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  • #3,621
  • Nov 29, 2010 10:55am Nov 29, 2010 10:55am
Quoting MephistoII
More specifically, Littleknown, if you would like an all inclusive pdf (excepting the most recent #3576, p.239) of the Superman posts (kindly provided by Eklavya - kudos!), go here:

http://www.forexfactory.com/showpost...postcount=3512
As a service to our new readers, it might be easy to just click on the paperclick/attachment icon and access this valuable pdf.

Eklavya - If you continue to provide updates to this PDF (we really hope you do ), it would be great to put the link in the post as well as an attachment for easy access.
Attached File(s)
File Type: txt Graeme - Link to 'All'Inclusive' PDF created by Eklavya on 11-11-2010.txt   < 1 KB | 1,348 downloads
Staying in my lane...
  • #3,622
  • Nov 29, 2010 12:55pm Nov 29, 2010 12:55pm
Quoting adowland
Dear "starving4pips" thanks for your post number 3204 page 214 it really helped me put Graeme's immense wisdom and his training to work, or at last I should say over the last couple of weeks or so finally "seeing the light". I was wondering how your perambulations were going of late.
You're welcome. It's nice to know that others are still finding my post to be of value.

As far as my trading goes, I'm holding my own. I've been quietly working on my trading method and making adjustments as I've seen fit. Success has been slow, but steady. Here are some things that I've learned since making that post:

1. Fundamentals matter. This is especially the case with position trading. When riding a long-term trend, it's important to know what is driving it. Pay attention to the fundamentals of a particular currency pair and trade accordingly. As an example, the future of the Euro is in question at the moment. As a result, investors are bailing on the Euro and running to USD for safety. If you're not short on EURUSD right now, you're missing the boat.

2. Pick one or two pairs and concentrate on them exclusively. There's no need to trade 20 pairs (though you certainly can if you want to), and quite frankly, I just can't keep track of that many. There are many successful traders who only trade one pair and make a nice living. Pick one or two pairs to trade and get to know them intimately. There will be no shortage of trading opportunities and you'll find that after a while you'll be able to predict movement. See #1 above.

3. For all intents and purposes, I've stopped using the monthly chart. For my trading style, the monthly is simply too long-term to matter. This doesn't mean I ignore the monthly, but I'm not looking at it for trend direction. I like the weekly for determining trend and take my entries off the daily. Sometimes I use the H4 for entries, particularly when looking to add to an existing position. Also, I always allow at least one day between stacking entries.

4. I've stopped using the "synthetic hedge" and am now using hard stops above/below previous day's high/low. This is for a couple of reasons: 1) I'm not sure it works all that well; 2) It requires open positions on a wide variety of pairs in order to be remotely effective. Due to the fact that I now only trade two pairs, it simply won't work.

5. I've stopped worrying about profit goals altogether. Goals create pressure and pressure leads to forced moves and clouded judgement, which usually is not in my best interest. Also, I can go 6 weeks without realizing any profit, then see 2000 pips of movement (due to stacked trades) in a single week. Don't worry about profit goals. Just trade what makes sense and the profit will come.

6. For me, the most difficult thing about this approach to trading is deciding when to close winning positions. Right now, I'm just trying to build legs and keep my losses to a minimum. This is a work in progress.

With respect to results, I've taken 50 trades using this method since 10/15. I've closed 44 of them for a total of +199 pips (including commissions & swap). The remaining 6 are still open (the oldest two positions are from 10/19 and I added two more this morning) with 1500+ floating pips of profit at the moment. I only trade EURUSD and GBPUSD.

As far as advice I can offer: Come up with a trading plan and trade it. Keep it simple and be realistic about goals. As time passes, you'll see what works and what doesn't and you'll make adjustments/refinements. Above everything else, keep at it and don't give up.

Regards,
Kevin
  • #3,623
  • Nov 29, 2010 1:15pm Nov 29, 2010 1:15pm
Thanks for the download chaps, had a look but like my way better, am only copying and pasting what's relevant and the things some others have contributed.
Thanks for trying, but I'll do it the hard way.
Only 181 pages to go!
"The probable is what usually happens." Aristotle
  • #3,624
  • Nov 29, 2010 5:07pm Nov 29, 2010 5:07pm
"starving4pips", thanks for your thoughtful reply and advice. As you say still a work in progress.
  • #3,625
  • Edited 10:55pm Nov 29, 2010 6:37pm | Edited 10:55pm
Quoting Starvin4Pips
You're welcome. It's nice to know that others are still finding my post to be of value.

