Building an equity millipede | Page 218 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Thegman's Journal (Equity Millipede Concept) 102 replies

Trading an Equity Millipede 23 replies

Equity millipede & Flying Buddha trading journal 9 replies

Build an Equity Millipede with the filtered Flying Buddha 171 replies

Application Development - Journal of Building an equity millipede 14 replies

Attachments: Building an equity millipede
Exit Attachments

Building an equity millipede

  • #4,341
  • Mar 4, 2011 1:14am Mar 4, 2011 1:14am
Quoting dazzdude
Thank you. I value all positive thoughts, ideas and feedback. The best learnings usefully come from an angle that challenges existing thought patterns.

COT data in FX is not as reliable as is in commodity futures (wheat, gold, cattle, etc). I agree with you. You can find just as many instances for when it works as when it does not in FX. I agree with you. Is it totally useless?

I pointed out two instances where COT data may be used to advantatage, and those do not occur very often, in fact rarely do they occur. It just happens...
Thks for your insights. Can I ask are you taking these trades exclusively on COT data?

Reason i ask is even with the above conditions it appears to work half the time (or maybe its just me) .... for instance take GU it probablly fullfils criteria for condition number 1. Its been heavily short by the commercials three year highest commercial short positions but continued to rally almost 250 pips already in the last 2-3 weeks and last weeks COT data indicates the commercials are now reducing their shorts.

So I'd like to ask are you taking trades solely based on interpreting the COT report or is it a combination of other forms of analysis as well.
  • #4,342
  • Edited 10:04am Mar 4, 2011 1:53am | Edited 10:04am
Quoting fugly
Short answer: It's a 'bias' only.
Long answer. I will reply, though busy on non-fx projects at the moment. I'd like to reply with a post that is clear on my thoughts, instead of rushing a reply.
Hi Fugly.

Just a quick story. Today, I was talking with a work mate, a really smart guy. He was telling me he went to horse races recently with the misses. Before going, he done some 'analysis' on the horses (wins rates, on wet track / dry track, on long track / short track, etc) - he had it 'all worked out'. His misses on the other hand randomly picked out horses based on how 'cute' their name was and the colour of the jockey. He just shook his head... 'silly girl'. Well, he blew all his cash, and she walked away with a few hundred dollars. On the same token, my wife sometimes looks at my charts and says 'buy now' . Thing is, she hasn't got a clue about trading, let alone what support and resistance is. I shake my head... 'silly girl'. I can see nothing to suggest a buy! in fact, it looks like a good time to sell! Thing is, I check the charts in couple of hours and wish I had bought!

I know this does not answer your question, and I am rambling, but it's going to be related. I have spent thousands of hours staring at charts. I used to look at the charts and think, wow look at that, missed that move! Dam! After a while, guess what happened? I would crank open the charts, and right before my eyes see a trade I had just missed it. Dam! The more I noticed this, the more it happened... until I changed my mind about what I was going to see.

Now to your question. You have spurred me to study the pound, going back to to 1990, using a three year look back, and only looking at extremes in cot (only looked at commercials). And guess what, I am not seeing the statistical edge I was expecting. Now why the story? I learnt/studied/applied cot in futures and it certainly gives an edge no matter how you slice and dice it. When I moved (back to) FX, I had a look and it looked good. I have used it successfully since (with short term entries only) OR was I just picking horses based on the colour of the jockey because I 'expected' it to work? (e.g. I have take two trades off the pound (one overnight), both short, both successful). You've got me thinking. I wish I had a better answer.

I have also looked at a 3 month look back, and I am more happy with this. Again, the fact remains, price must be in an uptrend for long (opposite for short). Also, cot is a set up, not an entry. I expect to see a pullback and break-out, or congestion and breakout, after the setup, else it's not valid.

