Building an equity millipede

Hi Vee

Your participation has been priceless. Thanks again.

Dan

Hey nomask,

I am hoping you would change your mind and stay with us but completely understand your frustration. Your charting analysis were quite valuable to those who follow this thread.

Arh thanks, that will be handy as I want to display current trades with #1 arrows instead of just more lines.

Will get a copy & cut-n-paste to see if I can mess it up.

cheers scalpz

Hi Nomask

Thank you for your contribution. As the matter with others I have read many of your posts here and I like them. Just at the time I started my own contribution slowly the thread started to approach to its end. Admitedly it has grown bigger as Greame intented at the first place. Perhaps you will let us know about your own thread though?

I want to tell you, also to others, one reason i enjoyed so much reading this material is the courtiosy and polite discussion of members. Many on FF are decent, true, but I feel this is a really outstending place. It may be because of the founder of this thread as he addressed everyone with high respect and interest.
Anyhow, everyone seems to get a touch of the manners and it is important so we can have a business like discussion.

So, Nomask, good luck to your own thread and hope to see you there.

Thx for shearing Vee
Do I see corrctly that you allow yourself to open trades because you already have a big paper profit?
By the way, I noted that you consider stopping posting your trades. From my perspective, please do not.
Someone mentioned earlier that one need to york out his own trading and that is true. However, looking at you in action make me wonder about things I would not figure on my own or only in long time. That is help, no other thing.

From my part, keep them coming.

Also, may I ask why do not enter longs?

Hello Nomask,

It is really sad to know, you left this thread. Hopefully you reconsider your decision and continue to share what you have learned from this thread.

Graeme is the Master and good teacher (there is no doubt in that) but during his absence, this thread needed someone or a group to carry on what Graeme stated. Fortunately this thread found You and few others for this job. You spent your valuable time to analyze price activities and shared the result with us. I am sure most of genuine learners in this thread appreciated your analysis. In my opinion, you became one the best students of Master Graeme.

Definitely I will wait for your own thread, BUT I prefer you STICK here and continue what Graeme started.

Thanks again for all your analysis.

Happy Trading all.

Thanks Vee, and also to Scalpz for your replies.

Alan

Good afternoon, all

Thank you for the continued interest and a very special thank you to the contributors.

It is amazing to read the evolution of thoughts and ideas. I was silently cheerleading behind the scene and my thoughts were with each one of our readers on a personal level.

Apologies for my delayed absence however, a gap of time was required to see just how far and quickly the evolving thoughts and ideas start to self-deprecate our initial intentions.

Perhaps this post will be just another similar reading and what one reader might consider a typical 'graeme' post. But I imploy you that this post is more than a confirmation or an re-iteration.

Im addressing this post to everyone, whether they choose to trade my way or another way, it doesnt matter, as the successful trading is derived from a sound approach. And this sound approach is universal and generic trait of any 'successful/professional' trader.

And this is why Im here. Im willing to show and guide anyone who is genuinely interested in 'an approach' that is generic to successful trading in any type of arena. Method dont make you the money but your logical and sound reasoning.

I truly believe that a successful trading approach is universal that can be applied to any 'instrument of investment' to reap profit vs time. Having said that I can also say, if it can be applied to any instrument of investment, then it can also be applied universally across all manners of personal interpretation whether it is technical or fundamental. If you can trade forex successfully you will manage to adapt and create profit in commodities, futures contract, real estate, shares, bonds, options, or anything that can be bartered with a difference in time vs price. There may be small negligible pre-requisite knowledge between the different fields however essentially you are trading; buying something cheap and anticipating to sell it later on for more.

Having said the above (which is very important), let me ask you, what specific method/system you currently have that can be universally applied to any field of investment?

You must stop looking for something that just works on forex because there is no such thing. Forex is just like any other market where passing time shows the difference in price or value.

Stepping little bit sideways, may I ask, 'What is important in life?' Victoria secret's model as girlfriend? Lavish penthouse? Staple of exotic cars? Perhaps a fledging business? All this is important however the most important things/elements in life is nothing more than the air we breathe, the love we receive from our parents, the love we give to our family and a healthy body and mind. This is the 'approach' of a successful life.

Im not here to show you how to get a ferrari or a penthouse as that is just a reward at the end of a successful trading career, but Im here to enlighten all readers that the ultimate goal in trading is something far more basic like the above necessities for a fulfilling life.

Now philosophy aside, let me get down to the specific things in trading that is considered to be an 'universal' necessity in 'successful' trading career.

1. Timing
2. Constant application in a constant frequency; consistency, perserverance
3. Belief in ones ability
4. Staying humble in your pursuit

If these 4 points are the necessities for a successful trading career, and they are the skeletal frame then let us add muscle and blood.

