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Weekly 80/20 Setups

  • #301
  • Edited 4:58am Jun 17, 2008 4:48am | Edited 4:58am
hello folks,

for a moment I had the idea that the longer the weekly candle, the more profit was possible.

that would be the pairs with the JPY and CHF, where the ATR compared to price are generally high.

looking on zulu, the system trading in both directions has 15 closed losing trades and out of those 15, 9 trades paired with the JPY ended up with a loss and 3 trades paired with CHF.

probably too early to draw any conclusions, but certainly something to keep an eye on.

count me in for this system and I will be starting next week. just finalising the 10 pairs I want to trade with as little correlation as possible, maybe without JPY? would 10 pairs be enough?

as to money management (sorry, I`m new to forex)
say account is $ 100,000; 1:50 is $ 5 mil available. it has been said that 29% is quite safe = 1.45 mil.
so with 10 pairs I would have my order size at 145k on average per pair.

thank you again Fly for so generously sharing your system.
  • #302
  • Jun 17, 2008 7:03am Jun 17, 2008 7:03am
Quoting yonnie
hello folks,

for a moment I had the idea that the longer the weekly candle, the more profit was possible.

that would be the pairs with the JPY and CHF, where the ATR compared to price are generally high.

looking on zulu, the system trading in both directions has 15 closed losing trades and out of those 15, 9 trades paired with the JPY ended up with a loss and 3 trades paired with CHF.

probably too early to draw any conclusions, but certainly something to keep an eye on.

count me in for this system and I will be starting next week. just finalising the 10 pairs I want to trade with as little correlation as possible, maybe without JPY? would 10 pairs be enough?

as to money management (sorry, I`m new to forex)
say account is $ 100,000; 1:50 is $ 5 mil available. it has been said that 29% is quite safe = 1.45 mil.
so with 10 pairs I would have my order size at 145k on average per pair.

thank you again Fly for so generously sharing your system.
I DO NOT think 29% is quite safe. You will lose 100K in no time if you are risking that much, in my opinion. I would start out much smaller just to get a taste. If your risk tolerance allows for it, you can step it up later. 29% is crazy. I started out at 3-5%, and quickly found out that even that amount was crazy. Keep in mind we are trading WITHOUT stop losses. The only way to safely do that is to start with small positions. Mathematician's numbers were based on my 57 closed trades assuming an average loss of 200 pips on losing trades. He and I both feel that we need more results to get a more accurate look at proper position sizing.

Finally, I want to say that you can't draw too much from what you see at Zulutrade. Zulutrade is what I get around to, when I have time. I have already stopped posting trades to BBFM Low Risk and BBFM High Risk. I only plan to keep up with BBFM Helter Skelter. (By the way, I still have not entered this week's levels over at Zulutrade). I'm finding that this system is taking up way too much time, when it should be more "set and forget." I've decided to scale back in a few areas and Zulutrade is one of them.
  • #303
  • Jun 17, 2008 9:48am Jun 17, 2008 9:48am
Closed Trade #57:
30-May-08 Short USD/CAD 0.9974 17-Jun-08 1.0180 -206



Overall Results:
+3434 Cumulative Pip Total

39 Winning Trades (+158.74 pips/win)
19 Losing Trades (-144.58 pips/loss)
67.24% Win Rate
+59.21 Pips/Trade


By Pair:
GBP/JPY +298
GBP/USD +477
USD/JPY +4
USD/CHF +495
EUR/USD +1254
AUD/USD +496
NZD/USD +401
USD/CAD +161
EUR/GBP +300
EUR/JPY -371

I currently have open positions in: (new positions in BOLD)

Trade No. Enter Date Direction Pair Price
#53) 27-May-08 Short USD/JPY 104.31
#56) 29-May-08 Long AUD/USD 0.9546
#60) 04-Jun-08 Long NZD/USD 0.7784
#61) 09-Jun-08 Short GBP/JPY 208.38
#62) 09-Jun-08 Long EUR/GBP 0.7909
#63) 10-Jun-08 Long EUR/USD 1.5517
#64) 10-Jun-08 Long GBP/USD 1.9534
#65) 10-Jun-08 Short USD/CHF 1.0419
#66) 16-Jun-08 Short EUR/JPY 167.75
#67) 17-Jun-08 Long USD/CAD 1.0180
  • #304
  • Jun 17, 2008 10:18am Jun 17, 2008 10:18am
thank you Flyjetz,

if I have 10 trades @ $ 145k each and I lose 200 pips per $100k on every trade @ $10 per pip that would cost me $ 29,000.

