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  • #841
  • Jan 14, 2008 2:19pm Jan 14, 2008 2:19pm
Quoting fti
Hi ALL,

Friend, please be assured that I appreciate all the pms that I am receiving.
Thanks guys.
But I am becoming tooo bacl-logged in the rplies and the typing of the lesson.
Plus negiotiating some deals at shenton way, for market, so please be patience if I missed some of the pms.
I would appreciate if some of you who have a clear view of the concepts that I am trying to explain, to help out some here who may be baffled at the lessons.
Debates and ideas sharing is much encouraged.

Lesson 2 on its way soon.

regards
I would suggest that anyone who is having difficulties understanding to post their questions so we can all discuss it further. It would make the thread a lot more interesting and would also allow us to discuss and understand everyone's interpretation.

All generals possess different qualities
  • #842
  • Jan 14, 2008 2:19pm Jan 14, 2008 2:19pm
Quoting DutchAngel
@ alexfot
Could you please explain why you think the calculations are incorrect? They look pretty good to me except that I would be a lot more aggressive with the entries each time ie by tripling initial entry rather than doubling it.
Just check the calculations.
@ Zoran
Thank you for your explanation, I got the idea, this is just an example.
Alex
  • #843
  • Jan 14, 2008 2:23pm Jan 14, 2008 2:23pm
Am I right that market is a battlefield, and the participants are the enemies, and the charts are the terrain and ground?
  • #844
  • Jan 14, 2008 3:05pm Jan 14, 2008 3:05pm
Quoting alexfot
Am I right that market is a battlefield, and the participants are the enemies, and the charts are the terrain and ground?
I agree with the market being the battlefield, however, fti recently posted this:

"There are no perpetual friends,
neither perpetual enemies,
only perpetual interest."

With regard to entering the battlefield, there are no defined friends or enemies... as traders we generally enter with the same interest... i.e. to collect pips and to increase our capital.

As for terrain, I would desribe that as market action. We must move (or dance) with the terrain and know where to take advantage of it.

Now, please let me know where my calculation is incorrect. The pip count at the end is not a running total but just a count from one move to the next.
  • #845
  • Jan 14, 2008 3:27pm Jan 14, 2008 3:27pm
Quoting Zoran
I agree with the market being the battlefield, however, fti recently posted this:

"There are no perpetual friends,
neither perpetual enemies,
only perpetual interest."

With regard to entering the battlefield, there are no defined friends or enemies... as traders we generally enter with the same interest... i.e. to collect pips and to increase our capital.

As for terrain, I would desribe that as market action. We must move (or dance) with the terrain and know where to take advantage of it.

Now, please let me know where my calculation is incorrect. The pip count at the end is not a running total but just a count from one move to the next.
This is very right about enemies and friends, and interests. This is what president of France once said.
Your calculations are right, and I understand that last column is the loss from the last move. But if at the end of each move you got the move of 25 pips, it would not bring you to BE, you would still be in loss. Just check it again. I guess there should be more lots added.
Regards
Alex
  • #846
  • Jan 14, 2008 4:40pm Jan 14, 2008 4:40pm
Quoting alexfot
This is very right about enemies and friends, and interests. This is what president of France once said.
Your calculations are right, and I understand that last column is the loss from the last move. But if at the end of each move you got the move of 25 pips, it would not bring you to BE, you would still be in loss. Just check it again. I guess there should be more lots added.
Regards
Alex
So the president of France also said that. fti mentioned Churchill and Lincoln.

Anyway, I see what you mean. I should have kept a running total (and averaged against it) so the snowballing must be more agressive to keep the average down. It messes up my skew so I might just park MM for now and focus more on lesson 2.

