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  • #641
  • Aug 6, 2010 11:53am Aug 6, 2010 11:53am
Well after drawing the chart and doing my calculations, my way of trading Graeme’s long term strategy is not working. I have to work on my entries differently so that they withstand the whipsaws. This is such an eye opener cause it made me realize that even though I get good results trading I cannot maintain a long term position with my style. So the think cap is on…
Good weekend to all...
Regards,
Chantal
  • #642
  • Aug 6, 2010 12:28pm Aug 6, 2010 12:28pm
Quoting Chantalb
Well after drawing the chart and doing my calculations, my way of trading Graeme’s long term strategy is not working. I have to work on my entries differently so that they withstand the whipsaws. This is such an eye opener cause it made me realize that even though I get good results trading I cannot maintain a long term position with my style. So the think cap is on…
Good weekend to all...
Regards,
Chantal...
I believe what Graeme does is watch for momentum on low time frames and jump in. He then moves his SL to break even fairly quickly (after the pair moves 10 or 20pips). So although a large number of these will be stopped out at BE, very few will be stopped out at a loss. I believe that is how he comes up with the 80% success rate figure.

But I am just speculating as (at least to me) I still am not exactly clear what Graeme does for entries even though I have read this thread a few times now. Not critisizing mind you. I believe he is intentionally vague because he understands that people need to figure these things out themselves.
  • #643
  • Edited 2:23pm Aug 6, 2010 12:31pm | Edited 2:23pm
Quoting bdcurrie
It seems we need a new forum where people are not judged on vouches and number of posts. A silly system, and is likely why most are here.

Perhaps someone should start a forum with verification such as mt4stats as a requirement to join and/or post.
The vouch system is a big joke if you ask me. There are lot's of people around this forum with 10+ vouches and thousands of posts who don't seem any more or less successful or knowledgeable than some guys with no vouches and few posts. Worse yet, a lot of them seem stuck in group think.
  • #644
  • Aug 6, 2010 1:54pm Aug 6, 2010 1:54pm
Quoting Warburg
I have been trading the Forex for the past 7 years and been a member of FF since 2008, however, this is my first post. What many of us have witnessed throughout this thread is what successful traders learned a long time ago - the market is made up of an infinite number of variables making it almost impossible to predict with any certainty. So we learned to let the market come to us. Let's thing about these variables - you have millions of traders trading different account balances, trading different time frames (1 minute to 1 month), using a multiplicity...
Hi all,

nice reading again, same like pipeasies texts. Thanks. I trade forex few years for now also and this is my first post also I have to 100 % agree with Mr. Warburg /i know such cars : )))/ and "constancy" is mentioned here for the first time.

Constancy is one of the biggies advantages/disandvantages of trading. Mr Wargurg is right that you need to be constant, or we can say your trading style has to be exact. I dont like word "system" because i find word system like . . . exact backtested thing which worked last 3 months and now we are hooked on it and lets play rock and roll with 400:1 leverage.

Constancy allow us earn and lost our money. Because sometime there is 150 pips move, sometime we think there is very same situation but there is 250 pips move. This is when we need our constancy, which can bring us nice profits in scenario numb 1 or which can stop us out in scenario numb 2 lets say.

Forex is one big market full of CHAOS. Yes of course there is something like "patterns" and i know they work, but maybe im wrong but there is no pattern that works 100 % of time. Allow me show you it on example.

Lets say its morning, and somebody will wake me up and ask me paint picture so i will. Im not painter so this picture wont worth a lot but it will looks like somehow.

After that my brain will be vanished by magic wand and next day i will be asked do the same. My paint could looks likesimilar to first but im almsost sure there would be differencies.

I would like to say that ONE human beeing, in ONE very same situacion, WILL NOT have 100 % same results. So what about MESS ? ! : )

Same is in forex. Thats why we need our constancy, we need it because forex market wont offer us such thing.

Most of trading "systems" bring us some secret constancy like: open long when there is RSI over 50 . . . . this is exact constant rule which has to be followed to reach TP . . or so. I dont like RSI and indicators at all, i admire ppl who can earn money using indicators, they are better then me. But back to RSI, unfortunately RSI has period, lets say 50, that means its calculated from last 50 bars, then its calculated from open, close, HL2 etc .. .depends on settings. But every new bar there is different basic RSI works on ! ! Thats one of the thing why i dont like indicators, cause where is their constancy ? They change every single bar !! So do i trade system ? Or do i trade random numbers !!! ???

