Building an equity millipede

Good evening Stevegee58

Thank you for excellent questions. I try my best to answer.

1. I read this three times and was amazed. Yes. And this happens not just in finance.

2. Yes, all correct. I personally dont know bajillion books but it has my interest now. In my personal view high probability systems with lower r:r is a long road of frustration. Im sure there are many successful traders doing this and I wish them well. It will be a different kind of stress level. In forex there are so many long term trends currently starting now, in the middle, or changing. All we need to do is participate. The power of growth starts from participation.

40% loss is fair amount but im assuming some of them are hopefully BE. There is a surprise that awaits all long term position builders. Even though we can blissfully work out how much we can potentially make from our existing positions, at the end it will be so much more on the table and you wouldnt be bothered working out why.

Sincerely,

Graeme

Good evening Pillager

Thank you for the question.

I do apologize for the lack of charts but Im currently learning how to take screenshots. It will be up soon.

Yes, I would enter short if I consider it to be a low risk entry and higher chance of my position to at least be. Even though I will keep my bias on the main weekly trend, I will enter. And once there is a correction and I find the need to move sl to be then our job is done. Name this position and write it in your journal book. It will be a lonely soldier amongst the other buy positions but let the market decide who the winner will be.

Please do not hesitate to ask me any other questions

Good night gentlemen. Day has taken its toll on me.

Sincerely,

Graeme

Hi Graeme,

Thanks a lot for introducing this very interesting trading concept of yours. This absolutely makes sense and I'm especially glad that you're able to get your thoughts across in a simple and comprehensible manner. I think that so far I was fully able to understand your approach. But I'm sure there will be some questions occuring as soon as you share a chart example with us.

Greetings,

sixx

Hi Graeme,

Thanks so much for sharing your trading method. I have always been drawn to intra-day trading. Having the patience to trade higher time frames was a problem of mine. Having read your thread, I now see the great potential and freedom position trading can be.

I'd like to take a stab at answering your question. Assuming the price has not moved much from day to day, adding new legs everyday will cause many trades to be opened around the same location. It would be the same as trading larger lot sizes. If you allow some space between scale-ins, this will allow your previous legs to have some profit built up. You then can use the legs properly to diversify, closing some out and moving some to longer term trades.

I already started trading live on a micro account yesterday. My first entry was stopped out and my second attempt was moved to BE successfully. It was up around 90+ pips before getting it's BE hit during the London session. How many positive pips up do you wait for before you make a move to BE? For me, it's hard for to let a trade go negative if it has made 20+ pips.

Thanks again for such a great thread!

Hi Graeme,
Sorry I think i missed your first question to me, I'm sure it wasn't there the first time maybe you added it afterwards?

I believe trying to establish entries all at once on the same day would result in losing positions all at once. Instead, spreading them out a little and losing only a few on a retracement while the others may live to ride the long term trend if they are lucky.


Yes believe me it was more than worthwhile. I am very grateful to have stumbled on this thread, I think it may have changed the way i trade forever.

May I ask… When you begin building your legs on a currency pair would you just jump in and participate keeping in mind the weekly trend, or would you wait for the daily/weekly charts to reach an area you consider to be a crucial turning point before you begin building legs?

Once you have established a group of say 5-6 legs and they are at break even with a nice profit. Do you still continue to take low risk entries on that pair or do you wait for the market to decide the fate of those legs first before entering more positions?

Thanks for your patience.

Morning Pipeasy,
A question if I may. Eur/usd had been in a long downtrend since about Jan of this year and you have built up some very nice legs on short side, now about june 8th price started to turn and have been going up on daily chart ever since so you start to build legs on long side, now lets suppose that on friday this retrace stops and price starts dropping again, and carries on dropping, so now what do you do with these long legs ? Do you just let them hit your breakeven stop and close out having lost quite a few pips? Do you close them when you think down trend has resumed and make a small profit? Do you close them and put profits back into your account and then open more legs on short side? Really like this way of trading but having some problems getting my head round what to do in this situation, perhaps you could explain what you might do in this scenario.
Many Thanks
Geoff

Good morning Graeme,

Using your method my 2 legs on the cable is coming out nicely and stress free.

