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Building an equity millipede

  • #261
  • Jul 22, 2010 12:55am Jul 22, 2010 12:55am
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...
yes the 3x 20 is hard. I got a sell off on the EU 15m bellow support made my 20 then tried again later and lost 20. Its really hard. I've been scalping way to long on 5m charts I guess.
  • #262
  • Edited 1:23am Jul 22, 2010 1:09am | Edited 1:23am
Master Graeme, Please mark my assignment.

Instead of asking questions(that may be unimportant or unorganized), I'd like to modestly please you to evaluate if my overall understanding is correct so that we learners can identify each other from our perspective, and you instructor clear some confusion.

Fundamentals of your method:

 

  1. 1.enter a position, if wrong, stoploss is limited small, if right, profit is unlimited(over months/years). Unlimited profit vs Limited risk, this is why your method is such a success.
  2. 2.but you don't really know(or try to outguess) market direction, so you have to participate both sides-- buy AND sell.

    a)when market goes on, you have to adjust position size of both buy AND sell sides. and this brings up my 1st guess, please validate it:


    Q 1:you prefer low risk entry, so i guess when adding long positions in a bullish run, it is done MORE at a pullback/retrace-down THAN at a break-up? Or you prefer to add long positions at a key level being broken up?

    Q 2:following your answer to above question, No matter in which way, you simultaneously reduce short position size, right?

  3. 3.at this point, there is in fact little left to examine. you enter positions and you adjust them, both sides. gradually, winning legs are stronger and longer. hold them as long as possible.

    a)but this leads to almost everyone's fundamental problem: entry picking and diversification timing. to me, this is in fact one thing--entry picking. Although in first page, you happened to mention that entry is not important, it turns out that entry is in fact essential according to your recent explanation. And solution to entry skill, per your suggestion, is to do a 6 month manual trading exercise targeting to stably achieve 3x20 pips profit every day.

    Question: if this skill is cultivated, then a trader like me will just trade with idea 1, and 2 in my mind. and success is achievable?


Is my understanding complete? Or I lack some serious concepts?

I am a little surprised that I only list 3 sections, and only 3rd section requires a 6-month exercise. (I know 6-month trading is not decisive. If I can cultivate a good entry skill from that exercise is……)

If after 6-month exercise, I still cannot enter well. What if I change to another training method, but the target is always nice entry skill?

In fact, I'd take a bold step (when learning, I’d better be bold, please forgive me) to say that the success of your method is simply hold indefinitely (so profit is indefinite) if possible. To do that, learn how to enter market right (entry skill) first. That’s it, isn’t it?

Many thanks, Master Graeme! Sorry for my long post, but I guess you might clear my doubts concisely. I truly appreciate your sharing heart, wisdom, and perspective.

  • #263
  • Jul 22, 2010 3:04am Jul 22, 2010 3:04am
Great thread, Graeme. I'd like to post a chart illustrating your idea of buying/selling in relation to the open. I believe one of the hardest things for people to do in trading is to sell when price is going down or buy when it's going up. I believe most try to pick turnarounds and are always getting it wrong.

This is a 5 minute chart of yesterday's Eur showing that there were many opportunities to sell with the momentum. I think it's self-explanatory, so I won't answer any questions. Using your simple method of 20 and 20, it would have been a decent day.

If you want me to remove this, I will.

Cheers.
Attached Image (click to enlarge)
Click to Enlarge Name: Eur_5 min_July 21.jpg Size: 82 KB
  • #264
  • Edited 4:47am Jul 22, 2010 3:49am | Edited 4:47am
Quoting charvo
Master Graeme, Please mark my assignment.

 

  1. 1. enter a position, if wrong, stoploss is limited small, if right, profit is unlimited(over months/years). Unlimited profit vs Limited risk, this is why your method is such a success.

Correct. Its the only way to make large amounts of capital growth in forex. And thats why we are here!

I do not like using names to support my statement but thats exactly what Peter Crowns was talking about when he brought out inside bar method. Low risk but high potential is what inside bar trading is about. But traders kept on putting that unnecessary pesky 'defined' take profit rule @ 1:2, 1:3 and not aiming for more. TheRealThing steps in here and tries to explain to everyone that the secret to inside bar is the long tails aiming for, 1:50, 1:100, 1:300 or more. This means hold onto your hard earned positions and let it grow to its potential which is infinity yield. TheRealThing also asks 'can you handle long losing streaks?' And the answer should be YES. YES. Everyone seems to applaud at them but then choosing not to listen to what they are trying to say.

