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Building an equity millipede

  • #3,061
  • Edited 3:12pm Sep 29, 2010 3:05pm | Edited 3:12pm
Quoting VEEFX
Further thought process (reasoning?) on why I took this entry position.

PnL: +5 Pips Go Guppy !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Zoomed out view and anticipation in the attached chart illustration. Not a whole lot of action at NYSE close (I was hoping for a downward continuation)
Attached Image (click to enlarge)
Click to Enlarge Name: 9-29-2010 12-55-13 PM.png Size: 66 KB

Attached Image
Staying in my lane...
  • #3,062
  • Sep 29, 2010 3:45pm Sep 29, 2010 3:45pm
Regarding the October regulatory changes, I'm not sure leverage is the real issue as we trade this strategy. I believe the real issue is the rule "First-In-First-Out" (FIFO). This means as we stack entries, they will have to be taken out in the order they were placed in. So.... the legs allowed to continue for the greater gains will have to be the last trades placed (which have less leg room and less margin for error than the first entries.
  • #3,063
  • Sep 29, 2010 3:53pm Sep 29, 2010 3:53pm
Quoting VEEFX
Update: Still waiting for a clear confirmation... although just missed one from the previous H1 candles as a good trigger to go short. My thoughts illustrated in the attached chart.

Attachment
http://i54.tinypic.com/2wn5i5u.gif

Instead of looking at 3 charts, you can look at 1 and still see the H1(red/green) and H4(dashed) candles. The advantages are less charts and seeing how price is moving within each time frame. The name of the indicator is candles-m.
  • #3,064
  • Sep 29, 2010 4:14pm Sep 29, 2010 4:14pm
Quoting VEEFX
Zoomed out view and anticipation in the attached chart illustration. Not a whole lot of action at NYSE close (I was hoping for a downward continuation)
Attachment
Attachment

hey Vee,
really enjoying your writtings,
this slow time has been good for you, i sense calm in your writtings atm, calm is good, you dont seem in a hurry to jump in, graeme would be proud.

i myself have gone short on this pair as well,
i took entry when price came back to the open of the previous 4hr bar, i also have an entry at the low of that bar(IB) that hasn't triggered yet.

keep up the good work

cheers
geoff
  • #3,065
  • Sep 29, 2010 4:30pm Sep 29, 2010 4:30pm
Quoting geoffrod
hey Vee,
really enjoying your writtings,
this slow time has been good for you, i sense calm in your writtings atm, calm is good, you dont seem in a hurry to jump in, graeme would be proud.

i myself have gone short on this pair as well,
i took entry when price came back to the open of the previous 4hr bar, i also have an entry at the low of that bar(IB) that hasn't triggered yet.

keep up the good work

cheers
geoff
Y'all have no idea how relaxed I am

Initially, I was getting pressured into making as many trades as I could possibly can for Graeme to provide feedback on my trades and we all could learn from my 'mistakes'. A few of you (and of course Graeme) were generous to advise me via PM to go easy, slow down, wait for confirmation, choose neat pairs etc so I dearly thank you all for that.

Dealing with H4 setups and triggering on H1 does require a lot of patience.... it is all good in the essence of us learning something great here.

I just hope Graeme could join us soon as the mood/morale from thread participants seems to be fading away a bit without his inspiring and thought provoking posts.

Catch you all again tonight before London open.

Regards,

Vee
Staying in my lane...
  • #3,066
  • Sep 29, 2010 4:35pm Sep 29, 2010 4:35pm
Quoting FrenchCuff
Regarding the October regulatory changes, I'm not sure leverage is the real issue as we trade this strategy. I believe the real issue is the rule "First-In-First-Out" (FIFO). This means as we stack entries, they will have to be taken out in the order they were placed in. So.... the legs allowed to continue for the greater gains will have to be the last trades placed (which have less leg room and less margin for error than the first entries.
really? How would it affect profitability or outcome of this strategy with the FIFO rule? You just have to maintain your own trading log in excel and manage your legs outside of your trading platform. Every trader needs to maintain a trading log... this regulation just forces you to have one. It is a royal pain for sure but I have gotten used to having a trading log in excel that updates all my open (and closed) positions in real time. FIFO, as I understand it, is just an accounting thing and overall outcome/performance should match close enough to your account statement (+/- 5% margin of error due to swaps etc)

EDIT: Lacking of Hedging capability for US accounts is a bigger impact to this strategy than FIFO imho
Staying in my lane...
  • #3,067
  • Sep 29, 2010 5:20pm Sep 29, 2010 5:20pm
Quoting VEEFX
really? How would it affect profitability or outcome of this strategy with the FIFO rule? You just have to maintain your own trading log in excel and manage your legs outside of your trading platform....
I just asked this question on the millipede trading thread since it has not seemed to be discussed much here. Since it is brought up here I will ask as well.

What are people actually doing to address these limitations. I get FIFO doesn't matter to the success of the plan but Hedging is pretty important. Do people use a complicated system of entry orders or just have 2 accounts? If 2 accounts then do they use the same broker? Maybe a MT4 platform and then a native client platform.

