Building an equity millipede

Wow! An excellent discussion!

I have to re-read this this thread and dip my toes in.

Hi Fugly,

My scalping was on index futures (Nikkei and Hang Seng) and I felt it was too fine a line to continue with long-term. My success varied wildly with the market volatility. When the whole subprime debacle started in 2008 I had my best results ever as the daily ranges exploded. Scalping for me, leads to high emotion ranging from huge elation and being on top of the world to clinical depression. I tried hard to control these emotions but it seems that the fast paced style enhances whatever I feel. It was affecting my family life, my sanity and my well being. So yes, I could make very good money when the market was volatile, but the intraday seasonality is very changeable and I don't like how it makes me feel. That is my reason for exploring Graeme's philosophy.

Hi Graeme,

I should clarify that I haven't received any growth at all. The 300 pips I mentioned was the best open profit that was available from one of my legs, this ended up being taken out BE.

Yeah, I know there have been huge moves in the currencies over the past few months and that is why I posted. I can't believe I couldn't get any of it. Moving to BE has been the main killer AND using stops that are small. Combine that with getting shaken out and then it moves in the USA session once I am asleep and this is the results I end up with. If I would be awake during these shake-outs there would be re-entry attempts.

I've also being trying to mirror your entry approach of jumping in with the momentum which has reminded me of my early days trading. Ultimate frustration of selling lows and buying highs. Compared to futures, where I would lean heavily on the order flow and the stock market internals - I don't have a good feel for real momentum by just looking at a price bar as it is forming and anticipating momentum to continue.

With regards to trading multiple pairs. I did a study over the weekend on just 4 pairs (eur/usd, gbp/usd, usd/cad, aud/usd) and it was clear that the huge majority of moves each day were correlated to within 1-2 hours of each other (I was using 60m chart for the study and did not drill down inside that timeframe). A lot of the time it was the exact same bar. This reinforced what I had noticed before when trying to trade many pairs - they often move at virtually the same time. I don't know how you manage to enter positions and stack. When the hindsight anticipated for the pairs is all happening at the same time, I lose track of assessing opportunity and feel overwhelmed.

I'm in a worse timezone than you are. 8am EST is 2am local time. Setting alerts that fire during the USA time is definitely going to affect my sleep schedule - that is a certainty. My current approach has been to go to bed at 3am (9am EST) to sleep for 5 hours and then have another nap before of 1.5 hours before London open. This isn't really working out though as it still seems I'm missing out.

The actual reason as to why I am struggling with your general philosophy Graeme, is somewhat unknown to me (although I have many theories ).

Thanks for the reply Graeme, I appreciate your candor.

With Christmas cheer,
MK

Thank you the detailed response.

Your experience shows through your detail.

With forex trading there is a certain degree of correlation between the pairs. I mentioned briefly in yesterday post that if eurusd trends gbpusd usually follows and usdjpy move in the opposite direction.

The prime opportunity is when all pairs across the whole board is moving. I assume most readers are aware of this and this is the period I trade. One of my golden phrases that I have said few times this week is, 'when the time is right you will have multiple opportunities [b]in a row[b]'

There is far more meaning than first meets the eye. I confirm myself that the period I am trading is moving with momentum when I continuously add positions with no loss. And the best periods are multiple 1hr and 4hr candles in a row. However, when I encounter the first or second loss this a personal hint that it is stalling and I do not need to trade any further. The best movements covers great distance where price will not likely to retrace back to.

During high activity it is correct to see movement across the whole board. And i know market is moving as a whole very fast when i receive multiple alerts to my cell phone in a row. And i choose to trade the pairs that looks promising. It is not hard to participate in few pairs if you don't trade the 5min. However in between 15min candle i will try few 5min trades.

In regards to trading time. If your trading platform allows may I ask you to try a little exercise for me. If its possible and if any other readers know how to do it please let us know in the thread. It is to change the opening hour of your platform so the start of the daily candle is at a hour of your choice. What you will notice is the day looks completely different with different looking 4 hour, daily and weekly candle. And what you will notice is that the opportunity you perceived to have missed is no longer valid. On the other hand, the area you didn't notice opportunity now shows as opportunity. The point I'm trying to get across is profitability does not depend on time of trading, type of candle pattern but soley on the speed of movement.