Pips......Lot.....Total..Average..Running Loss
Against.Additions.Lots.............Total
----------------------------------------
0..........1........1
50.........1........2.....25.........50
100........2........6.....25........150
175........3.......24.....25........600
200................................1200
  • #847
  • Jan 14, 2008 4:42pm Jan 14, 2008 4:42pm
Quoting Zoran
After some research, I can see that fti's MM seems to be based around W.Wilder's systems. Firstly his recovery table and his ATR (Average True Range). ATR is based on a 14 day MA (Moving Average). We have pi and phi in the system also. I am still having difficulties visualising it but lets discuss what we know. As fti has mentioned, there is enough processing power in this thread to solve problems.
yes the MM evolves around the WW tables, but the true Range that I use is not the 14 ATR, but rather the TR of a leg of the trend move on the general speed (gradient) of the thrust.
  • #848
  • Jan 14, 2008 4:56pm Jan 14, 2008 4:56pm
Quoting Zoran
So the president of France also said that. fti mentioned Churchill and Lincoln.

Anyway, I see what you mean. I should have kept a running total (and averaged against it) so the snowballing must be more agressive to keep the average down. It messes up my skew so I might just park MM for now and focus more on lesson 2.

Pips......Lot.....Total..Average..Running Loss
Against.Additions.Lots.............Total
----------------------------------------
0..........1........1
50.........1........2.....25.........50
100........2........6.....25........150
175........3.......24.....25........600
200................................1200
Yes he said that too.
Now you table and calculations are right.
  • #849
  • Jan 14, 2008 5:04pm Jan 14, 2008 5:04pm
Quoting fti
yes the MM evolves around the WW tables, but the true Range that I use is not the 14 ATR, but rather the TR of a leg of the trend move on the general speed (gradient) of the thrust.
OK, now you have my interest again. Do you calculate it visually or by using a tool of some sort?

So is this a two dimensional calculation based on time and price (x,y)? Or do you somehow use a three dimensional calculation (x,y,z)? Now that would be more interesting.
  • #850
  • Jan 14, 2008 5:04pm Jan 14, 2008 5:04pm
Quoting fti
yes the MM evolves around the WW tables, but the true Range that I use is not the 14 ATR, but rather the TR of a leg of the trend move on the general speed (gradient) of the thrust.
Hi, fti!
I think I have an idea, what you trying to tell us here, I come up with this stuff just a few days ago, I mean gradient and thrust, but more details would not hurt at all.
Would you please explain more about not gearing more than 30% or 10% of your account.
And thank you for the lesson 2, I've been pondering a lot about it. Now I'm pondering about lesson3.
  • #851
  • Jan 14, 2008 5:30pm Jan 14, 2008 5:30pm
Quoting Zoran
Hi fti, can you please let me know if I am on the right track. In terms of snowballing a bad position, I have come up with the following table. I used the fibonacci sequence (0, 1, 1, 2, 3, 5, 8) as the snowball skew (although I only went up to 3).

Pips......Lot.....Total..Average..Loss
Against.Additions.Lots
--------------------------------------
0..........1........1
50.........1........2.....25........50
100........2........4.....25.......100
175........3........7.....25.......300
200................................175
...................................---
.............................Total 625

So I could let a position go against me for 200 pips while at each additional entry I would only need to collect 25 pips to break even. If my three attempts failed then I would lose 625 pips. I'm wondering in terms of the W.Wilder table, whether these 625 pips would equate to 5%? The increases are just an example as under normal circumstances I would add at an opportune moment (i.e. when market action shows a potential retrace or throwback).
Zoran,
Re your table, the idea and concept is there.
The differences,
1. you use fixed price scales, I work with market volitility. for me the rigidity of fixed levels restricts my analysis of what the market is doing.Moreover it does not allow for optimum timimg of the critical turns. Akin to catch falling knifes and shooting rockets.

2. your progressive fibo exposures is close, but will be more effective if progression skew could relate to volitility of leg of the run. ie taking into consideration the time factor.

3. The recovery pips should not be rigid, must consider the overrall behaviour of the volitility and time factor. If the market does not behave strong into the retracements , you may want to impose stronger core attack then adding on at a constant progression on the attack to avoid drwing you average away too close to the market when it comes into your favour to ride , without giving the market any opportunity to threaten the net exposure.the key is to guesstimate the speed of the whole leg and behave towards it with caution on a low volitility move and to attack with stronger attacks on strong volitility runs. For strong vol runs, you should try not to overstay as the size exposure is bigger.

