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  • #501
  • Sep 23, 2010 8:15am Sep 23, 2010 8:15am
[quote=Zr-fx;4043671][quote=bauerjj10;4043521]Ive got a question on the recovery systems. From reading the explanations in the various .PDF documents I found it doesnt make much sense to me the way they are explained.
....
Quote

I think this is a good question and I admit I got confused and decided to stick with 2.4.2 (as you have described it) with three levels and then tackle L4 if I get there.

Perhaps it is better to post this in the main thread and hopefully Bob would explain it.

I am using 0.01 lots on my live micro account. So far what has worked for me...


Ok, I posted it in the main forum, I just didnt want to do that originally and get flamed by a million people telling me to read 2,500 pages of posts in which half of them are most likely useless.

When I get an accurate answer I will post it in here.
  • #502
  • Sep 23, 2010 8:33am Sep 23, 2010 8:33am
Quoting bluemele
....

L1 = .01
L2 = .02
L3 = .03
L4 = .02
L5 = .03
L6 = .02
L7 = .03
hmmm..

With the L1, L2 and L3 as you state it, we need L3 to be +133 pips for a BE. This is fine.

Now it kept going bad and we close L1 and take the loss, so we forget about it. And we open L4 = 0.02 as you say.

We now have L2=0.02, L3=0.03, L4=0.02? In this case we need L4 to be +200 pips for BE on the remaining three trades. Is this correct? If it is then perhaps the logic is that the deeper it goes the more chance of a bigger retracement so we keep L4 small to reduce our DD. Is this how it works?
  • #503
  • Sep 23, 2010 8:38am Sep 23, 2010 8:38am
Quoting bluemele
Man, I really wouldn't trade that pair.. Nor EURNZD.

Go back through history and take a look. Use the stoch sixth that moves and you will find that it just isn't worth it.

You will definitely learn L4.... L5.... L6.... haha...

Your choice, just trying to persuade you from doing the same things that I have already done.
OK, I went back to my trades from when I started this. Sure enough EN was the first pair that got me to experience recovery. I guess I forgot to check my own cheat sheet
  • #504
  • Sep 23, 2010 8:54am Sep 23, 2010 8:54am
This was posted by Bob in the Strategy thread in reply to my recovery questions, I hope this clears things up for anyone who was questioning this, I know it did for me.

"The purpose of the 2.4.2 recovery is to not martingale but to say this is the maximum amount I am willing to invest in this trade. We draw a line and say that is it. So the 2.4.2.4.2.4.2.4 would be the lots same as 1.2.1.2.1.2.1.2. I have only gone to L5 a couple of times in the last year so it is very rare to go more than 4 levels.

Because of that information I changed to a 1.1.3.3 since I almost never used a L5 and that has worked very very well. My L1 losses are small and the recovery back to even happens fairly quickly. So I have the benefit of keeping my losses low and L3 and L4 retracements return to 0 more quickly. I have never gone to L5 with the 1.1.3.3 so I really dont know what I would do. But probably increase it some to 4 or 5. I guess it would depend on the currency and what I thought the market was doing. I have done some 4 on L4 so they have been 1.1.3.4 and that has worked well too. So never having to take that big loss on the l3 and l4 trades but getting to use them to recover quickly has been really really good to me. I probably would not use the 2.4.2 method anymore I like the results of the 1.1.3.3 much better.

Again the whole purpose of the recovery method is to minumize losses as much as possible but not committing the dangerous act of committing your account to a losing situation. I have really taken some lumps the last 7 days but I am in no danger of damaging my account. I have lost most of my profit for the month and if this keeps up I will definitely take a loss this month but you know I cant expect a perfect world. The good news is starting yesterday and finally today I am back to taking profit trades which is a good sign. The market looks like it may take a rest which gives me a chance to catch up. I used to love Thurdays because I loved calling it reversal day and this looks like it may be the start of the normal reversal pattern I love so much. Price builds and builds and then on Thursday we see some double tops or bottoms and then Friday retracements. Time for some of these guys to cash out their profits and for us to cash in on our reversals."
  • #505
  • Sep 23, 2010 8:59am Sep 23, 2010 8:59am
man... L6, L7....no wonder the drawdown on a/c reaches that high....

historically, do you find for yourself, that the price bounces off the bb to retrace 70% of the time like bob says?

you trade fulltime, what else are you doing the rest of the time?


