NanningBob Study Club

Similar to what i do, but i just use the H1 to get a better when the H4 tells me to get in.

Ive been monitoring ADX closely and using that on the H1 to confirm strength of my ocunter-trend entry. Been doing OK for me and keeping me out of loss making situations..

Talking about it. Anyone get long EURGBP just now on #2?

Interesting. I think it is just too much work to go through 20+ currencies to analyze different time frames etc...

80% of the time, it will retrace if all stars are aligned per Bob's strategy. This strategy is more about money management and handling the draw down. Plus, I make most of my money off L2 and L3 trades...

I used to do what you did, but I got tired and lazy...

Hey Blue,
I was trading $1 a lot for a while with 38K but have since gone to .05 lots. It let's me be a lot more aggressive with trades. To give you an idea with DD, the lowest margin level I've seen in the last three weeks (taking every primary and secondary and a few#5 EA trades) was around 13,500% using .05 lots. Four trades have gone to L2 but retraced to BE. Have banked over $1000 during that time.

To me EUR/JPY looks like a good #2 buy, secondary trade. Thoughts?

anyone enter #2 buy on euraud ?

Yes I posted that one this morning. I am at work so I have to let the EA do its thing.

I am in that one too

i'm posting in the study club because my idea may not be appropriate to be posted in the main thread.

having started this on demo now, i've fully grasped that the 2 main strengths of bob's method are:

(1) the rules for entrance initially gives us an edge
(2) barring a run of a thousand pips without even somewhat of a retrace (which is all we really need, is but a small retrace), 2.4.2 provides an edge.

to cope with and to get ready and to stay prepared for (2), we need to keep lot size small on all entries for (1). i do not question the value of (2). it makes a lot of sense.

as the system is now, a big focus is being put on small lot sizes. i.e. 1 cent per 100usd of account balance divided by the number of trades you will potentially have open at anytime. the focus is to keep it small - the smaller the better, as the drawdown will most certainly be huge once we get a runner or even multiple runners instantaneously when we are doing 2.4.2.

i want to put some focus on (1) though. why are we entering at the points that we are initially? based on the rules, we are doing it, because there is an edge. i.e. if we were to make 100 entries using EA1 or EA2, and we were to hard set a TP or SL at 100 pips in every single one of those trades, the assumption MUST be, that we would win greater than 50 out of every 100 times. it MUST be. if the outcome is either unknown, or less than 50, what would the value of (1) be? there wouldn't be any value at all.

As a result of my assumption, if we give up on the 2.4.2 (not because it doesn't work- because i'm sure it does), we wouldn't need to worry about lot size anymore. the reason to give up on it, is not because it doesn't work, but because it hinders lot size.

If you had for example, a 10k account. you can buy instantaneously (at the same time) around 1.8 full lots at any given time. In this example, your lots will be force liquidated once each lot drops around 248 pips (it'll never get there, this is only an example). I'm drawing this example just to point out that, with a 10k account, you will be able to safely go in on any trade at 5 mini lots everytime and set SL/TP at +/- 100.

Since we are assuming entering at (1) gives us an edge, if you take just the trades that follow the entrance rules fully. even a 60% win rate would be astronomical. If you can take 100 of these trades in a 3 month period (just 30+ trades per month), and assuming your win rate is 60->65%... on 5 mini lots each times, (either you get stopped out at -100 or you tp at +100)..... you will be up 10->15k in 3 months.

the only way this would not work, is if the edge assumed at (1) is actually unknown. one cannot say that if you do this, you may lose 8 times in a row, followed by 3 wins, followed by 12 losses, and then once you have been wiped out, you would have gone on to win 20 times in a row if you still had money...--> as THAT is exactly what unknown means.

The only thing I can think of that trading (1) straight up will fail, is that the edge is actually very, very small (like a 51->55% win rate only). if the edge is that small, it is the same as unknown, as you could get in deep doodoo before the math ever has a chance to even out in your favour (for the mathematical edge to work in your favour)... OR... the primary purpose of trading (1) is because it is in a good position for (2) to work it's magic. personally, i find neither of these 2 explanations to be viable.

any thoughts?

Be careful buddy!
It looks like a runner runner.... : s

Dear mate....
so do you trade all pairs or just some of them?
What happpens if you need to start 2-3 recovery entries? if you go in with 1.5 lotsize etc. und you have to recover this trade with an L2 or L3 trade (1.6 *) you gonna blow up your account I think...

Our goal isn't to win >6/10 the more we want to win every trade ; p

Im feeling this runner......... ouch..

woohooooo thats what i like to hear......

I'm short on eurgbp (runner runner) and on usdchf as well (D1 + H4 bearish)

don't know but a lot pairs seems to dropping....uhhm

EURAUD rwb lines above 15 on the H4....but D1 shouts :,, Run Run! ''
hmmm


-----> CHF getting stronger ...seems like = D

I think the main point behind small lot is to not use a SL at all. We are using H4 which means there can be quite a bit of movement and having a SL means that in many cases it will get hit.

By lowering the lot and trading more pairs we are spreading the risk and also giving the price room to move.

Besided, the small lot is only realtive. If I can make 5% week on £1000 is £50, but the strategy will work the same on £10k and £500 a week.

USDJPY new 15-year-low ..... i bet it's gonna reach the 83 level soon...

Hit

hi,

i guess my newbie question is forgivable here.

for recovery trades, do you guys take the profit for the recovery knowing that it will retract again due to market condition and lack of fundamental support?

charts like
eur/chf
eur/nzd (almost near my retrace line)

just want to know how you guys handle/maximize recovery trades.

it's important that you don't recover too early....wait about 200 pips etc. to entry for recovery...
and as Bob said we don't want to make profit with recoverytrades,we just want to come BE or leave with a small loss...

hope i got ur question

chiba,
Ok, your idea is to trade larger lots with a hard SL and TP. I'm thinking a 50SL, 50TP may be safer than 100/100, I don't know. Let's say you only take #1 trades when you get perfect setups. I agree, this would work nicely if there was an edge (maybe 60-70% win rate). The only way to know is to manually backtest each pair which is difficult with Bollinger bands moving with price all the time. When you look at a chart after the fact, you might think price touched the BB at a certain price but in real time it touched at a different price. And remember the effects of spread. It forces price to go past the BB to make you pay the spread before the trade initiates. The only accurate way to test your idea would be a forward test. It would be great if someone could code an EA to buy and sell off the Bol. bands only when there is a perfect #1 trade setup.