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Peaks and Valleys (Trading Naked)

  • #401
  • Edited 7:52am Feb 22, 2008 7:33am | Edited 7:52am
Hi people,
Mid of day 5 update.
My results aren't good. I will use the weekend for back testing the reasons for it.
The Win/Lose ratio is fine 26/16, but profit is 520/-920 ($). It means that the trades weren't handled right. I will read more about money management as well.
BR
Dani_M
Attached File(s)
File Type: xls Dan_Mir P & V trading log.xls   67 KB | 495 downloads
  • #402
  • Feb 22, 2008 4:26pm Feb 22, 2008 4:26pm
I ended up with 22/18 Win/Loss for +92. What I changed this week is... In the weeks past I've always waited for the initial break-out to happen, then waited for a pull back and THEN entered or waited for an obvious trend reversal, then looked for a pull-back. This week, I straddled the "range" trying to catch the initial move and "anticipated" the reversals. More aggressive, this week. And more greedy . More forward testing will tell the story. Have a great weekend all.
  • #403
  • Edited 4:59pm Feb 22, 2008 4:56pm | Edited 4:59pm
Quoting dan_mir
Hi people,
Mid of day 5 update.
My results aren't good. I will use the weekend for back testing the reasons for it.
The Win/Lose ratio is fine 26/16, but profit is 520/-920 ($). It means that the trades weren't handled right. I will read more about money management as well.
BR
Dani_M
Are you pyramiding your entries? Personally I have found this makes up for the many small losses. You get one big fat win when you catch a good trend. See my post
http://www.forexfactory.com/showpost...&postcount=156

and

http://www.forexfactory.com/showpost...&postcount=204
  • #404
  • Edited 12:00pm Feb 23, 2008 3:19am | Edited 12:00pm
Quoting Jared
Are you pyramiding your entries? Personally I have found this makes up for the many small losses. You get one big fat win when you catch a good trend. See my post
http://www.forexfactory.com/showpost...&postcount=156
and
http://www.forexfactory.com/showpost...&postcount=204
Hi Jared,
Did you do it in real time with a live account?
In back testing, must of the systems behave well and you are able to gain money, but in real time & money, it is a different story.
BR
Dani_M
  • #405
  • Feb 25, 2008 4:04am Feb 25, 2008 4:04am
Hey guys,
I must begin to say that this thread is under rated. The peak and valley method seems to be a simple and effective method throughout all forms of trading. Let it be Forex, Stocks or Futures.. One just need to know how to apply it correctly. Kudos to kharvell for initiating this thread.

Ok here goes, I have used this concept a couple of times and it does reap some good profit, especially with the pyramiding. That is just a wonder.

However, I have a question on the order price. What would be the best order price to use? In this thread I have seen 3 possible orders to use:

1) to Buy 3-5 pips above the peak of the close price
2) to Buy 3-5 pips above the peak of the median price
3) to Buy 3-5 pips above the high of the peak bar

I know some of you will say to each is own. I just want to know if there is really a difference or is there a preferred entry.

Thanks to everyone for their contribution.

Regards,
Gyfu
  • #406
  • Feb 25, 2008 11:02am Feb 25, 2008 11:02am
Hi everybody!
I've been following this thread for some time. I am very sad that almost everybody abandoned searching. I trade myself this way so I will share few things with you guys.
My thoughts about pyramiding;
It's true that pyramiding gives you great opportunities but unless every week is like the first week of January 2008 on GBP/JPY, on the long run you will loose. Because pyramiding needs a huge SL. Also, you are adding positions without locking the profits. (unless you managed to enter 2 trades and know exactly were to exit the first one and when to set the second at BE)
Those who managed to trade this way are the lucky guys, as for me I didn't so I sticked to only one trade.

I'll talk more about SL later on but I don't have time right now

PS: Sorry for my bad English, it's only my third tongue.
Attached Image (click to enlarge)
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  • #407
  • Feb 25, 2008 12:51pm Feb 25, 2008 12:51pm
Hey guys,
I might be wrong here, but I assumed that when you keep entering trades in the same direction, you also move your stops when new peaks/valleys form.
That way your SL remains "normal" and you're adding to a winner while going with the trend.
Isn't that the general idea or am I off?

Tom
  • #408
  • Feb 25, 2008 1:33pm Feb 25, 2008 1:33pm
I might be wrong here, but I assumed that when you keep entering trades in the same direction, you also move your stops when new peaks/valleys form.
That way your SL remains "normal" and you're adding to a winner while going with the trend.

