Building an equity millipede

Chart below
Fridays action on eur/usd .
Looks like good entry long but "letting your winners run "
the entry got took out at be and retested a further 2 times.
Hope i have illustrated my post descibing how the statement :-
" let your winners run and cut your losers short"

It sounds so simple, But in fact entering from the break of the high would more likely be the winner.
so if we manage to hold this long trade after rising 3 times then to maybe blow through our entry and continue the downtrend.
Just think about the feelings you will experience.
Now think about holding for a week ,a month.
This is why I say when is it a winner or loser?

Graemes's strategy is very simple but its not easy to impliment emotionally.
As long as you are prepared for the emotional roller coaster when a trend does appear we will be very successful.
most trend traders spend 70% of there trading breaking even and small losers . when the trend does appear they make up there losses and make there profits.

Hey Guys


sorry to interrupt here , but i have a question to some of you excel pros out there ;:


could u build a excel sheet where you can manage your groups and legs ?

that would be awesome ..

like u enter the group name and add legs to the group .. at the price u bought and showing the total equity exposure .. and balance , profit..if u colse out a leg.. etc...


would be handy


thnx .. and btw.. awesome thread graeme.. an eye opener .. + the last puzzle piece i needed..

thnx

take care

It is definitely not as easy as it first appears. Everyone is different but I am not as concerned about being taken out at BE as you seem to be. I just jump right back in if and when price reverses again. If you read the first few pages of this thread I think Graeme was quite clear that there will often be times where you go weeks without anything surviving. The trick is to soldier on and keep participating without getting demoralized.

This method only starts to bear fruit when there is a decent long term trend IMHO. You could go weeks or even months without that happening. One thing I am trying to do to get through that psychologically is to swing trade some of my stacked positions. So in the short/medium term if price looks like it is reversing on me I will close some positions and take profits. If the others stop out at BE thats ok. Didn't cost me anything.

Hello Paul,

You certainly didn't need that much space to ask your questions, either way:

1) A loser is a loser if candle closes above your entry level (if short).

2) If you have a winner and you feel that trend is reversing, diversify, and eventually you would have only a small portion of the position closing at BE, if the trend resumes, just re-enter.

Kindest Regards,

Cam

Read this thread twice now. Outstanding. I think I need to read it twice more though - there's plenty here.

Thanks Graeme - hope things are ok for you. Your interpretation of price action is simple and concise and I'm using some of that already.

Great to see there are still people like you around. I can't think of any reason anyone would go to the lengths you have to explain something in here except a genuine wish to give. Kudos bro.

Wonder if I'm the only one who feels this way...but man it sure can be a pain to get adds to stick long-term in forex when trading from the EST(NY) timezone. Sure feels like the majority of best long-term entries occur around london open. Don't see many options other than just trading daily opens based on daily candles with small stop anticipations. Currently feel lucky to get 2 intraday adds to stick in a whole week, despite pinpoint entries.

I hear you brother. Graeme never said it would be easy. So many times he asked everybody : "Can you handle weeks of B/E trades ?" In spite of a great potential I see - as of right now - I would answer ...... I CAN'T !!! My psyche has been seriously damaged by years of bad habits. I need someone by my side to hit me with 2x4 when I screw up (but that wouldn't last long - I would pass away or 2x4 would brake ...... lol)

On the chart attached are areas (highlighted blue) on Euro that "survived". One "could" have a few positions stacked up in some legs, in others probably just 1 entry would survive. It added up to 4500 pips (not counting last leg and with "SL" for the sake of adding all those pips to 1.3600). Even if one managed to bank just a few trades here and there that survived, should have made at least 500-1000 pips. That's not an easy task if you scalp !!! Would be nice if this was my live account !

What surprised me is that out of 6 legs that survived 3 were in Asian session, one in Euro (am) and 2 in Euro/USA "overlap" period !!!

"What surprised me is that out of 6 legs that survived 3 were in Asian session, one in Euro (am) and 2 in Euro/USA "overlap" period !!!"

That is soo interesting. I really would not have expected that, nor did I even consider that a point that was worth thinking about. Only 1 our of 6 in the Euro (am) session and I would be have "assumed" it would have been 5 out of 6 for the Euro (am) session. Wow! I'm just job smacked.

I have thought to myself from the beggining of the thread:

"Graeme - why do you consider the Asian Open to be a good daily open in a 24 market and think that placing a trade here will survive? I do understand well Opening Range Breakout Theory, but the ASAIN Open. Really brother - what planet are you on :-) While I belive some poeple "technically" it is the start of the global FX day by time zone, almost everyone uses the Euro open, London open, or GMT midnight (and some NY 5pm) to signify the real open for the 24 FX hour day. So why use the Asian open Graeme?"

I did not ask Graeme - why - because usually the answer to all my questions reveal themeslves to me.... in time. No need to force any answer.

I wonder what Graeme knows that us lesser talented/informed traders do not about the the probability of survival using the Asian session? Graeme, I await your reply with anticipation.

Wonderful post mate. 10/10.

Kindest Regards,
Darren Poyner

[quote=dazzdude;4178279]"What surprised me is that out of 6 legs that survived 3 were in Asian session, one in Euro (am) and 2 in Euro/USA "overlap" period !!!"

That is soo interesting. I really would not have expected that, nor did I even consider that a point that was worth thinking about. Only 1 our of 6 in the Euro (am) session and I would be have "assumed" it would have been 5 out of 6 for the Euro (am) session. Wow! I'm just job smacked.


