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  • #3,081
  • Sep 30, 2010 10:01pm Sep 30, 2010 10:01pm
Quoting kcravey
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...
You may want to check into an MB Trading MT4 demo if you do not want to deal with FIFO as it seems they've found a way around it. I don't think all brokers are interpreting the rules the same and, hence, have addressed it differently. From what I understand, compliance can be achieved solely with reporting, which is what MBT has done (MT4 platform only), meaning you are free to close trades in any order you see fit (and no, your trades are not averaged together). I have a live MBT account and several demos and I can tell you that there is no FIFO going on.

I agree that the 50:1 leverage sucks, but it's not the end of the world. My soon to be banned UK account was at 400:1, which means that a position that currently requires $25 in margin will become $200 on 10/18. That's a big difference when your account is only $1000. The only options are to reduce lot size or add more money to the account.

I know I'll sure sleep better at night knowing that the CFTC is looking out for my well being.

Kevin
  • #3,082
  • Sep 30, 2010 10:08pm Sep 30, 2010 10:08pm
Quoting Starvin4Pips
You may want to check into an MB Trading MT4 demo if you do not want to deal with FIFO as it seems they've found a way around it. I don't think all brokers are interpreting the rules the same and, hence, have addressed it differently. From what I understand, compliance can be achieved solely with reporting, which is what MBT has done (MT4 platform only), meaning you are free to close trades in any order you see fit (and no, your trades are not averaged together). I have a live MBT account and several demos and I can tell you that there is no FIFO...
Hey Kevin,

You beat me in my response to kcravey on FIFO as I was going to say the same thing.

Kcravey - check this link out. it describes how they take care of accounting in their back office leaving traders with no effect on their trading strategies when this regulation came out. Their back office solution is similar to maintaining your own trading log and managing your positions outside of your trading platform.

http://www.ibfx.com/Corporate/post/2...FIFO-Rule.aspx
Staying in my lane...
  • #3,083
  • Edited 11:01pm Sep 30, 2010 10:34pm | Edited 11:01pm
Quoting qwerty00
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.
I disagree. Leverage is a set ratio for your account, so all positions are always using that leverage, whatever it may be (400:1, 100:1, 10:1, etc.). Using reduced leverage means a reduction in the potential number of open trades. For a strategy like the one outlined in this thread where stacking is utilized, this could be a real problem.

Example 1 (pre-10/18 rule change):
$1000 USD Account; Leverage 400:1 (which is the current leverage for my soon-to-be-banned UK account)
My MM dictates that I never risk more than 2% total over all open trades, which is 20 pips SL @ $1 per pip on USDXXX pairs.
At $1/pip @ 400:1, required margin is $25 on USDXXX pairs.
Since our strategy is to open a position and then move it to BE before opening another, theoretically I can have over 30 open positions (29 @ BE and the last one at 20 pip risk) and still have room to trade without fear of margin call, while still observing my 2% max risk exposure (30 x $25 = $750 required margin, leaving $250 for trading, which should be plenty good considering all trades but one are at BE and the last one is at $20 max risk).

Example 2 (post-10/18 rule change):
$1000 USD Account; Leverage 50:1 (max leverage for US-based traders)
Using same MM (2% max risk) and $1/pip lots as above, required margin for each position with 50:1 leverage is $200 on USDXXX pairs.
Max positions open with room to trade: 4 (4 x $200 = $800 required margin, leaving $200 for trading). Of course, any floating profit will add to available equity and could potentially allow opening more positions, but if you do this you better lock in some of those profits because if price returns to BE on all open positions, you could be facing a margin call.

Two examples using same account size, but different leverage. Before, I could potentially stack dozens of positions, now I can only stack up to 4 using same 2% risk MM. That's a HUGE, HUGE difference and from my point of view the lower leverage will severely limit potential profits.