You are trading 27 pairs @ 0.6-1.5% so that`s around 27%.
Is that then trading 27% of your own capital @ 1:1 and not 50:1?
  • #305
  • Jun 17, 2008 10:41am Jun 17, 2008 10:41am
Quoting yonnie
thank you Flyjetz,

if I have 10 trades @ $ 145k each and I lose 200 pips per $100k on every trade @ $10 per pip that would cost me $ 29,000.

You are trading 27 pairs @ 0.6-1.5% so that`s around 27%.
Is that then trading 27% of your own capital @ 1:1 and not 50:1?

I'm sorry, I misunderstood what you were suggesting. I added up my absolute exposure of the 24 trades I currently have and it equals about 27.6% of my account X 50:1 leverage.

If you are only trading 10 pairs, you are looking at 2.9% of capital per trade (at 50:1). Like I said, that's about where I started out, and I quickly scaled back because it was too risky for my appetite. Good luck if you choose to go that route!
  • #306
  • Edited 4:42pm Jun 17, 2008 4:21pm | Edited 4:42pm
Flyjetz

just finished reading this thread, you are making very good progress pipswise however, the only thing that scares me about this system is the drawdowns!

Have you read Jacko's thread in the journal section, he has a novel way of dealing with this problem,

in a nutshell if the price goes against his position by 100 pips (say) he exits and when (if) the price goes a further 50 pips in the same direction he sets an order to re-enter at the exit price.
he calls it "anti-hedging"

you might require an EA to control the trade during the week.

any thoughts?

Steve.
  • #307
  • Jun 18, 2008 10:18pm Jun 18, 2008 10:18pm
Just to clarify in my mind, I am wondering about when a trade has been activated do you still leave the other buy limit or sell limit pending? Or do you now delete/cancel that trade? In other words, if I set the trades up for the week based on the rules and I get my sell limit hit first. It is going in my direction and I am making pips. Eventually I have the TP hit and I am doing well. But at the same time my TP is hit I also activate the buy limit trade. Provided I did not cancel that trade. Do I want to allow that to happen?

I understand that you do not use a stop loss but do you ever place one in the trade after the fact? ie once the trade is in the positive for you will you place a stop loss in to lock in profit.

v/r,
RCWSO
  • #308
  • Jun 18, 2008 10:47pm Jun 18, 2008 10:47pm
Quoting Arnold49
Flyjetz

just finished reading this thread, you are making very good progress pipswise however, the only thing that scares me about this system is the drawdowns!

Have you read Jacko's thread in the journal section, he has a novel way of dealing with this problem,

in a nutshell if the price goes against his position by 100 pips (say) he exits and when (if) the price goes a further 50 pips in the same direction he sets an order to re-enter at the exit price.
he calls it "anti-hedging"

you might require an EA to control the trade during the week.

any thoughts?

