Building an equity millipede

Good afternoon, all

This is my last topic which is about emotional hurdles.

All traders will face emotional hurdles as part of an imporant learning curve. It is a mix of fear, anticipation, and greed. Even though we preach each other to be mechanical and to leave emotion out it is far easier said than done.

There are many reasons behind why we feel so agitated and anxious. In my personal thoughts I believe its because,

1. Fear of loss
2. Feeling insecure from/about the lack of capital
3. Greed to make more
4. Uncertain of their own personal ability and the market in general

Points 1,2,3 are straight forward but I would like to spend little more thoughts on point 4. We humans prefer being told what to do. Its one of the basic traits of a human being. Its also why systems that advise trader to enter here when this happens and exit here when that happens is so popular. They are perceived to be the easier road. Traders wont stay long enough to find out if the system does infact work or not. If they persevere, they might find more than they are actually looking for. Accidental discovery or related discovery?

There was a valid reason why I spent the last 2 pages of this thread advising everyone that I come across to practice entries at their own discretion on all time frames, all currency pair, all setups, everyday. Quiet simply there is no other easier way to learn how to trade.

If someone asks me what is some of the important part of my trading success? It is the indepth knowledge on how to enter the market at very good setups. Growth of capital starts from participation but before growth there is the participation. It is how we participate that makes us a pro trader or still a learner. Importance of main weekly/monthly trend, diversification of positions, exponential growth from stacks of positions can only be possible after I participate. Anyone can wildly enter but the professionals know when and where to hit. A street brawler with huge muscles can wildly hit away at a smaller opponent. But this smaller opponent is a professional fighter with much experience. He will evade and dodge until the time is right for a perfect, accurate, deadly strike to the area of maximum impact. This might not look as cool as the bigger fellow but they dont need to look flash to prove their point. Good entries is a must to be a pro trader. You cannot be a pro trader and have bad entries. No such thing. Learning and practicing countless entries teaches you so much more than just entries. I can assure you just from practicing entries, you will also discover that you are able to grasp market sentiments with amazing clarity. As you level up further you will be surprised at some of the things you werent aware of before but now making very clear sense and you could explain it all in great detail. Practicing entries everyday is part of traders self-awakening. What you will learn from this continuous practice is some of the inner traits you hold as a trader. It will be an enlightment.

So what does all this talk of entries has to do with anything in emotional hurdles? It has everything to do with your emotion. Uncertain of ones ability is the very reason why you are experiencing confusion and anxiety. Just like a good driver can anticipate and plan the roads he will be taking in his journey is because he has driven that journey a thousand times. Just like a pro basketball player will stand on the free throw and just know cause he has already practiced shooting from the same free throw line a million times. These experienced individuals certainly dont feel the pang of anxiety from not knowing what to do or what to do next. And this should be us as well. Just like a masterchef cooking his 1000th perfect pasta, we should be entering our 1000th perfect low risk entry. Then our job is done.

And thats that.

Dear all fellow traders, I have contributed last 2 weeks of my time in contributing to this thread. To focus on conveying my thoughts properly and smoothly into your thinking process I entered my posts with great detail. I hope with all sincerity that everyone finds their success in the markets and I would be beamed to hear that later on someone has reached the upper echelon of trading success from my recommended method.

This is not a farewell as such but I would prefer to step back now and continue on with my personal trading and life outside this forum. The whole experience has been satisfying and I feel content for my efforts.

I may or may not be able to reply to your pms or posts and I ask for your understanding.

As promised, I will summarise everything in charts and will post in one long continuous chain of posts either tomorrow or monday. They are currently worked on.

Onward and upward,

G.S

well id personally like to thank you. for your time and contribution here. im sure it will help many when they are ready to understand what you have layed out in front of them. i have learn't from this thread and may have to reread it a few times to take it all in as to not miss anything(as i do with all the good threads).

and here i was only a few weeks back saying i know enough in trading to suit me you just never know.

regards damien

pipeasy,
Very nice thread.Really eye-opener.
It has changed my perspective.
Thanks for insight.

Dilip

Awesome thread Graeme.
This will be an easy read for FF peoples for ages as its all posted clearly & concisely without the usual side tracking & wandering that unfortunately dogs even some of the better posters.

Congratulations on being able to format your thought provoking ideas so efficiently and getting them posted so well in such a timely manner.

I will also be rereading this thread like many others, to absorb as much as I can of your unique view on trading.

Again - Thankyou.

cheers scalpz

First of all, I'm a litte strange trader, I'm profitable since the first day I traded on real, I do only believe in scientifical aproach, and after about 2 years of research (learning english, reading book about MM,markets, indicators, risk management) and 6 months in demo-account I started in real.