I would also hone in on milking small shorter term moves, in the direction off the current trend for the time frame I am trading. Now what I have not told you is that I do look at other things to make a decision. One is a special form of accumulation and distribution (A/D) of I/O developed recently (maybe two years ago) by Larry Williams (the orange line). I want this to support the cot data. I did not mention this (and some other points) as this is not something you can get through MT4, etc.

But now you have asked, I am. So, below is a chart of the pound, weekly. I have marked out commercial buy setups (blue vertical line). However, the signal is only valid if in an uptrend (price above purple line - u could use anything you like) and only if followed by a pullback and break-out or congestion and breakout (or 1-2-3 break, whatever u want), and only if support by O/I A/D (I'll stop there).

Note: This is typically what I would do, but I have been successfully shorting some tops on AUD for 20 to 80 pips as an example, based on cot and other thoughts I have - but lets leave that aside for now and stick with the basics.

Then, and only then, I am looking for entries on smaller intraday time frames, in that direction. Below I show long market setups (NOT TRADES) on the pound. I have not done shorts setups, or other pairs, out of time, but believe the analysis would hold.

1. Works
2. Works
3. Not supported by O/I A/D (not valid)
3. Works (sorry, should be 4)
4. Works (it's still a month of up movement)
5. Works
6. Not supported by O/I A/D (not valid)
7. No pullback and break-out or congestion and breakout
8. Works

6/6

I hope this is an acceptable answer to your question. It's certainly been good for me to question my thought patterns.

Now, I really should not be deviating from the thread, and I am, for which I apologise. This thread is about holding for weeks, months and years (not hours days like I do). Note that 95% of all my trading to date in FX has been scalping on lower time frames, sometimes holding for minutes. This thread has helped me to move to holding for a few hours and occasionally, overnight. However, I would like to be able to hold on longer, like Graeme, if I can build up to that (I am getting better with time). That's why I followed this thread.

The point is, each of these cot set-up conditions, would have assisted one in looking for entries with the goal of holding on and trying to build a millipede leg, with the odds stacked in your favour.

The danger with this post, and others, is this is not what Graeme teaches. He teaches the benefit of poking and proding in both directions, long and short, and with much success.

So, that's it for me for a while as although this is all interesting, its a deviation from Graeme's core teachings and one thing amazing about this thread is the lack of deviation.

So, my best wishes all, and for now, over and out.

[edit] If It looks like I missed a couple of vertical blue lines, it's because the week closed below the purple line, so weekly trend is down and signal not valid.
Attached Image (click to enlarge)
Click to Enlarge Name: long.JPG Size: 193 KB
  • #4,343
  • Mar 10, 2011 2:01pm Mar 10, 2011 2:01pm
Quoting dazzdude
Hi Fugly.

[size=3][font=Calibri]Just a quick story. Today, I was talking with a work mate, a really smart guy. He was telling me he went to horse races recently with the misses. Before going, he done some 'analysis' on the horses (wins rates, on wet track / dry track, on long track / short track, etc) - he had it 'all worked out'. His misses on the other hand randomly picked out horses based on how 'cute' their name was and the colour of the jockey. He just shook his head... 'silly girl'. Well, he blew all...
thx for the reply, all of what you say is exactly what Larry Williams teaches in his "picture perfect trading course" about going long when commercials are at extreme longs in uptrends and vice versa for downtrends. The problem encountered with this was defining uptrends and downtrends ..... i see ur using the willtrend for this purpose.

I shall surely take a closer look at this ...... thx

I'd just like to ask was it tradenavigator u used to generate the above chart? also which plugins and data service did u purchase to display the COT data and willtrend and willvaluation index/
  • #4,344
  • Mar 13, 2011 11:34pm Mar 13, 2011 11:34pm
Hi Cam / Vee,

Thanks for your kind words and your advice about copying Graeme's posts!!!!

Happy Trading,

Chorlton
  • #4,345
  • Mar 18, 2011 4:59am Mar 18, 2011 4:59am
Quoting fugly
thx for the reply, all of what you say is exactly what Larry Williams teaches in his "picture perfect trading course" about going long when commercials are at extreme longs in uptrends and vice versa for downtrends. The problem encountered with this was defining uptrends and downtrends ..... i see ur using the willtrend for this purpose.