Thanks
  • #3,068
  • Sep 29, 2010 6:09pm Sep 29, 2010 6:09pm
Quoting Paradox
I just asked this question on the millipede trading thread since it has not seemed to be discussed much here. Since it is brought up here I will ask as well.

What are people actually doing to address these limitations. I get FIFO doesn't matter to the success of the plan but Hedging is pretty important. Do people use a complicated system of entry orders or just have 2 accounts? If 2 accounts then do they use the same broker? Maybe a MT4 platform and then a native client platform.

Thanks
Hi Paradox,

Let me try and address hedging in this post as I have been struggling with this aspect myself. Hedging requires me (i.e. a US citizen) to open account in another country. This was prior to the current regulation. New regulation will NOT allow you to have an hedging enabled account overseas unless you meet the following conditions (as per my fxcm representative):

(1) You relocate outside the USA. Then you will no longer be 'resident' of US. You could trade freely with whoever you choose to trade with.

(2) You open a foreign entity (an LLC or a corporation) IN the foreign country of choice, open a checking account in that country of choice and finally open a trading account under the corporation's name. All funding/withdrawal will have to happen from your corporate trading account into your corporate checking account.
disclaimer: do your own research!

To me, both are not workable and hassle-free unless I am super duper profitable making millions trading my own capital and other people's money. Until then, I will have to deal with the annoyance of trading with two accounts and have a more robust (and automated if possible) money and risk management strategy in place. Many brokers (oanda and IBKR that I know of) allow quick money transfers within a matter of minutes. IBKR literally allows sub-second transfers by a click of a button if you have an linked advisor account like I do.

Alternatively, one could manage the entire strategy outside of the trading platform and just take trades in whichever account fits the bill via the platform API/automated trading capabilities.. a little too advanced approach for some.

Unfortunately, we cannot have infinite yield by letting positions run forever in either accounts like Graeme does if we run out of capital in one of the sub accounts. No broker that I know of is going to allow you to transfer funds from one account to another from your floating profits. You will need to close profitable positions to transfer funds and I cannot find any way around that.

Let's take this discussion in this thread http://www.forexfactory.com/showthread.php?t=255481 if anyone has more questions or requires further dialogue and I would be happy to participate.
Staying in my lane...
  • #3,069
  • Sep 29, 2010 7:00pm Sep 29, 2010 7:00pm
Quoting VEEFX
Further thought process (reasoning?) on why I took this entry position.

PnL: +5 Pips Go Guppy !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Hi Vee

I'm just curious as to what happened to the 5000 account that was being traded for the purpose of this exercise? It seems now it's a 10000 account judging from this last post. Are you showing both demo and live?

Thanks for your continued efforts. . .

Confused.
  • #3,070
  • Sep 29, 2010 11:42pm Sep 29, 2010 11:42pm
Quoting andante9
Hi Vee

I'm just curious as to what happened to the 5000 account that was being traded for the purpose of this exercise? It seems now it's a 10000 account judging from this last post. Are you showing both demo and live?

Thanks for your continued efforts. . .

Confused.
Yikes! Good catch Andante. I took this trade in another account by mistake. Sorry to cause confusion. I am at -267 PnL in my $5000 account for this project. To avoid further confusion, I will remove this guppy trade from my trading log.
Staying in my lane...
  • #3,071
  • Sep 30, 2010 12:23am Sep 30, 2010 12:23am
Hi all,

I have selected nzdjpy pair for tonight. It has some good momentum going on at the moment. i ma tempted to get into a trade right away but decided to wait for a confirmation. I think H4 candle closing below 200ema would be a good confirmation to short this pair. My hindsight is short on monthly, long on weekly, short on daily, H4 and H1 timeframes.
Attached Image (click to enlarge)
Click to Enlarge Name: 9-29-2010 10-19-22 PM.png Size: 33 KB
Staying in my lane...
  • #3,072
  • Sep 30, 2010 1:02am Sep 30, 2010 1:02am
Quoting VEEFX
Hi all,

I have selected nzdjpy pair for tonight. It has some good momentum going on at the moment. i ma tempted to get into a trade right away but decided to wait for a confirmation. I think H4 candle closing below 200ema would be a good confirmation to short this pair. My hindsight is short on monthly, long on weekly, short on daily, H4 and H1 timeframes.
Attachment

it's really moving along now, but better to wait, and get a razor sharp entry
  • #3,073
  • Sep 30, 2010 1:35am Sep 30, 2010 1:35am
Hi Graeme,

Whats your opinion on usdchf? the price has fallen 1.0

Thanks
  • #3,074
  • Sep 30, 2010 3:26pm Sep 30, 2010 3:26pm
http://i56.tinypic.com/264jcqh.gif

Remember, Graeme spoke about patience. Instead of looking for entries every day, maybe just maybe, we should be waiting for the setups to occur on the weekly and monthly charts if we want our millipedes to grow legs. Then, and only then, should we even consider entering a trade.
  • #3,075
  • Sep 30, 2010 6:34pm Sep 30, 2010 6:34pm
Quoting VEEFX
Hi all,

I have selected nzdjpy pair for tonight. It has some good momentum going on at the moment. i ma tempted to get into a trade right away but decided to wait for a confirmation. I think H4 candle closing below 200ema would be a good confirmation to short this pair. My hindsight is short on monthly, long on weekly, short on daily, H4 and H1 timeframes.
Attachment
Good evening/morning all,

I have been waiting for a confirmation of nzdjpy pair since London open. Looks like we are heading south. My chart illustration attached for your input.

