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  • #241
  • Edited 6:44pm Jul 21, 2010 6:25pm | Edited 6:44pm
Quoting boz5
pipEASY,

Thanks for the thread.

I was thinking about the use of "hedging", for lack of a better term, in your method. I am, like others here, in the US and can't take advantage of that in my account. However, I would like to see what you think of this possible solution. What if, for instance, I am long 10 positions and get a short signal. Instead of having 10 longs and 1 short, I instead cover 1 long and end up 9 positions long, net? This would continue as signals are given and a person would always be either long or short but not long and short...
I'm in the same situation. I thought about it for a few days now and I decided to open another account with an offshore broker. It's not too big a deal. You just send them a money order in the mail. There is a possibility you could do this with 2 separate US brokers (not sure if there are rules against that or not). As someone else mentioned you could use separate subaccounts with your broker but that requires trading in more than one currency.

I believe what you are thinking about is referred to as averaging in and averaging out. I think the way Graeme does it is better statistically and psychologically. With his system you do not have to be right about the main long term trend and you can be participating (as he calls it) much quicker if the main trend has in fact reversed. I would have to do some what if's. Possibly some backtesting to confirm this.

This system is harder than it looks. At least to me. You have to be REAL good with your entries. You will be making a lot of them and if your percentage is low it will eat a lot of pips.
  • #242
  • Jul 21, 2010 6:34pm Jul 21, 2010 6:34pm
Quoting boz5
pipEASY,

Thanks for the thread.

I was thinking about the use of "hedging", for lack of a better term, in your method. I am, like others here, in the US and can't take advantage of that in my account. However, I would like to see what you think of this possible solution. What if, for instance, I am long 10 positions and get a short signal. Instead of having 10 longs and 1 short, I instead cover 1 long and end up 9 positions long, net? This would continue as signals are given and a person would always be either long or short but not long and...
Good morning boz5

Great question.

Broker issues are the least of the worries. There are many brokers in this world who are properly regulated and some even on the stock exchange that allow hedging.

In regards to your question,

10 long positions but you see an opportunity for a short. You dont enter short but cancel 1 long position.

What would happen if this short opportuntiy was start of some thing huge? You wont know and you would miss out.

When you close out 1 buy leg when a short opportunity arises you will increase your trade capital but also stopping your exponential growth. With your method you would be increasing your trade balance gradually and your equity curve will be smooth which has merits.

However, when trend changes, you will have no legs on the new trend.

Sincerely,

Graeme
  • #243
  • Jul 21, 2010 6:40pm Jul 21, 2010 6:40pm
Quoting pip_daddy
I'm in the same situation. I thought about it for a few days now and I decided to open another account with an offshore broker. It's not too big a deal. You just send them a money order in the mail. There is a possibility you could do this with 2 separate US brokers as well (not sure if there are rules against that or not). As someone else has mentioned earlier you could also use separate subaccounts with your broker but that requires trading in more than one currency.

I believe what you are thinking about is basically averaging in and averaging...
Good morning, pip_daddy

Correct. Spot on.

Im not sure how you can backtest the anticipated positions of the future but if you create a worst case scenario for any currency pair and that you enter on all low risk opportunities for both buy and sell. Even if you think very low of the method there will be groups of legs that survives. It is an inevitable fact. It is this small fraction of legs that survive from all your countless low risk entries that will build you huge profits.

Sincerely,

Graeme
  • #244
  • Jul 21, 2010 6:53pm Jul 21, 2010 6:53pm
Hi pipEASY

I'm just onto page 7 of this thread and I must say I have found it inspirational.

I quit the rat race and took up full time forex trading in December last year. So I am a releative newcomer, and within that timeframe I have used up most of my capital. If people can burn two or three account balances and then go on to be some of the most successful traders in the world then I will not falter either.

However I don't feel disheartened, as over the past few months I have noticed that I am getting better. I start to see the setups, release how the market "breathes" so to speak, and above all respect the larger timeframe trends. My entry points of all have come on leaps and bounds. I and my group of trading colleagues have all been taught intraday trading. Some of us still perform well in this volatile, fast paced environment, some of us not so well. One thing we have all noticed is how much we are hedging towards the 4 hour charts, and letting positions run for longer. These inevitably lead to less stress but need more confidence to not close early. We have all been programmed almost to close positions at set targets and that will be one of the hardest areas to change.

I have known for months that the longer term timeframes are for me but with limited funds I thought it was an impossible dream. However with this method it looks like I could actually make the switch to long term trading. Simple question for you, do you think £1500 equity and 0.1 lot sizes is a reasonable amount to work with, maybe 2-3 positions opened a week?