You do not need to be present trying to catch every good opportunities but simply catch when it does move and when you happen to be trading.

Draw a long line and highlight few sections. Close your eyes and with no sense of direction mark few dots. You will find dots in unmarked zone and perhaps few in the marked. As long as you have participated in a frequent interval you will inevitably hit the highlighted section. It is no use trying to sense where the highlighted intervals are as you are blind.

Sometimes when an alert arrives on my phone and I sit in front of computer. The market as whole seems to be moving with speed. After the first position or two and then to suffer a loss means that it is not a prime opportunity. There is absolutely no need to endure it anymore as most likely the price range will be revisited the next day.

In trading there are periods where every position survives and the opposite scenario where every position breaks even. It is a traders responsibility to trade when it does and avoid when it doesn't.

Now from the depth of your post I can sense that you are well aware of this already but the difference between you and I is that I place less focus on the reasoning of the move and simply participate almost blindly. And the reason I do this is that I know opportunities are not evenly spread out but arrive in clumps of good and clumps of bad; law of uneven distribution. I make sure I grab all clumps of good and ignore such occasions when market gives me 1 good and 1 bad and 1 good; a lukewarm scenario. A definite don't trade period is when you experience losses in a row. 3rd attempt us the maximum for myself. I'm only interested in the best opportunities that requires no analytical skill to capture profit.

With the above approach in mind you will find that you are filtering almost all bad periods out and keeping all the good periods with positions. It is almost a phenomena that has no scientific or mathematical reasoning behind it.

I sense that you are a person with great analytical skill with formal qualification. I find that people with higher form of qualification tend to observe, analysis, reason. It is how we are taught in college. And with trading it is far more simpler as only required trait is the observing.

Sincerely,

Graeme

Hello Graeme,

Unfortunately the only way to change the start of the daily candle hour on the trading platform is to actually change the broker to one that has a different opening hour.

Edit: Alright it seems there are some scripts for MT4 that would allow you to play with the timeframes, I just read quickly through this other thread I found whilst searching but I haven't tried the methods described there myself, so use at your own risk I suppose : http://www.forexfactory.com/showthread.php?t=168562

Kindest Regards,

Cam

Good evening, all

Today is the exact same day as yesterday for eurusd

It will be wise to probe now on lower timeframes under the assumption it will breach the support 1.3080.

Get ready to stack heavily if breached with momentum. If it does breach with momentum it will drop forming a bold daily candle down.

You are also reaching open price of the month. This is approaching prime area and all we need is prime movements.

Feel free to ask any questions without hesitation.

Sincerely,

Graeme

My first probe is just in from 15min chart

1.3094 SL @ 1.3102

eurusd 15min

http://img809.imageshack.us/img809/5006/87549982.jpg

Its taken out -9 pips before I even post this message up.

And thats it. I stop.

It is this simple to control your risk and tendency to overtrade.

Also there is no eye popping momentum, no need to over stress and force a position in there.

I will try again at next engulf pattern.

Sincerely,

Graeme

Edit: The golden rule to stacking is that the best opportunities to stack/trade is when you have multiple success in a row. The worst time to trade is when you suffer losses in a row. Take advantage of one scenario but ignore the other.

Tonight it is moving slower than yesterday at US session.

Dont expect much here but that doesnt stop me probing.

Placing one more probe (2nd for today) from 1hr eurusd

Sell 1.3100, SL above the high 1.3112

A 12 pip probe. This dies and I will walk away and reset price alerts

http://img823.imageshack.us/img823/4417/67594173.jpg

Nothing really to stress just a normal cruise.

Sincerely,

Graeme

Personal thoughts of current momentum?

Abysmal

Star rating of current trading period?

2 out of 5

What are you anticipating?