Where the reduced leverage helps a trader is in the case of a margin call. Since so much more of the account is tied up in margin, the margin call comes sooner, so the equity lost is considerably less than it would've been with higher leverage account. The problem is that experienced traders who know how to trade safely (i.e., protect their capital) are being handicapped by margin requirements that have been put into place to prevent inexperienced traders from blowing their accounts. Of course, they'll still blow their accounts, but it'll just take them longer to do it now.

Kevin
  • #3,084
  • Sep 30, 2010 10:54pm Sep 30, 2010 10:54pm
Quoting Starvin4Pips
Of course, any floating profit will add to available equity and could potentially allow opening more positions.


Kevin

floating profit is not allowing more positions on my us demo. I have positions now at +700 (5 days running now) on my 10k account and no more trades are allowed. I will have to close those (that could reach 10K!!!!) to add to my capital and then make more trades. This will result in a higher price and then have to go through spending days again to get my trades away from the retracements so it is in a "safe" zone.

For the sake of this experiment, I'm just going to let them run as long as they can and see how profitable it can become.

I also have the MBT demo, it has the 1:50 leverage already on it. I do like their version of FIFO better than Alpari's.
  • #3,085
  • Sep 30, 2010 10:55pm Sep 30, 2010 10:55pm
Hi All,

Here's my pair for tonight. I keep coming back to this pair hoping it will break down. My analysis and anticipation in the attached chart

Hindsight: Short on monthly, weekly, daily, H4 and H1.
Anticipation: It will eventually cut thru the support line (after a more painful range)
entry level: Will look to go short below 2.1284 level depending of price action at the time.

Attached Image (click to enlarge)
Click to Enlarge Name: 9-30-2010 8-38-00 PM.png Size: 53 KB
Staying in my lane...
  • #3,086
  • Sep 30, 2010 11:01pm Sep 30, 2010 11:01pm
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
Latest update on NZDJPY position: It came very close to take my SL out !

Attached Image (click to enlarge)
Click to Enlarge Name: 9-30-2010 8-59-07 PM.png Size: 38 KB
Staying in my lane...
  • #3,087
  • Sep 30, 2010 11:05pm Sep 30, 2010 11:05pm
Quoting kcravey
floating profit is not allowing more positions on my us demo.
Strange. With my MBT accounts, floating profit/loss increases/decreases available margin and should allow addional positions as long as there is enough available margin to cover them... but I could be wrong.

Kevin
  • #3,088
  • Oct 1, 2010 12:01am Oct 1, 2010 12:01am
Quoting VEEFX
Latest update on NZDJPY position: It came very close to take my SL out !
Hi Vee,

I have a question. When do you move your SL to BE? how many pips you give for the trade to breath?

THanks
Amar
  • #3,089
  • Oct 1, 2010 12:26am Oct 1, 2010 12:26am
Quoting TheFutureAce
Hi Vee,

I have a question. When do you move your SL to BE? how many pips you give for the trade to breath?

THanks
Amar
Good Question FutureAce. I don't believe there are any rigid rules around moving SL to BE. I move to BE only when PA agrees with me to open another position and current position is atleast 10+ profit for tight spread pairs. I also watch the ATR if trading on M15 or lower timeframes. One of the golden rules I follow is to never open another trade unless you can move SL to BE.
Staying in my lane...
  • #3,090
  • Oct 1, 2010 12:36am Oct 1, 2010 12:36am
Quoting VEEFX
Good Question FutureAce. I don't believe there are any rigid rules around moving SL to BE. I move to BE only when PA agrees with me to open another position and current position is atleast 10+ profit for tight spread pairs. I also watch the ATR if trading on M15 or lower timeframes. One of the golden rules I follow is to never open another trade unless you can move SL to BE.