Quoting bluemele
Man, I really wouldn't trade that pair.. Nor EURNZD.

Go back through history and take a look. Use the stoch sixth that moves and you will find that it just isn't worth it.

You will definitely learn L4.... L5.... L6.... haha...

Your choice, just trying to persuade you from doing the same things that I have already done.
  • #506
  • Sep 23, 2010 9:28am Sep 23, 2010 9:28am
DOWN EURO, DOWN!!

Boy what is happening with the EUR this week?

Well at least I got out of EurGbp at just over BE. I should not have been in this in the first place.

Now I have in recovery:
EurUsd L1 -466, L2 -313, L3 +60. Need about another 99 pips retrace.
AUDUSD L1 -295, L2 -144, L3 +30. 70 pips to go.
EURCAD L1 -259, L2 -4. 90 to go.

Actualy this feels more like in the Intensive Care Unit (ICU) than recovery. Recovery is when a patient has been treated and is getting better. Here the patient is in ICU and may live recover or may lose an arm (L1)... ... oh dear these are not good thoughts. It is more positive to call it recovery actually.
  • #507
  • Sep 23, 2010 10:29am Sep 23, 2010 10:29am
Quoting chiba_san
man... L6, L7....no wonder the drawdown on a/c reaches that high....

historically, do you find for yourself, that the price bounces off the bb to retrace 70% of the time like bob says?

you trade fulltime, what else are you doing the rest of the time?
I trade futures (TF) and also taking test to be CTA (commodity Trading Advisor) and starting up a PAMM account to trade this along with trendlines and other things for other people who want to jump onto my trades. Plus 2 kids, an amazing wife and exercise etc.. Life is good.

Per L6, L7 etc.. the 200MA is very important, and I would say it works a lot! The key for me is not so much the BB, more about the area (being safely at the top of an already good trend) and having the 2.4.2 or whatever to save your butt. I will start trying the 1.1.3.3 which I have done similarly in the past, but I sure like my L2 making me some pips... I usually tend to hold L2 for a nice profit and L3 tends to be my get out of jail free card.

I will hold my L2 for like 200 pips sometimes. But lately since trying 5.0 system, I have been more cautious and taking smaller chunks and more trades....
We are our own best indicator.
  • #508
  • Sep 23, 2010 10:31am Sep 23, 2010 10:31am
Quoting Zr-fx
DOWN EURO, DOWN!!

Boy what is happening with the EUR this week?

Well at least I got out of EurGbp at just over BE. I should not have been in this in the first place.

Now I have in recovery:
EurUsd L1 -466, L2 -313, L3 +60. Need about another 99 pips retrace.
AUDUSD L1 -295, L2 -144, L3 +30. 70 pips to go.
EURCAD L1 -259, L2 -4. 90 to go.

Actualy this feels more like in the Intensive Care Unit (ICU) than recovery. Recovery is when a patient has been treated and is getting better. Here the patient is in ICU and may live recover...
Just look at your chart, tell yourself that this could go for another top and you will be ok and this is what my plan is. If this moves another 200 pips above this, what will it look like and what will I do....

Most likely it will happen if not today, sometime in the future.

You are funny, yes, I made like 75.00 on the EURGBP trade.. That was nice. Now the rest can drop and I would be very happy!

My DD on my small account is now only 42%!!! hahahahah....
We are our own best indicator.
  • #509
  • Sep 23, 2010 10:32am Sep 23, 2010 10:32am
Quoting bauerjj10
This was posted by Bob in the Strategy thread in reply to my recovery questions, I hope this clears things up for anyone who was questioning this, I know it did for me.

"The purpose of the 2.4.2 recovery is to not martingale but to say this is the maximum amount I am willing to invest in this trade. We draw a line and say that is it. So the 2.4.2.4.2.4.2.4 would be the lots same as 1.2.1.2.1.2.1.2. I have only gone to L5 a couple of times in the last year so it is very rare to go more than 4 levels.

