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Building an equity millipede

  • #401
  • Jul 28, 2010 1:27am Jul 28, 2010 1:27am
Quoting ozziedave
Just thought I'd share this chart and some of the things I look for when determining trend and trend strength. Here is the EURUSD daily chart. We are in an uptrend the last two months since about 4th June. As you can see there are 3 significant pullbacks in the up trend. Take a look at number 1 and number 2 pullback and compare it to the number 3 pullback. Do you notice anything different about the pullbacks and subsequent break outs to resume the trend?

Note that on pullback 1 and 2 it only takes 1 or 2 candles to break the top of the pullback...
Good afternoon, Dave

That was a good price action analysis. Well done

Sincerely,

Graeme
  • #402
  • Jul 28, 2010 1:43am Jul 28, 2010 1:43am
Quoting pip_daddy
Just put some numbers into Oanda interest calculator. If I am trading standard units the interest payments on keeping some of these positions open for a year or more runs into the thousands of dollars. Depending on which pair and whether it is long or short some will pay you interest but the sides that charge interest are usually a lot more. That would suck to fork out a few grand in interest only to have the position stopped out at BE.

You would actually have to be a bit careful with this because some sides of some pairs could get kind of expensive....
Good afternoon, pip_daddy

Very good observation which opens to a very good discussion.

I have 2 questions:

1. In forex, price always moves? YES.
Price last year will not be same as this year (unless you are super lucky to have a retrace back to entry price of last year which means that you are currently in a trend that lasted few months to come back). So in another words we are talking about price moving at least couple of thousand pips in a year.

2. Swap, slippage, is a necessary business cost (but it is relatively marginal). However losses and drawdowns from sloppy entries are unnecessary business expense.

You calculated $4600 net loss for 5 standard positions ($50 per pip) at 1 year? I believe in your calculations.

After working out on my calculator, thats, 92pips (since we have 5 standard lots).. So i can agree that it would be about 10 pips per month.

This is very small amount to pay for the potential of growing your positions on a main trend.

From my statistics, every position I hold is producing approximately 37 pips of net profit every week (calculated on the basis of last 4 months).

This is not gross before losses but net profit after accounting and settling all my losses through numerous diversification during growth.

If one position is roughly giving me 37 pips of growth per week or 148 pips per month. I would gladly trade 10 pips for a potential 148 pips anytime, all the time.

But, that 37 pips of net profit Im referring to has already accounted and settled:

1. All losses occured when establishing positions
2. Any miscellaneous marginal swap rates

So technically I should say 37 pips of net profit is 'after' I have accounted and settled my swaps.

Swap, slippage, negatively correlated pairs, these kind of factors only hinder traders who are trying to capture small slice of profit from intraday or any other short term trading.

We, long term traders are above and beyond all that.

Please do not allow swap to effect your participation or judgement. I trade negative swap pairs all the time and have great results from them.


Sincerely,

Graeme
  • #403
  • Jul 28, 2010 1:44am Jul 28, 2010 1:44am
Quoting tommbstone
Graeme,
Will you adpot me? I have no real dad anyways to teach me about life fishing and trading. LOL
Good afternoon, tommbstone

Thank you. I had a great laugh

Sincerely,

Graeme
  • #404
  • Jul 28, 2010 2:03am Jul 28, 2010 2:03am
Great Q & A!

Thanks Graeme and thread participants.
  • #405
  • Jul 28, 2010 3:23am Jul 28, 2010 3:23am
1. If the price is coming down from last .00, then enter 2 sell positions, 1 position at take profit 100 pips and other position has no take profit. Both positions to have stop loss -100 pips. If price reverses from your entry you lose -200pips but then enter another x2 lots of buy positions since price is coming up from .00
2. You let it run. After 100 pips, 1 position will close by taking +100 pips, and the other remaining position is completely free. Dont move the -100 stop loss of the remaining position, this is your free leg.
3. Hopefully this remaining leg will turn into a leg on your millipede.
4. Place a buy stop/sell stop on every .00


Sorry still is not clear in my head.
Is my example correct?



Quoting pipEASY
Good morning, xman

I looked at my charts and there is one or two that I have circled that shouldnt be there. You are correct about the small error however the rules above is firm.