Thanks for a really superb thread and I look forward to getting to the end of reading it, and hopefully contributing to it, as well as becoming as successful as yourself in this beast that is forex!

Cheers
Mark
  • #245
  • Edited 8:23pm Jul 21, 2010 7:23pm | Edited 8:23pm
Quoting mcornbill
Hi pipEASY

I'm just onto page 7 of this thread and I must say I have found it inspirational.

I quit the rat race and took up full time forex trading in December last year. So I am a releative newcomer, and within that timeframe I have used up most of my capital. If people can burn two or three account balances and then go on to be some of the most successful traders in the world then I will not falter either.

However I don't feel disheartened, as over the past few months I have noticed that I am getting better. I start to see the setups, release...
Good morning Mark

Thank you for your post and the kind compliments. I found it very interesting.

Im sorry to hear that you have lost money.

1500 pounds, 0.1 lots is suitable starting point.

However, anyone with limited capital must be extra certain on their entries. Traders lose money on careless entries.

If you know for certain from your experience that you can enter manually 10 times and have more than half of attempt at least move to breakeven you are ready.

I can sensibly say that with good entry method and skill you will be growing your capital very quickly. This depends on your entry skills and patience. Growth will take care of you.

Good skill in entries protects your capital as well. And this is vital to your survival. Systems dont protect capital balance, its your skill to know what to do and when.

First 2-3 months will be the hardest.

Can you handle days/weeks of breakevens?

Sincerely,

Graeme
  • #246
  • Jul 21, 2010 8:16pm Jul 21, 2010 8:16pm
Hello Graeme,

This refers to post 178 pertaining to practicing of entries. Can I go to the lower time frame to look for entries like 5m, 15m or 30m?. Can I use indicators as a guide or do I have to trade naked to practice our feel and gut feelings?

Thanks again for your guidance "sifu"

Sincerely,
chonghm
  • #247
  • Jul 21, 2010 8:42pm Jul 21, 2010 8:42pm
pipEasy,

I'm curious as to what the real RR that average trader can expect from this. One scenario presented by you was losing 100 pips per position moved to be. Based on that scenario the rr would be somewhere around 7 to 1. One certainly has to take into account the cost of producing those positions. My point is..... Would you not be similiarly or perhaps more profitable using a similiar rr that you are already achieving and applying it to each trade? 10 to 1 or 15 to 1....

12859 pips made after approx 2 years
2000 pip cost to produce those positions
6.5 to 1 rr
uhhhhhhhh........
  • #248
  • Jul 21, 2010 8:48pm Jul 21, 2010 8:48pm
Hi Graeme,

I ran a very rough study over the EUR/USD from 3/12/09 to 7/6/10 on a daily chart. Allowing 2 trades each day with one sticking at BE even for a short while and the other averaging a -15 loss. (not good trading) On protruding candles I reckoned on about 29 alive that lasted the overall 3000 points fall over 159 days. With another 15 alive in divergences that were closed at profit once the main trend returned that covered losses of the failed entries. Even if I changed the losers to -30 the overall position if all was cashed in and closed on 7/6/10 was over 40,000. The cost of creation was 1 alive in 6 attempts average so if the stop was full at -30 each live soldier cost 150 (not including 15 alive divergences that made profit). The outlay to cover the time frame with no capital returns was 4,770 with possible divergence returns say around 2,000. Feel free to criticise and it is calculated on a really good trend. But I am impressed with the result.

Your a very clever guy to see this method and then be able to hang in over 20 or more days of losers. It is a bit like building legs in an amway business. Many failures just to get a few winning legs.

If I may ask a question, what are the worst cases of slippage you have suffered when your soldiers were hit during a news event? Do you take this into consideration and perhaps close trades that are too close to the action before this happens?

regards
Rob
  • #249
  • Jul 21, 2010 9:01pm Jul 21, 2010 9:01pm
Quoting chonghm
Hello Graeme,

This refers to post 178 pertaining to practicing of entries. Can I go to the lower time frame to look for entries like 5m, 15m or 30m?. Can I use indicators as a guide or do I have to trade naked to practice our feel and gut feelings?

Thanks again for your guidance "sifu"

Sincerely,
chonghm
Good morning, chonghm

Great question.

You can use any timeframe, 5min is fine. You can use as many indicators as you like as well. You can do anything you think it will work. But try not to use a method as such. Just enter mostly on gut feeling.

I assure you most people will have hard time hitting x3 20 take profits on most early days. And even if they do on lucky days they cant give an answer why they were able to achieve them. This is the first part of unconscious gut feeling.

