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Part Time Wealth Building Trading System - Daily Scalping

  • #841
  • Feb 24, 2007 7:22am Feb 24, 2007 7:22am
  •  Trader#0000
  • | Status: Unregistered Trader
Quoting Al_Have1
Scrat is correct. Trend & volitility are key when choosing a pair. Others can be profitable too but you may want to adjust your SLs & TPs. You can't expect a 100 pip TP if it is expected to move 30 pips. See below (from SFO mag):

Average Daily Range (pips)

GBP/JPY 148
GBP/USD 142
EUR/CAD 125
EUR/AUD 122
GBP/CHF 117
USD/CHF 117
EUR/USD 101
EUR/JPY 99
USD/JPY 99
USD/CAD 92
AUD/JPY 73
NZD/USD 72
AUD/USD 67
CHF/JPY 67
EUR/CHF 47
EUR/GBP 34

Remember, the markets are always dynamic.
There is also an article here: http://www.actionforex.com/forex_ana...2007010515514/
  • #842
  • Feb 24, 2007 7:40am Feb 24, 2007 7:40am
no, i don't think it's a good idea. if you double the risk, you have more chances to blow up your account; remember, the market can go in ANY direction. i've seen ranging periods of 4-6 weeks within the last 67 months, what would you do if this would happen?
i would limit my trades and set lower TP in a ranging period. 100 pips/week is a very decent target, right? the only problem is to stay away... lol.

Quoting ForexDude2
I've been looking at different money management approaches (thanks bholiday for bringing it up) and by looking at yezbick's sheet I think its a good idea to double up after a loosing week especially for the daily method. This would take advantage of the higher probability that volatility will pick up after a low volatility/ranging week. Plus you don't have to go to extremes like the martingale method (which also seems to work with TK's trading if you have enough in your account).

But, we would need a lot more backtesting to be sure. Looks like a valid method though and I'll forward test it on a demo.

Any comments welcomed.

Have a nice weekend.

PS: Could anyone following the original rules (with no TP or max losses) post their results for this week? Thanks
Nihil Sine Deo.
  • #843
  • Feb 24, 2007 8:06am Feb 24, 2007 8:06am
has anyone achieved that..? curious..
  • #844
  • Feb 24, 2007 8:06am Feb 24, 2007 8:06am
  •  Trader#0000
  • | Status: Unregistered Trader
Added another mm strategy (Fibonacci progression) to discuss http://forexfactory.com/showpost.php...&postcount=840
  • #845
  • Feb 24, 2007 8:07am Feb 24, 2007 8:07am
Quoting ForexDude2
I've been looking at different money management approaches (thanks bholiday for bringing it up) and by looking at yezbick's sheet I think its a good idea to double up after a loosing week especially for the daily method. This would take advantage of the higher probability that volatility will pick up after a low volatility/ranging week. Plus you don't have to go to extremes like the martingale method (which also seems to work with TK's trading if you have enough in your account).

But, we would need a lot more backtesting to be sure. Looks like a valid method though and I'll forward test it on a demo.

There is also this option: http://www.forexfactory.com/showpost...5&postcount=48
http://www.forexfactory.com/showpost...6&postcount=52

Any comments welcomed.

Have a nice weekend.

PS: Could anyone following the original rules (with no TP or max losses) post their results for this week? Thanks

Here they are for weekly system... no TPs:

GBP/USD: net -419 pips
GBP/JPY: net 270 pips
  • #846
  • Feb 24, 2007 8:11am Feb 24, 2007 8:11am
Quoting ForexDude2
There is also an article here: http://www.actionforex.com/forex_ana...2007010515514/
Great data! Thank you very much.
  • #847
  • Feb 24, 2007 8:11am Feb 24, 2007 8:11am
  •  Trader#0000
  • | Status: Unregistered Trader
Quoting --Id--
Here they are for weekly system... no TPs:

GBP/USD: net -419 pips
GBP/JPY: net 270 pips
I meant for Daily but thanks
  • #848
  • Feb 24, 2007 9:04am Feb 24, 2007 9:04am
i have been testing a version of the daily system on a demo account during the last week; i used different settings because of the ranging: i set a low TP (+50) and i increased SL for g-j. i put a limit of 2 losing trades/day.
and here's what i got for last week:
- g-u: +138 pips (SL = -40, TP = +50)
- g-j: +80 pips (with SL = -60, TP = +50)
not bad for such a crappy week, is it? if only i have used it on my real account.
i got this idea after i've seen what happened during the last week of january. i think taking small profits along the way is the best way to use this system when market is ranging. if someone has time, maybe it would be a good idea to backtest g-u and g-j with these parameters on the worst weeks from last year (TP = +50; and a higher SL of 60 only for g-j).
i'm doing it now, but it would be good if someone else can run this test. i would be curious what are the results compared to the original settings...
Nihil Sine Deo.
  • #849
  • Feb 24, 2007 9:16am Feb 24, 2007 9:16am
Quoting Scrat
i have been testing a version of the daily system on a demo account during the last week; i used different settings because of the ranging: i set a low TP (+50) and i increased SL for g-j. i put a limit of 2 losing trades/day.
and here's what i got for last week:
- g-u: +138 pips (SL = -40, TP = +50)
- g-j: +80 pips (with SL = -60, TP = +50)
not bad for such a crappy week, is it? if only i have used it on my real account.
i got this idea after i've seen what happened during the last week of january. i think taking small profits along the way is the best way to use this system when market is ranging. if someone has time, maybe it would be a good idea to backtest g-u and g-j with these parameters on the worst weeks from last year (TP = +50; and a higher SL of 60 only for g-j).
i'm doing it now, but it would be good if someone else can run this test. i would be curious what are the results compared to the original settings...
Scrat,