Cool Thanks. I usually have trades which I am making money only to see the profit vanish and my SL getting hit. I end the trade in minus instead of plus

thats the reason. I need to understand that no profit is equal to 0 loss.
  • #3,091
  • Oct 1, 2010 12:48am Oct 1, 2010 12:48am
Quoting TheFutureAce
Cool Thanks. I usually have trades which I am making money only to see the profit vanish and my SL getting hit. I end the trade in minus instead of plus

thats the reason. I need to understand that no profit is equal to 0 loss.
no profit is equal to 0 loss...
Staying in my lane...
  • #3,092
  • Oct 1, 2010 1:46am Oct 1, 2010 1:46am
Quoting VEEFX
no profit is equal to 0 loss...
Gotta hammer that thing in my head
  • #3,093
  • Edited 3:38am Oct 1, 2010 2:36am | Edited 3:38am
Quoting VEEFX
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 ?...
Price just hit my SL. Makes me wonder if I have got this strategy all messed up in my head. Please raise your hand if anyone had one successful TP since the start of this project
Attached Image(s) (click to enlarge)
Click to Enlarge Name: SnapShot025 2010-10-01.jpg Size: 276 KB
Click to Enlarge Name: SnapShot026 2010-10-01.jpg Size: 323 KB
Staying in my lane...
  • #3,094
  • Oct 1, 2010 4:12am Oct 1, 2010 4:12am
Quoting VEEFX
Price just hit my SL. Makes me wonder if I have got this strategy all messed up in my head. Please raise your hand if anyone had one successful TP since the start of this project
The concensus of opinion amongst some of the top commentators/analysts is that the FX market is currently at its maddest; all rules seem to be being broken. Two of the majors - Yen and Eur are just not responding to what 'should' be happening from all the fundamental interpretation. Japan poors trillions in to weaken the Yen and it has little effect, Eur flooded by bad news and keeps powering up, UK gets a few pounds back from Brussels and sinks like a stone - I do not think you are doing anything wrong, just unlucky - at the moment. If you do nothing you lose nothing!
Maybe 'Freaky Friday' will be kinder!

Who am I to speak - lost 5% yesterday - thought my take was more than reasonable, just left the stops off!

And yes have taken about 2000 pips out, but this does not cover losses - only trading live too.

Ray

One thing that might help you qualify trades a little better is the volume - in the chart - right click - select volumes. Although not reflective of the market in its entirety is relative to your broker, (should be reflective of all FXCM bankers .
  • #3,095
  • Oct 1, 2010 4:19am Oct 1, 2010 4:19am
total PL = realised PL + unrealised PL

Its all about simple accounting FIFO, LIFO whatever FO does not make a difference. Its all in the mind. One of the issues many traders/investors have always struggled with is the idea of "paper profits" (usually this is actually a rubbish justification for too many people to say - "its only a paper loss, and not a real loss until I crystalise it".)

This debate will confuse you and the only way to work out a solution for yourself is use an excel sheet to come up with the best manner to account for it that works for you. Do this by comparing a couple of simple examples next to each other.....

If you have a mental issue with either side of the equation, then adopt a method that eliminates this mental issue..... but the end result for the total PL will still remain the same!

(otherwise this is still interesting reading, good luck Vee, and while I dont like to comment too much on other peoples entrys exits etc, .....as food for thought.... I have noticed that a fair few entries seem to be on the wrong end of hindsight wicks, hence the the stops are continually getting hit. Possibly look for confirmation/hindsight in the weekly, daily, h4, h1 for direction - BUT anticipate some levels in the 5 min on the opposite end (or the 50% retracement areas,) and dont wait for confirmation here. Less trades, but maybe more opportunity to let trades turn into runners... .... otherwise completely ignore me)
  • #3,096
  • Oct 1, 2010 6:40am Oct 1, 2010 6:40am
Quoting Starvin4Pips
I disagree. Leverage is a set ratio for your account, so all positions are always using that leverage, whatever it may be (400:1, 100:1, 10:1, etc.). Using reduced leverage means a reduction in the potential number of open trades. For a strategy like the one outlined in this thread where stacking is utilized, this could be a real problem.

