Building an equity millipede

Hello Mr. Graeme. yesterday when I saw upward momentum, I positioned myself long in EURUSD as well as a few other pairs. I thought what I did was in line with your teaching. however your latest post has shown me that your bias is for EURUSD and GBPUSD to go down, and apparently you haven`t sent any long probes for the time being. may I ask why have you ignored the latest upward move in the above mentioned pairs? and what`s your current analysis for EURGBP, EURJPY, AUDUSD and NZDUSD? I`ve a few long probes in them as well, and I have started to feel nervous about them. I also have short probes in USDCHF and USDJPY, am I in line with the market`s direction? I really can`t decide which way the market is likely to go by looking at the long term charts for them.

Good morning all

Thank you for the warm compliment alpiner.

Great analogy.

Personally I focus on position building so I do keep the whole picture of the movement on my mind.

Due to personal time restrictions, if you wish to observe 1 or 2 hours before london open and then to execute on the 1st hour, yes you can still build positions.

However, you will have:

1. Less number of entry opportuntities as it needs to meet with the given time
2. Far greater period of no participation in the market

Not many people who trade 1 or 2 hours at london open will become a position trader as it takes far more persistence than usual. And this is not the case with most traders as they are in a rush to see profit.

Hope this helps.

Midknight - Thank you for the question. Im not sure if any of the readers remember in the earlier part of the thread where I show where I place price alerts during weekend. As a trader with extensive experience, there are certain scenariors where you personally prefer to happen in the market. Some traders have such list from the best to worse and then choose to trade the best only. I am similar however I tend to watch the few pairs and not one.

The pair that I focus most is a pair that had a bold weekly candle that has recently crossed over 5/10ema. This bold weekly candle is a bearish/bullish engulf or pennant breakout or simple resistance or support breakout.

The pair that I least focus is a pair that I already have extensive number of positios that struggled to reach any new highs or lows the previous week. There is no point to add positions into such pair until a new movement occurs.

Now, one of the previous post you asked about trading both side of the direction. You were wondering why, how. I think it is a good time to discuss such matter as the pair we are focusing on is at a level of uncertainty.

eurusd daily

http://img832.imageshack.us/img832/9945/55328691.jpg

This current up movement could be a short term (1 to 3 weeks) retrace or the start of new trend. Few traders who are trading eurusd with me currently for now, we will need to patiently wait it out as we are only trading one direction for this particular exercise. Probing only at the new highs where buyers seem to lose power.

For few traders who noticed the up movement from yesterday and think that this is the change of major trend. You could also be correct and im very pleased to see that your analysis has flexibility. I hope for these traders they would realize why I participate on both side of the movement as the only cost of few probes could result in my participation from very early of the new trend which is at the best possible place to survive.

For midknight and others, here is an important chart that could help you understand. For the last few years I have seen such cycle happen in a repeat. It is the flow of positions.

If this is a 'generalised' movement on a daily chart over the period of few weeks

http://img3.imageshack.us/img3/5732/aa1xd.jpg

I have found on many occasions that the position flow I have

http://img413.imageshack.us/img413/151/bb1eu.jpg

If you think about the above scenario very carefully. Over a given period of few weeks I am technically fully hedging my positions. However I am also strategically placing my interest to reap the 'inevitable' big move that will happen sooner or later by simply following the current movement happening.

http://img443.imageshack.us/img443/7849/cc1j.jpg

Does this really happen?

All the time.

eurusd daily

http://img834.imageshack.us/img834/725/ee1jd.jpg

And this is happening to current eurusd as well.

You can fit the above template to any pair over any given period of time.

My personal conceptual trading mindframe.

Sincerely,

Graeme

Thanks a lot for the light shed, Horned. In fact, I bought the book last year, read it once but the method looked to complex to me, so I put it on the shelf and forgot.
One needs anyway rearrange any method his one way. For instance, I believe some indicators can be very helpful, if only for divergences at the end of a trend, and I pay great attention to economic news releases.
I will re read BWILC this time knowing that I have a master who might help with questions.
My best wishes to you and family,
a pipfull 2011 for all.

