Building an equity millipede | Page 9 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Thegman's Journal (Equity Millipede Concept) 102 replies

Trading an Equity Millipede 23 replies

Equity millipede & Flying Buddha trading journal 9 replies

Build an Equity Millipede with the filtered Flying Buddha 171 replies

Application Development - Journal of Building an equity millipede 14 replies

Attachments: Building an equity millipede
Exit Attachments

Building an equity millipede

  • #161
  • Jul 19, 2010 2:29pm Jul 19, 2010 2:29pm
Quoting bdcurrie
The way i understand it is that he has developed a skill in regards to entries. The light bulb is beyond the scope of this forum. Perhaps theres a 10,000 entry rule

Now that I think about it... I'm good at only 1 entry. Why....??? Because its the only entry I've ever put a significant amount of time into.

BDC
Good morning, bdcurrie

Thank you for your contribution and the warm remark 2 pages before.

Yes, most traders look for answers and the answers are awaiting for them from practicing entry. It is the basic hurdle all traders need to accomplish first. There is always a better way to enter.

I have practiced far and wide to reach this far and yet I still make mistakes and still learning. However it is almost like driving my car.

Sincerely,

Graeme
  • #162
  • Jul 19, 2010 3:58pm Jul 19, 2010 3:58pm
Quoting pipEASY
Good afternoon all fellow traders
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......
Hi Graeme,

Thanks a lot for the nice thread. I think most traders face difficulties on the entries itself. In your case just the entries itself would make an excellent trading method with good expectancy and a smooth equity curve.

Given that your stop losses are very small, a 80% hit ratio is a method many would die for.
  • #163
  • Edited 4:33pm Jul 19, 2010 4:10pm | Edited 4:33pm
Hi PipEasy,

Thank you very much for the charts. I think I understand most of what you are doing now. However, you do not show on your charts what you are doing when the trend changes on you and you start taking opposite positions. You mostly just show the taking of one position over weeks and months of the long term trend. I totally get that and love that idea. It's the counter trend part that bothers me. I see the logic of it. But what about exits of existing positions. While you are counter trading (or as you call it, diversifying) your opposite positions are getting stopped out. At some point sooner or later you want to exit to take profit so would it not make sense to average out those positions for small profit when you know they will be stopped out and are in fact betting on it by making those counter trades?

There is a technical problem with it for me as well as my broker does not allow counter trading on the same pair unless I do it with a different currency. I plan to add a different broker that will allow this but in the mean time it is a problem for me.

I also see that the hardest part of your method is entry. To enter on dailies with only 20-30 pips stop loss is not easy and 80% success doing that is quite impressive. I would assume the best way to do that is use momentum trading methods for entry? As you say, move SL to BE as soon as it moves a bit and your risk is zero. If you get stopped out just wait for another opportunity. Great system if one is able to handle the mental part of it. One would also need to have the patience of a rock but I have been a buy and hold investor for years so I think I can do that.

So my main question for you is, can one just trade the main long term trend and never trade against those legs and still make this system work? This is basically exactly what you have just shown on all your charts. So always just buy or just sell but never both unless the long term trend changes at which point you liquidate and start trading the other direction.
  • #164
  • Jul 19, 2010 4:11pm Jul 19, 2010 4:11pm
very intriguing thanks for the great info graeme

regards damien
i pull the trigger when others are fearful---me
  • #165
  • Edited 4:36pm Jul 19, 2010 4:25pm | Edited 4:36pm
Quoting Eklavya
Hi Graeme,

Thanks a lot for the nice thread. I think most traders face difficulties on the entries itself. In your case just the entries itself would make an excellent trading method with good expectancy and a smooth equity curve.

Given that your stop losses are very small, a 80% hit ratio is a method many would die for.
Good morning, Eklavya

Thank you for your feedback. It is appreciated.

Due to alot of requests, I will spend some time just going through the topic of entries. This will hopefully add some new insights.

One of the secrets to entries is to piggyback ride the mass of majority of traders. This may already be known to the experienced traders but please allow me to expand on this for all the readers.

My entry methods are mostly based on areas where price needs to breakout. Price cannot stay static and remain in a range bound. It needs to breakout and I will be there on the sideline waiting and watching this happen.

Now, let me show you what I mean by piggyback riding other traders. Even if you have practiced your entry methods a thousand times and your skill is more than competent, you require the assistance of the other traders. Let this soak in your thoughts.

Imagine you intrepreted the perfect pennant breakout on the charts. It will be only considered perfect opportunity when other traders/banks/rest of the world also jump into the participation and actually moves the price out of the range that needs to breakout. Before that happens its not a breakout.

