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Building an equity millipede

  • #3,941
  • Jan 5, 2011 7:46am Jan 5, 2011 7:46am
I have been lurking in the shadows and decided it was time to step into the light

Took me a good 7 days to read this thread from start to finish , and Guaranteed I will have to re-read it again to understand all the nitty gritty details as well as all the underlying and hidden messages.

Just wanted to say to Graeme , awesome awesome thread !! Can't wait for the Book to be published .

To all the other people who contributed positively , well done and thank you. It has been a great learning experience.

Now it is time to start building a mutant millipede !
  • #3,942
  • Jan 5, 2011 8:04am Jan 5, 2011 8:04am
Hi guys!

It was like miracle today, when I read the pipEASY's message and saw this words beside.

God bless you!

Adylis
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  • #3,943
  • Jan 5, 2011 9:14am Jan 5, 2011 9:14am
Thanks for Posting this thread. It is easy to get caught up in all the commotion and forget to take it slow.

28% profit a year is excellent by most standards but using the basics of MM and position sizing you take us through an easy way to make way more then this.

Sometimes you just have to take a step back.

I know I was a bit late joining this thread. Weird I haven't ran across it before.....
  • #3,944
  • Jan 5, 2011 9:51am Jan 5, 2011 9:51am
Quoting geoffrod
so is anyone stacking at the moment

i have 5 short on the e/u 4 at be
we will see how they go
great job..i think your free rides have really good chance to survive after today's move...
  • #3,945
  • Jan 5, 2011 9:52am Jan 5, 2011 9:52am
Quoting maxss280
Thanks for Posting this thread. It is easy to get caught up in all the commotion and forget to take it slow.

28% profit a year is excellent by most standards but using the basics of MM and position sizing you take us through an easy way to make way more then this.

Sometimes you just have to take a step back.

I know I was a bit late joining this thread. Weird I haven't ran across it before.....
as Graeme said before..there is nothing late in forex...
  • #3,946
  • Edited 3:26pm Jan 5, 2011 3:13pm | Edited 3:26pm
Quoting nomask
great job..i think your free rides have really good chance to survive after today's move...
thanks nomask
just wanted to show where i stacked my positions, after a bit of a wait, and yep, they might survive, time will tell, there are 7 of them now, all at be, i think i had 3 stoplosses, 2 at BE, 1 for a loss in establishing these 7 surviving positions.
it is all about timing i think, you wait for the market to start moving in your direction and hop on board.

cheers
geoff
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  • #3,947
  • Jan 5, 2011 3:47pm Jan 5, 2011 3:47pm
I woke up this morning, anxiously turned on my computer, half expecting all my profit from last two day`s endeavour would be gone. Instead, it was more than doubled, I now have more than 50% return for two days work after cost. this is the power of trend trading and stacking. thank you Graeme for opening my eyes and my mind for this kind of possibility.
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  • #3,948
  • Jan 5, 2011 6:02pm Jan 5, 2011 6:02pm
@ graeme and anybody who would like to answer to this:


diversify and beeing in the market most of the time, not standing on the sidelines waiting for the perfect setup. that are some of the biggest gamechangers vor me in this thread.

moving the odds inch by inch to our side. i would like to know if you would see the following as another form of diversifying:

choose of account base currency:

i live in the eurozone. in this volatile times would it mitigate the risks by to spread assets in lets say 2 or 3 accounts with euro, chf, dollar?

to diversify further choose 2 diferent strategies, lets say your infinityield method and a carry trade basket which is easy to manage because you dont have to look at it all the time. the carry basket is another form of diversifying with lets say 10-20 postions all interest positive (given the account has enough margin to sit out possible unwindings)

so my question is if this is a (small) edge or just useless...?

thanks
  • #3,949
  • Edited 10:57pm Jan 5, 2011 7:08pm | Edited 10:57pm
Hi alpiner,

Useless (perhaps not 'worthwhile' is more appropriate) as even with a single base currency account, you will always have net exposure in several currencies depending on pairs traded and prone to market fluctuations.

Not a big fan of carrytrade either...too much drawdown for my taste.

