Building an equity millipede

Hello RDWatkins

I remember your s/r chart from previous exercise and you are well on the right track.

Just like the spinning girl picture, I honestly believe when a trader combines ema lines with candlesticks they are purposely choosing to confuse themselves and the sad part is they dont even know what they are doing.

I can trade effectively with just weekly 5ema, stacking positions, and diversification.

Banks probably take less than 10 trades a year as the sheer amount of capital they control is cumbersome to move around quickly.

We drive sedans but the banks drive 18 wheelers. We can turn corners easily but they need alot more room to turn. Think about this.

The biggest myth alot of traders have on this forum is that 'you cannot trade like the bank cause they have more money.'

That is completely wrong, and you can definitely trade similar style to large managements and also create a big 'growth.'

I know its possible cause Im doing it.

Sincerely,

Graeme

Hi Graeme,

Welcome back. I must say you ask some of the most thought providing questions on the forex factory forum.

I hate to admit this but I've been trading for 5 years and I can't say that I have just one thing that I do time and time again that makes me pips. I know I have at least 199 things that I do when I trade forex but I can't tell you which ones work most of the time.

Some thing I need to think on.....but thank you for the question.

nice to see you back Graeme, i'd just like to say forexfactory has an "ignore' feature, its very useful just put any user who is unnecessarily "picking a bone" on the ignore list and they wont be permitted to post in the thread.

Graeme i couldn't come up with my 1 thing even after 10 seconds of thinking, i thought of a couple of things later on but i can't honestly say i know it well enough to call it my 1 thing.

Hi Graeme,

just started looking into your thread and like your apporach. Must admit im looking forward to when you collate all the information as it is quite a hard read going through the thread, but looking forward to getting my own millipede.

Regards.

Your students missed YOU!

Glad to see you are back Graeme, we missed your presence and really appreciate the knowledge you bring to the forum. Thanks alot and I look forward to learning more from your way of acknowledging the markets.

Thanks again,

AB

My millipede lost a few legs today but the little guy just keeps going.

This is an eye opener.

Greame, your return has uplifted me, what a surprise. We all hoped for your return, Thank You. George

Good idea.

Dont let anyone else tell you it doesnt work.

You should find out that if it works or not.

Try it, and please let us know.

May I forecast that your result will not achieve much and it will only lose out on the potential move for the winning position on day 1 and closing out losing position on day 2 is an unnecessary realized loss which could have been easily prevented.

I like your emotionless mechanical approach however it needs to be applied differently.

Thanks for your reply I had two new legs close last night at a loss so I will try a hedge entry and reprt back. It seems to me the small amount of profit given up with the hedge entry is insignificant compaired to the huge profit of a succesful leg and in addition will reduce that painful feelling you get when a position closes before your break even stop is placed

Good morning, all

Apologies to condense my reply into one post, but please understand for the sake of new readers im trying to keep this thread modest sized.

Dave - It takes true warrior to admit his weakness. Thank you for sharing with all. Alot of traders dont even realize they dont have this '1 thing.' They believe the current system they are using is their '1 thing' but I assure all readers this '1 thing' will be something far simpler.

Fugly - Thank you for your continued contribution. I wasnt aware about the ignore list. However no one will be listed as I believe we are still part of public community and everyone is entitled to their personal opinion. Having said that, I have decided to place greater effort in preparing the one big reading material. Thank you for your honesty. It takes more to admit to ones weakness. Thank you

Rumpfunk - Hello there. Thank you and I understand and I will more or less decrease my thread participation and focus more on the material im preparing.

Gasservettes - Thank you for the kind remark.

Abailey - Thank you very much

Pip_daddy - Thank you for your continued contribution. Im glad to hear you have started. Always remember to spread your exposure and never get attached to one single pair of currency. How will you react if your current group dies on breakeven? I know you will be a bigger person and realize that if price cameback to close all current legs on breakeven, its most likely trending in opposite direction to your current group and you should have few legs growing on the new direction.

Knukk - Thank you

Gp144 - George, thank you as well

Stumpy1 - Good. Please let us know.

Sincerely,

Graeme

Hi Everyone,

Apologies for the slightly off-topic question but I'd welcome comments from others on here.

I would like to practise my entries as per Graeme's exercise but given current constraints I do not get home til very late which means I am unable to demo trade in the evenings. Although FX is a 24hr market, the weekend period as we know is relatively flat so trying to demo trade during this period seems to some degree to be rather useless.

Consequently, has anyone got any ideas as to how I could gain the practise? The options I can think of are as follows, although IMO most of them have serious drawbacks / limitations.

1. Manually go back over intraday charts and look for entries.

The issue here is that as one is not trading of the right side of the chart it is very easy to ignore those set-ups which wouldn't have worked. Plus, as you can already see whats going on to the right of a particular set-up it has a huge negative effect on ones learning.