Muntu

Dear Graeme,

The 'generalised' models that you are showing us are great ! It is amazing how you managed to find a few things that keep repeating in the market and taking advantage of them. This particular template also helps with the expectations, adding positions in both directions you know there's going to be a clear breakout in one of them at some point, and then you are going to be early in the newly formed trend.

Thank you very much,

Cam

Dear Mr. Graeme, I`ve been experimenting with stacking for the last few days and it didn`t work out too well for me at first. the last 4 days stacking had cost me 1/4 of my initial account balance and I barely managed to keep 2 probes alive after BE. but today it really payed off, thank God I didn`t give it up, I not only made all my losses back I have also been able to nearly double my account. I don`t know whether or not my current success is temporary or not, but I don`t care. I`m experiencing the power of your method first hand and I`ll make it work for me long-term. whatever the cost.

best regards
iPG

Hello iPlayGames,

Even though I'm not Graeme, will try to help you out. You are probably in one of these situations:

A. Not using the right position size for your account.
B. Overtrading, trying too hard to make probes stick.
C. All of the above.

For A I will give you some guidelines what my thought process was when I decided on which position size to use: in one of the initial posts Graeme mentions he started off with a six figures account and uses 2 lots per position, I thought: ok so $100000 divided by $20 (which is roughly 2 lots moving 1 pip) is 5000. Now this 5000 represents the number of pips Graeme could have lost with his initial account and his position size until his account was depleted. So based on the above rationale I put aside $5000 for my initial account and am using 0.1 lot (which is about $1 / pip), so the same, I can lose 5000 pips from the initial account (or if you prefer, I have 5000 pips to "play" with).

For B I would suggest sticking to one pair until you get your game on. EURUSD is on the watch list these days, see Graeme is posting charts with the EURUSD evolution. It has been in a range for a while and it's bound to explode in one direction and we'll be there to profit from that.

Kindest Regards,

Cam

Short Euro from 1.3220 (be) and all costs covered. I decided to do this as an add on to my already successful scalping business.

I tried a short on the euro at 0830est and stopped out for 10 pips. waited for consolidation to drift over to the descending 20ema and put a short under the range at 1.32085. Now at 0955est out of all except the 10%. stop is at 1.3220 12 pips above entry but am hoping the consolidation area will help my guy to live out the day. the twelve pips on the 10% is a mere fraction of the profit on the entire day.

As for the position of the trade it is near the top the current daily bar(for now) close to the descending 20ema.

On the other hand, these breakdowns have been consistantly retracing in the afternoons, lately. But like pipEAZY says, we just have to put in the work and let the market decide. I remember his stat. 4000 attempts and 180 some odd positions working.

Archie

this few hours has been a great downward momentum in EURUSD that's allowed
aggressive stacking.

we're seen very strong bearish engulfing candles in
H1 and H4 that's allowed us to build a strong hindsight and start stacking
right now have several positions from the 3200 levels that has stop moved to BE
and closed a few positions for some "ammo" for future probes...
hopefully the day will close and break through 3080 levels so that we can continue our lessons with Graeme..

Note: H4 HUGE bearish engulfing candle just formed and it looks like only the start of a HUGE move down.
Anything can happen but i am going to use this hindsight to stackthem!

As Graeme said, when u have a good run this is the time to increase focus and stack them..

Now I have a long soldier, all costs covered from 1.3118. took two attempts and his position is tenuous. We'll see if one, both or neither live through the day.

after 6 weeks....

unrealized p&l = 61%

have some losses though.

% profit on opening balance around 30%

what I like most about this is I make money while I sleep.

Good afternoon, all

Just a quick courtesy message for all.

Im still on vacation and will be returning home tomorrow.