That's my understanding too.....the SL moves with you as you pyramid.
  • #409
  • Feb 25, 2008 2:09pm Feb 25, 2008 2:09pm
After doing some little researches on managing the trades I come with the following proposal for the TP and SL. The TP and SL should of course be set in such a way that a good money management must be followed. So, assuming you are risking in every trade maximum 2.5% of your account and following the so called rule “let your profits run”, I think that a ratio of 1:1 for the SL and TP should be enough for about 70% of your position, and let the rest of 30% for extra bonuses. Example: in a case of a long trade a SL of about 30 pips is given by a previous formed valley, the TP for the 70% of the position will be about 42 pips. So, if the market goes against us, we will loose the 30 pips. If it goes in our favor we will close 70% of our position at about 42 pips. In this moment we will move our SL to BE and let the rest of 30% run. The idea behind this kind of entry is that the value of the ratio TP/SL must be somewhere around 1.4:1, giving a total per position of a ratio equal to 1:1.
More examples: SL=15, TP=20
SL=20, TP=28
SL=25, TP=35, and so on.
And about pyramiding… This can be done when certain market conditions are meet. Doing some backtesting, I’ve noticed that most of the time it’s better to take a single trade than to add new lots to an existing position. But, that doesn’t mean that sometimes good trends don’t give this opportunity of pyramiding. In this case, I think in order to minimize the risks, any new number of lots or minilots added must be lower than the original position. Example: if we open 0.5 lots we can add 0.2 lots, then 0.3 lots, then 0.4, and so on. So the risk in the case that market goes against us is minimized and in the same time our position is grown gradually.
I’m waiting your suggestions and ideas.
A good trade is when I Break Even. A great trade is when I Take Profit.
  • #410
  • Feb 25, 2008 5:16pm Feb 25, 2008 5:16pm
I consider myself simple minded and because of that I like to keep my trading simple.
I'll outline my thoughts on how I prefer to trade this method.
First of all, I think going with the trend is key but not always necessary. Discretion is needed to determine times of sideway action where trading this way can be a losing battle. Support/resistance is also something to consider.

I don't believe in pre-set take profit or stop loss figures. IMO it limits the trade's potential by putting a 50 pip TP for example.
I do not set any profit targets. I ride the wave until I get taken out. Sometimes it's a long ride, sometimes short.
We all know the way to enter (enter on break of peak when long and vice versa for short). Then set the stop loss below the previous valley (when long). As price moves up (hopefully), you move your stop loss below each valley that is formed. To pyramid (which I think is another important component), open new long positions everytime a new peak is broken upwards. And move the stop loss of the new position below each valley accordingly.

That's pretty much it.
Using a 1sma on average price seems to do the trick for me.

I'm not saying this is the right way to do it. There is no right or wrong way. Whatever works for each person. As long as money is made.

Tom
  • #411
  • Feb 26, 2008 3:17am Feb 26, 2008 3:17am
Quoting Cornelius

And about pyramiding… This can be done when certain market conditions are meet. Doing some backtesting, I’ve noticed that most of the time it’s better to take a single trade than to add new lots to an existing position. But, that doesn’t mean that sometimes good trends don’t give this opportunity of pyramiding.
100% right , if pyramiding you should lock profits of the last position (or BE) before thinking of adding another one.
The problem i encountered in pyramiding is that all the time (except when market is really trending), you won't be able to put more that 2 or 3 trades and almost all the time the last one is a loss.
That's why i trade with a single loss.
I only choose the trades with a low SL value. Buy at picks and sell at valley (although sometimes i manage to enter before the break) I put my stop loss at the opposite pick/valley.
I only put my trades if I know that I have nothing to do in the next 2 or 3 hours. It's the time that takes me to manage my SL.
Once I'm in good profits (and that depends on the pair I'm trading and the rally this pair made this day comparing to it's volatility) I set my SL at the previous bars high/low. It's like a a trailing stop.
If i see a long bar in my favor I close the trade because most of the time a correction will be made.
I always put a sheet of paper on my desk, write on it the trades I'm in, I put next to each trade the value of my stop loss, every time I change a stop, i make a new column to check the progress of my trades. Because I never look at the floating P/L . I come in mind that today I allow myself to loose let's say 200 pips and keep the progress of my maximum drawdown. It should be something like this :
-200
-170 (oh good! I've won 30 pips... In fact I didn't LOL)
- 150
-100
....... until I'm in positive If all my SL are hit
If I put 5 trades, and only 1 trade went in good profits, 2 of them hit their initial SL (which from the beginning are too small) and the others where small profits or small losses. I have a winning day