I know you just started trying this method the past week, but were you re-entering on the daily after your TP's were hit, or did you take your 50 and call it a day?
  • #850
  • Feb 24, 2007 11:14am Feb 24, 2007 11:14am
Quoting Scrat
i have been testing a version of the daily system on a demo account during the last week; i used different settings because of the ranging: i set a low TP (+50) and i increased SL for g-j. i put a limit of 2 losing trades/day.
and here's what i got for last week:
- g-u: +138 pips (SL = -40, TP = +50)
- g-j: +80 pips (with SL = -60, TP = +50)
not bad for such a crappy week, is it? if only i have used it on my real account.
i got this idea after i've seen what happened during the last week of january. i think taking small profits along the way is the best way to use this system when market is ranging. if someone has time, maybe it would be a good idea to backtest g-u and g-j with these parameters on the worst weeks from last year (TP = +50; and a higher SL of 60 only for g-j).
i'm doing it now, but it would be good if someone else can run this test. i would be curious what are the results compared to the original settings...
For the month the GBP/JPY works out at about 600 pips using a 50 pip straddle entry, 50 pip TP1 stop to B/E and 100 pip TP2...
  • #851
  • Feb 24, 2007 11:50am Feb 24, 2007 11:50am
no. i took 50 pips and that was it. but i left the other pending trades open until the end of the day (which proved to be useful on that friday g-u move).
now if i can find a way to figure out when and how much i should adjust SL and TP...

Quoting grajo
Scrat,

I know you just started trying this method the past week, but were you re-entering on the daily after your TP's were hit, or did you take your 50 and call it a day?
Nihil Sine Deo.
  • #852
  • Feb 24, 2007 12:08pm Feb 24, 2007 12:08pm
If you look at the calculations done in post 623...you will see that doubling does not double the risk...if done correctly...you actually have a better chance of success with it....do the math...

Quoting Scrat
no, i don't think it's a good idea. if you double the risk, you have more chances to blow up your account; remember, the market can go in ANY direction. i've seen ranging periods of 4-6 weeks within the last 67 months, what would you do if this would happen?
i would limit my trades and set lower TP in a ranging period. 100 pips/week is a very decent target, right? the only problem is to stay away... lol.
  • #853
  • Feb 24, 2007 12:18pm Feb 24, 2007 12:18pm
ok, then tell me what if you double and the next week you have a greater loss?

Quoting bholiday
If you look at the calculations done in post 623...you will see that doubling does not double the risk...if done correctly...you actually have a better chance of success with it....do the math...
Nihil Sine Deo.
  • #854
  • Feb 24, 2007 12:28pm Feb 24, 2007 12:28pm
Did you look at post 623?

Quoting Scrat
ok, then tell me what if you double and the next week you have a greater loss?
  • #855
  • Feb 24, 2007 3:10pm Feb 24, 2007 3:10pm
yes i did. but i'm not sure i got it right.

Quoting bholiday
Did you look at post 623?
Nihil Sine Deo.
  • #856
  • Feb 24, 2007 3:18pm Feb 24, 2007 3:18pm
Quoting bholiday
If you look at the calculations done in post 623...you will see that doubling does not double the risk...if done correctly...you actually have a better chance of success with it....do the math...
Hi there B.

This is intriguing. Couple of questions and comments.

1. How do you size your initial position? Looks like it is somewhat less than your "normal " risk amount (say 2 or 3%), and then works its way over that.

2. My testing shows that the daily method brings just under 50% of one trade days. So on those days your net would be substantially less if your initial position is "smaller". You would take an overall profit hit on those days. Does the method make this up amount lost on those days?

I love creativity keep up the good work!

Regards.

Jim No
  • #857
  • Feb 24, 2007 4:03pm Feb 24, 2007 4:03pm
Seems like there is a lot of confusion about my post (623)....I will try to make it more understandable.

Basically...if you can afford to go in with 4 mini lots to start...don't...instead start with one mini lot instead...if your target of 100 pips is hit...
you made 100 dollars...if you lose 40...you lose 40 dollars...at which point you are now entered in the opposite direction...and if you hit the 100 pip target...you now made 60 dollars...(100 pips minus the 40 pip loss)....

