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Building an equity millipede

  • #2,621
  • Sep 21, 2010 6:04pm Sep 21, 2010 6:04pm
Quoting thx1139
Can we please stop with this coin toss distraction. It is not relevant to the thread IMHO and only adds noise. The sorts of statistics you are talking about are gambling and not trading statistics anyways. I can say with 100% certainty that you have not stumbled on some holy grail loophole in trading that allows you to just take random trades and succeed when half the statisicians on the planet are constantly looking for some edge.
An interesting excerpt from Ronald Raygun's profile page...

Here's a tip for the newbies who are learning to trade.

Ignore all that hype for various systems. Remember--for now--this one fundamental rule: The exit is more important than the entry.

With that in mind, I want you to do the following on a demo account:

1) Toss a coin: Heads long, Tails short
2) Manage the trade as you see fit. If you think the trade is bad, exit.
3) When you exit a trade, go back to step 1.

If you can double your account in less than 50 flips, I consider you a good enough trader to go live. I personally average between 20 and 30 flips, and I do it once a week, on the weekends, trading simulated data.
  • #2,622
  • Sep 21, 2010 6:04pm Sep 21, 2010 6:04pm
Good morning/evening Graeme and fellow traders,

Hope you all enjoyed our live learning adventure yesterday. I personally had a blast putting my thoughts on charts prior and after each trade to share with the readers of this thread and being advised every step of the way. I sincerely thank all those who have sent me their appreciations. We are all on a learning expedition with these real time trading activities. Let us all make the best use of Graeme's valuable time on this endeavor.

If you wish to ask a question or clarification on any of my posts, please don't hesitate to PM me. I will try and response as soon as I possibly can. Due to character size limitation with PMs, I prefer to respond via email if you choose to share email in your PM.

Some thoughts to share before the start of Round#2 tonight.... I got a hard doze of reality from yesterday's price interpretation with relying too much on support/resistance levels.

I do hope everyone is keeping a log of what their trading style used to be prior to this thread and start the process of refining their trading rules based on lessons learnt from this thread.

Here's the new entry in my trading plan:
Support/Resistance/Pivot levels are just speed bumps in the road to price discovery. Drawing S/R lines narrows my vision and limit my ability to go with the flow.

From now on, I will always wait for price confirmation first, prevent myself by arriving early in a trade and follow these two rules:

(1) If I am looking for short entry, I WILL wait for price to close below the open of previous up/green candle
(2) If I am looking for long entry, I WILL wait for price to close above the open of the previous down/red candle

P.S. I knew about these two rules for a long time from earlier posts, but HAD to experience and convince myself firsthand in order to fully understand their importance.

I suppose we all have our ways to learn and could not have come to this conclusion without Greame support to allow me to go through this experience and learn.

Please PM me with any suggestions/improvements/dos & dont's to maintain the integrity of this thread. I have already got a few and I thank everyone for that.

Looking forward to tonight's price action.
Staying in my lane...
  • #2,623
  • Sep 21, 2010 6:16pm Sep 21, 2010 6:16pm
Quoting thx1139
Can we please stop with this coin toss distraction. It is not relevant to the thread IMHO and only adds noise. The sorts of statistics you are talking about are gambling and not trading statistics anyways. I can say with 100% certainty that you have not stumbled on some holy grail loophole in trading that allows you to just take random trades and succeed when half the statisicians on the planet are constantly looking for some edge.
We ought to encourage such discussions thx1139 but agree this thread is not the right place for it. May I suggest we continue this discussion on this thread http://www.forexfactory.com/showthre...30#post4014530 for those interested to gain a statistical insight as most traders (me included!) are not very strong in their understanding of statistical modeling and it does play an important role in Graeme's trading philosophy. just my 2cents.
Staying in my lane...
  • #2,624
  • Sep 21, 2010 6:26pm Sep 21, 2010 6:26pm
Hi VEEFX... can you tell me what time frame you use for your candles?? 1H - 4H or daily?? Thanks in advance.. and you're doing a great work with Graeme.. cheers
Jean
  • #2,625
  • Sep 21, 2010 6:33pm Sep 21, 2010 6:33pm
Quoting pipEASY
Majority of the new traders anticipate too early and then participate too early.
.....

However, I do know that VEEFX will now always take the hindsight/advice of the higher timeframe and apply it accordingly to lower timeframe.

Good work and lets do it again tomorrow, starting 2 hours before london open.

Sincerely,

Graeme
Greetings Graeme,

Looking forward to tonight. Doing 20:20 hindsight now on last night's choice of pair, there is a price stall/range on monthly and weekly TF.
Daily and H4 looked promising on the long side. Based on our 1st weekend's assignment looking at hindsight on weekly TF, I would have stayed away from this pair at all costs until a definite breakout in either direction.