Thought Process at the moment: I think I need another 'filter' to my confirmation i.e. wait for see where the candle closes in regards to the previous candle open/close levels. My past confirmations would have stopped out my trades just like on previous pairs.

Hope Graeme gets to join us tonight.
Attached Image
Staying in my lane...
  • #3,076
  • Sep 30, 2010 6:40pm Sep 30, 2010 6:40pm
Quoting VEEFX
Good evening/morning all,

I have been waiting for a confirmation of nzdjpy pair since London open. Looks like we are heading south. My chart illustration attached for your input.

Thought Process at the moment: I think I need another 'filter' to my confirmation i.e. wait for see where the candle closes in regards to the previous candle open/close levels. My past confirmations would have stopped out my trades just like on previous pairs.

Hope Graeme gets to join us tonight.
Further thoughts on H1 candle timeframe in the attached chart illustration. Hope I am making sense explaining what is going on in my head when I placed the entry order.
Attached Image (click to enlarge)
Click to Enlarge Name: 9-30-2010 4-36-34 PM.png Size: 46 KB
Staying in my lane...
  • #3,077
  • Sep 30, 2010 6:51pm Sep 30, 2010 6:51pm
Quoting VEEFX
Further thoughts on H1 candle timeframe in the attached chart illustration. Hope I am making sense explaining what is going on in my head when I placed the entry order.
Attachment
Limit Sell triggered @ 61.34.

Current Thought Process:
(1) As a new Daily candle just formed, should I have waited for another H1 candle to close and get a confirmation on the short Daily trend continuation ?
(2) I am also concerned about the long green candle on H4 after every couple of red candles. This pair is NOT very NEAT.
(3) Could the past H4 candle be turning into a sinking buddha? I knew that before entering the trade but the 5 and 10 EMAs were too far apart to justify any concerns of a reversal. I put my entry order a bit above to accommodate any mini-reversal.

Let's see how this position works out.
Attached Image (click to enlarge)
Click to Enlarge Name: SnapShot024 2010-09-30.jpg Size: 41 KB
Staying in my lane...
  • #3,078
  • Sep 30, 2010 8:24pm Sep 30, 2010 8:24pm
I agree..... ...I like the daily down to at least 60.20 and some resistance ...I also dont see too much of a push up. I am shorting but only .6 of a lot. A little bit of an upside before the turn yet...just a thought.
  • #3,079
  • Sep 30, 2010 9:18pm Sep 30, 2010 9:18pm
I have opened two US demos to practice using the US accounts with this strategy since I will be forced to close UK accounts by the 18th.

I do not understand how FIFO helps me at all. I have good trades I would have to close before I can close any bad trades. I don't understand how "my method of accounting" fixes this???

The way I see it, I lose my earlier position that is basically risk free and away from any possible retracements. Closing that position forces me to another price that will get zapped by the slightest retracement. (God bless the USA! ) and accounting helps me keep my earlier position how?????

Ranting aside --- attached is my 500K demo. As of this writing, trades are currently at +64K in floating profits.

I started with a balance of 500k, so it has cost me @ 43K to get 64K in profit. This is only 4 days of profit also. Each day seems to increase by 10-15% by letting it run. The first few days I was using stops and everything was getting knocked off. I deleted all stops and now the positions are sticking. I close the bad ones off after letting them have a while to run. If the price retraces to a better price, then I will close the loser and reenter at an earlier price.

I also have a 10k demo I am working on also. It is maxed out with 8 trades of 8 units running. No more trades can be placed due to the 1:50 margin requirements, even though all open trades are in profit. The capital is currently at 6K, and it has cost me 4K to get about 4K in trades running. Hopefully by tommorrow the trades will be running around 4500-5000. I will not be able to make any more trades until some close (and someone tell me again why 1:50 helps me?? lol)


edit: also, when I place a stop of BE + 3, later in the day the spreads widen like crazy. A retracement comes, and even though the price is nowhere near my stop - I noticed the spread causes it to stop my position out. I lost a really good USD/CHF leg due to the late afternoon widening of the spread and a slight retracement.
Attached Image (click to enlarge)
Click to Enlarge Name: millipede demo one.gif Size: 79 KB
  • #3,080
  • Sep 30, 2010 9:30pm Sep 30, 2010 9:30pm
Fifo is irrelevant....
the method of accounting is up to you, as it always averages the same when doing manual tracking of trades.

Also, there is little reason why you should be using max leverage as well. I don't understand why that is a complaint. Exposure included.
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