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Building an equity millipede

  • #1,461
  • Aug 26, 2010 8:27pm Aug 26, 2010 8:27pm
Quoting longhornxtreme
with even as little $100.00.
Building an Equity Micropede.
Attached Image
  • #1,462
  • Aug 26, 2010 8:31pm Aug 26, 2010 8:31pm
I always tell people to put $100 in a broker that lets you trade to the unit instead of demo trading. At least there's 'some' money on the line with each trade.

I don't trade an account that small, though.
  • #1,463
  • Aug 26, 2010 8:33pm Aug 26, 2010 8:33pm
WOW!!, Finally after 6 days of reading I get to this point, It's a very interesting and helpful thread.

I have learned a lot, and I already have a small millipede, but I have to make my entries sharper.

Thanks Graeme! I'll keep reading and will participate.
  • #1,464
  • Aug 26, 2010 8:37pm Aug 26, 2010 8:37pm
Hi Graeme,
I know your busy with preparing for the weekend assignment. I just wanted to post this chart showing my failed stacking attempt. I tried stacking aggressively without initial stop loss. The problem I have with only closing positions after 5min candle has closed above or below s&r is that if the candle is huge you can end up with quite a substantial net loss compounded by stacking. I just wanted your take on it,(or anyone else's)as Im sure the below scenario is quite common.
Kind regards,
Ben
Attached Image (click to enlarge)
Click to Enlarge Name: failed stacking.png Size: 69 KB
  • #1,465
  • Aug 26, 2010 8:42pm Aug 26, 2010 8:42pm
Quoting longhornxtreme
I always tell people to put $100 in a broker that lets you trade to the unit instead of demo trading. At least there's 'some' money on the line with each trade.
Definitely! Just making a little joke.
  • #1,466
  • Aug 26, 2010 8:51pm Aug 26, 2010 8:51pm
Quoting FXSurfer
Definitely! Just making a little joke.
  • #1,467
  • Edited 9:08pm Aug 26, 2010 8:57pm | Edited 9:08pm
Quoting leggo
Hi Graeme,
I know your busy with preparing for the weekend assignment. I just wanted to post this chart showing my failed stacking attempt. I tried stacking aggressively without initial stop loss. The problem I have with only closing positions after 5min candle has closed above or below s&r is that if the candle is huge you can end up with quite a substantial net loss compounded by stacking. I just wanted your take on it,(or anyone else's)as Im sure the below scenario is quite common.
Kind regards,
Ben
Hey there Leggo, I was also in this play for the longside, and was stopped out on BE. As soon as price came back down, I saw buyers retaliating. Knowing price came through 1.27, we should've seen a bigger impact from sellers. As soon as I recognized the 'burst', I was in long yet again. Something I highly advise is watching how price reacts around these psychological levels. This is my interpretation of it however, use it how you wish. Looking forward to the upcoming exercise.

EU Trade:

http://img837.imageshack.us/img837/9301/25573487.png


Just an update of where I entered another order. I hope this helps somewhat Leggo. But like Graeme has mentioned, this is my interpretation of price. I spent a tedious amount of time studying how price reacts on the 1 minute and tick charts via Market Watch on MT4 to finally understand the 'flow'.
http://img840.imageshack.us/img840/2937/eu2.png
  • #1,468
  • Edited 9:21pm Aug 26, 2010 9:09pm | Edited 9:21pm
Quoting leggo
Hi Graeme,
I know your busy with preparing for the weekend assignment. I just wanted to post this chart showing my failed stacking attempt. I tried stacking aggressively without initial stop loss. The problem I have with only closing positions after 5min candle has closed above or below s&r is that if the candle is huge you can end up with quite a substantial net loss compounded by stacking. I just wanted your take on it,(or anyone else's)as Im sure the below scenario is quite common.
Kind regards,
Ben
Good morning, Ben

I would like to step in here and answer your post.