1. Timing - No one needs to be trading one particular pair everyday, every hour. There is absolute no need for it. Even if your an intraday trader you dont trade everyday. There is no golden opportunity everyday of the week! Even though I have preached all this time about being flexible in trading (and I still do), I find that few of the traders are all over the place and trading everything that moves. Perhaps if I suggest a very basic guideline by saying choose one of the following:

1. Trading with 200ema on weekly chart
2. Trading with 200ema on daily chart
3. Trading with 5/10 ema on weekly chart
4. Trading with 5/10 ema on daily chart
5. Trading buy if price closed above open price of previous down candle or trading sell if price closed below open price of previous up candle - on weekly/daily chart
6. Trading with breakouts consisting of at least 4 candles in daily or weekly; pennants, range

All this is nothing new and we have discussed each one of them in great detail but choose one. One. I take trades from the guidance of 'all the above' however I know how to control my participation just right and also know setups currently happening is either useful or useless at a glance. Choose one timing criteria and you will still be busy as there are many pairs in forex.

What I think this will do is that it will relieve much of the stress traders are currently experiencing. I notice that many traders are jumping all over the place, timeframes, criterias. I strongly suggest you choose one. This will save you alot of time and stress so you can spend more time outside trading.

2. Constant frequency - This flows on from the above. Choose one criteria, adhere and remain loyal to its guidance and only participate when your guidance tells you to do so. Send scouts and prod 'when' your guidance tells you to do so. If the scout or prod dies then stop and observe. Your second attempt should have a much stronger feeling and reasons for you to participate. Taking less trades for more profit is critical. No need to spend hours and large chunks of your capital in one sitting. You are over doing things and rushing to create profit. Try once, if it doesnt work get up leave. Life is so much more than trading.

3. Believe in yourself - Once you have chosen your criteria, marry it. Dont have an affair and get caught with your pants down. Even with just one criteria you will be busy with ample opportunities popping up here and there across the board. You must believe in your criteria, you must know your criteria and vouch for it with your life. You need to know even the smallest details like:

If you have chosen criteria number 1: Trading with 200ema on weekly chart. If this is your wife than you need to know every little thing about her. Do your homework and gather your statistics, like:

1. Since year xxxx, 200ema was breached xx times and bounced xx times
2. Average range in pips of a breach; how far does it travel before a head-shoulder pattern or 50% retrace from the breach or any criteria you choose for the underlined
3. The biggest move in the last xx years after breach or bounce
4. The shortest move in the last xx years after breach or bounce
5. The average pips from 3 and 4; so now you know the average
6. How many breaches in the last xx years?
7. How many bounces in the last xx years?

All these stats will give you a very detailed statistical analysis of your chosen wife. Once you have this detail you can map out your specific battleplan like; exiting strategy, entering strategy, holding strategy. And the above statistics wont change dramatically in a day, a week or a month or even a year since you are backtracking years worth. However it will still evolve but very slowly and can be easily adapt to its changes (if it happens). Some statistics hold true after few decades and the variance in the numbers will ultimately plateau out.

4. Staying humble in your pursuit - We all hate our day jobs. We have big dreams however the reality is different. Once you try to rush to your freedom you will never find it, ironically, you will find freedom when you dont pursue it. Profitable progress in trading should look negligible but it is this slight negligibility that grows into inevitability. Dont rush and dont aim for your ferrari..yet.

Here is something for everyone to think about:

Eurusd assignment we are currently on, which started on the week of christmas. What can you tell me about the current looks?

http://img718.imageshack.us/img718/7...01184148pm.jpg

Which criteria does the current eurusd monthly agree with?

The answer: More than 1. There is no clear indication as to what is going to happen. My verdict? Few short, small prods here and there but for now eurusd is definitely 'not' on my important list of trading pairs. Would everyone agree? We need perserverance as we need to continue watching and adapt to its changes.

Thank you all for the PMs and I will go through them in the next 1-2 days to answer them all. If you have any questions please send them to me now so I can finish them off in this batch.

Sincerely,

Graeme

Thank you again for all your support.

Welcome back, I live in Brisbane (just drying out at the moment if you know what I mean) and I know you reside in Sydney. Perhaps one day we will have opportunity to meet, Really looking forward to the book (any chances of an advanced copy (just joking)). I sincerely pray your health is improved. Thanks more than words can say for your generous contribution to this poor trader's education and expanding world view.

Alex

Thanks to everybody again..I read all the pms and good things said about me..
Just to clarify better in case I caused misunderstanding with my last post.
This little break will give me some time to freshen my mind and come back later with more stuff to put together beside what Graeme taught and I'll keep sharing.
Keep reading Graeme's posts and also I'd humbly advice that to check out Silent Service Method and James16 thread if you haven't so far.
You'll find almost everything about price action in those guys' thread and money/position management in this thread.Thats all you need
I've been thinking to put them together.
But I can't do that here because that wouldn't be nice to Graeme..
So I'll see you guys later..
Good luck all until then ...