I would like to use the phrase 'compelling momentum.' I anticipate the flow first and only enter with the rest of the crowd when they are climbing on board. Im using their participation to help my position to make at least breakeven. All I do is cheer with the crowd whether its a buy or sell. I never enter first and then expect the market to follow me. You are never too late in the markets, you're always too early. Dont forget that please.

I asked in post 146 why I would have indicators on my charts and yet I dont use them?

Nobody answered or perhaps maybe I was too vague.

Sincerely,

Graeme
  • #166
  • Jul 19, 2010 4:29pm Jul 19, 2010 4:29pm
Quoting pip_daddy
Hi PipEasy,

Thank you very much for the charts. I think I understand most of what you are doing now. However, you do not show on your charts what you are doing when the trend changes on you and you start taking opposite positions. You mostly just show the taking of one position over weeks and months of the long term trend. I totally get that and love that idea. It's the counter trend part that bothers me. I see the logic of it. But what about exits of existing positions. While you are counter trading (or as you call it, diversifying) your opposite...

Good morning, pip_daddy

Thank you for your contributions into this thread. It is appreciated and I hope all readers learn something from the replies generated.

Im reading your post after I just posted about compelling momentum. You read my mind first.

80% success rate is nothing impressive. Humans cannot comprehend what they perceive to be impossible. I assure you nothing is impossible. Running 20km marathons is beyond most humans capabilities and yet people can still achieve this by waking up early in the morning before work and going for a long run. As the time goes past, they will find that they can run alot longer and easier. After months of practice they will look back and only then they can really reflect on their achievements.

Please allow me to correct any confusion. 20-30 pip stop loss daily entries is impossible for me as well. Perhaps I wasnt clear enough in my earlier posts. I will enter from dailies when I know I will be away from my computer to do any manual entries. Upon my intrepretation I will use a larger hard stop loss or open a position with no stop loss, it depends on the strength of the trend that is happening. Its the manual entries I perform from mainly 1 hr charts and then I scan 5min chart to see the actual price movements in real time to judge when to move stoploss to be or let it endure more. The manual entries usually has 20-40 pip loss on unfortunate scenarios.

Does it sound queer when I say that watching the 5minute chart is like listening to music?

I can hear the rhythm, pace and the crescendo.

Sincerely,

Graeme
  • #167
  • Jul 19, 2010 4:41pm Jul 19, 2010 4:41pm
i noticed it was macd and stochs they are the most used indis apart from m.as so you know theres a huge amount of people watching them.

regards damien
i pull the trigger when others are fearful---me
  • #168
  • Jul 19, 2010 4:43pm Jul 19, 2010 4:43pm
Quoting damosdmf
i noticed it was macd and stochs they are the most used indis apart from m.as so you know theres a huge amount of people watching them.

regards damien
Good morning, Damien

Yes, absolutely. Traders love them and I need their assistance.

Your contributions here is greatly appreciated.

Sincerely,

Graeme
  • #169
  • Jul 19, 2010 5:02pm Jul 19, 2010 5:02pm
Good morning, all

In regards to questions about brokers.

Im aware U.S based brokers do not allow hedging. I do not understand why they would implement such measures. There must be a valid reason but I dont personally see any reason for this type of measure.

The strength behind my method is to anticipate movements for both buy and sell.

Im aware that non U.S brokers allow hedging and thats how it should be.

Im aware of the hassle to use multiple accounts but Im sure everyone can work around this minor hassle.

Sincerely,

Graeme
  • #170
  • Jul 19, 2010 6:42pm Jul 19, 2010 6:42pm
gomarkets allow hedging if its any help to anyone

regards damien
i pull the trigger when others are fearful---me
  • #171
  • Edited Jul 20, 2010 5:52pm Jul 19, 2010 6:45pm | Edited Jul 20, 2010 5:52pm
Good morning, all

Thank you for your interest in this thread. It makes my efforts worthwhile and I feel satisfied at the current progress.

From the last 2 weeks of my contributions here at this forum, I have noticed by first hand some of the fears traders hold.

Even though I have tried to address these problems, I know my efforts is against multitudes of bad habits originating from one bad trader to next.

I wish to address some of the common known myths about the markets.

1. Money management
You will find many traders discussing money management here and there. Most discussions start like this, 'So everyone. With this system all you need is good money management. For good money management, you risk 1% of your capital and aim for 2% growth.' Then everyone will nod their heads in approval and applaud each other at this breakthrough.