Hi Darren,
Somewhere in the thread, when responding to some people's views that nothing much happens in the Asian session, Graeme said something like he knows that the London open brings an increase in activity but it often continues moves that were started in the Asian session.
Kan
Thanks for your interesting posts.

I found this thread early in October and it appealed to me, as I saw a method / system that did not need to take a whole lot of time, which gave returns in the process.
I have only read the first 13 pages of this thread.

My first month and I was smiling my account balance grew 155 and I was only trading two pairs. whilst still trying to figure out diversification I grew impatient and closed all trades my account up 15%.

I then decided to add two more pairs and November so far has been tough.
My account is up only 4% from my starting point. Thank you GBP/USd and my laziness to find better entries.

I have been entering a buy and sell daily on all pairs. regardless of where price is. I have been setting my stops on the previous swing high / low on the hourly chart.

So far I see the merit of this system and hope to see my legs grow, which I'm sure will happen as my discipline improves.

Kan, thanks for the reply. Inspired to look at this further, I looked at recent optimal entry points (entries that would have survived) for the GBPJPY. Interestly, we have:

UKam : 4 (assuming today moves up)
USam : 1
US : 1
Asian: 0


Conclusion: Sample is to small. A larger study would be interesting.

One differnce. GBPJPY trend is up, EURUSD trend is down. Not sure if that would make any long term statistical difference.

Regards,
Darren.

Red-Dragon. Nice work mate.

What Open do you use? (please provide the time in GMT)

What do you mean you open both buy and sell? Can you be more specific? Do you mean on the same pair?

Regards,
Darren.

I've done a study on 1.5 years worth of data to examine which session 'opportunity' tends to arise on the EURO and my findings were that only 19% of the opportunity happens in the asian session. But, if you only study a small amount of data you will also find that opportunity does tend to clump up, that is to say that you'll get a string of days where one session gets the opportunity. The most consistent opportunity is in the Europe morning and the USA morning. If you could trade the entire Europe day that would see you through 65% of the opportunity available based on my study from the past 1.5 years. Keep in mind further that there is not opportunity every day. I considered moves of 100p+ from a 60m chart to be opportunity.

With kind regards,
MK

thx MK

Regards,
Darren

Good evening, all

Thank you for the continued interest and the private messages. Apologies but I will get around to them.

Last 2 weeks I have been catching up with my personal life whilst I was away.

First of all, Im very happy to see that alot of traders are truly thinking as professional traders. What this means is that you have finally admitted defeat that you cannot predict the direction of the price. The only thing you can ever do is enter and follow. However, as we all know enter and following is not simple as 1-2-3.

The reason is that the market moves slower than most traders anticipation vs time.

In reply to the last few posts about price moving during asian session as well. Good observation. Allow me to explain why this happens.

Few posts ago I asked everyone what type of candle do you like?

I personally love/adore/cherish/treasure full bodied candles with very small retrace. These are normally very strong movement with much higher probability of price not coming back. And this type of excellent candles happen on any timeframe. If you open a daily chart on any pair, you will see daily candles with no retrace. Those candles are the ones you have found price to start from asian and charge straight forward. You will also find that most times this type of movement is strong and continuous. From personal experience eur/usd has the highest number of these full bodied long candles with no retrace on daily/weekly/monthly chart.

I do not wish to add confusion to any readers but I believe that you will find alot of information already discussed in this thread.

It is time to mould your skill set.

Sit down with a piece of paper and pen. Plan your trading. And everyday execute as per your plan. Do not deviate. After few months or few hundreds of trades, you need to start analyzing your trade statistics.

Your own trade statistics will help you optimize your trading plan.

2 years ago when I first started building my millipede, I had few bundles of positions that grew for few weeks. One of the first diversification I did was on eur/usd and I closed more than half of the positions and left 3 legs. At that moment I was pleased to see that I have replenished my account balance and added large profit. I learned nothing then. Few months later, I specifically remember closing 2 legs of the remaining 3 legs to find that these 2 legs brought in more profit than all the legs combined in the first diversification. Infact it was almost triple.

Traders choose to see their current winning positions closed and finalised to see their account balance replenished with minor profit added than a greater potential reward later on.

I remember feeling content after the first diversification as I had -400 pips that I was anxiously trying to replenish only to notice few months later my anxiousness about -400 pips actually cost me few thousands of pips of potential profit. And I would have never made this discovery if I did not audit all my past trades. Your personal trading statistics is very important.

I never went back to my old self about counting how many pips im currently down as I know 'inevitably' market will return it back to me + so much more. Inevitable.

I hope my little story answers 2 things. 1) Your current emotional hurdle of watching your current realized loss and placing unneccesary doubts on your trading abilities. 2) Looking back at your past trade statistics to see areas of improvement is of critical importance.

Sincerely,

Graeme

Hello Graeme,

Happy to see a new post, spot on with the emotional hurdles, it's probably human nature to want to replenish the losses quickly, but one must "step out" of the emotional state where mind is clouded, and look at the situation objectively, looking at the trading platform almost like watching a film, being emotionally detached.

Kindest Regards,

Cam

Welcome back Graeme. This post helps puts things into perspective as well. 9864

Regards,
Darren.

Just curious as to what the consensus is on the start of the Asian session as far as GMT time. I'm partial to 00.00gmt but have heard and read anywhere from 2300 to 0100. Also any thoughts on other opens GMT are welcome.

Hi there,

I use New York close (1700 EST) as that is what some data vendors tend to use - Tullets, Barclays, GTIS, Interactive Brokers.

With kind regards,
MK

PS: Welcome back Graeme - cheers to your future good health