1. New 1 hour candle with ema crossed over. If there is a good movement it happens most often just around cross
2. Less than 33% retrace - always best scenario
3. Breaching with momentum 1.3080 which would be the end of this siege for eurusd. The potential profit is very large if breached.

eurusd daily

http://img706.imageshack.us/img706/2536/86425018.jpg

I love it when it stalls. The inevitable fact that the built pressure will soon explode out with long trend. It increases my heartbeat faster day by day.

Sincerely,

Graeme

Great wording, Graeme. I have the same feeling, the pressure for price to explode is in the air, the game is on.

Kindest Regards,

Cam

Graeme,

Seeing as there is no momentum, is the 2nd probe still open or do you close it and wait for a better opportunity?

Rustam

Its over for this trading period for myself.

There is nothing to trade. No momentum, no confirmation.

You will lose more if you stay and trade at current situation.

This is the point to stop and reset your price alerts.

No one can profit at the moment.

Lost 2 probes and I rarely do 3 attempts.

eurusd 1hr

http://img9.imageshack.us/img9/1280/39683508.jpg

Sincerely,

Graeme

P.S Setting price alerts @ 1.31275 and 1.3095

Good question.

I dont usually close probes as they are usually less than 10 pips per probe (on average). Perhaps its the wrong mentality to consider them as tissue but I do.

Probing is far more effective than watching raw price fluctuating. Probes that survive bring in the biggest reward as they are in first.

Most importantly please dont sit there and force a position in their to stick. The best time to trade is when you effortlessly stack positions with each position going into profit without much hesitation. That is a 5 star opportunity.

Sincerely,

Graeme

Edit: -20 pips from 2 probes today, london session

The reason we are focusing on eurusd is that most of the traders who do message me are focusing on this pair. It is a universal pair for most.

It might not happen in a day or a week but I will show all to the best of my ability at the least a prolonged growth of few weeks that does create few thousand pip reward at the end. Enough to replenish + add profit into your capital.

The very next movement on eurusd that does move 300pip+ will be ours.

Let us be patient and await.

Sincerely,

Graeme

Thanks for the reply Graeme. I'll continue to put effort into finding the right time to trade where I can get multiple successes in a row. You are also right that I am analytical and I know it is more of a curse than a blessing with discretionary trading. My first couple years were filled with trading plans and many many explicit rules. Ironically my trading didn't start to become profitable until I let go and trusted my gut.

Anyhow, thanks again.

With season greetings,
MK

Thank you for your reply, Midknight.

Your input is highly regarded and please dont hesitate to ask anything on your mind. And that applies to every reader as everyone has equal opportunity.

I hope that I can achieve the right demonstration this time to finally know that it was all worthwhile.

Thank you.

Graeme

Edit: I will start answering the PMs from 2 days ago. Apologies for the delay.

Just about to walk away when I received price alert.

I re open chart to see this in my first view

eurusd 1hr

http://img443.imageshack.us/img443/623/aa1k.jpg

eurusd 5min

http://img262.imageshack.us/img262/6193/aa2p.jpg

Abysmal.

No trade. No one can profit from those sudden knee jerk spikes. Useless. The next 5min candle shold have less than 33% retrace that buyers find trouble pushing it up anymore. 50% already. No thank you as I know I will lose pips on this.

Resetting price alerts @ 1.30882

This is really useful commentary, Grame, also the alerts level so we know exactly how you see things, what areas you are watching.

Thank you,

Cam

I think the book is a brilliant idea and I would happily buy it even if you did profit from it.

Learning from a book would be far easier than from a forum, where the thread becomes unwieldy with many posters with all different motives, taking the thread in unwanted directions or causing you to post material in a different order or manner to which you intended.

I do hope your time here has helped with the presentation of the book, not that I'm suggesting for one minute that that was your intention. I also hope that talk of leaving a legacy is not a reflection on your present medical condition.

Merry Christmas and a happy and healthy New Year to you kind sir and your loved ones.

thanks for the play by play posts Grame.

i think u have the same hindsight as yesterday,
for price to breach strongly under the 80ish levels on H1 support..

Hey Graeme, may I ask why no upside price alert set? I guess you strictly have a short bias at this point, but I thought have an upper point of interest as well.

With kind regards,
MK