I tried to short the eur/gpb as an example but it got stopped out at 90 pips. Instead of a stop loss do you put a buy(hedge) in lieu of the stop loss because sooner or later its going to come down in tandem with the long term trend.

Your opinion of this please?

chonghm

Good morning, Sixx

Thank you for the compliment. It makes my efforts worthwhile.

Just on a friendly note, human perception chooses to see only what they wish to see and believe. Please remember this in your journey of learning. I had no intention of adding charts into my explanation as I wanted all readers to soak and digest on their own thinking capacity. However, I will add some charts to my conclusion this weekend.

Please look forward to them and feel free to ask any questions.

Sincerely,

Graeme

Good morning, Someone

Great questions.

Please keep your open mind for me as undoubtedly you will need my advice at the moment.

Your answer to my question is correct. If I may summarise in a single sentence, increased risk doesnt necessarily increase profit.

I would rarely add more than 3 positions per day. Its a rule I have adhered to this very day and will continue so.

I applaud at your mental strength to open a live account and I stand behind you as support. Please be ready for the emotional hurdles.

Hopefully you have 2 or 3 reliable entry methods that you know so well that you can write a phd thesis. If not, you will have tough time and this concerns me.

Entries are at your own personal discretion. Personally I write down the main weekly/monthly trend on a paper infront of me. I dont mind if they are against each other but I will be content to see them both heading same direction.

I would switch to 4hr, 1hr, and 'scan' the charts for obvious areas of interest (this is also my personal discretion and part of my own entry method). Under my belt I have 4-5 entry methods that I know very well. Then, I will enter the market as per my entry method whether it be buy or sell. Im just following the market at that very moment. When I witness a breakout happening with excellent momentum, I enter with the flow; could be buy or sell. I will concentrate on this new leg and ensure the danger is past and before I walk away I will move sl to be and write down the position name in my journal.

Main trend when I enter is on my mind but 2nd in priority as my complete focus on hand is clean risk free entries.

I will take as many low risk entries as the market gives me. However, this is possible if you have large capital pool. If you dont at the moment, please dont worry and let it effect your clairty or overshadow your participation. You might have to pick from two low risk entires but you are doing you job as per description. Well done.

If you started with $5000 USD, it is doubly important not to add positions on one single day. With limited capital, you must be extra certain about your entries. Let time pass and soon you will have 5-6 positions in your group. Wait till they are distilled and soon you will notice that the market killed off legs that were on the wrong side of the main trend. Soon after growth and markets judgement you will find that you have 2-3 legs left of the same side growing rapidly. Diversify here and hopefully you can keep 1 larger leg for more and 2 legs closed to replenish your capital balance and also adding profit. This ensures that your equity curve is smoth. Try and avoid jagged equity curves. You will understand later on about equity curves. Going back to the surviving leg, it is now promoted and will grow on its own for you. You have already done hard work for him.

It is harder at first but you will find with this type of trading method it will be like rolling a ball down a hill. It just gets so much easier as long as you do your job which is entering the market well for your legs.

I find other trading method concepts is like rolling a ball constantly up the hill. Continously taking small lots of profit then find the ball rolled little back and then to continue pushing it up the hill.

Do you want to roll the ball down the hill or up the hill?

Im very proud of your questions and hope you well


Sincerely,

Graeme

Good morning, Geoff

Your questions are always welcomed and they are excellent.

Correct, eur/usd had a very good downtrend since early this year or end of nov last year to be precise.

And just on the side I would like to mention that anyone would have made large profits simply only selling below the days open price. It is obvious trend and very foolish not to be considering long term positions on this type of trend. Moving on.

Geoff, in times of uncertainty I will diversify. When I diversify, in my own terms, Im reducing my risk to zero + banking a healthy capital balance + its gets out my way in my mind. I dont decide the fate but the market will later on. Im just a position manager.