Question: When you mention 'VEEFX will now always take the hindsight/advice of the higher timeframe and apply it accordingly to lower timeframe.' did you mean hindsight on H4 timeframe only and entries on H1 or lower timeframe? Since we chose a pair based on proximity of price near 200ema, I did not even bother to look at daily/weekly/monthly hindsight. Just thought a quick clarification for our readers would benefit all.
Staying in my lane...
  • #2,626
  • Sep 21, 2010 6:35pm Sep 21, 2010 6:35pm
Quoting Froggy10
Hi VEEFX... can you tell me what time frame you use for your candles?? 1H - 4H or daily?? Thanks in advance.. and you're doing a great work with Graeme.. cheers
Jean
Hi Froggy,

I suggest reading this thread starting from post 2402 onwards... http://www.forexfactory.com/showpost...postcount=2402

We start at H4 timeframe and make entries on H1 or lower timeframe
Staying in my lane...
  • #2,627
  • Sep 21, 2010 6:49pm Sep 21, 2010 6:49pm
Did anybody take trades today based on the 4 hour 200ema theory? How did they turn out?
  • #2,628
  • Sep 21, 2010 6:52pm Sep 21, 2010 6:52pm
Thank you very much for your answer VEEFX..i will.. cheers

jean
  • #2,629
  • Sep 21, 2010 7:14pm Sep 21, 2010 7:14pm
Just took a GBPUSD long trade based on proximity to 4H 200 ema and closes above open of previous down bars on 1H and 5M. See how it goes currently +10 pips.
  • #2,630
  • Sep 21, 2010 8:08pm Sep 21, 2010 8:08pm
I took a short after breaking resistance of the 85.000 usdjpy 2 hours ago and it is continuing to grow in profit off of the 200 ema line.
  • #2,631
  • Sep 21, 2010 11:03pm Sep 21, 2010 11:03pm
If any of you are in the US can you please respond to my question here:

http://www.forexfactory.com/showthre...32#post4039032

Thanks,
Coastalfx
  • #2,632
  • Edited 11:27pm Sep 21, 2010 11:06pm | Edited 11:27pm
Good evening everyone,

While we wait for Graeme to join, I have chosen GBPJPY as my pair for tonight.

Entry Order placed at 50% fib. Let's see if it hits.

PS. Might cancel this order if it is not hit before Graeme comes online tonight.

EDIT: Just to document my hindsight for future reference.
Monthly, Weekly Daily TF is DOWN
H4 is UP... so if this enter goes goes in, it will be against the long term trend.
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Staying in my lane...
  • #2,633
  • Edited 11:41pm Sep 21, 2010 11:12pm | Edited 11:41pm
My second pair of choice for tonight if Guppy fails to deliver her promise to bring prosperity tonight :-

EDIT: Just want to document the hindsight for this pair:
Monthly, Weekly, Daily, H4 and H1 are all in downtrend. This might be a better pair to trade tonight compared to guppy.

EDIT1: I plan to go short (at 50% fib of current H1) on next H1 candle if the current H1 candle's wick goes below the previous H1 candle (ie lower low Wick on H1 would confirm a downward break from the range (I think!)
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Staying in my lane...
  • #2,634
  • Sep 21, 2010 11:23pm Sep 21, 2010 11:23pm
Seems to me there would be equal opportunity trading extended price expansion back to the 200 ema also. Anyone else thinking like this?
T
  • #2,635
  • Sep 21, 2010 11:31pm Sep 21, 2010 11:31pm
Quoting tmanbone
Seems to me there would be equal opportunity trading extended price expansion back to the 200 ema also. Anyone else thinking like this?
Break away off 200ema is more predictable than anticipating price moving towards 200ema. As Graeme said in his posts, price cannot continue to hug 200ema for long... it HAS to bounce or pierce. hence more predictable
Staying in my lane...
  • #2,636
  • Sep 21, 2010 11:43pm Sep 21, 2010 11:43pm
From the past 10+ years of price history across the whole board: a model based on price expansion from 200ema has an average 400+ pip expansion per opportunity.

This was the post that got me thinking this way.

EDIT:

I guess now after another read, where would you draw the line? 400+ could be a little tricky.
T
  • #2,637
  • Sep 21, 2010 11:45pm Sep 21, 2010 11:45pm
Looking good Vee, keep it up
  • #2,638
  • Sep 21, 2010 11:56pm Sep 21, 2010 11:56pm
Just my 2 cents:

1. Perhaps USD/CHF would be of interest, it is far from 200 EMA on daily, but there is something big brewing I think, very close to weekly/monthly low.

2. Graeme and Vee, please keep it up, learning a lot. Especially about entries, the most important part. I got 2 legged and few 1 legged millipedes my self, only 1 week old, but I must say, over 700 pips total of unrealized profit, and 200 pips of realized in the account. Entries very sloppy though (to be polite), but a little bright dot at the end of long tunnel is forming.

Thank you.

Krk
  • #2,639
  • Sep 22, 2010 12:10am Sep 22, 2010 12:10am
Quoting tmanbone
From the past 10+ years of price history across the whole board: a model based on price expansion from 200ema has an average 400+ pip expansion per opportunity.

This was the post that got me thinking this way.

EDIT:

I guess now after another read, where would you draw the line? 400+ could be a little tricky.
A close entry will be when there is a engulf candle signaling a major trend change depending on the TF you are trading.
Staying in my lane...
  • #2,640
  • Sep 22, 2010 12:25am Sep 22, 2010 12:25am
Here's my latest on price discovery (thought process). I also added gbpcad as 3rd pair on my watch list for tonight (short hindsight on all monthly, weekly, daily and H4 timeframes... another good pair to keep an eye on)

Attached Image (click to enlarge)
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Is it 1.5 hours away from london open or 2.5 hours???
Attached Image
Staying in my lane...
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