My problem was/is the initial amount of capital, less than 5.000. In ten month I achieved to double it with a very simple method of entries an exits, It works intraday, and it is fully automatic.

With my mathematical aproach to the forex markets in order to continue growing and try to learn I found FF, and after a while this thread that I consider very interesting. I'm trying to prove that mathematically the "millipede" method has a positive expectancy, that's my goal now.

I read carefully but even doing this I have a lot of questions. In order to create space to the "creator" of the system, I will be posting my question and the results of my research if he wants.

My first question:

You explained that you try to enter to the market every day with a very short SL. And after letting the market do its work move the stop loss to the break even. I can't understand why don't you make a trail with the SL after that, let's say every 500 pips, and compensate the news hits with more legs.

Thanks

As they say, "this thread is full of win!" LOL

Hopefully someone will start up a journal thread chronicling their choices of pairs, trends and entries/exits...

I have to say this one of the rare Gems of ForexFactory!

Hello everyone.

As I said when I read pipEASYs first post, I knew it was something special. I do not know whether it was my voice when I read the charges or his words and the way he passed by.

Anyway, his words I projected onto the charts, and the fact is that every major move in the weekly / monthly chart in one moment begins with one pip move. What he would like to say is that the management of the good position with close SL can produce BIG profits and other failed position are negligible. Entries and exits are not so important, in management of positions are large reserves.

I once had a demo account with a brooker only for charts. One day I opened a position for fun and forget it. It was not soo big position. After a good half a year I saw the yield on account of 300%. Then I learned nothing. But today, with the help of pipEASYs Im looking the forex business by other means with much more opportunities.

pipEASY, thank you very much.

Maybe I am just dumb. I'm still having a hard time understanding what the OP means by 'diversifying' as there is no such thing in forex that I am aware of so I am assuming they are using it in place of another common forex term?

Also, I am having a hard time understanding how one can have buy and sell position on the same pair at the same time. With my broker (Oanda) you cannot do that. If you have a buy position and you enter a sell position it simply subtracts that amount from your buy. If it's the same amount it is exactly the same as closing the position. So following this method. I would follow the market even if the long term trend is in corrective retrace. But all I will be doing is reducing my long term buy or sell units by placing short term sells or buys.

Am I understanding it right?

PipEasy's meaning for diversifying is basically the act of banking one more legs and promoting some legs to long term positions. You would need to use a broker which allows hedging. PipEasy doesn't hedge in the normal sense. He opens longs and short based on what the market tells him. It's a very organic way to trade, since he will have trades in place regardless of how the market moves.

I posted an analogy to portfolio balancing in this thread that pipEASY seemed to agree with:

http://www.forexfactory.com/showpost...1&postcount=78

Regarding being long and short at the same time, non-US forex brokers let you do this. If you're in the US you can open an account with one of the off-shore brokers. It's not as convenient, but you can open two accounts and trade long in one and short in the other to get around the hedging rule. Oanda lets you do that very easily with their subaccount arrangement.

Thanks. Yes I suppose one could use subaccounts but I believe that is for trading different currencies and you can only have one account per currency so you would need to trade in multiple currencies.


Ok, so now I understand he is basically hedging and US accounts don't allow that. Now I understand. Thanks.

Thanks Pipeasy!

Top shelf thread. Looking forward to you charts.

BDC

#1: I have a single EUR account with Oanda and have multiple subaccounts that allow me to do anything I want including hedging where you would have to go long in one subaccount and go short in another one.

#2: In my view pipEASY's trading approach is far away from what I would call "basically hedging" but I'm sure he will answer to your perception in person.

You can't do it if your broker doesn't allow hedging so as far as I'm concerned it's hedging. He may be doing it on high time frames and his system does not really see it as hedging but it still is what it is.

I think I have the jist but without charts I am finding it pretty difficult to translate his trading language. I'm more of a visual thinker. I will have to read the entire thread 10 or 20 more time I think.

I do like the basic concept of position trading. I see the importance of taking trades on both sides in this particular system but I see no reason it can't work well just averaging in and averaging out. Always with the trend. So all trades spanning weeks and even months would all be buys or all be sells for a particular pair. I can see the power in this because when you are leveraged all +ve pips are exponential profits and if you use hard stop loss your risk is the same each time. The basic system also talks about moving up the stop loss each time a new position (leg) is added. That would be different from this system I guess but it's necessary if you are not taking buys and sells simultaneously.