If instead of gaining 100 pips you lose again...you are now down $80 dollars (2 times 40 pip stop outs)...

At this point...you enter the other way again with 2 mini lots instead of 1...if it goes 100 pips in your favor...you now have a profit of $120...($200 profit minus $80 loss)...

If you lose 40 pips instead...you now have lost a total of $160...(80 pips from the two losses with one mini lot...and one 40 pip loss with 2 mini lots =80).

At this point you re-enter the opposite way for a target of 100 and if it is reached...you now have a profit of $40...(100 pips times 2 mini lots equals $200 minus the previous losses of $160).

So even after three stop outs...you are still in profit ($40).

Compare this to minus $80 if you had entered and re-entered with 4 mini lots from the beginning. (see post 623 for the full comparison).

Lets say instead of gaining 100 pips...you lose again...(4 stop outs)...you are now down...-$240. If you had started and continued with 4 mini lots...you would be down -$640 instead.

At this point...you enter the opposite way with 4 mini lots...if it goes 100 pips in your favor...you would have a profit of $160 (4 X 100 equals $400 minus the previous loss of $240)

Compare this to a loss of -$240 if you had entered with 4 mini lots
from the beginning.

Did you catch this? By using the strategy i am proposing...when it finally hits your target of 100 pips...you have a win of $160 instead of a loss of -$240 using the 4 mini lot entry method...after 4 stop losses of 40 pips.

Lets take it to 6 stop outs without a 100 pip win...you would be down
-$560 with the method i am proposing...as opposed to down-$960 if you had continually re-entered with the original 4 mini lots approach.

At this point you would increase your entry to 8 mini lots...and if it finally went 100 pips in your favor...you now have a profit of $240....guess where you would be with the 4 mini lot entry system...down -$560 even with a 100 pip win.

What is the likely hood of 6 stop outs before a 100 pip gain? Possible...but not likely...but either way...you will still be ahead starting light...and following the strategy outlined in post 623...

Hope this makes sense...


Quoting Scrat
yes i did. but i'm not sure i got it right.
  • #858
  • Feb 24, 2007 4:08pm Feb 24, 2007 4:08pm
  •  Trader#0000
  • | Status: Unregistered Trader
Quoting james275
Hi there B.

This is intriguing. Couple of questions and comments.

1. How do you size your initial position? Looks like it is somewhat less than your "normal " risk amount (say 2 or 3%), and then works its way over that.

2. My testing shows that the daily method brings just under 50% of one trade days. So on those days your net would be substantially less if your initial position is "smaller". You would take an overall profit hit on those days. Does the method make this up amount lost on those days?

I love creativity keep up the good work!

Regards.

Jim No
Using 3% you would go up to 12% using bholiday's mm. The question is how many max losers in a row you can have before a win. If its max 6 then you could start with only 10,000 on standard lots.

I'm actually looking at another approach atm (using weekly results, if 2 loosing weeks in a row then double up etc) but I need a lot of backtests to conclude...
  • #859
  • Feb 24, 2007 4:19pm Feb 24, 2007 4:19pm
I came up with this approach...because i really hate to see my account take big hits...i lost a ton of money already in forex...and lets face it...the odds are against us...so i prefer a more conservative approach...(the tortise vs the hare).

I would rather consistently make small profit...(on weeks where others are losing) than try to hit homeruns...

As my account grows...i can increase lot sizes...keeping the same principles in place...and over time...my profits will also be very substantial...

One of the main concepts in successful investing is preservation of capital...I feel it is the most important part of the game...because as long as i have money...i still have the opportunity to make it grow...slowly but surely...

Nobody knows what will happen in the market...so i prefer to play it a little safer...and give myself a little statistical edge...

Perhaps risking 3 percent of your account per trade will turn out to be more profitable over time...but i like to know i have a cushion...when things don't go as planned...

Thanks for the good question.





Quoting james275
Hi there B.

This is intriguing. Couple of questions and comments.

1. How do you size your initial position? Looks like it is somewhat less than your "normal " risk amount (say 2 or 3%), and then works its way over that.

2. My testing shows that the daily method brings just under 50% of one trade days. So on those days your net would be substantially less if your initial position is "smaller". You would take an overall profit hit on those days. Does the method make this up amount lost on those days?

I love creativity keep up the good work!

Regards.

Jim No
  • #860
  • Feb 24, 2007 4:23pm Feb 24, 2007 4:23pm
That's why i dont start at 3%...that would defeat the whole purpose of what i am trying to accomplish...I would be starting at less than 1 percent.

Quoting ForexDude2
Using 3% you would go up to 12% using bholiday's mm. The question is how many max losers in a row you can have before a win. If its max 6 then you could start with only 10,000 on standard lots.

I'm actually looking at another approach atm (using weekly results, if 2 loosing weeks in a row then double up etc) but I need a lot of backtests to conclude...
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