As far as my trading goes, I'm holding my own. I've been quietly working on my trading method and making adjustments as I've seen fit. Success has been slow, but steady. Here are some things that I've learned since making that post:

1. Fundamentals matter. This is especially the case with position trading. When riding a long-term trend, it's important to know what is driving it. Pay attention to the fundamentals of a particular currency pair and trade...
Starvin, are you a full time trader? I think, not sure, that I may recall you mentioning that you have a full time job and trading is part time for you....if not I apologize. If you are a part time trader then I could see where focusing only on a few pairs would be beneficial otherwise trading as many as you can handle is most beneficial as it acts as its own diversification PLUS you arent forced to trade during Ranging periods being limited to just a few pairs....when ur current pair goes to range just put it on hold and monitor it regularly while looking for ANY strong trending pair.....not easy but gets easier. Do you remember when Graeme said you may only have 6-10 weeks of optimum opportunity per year? Its true....but multiply that by 20 pairs....now you've got opportunity! Slugging it out trying to find those magical 6wks on only two pairs will have you hating and done with this method forever. I HIGHLY recommend practicing on a simulator to fine tune this method on multiple pairs, it's been a tremendous help to me but the speed of it can spoil you.

As far as fundamentals, yes right now in the midst of arguably the worlds largest economic meltdown where countries are publicly announcing they are about to dilute their currency by the billions/trillions I would agree some attention is warranted. This is far from normal however and 99% of the time price action will tell you the story....you would still know how to trade the Euro without having heard a word if you follow PA, and I can promise you there won't be any equal red flag news day to tell you when you should begin to go long the Euro....you'll have to follow PA.

As far as diversifying I've been culling about 75% of my legs after a 25-35% retrace of a 2 to 3+ wk trend, otherwise you are most likely in a "range" or non-optimal trading enviro and getting stopped out at BE is to be expected. BUT taking positions on that retrace allows you to make profit either way.

What do you mean by "synthetic hedge"?
  • #3,626
  • Nov 29, 2010 10:00pm Nov 29, 2010 10:00pm
  •  acim
  • | Joined Jan 2010 | Status: I'd rather be stacking :-P | 46 Posts
"Borrowed" link from another thread. Very much worth reading!

http://www.eminiplayer.com/2009/06/l...ul-trader.html
  • #3,627
  • Edited 7:34am Nov 30, 2010 7:26am | Edited 7:34am
Thank-you very much Starvin4pips for another very informative post/PM.

I'm still a little unclear about determining trends, particularly on higher TF.
I have posted the weekly E/U chart below.
Is the trend:
1. downward because of the higher Nov '09 high and the lower Oct '10 high?
(ie. the big picture)
2. downward because of the down move since the beginning of this month?
(ie. looking at the last 8-10 candles)
3. upward because of the move up since May '10 and the higher low in Aug
and the fact that the Aug low has not been breached as of yet?

Thank-you in advance for your reply, I really appreciate all your advice.
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  • #3,628
  • Nov 30, 2010 7:38am Nov 30, 2010 7:38am
Quoting deepblue44
Starvin, are you a full time trader? I think, not sure, that I may recall you mentioning that you have a full time job and trading is part time for you....if not I apologize. If you are a part time trader then I could see where focusing only on a few pairs would be beneficial otherwise trading as many as you can handle is most beneficial as it acts as its own diversification PLUS you arent forced to trade during Ranging periods being limited to just a few pairs....when ur current pair goes to range just put it on hold and monitor it regularly while...
No, DB, I'm not a full-time trader. Good thing, too, or I'd likely be homeless by now.

I do have access to my trading platform while at work, but have found that while day trading I often get pulled away from my desk at the most inopportune times (these people actually expect me to work while I'm at work. Jeesh!). The only session available to me when I'm not at work is the first few hours of Asian, which we all know doesn't move all that fast most of the time and is not very conducive to day trading (nor is trading in the evening conducive to family life). I've found that if I take 3-5 trades per week on each of my two pairs, most will get stopped out at BE or with a small loss, or I'll close for a small profit, but every now and then I'll get one that sticks for weeks. Turns out that one can do very well, profitwise, with this approach based on what I've observed. I've tried trading as many as 21 pairs in the past, but it was just too much to deal with, and as I found out, completely unnecessary. It helps to trade currencies that trend much of the time, which is why I settled on EURUSD and GBPUSD. As I mentioned in my previous post, there are highly successful traders who trade only one pair. Due to the 50:1 leverage limitation here in the States, I no longer get the bang for the buck that I used to get with my 400:1 UK account, so I have to be more conservative with the trades I take because I can realistically only have maybe 10-15 positions open at once with my little $500 micro account trading $0.10 lots. Spreading my margin requirements out over various pairs can make it difficult to add to a well-trending position, so that's another reason why I only trade two pairs. Again, this is what I've found works for me and my unique situation. Your mileage may vary.