I studied your charts and you have interpreted price action very well.

You did nothing wrong.

Lets go over the numbers:

5min chart entries, 4 positions.

3 positions closing for net -30 pips and 4th position for zero.

Thats 7.5 pips average loss per position. That is well below recommended 10-15 so its good.

What if the price was a clear breakout of .00 and never came back and went for 50+ pips?

200+ pips for the risk of 30-40 pips? I will do that everyday, everytime since sooner or later it will work into my favour. Thats statistics. And what stops a price at such 50 pips? Nothing, it could continue on for next 300+ pips.

Your question is also about the sudden large movements. Yes, I do experience a sudden big spike up from time to time. Market is fair and with all fairness there are times when price does spike towards my intended direction as well.

The difference?

Yes, a sudden price spike against our direction will cause a larger loss than usual (only a temperamental increase of loss) but

what about the other half of times when a sudden spike in price is towards our direction?

You would lose what you lose on 'x1' 5min candle when it goes against you.

BUT

You will profit on at least x1 5min candle if it goes in your favour.

The loss remains static and pre-defined at x1 5min candle whilst the potential profiting is minimum x1 5min candle. Must understand this all

The 'occurence' of such large spikes when they do happen would be more or less 50% of times to our favour and 50% of times against our favour (I will have to add here that one of the planned topics today will change the above % much more to our side).

It is the statistic fact that we will profit more when it goes to our favour and lose much less when it is against our favour.

Will I scare you to inform you that once I had 5+ positions on gbp/jpy to have a huge spike up against me for -40 pips on x1 single 5min candle. -200 pips from that one single spike of price against my intended movement.

But I also remember many times when I have stacks of position and then 40+ pip movement towards my intended direction.

Everything is all relative in the markets/or any matter on the same plane of physics and if I can calculate my risk:reward for forex I can use the same universal principal to apply it to any given formulae on any given grounds to achieve results for the same universal purpose. In other words, r:r of the above simulation of my gbp/jpy story will also show and work out with positive expectancy on the intended series of random outcomes as the time line progresses on.

Sincerely,

Graeme
  • #1,469
  • Aug 26, 2010 9:09pm Aug 26, 2010 9:09pm
Quoting Benevolent
Hey there Leggo, I was also in this play for the longside, and was stopped out on BE....
Thanks Benevolent,
Its good to see both sides of the coin! You were long I was short. Thats what makes the market tick I guess. I know what your saying. When the price first broke down through .00 it seemed to have great momentum. I may have been a little hasty in my stacking considering the close proximity of price to .00 something to look out for next time.
Good luck
Ben
  • #1,470
  • Aug 26, 2010 9:14pm Aug 26, 2010 9:14pm
Quoting pipEASY
Good morning, Ben

I would like to step in here and answer your post.

I studied your charts and you have interpreted price action very well.

You did nothing wrong.

Lets go over the numbers:

5min chart entries, 4 positions.

3 positions closing for net -30 pips and 4th position for zero.

Thats 7.5 pips average loss per position. That is well below recommended 10-15 so its good.

What if the price was a clear breakout of .00 and never came back and went for 50+ pips?

200+ pips for the risk of 30-40 pips? I will...
Thanks Graeme,
I must admit it feels a bit like banging my head against a wall at present, however its good to know my application was sound. Just Random price action that took me out.
Regards
Ben
  • #1,471
  • Edited 9:38pm Aug 26, 2010 9:18pm | Edited 9:38pm
Quoting leggo
Thanks Graeme,
I must admit it feels a bit like banging my head against a wall at present, however its good to know my application was sound. Just Random price action that took me out.
Regards
Ben
Ben,

I promise you tonight, that everything will be much much clearer.

I understand how you feel at the moment, and trust me few traders are feeling this right now.

One of the first emotional hurdles that I need to get all readers over tonight.

Everyone needs to keep their beliefs intact and see the bigger picture and I will add my next topic on top to make everything click into place.