Your insights will grow from:

unconscious gut feeling -> to good gut feeling -> to insight with reasons -> subconscious actions with plenty of reasoning

Sincerely,

Graeme
  • #250
  • Edited 10:08pm Jul 21, 2010 9:24pm | Edited 10:08pm
Good afternoon, all

Just a little bit of inspiration as undoubtedly traders would like to know how much they could potentially earn from long term growth.

Here are some facts:

Few post before I stated, '292 pips growth per week is not even 5% of my current weekly growth'

Since I have positions across the whole board it is impossible to place a hard number of growth of pips per week. I have just counted 187 positions that are currently still working for me. That works out to be 1.7 positions (that survived) per week over the period of last 2 years.

I had more than 4000 positions in the market one time or the other, which means I had entered successfully (moving the sl to be at least) into market 40 times per week.

Approximately 5% (slightly less) of my positions survived for long term growth. I would say 80% died from breakeven and 15% gave me profit during one of the diversification.

Basing on last few months of progress (not calculating on a daily basis), Im currently adding almost 7000 pips of unrealized profit every week. Obviously it fluctuates but the amount of pips is increasing as the time goes. IM confident I will reach 10000 pips per week comfortably by end of next year.

I will not increase my lot size cause that would hinder me from piggyback riding other traders (one of the reasons why banks have to stay with higher timeframe).

Instead of increasing lot size im increasing my exposure by having positions in every pair of currency. It works out exponentially better.

I can sensibly suggest that anyone starting with recommended 5000usd can turn it into 100000usd around 3-5 years (comfortably). This is based on my performance and please be advised performance varies from trader to trader.

Before you even get halfway there, you will stream tears, anguish and sheer frustration. I would say only a small percentage of trader will get there.

And no, I cant be billionaire from doing this because my exponential growth is still limited to the main monthly trend which can change direction anytime sooner or later. If the main monthly trends of all currency pair last 10+ years and I have growing number of positions across the board then its possible.

Does this motivate you? Then please stick to basics and keep practicing low risk entries everyday without fail.

Traders fail because they skip the basics and go straight to strategy section of the forum looking for steps 1 to 10 in making money from markets.

You need to learn how to walk before running let alone even flying.

Sincerely,

Graeme
  • #251
  • Jul 21, 2010 9:32pm Jul 21, 2010 9:32pm
Hello Graeme,

one more question. Since indicators are discouraged, do you use candlestick charts for interpretation for entries?

Thanks again.

chonghm
  • #252
  • Jul 21, 2010 9:37pm Jul 21, 2010 9:37pm
Quoting chonghm
Hello Graeme,

one more question. Since indicators are discouraged, do you use candlestick charts for interpretation for entries?

Thanks again.

chonghm
Good afternoon, chonghm

Yes, I use candlestick. But for me it doesnt matter now.

Have you tried the exercise yesterday?

How many attempts did it take you to hit x3 take profit?

Sincerely,

Graeme
  • #253
  • Jul 21, 2010 10:12pm Jul 21, 2010 10:12pm
hello Graeme,

Good afternoon. like you said it not easy to make 3x 20 pips daily. If I can do that I would be happy n deemed to be successful already. Even with indicators I have a hard time doing that and I now I got to practice trading naked. Just imagine that. In fact I gave up forex trading after blowing up a few accounts but I do pop into ff once a while to check on new strategies which I feel will be workable for me.

Your concept of trading opens up my narrow minded ways and as you say there is no short cut and only a small percentage will make it. I am now starting to demo with this new concept of trading and I am not going to rush into a live account. Maybe after 6 months of practicing entries I will decide whether I can make some pocket money trading forex.
You are truly generous in imparting your profitable and successful idea to other traders. In fact your forum is the first forum I participated in ff. Thanks again "sifu"

Sincerely,
chonghm
  • #254
  • Edited 10:54pm Jul 21, 2010 10:22pm | Edited 10:54pm
Quoting bdcurrie
pipEasy,

I'm curious as to what the real RR that average trader can expect from this. One scenario presented by you was losing 100 pips per position moved to be. Based on that scenario the rr would be somewhere around 7 to 1. One certainly has to take into account the cost of producing those positions. My point is..... Would you not be similiarly or perhaps more profitable using a similiar rr that you are already achieving and applying it to each trade? 10 to 1 or 15 to 1....

12859 pips made after approx 2 years
2000 pip cost to produce those...
Good afternoon, bdcurrie

Good analysis.

6.5 : 1 is the rr for that moment.

Then what is my rr if i entered a position with 20 stop loss and was closed 2 years later @ 6000 pips? Yes, not all my positions are like that but

the whole purpose of long term trading is for infinite growth.

You are correct that most of my diversification will close legs from anywhere from 1:7 (or less) to 1:15 (or more).