In the end everyone have his own type of trading that fits him!!
I'm only sharing with you the way I do it and hoping to give you more ideas.
happy pipping!!!
  • #412
  • Feb 26, 2008 4:28am Feb 26, 2008 4:28am
Hi people,
I wanted to ask two questions -
1. Do you use the P & V system at it basic or do you follow the 1-2-3-4 rule as well?
2. Do you use any trend or momentum indicator ?
I ask this questions because my performance is getting worse every day, and I'm a little lost.
BR
Dani_M
  • #413
  • Feb 26, 2008 4:51am Feb 26, 2008 4:51am
Quoting dan_mir
Hi people,
I wanted to ask two questions -
1. Do you use the P & V system at it basic or do you follow the 1-2-3-4 rule as well?
2. Do you use any trend or momentum indicator ?
I ask this questions because my performance is getting worse every day, and I'm a little lost.
BR
Dani_M
1-I use the 123 formation described by joe ross
2-I also use ATR to check for current price volatility. It helps a lot to know when to close position
  • #414
  • Feb 26, 2008 2:51pm Feb 26, 2008 2:51pm
Quoting dan_mir
Hi people,
I wanted to ask two questions -
1. Do you use the P & V system at it basic or do you follow the 1-2-3-4 rule as well?
2. Do you use any trend or momentum indicator ?
I ask this questions because my performance is getting worse every day, and I'm a little lost.
BR
Dani_M
Hello Dani, I see you have some problems and I would like to give you a little hand. I must say to you that I am closely to finish backtesting the P&V on the E/U on 2007. So, based on this, I’ve managed to pull out some conclusions and ideas that I hope you will find them useful. About SL and TP on this pair, SL is maximum 50 pips on 4H TF. And regarding further management of the trades, I posted my previous post my ideas. P&V is a profitable strategy as it is, with no indicators. Also, on 4H TF, parities like G/J and G/C requires very large SL and that’s why I believe that these pairs must be managed on lower TF in order to achieve a reasonable SL. I’ll test this idea, too. In order to achieve better results, maybe you should watch fewer parities, because there are periods when you need to take a good care of your transactions, and not letting the green pips turn into red. Having to watch too many parities might distract you. Even f I reduced the number of my charts. Just think about it. That’s about all for now. Btw, today was a very good day for P&V on the dollar parities. I’m expecting good news from you. Don’t give up!
A good trade is when I Break Even. A great trade is when I Take Profit.
  • #415
  • Feb 26, 2008 8:51pm Feb 26, 2008 8:51pm
Quote
Originally Posted by dan_mir http://www.forexfactory.com/images/buttons/viewpost.gif
Hi people,
I wanted to ask two questions -
1. Do you use the P & V system at it basic or do you follow the 1-2-3-4 rule as well?
2. Do you use any trend or momentum indicator ?
I ask this questions because my performance is getting worse every day, and I'm a little lost.
BR
Dani_M

Hi Dan_Mir,
I used a trend indicator to determine the trend. I know this is suppose to be naked, but the indicator makes it easier to study the chart. I also look at the daily chart and to enter my order from the 4H time frame following the overall trend from the dailies.

I am also quite new to this concept but at times, you might just get out of luck. I was in EURUSD and GBPUSD yesterday, it hits my SL at 50 and now it rockets up..

Hang in there buddy. All will be good. Don't give up.
  • #416
  • Feb 26, 2008 8:54pm Feb 26, 2008 8:54pm
Quote
Hey guys,
I must begin to say that this thread is under rated. The peak and valley method seems to be a simple and effective method throughout all forms of trading. Let it be Forex, Stocks or Futures.. One just need to know how to apply it correctly. Kudos to kharvell for initiating this thread.

Ok here goes, I have used this concept a couple of times and it does reap some good profit, especially with the pyramiding. That is just a wonder.

However, I have a question on the order price. What would be the best order price to use? In this thread I have seen 3 possible orders to use:

1) to Buy 3-5 pips above the peak of the close price
2) to Buy 3-5 pips above the peak of the median price
3) to Buy 3-5 pips above the high of the peak bar

I know some of you will say to each is own. I just want to know if there is really a difference or is there a preferred entry.

Thanks to everyone for their contribution.

Regards,
Gyfu

hey guys... any response to this.. ??
  • #417
  • Feb 27, 2008 4:12am Feb 27, 2008 4:12am
Hi GYFU,
I prefer to buy above the high/low...
sometimes I try to enter before the breakout. Take a look at this trade I made on EUR/CHF
We have some kind of a strong resistance at A
At F We had a break of the Valley but at that time i was sleeping so i missed that entry
Now if don't want to take into consideration the whipsaw in B, E have formed around 50% of retracement. So I place my entry at the low of bar E with SL at it's high+spread.
What I did is that I entered the market at around 7 pips before the breakout!!
And I entered with a lower SL of 20 pips.
Same thing can be done at F

Happy pipping!!!!
Attached Image (click to enlarge)
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  • #418
  • Feb 27, 2008 4:58am Feb 27, 2008 4:58am
A strong support is showing on CHF/JPY Will exit this trade as soon as i'm at BE or small loss
Attached Image (click to enlarge)
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  • #419
  • Feb 27, 2008 5:21am Feb 27, 2008 5:21am
Hi,
Till now, it looks much better today.
BR
Dani_M
  • #420
  • Feb 27, 2008 3:49pm Feb 27, 2008 3:49pm
Hello everyone,
I've just found this thread a couple of days ago, and just finished reading it from scratch. As it was already said many and not enough times, thanks a lot to Kevin for starting it and for his contributions, and to all those who have given their time, especially Swingtrader65 and Freevey.

I started trading demo today, and so far 2 winners out of 3 (the loser wasn't supposed to be taken as per the rules, btw).

One question that was already asked but not answered: Is there some reason to use the median to draw the 1SMA instead of the close, or the high/low for that matter? As Freevey said, it is a matter of personal taste, but if we are looking for a breakout of the range, shouldn't it be "appropriate" to use the high/low of the peak/valley bar?

Well, just stopping by. Will post any future results, for anyone interested.

Pips to you all

Middleastern
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