Because of that information I changed...
Thanks... This is good to know. Bob is the Master....
We are our own best indicator.
  • #510
  • Sep 23, 2010 11:12am Sep 23, 2010 11:12am
Quoting bluemele
Just look at your chart, tell yourself that this could go for another top and you will be ok and this is what my plan is. If this moves another 200 pips above this, what will it look like and what will I do....
....
The plan is clear:
1-If L1 reaches re-entry line then start looking for L2 entry
2-If L2 reaches re-entry line then start looking for L3 entry
3-If L3 reaches re-entry line then do the following:
a-start looking for a suitable entry to start L4 at 0.02 (according to 2.4.2)
b-When L4 is triggered, or if things are getting worse (whichever is earlier) then immediately close L1
4-L2 is now L1, L3 is L2 and L4 is L3
5-Goto 1
When all three levels are active then aim for BE, not to make profit.

Quote
My DD on my small account is now only 42%!!! hahahahah....



  • #511
  • Sep 23, 2010 1:18pm Sep 23, 2010 1:18pm
Ok, I was a bit aggressive, jumped on the GBPCAD trade heading south, but getting nervous... Missed the first 85 pips, so may let it hit me at be + 1, up now about 20 pips...

went north on USDJPY, not in the sixths, but it is a slow moving currency and I have no problem taking this one. If it were gbpcad, no way! haha...

I am sure they will come back to bite me.

These are what I call "TERTIARY" trades and I rarely take them, but the setups look nice...
We are our own best indicator.
  • #512
  • Sep 23, 2010 4:36pm Sep 23, 2010 4:36pm
Quoting Zr-fx
Guys

I have tried to create a very condensed cheat sheet to fit on one, two-sided A4 sheet.

This is mainly from Marshy's excellent sheets supplemented by other important bits of information and condensed to include the bare essentials. Non of the information on the sheet is mine so I have not improvised in any way.

This is really for people who are or semi-experienced in the system as a quick reference as I am always refering to it as a memory jogger. I keep a hard copy near me at all times.

For newbies, this is in no way a substitute...
Thanks for posting this. It looks very helpful.

I've got a couple of suggestions. Your recent post describing the recovery system might be an excellent replacement or addition to this sheet. I think your steps are even clearer than the description in your summary.

Also, any summary of this system could benefit from a brief description of the different types of trades. As I understand it, there are three: Primary, which slavishly follow the basic trade rules. Secondary, which occur after a successful primary trade, and are more flexible on the entry point (especially on where the white and red are in the RWB indicator); and Recovery which involve understanding re-entry levels, EA4, etc...

I really like your inclusion of the volatility graph. I think Bob uses volatility for deciding where to enter on a Primary trade as well. If more volatile, then wait until price is outside gold band. For the low volatility pairs, then entry can be somewhere between the Green and Gold bands.

Finally, you repeat the advice about bluey leaving whitey. That's not a big deal, but I think this info has more to do with taking profits than the entry rules. I could be wrong on this.

Thanks again for posting this. I love clear, concise condensations (and alliteration too).
  • #513
  • Sep 23, 2010 5:49pm Sep 23, 2010 5:49pm
Quoting duffypratt
Thanks for posting this. It looks very helpful.

I've got a couple of suggestions. Your recent post describing the recovery system might be an excellent replacement or addition to this sheet. I think your steps are even clearer than the description in your summary.

Also, any summary of this system could benefit from a brief description of the different types of trades. As I understand it, there are three: Primary, which slavishly follow the basic trade rules. Secondary, which occur after a successful primary trade, and are more flexible on the...

All good suggestions. I did this early in my learning phase when I still did not understand many things so a lot of it is verbatim. I take your point that now we can add some know-how.

Your point about secondary trades is very valid too. Initially I had left a space for that but struggled to find a clear definition for secondary trades. So I left it out while searching for information and trying to get to grips with them myself. I now have a better understanding.