Few pages ago there was nice post from pipeasy i would call it "strength of randomness" who is interested should check it, its very nice reading

My trading style is very very very similar to pipeasies but there are small diferencies which impressed me. I have never heard of 00 system few years ago and i find it like great constancy potential. Once you draw your line at 1.3500 you know its support for YOU, from YOUR angle of view and you know this support is here forever. Price could be 2.5000 or 0.5000 never mind you have your own level every 100 pips and it wont change after bar is closed or so. . .

I find myself beginer in forex trading. I trade forex for several years and i do have experiences but there is very long way for me to became professional, but allow me one advice to people who find themselves bigger beginers then i am And Mr easypip please write me what you think about my advice, if it should be follower or no. Thank you

- If you would like to avoid big drawdowns there is one easy thing. Draw only few 00 lines into your chart. E/U price for now is1.32xx . . . so try to draw 1.31 to 1.34 levels. and what you get ? Only thing you should be worried about is chop around these levels but once price get out of these levels we should have short trend to retest 1.19 lets say ! that means you will have 2 shorts 1.32 and 1.31 = 1300 pips and 1200 pips right ? 2500 pips is this bad ? And lets calculate how many losing positions can we have ? 25 ? Between 1.31 and 1.34 ? Do you think its not worth it ?
This is not a recomodation or some "upgrade" of Mr pipeasy system this is only advice to traders who are afraid of big drawdowns or who has limited starting capital. . . I saw post about limited drawdown few pages earlier.

Mr. easypip didnt post any new post for a long period i hope he is still with us
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  • #645
  • Edited 8:21pm Aug 6, 2010 5:42pm | Edited 8:21pm
Mr. GrRt,

I appreciate your response and comments. Just to make sure we have no confusion in language, please allow me to give my definition of "constants" when trading the market. This is not to be confused with "consistency". Consistency is necessary when trading, however, when I use the word "constants", I am referring to the opposite of "variables". Please allow me to explain. Occasionally while driving in town, you might have an animal run out in front of you. I've found through the years that if you start swerving from left to right in an attempt to miss the animal and at the same time the animal begins to run left and right in order to miss you, you will invariably run over it. Why? You have two variables trying to dodge each other and neither one knows where the other is going. However, if you make it a practice to slow down and continue to drive straight, the animal will dodge your tires and run to safety. What you did was become a "constant" to allow the animal to dodge you. This may be a bad illustration, but the world of trading works the same way. Since the market moves as Graeme describes, without any certain rhyme or reason, WE must become the "constant" because the market (price) is certainly without question the variable. So rather than chase an unpredictable set of time and events, we lie in wait (as a constant) planning our strategy around this unpredictability.
  • #646
  • Aug 6, 2010 6:17pm Aug 6, 2010 6:17pm
Graeme, I'm sorry the negative got the better. I've been trying to keep
up with the thread, been hard (commuting to my job, far away in the city). Been there in spirit though, reading the threads and studying.
I never claimed to be an intelligent trader, so any posts I made, wouldn't be of much value anyway. From you sir, I saw your
"Giving side". You were there to mentor your students as they took their baby steps. What most impressed me early on, was the mention you made to the important things in life, the bonds you have with your "loved ones".
If we never hear from you again, I would like to say Thank You
for what you gave to us. Be Well and Happy. George
  • #647
  • Aug 6, 2010 7:26pm Aug 6, 2010 7:26pm
In my humble opinion, the best way to proceed with this thread is for those of us who want to adopt this style of trading lets trade and discuss what we have traded. Those who think its B.S. thats cool just leave the forum. The best way to get Graeme back on here is for him to see that we are being proactive rather than constantly discussing if what and when! It doesnt have to be Graeme's exact style as he says its your own focal interpretation. I think we need to give it a couple of months or so and discuss our findings this is better than backtesting and arguing the pros and cons before we have even tried it out.
Regards,
Ben
P.S. Many thanks Graeme you have been an inspiration to many.
  • #648
  • Aug 6, 2010 7:38pm Aug 6, 2010 7:38pm
This is my first post in FF. I Just wanted to thanks Graeme for his insightful and selfless contribution. He provided us with different prospective view of the market. I really like to continue learning from him and hope he will come back soon.

Thanks and best regards to Graeme.
  • #649
  • Aug 6, 2010 8:17pm Aug 6, 2010 8:17pm
Quote
The take 2 orders thing is mostly just to reduce the psychological effects IMHO. Mathematically I believe your risk/reward and probability is about the same whether you take 1 or 2 orders. Someone correct me if I am wrong.