Steve.
Steve,

You are right, this system will not work without patience and tight risk management. I have seen Jacko's thread and find it interesting. However, as I understand his method, you get back into a trade that was stopped out at a Stop Loss. Since this system does not use Stop Losses, it's a little more difficult. For some, it may be possible to implement some of his methods. One that I have mentioned on here is the possibility of requiring a price to hit the projected end of the candle (100% or 0%) before triggering at 80/20. In other words, you pick up the trade with some momentum toward the profitable side. I like the set and forget for now, so I will not be implementing that. The bottom line is that if you are going to trade this system under the rules in Post #1, you must use small position sizes and have patience.
  • #309
  • Jun 18, 2008 10:54pm Jun 18, 2008 10:54pm
Quoting Rcwso
Just to clarify in my mind, I am wondering about when a trade has been activated do you still leave the other buy limit or sell limit pending? Or do you now delete/cancel that trade? In other words, if I set the trades up for the week based on the rules and I get my sell limit hit first. It is going in my direction and I am making pips. Eventually I have the TP hit and I am doing well. But at the same time my TP is hit I also activate the buy limit trade. Provided I did not cancel that trade. Do I want to allow that to happen?
RC,

When I first started this system, I only traded in the direction of the trend. So if you trade by the original rules, you would only have one trade set up and would not need to cancel a second trade. Under the new rules, you still don't cancel any trades. Once one of the trades is triggered, it will run until it hits its TP, which is also the entry for a new trade in the opposite direction. Every time you TP a trade, a new trade will open, and you will need to enter a new limit order for when the currently active trade TP's. Basically, you are "ping-ponging" between the 20% and 80% level forever. Of course, the 20 and 80 levels will change every week, so you will need to adjust your TP's and limit entry prices on the weekend.

Quoting Rcwso
I understand that you do not use a stop loss but do you ever place one in the trade after the fact? ie once the trade is in the positive for you will you place a stop loss in to lock in profit.
v/r,
RCWSO
No. I decided early on that Stop Losses killed the flexibility needed for this system. I control risk through position sizing.
  • #310
  • Jun 19, 2008 7:09am Jun 19, 2008 7:09am
Closed Trade #64:
10-Jun-08 Long GBP/USD 1.9534 19-Jun-08 1.9704 +170

http://i276.photobucket.com/albums/k...USD19JUN08.jpg

Overall Results:
+3604 Cumulative Pip Total

40 Winning Trades (+159.03 pips/win)
19 Losing Trades (-144.58 pips/loss)
67.80% Win Rate
+61.08 Pips/Trade


By Pair:
GBP/JPY +298
GBP/USD +647
USD/JPY +4
USD/CHF +495
EUR/USD +1254
AUD/USD +496
NZD/USD +401
USD/CAD +161
EUR/GBP +300
EUR/JPY -371

I currently have open positions in: (new position in BOLD)

Trade No. Enter Date Direction Pair Price
#53) 27-May-08 Short USD/JPY 104.31
#56) 29-May-08 Long AUD/USD 0.9546
#60) 04-Jun-08 Long NZD/USD 0.7784
#61) 09-Jun-08 Short GBP/JPY 208.38
#62) 09-Jun-08 Long EUR/GBP 0.7909
#63) 10-Jun-08 Long EUR/USD 1.5517
#65) 10-Jun-08 Short USD/CHF 1.0419
#66) 16-Jun-08 Short EUR/JPY 167.75
#67) 17-Jun-08 Long USD/CAD 1.0180
#68) 19-Jun-o8 Short GBP/USD 1.9704
  • #311
  • Jun 19, 2008 7:23am Jun 19, 2008 7:23am
http://i276.photobucket.com/albums/k...screenshot.jpg

I thought I would post my Activity screenshot to help explain how the new twist to the system works. I woke up this morning to see that the GBP/USD TP'd at the 80% level at 3:35 AM (Central Time). At the same time, the Limit Sell was triggered starting a new trade from 80% to 20%. At 6:56 AM, I noticed the TP and entered a new limit buy order at the 20% Level with a TP at the 80% level.
  • #312
  • Jun 19, 2008 6:35pm Jun 19, 2008 6:35pm
Closed Trade #60:
04-Jun-08 Long NZD/USD 0.7784 19-Jun-08 0.7628 -156

http://i276.photobucket.com/albums/k...USD19JUN08.jpg

Overall Results:
+3448 Cumulative Pip Total

40 Winning Trades (+159.03 pips/win)
20 Losing Trades (-145.15 pips/loss)
66.67% Win Rate
+57.47 Pips/Trade


By Pair:
GBP/JPY +298
GBP/USD +647
USD/JPY +4
USD/CHF +495
EUR/USD +1254
AUD/USD +496
NZD/USD +245
USD/CAD +161
EUR/GBP +300
EUR/JPY -371