Maybe I still don't get it because if it is all about trading with the long term trend why would you have active buys and sells simultaneously. The long term trend will always be either buy or sell but never both. Unless of course he is talking about the long term trend reversing way down the road like weeks or months later and instead of closing the previous positions that have been going for serveral weeks/months he just keeps taking more positions but changing the direction of the position???

The way I'm understanding it is buy low sell high with the long term trend and just hold it. He counter trends the weekly charts opposite of his main leg positions. This way his equity curve stays smooth. Fact is that his main position it temporally losing pips while his counter trend is making them back up. In the end it looks as if he's having no draw downs but in reality he is. Now I could be 100% wrong. First off I love this idea. I live in Ca so its nearly impossible to trade intra day charts. Either NY is open at 5 AM and I have to work at 8 AM and London is open when I need to be in bed.
So I love the idea of trading a daily weekly monthly FT. But entry is the key and he's been vague because he wants us to do some of the work and figure out what WE like as entry points.

If you go back an look at these long term charts they are so smooth and easy to read. But 20/20 right. Its something I can demo in my spare time since this is a boring way to trade. Or rather a piratical way for me with my time constraints.
my .2 cents

I really hope he post a lot of charts to show us his ideas and what his favorite entry's look like.
I applaud his help.
Thank you Pipeasy

Good afternoon all fellow traders

I have just completed reviewing all my posts from the beginning of the thread and I must say it’s a long read. I can understand how a trader would be confused at such concept of opening both buy and sell with no pre-defined exit strategy and to add more insult just leaving the positions open at the mercy of the markets indefinitely. Ofcourse this is against the beliefs of the majority of traders, as they choose to be in control over their decisions, positions, and their profit. If you ever wake up from this common traders fallacy you will realize in a sense you have no control at all. You will find successful traders admitting that they are not cleverer than they thought they were and their success is more or less based on the markets final verdict. All they could ever do was to enter at the very best of the opportunities in their own focal interpretation.

For the hot blooded new starters, you will never admit defeat and unfortunately the market will punish your egotistical views sooner or later. And I hope sooner than later. It is up to you whether you truly admit defeat and approach trading in a constructive way or you can continue wearing your favourite hat with the slogan, ‘NO, im still the best in the world’ and pullout new indicators out of your bag and try setting a set parameter again to an infinite possibility of the market.

Unfortunately, I can already see the Chinese whispers game playing out in this thread and I know I have overstayed my welcome. Please take me honestly when I say, I have earnestly gave away all my trading secrets in my posts. I had no beneficial reasons to but I don’t see how my help hinders any of my profits.

Now, before I post my long continuous posts of charts I would like to place a lighter tone by adding a small mocu-interview that I believe will help with everyone understanding. This is me in a potential traders interview. It will be amusing to see that I ask the question and I answer them. Enjoy.

Q. How did you start out trading in forex?
A. During my tenure as D.O of my imp/exp company I noticed some price for goods remain getting cheaper by the month, by the year. It was my job to keep buying goods at cheaper prices. I had constant tabs on politics of both country that I reside and operate and the country we were importing goods from. It was a smooth transition for me into forex trading. I have been live trader for 2 years.

Q. What type of trader are you? And why?
A. Long term (position) trader as I find potential profit of the obvious main trends of weekly/monthly trends that lasts many numbers of years to be an absolute profit making vehicle. Anyone can create exorbitant amounts of capital growth from just following the trend.

Q. What kind of return are you looking at?
A. Whatever the market gives me. I do not pre-define my reward. If the market gives me 10,000 pips, I will take it. If the market gives me 5,000 pips, I will take it. Currently I have more than doubled my trading capital balance easily and still hold a very large unrealized profit that some traders might get squeamish with.

Q. How is such reward possible? What is the trick?
A. Size of my reward doesn’t come from my lot size but simply following and accepting what the market gives me. I never try and predict what the market will do next hour, next day or next month. Nobody can. If anybody has an innate psychic ability then good for them, I don’t.

Q. Do you have a system you use? What indicators do you use?
A. No system. The only indicators I use on my longer timeframe charts are 5/10/200 ema close. I do not base my entries on ema crosses however, 5/10 ema gives me a scope/angle of the trend but I find them sometimes stealing my focus from the actual prices. 200ema is my moving long term s/r.

