has gone down over the whole month 800 or more..

I would say keep a dooms day buffer scenario at 1000 PIPS or nothing. We would never want our strategy to be hit by a stop loss. we would care less if we loose all our money. we have come in to play and make money. We would only play with the money, we are willing to loose.

There is a solid foundation behind Dion Strategy..with few tweaking..We would only wait for the results to come.

I was working on NZDJPY for the Interest part of it for one year plan, so my buffer was 1000 PIPS however, i have not kept the stoploess now..so that i can inject to my mind everyday that the money i put is to looose.

I agree, its really very very hard to keep it going..once you see your profit soar..even if u see a 100 percent rise...we would be 100 percent less brave to go on with the plan.

We may have 100s of working strategy, but to implement is what differentiates between the million dollar and the deposit.

During my two years of trading..I have only found that its your mental attitude and the market, that seperates you from being successful.

And the eternal truth..Boy it stands for ever...

"ONLY THE BRAVE WILL MAKE THE FORTUNE"

There is no need to be a PH.D in Mathematics to be successfull...Its all the braveness factor that would make you count millions

Essentially, the world has not changed, the old fundamentals of mind versus matter/market still exists.


Be Brave, Be Brave, Be Brave.....there is nothing else to work for but to increase our bravenes factor.

Did anyone notice a sharp 200 PIPS rise in AUDJPY today thats X'mas day

NZDJPY, GBPJPY...will follow suit as is...

here is a very good general article on things to come for YEN in 2007.

http://www.dailyfx.com/story/currenc...810113734.html

I've been reading this thread with interest. This post is causing me to want to take a more serious look at Dion's strategy. The fundemental truths here regarding fiat currencies can't be denied. The bankers are playing it fast and loose and there surely is a way to profit from their folly.

I would only add that once the profits were made, that it would be wise to do with them what the bankers won't do...invest in gold and silver bullion.

Thanks for the info both tdion and spiderforex.

The strategy in Post #1 is rigid. There is no room for error.

The strategy in Post #8 gives leniency for 1 reversal beyond 100+ pips. That is unacceptable risk.

So now, here is my first attempt at a complete solution. For those of you following this thread, you've realized that the system doesn't adapt to the market conditions. We need to change that.

Here is what you do in a nutshell. Start with $11,000, treated as 11 individual $1,000 legs. As the price advances 100 pips, exit a leg and put the profit in a reserve fund (DO NOT open a reverse position as with Trojan Warfare.)

It is CRITICAL that you only go long NZD/JPY doing this because the daily interest is a pip. Your account will collect these "bonus" pips to pay for commissions required on a full hedge in the opposite direction. The margin money for the full hedge is the sum of all legs you have exited to that point in time.

Example situation: Level 2 passed: 83 contracts long + 66 contracts long, total margin is about $250. But you only exited 1 leg so far (at 100 pips) so you have 10 x $250 margin you need to create the full hedge in the opposite direction. To pay for this hedge, you use your reserve fund (discussed in paragraph 4.) Full hedge is initiated when the price has gone -90 pips (could be -99 but we don't want slippage to cause a margin call) from the latest entry. The beauty of this strategy is that the hedge is made of pure margin money, therefore you will never lose it (only the commission paid to enter it.) Full hedge offers 1:1 coverage, thus 100% neutral vs. price action. Every day you are in the position, you are gaining money needed to pay the broker to open the hedge until its time to open it.

This system isn't mathematically perfect, but give the average Joe a real shot at making it work. I need constructive criticism.

given the complexity of the strategy, would you be trading manual or EA? would be time consuming to monitor throughout.

My initial thought is that there will be no EA for this. You need 400:1 leverage to do this and the NZD/JPY pair. FXSol is the only broker I know that provides both of these, and they do not have an API or Metatrader interface.

I do not want an EA programmed, even if possible. I don't want to have 20 people downloading it and taking 1 mil out of the market through a single broker at the same time. Too much fear the broker would shut down the accounts.

Anyway, it isn't THAT restrictive. We are talking about 90-190 pip swings, so should be plenty of time away from the computer monitor.

I guess the course of action should be:

1) Is it mathematically correct?
2) Is it likely to work?
Possibly 3) Papertrade with Fxsol demo

I expect everyone interested in this idea to take the time to work the mechanics out for themselves. Double check what I've put together. Improve on it.

The strategy will be successfull, I do not think we need extra hedge with all the data we already have.

We would squeeze the number of days it would need to run to achive the result.

Spending an hour a day after work and 1000 bucks, won't make you broke...but yeah...it sure has the potential to change your life.

Would you post a detailed plan of what you are considering? 1000 pip doomsday buffer, etc.

We need details.... Everything needs to be thoroughly laid out to be assessed. Thanks.

Combinations of stop and reverses totaling 11 (limited to 2 SARs)

1-10,1-9-1,1-1-9,1-8-2,1-2-8,1-3-7,1-7-3,1-6-4,1-4-6,1-5-5,2-9,2-8-1, 2-1-8,2-2-7,2-7-2,2-6-3,2-3-6,2-5-4,2-4-5,3-8,3-7-1,3-1-7,3-6-2,3-2-6, 3-5-3,3-3-5,3-4-4,4-7,4-6-1,4-1-6,4-5-2,4-2-5,4-4-3,4-3-4,5-6,5-5-1, 5-1-5,5-4-2,5-2-4,5-3-3,6-5,6-4-1,6-1-4,6-3-2,6-2-3,7-4,7-3-1,7-1-3, 7-2-2,8-3,8-2-1,8-1-2,9-2,9-1-1,10-1

Count of 55.... so putting $100 into each one, that's $5500 invested with a goal of $100,000. So if the price moves 11 levels within 2 stop and reverses, that would be $100,000.... but if it chopped (say 1-1-1) then we'd lost 80% or so of the $5500. Other combinations (say 1-4-3) would make for a small loss or gain.

For those of you that follow this thread, I'd like to present my philosophy of what forex means to me.

It all started 3 years ago when I discovered Netpicks. I explored signal service providers such as FX-Master and Forextrendpointer. I then looked at systems such as Quantum Global and Time Trap.

My first idea was to use a Martingale money management with Quantum Global (a fibo retracement system.) It turned out to be too risky.

After thoroughly researching Prosignal.net, I decided on a new strategy. To put in a small ($1000) investment, and trade a set of signals with extremely high leverage (say 400:1 with room for 120 pip stopout.) I figured a needed a small run of 1300 pips or so with only 1 or 2 bad trades to make a million dollars. Historically, I would have made $1,000,000 three years in a row doing this with Prosignal.

Unfortunately Prosignal suffers from curve fitting because it is based on raw price movements, thus nontrending markets will produce false positive signals. Trending markets could return and the strategy COULD work, but I have moved on to new ideas.

I continued pushing the high leverage strategy into the current pyramid idea. I discovered small contract requirements could play a critical role in success. My goal is to get rich quick, using educated calculated risk. All of this effort could be in vein, but one thing is certain: I push my ideas to their limits.

Thats the way to go....Why wait for the ordinary..when there is a platform to go with calculated risk for millions.

I wish i could have invested my lost money in poker, casino and e-lotto damm vwd into forex carry trade...there is no platform i think on the internet right now...which pays for parking your money...yeah..if you put once in slot machines..it aint coming back..atleast...we get daily interest for the money we put in forex.