If price moves from 135.000 to 134.000, then we enter 2 sell positions
If price moves from 134.000 to 135.000, then we enter 2 buy positions

If, price moved from 135.000 to 134.500 and then straight up to 136.000, then we enter 2 buy positions at 136.000. But then, if price goes to 136.500 but then down to 135.000, then we would enter 2 sell positions at 135.000....
Attached Image (click to enlarge)
Click to Enlarge Name: example.gif Size: 25 KB
  • #406
  • Jul 28, 2010 5:41am Jul 28, 2010 5:41am
Hi Graeme,

just have a question in order to "understand" your trading routines...

You mentioned that it takes you 2-3 hrs a day to check charts etc.

You also mentioned, that in average you put on 8 positions a day. Do you put on these trades at start of day or do you wait for perfection entries, which basically can happen anytime 24/6...?

Can I ask you, do you consider yourself as a full time trader, meaning do you spend most of your day trading (or your imp/exp biz)?.

Im just trying to figure out how much time/screen-time it takes to trade this strategy fully. Im aware of the text alerts etc which can be used to give alerts of perfect set-ups, but in general it would be nice to know the time required to trade your strategy.

Whit your results Im sure it would be the best "job" in the world!

Again, thanks for all your hard work and patience with all our questions

BR

PC
Less is more...
  • #407
  • Edited 4:54pm Jul 28, 2010 8:36am | Edited 4:54pm
Quoting xman
1. If the price is coming down from last .00, then enter 2 sell positions, 1 position at take profit 100 pips and other position has no take profit. Both positions to have stop loss -100 pips. If price reverses from your entry you lose -200pips but then enter another x2 lots of buy positions since price is coming up from .00
2. You let it run. After 100 pips, 1 position will close by taking +100 pips, and the other remaining position is completely free. Dont move the -100 stop loss of the remaining position, this is...
These charts are for you xman and everyone else. It will clear alot of things


http://img842.imageshack.us/img842/8301/eurusd11u.png

http://img517.imageshack.us/img517/8941/eurusd12.png

Edit: I just noticed that the time period of growth was more than 1-2 weeks so yes, i would have diversifed my first group in the green area. Im interested to diversify anything that grew more than 2 weeks at least. Anything less is ignored

Edit: In the first chart, I meant to say that you should have held onto the positions that are ticked not circled. Orange circles in the first chart are your losses

Edit: I also noticed that on the 2nd chart there is much more than just x3 +100 pips from 1:1 positions. Apologies, I rushed to get the charts up here. I see x9 +100pips from 1:1 positions which means the net profit after the 1st diversification would have been 1400 + 900 = 2300pips
  • #408
  • Edited 8:55am Jul 28, 2010 8:44am | Edited 8:55am
Quoting pipcruiser
Hi Graeme,

just have a question in order to "understand" your trading routines...

You mentioned that it takes you 2-3 hrs a day to check charts etc.

You also mentioned, that in average you put on 8 positions a day. Do you put on these trades at start of day or do you wait for perfection entries, which basically can happen anytime 24/6...?

Can I ask you, do you consider yourself as a full time trader, meaning do you spend most of your day trading (or your imp/exp biz)?.

Im just trying to figure out how much time/screen-time it takes to...

Good evening, PC

Thank you for the question.

Please allow me to speak from my current statistics, it looks like I have been adding 8 positions per day for the last 2 years of every trading day.

I spend about 2-3 hours per day looking at areas of interest across all charts and setup alerts to my cell phone. I also spend a hour looking at my journal as it also tells me whether there is a clear trend or a retrace at the moment.

So in total I spend about 4-5 hours per day without fail. This amount of workload is considered full time trading.

Nowadays, I draw clear trendlines across the pair of currency on monday and adjust them little by little as the week goes. Some trendlines, fibs, s/r lines are few weeks old and all I do is just move them with the market flow.

It depends on your entry method. If you have an ema crossover entry method that uses momentum to enter safely before or at the crossover then you would need to watch the london/us session more closely. I use mostly entry methods where i get alerted when the price actually moves into preferable 'zones' from my personal focal interpretation.