I shall surely take a closer look at this ...... thx

I'd just like to ask was it tradenavigator u used to generate the above chart? also which plugins and data service did u purchase to display the...
I thought it was : going long when commercials are at extreme longs in DOWNTRENDS, as the commercials are counter the trend except at the extremes, since nobody is left to push the trend any further.
Patience is magic
  • #4,346
  • Mar 22, 2011 7:57am Mar 22, 2011 7:57am
Quoting fugly
I'd just like to ask was it tradenavigator u used to generate the above chart? also which plugins and data service did u purchase to display the COT data and willtrend and willvaluation index/
Yes, Trade Navigator. COT is $20/mth additional to the data service. I think willtrend and willval comes with the software. Willval is not reliable enough in FX (better in commodities, against gold).
  • #4,347
  • Mar 23, 2011 7:11am Mar 23, 2011 7:11am
Quoting dazzdude
Yes, Trade Navigator. COT is $20/mth additional to the data service. I think willtrend and willval comes with the software. Willval is not reliable enough in FX (better in commodities, against gold).
please stop promoting your crap.

thank you.
  • #4,348
  • Mar 23, 2011 7:24am Mar 23, 2011 7:24am
Guys,

I have to tell you this! I had used Trade Navigator long time. My honest opinion is most crappiest system I ever used. Price goes one way, indicator plots somewhere else..... Think twice before act!

Good Trading!
  • #4,349
  • Mar 23, 2011 8:50am Mar 23, 2011 8:50am
Quoting piccolo
please stop promoting your crap.

thank you.
  • #4,350
  • Mar 23, 2011 3:42pm Mar 23, 2011 3:42pm
Firstly, thank you Graeme for educating all of us. I've been silently following this thread for awhile now. I hope you read this from time to time. I am confident that this thread will be life-changing for many us. You inspire us not only to trade well, but to be the best person we can be in all areas of life. I hope that you are well wherever you may be.

I have a question about hedging for US traders:

If you've been using two accounts to build positions and countertrade, how has it been working out for you? Do you have any suggestions/advice after some experience with this method? It would be interesting to hear some feedback on how US traders that have been trading this method for awhile are handling the restrictions.

Thank you,

Jason
  • #4,351
  • Mar 24, 2011 2:03am Mar 24, 2011 2:03am
Quoting piccolo
please stop promoting your crap.

thank you.
WTF? I was asked a question?
  • #4,352
  • Mar 24, 2011 2:51pm Mar 24, 2011 2:51pm
Why mess up a beautiful tread with COT stuff that has nothing to do with Graeme's method. Even Larry Williams had to admit that the COT stuff was marginal at best but used because of lack of better info at the time. Larry made his fortune using breakouts and his %R (if COT worked to reinforce his trade all the better). If you want to promote COT open its on thread for COT but don't contaminate this one. Readers are going to come to this thread and read the lead in and then read the last few pages. These pages need to be about building an equity millipede. You would be hard pressed to build a one legged bug using COT for forex.
Graeme has given us a gem here. It is complete AS IS.

gmcc
  • #4,353
  • Mar 25, 2011 12:36am Mar 25, 2011 12:36am
Quoting jasonc1213
Firstly, thank you Graeme for educating all of us. I've been silently following this thread for awhile now. I hope you read this from time to time. I am confident that this thread will be life-changing for many us. You inspire us not only to trade well, but to be the best person we can be in all areas of life. I hope that you are well wherever you may be.

I have a question about hedging for US traders:

If you've been using two accounts to build positions and countertrade, how has it been working out for you? Do you have any suggestions/advice...
Hi Jason,

I have Oanda account. I have created two sub accounts for long and short and split the capital between the two. Its pretty good.