The above plan for 1% risk for 2% growth is sensible. Not feasible but sensible. First I would like to address the 2% growth. Why stop at 2%? Who is telling you to stop at 2% growth? We all know market has cycles of good trends and cycles of no trend. It is our responsibility to milk every single pip out when there is a trend. You would be risking 1% risk for 100% growth or more. Ofcourse the accuracy will drop dramatically however you are stopping your own growth by setting pre-defined exits. Market moves 2000 pips in one month, you enter 5 times for 2% growth each. Since its a very good trend you add 10% capital growth into your trade balance. And then you bask in the glory because thats an excellent return? Trust me, if the market moved 2000 pips for you in one month and if you banked only 10%, you are not reaching your potential. Period. When I know from my experience that the charts are telling me a good trend I become very aggressive in stacking.

1% risk? Most traders will say, 1% of my capital is $50 so my stop loss is 50pips so my lot size is 0.1 or $1 per pip. Your risk should really be your chance of losing out in the market not a pre-defined loss. You should really be saying, I know I have performed my breakout entry a thousand times and I can see that a 'good' setup is occuring. Hmm... I give myself 20% chance of losing out with loss and 80% success of at least making breakeven. 20%:80% thats 1:4 risk/reward so I will enter. Hmmm... no participation from other traders.. uh oh not a good sign.. hmm.. i will close out now for -15 pip loss.

But, most traders will enter with pre-defined stop loss. They enter with 50 pip stop loss because the average daily range dictates so and considers that breathing space for their position. I would never allow a position to hit 50pips loss if I knew at -3 pips that something is wrong.

Im not implying that only my thoughts are correct but there is a certain degree of pessimistic views traders hold and it gets passed around.

2. Protect your capital
Another common myth thrown around alot. Everyone should be safeguarding their capital reserve. From what? From yourself and your thoughtless, pointless entries at times when you should be watching everyone else. Does traders realize how a good entry also protects their capital? Unfortunately not. Knowing a good setup and bad setup will avoid thoughtless punts, hence protects your capital from any unnecessary losses or drawdowns. Thats how you protect your capital.

Step outside the bounds of human imagination. Its why we have lightbulbs, combustion engine, microwaves, airplanes.

Sincerely,

Graeme
  • #172
  • Jul 19, 2010 7:07pm Jul 19, 2010 7:07pm
Thanks again pipEasy.

I completely understand how your system can blow away many other systems in terms of potential growth. The money management rules go out the window because all legs are at break even SL so you can be 100% invested right up to your margin and still be technically safe with 0% risk.

I would REALLY have to trust my broker though because there is nothing stopping them from just closing out all my positions one day. I could have been slowly building some of them up for months or even years. That would be a disaster. Maybe it's because you hit your margin or maybe they see that they will lose a bunch of money if you liquidate so they flat out screw you. Maybe they try blame it on a technical glitch. I would have to read their terms of service more carefully to see if there is anything stopping them from doing this. I would also need some assurances from them that I am protected in case my stop losses get erased by them for some reason and I suddenly lose everything.

I would definitely use more than one broker doing this just to hedge against a catastrophy of some sort.
  • #173
  • Jul 19, 2010 7:13pm Jul 19, 2010 7:13pm
Quoting pip_daddy
Thanks again pipEasy.

I completely understand how your system can blow away many other systems in terms of potential growth. The money management rules go out the window too because all legs are at break even so you can be 100% invested right up to your margin and still be technically safe with 0% risk.

I would REALLY have to trust my broker though because there is nothing stopping them from just closing out all your positions one day even if you have been slowly building them up for months or even years. Maybe it's because you hit your margin...
Good morning, pip_daddy

You are absolutely correct. My very large unrealized profit is starting to worry me. Im also looking at ways to become a broker myself for my own personal trading.

However, I can say brokers wont play folly as I do bring them good business. They make money on spread everytime we enter market. But you are correct by saying I should be doing something.

Sincerely,

Graeme
  • #174
  • Edited 2:32pm Jul 20, 2010 2:23am | Edited 2:32pm
Good afternoon all fellow traders

Before I post the next group of charts I would like to take this opportunity just before the charts to say something important and hope it becomes a cold awakening to all.

Most of us will unfortunately fail as a trader. Vast number of people will lose great deal of money, their home, business to ventures like forex trading. Forex trading is the apex of high risk/high return. And this lure will attract countless souls forevermore. Forex is now mostly made up of overbloated hype and false hopes which devours innocent souls and robbing them blind in a sense. It can financially and emotionally ruin people.