2. Trading real-time using Daily/Weekly timeframe/bars.

Although this is how I currently trade equities (and based on your recent posts how I will probably look to trade FX), the issue here is the time involved to watch a single set-up present itself.

3. Mechanically code up an entry and backtest it over previous years data.

Apart from having to learn another programming language first (in this case MT4's MQL) I'm not sure whether the results would be that reliable based on what I've read about the MT4 tester. Also, as we know there are drawbacks with system trading as opposed to discretionary.

4. Purchase a Simulator. This will enable me to "demo-trade" in realtime after the actual event (ie over the weekend if necessary)

Given my options it seems that #4 is the better one. However, before I go ahead & purchase it, I wanted to ask what others think on here...... Is there any other way to achieve this?


Apologies again for the slightly off-topic question but I thought it useful to post it as there may be others on here who might be in a similar position......

Chorlton

PS. As a sign of respect to Graeme and so as not to disrupt his flow of information, can I ask that replies as sent via PM. Many Thanks....

Have a look at this site http://www.forexpractice.com/ You can adjust the time it takes to display a new bar so you could look at a daily chart and have a new bar drawn every few minutes. Downside to this side is the data only goes upto 2007 last time I checked but it may prove helpful.

There was also an ea posted on FF that would do a similar thing. Think it was called LFH simulator or something like that. Was fiddly to use though.

Lastly you can disable autoscroll in MT4 and advance 1 bar at a time by pressing F12.

Hi Willf,

Thanks for the prompt reply. I'll take a look at the site.....

Cheers mate..........

Good morning, all

Thank you for all the personal messages, Im still replying to them.

I have mentioned this before in my earlier posts.

I asked anyone with modest success in trading to pull out a paper and calculator. Write down all their trades they have completed few months ago.

Just write down, Entry Price, amount of pips earned, buy/sell.

Example,

1. 132.000 +100 / Sell
2. 1.28000 +100 / Sell
3. 2.12500 +50 / Sell

And so on..

Now write down current price of the pair of currency next to it.

1. 132.000 +100 / Sell 124.000 (tick)
2. 1.28000 +100 / Sell 1.35000 ( )
3. 2.12500 +50 / Sell 2.78000 ( )

Compare it? What do you notice?

First list shows short term trader who knows how to trade effectively.
3 trades, 3 wins, +250 pips. Excellent.

Second list shows what happens if this short term trader decides to turn into a long term trader. He/she still uses same entry method however the only difference is; he/she holds onto the winning positions indefinitely.

3 trades, 2 breakevens, but..

+800 pips of unrealized profit. Im sure this trader has many other positions as well but he/she can close that x1 position of +800 pips right now through diversification and have trebled the short term trader by doing nothing. Accuracy drops significantly but it is the small number of legs that survive which will be outrageously larger profit later on. Winning rate/percentage is not important, it is how much profit your winning rate/percentage brings that is important

Once a reader asked me through personal message who I admire in this forum. There are great traders out there and admire many. They have a sensible trading method and Im sure most of them enjoy their success. However it is this success that gets into their head and suddenly they close their mind on anything else. I know it will be fruitless to get through their wall of egoness but they can be so much more by just holding onto their winning positions longer. Few weeks or more the better. They will never go back to closing out their position at 1:3 or any other small r:r they managed to conjure and apply with some degree of success.

If you are well respected, successful trader please dont stop learning. I still attend local seminars just to feel it all again. Please stay true to your roots and admit that even if you are currently running ahead of the pack there are traders that are flying above you.

Sincerely,

Graeme

Just on a side topic, I would like to show you a chart that is a true/similar representation to where I stand. This is not a bragging show but there is something that I wish all readers notice and learn.

This is what all traders should aim for in the long term

http://img840.imageshack.us/img840/8928/equity.png

I would like to talk one more topic before I retrace back and continue my efforts into the reading material.

Price Action.

I speak on behalf of all learners. What is price action? Action of the price?

How do you define price action?

I choose to interpret 'price action' as the current market sentiment of the movement in price that is on hand.

Im sure everyone knows to some extent what price action is but do you really know how to apply it?

This will be my longest and hardest topic to describe to all.

Let me start with wicks..

Everyone knows what wick is.

Can you explain it?

http://img838.imageshack.us/img838/4020/buysell.gif

http://img405.imageshack.us/img405/9229/84945224.png

2 guys approach each other.

Mr Buy: Hey, today I want to go my way
Mr Sell: Yesterday, you went your way so today im going my way
Mr Buy: Nooooo. Im pushing it my way and you cant stop me
Mr Sell: Pfft. As if I care if you push or not