I currently have open positions in: (new position in BOLD)

Trade No. Enter Date Direction Pair Price
#53) 27-May-08 Short USD/JPY 104.31
#56) 29-May-08 Long AUD/USD 0.9546
#61) 09-Jun-08 Short GBP/JPY 208.38
#62) 09-Jun-08 Long EUR/GBP 0.7909
#63) 10-Jun-08 Long EUR/USD 1.5517
#65) 10-Jun-08 Short USD/CHF 1.0419
#66) 16-Jun-08 Short EUR/JPY 167.75
#67) 17-Jun-08 Long USD/CAD 1.0180
#68) 19-Jun-o8 Short GBP/USD 1.9704
#69) 19-Jun-08 Short NZD/USD 0.7628
  • #313
  • Jun 21, 2008 2:22am Jun 21, 2008 2:22am
had a look at the 18 closed trades on Zulu for 17/4/08 when the BBFM Helter Skelter strategy was started up.

Exposure was very unbalanced at the end of 17/4 if these are the trades taken on that day and no other trades are still open.

euro 1 buy/4 sell contracts - chf 3 buy/1 sell - gbp 1 buy/3 sell - usd 4 buy/4 sell - cad 1 buy/2 sell - sgd 1 sell - jpy 6 buy - nzd 2 buy - aud 3 sell

shouldn`t the exposure be no more than 1 contract to keep your risk to any currency balanced?
say jpy 3 buy and 4 sell contracts is alright, but not just 6 buy contracts like what happened on the 17th.

if it is true what I`m saying how can you keep everything balanced? you dont know which orders will be triggered today, tomorrow and the remainder of the week.

if a trade closes out and your jpy exposure as in the example above is now 2 buy and 4 sell contracts, what do you do now.......close out a trade, cancel an order?

just some thoughts.....maybe I`m wide off the mark, but at least I keep my grey cells working!
  • #314
  • Jun 21, 2008 1:25pm Jun 21, 2008 1:25pm
PAIR // 20% Level // 80% Level

GBP/JPY // 209.95 // 213.76
GBP/USD // 1.9519 // 1.9736
USD/JPY // 106.99 // 108.55
USD/CHF // 1.0286 // 1.0484
EUR/USD // 1.5434 // 1.5657
AUD/USD // 0.9425 // 0.9565
NZD/USD // 0.7490 // 0.7613
USD/CAD // 1.0142 // 1.0284
EUR/GBP // 0.7880 // 0.7970
EUR/JPY // 166.53 // 168.89
  • #315
  • Jun 21, 2008 2:20pm Jun 21, 2008 2:20pm
Quoting yonnie
had a look at the 18 closed trades on Zulu for 17/4/08 when the BBFM Helter Skelter strategy was started up.

Exposure was very unbalanced at the end of 17/4 if these are the trades taken on that day and no other trades are still open.

euro 1 buy/4 sell contracts - chf 3 buy/1 sell - gbp 1 buy/3 sell - usd 4 buy/4 sell - cad 1 buy/2 sell - sgd 1 sell - jpy 6 buy - nzd 2 buy - aud 3 sell

shouldn`t the exposure be no more than 1 contract to keep your risk to any currency balanced?
say jpy 3 buy and 4 sell contracts is alright, but not just 6 buy contracts like what happened on the 17th.

if it is true what I`m saying how can you keep everything balanced? you dont know which orders will be triggered today, tomorrow and the remainder of the week.

if a trade closes out and your jpy exposure as in the example above is now 2 buy and 4 sell contracts, what do you do now.......close out a trade, cancel an order?

just some thoughts.....maybe I`m wide off the mark, but at least I keep my grey cells working!
Yonnie,