Alot of readers are still searching for the exclusive formulae to solve their problem. This business is hard and its not going to be that easy. You have to earn your learnings.

Now, if I were to choose which part of my contribution in this thread is worth remembering is the next part Im here to say.

Open a demo account with 5000USD and leverage 1:100. You can watch the market anytime that suits your trading. Only one rule, enter only sell if the price is below the daily open or enter only buy if the price is above the daily open (of asian or london). Stick to this rule. Enter with 20 pip take profit including spread and 20 pip hard stop loss from entry. You cannot close the position unless you take 20 pip profit or you lose 20 pip loss. Also you cannot overlap your positions. Only one position open at a time. If the price was higher than open but later went below open then you would only enter sell. No entry methods to be used. Just enter blindly but only buy if higher than open price or sell if lower than open price. If you blow your demo account open another one at same 5000USD and 1:100.

I want you to achieve x3 20 pip take profits before quitting for the day. You failed if you couldnt achieve x3 20 pip take profits for the day. Do this everyday without fail. After 6months you will be a completely different trader.

What does this exercise accomplish? It conditions you to be an effective trading machine. You will connect with the market on subconscious levels. You will be able to see, hear and smell the market. You will have different look in your eyes. Your trading decision are now almost reflex actions.

Currently this is you,

Market -> Indicators -> Your thoughts -> Your action

After this training,

Market -> Your action

After 6months of this exercise, your subconscious decisions will enter the market for you to the second of market movements.

You will have amazing clarity in market sentiments, and can hear/out think what the other traders are anticipating. Most of the time you do not require a hard stop loss cause you can judge very soon after entry whether its going to work out or not.

With this amount of skill any sensible method becomes deadly and you will listen to your inner voice than what you see on s/r lines, trendlines. Price action becomes slow motion in your focal interpretation.


Sincerely,

Graeme
  • #175
  • Jul 20, 2010 4:48am Jul 20, 2010 4:48am
Quoting pipEASY
Good afternoon all fellow traders

Before I post my last group of charts I would like to take this opportunity just before the charts to say something important and hope it becomes a cold awakening to all.

Most of us will unfortunately fail as a trader. Vast number of people will lose great deal of money, their home, business to ventures like forex trading. Forex trading is the apex of high risk/high return. And this lure will attract countless souls forevermore. Forex is now mostly made up of overbloated hype and false hopes which devours innocent...
Hi Greame,

do you mean it is posible to get three 20 pips profit trades after minusing the looses? Thanks.
  • #176
  • Jul 20, 2010 5:04am Jul 20, 2010 5:04am
http://img832.imageshack.us/img832/7568/gbpaud1.png
  • #177
  • Jul 20, 2010 5:08am Jul 20, 2010 5:08am
Quoting Saintsurfer
Hi Greame,

do you mean it is posible to get three 20 pips profit trades after minusing the looses? Thanks.
Good evening, saintsurfer

Thank you for the clarification.

Daily achievement of x3 20 pip take profit with no regards to any losses but cannot have more than one position open at a time. If you enter and the market takes your -20 stop loss you still need to get x3 20 pip take profit.

Dear readers this simple exercise will help you turn into a trader and you will be amazed at the related discoveries along the way.

Sincerely,

Graeme
  • #178
  • Edited Jul 21, 2010 2:48am Jul 20, 2010 5:40am | Edited Jul 21, 2010 2:48am
http://img64.imageshack.us/img64/384/gbpaud2.png

http://img693.imageshack.us/img693/605/gbpaud3.png
  • #179
  • Edited 2:03pm Jul 20, 2010 6:11am | Edited 2:03pm
http://img188.imageshack.us/img188/8932/gbpjpy1.png
  • #180
  • Jul 20, 2010 6:43am Jul 20, 2010 6:43am
Quoting pipEASY
Good evening, all

Thank you for your interest.

Just wonderig if the last 3 charts has summarised what I do clearly for your understanding.

Looking forward to your feedbacks

Sincerely,

Graeme
Hi Graeme,

I have been following every one of your posts with great interest, to me your charts make your whole method very clear. Thank you for taking the time to create them.

Regarding the entries you marked on the last charts, as far as I can see you were not entering at the open of the daily candle. I guess you would have been taking the entries on the 1H charts as you discussed in earlier posts?

Earlier in the thread you mentioned that sometimes you take a trade at the open of a new daily candle instead of trading the lower time frames, I would be very interested to learn what you look at on the daily chart to decide which candles to trade and which to avoid?

Thank you
9 traders viewing now