Just my 2pips.
Staying in my lane...
  • #3,950
  • Jan 6, 2011 3:46am Jan 6, 2011 3:46am
when Mr. Graeme diversifies for a currency pair, he closes a small portion of his millipedes to cover losses and secure a small profit for that particular pair. in practice I`ve found this very difficult to copy, partly because I keep an imperfect log, partly because uneven distribution of trading opportunities. I`ve developed a method of diversification to suit my own need. here is what I do:

1. calculate the total realised loss since last diversification. e.g. -$30
1. write down current total unrealised profit, e.g. $120
2. calculate running profit for each pair, e.g. EU $60, GU $40, UC $20.
3. find the diversification ratio for each pair, dividing the running profit by the total unrealised profit, e.g. EU = 60/120 = 1/2, GU = 40/120 = 1/3, UC = 20/120 = 1/6.
4. multiply each pair`s div ratio to find out how much each pair need to shoulder the loss. e.g. EU $30*1/2 = $15; GU $30*1/3 = $10; UC = $30*1/6 = $5.
5. close out appropriate portion of each pair to finish this diversification.

the advantage of this is that the good pairs help shoulder the pain caused by the bad pairs. the disadvantage is that this reduces future profitability for the good pairs, and also the calculation can get quite tedious if you have multiple open positions across many currency pairs.

I might do an indicator to automate this on MT4, however I haven`t done any programming for a few yrs now, I wonder if somebody has already done this. it`d be great if someone could post an indicator or expert that does sth similar here.
  • #3,951
  • Edited 11:01am Jan 6, 2011 10:24am | Edited 11:01am
Once price cleanly broke throught 1.3080 i saw that momentum and it was time to stack.
have 2 new positions at +50 and +24 SL moved to BE.. hopefully this 2 new soldiers work hard for me..
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  • #3,952
  • Jan 6, 2011 4:30pm Jan 6, 2011 4:30pm
Quoting iPlayGames
I now have more than 50% return for two days work after cost. this is the power of trend trading and stacking. thank you Graeme for opening my eyes and my mind for this kind of possibility.
Your gearing looks to range between 2.8 and 8.6 per entry. That's pretty high, even for the low geared legs.

A patch of losing trades could really eat into your account. What sort of risk of ruin or equity stop loss do you have in place?
  • #3,953
  • Jan 7, 2011 12:24am Jan 7, 2011 12:24am
Quoting HornedGod
Your gearing looks to range between 2.8 and 8.6 per entry. That's pretty high, even for the low geared legs.

A patch of losing trades could really eat into your account. What sort of risk of ruin or equity stop loss do you have in place?
Hello HG, I do not worry much about my gearing. I control my risk by having a fixed dollar amount to risk for each trade, currently it`s $1 per position for every $500 in my account. so that even if I send in a probe for all 12 pairs I only risk $12 which is about 2% of my account. and that is an acceptable amount of risk in my opinion. but then again, I haven`t been trading like this for long, so I can`t yet say confidently that my risk management is adequate. if you are quite certain that I`m on a way to ruin, could you please show me how you reach that conclusion? I`ll be much obliged.

Sincerely
  • #3,954
  • Jan 7, 2011 2:43am Jan 7, 2011 2:43am
For the people trading eu with Graeme's method..I'd humbly advice to keep in mind the big picture..
this guy(eu) loves touching and playing around major round numbers such as 1.5000 1.6000...... 1000 pips apart...
they represent market decision levels..this is where the big amount of money head to..
we're on one of them and it doesn't happen often..try to take advantage of it..
in 2010 only 7 times price played around those numbers..
2009 is 5 times
2008 7 times..
what about the 100 pips apart round numbers such as 1.2900,1.2800?..they're still important but just good for entering,stacking,re-entering and analyzing short term direction,etc....
check out the chart..
http://www.screencast.com/users/noma...2-08ccc59bfe2c
  • #3,955
  • Edited 3:31am Jan 7, 2011 3:03am | Edited 3:31am
here is my projection of the down side..
also have the same approach for the opposite direction..
the best clue you would get for such projection is the candlestick forms and patterns around those levels rather than any indicator...
http://www.screencast.com/users/noma...4-15a6724c4bc0

I just wanted to edit this post to explain what i meant by saying that "the best clue you would get for such projection is the candlestick forms and patterns around those levels rather than any indicator"
Check the chart at http://www.screencast.com/users/noma...d-84769f574b05
along with those explanations...
Its about anticipating next week's candle via present candle pattern at key levels..
1.Engulfing bar..hindsight would be down but failed
2.Another engulfing bar... hindsight would be down and it worked.
3.Volatile breakdown.. hindsight would be down and it worked.
4. Volatile breakdown.. hindsight would be down and it worked.
5. Not Volatile breakdown.. but hindsight would be down and it failed..
6. Not Volatile break up.. but hindsight would be up and it worked..
7.Volatile breakdown.. hindsight would be down and it worked.
8. Not Volatile break up.. but hindsight would be up and it worked..
9. Bearish pinbar.. hindsight would be down and it worked.
10. Bullish pinbar.. hindsight would be up and it failed.
11.Bearish Engulfing (not completed yet)..if its the case hindsight would be down..we’ll se next week.
Total..10 hindsight....
3 failed and 7 worked....
  • #3,956
  • Jan 7, 2011 10:44am Jan 7, 2011 10:44am
good place to stack ?
breakout pennant on M15 on EU
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  • #3,957
  • Jan 7, 2011 1:45pm Jan 7, 2011 1:45pm
Quoting nomask
here is my projection of the down side..
also have the same approach for the opposite direction..
the best clue you would get for such projection is the candlestick forms and patterns around those levels rather than any indicator...
http://www.screencast.com/users/noma...4-15a6724c4bc0