Sincerely,

Graeme
  • #1,472
  • Aug 26, 2010 9:41pm Aug 26, 2010 9:41pm
Greame,
Really appreciate the advice you are giving away. I have just finished reading through the entire thread, and I must say I appreciate the merit of it. Keep up the great work
  • #1,473
  • Aug 26, 2010 9:56pm Aug 26, 2010 9:56pm
Quoting pipEASY
Good morning, Ben

I would like to step in here and answer your post.

I studied your charts and you have interpreted price action very well.

You did nothing wrong.

Lets go over the numbers:

5min chart entries, 4 positions.

3 positions closing for net -30 pips and 4th position for zero.

Thats 7.5 pips average loss per position. That is well below recommended 10-15 so its good.

What if the price was a clear breakout of .00 and never came back and went for 50+ pips?

200+ pips for the risk of 30-40 pips? I will...
Graeme.
Please allow me to add my two cents as I am looking forward to learn as well based on what you think

Leggo,

Position 1 -- was perfect entry
2 -- was kind of too much for Stop loss, even though it broke the support, could have waited for some 50% retrace
3 -- is a good entry with a defined SL
4 -- is too soon given you just entered 3

Technically you could have only 1 and 3 or 1 and 4

Overall too many positions too close based on Graeme's feedback to my trades earlier.

This is for my learning as well; invite inputs

Thanks
TS
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #1,474
  • Aug 26, 2010 10:10pm Aug 26, 2010 10:10pm
Quoting TradeStar
Graeme.
Please allow me to add my two cents as I am looking forward to learn as well based on what you think

Leggo,

Position 1 -- was perfect entry
2 -- was kind of too much for Stop loss, even though it broke the support, could have waited for some 50% retrace
3 -- is a good entry with a defined SL
4 -- is too soon given you just entered 3

Technically you could have only 1 and 3 or 1 and 4

Overall too many positions too close based on Graeme's feedback to my trades earlier.

This is for my learning as well; invite inputs

Thanks
TS...
Good afternoon, TS

I sincerely hope Ben doesnt feel cornered or take any offence as we are discussing his efforts from last night.

Ben I hope what TS has added is a help to you as TS has perfectly pin pointed 'tighter' entries.

If TS was trading the same pair of currency last night and the same setups, the outcome is the same for both Ben and TS however, TS will have much lower drawdown and less risk on the table and the potential of equivalent profits. This helps alot in preserving/safeguarding your capital and it is very important. But also adds a huge bonus on your emotional control.

There was nothing wrong with Ben's entries, especially .00 breakout entry however with .00 breakouts you expect the order flow/interest of other traders pushing your newly added breakout entry almost instantaneously into profit with rows of long bold candles. If not, close out as it will stall on you and whipsaw around that area.

Ben, please feel free to question me as Im always willing to help.

Sincerely,

Graeme
  • #1,475
  • Aug 26, 2010 10:55pm Aug 26, 2010 10:55pm
Quoting pipEASY
Good afternoon, TS

I sincerely hope Ben doesnt feel cornered or take any offence as we are discussing his efforts from last night.

Ben I hope what TS has added is a help to you as TS has perfectly pin pointed 'tighter' entries.