Regarding price action vs. fundamentals: I believe pure price action works for short-term trading, but it falls apart when employing a long-term strategy. It's the fundamentals that move the markets long-term and determine the trends. At least, this has been my observation, as I've been burned by PA too many times. Take a look at a weekly or monthly chart and you can see trends that have been intact for years. Those trends are driven by the fundies, not PA. I agree that PA is where it's at when looking for an entry because you're trying to take advantage of short-term swings, but PA will only get you so far. Granted, taking a gander at a long-term chart will give you very basic insight to the pair's fundamentals (I.e., strength vs. weakness), but I have a desire to know the underlying reasons that make one currency stronger than the other so that I can anticipate trend changes when the reasons behind the fundies change.

I like your approach to diversifying. I need to think about this some more and employ something like what you describe. I want to take some profits before they disappear, but I don't want to unnecessarily remove potential profit from the table before it materializes. I guess that's the name of the game and if were easy we'd all be rich.

"Synthetic hedge" is simply trading a wide variety of pairs so that when one is up, another is down and, in theory, they cancel each other out. There will be times when more are up than down and vice-versa, but usually this tendency to offset each other provides a level of protection from large loss. The only problem with this is that the market can enter a phase where everything is running against you at once and you have to be ready to cut loose the biggest losers or you could be taking a road trip to Margin Call City. Since I can't realistically monitor my trading during the most active trading hours, I no longer feel comfortable doing this. Being a US trader, I can't employ true hedging (at least, not without having multiple accounts, which I have no interest in doing), so I was hoping I could get similar benefits using the "synthetic hedge." Here is where I first learned of the "synthitic hedge" concept, which explains it in much greater detail. And here is a FF thread where some members have been toying with an EA built around the concept.

Regards,
Kevin
  • #3,629
  • Nov 30, 2010 8:47am Nov 30, 2010 8:47am
Quoting forexjpn
Thank-you very much Starvin4pips for another very informative post/PM.

I'm still a little unclear about determining trends, particularly on higher TF.
I have posted the weekly E/U chart below.
Is the trend:
1. downward because of the higher Nov '09 high and the lower Oct '10 high?
(ie. the big picture)
2. downward because of the down move since the beginning of this month?
(ie. looking at the last 8-10 candles)
3. upward because of the move up since May '10 and the higher low in Aug
and the fact that the Aug low has not been breached as of yet?...
forexjpn, all three of your scenarios are correct, but they're not all relevant. Relevance is determined by your trading plan. Here's what I mean...

Even though this is a weekly chart, both the long-term weekly (and monthly) trends are "1. downward because of the higher Nov '09 high and the lower Oct '10 high (ie. the big picture)." This is too long-term for me, though, so I'm not looking that far back.

Until a few weeks ago, the short-term weekly and monthly trend was "3. upward because of the move up since May '10 and the higher low in Aug." The May swing low would have prompted me to go long, then short at the August swing high correction, then long again at the Sept swing low until the October swing high. However, this is all water under the bridge, so is of no use to me either. Maybe the uptrend will resume in few weeks, but I'll deal with that when it happens.

Near-term trend is "2. downward because of the down move since the beginning of this month." This trend is the one I'm really interested in because it fits with my unique circumstances and trading plan of daily trades using the weekly trend.

Due to the last few weeks' downward movement, I'll be trading this pair short until I see a new swing low on the weekly telling me a reversal has occurred. Then, I'd trade it long until I see a new swing high telling me another reversal has occurred. Price action on the daily can provide advance clues that the weekly trend is about to change before it is confirmed with a new swing high/low on the weekly, so I'll be paying attention to the daily candles for such clues.

Remember, unlike Graeme, who can trade in both directions and is looking at the monthly, weekly, and daily charts to establish positions that may survive for years, my strategy is to trade the daily in one direction ony using the weekly as a trend indicator. Swing structure on the weekly provides my bias for trend direction and that's the only direction I will trade, so my oldest positions are likely to be weeks old, not months, and certainly not years. So, if I'm short on the EURUSD right now and a new swing low prints on the weekly over the next couple of weeks, I'll liquidate all open positions and start taking longs. More than likely the daily will start to indicate weekness in the weekly trend signifying that a reversal is coming, so that's where short-term PA comes into play in my analysis.