Hello Graeme,

Thank you for stepping out at the right time. We hope your health condition improved or improving very well. We needed your presence badly. I like the way you started your last post “very special thank you to the contributors” which is appreciating and acknowledging the effort of genuine contributors (Veefx, Nomask and few others included).

Your last post also guiding us how to be an effective and profitable trader by just sticking with at least one hindsight we receive from higher time frame. Thanks again for your time, effort and other resources put into this thread.

Graeme

nice to see a post from you again and what a thought provoking one at that.


Which criteria does the current eurusd monthly agree with?


I agree with you that EURUSD is not number one on my list.
Monthly - November is the controlling BAR and If I were trading off the monthly I would need to see either the open or close taken out for me to show interest in this pair.
This bar is a 1000 pips, which I why I will probe on lower TF's.
The weekly charts shows a downward trend the last few weeks but support/resistance @ 1.3550 the 200 EMA and support on the daily chart blue stripe line.

Hello Graeme,

Thanks for sharing another doze of wisdom with us. Your philosophical perspectives are extremely enlightening to me personally as it relates to my own life growing up to be who I am at this juncture in life. They are priceless so please keep 'am coming.

Your post dragged me into a spin as to my overall interpretation of trend. How could I be so wrong in my conviction? Looking at your chart threw me off the wall when compared to my charts with citifxpro. For me, price is below the 200ema on both monthly and weekly! Simply because I do not have as many historical monthly and weekly candles as FXCM does!

Conclusion/Lesson Learnt: Make sure you have atleast 200 candles in your platform's history before relying on moving averages !

Regardless of the messup in 200ema, I have something to explore here. When I decided to trade this pair, I was purely focussed on the weekly 'area' where I started taking my trades (i.e. tip of wick on 2/6 weekly candle) due to the following conviction: price below 200ema, FB formed on 1/23 candle, long pinbar formed on 1/30 candle demonstrating strong weakness from buyers and January's monthly candle not closing above the opening price of November monthly candle.
So, hindsight on monthly and weekly was down when I started sending my scouts. a few died at first and then a few started to survive which prompted me to get aggressive with my stacking episode on M5 as and when price action got aligned with daily, H4, H1 timeframes.

QUESTION: If my 'profiting ground' is on Weekly timeframe AND if I still have 9 positions all set to BE and struggling to fight hard for me AND if I am still convinced of a downward 'triple tip of wick' formation on this week's candle if price continues to drop further after the current upward retrace, should I stick with the hindsight and start sending further probes if there is a FB (or any other PA agreement) being formed on Daily or H4 demonstrating buyer exhaustion ?

OR

Should I have moved on to other pairs on monday of this week since all the positions were set to BE and I had some decent realized gains captured as well?

Before I sent my first probe, I had a exit strategy in place which was... if the current week closes above the open of 2/6 candle, close half my positions and then move on to the next pair. Is this considered a 'pre-defined' action in your opinion? I think it might be and I need to be flexible and go with the market flow and change my opinion based on what Price Action warrants. But I fear, with that approach, I would be just 'chasing' the market against my hindsight/anticipation and that approach causes a lot of confusion in my thought process. I find it easier to 'commit' myself to the hindsight of my profit-taking ground as long as I have positions running in profit and some decent realized gains already banked.

Sorry for the long post. I find it hard to articulate my thought process at times :-(

I too had your short bias Vee, for similar reasons, and also got about 10 positions to stick, and then kept trying to add during last week with very limited success -- all this weeks additions were stopped out at BE or a few pips. And now only one of my original positions remained (at one point the legs were showing +3600pips.)

I have not recouped my losses for setting up these legs. That said, I was mainly focusing on entries for this exercise. I was going to wait till I had a close above the previous candle on the weekly to exit (diversify). So I've lost quite a few positions on BE (many at small loss) which were at one stage a very decent profit, which will happen particularly if trying to profit on the Weekly TF. My mistake was trying to keep adding (I tend to try and stack like there is no tomorrow...and apparently there is!) this resulted in too many small losses that all add up, and also probably not focusing enough on price action because those initial positions stuck.

Basically, I was trying to force things. I look forward to Graeme's answer to your questions.

For this little exercise though, I have experienced two things: a decent unrealized profit, and now a decent realized loss. Flip those around and I'll be getting somewhere...

Cheers
SJB

Hi SJB,

It's hard not to stack like there is no tomorrow when there is large unrealized profits. I look back at my trading style for past two years and my aggressiveness always go up exponentially when my (realized) account balance have some decent gains.... which often lead me into big trouble! I think it is ok to continue to stack but only if Price action agrees. I think Aimlessly stacking/participating by just looking at your net unrealized pips is letting greed take over your emotions. Try putting similar PA, S/R analysis in every entry.