I request you grab a piece of paper and simulate a scenario of the one you mentioned above and what I would have done. You will find, profit on both side of the coin.

Please do not allow legs dying on breakeven to effect your emotion in anyway. Even if that leg was up 200 pips yesterday. As a long term trader we do not necessarily want 200 pip legs. If a leg only fought for you and reached 200 pips before dying on breakeven, this is not your fault but the legs fault. That leg doesnt even deserve a soldiers burial in my regards. Also please look at it as glass half full by assuring yourself, that leg had the potential to grow 3 or more years for you and finally exit with 10,000 pips at your leisure. You just had a chance to make 10,000 pips on a position and the beauty is, worst case scenario it would have died on breakeven. Wouldnt you consider that an extremely good payoff?

And yes, if market dictates that downtrend has resumed, I will do my job of entering with the flow at low risk setups. Im at the mercy of the markets judgement. When market resumes the downtrend, I will enter sell. You will notice in that particular group your building to have mix of buy positions and mix of sell positions. Allow time for the market to judge. If the downtrend resumes, you will find buy positions dropping like flies and sell positions increasing in number and size. Then you will know that the market has decided where to go. We cant do anything but follow.

Beautiful day everyone. Hope you all a wonderful loving day.

Sincerely,

Graeme

I am already beginning to see what you mean by 'emotional hurdles', while testing this long term approach I now have 6 open positions all at break even over a couple of pairs. These positions were initiated with very little risk and are now in profit and showing a floating collective gain of 12% of my total account ballence.

It is very hard to see 12% gain sitting there and not touch it or take any profits.

Good morning, Stimulus

Apologies, I nearly missed your post.

Your answer is correct. Increased risk doesnt necessarily increase profit. Please also read the reply I typed just now for member: someone. It will benefit you too.

Moving sl is at your discretion. Once you know your entry method very very well, you will just know when to do what.

Keep practicing low risk entries on demo for all timeframe, all pairs, all setups, everyday. You will learn more than you anticipated. Sounds vague at the moment but you will smile then.

Sincerely,

Graeme

Good afternoon, Someone

Im very happy at the flow of your question. This is flowing nicely into my next topic.

Please dont allow any sentimental attachments to your legs or you will be disappointed when legs die out on breakeven due to fluctuations we have no control over. There should be no room for disappointment if you have done your job to the best of your ability.

As long as your capital holds (please be sensible and realistic), feel obliged to enter as many positions on same currency pair both buy and sell. The market dictates whether you enter buy or sell and your only responsibility is to participate with a low risk entry. As long as you have moved the sl to be your job is done.

Keep your emotion under control or it will control you which will effect your clairty and hinder your participation in the market. Your capital growth starts from your participation.

Imagine yourself as an army general and you are parachuting soldiers 'strategically' across the battlefield. Better deployment will have higher chance for the soldier leg to survive and continue fighting. Be a better general.

Sincerely,

Graeme

Afternoon Graeme
Many thanks for your reply, it clarifies a lot of things. Will do some more study at weekend and will probably have some more questions, please dont disappear too quickly.
Kind Regards
Geoff

Graeme, thank you very much for all your efforts and charity.

Im reading this forum for about two years, but today I registreted just to greet you.

When I read your first post i knew this will be something big. From that day I hardly wait for every post you make.

I admit that you are changing my view of market and I belive I will soon realize what you are tring to say. Till then every best...

P:S: I now my English is not superior....

Hi Graeme,

been reading this thread since start and must say this is one of the best threads here at FF.

Thanks for sharing all your knowledge with us here, it is priceless...

BR

PC

Good afternoon all fellow traders

Thank you for coming this far with me. It is greatly appreciated and hope my contributions has opened a different perspective to your trading beliefs.

For the new comers, I request that you start the read from the start of the thread. I have put in alot of effort to come this far and if you are here for answers then I'm certain you will find something that you will like.

Im drawing closer to end and my next topic is about the required thinking process to be a long term trader.