Taking pain now for enormous gain tomorrow.

In forex, you can aim at 1% risk for 2% growth everyday and see your capital increase slower than working at burger king and saving up your pay. Right now one of you is going to stand up and say, "excuse me graeme, your wrong, because we can increase our lot size as we grow our capital..." oh dear.... This is common myth that is wrong and will be the cause of your capital destruction when the day finally comes when you face 10 or more losing streaks. Increased risk doesnt necessarily increase your reward. You need to expand your exposure in the market to increase your reward.

Sincerely,

Graeme

Moving onto next question.
  • #265
  • Jul 22, 2010 4:10am Jul 22, 2010 4:10am
Quoting pipEASY

...

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.
I want to thank you again for starting this thread, but most importantly for posting The 3x20 Exercise! In my opinion it is like doing 3x20 push-ups each and every day for 6 continuous months. Results should follow naturally... The exercise was an eye opener for me. Everything is so well thought over: 20, 3, Asia, London, Above and Below.

Thank You!

:-)
  • #266
  • Jul 22, 2010 4:22am Jul 22, 2010 4:22am
Quoting pipEASY
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...
Hello Graeme,

I have been reading this thread with great interest and have to say this is one of the most effective ways I have seen of trading the forex markets.

This is defintely how I wish to trade going forward.

I have taken up your 3x20 pip challenge. This is my third day and I can say that to date I have been able to achieve the goal of 3 wins per day without any indicators, just following the rules you laid out. Brilliant!

One question though, Is it advisable to see out the 6 months of practicing entries before starting to live trade building the 'equity millipede' or can it be done concurrently?

Thanks once againg for starting this thought provoking and illuminating thread.
  • #267
  • Edited 5:11am Jul 22, 2010 4:33am | Edited 5:11am
Quoting charvo
Master Graeme, Please mark my assignment.

2. but you don't really know(or try to outguess) market direction, so you have to participate both sides-- buy AND sell.
Nobody knows. Market is a generic infinite ever-changing transparent energy. Its not even a place or an item. It can be any shape and size. It has no bounds and no limits. Market is so much more than struggle between bears and bulls.

No one with 10+ voucher can forecast where the market will be tomorrow or next day. So stop listening.

Can you tell me what you are going to do tomorrow at home?

'Yeh, sure Graeme, I will be going to cafe for breakfast and then a quick drive to real estate to pay rent and then home for lunch.'

Great plan but how many times does it not work out? More often than preferred. Thats exactly the same in market. People speculate what to do for the future but unfortunately reality most often does not meet expectation. Everyone needs to stop right now and think about it logically.

'Graeme, eur/usd had a long uptrend for the last 3 years. Its due to change main trend cause something happened with the u.s dollar and yeh, look at that candle. It just broke the major trendline, oh my god, its happening, its confirmed breakout cause it closed outside the line! Runnnnn Graeme, its a downtrend now!'

oh dear.. get that man a trophy cause he has abilities that i certainly dont have.

http://img687.imageshack.us/img687/6294/eurusda1.png
http://img96.imageshack.us/img96/650/eurusda2.png

Edit: You can diversify in anyway you like. There is no golden rule. It will all workout the same at the end. However, the main point of diversifying is keeping the 'larger' legs of the group and closing the smaller half to lock in profit into your trade balance. This also keeps your equity curve smooth and not jagged.

Im little tired tonight gentlemen so please pardon my tone. It is might sound raised when reading my post but its not. I spent last 2 days in this forum and I just need some personal time. Will be back to continue answering those excellent questions by charvo.

May I suggest everyone to please read this post as it has hard numbers which everyone can base their expectancy. Only 3-5% of my positions survive for long term. Can you handle 80% breakevens?

http://www.forexfactory.com/showpost...&postcount=250

Edit: Just wanted to say a big thank you to charvo for excellent well thought questions. I will return to answer them.

Sincerely,

Graeme
  • #268
  • Jul 22, 2010 4:35am Jul 22, 2010 4:35am
Quoting tommbstone
yes the 3x 20 is hard. I got a sell off on the EU 15m bellow support made my 20 then tried again later and lost 20. Its really hard. I've been scalping way to long on 5m charts I guess.
Good evening, tommbstone and also chonghm

Thank you for the honest feedback.

Yes it is hard at first for everyone. This exercise will show your inner traits as a trader.