If you, or anyone, would like to add anything then please have a go. I have attached the original ppt here. Feel free to modify and share but it would be great to keep it to one 2 sided A4.
Attached File(s)
File Type: zip My Cheat Sheet V0.3.zip   54 KB | 325 downloads
  • #514
  • Sep 23, 2010 5:52pm Sep 23, 2010 5:52pm
Quoting Zr-fx
All good suggestions. I did this early in my learning phase when I still did not understand many things so a lot of it is verbatim. I take your point that now we can add some know-how.

Your point about secondary trades is very valid too. Initially I had left a space for that but struggled to find a clear definition for secondary trades. So I left it out while searching for information and trying to get to grips with them myself. I now have a better understanding.

If you, or anyone, would like to add anything then please have a go. I have...

Secondary trades are for when it doesn't meet the RWB, but you are at a support/resistance area and you are still within the sixth's etc.. They are trades that most likely will reverse regardless of where your oscillators are, but it is always good to have them up towards the top. If they are bunched at the bottom and you are at resistance, then obviously you wouldn't take that one.

Recovery trades are basically Primary or Secondary trades after they have met the initial pippage in drawdown.
We are our own best indicator.
  • #515
  • Sep 23, 2010 5:56pm Sep 23, 2010 5:56pm
I want to expound on a few ways to trade this. I have been trading this system like this:

I take a primary trade and I wait for it to go to the middle or somewhere around there until the RWB's look ugly and are going to bounce back at you. These require fewer trades more drawdown, but with higher profits. Usually I will let my profits run on L1 & L2's for a nice sum. This method you would trade smaller lots.

Another common method and how Bob seems to be mostly trading (And now me on 5.0) it is that he takes a lot more trades and scalping little bit by little bit and also setting himself up for the big runs as well.

Either way works, to each their own. I see that Bob is more loose on his entries which is fine to me as he makes a lot of pips to recover any losses. Or you can be more particular and just wait wait wait and have less drawdown, but less overall $$ in profit.

I think this all plays into your personality.
We are our own best indicator.
  • #516
  • Sep 23, 2010 8:49pm Sep 23, 2010 8:49pm
Quoting bluemele
I want to expound on a few ways to trade this....
It's also a testament to how robust the edge must be that the system is not all that sensitive to how you go about taking profit.

From what I've read, Bob seems now to set a stop at 30 when the trade moves 40 in his favor. From there it either trails or jumps, but stays pretty close to the price. So his big gains have to be from moves that don't bounce back much at all.
  • #517
  • Sep 23, 2010 8:56pm Sep 23, 2010 8:56pm
Quoting duffypratt
It's also a testament to how robust the edge must be that the system is not all that sensitive to how you go about taking profit.

From what I've read, Bob seems now to set a stop at 30 when the trade moves 40 in his favor. From there it either trails or jumps, but stays pretty close to the price. So his big gains have to be from moves that don't bounce back much at all.
Yah, you end up a measure of how much you give up or back and how much risk you are willing to take. I think Phanti has it right in looking at different timeframes etc..

Right now on the charts it looks a little 'scary' for most currencies. Looks like we may get a bounce back up on the AUD pairs which is fine.
We are our own best indicator.
  • #518
  • Sep 23, 2010 11:18pm Sep 23, 2010 11:18pm
i noticed phanti stopped posting here after he took the -450 hit on the eur/usd.
  • #519
  • Sep 24, 2010 12:17am Sep 24, 2010 12:17am
Quoting chiba_san
i noticed phanti stopped posting here after he took the -450 hit on the eur/usd.
Gosh, I hope not. I am sure he is just on a break? I think he was trading pennies, so I doubt $4.50 will break him.

I loaded this platform onto instaforex... I was then looking at my indicators and my eyeballs about exploded! I couldn't believe their spreads! WOW!!!!

TERRIBLE! No wonder they can give back a measly 1.3 pips when they are taking so much. I thought this system would work on every broker, but not even close to that one.
We are our own best indicator.
  • #520
  • Sep 24, 2010 12:35am Sep 24, 2010 12:35am
#3 trade opened a good position and is now trying to breakeven the 3 earlier trades opened using the EAS settings from the panel.

note i switched using steve w/ trend, all bob's EA true.

http://www.mt4i.com/users/karlowe_ong

will continue to monitor how things go for testing purposes, i'm not manually intervening and just watching/monitoring.
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