While swing structure and PA can give you a lot of valuable information, it's important when position or swing trading to consider the fundamentals. Back in mid-October, fundamental analysts were calling a top to EURUSD because there was no basis in reality for the Euro to keep gaining strength against the dollar and this was being signaled ahead of time by daily and weekly price action (long upper wicks, pinbars, failure to post new highs, etc.). Using this analysis, I took several shorts that didn't pan out before getting a couple to stick once the uptrend finally petered out (it took about 3 weeks for this to transpire). This goes back to what I wrote in yesterday's post about having several weeks with little or no profit, but once the dam breaks, you could see several thousand pips materialize very quickly from just a handful of stacked positions placed early in the reversal.

I hope this helps.

Kevin
  • #3,630
  • Nov 30, 2010 8:57am Nov 30, 2010 8:57am
Hi everyone. I must say I like your approach very much. That's pretty much the only effective way to trade for most of the people who are still lucky to have a job in this economy.

I think one of the solutions for those of you, who want to try trading multiple pairs at the same time would be applying this method to a basket of currencies. This way you only watch 3-4 charts (same chart actually with different time frames as you do for one pair). Instead of looking at normal bars you would use a basket candle indicator, which draws synthetic currency bars. I'm not giving any links and I hope I'm not hijacking this thread, just giving you another idea. Again, this method is way to go.
  • #3,631
  • Nov 30, 2010 9:14am Nov 30, 2010 9:14am
Quoting acim
"Borrowed" link from another thread. Very much worth reading!

http://www.eminiplayer.com/2009/06/l...ul-trader.html
Thank you. Not agree with all but very instructive over all.
Patience is magic
  • #3,632
  • Nov 30, 2010 2:29pm Nov 30, 2010 2:29pm
Quoting Starvin4Pips
forexjpn, all three of your scenarios are correct, but they're not all relevant. Relevance is determined by your trading plan. Here's what I mean....

I hope this helps.

Kevin
Thank-you very much, this helps a lot.......... in fact it's something that I had wanted to know about for quite some time, but never really asked. I really appreciate you taking the time to explain.
  • #3,633
  • Dec 1, 2010 12:16pm Dec 1, 2010 12:16pm
Quoting Starvin4Pips
No, DB, I'm not a full-time trader. Good thing, too, or I'd likely be homeless by now.

I do have access to my trading platform while at work, but have found that while day trading I often get pulled away from my desk at the most inopportune times (these people actually expect me to work while I'm at work. Jeesh!). The only session available to me when I'm not at work is the first few hours of Asian, which we all know doesn't move all that fast most of the time and is not very conducive to day trading (nor is trading in the evening conducive...
My particular method of diversifying is very subject to change depending on "typical" retraces on a larger TF per a particular pair. The 75% of a 25-35% retrace in the grand scheme of a large trend could def be seen as jumping the gun. You can look at many trends where if I stayed hard and fast to this rule given previous retrace patterns would've been foolish. If you are doing a condensed version of the Millipede e.g. playing the monthly/weekly oscillations within the larger overall trend then my numbers would be more applicable.

It's really discretionary. I'd like to add that I've only been thru about 10 months of around 12 pairs on the simulator so I by no means have a "lock" on anything regarding this method, these are merely my personal observations so far and discretion is advised.

How is everyone else doing?
  • #3,634
  • Dec 2, 2010 2:37am Dec 2, 2010 2:37am
Quoting deepblue44
My particular method of diversifying is very subject to change depending on "typical" retraces on a larger TF per a particular pair. The 75% of a 25-35% retrace in the grand scheme of a large trend could def be seen as jumping the gun. You can look at many trends where if I stayed hard and fast to this rule given previous retrace patterns would've been foolish. If you are doing a condensed version of the Millipede e.g. playing the monthly/weekly oscillations within the larger overall trend then my numbers would be more applicable.