The more time you allow the group of legs to grow the more it will bring in.

You can use rr for a personal speculation but never allow it to pre-define your exits.

Very good question.

Sincerely,

Graeme
  • #255
  • Edited Jul 22, 2010 12:12am Jul 21, 2010 10:26pm | Edited Jul 22, 2010 12:12am
Quoting kurokyandoru
Hi Graeme,

I ran a very rough study over the EUR/USD from 3/12/09 to 7/6/10 on a daily chart. Allowing 2 trades each day with one sticking at BE even for a short while and the other averaging a -15 loss. (not good trading) On protruding candles I reckoned on about 29 alive that lasted the overall 3000 points fall over 159 days. With another 15 alive in divergences that were closed at profit once the main trend returned that covered losses of the failed entries. Even if I changed the losers to -30 the overall position if all was cashed in and closed...

Good morning, Rob

Well done with the project. You probably spent alot of time.

Your amway analogy is correct. I wish all my legs survived for long term but that would make things too easy. Most people fail on amway and I cant help but smile and nod that it will be the same here with the positions and the traders.

Can you imagine profiting from similar result on every pair of currency?

In regards to slippage, it is something that I neither ignore or focus. Yes it will effect me when I enter but it is something that I know I cant control.

Sincerely,

Graeme
  • #256
  • Jul 21, 2010 10:28pm Jul 21, 2010 10:28pm
Quoting chonghm
hello Graeme,

Good afternoon. like you said it not easy to make 3x 20 pips daily. If I can do that I would be happy n deemed to be successful already. Even with indicators I have a hard time doing that and I now I got to practice trading naked. Just imagine that. In fact I gave up forex trading after blowing up a few accounts but I do pop into ff once a while to check on new strategies which I feel will be workable for me.

Your concept of trading opens up my narrow minded ways and as you say there is no short cut and only a small percentage...
Hello chonghm

Thank you for the overwhelming feedback and the honour of naming me as your sifu. Im glad that you have seen trading the markets in different perspective to most others.

Believe in the long trends, practice, wait, and enter without hesitation.

Sincerely,

Graeme
  • #257
  • Jul 21, 2010 10:51pm Jul 21, 2010 10:51pm
Hello Mr. Graeme,

Since you enter your trades at various time frames, can you give me a guideline as to the numbers of pips up before you move your trade to break even to allow the breathing space.

Thank you,
chonghm
  • #258
  • Jul 21, 2010 10:58pm Jul 21, 2010 10:58pm
Quoting chonghm
Hello Mr. Graeme,

Since you enter your trades at various time frames, can you give me a guideline as to the numbers of pips up before you move your trade to break even to allow the breathing space.

Thank you,
chonghm
Hello chonghm

Good question.

That depends on my focal interpretation and it differs from case to case.

Usually Im looking at moving sl to be when I know the danger has passed and the movement will definitely go my way.

Sometimes I enter and then none of the traders are jumping in with me. I will look at closing that position with minimal loss or moving the sl straightaway to be if in slightly profit.

I prefer it when there is big spurt of momentum, then i enter, then the rest of the traders follow me. Im piggyback onto other traders participation. When i enter the guidance of momentum my position is immediately in profit.

Sincerely,

Graeme
  • #259
  • Jul 21, 2010 11:43pm Jul 21, 2010 11:43pm
Quoting pipEASY
Good afternoon, bdcurrie


Then what is my rr if i entered a position with 20 stop loss and was closed 2 years later @ 6000 pips? Yes, not all my positions are like that but


Graeme
Thanks for the reply.

Every trader is going to have a different rr on that trade. This approach it seems can only be defined by years of trading. I know you will say all trading is defined over years, and you are correct, but the real issue is time. This is the difficulty I'm having. I've put small %age of each of my trades towards this approach. Perhaps I'll increase that %age. I'll let you know in about 2 years what my rr is after I close pumpkin and watermelon


Thanks again,

BDC
uhhhhhhhh........
  • #260
  • Jul 21, 2010 11:48pm Jul 21, 2010 11:48pm
Quoting bdcurrie
Thanks for the reply.

Every trader is going to have a different rr on that trade. This approach it seems can only be defined by years of trading. I know you will say all trading is defined over years, and you are correct, but the real issue is time. This is the difficulty I'm having. I've put small %age of each of my trades towards this approach. Perhaps I'll increase that %age. I'll let you know in about 2 years what my rr is after I close pumpkin and watermelon


Thanks again,

BDC
Hello bdc

Thank you for correspondence.

I hope all the best for pumpkin and watermelon. Im still holding mine

Had a good laugh. Thanks

Sincerely,

Graeme
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