As an initial attempted model it is ok, much tweaking required. Try not to be rigid in the modelling.AND do not allow the market to go against you too far. On Balance the market should not draw your snowballing too deeply into the retracement, otherwise it may actually be a change in trend and could xcatch you snowballing into a trap. set limits based on volitility/ time sequence. If posotion became too hot too quickly , stay your MM until clearer signs appears then run a progression using the net exposure as a core base.I feel that more than 175 pips against you is too deep and too large position exposure to manage.Unless you have unlimited capital. Even with unlimited capital , you should not waste bullets.

regards
  • #852
  • Jan 14, 2008 5:34pm Jan 14, 2008 5:34pm
I've done a bit of work with the MM and skew, just quickly I came up with these figures. A thing to remember though is that as you add units you are averaging your price down as well so you may be able to be a little more conservative with the added units. If I get more time later I'll add some more calc's to the spreadsheet.
Attached Image
  • #853
  • Jan 14, 2008 5:42pm Jan 14, 2008 5:42pm
Thanks for the last post Fti, indeed I don't think you can be too rigid, it is good to get the feel of what's involved though in calculating your overall position.

With my last trade I noticed that as I added units to a loss it averaged down my 'pips lost' considerably even though I was only adding 1 unit at a time (very mild skew value), this still enabled me to add profits to the book as the PA allowed although it was very hard work. A happy median between playing PA and skew is what I need to work out now.
thanks.
  • #854
  • Jan 14, 2008 5:43pm Jan 14, 2008 5:43pm
Here is my interpretation of part 1 of lesson 2:

Lesson 2 The Battlefield
Part 1: 2.01.01
In picking your battles, do so with caution and do not enter into a drawn out execution. It is psychologically taxing and there are other battles (trades) worth engaging. Have your mental entries and additional entries forecasted for both winning trades as well as for rescue losing trades. You should also have an idea as to where this battle may end. This forecast and predetermined levels, although may be amended at anytime based on gradients and conditions will assist you in exiting the battle swiftly and painlessly.


5 Keys :
When: avoid critical news events with your pairs of choice, these can be surprise attacks and unforeseeable beyond the normal dance. Based on the PA (the dance) be patient and choose the optimum entry place to engage into battle.
Always engage into a trade with the trend at your back.
Choose pairs that you have an understanding of their characteristics. Know thy enemy!
Think twice about shorting high yield pairs, especially on a higher TF’s. There are forces with much deeper pockets that will want longs to prevail. There is also the factor of the negative yield that you must pay for whilst in battle.
Bear in mind key levels of support and resistance, regardless of how the price action is shaping up. These are levels that could be major barriers to entry.


Water:
Taking the following into consideration, overall trend, S/R levels, Fib levels, Capital required (MM rules), only enter into a battle on the path of least resistance, The wind at your back. Also be prepared for the unexpected. Have appropriate resources available to deploy at optimum levels in the event the enemy gets the upper hand. Remember. There are no guarantees.


Discipline and disorder:
When rescuing a trade, be patient and tactical. When the fire in the enemy is burning out then execute your attack. This may be at s/r levels or fib levels predetermined. Let the dance dictate when the music has slowed.
When the sprit is keen, let the young bull run his course. Be patient and wise. Let the enthusiasm if this young strong bull spend itself. When his attack is over, use your resources to counter attack with furor. Slow and steady will win the race. Remember to trade with the wind at your back and don’t play chicken with a speeding freight train.

More to come.

NP
  • #855
  • Jan 14, 2008 5:45pm Jan 14, 2008 5:45pm
Quoting fti
Zoran,
Re your table, the idea and concept is there.
The differences,
1. you use fixed price scales, I work with market volitility. for me the rigidity of fixed levels restricts my analysis of what the market is doing.Moreover it does not allow for optimum timimg of the critical turns. Akin to catch falling knifes and shooting rockets.

2. your progressive fibo exposures is close, but will be more effective if progression skew could relate to volitility of leg of the run. ie taking into consideration the time factor.

3. The recovery pips should not be rigid, must consider the overrall behaviour of the volitility and time factor. If the market does not behave strong into the retracements , you may want to impose stronger core attack then adding on at a constant progression on the attack to avoid drwing you average away too close to the market when it comes into your favour to ride , without giving the market any opportunity to threaten the net exposure.the key is to guesstimate the speed of the whole leg and behave towards it with caution on a low volitility move and to attack with stronger attacks on strong volitility runs. For strong vol runs, you should try not to overstay as the size exposure is bigger.