Im still ambitious to add more positions and still consider myself an aggressive trader.

Personally, I believe that my growth/profit is only small compared to some of the larger traders. I havent met anyone personally but I doubt Im one of the biggest trader. I consider forex market as the best vehicle of growth investment currently available. The only catch is, there is a big learning curve to master. So practice will be definitely worth the reward

However, I must clarify that my $7 million+ current annual growth rate is largely unrealized as I still hold onto the positions. Can you handle that? It will be one of the last emotional hurdle that is coming to you.

Does everyone know how to setup a VPS account, sign up smtp server, and have the alert sent to their phone? It is an instant notification for me.

I consider VPS server a must if your serious about trading and have the spare $25usd per month.

Sincerely,

Graeme
  • #409
  • Jul 28, 2010 8:50am Jul 28, 2010 8:50am
Good evening, all

Thank you for your continued interest and I hope all readers have learnt something useful from my contribution.

These facts presented by myself is not something I was smart enough to create. All I ever do is follow the market.

I just want to let everyone know that all the PMs and posts of compliment are greatly appreciated.

Please do not take it the wrong way when I dont acknowledge them publically in the thread anymore. Unfortuantely, we are already at page 27 of this thread which is beyond my personal intention and I wish to somehow stop this thread from growing. Such ironic thing to say but as we all know, long tiresome threads are never better for the new readers.

Some of the recent compliments (in the last 5 pages) has been read and I thank you for such warm remarks.

Thank you all.

Sincerely,

Graeme
  • #410
  • Edited 9:36pm Jul 28, 2010 10:19am | Edited 9:36pm
PipEasy,


Its been like ages when i have to come to "TRADING SYSTEMS" and found something that has really vowed me....i read till 10 pages and i think i got the Jinx of what r u doing....i will just list some of my points that i love about ur trading.


1. You are a humble guy
2. You respect the market
3. You created your own system one that suits u.


Rest something i like may not be clear is your "RISK"... i am not a big fan of R:Reward but i am a big fan of thing called RISK...

But all in all a amazing thread...and for this you definately deserve a vouch...

V

Edit: As again in my point 3 Pipeasy has given a Method(not a system) whosoever suits should use....
  • #411
  • Jul 28, 2010 10:23am Jul 28, 2010 10:23am
@PipEasy

All clear now. Thanks for chart.

All best
X
  • #412
  • Jul 28, 2010 2:03pm Jul 28, 2010 2:03pm
Quoting indianguyinny24
PipEasy,


Its been like ages when i have to come to "TRADING SYSTEMS" and found something that has really vowed me....i read till 10 pages and i think i got the Jinx of what r u doing....i will just list some of my points that i love about ur trading.


1. You are a humble guy
2. You respect the market
3. You created your own system one that suits u.


Rest something i like may not be clear is your "RISK"... i am not a big fan of R:Reward but i am a big fan of thing called RISK...

But all in all a amazing thread...and for this you...
Good morning, V

Thank you for the compliment and the vouch.

Once again, I thank everyone for the support and wish everyone a successful trading career. There must be sacrifices made, pain taken to be successful at anything.

Only 10% (slightly less) of new businesses ever make it past 10 years of operation without going bust. I believe this statistic also applies to trading.

You are in charge of your own business.

Thank you too xman as well for a great question.

Sincerely,

Graeme
  • #413
  • Jul 28, 2010 7:41pm Jul 28, 2010 7:41pm
Graeme, firstly, I would like to add my thanks to all the other gratuetous traders for making your trading method available to all.
I have taken ownership of your trading method and am going to use it to grow my account enough that I can fly to Europe and travel indefinitely. To this end I have a lovely photo of my destination as a background on my compy as an incentive.
I have been an FX trader for some time, and have never addressed the VPS system . As my one and only request, could you please tell me how I can set this up as I can see it is important.