Only on occasions where the price is continuing on one direction, you wish you had more capital on one side, to add more positions.

Again, if you are opening small positions with small SL, relative to the capital, you should be OK

Regards,
TradeStar
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #4,354
  • Mar 25, 2011 4:27am Mar 25, 2011 4:27am
Quoting gmcc
Why mess up a beautiful tread with COT stuff that has nothing to do with Graeme's method....
The cot can be useful even-dare I say especially- with Graeme's method which is essentially trend following. The cot shows when a trend has ended. Okay, maybe not as clearly in otc forex but there are also futures and commodities traders here.
Patience is magic
  • #4,355
  • Mar 25, 2011 8:26am Mar 25, 2011 8:26am
This is my first post in this forum cause my write in english is very basic: However, I can read and understand it perfectly.
I think this thread is the best I read ever. A trader no need anything more to be profitable in this business.
A lot of thanks Graeme. You are an inspiration for me and a good person.
Excuse my english please.
From Spain.
That which you give to others, life will return it in spades
  • #4,356
  • Mar 29, 2011 3:20am Mar 29, 2011 3:20am
Just dropped by to say hi to all traders and especially to Graeme for his wonderful insight..
  • #4,357
  • Mar 29, 2011 11:05pm Mar 29, 2011 11:05pm
Did anyone buy the panic selling a couple of weeks ago in the xxx/JPY crosses? My lowest positions:

AUDJPY + 850 pips
CADJPY + 625 pips
EURJPY + 800 pips
GBPJPY + 750 pips
NZDJPY + 650 pips
USDJPY + 450 pips

I added a few positions to each after those initial positions ... but after central banks intervened and the huge spike, I added quite a bit more on the pullback days after.

Huge gains ... so I recently diversified and liquidated quite a bit recently, but still have the lowest positions open with SL at b/e.

Equity Millipedes do work!!! :-)

EZ
  • #4,358
  • Edited 2:44am Mar 30, 2011 2:29am | Edited 2:44am
Long time since i wrote in this thread.
And wow this thread grows fast ive been semi away from trading a few months but I still come here to catch up!
This thread is the best thing ever. Ive gone from consistently bleeding equity as a trader to consistently bleeding equity AND BOOOM! equity explosion
This way of trading is very challenging but the rush when that small bubbling geyser just takes off is very addictive!

My entries are still subpar but I do participate trying to steadily probe.
Ive noticed when i have a probe in a currency pair its easier for me to really see whats going on as the charts move relative to something i dont know hard to explain but having a probe in gives me better understanding someway!

The key ive found out so far is to atleast get in a few stacks im lucky if i get 2-4 in and i am far from beeing able to stack as aggresively as others here. BUT just getting in one or two more positions offsets my losses fast!
1 pip in my direction might offset 3-4 pips losses.
I Havent diversified very often as i have set my head to not even touch the positions after moving to BE and let them live for minimum 2 weeks.
Wich undeniably has led to several 300 400 500 pip+ going back to BE and that is a hard blow. But i try to see it as im constantly getting closer to that really BIG one!

Good luck in your trading and i hope you all get to see the addicting equityplosion!

And Graeme I really hope you do write a book your writing is very good and makes me ponder other things in life not related to trading. There is a lot if wisdom in your words!

English is not my main language so I apologize if I dont make sense
The universe seems neither benign nor hostile, merely indifferent.
  • #4,359
  • Apr 5, 2011 9:36pm Apr 5, 2011 9:36pm
I wish I had found this thread sooner. This is just.. amazing stuff.
  • #4,360
  • Apr 6, 2011 12:55am Apr 6, 2011 12:55am
Quoting ezcurrency
Did anyone buy the panic selling a couple of weeks ago in the xxx/JPY crosses?...
Yea I got some probes in didnt stack in the begginning but have more now and last week and i hope you still have your positions because wow XXXJPY all went North with a boom
The universe seems neither benign nor hostile, merely indifferent.
3 traders viewing now