As an initial attempted model it is ok, much tweaking required. Try not to be rigid in the modelling.AND do not allow the market to go against you too far. On Balance the market should not draw your snowballing too deeply into the retracement, otherwise it may actually be a change in trend and could xcatch you snowballing into a trap. set limits based on volitility/ time sequence. If posotion became too hot too quickly , stay your MM until clearer signs appears then run a progression using the net exposure as a core base.I feel that more than 175 pips against you is too deep and too large position exposure to manage.Unless you have unlimited capital. Even with unlimited capital , you should not waste bullets.

regards
Thanks fti, I did realise the fixed levels were a problem. I will now take all the new information into consideration to see whether I can work it out. But first I need sleep.
  • #856
  • Jan 14, 2008 5:47pm Jan 14, 2008 5:47pm
Quoting sitoca
Think you guys might be interested in this especially Fti. This link was taken from the other thread in the "Brokers" forum.

http://www.londonfx.co.uk/ecn.html

Wonder what are Fti thoughts on this especially FXall?
Thanks for the read.
Interestingly many teir 1 seems in the picture. I do suspect that its not the spot people involved, probably corp desk could be Customer services section. But would be surprised that cust services moved from quoting board rates to interbank styled spreads,very likely Corp desk or could be off treasury projects.
Would be nice to get some verfication from the banks.

I find it funny that Londonfx seems an IT consulting specialist but manages their web page so badly that many of their links are dead. Anyone experienced that? or is it just me?

regards
  • #857
  • Jan 14, 2008 6:00pm Jan 14, 2008 6:00pm
Quoting Zoran
The message I got is that "the system must survive" so whatever is needed to keep it alive will be done. There is no alternative apart from a complete collapse.

Also, although the US banking system caps the loan amount by requiring that for every $10 loaned, the bank must have $1 in reserve and as this amount gets deposited it snowballs into about $1 in reserve for $100 loaned, however, keep in mind that the European system does not have this limit (as far as I'm aware). That seems a bit more scary to me.
I wouldn't be overly concerned with the way the world's economics is run.
Be assured that there are hords of "economic engineers" tweaking it all the time. I think we are not close to the end of the financial systems yet, likely nyper inflation or even depression,but I think no where near the end yet.

regards
  • #858
  • Jan 14, 2008 6:02pm Jan 14, 2008 6:02pm
Quoting fti
yes the MM evolves around the WW tables, but the true Range that I use is not the 14 ATR, but rather the TR of a leg of the trend move on the general speed (gradient) of the thrust.
Hi Fti,
Can you or anyone who figured out this help me. Currently I use an ATR(20) for figuring out my SL. By stating "a leg of the trend" do you mean we have to use ATR(X) - X being the number of periods in the most recent trend. Hope my question is clear.
Thanks much,
WaveRider3
  • #859
  • Edited 6:32pm Jan 14, 2008 6:29pm | Edited 6:32pm
Another model to ponder -
Attached Image
  • #860
  • Jan 14, 2008 7:05pm Jan 14, 2008 7:05pm
Quoting WaveRider3
Hi Fti,
Can you or anyone who figured out this help me. Currently I use an ATR(20) for figuring out my SL. By stating "a leg of the trend" do you mean we have to use ATR(X) - X being the number of periods in the most recent trend. Hope my question is clear.
Thanks much,
WaveRider3
WaveRider,

First off I think losing the concept of having a Stop Loss other than a mental limit of exposure must be addressed, do not show the enemy your cards. fti says he uses the true range of a leg of a trend...hint: use a fib retracement tool (for example) on the most recent leg to give you an idea. This does a few things...it shows volatility as well as possible levels of inflection...no two trades are the same due to the fact that no two trends are the same in length or speed. We cannot be so regimented and stuck on fixed numbers or pips down but nimble to both volatility and exposure. Once you have probable (remember, things can change and often do) levels of inflection based on the volatility present, you can work backwards from your initial capital to determine an exposure level to start with and at how many degrees you will attack.

NP
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