In regards to all traders who are following eurusd with myself.

Current weekly candle has a very long wick.

We all know what long wicks stand for. Wick is at the top meaning buyers losing power.

It is harder for price to gather strength again just to climb back up to previous high established on the same candle. This applies to any timeframe.

Eurusd, gbpusd had a whopping down day yesterday.

Gbpusd broke the support and is better scenario than eurusd.

Eurusd still lingering at 1.3080. Current bullish engulf on 4hr. Buyers are back in control however, tonight at UK/US session if price retest the support get ready to spend few probes under the anticipation 'that it will break that support.' For eurusd traders, since we are only trading one pair and one direction for this exercise, we need to maintain a greater patience.

gbpusd traders are at a better position as the monthly candle established retrace and now heading past down opening price of the month.

For the readers who are little confused at current progress, soon we will witness through the efforts of fellow traders at the very least few thousand pip growth. At the end of the exercise, I will request few traders to post their statement live if they dont mind for all readers to analyize their trading pattern.

Apologies I havent been able to answer any PMs.

Sincerely,

Graeme

P.S eurusd, set your price alerts to 1.3090

P.P.S gbpusd, once buyers lose control, probe and stack again

Hello Cameron, thank you for your help. I really appreciate it.

I`ve gained a few insights from last few days trading, I want to share them here.

1. probes gain pips almost instantly in favorable market conditions.
2. even in favorable market conditions, most probes die sooner or later in any one particular pair.
3. favorable market conditions happen across multiple currency pairs at around the same time.
4. it`s better to stack across multiple currency pairs, instead of concentrating on any particular one. that is, when favorable market conditions occur, try to spread probes on as many currency pairs as possible, but only send one probe in for each currency pair, walk away when you`ve broght them to BE. do this again when the next favorable market condition occurs, perferably at least a day later.

this has so far been my experience with stacking. I wonder if anybody else would like to share their own experience trading Graeme`s way. I personally would very much like to hear them.

eurusd 1hr

Showing clear signs of buyers slowing down

Best time to probe

I see opportuntiy and its getting warmer

All signs show DOWN on eurusd, gbpusd

http://img264.imageshack.us/img264/3191/aa1n.jpg

It could be the day we have been waiting for the last 2 weeks.

And I hope everyone is catching the move

eurusd 1hr

http://img838.imageshack.us/img838/8808/aaaalg.jpg

Get ready to break that 1.3080 on eurusd

4hr bearish engulf forming with great momentum

Hello Graeme,

Hope you are having a great time.

Am watching that area, have some positions since yesterday... I think it's about time EURUSD stops teasing us and breaks 1.3080

Kindest Regards,

Cam

Hey cam/Graeme /all,
I too am watching the euro, Gbp , aud, whilst camping in a tent in port Stevens nsw, with the family.
Cheers Geoff

watching that area.. looks like price is going to break out,
qns is UP or DOWN now..

I agree with William
Breakout yes up or down.
Daily has failed to make a new low at this point.
whilst it looks down I am not trying to forecast but will go where the price goes.

Good morning, all

For the few traders who had positions from the previous day to watch most of them or all of them to be taken out at breakeven yesterday will undoubtedly feel uneasy.

Buyers are back in control and there is nothing we could do.

Hold on and keep faith in your monthly hindsight.

If it doesnt work it was not your fault.

There have been periods of 4 to 6 weeks in the past where a given pair was stuck in a range. We are currently in our 2nd week with eurusd.

Write down your losses and hold on until the inevitable new move comes along.

The current up trend could be start of a new direction with eurusd + gbpusd. We just dont know however for now we are only participating as per our monthly hindsight.

Until eurusd monthly hindsight changes direction as per our price interpretation we will hold on.

Holding onto your faith especially in trading is not easy and I know it very well.

Sincerely,

Graeme

thats what i'm up to...
thaks a lot for your help