All my positions also stopped out on Friday. I had over 300 pips of realized profits mid-week and used up those pips also (which now I think is probably not a good idea). I capped out at under +3000 pips about 28% of my account balance. I strongly feel stacking to be a very important element in any trend following system. It enables you to build a 'emergency fund' for future losses. Next stacking opportunity, I am thinking of taking 50% of unrealized profit off the table if my equity grows by more than 15-20%. I must admit though, it is an awesome feeling to see the profits 'explode' when price does move in my direction. The feeling is equally horrible when price goes away from you to see your BEs die one at a time. But this time it was not too hard for me compared to last time so I guess time does heal any wound. We are all evolving towards being better traders with these practice assignments.

Nice to hear from you again Graeme. I found your post very informative and I'll be reading it over many times.

Over the past few months I've been trying to trade with the higher TF in mind but I've found it quite difficult as the few positions that I did get to stick were taken out in a few days. Right now I am trying to hold on to the capital I have left in my account and only make entries that have a high probability of being moved to BE and hopefully surviving the long run.

I was trading EU for a while but it happened to go against my bias of down and after taking a look at the higher time frames I also realized that this was not a good pair to trade for now.

Do you have any suggestions as to which pairs are good to trade at the moment.

IMHO GBP/CHF seems to be resuming it's long term downtrend. I can't put up any charts right now but I will later.

Once again, I appreciate all you have done and are doing for everyone following this thread. I hope you are in good health.

A

Graeme, I do believe you know the "secret". But you know you can't reveal it because you would hounded. So you must keep it "veiled" in moving averages. Good work.

A quick note for those who wrongfully thought I was doing martingale during my last stacking episode with no SLs set... here's my brief explanation (not suitable for newbies though as it does require a lot of discipline and focus)

For reference, I will use this post from Graeme:
http://www.forexfactory.com/showpost...&postcount=911

Price usually stalls a lot on M5 timeframe even during a established strong trend on H1/H4. It is quite visible to the naked eye at frequent intervals forming a typical flag formation upon retrace causing mini SR levels. This could be exploited during aggressive stacking in a rinse & repeat fashion as follows:

- probe successful generating some unrealized profit
- start stacking conservatively first to build positive pips
- once you have a few hundreds floating, only then stack aggressively (all entries need to confirm to your personal price action setups either on M5 o higher TFs... no more than a few careless or random entries!)
- now you notice price approaching a good support level. Take some profit off the table. Let say we booked 25 pips in realized profit
- upon price retracing off support level, resume stacking with no SL and a mental SL of 25 pips + your typical/average SL pips (let's say it's 15 pips.. so mental SL of 40 pips.
- if price retraces more than 40 pips, close this trade
- if price continues in your direction, continue stacking on M5
- rinse and repeat above actions as long as trend continues in your direction and continue to book some pips in your "pip bank" for future stacks.
- On your battle zone timeframe, price approaches a strong SR. Close out 50% of your floating pips and add capital of your balance.
- You could use this 50% of realized pips as your 'pip bank' for future stacking with no SL on M5 if price continues in your intended direction.

Bottom line - there are many way to skin a lamb and one should only believe in themselves and not follow anyone when it comes to a trading style as there is human physiological hurdles involved.

EDIT: I will delete this post in a while as this is too personal of a style of trading to confuse our readers. Just wanted to share as I had committed myself to respond earlier.
EDIT2: Sorry... forgot to mention, if a trade is more than 30-40 pips in profit, I move SL to BE to reduce exposure. I should also limit my stacked trades with no SL set to no more than 3 or 4.
EDIT3: It is also worth mentioning that stacking on M5 in itself is over-exposure. I would avoid doing that when I reach the level of trading multiple pairs. I am just not there yet mentally nor I am with trading in both directions.
EDIT4: and I use a xls with realtime quotes to keep track of my floating and realized pnl along with a close eye on 'average BE' for all open trades
EDIT5: and for those practicing on M5 TF, this post is golden... http://www.forexfactory.com/showpost...&postcount=582

Graeme, Thanks for your excellent teaching. It's a wonderful thread.
Kan

Good evening, all

Thank you for the continued interest.

Unfortunately Im still going through the private messages and I will reply to all of them.

I still have fair number of PMs to answer so I apologize for the delay. Please send me your questions if you have any as I plan to finalize them by tomorrow at the latest.

I also plan to come back and answer each post in this thread after my latest post few days ago.

The day has taken its toll for myself and I will go rest for now so I apologize to few traders who are currently online and awaiting my pms.

Sincerely,

Graeme