How do you see the market? Do you know the size of a single currency pair? There are so many factors inside a single currency pair. Yes, there are ever growing number of traders out in the field all contributing their share into the market. This contribution from traders is nothing compared to what might be really going on in the background. It will be more or less a dot in an infinite space and time.

And it is far more than what fundamental traders, economist forecast. How many times has an economist been proven wrong? It will be less than the amount they were right but perhaps this is a folly from the newspaper or magazine who has an interest in selling publicity for their own personal profit taking. If an investing magazine publishes about an economist failure, who wants to pay money to read that? No one. It is mass medias interest to keep you interested in what you want to believe as long as you are buying their magazine. And this includes all trading seminars. Brokers? They want you to be an intraday trader. More executions, more risks, more revenge entries, more punts, more speculations. Thats what they want and they will allow you to do anything on their platforms to make you belive that you have it under control. Just like casinos supplying scorecards at their tables so the gamblers can draw little pictograms and work out the future from what happened in the past. I consider indicators to be the same and ofcourse the brokers will allow them by all means. I have just noticed that the word broker automatically becomes a hyperlink to click on. So perhaps the interest of this very forum is different to our traders interest too.

There has been countless and countless number of intellectually superior individuals over the centuries to try and work out how to make money from the markets. This riddle will never be solved. Or perhaps it wasnt suppose to be solved but respected and accepted as it is. There will be chaos if this riddle is solved and everyone will be very rich or it would be the doom and closure of every market in this world. There is no set of indicators or method that is readily available for anyone with an IQ of a warm room to adapt and make zillions from the market. Some of best and brightest minds on this earth are still researching. My son is currently hired by an international finance giant to create a model for listening to certain waves in the market. And he has a doctorate in astrophysics.

A very few percentage of people will make it happen. Just like there is professional gamblers who make millions from just gambling, some people just make it work. But it wouldnt be from the common belief of the majority. They made it cause they accepted the facts and looked outside the box away from the common crowd and diligently worked towards their dream with sensible and realistic efforts.

Amongst the people who have made it, Im sure there are scalpers, intraday, swing, position traders. All shapes and sizes. Anyone who can make it in the market deserves the reward they create. I have personally met a very successful swing trader who holds positions only for a week or two. Im the type of person who would never believe any claim thrown at me however this gentleman definitely has genuine success. We became good trading buddies and we would speak about the market to great lengths. He was very bold and direct and definitely wasnt shy about his actions. I could see his character through his method. It wasnt a surprise to see that his method has changed this persons natural character to an aggressive and on the edge temper. He was quick to conclusion and quick to change his mind. I didnt admit back then as there was no need but we were using same lot size and similar entry methods but my profits was many folds larger than his. He still thinks otherwise of me and thats all i care to do for now. Over the numerous meetings I would carefully advise that perhaps he should hold onto his hard earned positions indefinitely and let them grow to their potential. He retorted at such idea and didnt even give second thoughts. This person is definitely a better trader than I am and he could be so much more if he just followed the market. Unfortunately he is already locked up in his own box and the key thrown away a long time ago.

Just like my trader friend, everyone chooses to see what they wish to see. This will be the first hurdle that everyone needs to overcome to be a better trader and a better person in life. Even though I understand how and why some traders would like to only intraday trade. It is most likely they are looking for instant fulfilment when looking at the days profit statement or end of week. However, you need to become a bigger person and acknowledge that this market is so much more than a blip of 80 pip movement. And you certainly shouldnt be focusing so much on 80 pip movements everyday for the rest of your trading career.

I request all fellow traders who has some level of success in trading to keep a simple journal of all their live trades or serious demo trades. Write down entry and exit price and continue doing this for the next 2 months or more preferred. After 2 months please write down the current price of the market for all the pairs of currency you have traded in the last 2 months. Look at this journal and tick any positions if the price of the current market never came back to its entry price. Then work out how many pips have moved from the entry of the position to current price of every ticked positions. Add all the pips and compare this final total amount to your profits. This exercise will add new perspective to your current beliefs, you will be very surprised.