Please keep it up

Sincerely,

Graeme
  • #269
  • Jul 22, 2010 4:36am Jul 22, 2010 4:36am
Quoting Dopey
Great thread, Graeme. I'd like to post a chart illustrating your idea of buying/selling in relation to the open. I believe one of the hardest things for people to do in trading is to sell when price is going down or buy when it's going up. I believe most try to pick turnarounds and are always getting it wrong.

This is a 5 minute chart of yesterday's Eur showing that there were many opportunities to sell with the momentum. I think it's self-explanatory, so I won't answer any questions. Using your simple method of 20 and 20, it would have been...
Good evening, Dopey

Thank you for your contribution, it is appreciated.

Nice chart and I agree with what you say.

Yes, momentum for me = piggyback onto other traders.

Please leave your chart as it is.

Sincerely,

Graeme
  • #270
  • Jul 22, 2010 4:38am Jul 22, 2010 4:38am
Quoting fiftylots
I want to thank you again for starting this thread, but most importantly for posting The 3x20 Exercise! In my opinion it is like doing 3x20 push-ups each and every day for 6 continuous months. Results should follow naturally... The exercise was an eye opener for me. Everything is so well thought over: 20, 3, Asia, London, Above and Below.

Thank You!

:-)

Good evening, fiftylots

Thank you for the feedback.

Did you find hard to hit x3 take profits?

Please try and do exercise everyday for 6months. You will find amazing related discoveries that none of the threads on the system (including myself) can teach you.

Trading is a self-learning experience.

Sincerely,

Graeme
  • #271
  • Edited 5:36am Jul 22, 2010 5:01am | Edited 5:36am
Quoting mojazz
Hello Graeme,

I have been reading this thread with great interest and have to say this is one of the most effective ways I have seen of trading the forex markets.

This is defintely how I wish to trade going forward.

I have taken up your 3x20 pip challenge. This is my third day and I can say that to date I have been able to achieve the goal of 3 wins per day without any indicators, just following the rules you laid out. Brilliant!

One question though, Is it advisable to see out the 6 months of practicing entries before starting to live trade...
Good evening, mojazz

Thank you for your contribution.

Im glad to hear that you are doing well with the exercise.

I would recommend 6months exercise first from my point of view, however if you can honestly have the insight and the required focal interpretation to enter manually 10 times and have more than half easily moved sl to be without any difficulties. Then you are ready.

Sometimes traders think they are ready but then they find that it was not enough.

Hope to see more of your contributions here.

Edit: I should not have assumed you as a new trader in my original post. My apologies.

Sincerely,

Graeme
  • #272
  • Jul 22, 2010 5:16am Jul 22, 2010 5:16am
Graeme,

thank you so much for the energy you have taken to convey your knowledge and perception to others. If more people on this planet operated in the realm of the whole or totality it would be a very different place.

This is one of the few threads on FF worth commenting on and should be mandatory reading for all traders, particularly those only starting on this path.

Cheers,

Andrew
  • #273
  • Jul 22, 2010 5:16am Jul 22, 2010 5:16am
Quoting pipEASY
Good evening, fiftylots

Thank you for the feedback.

Did you find hard to hit x3 take profits?

...
It was easy, maybe because it was trending days, but I think mostly because of your set rules buy above - sell below. Yes, I will continue - this exercise is too much fun to quit!

Cheers,

  • #274
  • Jul 22, 2010 6:34am Jul 22, 2010 6:34am
Hi Greame,
I see that diverifiing works great probably when one trade looking at monthly and weekly charts. But if to only deside where we are going looking through daily, there is no need to diversify becose daily is a little bit quicker and if it changes so do I. In this case I mean that we (let us think that)know overall trend and we count on this tendency and do not take counter trend trades. With all respect to your trading style Graeme, does it make any sence? Thanks.
  • #275
  • Jul 22, 2010 6:45am Jul 22, 2010 6:45am
Quoting Andrew N
Graeme,

thank you so much for the energy you have taken to convey your knowledge and perception to others. If more people on this planet operated in the realm of the whole or totality it would be a very different place.

This is one of the few threads on FF worth commenting on and should be mandatory reading for all traders, particularly those only starting on this path.

Cheers,

Andrew
Good evening, Andrew

Thank you for the overwhelming feedback.

It is greatly appreciated.