I would tend to disagree, in part. The way I understand it (and I may be wrong) is that the entering of 2 trades offers a number of benefits, assuming that at least the first exit is reached.

These are:

1. Smooth out your equity curve, which I guess could contribute to the psychological aspect. No one likes to see the equity curve constantly trending down!!

2. Creates a little more breathing space for the 2nd trade to develop without the risk of it being stopped out. This is important if we are to develop a longer leg.

3. (and this is the key point IMO)... If our particular entry is good and we end up with one of the longer legs of our millipeed as a result, then we have both trades which are capturing the big profits / fat-tails.

Chorlton
  • #650
  • Aug 6, 2010 8:25pm Aug 6, 2010 8:25pm
I believe grame mentions that:

when we use 2 positions we create a larger drawdown for the short term temporarily however it would be exponentially better in the long run.

not long ago he said that positions that die on -200 is static loss however a position that grows on the main trend will bring in infinity yield by constantly growing.

we need to compare that static loss of -200 against the 'potential' of infinity yield is definitely worthwhile risk:reward

i believe peter crown also mentions the same with entering 2 positions at the same time and closing 1:1 on 1 of them and letting the remaining leg to run but with bigger breathing space.

i have done a backtest on few currency and can see that there is slightly bigger drawdown with unsuccessful entries on short term but when we let the other run, the profit at the end is sooo much more.

also if we have a personal entry method that we know so well that will at least move certain number of pips this can be a huge advantage when used with above 2 position entry.

just my 2cent and hope it helps
  • #651
  • Edited 9:52pm Aug 6, 2010 9:23pm | Edited 9:52pm
Quoting Chorlton
I would tend to disagree, in part. The way I understand it (and I may be wrong) is that the entering of 2 trades offers a number of benefits, assuming that at least the first exit is reached.

These are:

1. Smooth out your equity curve, which I guess could contribute to the psychological aspect. No one likes to see the equity curve constantly trending down!!

2. Creates a little more breathing space for the 2nd trade to develop without the risk of it being stopped out. This is important if we are to develop a longer leg.

3. (and this is the...

For #1, by taking 1 position I can bet double the size or use twice the SL so my r/r is the same.

#2 I take whatever SL the trade requires even if it was a pair of trades. I usually look at H1 and place S/L behind previous s/r. I don't believe in fixed SL unless you are only putting in catastrophic SL which is very large. But that's just what I do. It's not necessarily the best way and certainly not the only way to go about it.

#3 Not sure what you mean. If the trade goes in our favor then one leg hit's TP at 100pips no matter what and we are still left with one trade for a runner that is going to be half the size it would have been if we only did 1 trade. So you got 100pips in the bank by doing 2 trades but you potentially missed out on thousands of pips if that second trade was all part of just 1 trade.

So my point is they should average out to about the same. I would argue that 1 trade should average out to more since the potential pip reward is so large with this system. When you get a surviving leg that is twice the size it's going to be a much larger reward. The difference is that the 2 trade strategy is going to be better on the nerves for some people.
  • #652
  • Aug 7, 2010 12:02am Aug 7, 2010 12:02am
Quoting pip_daddy
For #1, by taking 1 position I can bet double the size or use twice the SL so my r/r is the same.

#2 I take whatever SL the trade requires even if it was a pair of trades....
I think there are pros and cons to both strategies and you need to pick whichever one suits your trading style. I believe one of the other reasons Graeme suggested 2 lots was to boost a traders confidence and keep his head in the game. I had brought up the fact that you may go through long periods of time where none of your scouts survive. For alot of traders this would become very discouraging. I know for myself If I were to spend 3 or 4 weeks taking position after position with 1 lot only to have them lose money or end up at BE I would feel like I wasn't accomplishing much. So if you use 2 lots and you take one out at +100 pips even if all the others lose or BE you still may come out with some positive pipage. Again, I think his suggestion was as much of a mental thing as a position/lot size strategy.

If you do read the thread Graeme states many times there is no wrong or right way to implement this trading methodology. You need to find out what works for you and to refine those skills.
  • #653
  • Aug 7, 2010 12:09am Aug 7, 2010 12:09am
I would like to make a suggestion. Can someone with some skills using PDF make another PDF file of the thread including the last 20 or so pages and post it.

I suggest this because there is always the possibility that Graeme or the admin people may choose to delete the thread and all of this great information would be lost. I've seen this happen many times on the forum.