Q. What are your specific entry methods?
A. I have 4-5 entry methods that I use all the time. I have practiced thousands of times and have performed thousands of live entries. I know them very very very well. I prefer entry methods that need to be broken out of range or squeeze. It needs to. It needs to. I will enter with flow and what the market dictates either buy or sell. I will know very soon after I enter, if it’s playing out correctly to my expectations or something has gone wrong. If it does not play out right I will close out with minimal or zero loss and go back to the waiting line. Entries are something a trader must accomplish as their own personal quest. I would recommend 6months of constant practice to be anywhere near effective. I guarantee a trader will learn more than just entries after that much practice. After entering as per my own personal entry methods I will move sl to be of that position when I perceive the need to. Then my job is done. I have controlled the risk and now that position is at the mercy of the market.

Q. What is your percentage of successful entry?
A. I can vouch my entry methods and I know I can successfully enter a market most of the time and at least move the sl to breakeven. If I were to put a hard percentage, I would say 80% of my entries do exactly what I expect it to do and have its sl to be sooner or later. 20% would unfortunately not work out and I will close out the position with minimal loss or zero loss most times. If im present infront of my computer to manually enter the market, I would never use 100 pip stop losses on any timeframe, which is what I consider a sloppy entry. Losses I encounter will be 20-40 pips, but smaller on most occasions. I prefer to watch the actual market movements on 5min chart after manually entering and consider 5min chart as movements that are actually happening in real time.

Q. Why enter buy and sell? Isn’t that hedging?
A. Seemingly. When I first started trading I was just like all others. I was looking for perfect set of indicators telling me buy or sell. Then I realized that I have no power or the intellectual capacity to try and anticipate where the market might be heading to. It was a lightbulb moment. I saw past the misconception most traders hold against entering both buy or sell of particular currency pair. Trust me, there is more to it than first meets the eye.

Q. What are some of the strengths behind your method?
A. Infinite yield, allowing the market and my positions to make me my profits and not the other way around.

Q. From other successful trader/investor who would you compare yourself to and why?
A. Jessie Livermore and Warren Buffett. Jessie Livermore’s concept of sending out probes (small positions before a major investment) into the market is similar to what I do. Warren Buffett’s concept of holding stock indefinitely is what I also do with my positions in forex.

Q. Where would a trader find difficulty behind the concept of your method?
A. Patience to wait for extended periods, often days and weeks. Unbending faith in ones ability. The reward is definitely worth the wait.

Q. Why do you think most traders fail?
A. Not knowing what to do and when. Traders should be vouching their own ability not the forum community. Also only choosing what they wish to believe and see.

Q. So what is the required ability of a trader?
A. This is the only job requirement: To allow the market in dictating opportunities and continuously executing clean low risk entries as per ones own entry methods on both buy and sell of the same currency pair. That’s all it’s required.

Q. Which pair of currency do you focus on?
A. Every pair of currency that is available except exotic. I have no regards for spread from my broker. Currently Im holding 170+ positions across the board. Every weekly/monthly trend accounted for and eager to add more and more and more.

Q. What is the first surprise an intraday trader moving into long term trading will notice?
A. Intraday trader targeting 2% increase on capital per week will be surprised to see that they can attain so much more by just holding onto their position and letting the market and time grow it for them. Also they will notice that it is a completely different type of stress.

Q. You must have huge drawdowns to hold that much positions.
A. Zero. All risk has been accounted for, all positions sl moved to be. Worst it will do to me will be a zero loss. Any losses encountered from sloppy entries on my par are already settled on my diversifications. I consider drawdowns when position is negative in loss. I dont consider it as a drawdown when a position is up 2000pip last month but now only 1000pip up this month. Thats just part of trading and everyone needs to become a bigger person.

Q. Do you see yourself changing your method sooner or later?
A. Never. I truly believe in my method and I have my profit statement to confirm my beliefs. There is always room for improvements but at the moment I don’t see any necessity. It’s working extremely well at the moment.

Q. Future plan? And when?
A. Continue building my equity millipede. When I quadruple my initial starting capital in my trade balance (not including any of my unrealized profits), I will increase my lot size to 10 standard lots and focus more towards monthly candles. Based on last 2 years, I will comfortably reach my target in next 2-5 years but this also is at the mercy of the markets. You are never too late in forex. You are always too early.

Q. Do you have any worries in regards to trading?
A. Nowadays, my large unrealized profits worries me. I don’t know my broker on personal level and Im thinking about meeting them to arrange some type of special agreement, preferably in a legally binding contract. They have been content with my business and I have also been content with them.

Thank you for your patience.

Please step inside my focal interpretation through my charts.

Try and imagine how I see and think of the market, it will help.

And a warm thank you to everyone who had contributed in the thread the past few days. It is greatly appreciated.

Cordially,

Graeme

The next 6 charts are about how I see the market in general.

I will add more charts on specific topics few days later. Apologies for the delay.

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