It's really...
attached pdf is 1st month's result influenced more by Graeme's open/beginning of the new 4hr/daily/weekly idea...
I didn't follow his entry methods particularly (i'm kinda good at it already) and i had too many sloppy and unnecessary entries and so on..but still almost over %30 of initial capital banked so far.
But after 1 month of trading i guess i just started getting the Graeme's idea better.
if i didn't close my 6 trades at 100 pips tp that opened at the same time with my largest profit trade
my profit rate would have been %128 by now....
i also attached my trading plan about eurusd due to some posts regarding defining the trend...
Graeme mentioned that entry is not so important...but i think defining trend is less important than entry itself because you never know which move is correction or a retrace until it ends..
current monthly trend is down on eurusd because of the lower lows and lower highs + last months bearish engulfing bar...
but that doesnt mean i'm stuck with this idea forever...What if it turns out a bullish pinbar on weekly and starts moving up...that could be a new support area for a brand new upward move and you don't want to miss it out...Graeme's idea of anticipating and participating with low risk entry is the KEY
good luck all..
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  • #3,635
  • Dec 2, 2010 5:18am Dec 2, 2010 5:18am
imho very informative trades that i just took...
http://www.forexfactory.com/showpost...&postcount=108
good luck all
  • #3,636
  • Dec 2, 2010 5:33am Dec 2, 2010 5:33am
update..
http://www.forexfactory.com/showpost...&postcount=109
pretty much i'm done for today if my last two trades don't work out as i need some momentum for new positions..
good luck all...
  • #3,637
  • Dec 2, 2010 9:35am Dec 2, 2010 9:35am
Quoting nomask
attached pdf is 1st month's result influenced more by
...Graeme's idea of anticipating and participating with low risk entry is the KEY
good luck all..
Hi Nomask,

Wonderful results man.

Thanks for the charts and statement. In Graeme's absence, we need traders like you, Starvin4pips, Veefx, etc. to motivate other fellow followers of this wonderful thread.

-happyTrading all-
-happyTrading, maaj-
  • #3,638
  • Dec 4, 2010 5:27am Dec 4, 2010 5:27am
Quoting nomask
attached pdf is 1st month's result influenced more by Graeme's open/beginning of the new 4hr/daily/weekly idea...
I didn't follow his entry methods particularly (i'm kinda good at it already) and i had too many sloppy and unnecessary entries and so on..but still almost over %30 of initial capital banked so far.
But after 1 month of trading i guess i just started getting the Graeme's idea better.
if i didn't close my 6 trades at 100 pips tp that opened at the same time with my largest profit trade
my profit rate would have been %128 by now....
i...
Some good clean posts, Nomask. Thank you. I see 30% in spite of closing few good positions.
Could you share your current MM plan. Is it 1% risk per each position opened.

Thanks in advance,

TradeStar
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #3,639
  • Edited 1:29pm Dec 4, 2010 1:18pm | Edited 1:29pm
Quoting TradeStar
Some good clean posts, Nomask. Thank you. I see 30% in spite of closing few good positions.
Could you share your current MM plan. Is it 1% risk per each position opened.

Thanks in advance,

TradeStar
i don't use an exact percent for mm..but i try to keep my sl in 10-25 pips while I'm watching it..thats why i use 5 min charts for my entries.
As Graeme mentioned before, you need some sort of data showing your maximum drawdown,consecutive losses etc..
for example if your average loss is 15 pips and your average consecutive loss is 5 trades..then probably you would decide your risk based on those numbers...i mean if you want to risk maximum %5 of your capital total maybe you should risk %1 because its possible to loss next 4 trades as well..so it becomes %5 at the end...
again..its all up to how you doing and what makes you feel comfortable...i'd totally suggest you collecting your own trading data,characteristics first and creating your own money management...all you need is a period of serious demoing or maybe live trading with very small amount of money...

p.s:you could also keep it simple as long as you know your maximum pips to risk...0.1 lot reasonable for 5.000 usd or 1 lot for 50.000usd or 2 lots for 100.000usd
lets say my avg.consecutive losing trades (or you can take your maximum consecutive loss) is 5 and my average loss in pips is 20..so my gross loss would be 100 pips..if i use .1 lot for 5.000 usd..that would make 100 usd which is %2 of my capital...
  • #3,640
  • Dec 5, 2010 9:57am Dec 5, 2010 9:57am
Quoting nomask
i don't use an exact percent for mm..but i try to keep my sl in 10-25 pips while I'm watching it..thats why i use 5 min charts for my entries.
As Graeme mentioned before, you need some sort of data showing your maximum drawdown,consecutive losses etc..
for example if your average loss is 15 pips and your average consecutive loss is 5 trades..then probably you would decide your risk based on those numbers...i mean if you want to risk maximum %5 of your capital total maybe you should risk %1 because its possible to loss next 4 trades as well..so...

Thanks for the guidelines, nomask.

I was interested in knowing the kind of risk management you applied in terms of % risked per trade, to get to that 30%

If I understand you right, you have taken at an average 0.4% risk per trade to get this result. ( assuming 2% max for potential 5 losses)

Thanks again for your contribution

TradeStar
Haste not to Enter AND Haste not to Exit !-TradeStar
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