Sincerely,

Graeme
  • #276
  • Edited 7:28am Jul 22, 2010 7:06am | Edited 7:28am
Quoting Saintsurfer
Hi Greame,
I see that diverifiing works great probably when one trade looking at monthly and weekly charts. But if to only deside where we are going looking through daily, there is no need to diversify becose daily is a little bit quicker and if it changes so do I. In this case I mean that we (let us think that)know overall trend and we count on this tendency and do not take counter trend trades. With all respect to your trading style Graeme, does it make any sence? Thanks.
Good evening Saintsurfer

Thank you for the contribution.

I had to read it twice before typing to reply.

The reason I enter both buy and sell is because I do not know when the daily/weekly/monthly trend is changing. But if its changing I want positions already in there with the new trend.

If you know the correction that is happening right now is nothing permanent and the main trend will resume then its an ability I dont currently have. I know what you are saying by following the daily trend and its a sensible thought.

But you must agree with me that some corrections on daily chart last for days. What will you do if a correction against main trend lasts 7 to 15 days or more? Since you dont take opposite direction trades will you be sitting out for 2 weeks? And then how do you know when the trend resumes its really resuming? You may have enough experience to predict permanent change from temporary change but you could also simplify things further by just taking both buy and sell and letting the market decide who the winner will be.

However, during prolonged correction as above, I know you are sensible to shift your entries as the same direction of the correction which is also sensible thought. One of other reason I request all traders to upskill their entries is that the difference between a trader with a system and a trader with excellent entries is that during periods of range where price doesnt move at all; Trader with a system will lose alot while trader with excellent entries will also have losses but mostly breakevens. A big advantage in most scenarios.

I do not pre-define my entry in any way at all. If market gives me a beautiful looking inside bar setup but its on the wrong side of the trend, I still take it. Cause no one knows if this particular beautiful perfect setup might end up as a 10000pip leg 2 years later. Just one leg like this will save me more than half a year of all my potential small careless entries, hypothetically. And in that half a year how many more other long term legs could I add? My statisctics show I have been successfully adding 1.7 per week. Half year of that creates a huge huge huge difference and it all started from that one beautiful perfect inside bar setup that some refused to take cause its on the wrong side of the daily trend. Unfortunately you may be limiting your potential. Please think about it

I have small subgroups of positions everytime there is a correction against the main trend. Sometimes they die within a week and I dont mind. Sometimes they last 1-2 weeks and I pocket a good profit when I diversify this mini group when I see that the correction is finishing up. If the correction doesnt finish but continues to grow into a new trend then the diversification will ensure me that I have larger half of my legs already in place.

Im glad you have belief in the main trend which is a big leap from most of the new traders however you should be making profit on both side of the coin.

Diversification is just a safety measure I use to ensure there is a continuous increase in my trade balance and also keeping some positions for infinite growth. If I dont diversify, my accuracy will drop further than it currently is. That makes it too hard even for myself however the reward would be much bigger than it currently is.

Good insight but may I ask that there might be perhaps more than what you see.

Sincerely,

Graeme
  • #277
  • Jul 22, 2010 7:31am Jul 22, 2010 7:31am
Thank you very much Graeme for your time and efforts in this thread, you do a briliant job. Your knowledge and experience are unik.
  • #278
  • Jul 22, 2010 7:34am Jul 22, 2010 7:34am
Quoting Saintsurfer
Thank you very much Graeme for your time and efforts in this thread, you do a briliant job. Your knowledge and experience are unik.
Good evening, Saintsurfer

Thank you for the kind compliment.

I understand what you are asking and its a very good question.

The answer you are really looking for is in my above post.

Hope I put in enough effort for you to perhaps read it one more time for me.

Edit: The day has taken its toll on me gentlemen. Good night to all. Stay warm and under loving care.

Sincerely,

Graeme
  • #279
  • Jul 22, 2010 8:36am Jul 22, 2010 8:36am
@PipEasy

You have missed this question, can you read it, please.
http://www.forexfactory.com/showpost...&postcount=125
  • #280
  • Jul 22, 2010 9:18am Jul 22, 2010 9:18am
Quoting pipEASY
Good evening, Saintsurfer

Thank you for the kind compliment.

I understand what you are asking and its a very good question.

The answer you are really looking for is in my above post.

Hope I put in enough effort for you to perhaps read it one more time for me.

Edit: The day has taken its toll on me gentlemen. Good night to all. Stay warm and under loving care.

Sincerely,

Graeme
It will not heart to read whole thread a few times more to me and perhaps for everybody, I gess .
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