As I pointed out, there are a lot of limitations with Zulutrade. Since I can't control contract size on Zulutrade, I really have no way to control risk on that site. The only way to do that, is if you see one currency with too many longs or too many shorts, then you would need to make multiple identical trades in the opposite direction on a pair that is trading in the opposite direction. When you look at the Zulutrade stats, keep in mind, I am not trading real money there, and it get's the least amount of my attention. I have been using it to really just track pips gained and lost. I have not been employing any risk management. If you want the most accurate stats, take a look at the closed trades in this thread.
  • #316
  • Jun 21, 2008 4:20pm Jun 21, 2008 4:20pm
Flyjetz,

I see that you posted this coming weeks 80/20 levels. My numbers are fairly different. By as many as 10 pips in some cases. I have checked, double checked and again checked to see if my formulas are incorrect. I cannot find an error in those. A couple of questions.

1. Are you using the Bid or the Ask high and low for the weekly? I am using the Bid price.

2. If you are also using the bid can you compare my weekly high/low to yours for the following pairs? This is the actual reported BID high and low for the last week. I use IBFX. Week of 15 June 2008.

EUR/USD-Max 1.5651 Min 1.5345
GPB/USD-Max 1.9789 Min 1.9465
GPB/JPY-Max 213.26 Min 210.42
EUR/JPY-Max 168.11 Min 166.44

That should be a sample to see if I even have the same starting numbers for this last week. If I do not, then I see the problem. If so, then I am confused even more. I realize 10 pips is not that much when talking 200-300 for some moves in a week on certain pairs. I still would like to have numbers that are close.

3. Clarify that you are using 20 or 21 weeks of data. I know you say you average 20 weeks of info but for the first week you could either start with the 21st or 20th weeks to start with since you need the "previous" week for the first calculations. So is you "Previous Week" the 20th or 21st?

Thanks,
RCWSO
  • #317
  • Jun 21, 2008 6:21pm Jun 21, 2008 6:21pm
thank you for your reply.

I dont try to be difficult here, just wondering and trying to learn.

being neutral is the most important thing to mitigate risk together with money management.

ofcourse you can be currency-neutral when you place your orders, but you have no control when those orders will be triggered.

that means your risk in a particular currency might be sky high at times.

is that your experience Flyjetz?
  • #318
  • Jun 21, 2008 10:43pm Jun 21, 2008 10:43pm
Jetz, I must be missing something. Here is an example of where I am confused: Let's say that you are short in a falling market (your 80 level was hit) and your trade subsequently hits the TP. You immediately reverse to long. The market continues to fall. Now, the week ends and you calculate your new 20/80 limits. The problem is that the new 80 or sell limit is below the previous level of where you bought. It appears that you have locked in a loss. Do you continue to work with the original TP instead of the new sell limit? What am I missing?

TIA,
tb
  • #319
  • Jun 22, 2008 7:06am Jun 22, 2008 7:06am
I`ve been looking at the results made so far in this journal.

until the end of April the system was going in overdrive with 3,634 pips profit and on 6 May even 3,955 banked pips.
after that the pip machine grounded to a halt and stands now at 3,434 with a loss of 492 pips in the open positions.

I think the difference is that the GBP and JPY changed direction in March and because of the 20-week rule, that change was not recognised until much later.

we know that a weekly candle will be formed somewhere connected to last week`s candle, but where will it run?
would it be better to look at a shorter past time frame (the past 6-10 weeks for instance) to better go with the current trend without giving in to whipsaw?

flyjetz, did you have a particular reason to choose 20 weeks?

thank you for all the hard work you put in and for sharing your ideas.

take care
  • #320
  • Jun 22, 2008 8:40am Jun 22, 2008 8:40am
To all,

I am in the process of moving my family three states north. My time and ability to post on here will be very limited over the next two weeks. I know there are several questions that came in over the last day or two, and I will try to compose a response tonight. I just wanted to give you all a heads up as to why I will not be around as much over the next two weeks.
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