I just wanted to edit this post to explain what i meant by saying that "[b]the best clue you would get for such projection is the candlestick forms...

Hello Nomask,

Nice explanation...you are already mastering PipEasy's teaching and we all are benefiting from everyone.

Tq,
-happyTrading, maaj-
  • #3,958
  • Edited Jan 8, 2011 12:59am Jan 7, 2011 11:14pm | Edited Jan 8, 2011 12:59am
Hello, teacher Graeme,

Let me just say it was an HONOR and BLESSING from high above to be your student. But I do get a wary six sense that sensei Graeme may have left us.

Whereever you are teacher Graeme, you should know that a good seed has been planted inside this little brain and I will do my best to make it grow.

"If I were to selfishlessly request something for myself is that when a trader is profitable through the methods I have presented for a good length of time to phonering any charity of their choice, in any country, any cause and donate whatever amount you think you can afford at that stage." pipEasy, post number 853.

WOW, T.T, I realized this before the post and feel so blessed that you feel the same way and the final purpose of this post is not $$$.

that warm little bird under your wing.
  • #3,959
  • Jan 8, 2011 2:58am Jan 8, 2011 2:58am
Quoting maaj
Hello Nomask,

Nice explanation...you are already mastering PipEasy's teaching and we all are benefiting from everyone.

Tq,
Thx maaj..I honestly believe that Graeme's method is the only one being "very profitable"among all the methods/ideas that I've been through...
as everyone knows confidence and patience are keys in forex..but for Graeme's method they're vital..
Whenever i lose one or both of them i start struggling and losing but whenever i get both in my arseanl then i start making some pips..
confidence with your trading..
are you convinced with your entry?has it moved in your favor right after you entered (thats a good sign you get some push behind your entry)
is it eye catching or you just imagining..
maybe you think you're smarter than anybody to see the opportunity???
(Remember...If the opportunity doesn't get any attention then there is no opportunity no matter how smart and good you are with your entries or analysis)
patience with your trading
are you nervous after 10-20 consecutive loss..?
do you feel like closing your only profitable position for the sake of covering your 200-300 pips drawdown?
did you start thinking that catching couple thousand pips only for people like Graeme.?
or did you start thinkinh maybe Graeme was wrong maybe price will be ranging for the next ten years so no more millipede legs..)

last weeks overview
http://www.screencast.com/users/noma...a-4c8c9ec616b8 (setup on 4hr)
http://www.screencast.com/users/noma...e-202f7f07f21a (entry on 5min)
http://www.screencast.com/users/noma...1-1ad4b5b1243a (setup on 4hr)
http://www.screencast.com/users/noma...d-9f10f282ff5d (entry on 5 min)
http://www.screencast.com/users/noma...6-1fcbc0c7c7e1 (end of the week)


good luck all..!
  • #3,960
  • Jan 8, 2011 4:02am Jan 8, 2011 4:02am
Quoting nomask
Thx maaj..I honestly believe that Graeme's method is the only one being "very profitable"among all the methods/ideas that I've been through...
as everyone knows confidence and patience are keys in forex..but for Graeme's method they're vital..
Whenever i lose one or both of them i start struggling and losing but whenever i get both in my arseanl then i start making some pips..
confidence with your trading..
are you convinced with your entry?has it moved in your favor right after you entered (thats a good sign you get some push behind your...
Thanks for the Charts.
I blew my demo account again.. I guess its start from scratch time again.

I have been taking trades according to the built-in low-risk entries but I'm hanging on the my own belief and not acting upon what the market is telling me.

For this week, all my hindsight have turned out to be correct on the weekly, but I :
1. Failed to move my stops or killed the entries for a small loss.
2. Hope that I might see a stop and turn ( not good)
3. This week I will cut losers early.
4. No patience and over trading - perfect sword to kill confidence

Thanks for the reminder
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