If TS was trading the same pair of currency last night and the same setups, the outcome is the same for both Ben and TS however, TS will have much lower drawdown and less risk on the table and the potential of equivalent profits. This helps alot in preserving/safeguarding your capital and...
Hi Graeme, TS,
I agree with both of you. I dont feel cornered one bit, Im enjoying the feedback. If I am honest my gut instinct is to be more conservative with my stacking. My reasons for been so aggressive were influenced by Graeme's post yesterday when two positions were added on one 5min candle. I'm struggling to see how I can spread my risk yet still be as aggressive in my stacking as Graeme/Joe.
The way I see it you cannot be aggresive when you win and less aggresive when when you loose, you would need to know the outcome before you started for this to happen.
T.S. I agree its better to wait for a retrace to stack and I had been doing this initially. However having witnessed several volatile breakouts now I have noticed the biggest movement is often in the first 2-3 candles. There have been a couple of times were I have waited for a retrace and still been waiting 30 pips later when move is slowing down.
I suppose my biggest stumbling block at the moment is how can I spread my risk while still been aggressive enough to have multiple positions in the first 30 pips of a move?
Thanks for the feedback guys. Im short on AUD as we speak.
Regards,
Ben
  • #1,476
  • Aug 27, 2010 2:07am Aug 27, 2010 2:07am
Hope the team has started to build some short positions now. Looks like they have a potential to be a long life soldiers.

Regards,
TradeStar

PS: Using 1 minute chart also seems to be helpful !!
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EURUSD_Short Aug. 27 12.34.gif Size: 47 KB
Click to Enlarge Name: EURUSD_Short Aug. 27 12.33.gif Size: 50 KB
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #1,477
  • Aug 27, 2010 2:41am Aug 27, 2010 2:41am
Quoting TradeStar
Hope the team has started to build some short positions now. Looks like they have a potential to be a long life soldiers.

Regards,
TradeStar

PS: Using 1 minute chart also seems to be helpful !!
What an irony! we just spoke about huge 5 min candle close this morning and the same thing happened all the soldiers got killed.

Will see

Regards,
TS
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #1,478
  • Edited 5:05pm Aug 27, 2010 2:50am | Edited 5:05pm
Good afternoon, all

Yesterday I posted how I interpret price action. I found alot of readers not having a clear price interpretation and I deemed it necessary to re-hash again.

I hope you have gained positive insight from my posts.

Moving on in a planned flow of explanation, I asked everyone a mini quiz.

Which chart is 5 min and which chart is weekly

Chart A

http://img163.imageshack.us/img163/172/aa8.png

Chart B

http://img59.imageshack.us/img59/7178/aa9b.png

I read all the answers and I thank the participants for their contributions.

Please do not take me the wrong way but I had no intention to reveal which chart is 5min and which chart is weekly.

The main purpose was to show all that nobody can tell the difference. It is exactly the same without any numbers. So why is this important?

I would like all readers to think with me.

If chart A and chart B has a big timeframe difference but looks exactly the same then the only difference is the scale.

Before I explain the scale, traders must agree that you could have drawn s/r lines, trendlines, price action (flying buddha, inside bar, engulf, pin bar) to EITHER CHART A OR CHART B and still have same price interpretation. You must understand how important this is.

I say a very very important sentence:

your profit expectancy depends on the scale

Continuing on..
  • #1,479
  • Aug 27, 2010 2:52am Aug 27, 2010 2:52am
Quoting TradeStar
What an irony! we just spoke about huge 5 min candle close this morning and the same thing happened all the soldiers got killed.

Will see

Regards,
TS
It might be better to do BE+1 or 2 pips to gain some emotional comfort.
Staying in my lane...
  • #1,480
  • Aug 27, 2010 3:01am Aug 27, 2010 3:01am
your profit expectancy depends on the scale

What do you mean Graeme?

Even though I would prefer my legs to grow on the main weekly/monthly curve for the next 2-10 years. First, I must be realistic in my expectation at the events that is going to happen before the 2-10 years of growth.

If you are entering positions on 5min chart then your realistic expectation after 20-30 candles is??

http://img833.imageshack.us/img833/3140/aa1y.png

Even though it has moved very strongly down for us the potential profit is just over 60+ pips. And we all know market is more than just 60 pips on offer.

Now, the above chart can also be a weekly chart.

Exactly the same but the scale is different. Scale is the potential profitable 'ground.'

If the above was a weekly chart then you would all agree that 20-30 candles would be few thousand pips.

What is the difference??

Continuing on..
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