Example 1 (pre-10/18 rule change):
$1000 USD Account; Leverage 400:1 (which is the current leverage for my soon-to-be-banned UK account)
My MM dictates that I never risk more than 2% total over all open...
Can i point out kevin the theory is fine "if" you get them to be but you have to drastically alter your r/r figure.
Based on 10 pip losers.
Based on 1:400 v 1:50
$1 a pip.
1) 1:400 = $10:$25 40% per trade risk/margin
2) 1:50 = $10:$200 5% per trade risk/margin
which is safer based on losers? I say 2
which is better based on be or winners? I say 1
So it comes down to win ratio.
large win ratio go number 1
low win ratio go number 2
I know if you get to be its fine but a string of losers were you dont get to be which happens all the time is 40% an entry

with number one you can put a lot more positions on risking 40% of the total margin requirement.
number 2 limits the amount of positions but risking 5% of margin requirement
making green pips large and red pips small this is my goal.
  • #3,097
  • Oct 1, 2010 6:53am Oct 1, 2010 6:53am
Quoting VEEFX
Price just hit my SL. Makes me wonder if I have got this strategy all messed up in my head. Please raise your hand if anyone had one successful TP since the start of this project
Just to comfort you vee there is a lot less posts on the threads that i follow my interpretation is that traders are all taking losses at moment.

Yesterday eur/usd near london close 1 hour candle down 90 pips,open chart today up 200 pips.
Your doing nothing wrong how could you possibly have any survivors?
I havent traded today .
making green pips large and red pips small this is my goal.
  • #3,098
  • Oct 1, 2010 7:07am Oct 1, 2010 7:07am
Hello everyone
just another rookie losing pips on demo here .
First I wish to say big thanks to Master Graeme. I'm impressed by his dedication both to trading and teaching and hope he is alright and well. I also wish to thank VEE and others for their work on his thread - this is a good way to go, I suppose only A-student learning habits can do in this line of work.

(Btw. what about gold? First decent pips I made. I't has been steadily going up with mild retracements, just take a look at its H4. And there are some FB that have been doing their job alright.)

I don't know when my message will reach this thread (it-s about 1pm GMT now), I wish everyone good trading both live and demo
R.
  • #3,099
  • Oct 1, 2010 7:47am Oct 1, 2010 7:47am
http://www.olsenblog.com/wp-content/..._Trade_5.2.pdf

This seems to how some of the experienced traders see entries not as a single entry.
But based on splitting your position into smaller pieces.
then your entry is based on your average price.
Gives a lot more flexibility on entries.

After all we are only trying to get an entry into a trend based on highnsight.
At the moment greame is just trying to get us in on the ladder.
I know the only reason i dont have big legs on eur/usd is my stops.
If i had a 10 pip take profit instead of stop loss who knows lol

thoughts please purely as entry method.
making green pips large and red pips small this is my goal.
  • #3,100
  • Oct 1, 2010 8:07am Oct 1, 2010 8:07am
Quoting paul1
with number one you can put a lot more positions on risking 40% of the total margin requirement.
number 2 limits the amount of positions but risking 5% of margin requirement
I get what you're saying, Paul, but isn't the ratio of risk to margin requirement irrelevent? I mean, who cares about risk:margin? I know I don't. I'm concerned only about risk:account balance, and both of your examples have the same risk, i.e., $10. My point is that the lower leverage really does reduce the number of simultaneous open positions your account balance can support. That may or may not be a big deal depending on one's trading style.

However, with that said, the lower leverage cap really should not stop a trader from being profitable. We just need to adapt our trading style in such a way as to make it work, and it shouldn't be at all hard to do. But, if I had my druthers, I'd still prefer to be trading at 400:1 or 100:1, as opposed to 50:1. Oh well, enough of my whining. Let's make some pips!

Kevin
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