Again, just my suggestion.
  • #654
  • Aug 7, 2010 12:48am Aug 7, 2010 12:48am
Quoting pip_daddy
For #1, by taking 1 position I can bet double the size or use twice the SL so my r/r is the same.

#2 I take whatever SL the trade requires even if it was a pair of trades. I usually look at H1 and place S/L behind previous s/r. I don't believe in fixed SL unless you are only putting in catastrophic SL which is very large. But that's just what I do. It's not necessarily the best way and certainly not the only way to go about it.

#3 Not sure what you mean. If the trade goes in our favor then one leg hit's TP at 100pips no matter what and we are...

Hi Pip,

#1: My point was that once the first trade hit 100 it would exit which would mean that some some profit would be immediately returned to the account which helps smooth out the curve whilst the larger positions remain open.

#2 I agree with you about using a valid technical reason for choosing the stop level rather than a standard fixed stop.

#3 Yeah sorry.... just ignore my comments for this point. Basically, I was thinking of another alternative exit method whilst typing my reply so hence the confusion.
  • #655
  • Aug 7, 2010 4:00am Aug 7, 2010 4:00am
Hello Wargurg,

Thank you for your reply, maybe its because English is not my mother tongue, sorry.

Nice example here, and yes i completle understood and understand your definition of constants, maybe i wrote my post very not very clear, my bad, need to improve my English little bit

I know one saying about this maybe it will say more then 1000 words. Im not sure if i write it correctly but its something like: " Dont chase market, let market come to you /come to your entry,TP/ "

As im reading your post again, allow me quote your last words where you maybe mentioned that.

"So rather than chase an unpredictable set of time and events, we lie in wait (as a constant) planning our strategy around this unpredictability.


Quoting Warburg
Mr. GrRt,

I appreciate your response and comments. Just to make sure we have no confusion in language, please allow me to give my definition of "constants" when trading the market. This is not to be confused with "consistency". Consistency is necessary when trading, however, when I use the word "constants", I am referring to the opposite of "variables". Please allow me to explain. Occasionally while driving in town, you might have an animal run out in front of you. I've found through the years that if you start swerving from left to right...
  • #656
  • Aug 7, 2010 4:05am Aug 7, 2010 4:05am
Quoting Gp144
Graeme, I'm sorry the negative got the better. I've been trying to keep
up with the thread, been hard (commuting to my job, far away in the city). Been there in spirit though, reading the threads and studying.
I never claimed to be an intelligent trader, so any posts I made, wouldn't be of much value anyway. From you sir, I saw your
"Giving side". You were there to mentor...

I still hope Mr Greame wont leave us and his temporary days without any post will finish soon.
  • #657
  • Aug 7, 2010 9:47am Aug 7, 2010 9:47am
This is an awesome thread. Not only thanks to pipEASY, but to those who came with interesting questions and input. I hope pipEASY leaving teaches someone a lesson. If anyone makes it about the last post he responded to, they are missing the big picture. That post had little to do with it.

It was a response to people's attitudes and laziness. People act too little upon the information they have. Laziness is the main reason so many people only live ordinary lives around the globe. You'll achieve much by following Nike's slogan: Just Do It (JDI). In fact, to demonstrate how long a hand full of will power can take you, JDI everyday hereon for every task you come across: wash your car, vacuum clean the house, fix that broken fence, read a book, trade forex.

He received silly requests of posting entries he made. This is on the contrary to what he wanted. He repeatedly mentioned throughout the thread that we might discover our own entry style and that replicating him 100 % was unnecessary for success. "Give man a fish and you feed him for a day. Teach him how to fish and you feed him for a life time". pipEASY seems to be a profound supporter of this.

I can understand that it's tiresome to repeatedly trying to get a message across, explaining it in-depth, but still receive questions coming from someone who obviously either 1) should have a change in attitude before starting with forex, who doesn't want to put in effort and give the methods a try, but want to be watched over like a baby and be instructed on the millimeter on what to do, or 2) someone who is incapable of learning anything.

This thread is not a trading system and it was never intended to be. This thread provides a set of (excellent) ideas and perspectives on trading the market. Primarily he taught us that the market is the final arbiter. We cannot convince the market to take us anywhere. We must accept this fact. We can only go where the market takes us. This is the basic premise.