Kind regards, Reverb
  • #414
  • Jul 28, 2010 10:33pm Jul 28, 2010 10:33pm
Quoting Reverb
Graeme, firstly, I would like to add my thanks to all the other gratuetous traders for making your trading method available to all.
I have taken ownership of your trading method and am going to use it to grow my account enough that I can fly to Europe and travel indefinitely. To this end I have a lovely photo of my destination as a background on my compy as an incentive.
I have been an FX trader for some time, and have never addressed the VPS system . As my one and only request, could you please tell me how I can set this up as I can see it is important....
Hi Reverb

You simply purchase VPS hosting from whichever company you prefer, just type "Forex VPS" into Google and you'll see plenty of options. They will configure everyting for you once you've given them your broker information, nothing complex for you to do. Then you will have a dedicated server running MT4 24/7 with them, which you will be able to log onto from any PC/smartphone with an internet connection and open/close/adjust trades as you see fit.

If your dream would be to travel and trade then I can see why a hosted solution is a must for yourself.

Cheers
Mark
  • #415
  • Jul 29, 2010 12:53am Jul 29, 2010 12:53am
Thanks for your help Mark, I'll look into it.
Cheers, Rob
  • #416
  • Jul 29, 2010 6:43am Jul 29, 2010 6:43am
Hello Graeme,

Thanks for sharing your system and for being so patience with the questions. Here I have a few more I hope you can help me.

I've started with the system, entering at .00 and I'm not sure about a few things.

1.- You recommend to start with "USD $5000 for 4-6 positions @ $1 per pip (0.1 lot size)". Since this limits the number of pairs we can open position in, do you have as well some recommended pairs to start with or is it better to check which pairs are treding and choose those ones?

2.- With the .00 entering system, it doesn't look very necessary to look other TF than the daily one since you will always open/close orders on a mechanical way, or am I missing something?

3.- Even for the ones that have other systems to enter the market, do you recommend to keep the .00 one as one of them? Do you still use it?

Thanks a lot!
Regards,
Fernando.
  • #417
  • Jul 29, 2010 7:28pm Jul 29, 2010 7:28pm
Pipeasy.
I have been reading your postings and your method is very similar to Jesse Livermore. Jesse strategy, send out scouts into the battle, to determine the best time to commit additional soldiers.
I believe you are using the same strategy, however, I would like to suggest and alternative approach for those those investors who don't have the same financial resources that you have.
When commiting scouts to the battle, use use the lowest number of pips to determine the current status of the battlefield. My recommendation who be to scout with micro pip values, the lowest possible.(.01) or ten cents.

This provides the information required at the lowest financial risk.

Using this approach for smaller accounts, do you agree or disagree?

Thank you for helping me to refocus my attention on the war and not on the small battles.
  • #418
  • Jul 30, 2010 8:46am Jul 30, 2010 8:46am
I was asked to provide an updated pdf file of all of pipeasy's posts.

I have attached the actual html file and posted a link to download the pdf.

Note that the html file works like a normal html file. If you click on a link then you will be taken to FF file and not the one you are in. All the charts are still hosted at imageshack as that is what pipeasy does.

The reason for the pdf is so you can have a permanent record of the postings. In the pdf the charts are embedded in the pdf so it does not matter if imageshack disappears.

The html file is zipped up as FF does not allow html files to be attached.

The link to the file at mediafire is... http://www.mediafire.com/file/vj7vnabc3e3xwvj/Building an equity millipede Page 28.pdf
Attached File(s)
File Type: zip pipeasyP28.zip   139 KB | 1,890 downloads
  • #419
  • Jul 31, 2010 12:16pm Jul 31, 2010 12:16pm
Hello everyone!

Greame, congratulations on this thread and for its treatment of traders!

Wanting to show the potential of what we are teaching Greame, this EA can see what we can achieve data.

This information is NOT diversify and take profits without the second position +100 pips.

They are from this July.

(Do not ask me the EA, it's just to see this data)

GBPUSD 892 pips (no diversification, no second position)
EURUSD 1707 pips (no diversification, no second position)
only 1 position for level, and increase.

bye!
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gbpusd.gif Size: 9 KB
Click to Enlarge Name: eurusd.gif Size: 9 KB
  • #420
  • Jul 31, 2010 2:41pm Jul 31, 2010 2:41pm
This is one of the best threads starting in forex, I wish there were such threads when I started learning to trade. Thanks to the owner of this thread.
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