Lets be honest most traders wont even consider to do the above exercise and then I wonder why they are here in this forum in the first place? I thought we are here to learn from each other. But all I see is blind leading the blind. I know Im treading on thin ice to say the next but perhaps readers only listen to someone in forum with 10+ vouchers? Perhaps my lack of posts or vouchers effects my credibility. This is not an attack on the integrity of this forum but all im trying to say is, as a searcher looking for answers you need to search far and wide. I dont see the necessity but I could also join other threads with lots of activity and quote something already known and preached, befriend few traders and have no doubts that sooner or later I will have the required recognition. Perhaps they are focusing more on forum activity than the actual trading itself.

Open your ears and your mind and perhaps someone with no vouchers and under 10 posts could give you that final piece of the puzzle. It can happen anywhere and anytime.

I will leave this post for now and will come back later to edit as there is something important im trying to convey. I do apologize but I have a dinner arrangement tonight.

Will try logging in later on.

Sincerely,

Graeme

Good evening, Chonghm

I apologize for missing your question.

Very good question and i hope other readers also read on.

First of all, Im very glad to hear of the 2 positions you have deployed successfully. I wish them the best. Although I have answered the same to other members of the forum I will answer again for you personally. Please do not grow any sentimental attachments to your legs and also please do not try too hard in one single day to get positive legs. Trust me when I say there is so much time to our side, we do not need to rush.

What I request you to do as the main exercise for the next 6months is to open a demo account and practice your entry everyday. Every timeframe, every currency pair and every setup possible. You need to know your entry method better than anyone.

In regards to your 90 pip loss, Im assuming you entered sell after you read post 53 when I advised Geoff that eur/gbp was losing pressure and that I already had a sell position in place. This is not your fault at all but this is one of the reason everyone including myself should keep their personal speculation personal as it will cause problems like this. Near the end of post 53 I explained that I will enter sell on the open of the next daily candle if price broke through yesterdays low. Price didnt break previous days low so I didnt enter sell but was ready to let the market tell me what is going on. There was no intention to misguide anyone but my actions is so much faster than what I can post here for the general view of the public. News 5 minutes ago is still old news

There was 2 breakouts from yesterday to today which should have been noticed. My sell position of wed died at be yesterday however added 3 more up positions in the last 2 days all now at be. Everyone should have definitely caught the todays range breakout as this is a classic setup.

I just had a look at group egbb4 and it has now all buy positions. What is this telling me? Clear up trend and the blip of retrace of mon, tues, wed is now over and done for now. Did i lose anything from retrace? No, but it gave me opportuntity to add 3 more buy positions almost for free. And I was ready to enter sell positions and would have been the first in and building a group of them if the downtrend of mon, tues, wed continued. If this temporary down movement was the start of a new main downtrend on weekly/monthly chart, I would already be in at the very top and groups of legs already forming. Power of participation.

I will diversify group egbb4 tonight. Please dont follow me at all but please follow my concept. This group has been doing very well for last few weeks but it is on the wrong side of main monthly trend. This could be beginning of something huge, perhaps a new monthly uptrend. Nobody knows and Im not sure either so I will diversify to get it off my mind. I will diversify and close out smaller half of my legs to replenish and increase my capital pool and keep the bigger half of legs to remain fighting for me as my uptrend soldiers. If they die at breakeven later on I wont even care/notice because I have group egbb2 (refer to post 53) and egbb3 all ready to fight for me again as my downtrend soldier legs. Its like watching an action movie sometimes.

Chonghm, please read the above twice if necessary cause i know what you are really asking and it is in my story above.

Kindest Regards,

Graeme

Good evening, Geoff

My pleasure. Please read my reply to chonghm just above this post. This will benefit your learning.

Sincerely,

Graeme

Good evening, lolek

Thank you for your feedback. It makes my efforts worthwhile. Your english is fine.

Sincerely,

Graeme