The next question is: given the basic premise, how can we join the ride? The answer is reading prices, interpreting price action on a wide range of time frames. Dedicating hours, days and years reading charts is the only way you're ever going to be good at doing it, so you'd better be starting with that today (JDI).
  • #658
  • Edited 12:45pm Aug 7, 2010 11:12am | Edited 12:45pm
This is my intuitive take on .00 entries on the H4 chart:

First I recognize a .00 first time resistance (FTR) or first time support (FTS) by that price closes right above, on or below. If it does so in a range it is an FTR and also a range resistance (RR) or a range support (RS). A second time resistance (STR) or second time support (STS) is a resistance or support on a .00 for which there exists an FTR or FTS. An STR/STS can also be an RR/RS.

I do not enter a position on a .00 break unless I can spot an FTR/FTS for that .00. If price breaks through a .00. I enter once price breaks through an FTR/FTS and closes a bit above/below the .00.

See pic for example. (You can also spot third and fourth time resistance there).

We enter 2 positions per new breakthrough, both with 100 pips SL and one with 100 pips TP and let the other position flow. When the other position reaches 100+ pips we adjust its SL to BE. We get the following:

 

  1. 2 long positions @ 1.0600. TP @ 1.0700 and 1.1500
  2. 2 long positions @ 1.0700. TP @ 1.0800 and 1.1500
  3. 2 long positions @ 1.0900. TP @ 1.1000 and 1.1500
  4. 2 short positions @ 1.1000. SL @ 1.1100
  5. 2 long positions @ 1.1200. TP @ 1.1300 and 1.1500
  6. 2 long positions @ 1.1400. TP @ 1.1500


When I say positions @ 1.1400 it's not entirely true that they're at 1.1400. E.g. for a long position that means we enter somewhat above 1.1400. For a short position we enter somewhere below.

All long positions go to 1.1500. During the trending we get to realize some profits so our equity curve is smoother than if we did not have the 100 TP for one of the positions.

We get net normalized pips = 100 + 800 + 100 + 600 - 100 - 100 + 100 + 300 + 100 + 100 = 2000. Adjusting 25 % down for that we enter above .00 for long positions and below .00 for short positions, and also spreads and slippage, we get 1500 normalized pips.

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  • #659
  • Edited 6:06pm Aug 7, 2010 12:01pm | Edited 6:06pm
Explaining "normalized pips"

I used the phrase "normalized pips" in my previous post and would like to elaborate on its meaning for those who may be unsure of it.

Assume that two traders net the same amount of pips. In order to know who had the highest monetary return you need to know their pip values. When you go through a set of trades such as I did in my previous post, you can calculate the return as pips. This does not say anything about the monetary return. We we denote forex returns in pips because given certain account size and margin restrictions, a net of 100 pips on a $1000 account is as good as catching 100 pips with a $ 100 000 account. The difference is that the $ 100 000 trader can trade with a bigger pip value from trading larger lots, and still risk no larger percentage of his account than what the $1000 trader does.

Teaching by example, I'll use the following example:

We enter a long position of three standard lots on EURUSD @ 1.2500. We will close one third of the position @ 1.3000, one third @ 1.3500 and the remains @ 1.4000. For three standard lots trading XXXUSD, we know that the pip value is $30. The price goes to 1.4000. You gained 1500 pips, but you did not earn 1500 pips * $30/pip = $ 45 000. On the first 500 pips you earned $30/pip; on the second 500 pips you earned $20/pip; on the last 500 you earned $10/pip. Return is thus: 500 * 30 + 500 * 20 + 500 * 10 = $30 000.

You net 1500 pips with average pip value of $20.

Let's rephrase it a bit:
We enter three long positions of one standard lot each on EURUSD on 1.2500. One position has TP @ 1.3000; the other one has TP @ 1.3500 and the last has TP @ 1.4000. Price goes to 1.4000. Pips gained are 1500, but normalized pips gained are 3000:

500 pips gained for the first position.
1000 pips gained for the second position.
1500 pips gained for the third position.
A total of 3000 normalized pips are gained.
The normalized pip value is $10.
  • #660
  • Aug 7, 2010 8:51pm Aug 7, 2010 8:51pm
Quoting knukk
I
This thread is not a trading system and it was never intended to be. This thread provides a set of (excellent) ideas and perspectives on trading the market. Primarily he taught us that the market is the final arbiter. We cannot convince the market to take us anywhere. We must accept this fact. We can only go where the market takes us. This is the basic premise.

The next question is: given the basic premise, how can we join the ride? The answer is reading prices, interpreting price action on a wide range of time...
Great post! Lets just do it
Loss of opportunity is preferable to loss of capital
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