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Building an equity millipede

  • #4,961
  • Oct 10, 2011 5:52pm Oct 10, 2011 5:52pm
Quoting spyderman
I stumbled upon this thread this weekend and I've gotta say it's quite intriguing.

I haven't been able to read the whole thread of course but I've read through the PDF of Graeme's posts so hope I have the gist.

It is a little hard to wrap one's mind around but let me give what I understand to be the skeleton and I'd appreciate help where I'm missing the point.

Okay,

Let's take a hypothetical pair. We take a look at the weekly or maybe better monthly to discern the trend. We go down to the daily and maybe 4H and using our chosen entry method...
Welcome and continue reading Graeme's post and digest his words. Pretty much everything he says can be interpreted or perceive differently. Just like the market.

Same for me, I stumbled one day and started reading, It took me a lot of time trying the figure things out and I still not certain I am implementing all the I perceived correctly, but your result will show and your mental stress
will ease

I no ware near a pro trader, I don't think the pros have time to come here, but I just participate because it's just the right thing to do.

There's truly a free gold mine in this thread.
  • #4,962
  • Oct 10, 2011 6:01pm Oct 10, 2011 6:01pm
I'm looking at the recent daily movement with the pair below.
Sellers are willing to take the price lower. Now I am looking for a entry during the Asian open.

1. I can enter and prepare for the drawn down or
2. wait for the retracement to complete, wait for the low risk entry.

My option is 2

I have two shots per day lets see if the market will take us further in the coming days.
Normally price retrace, less than 50% means sellers are some what optimistic.
but I am not totally fixated on that.

I just want to do my job ..low risk entry BE and I am done.
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  • #4,963
  • Oct 10, 2011 10:18pm Oct 10, 2011 10:18pm
Hiya Chips I appreciate the stimulating discussion and sharing from your posts.

Quoting chips
....If you loose then it will be a small drop in the bucket, because on days like today you would have made up for it and much more in the days weeks to come....
This is a fair point IF you are taking a profit on days like today. If not though, then those small drops in a bucket do add up and can easily pull a method into a negative expectancy. I just wanted to highlight that because your comment doesn't address that.

Quoting chips
I say something. Why risk 1% or 2% of your account for the gain of 200 pips. when you can risk a tiny portion for the 1000 pips gain.
There are many reasons why and it will depend on the traders situation. If trading is your sole means of income, then you need a means for generating income. The 1000+ pip moves happen a handful of times a year or less. The smaller the move one looks for, the more frequently they can ring the cash register so to speak. Expectancy AND frequency matter far more than catching a big 1000+ pip move on a single trade. For some people based on their beliefs, lifestyle etc....catching 1000+ pip moves gives them the best expectancy, but this is NOT true for everyone, in fact I'd say its not true for the majority of profitable traders.

All my best,
MK
  • #4,964
  • Edited 11:34pm Oct 10, 2011 10:47pm | Edited 11:34pm
Quoting MidKnight
There are many reasons why and it will depend on the traders situation. If trading is your sole means of income, then you need a means for generating income. The 1000+ pip moves happen a handful of times a year or less. The smaller the move one looks for, the more frequently they can ring the cash register so to speak. Expectancy AND frequency matter far more than catching a big 1000+ pip move on a single trade. For some people based on their beliefs, lifestyle etc....catching 1000+ pip moves gives them the best expectancy, but this is NOT...
Good point MK. I have been thinking a lot about this lately as I progress myself into working on fine-tuning my RM/MM/Trading/BusinessPlan. Fortunately, I am not a fulltime trader yet so one way to deal with this is to gradually transition into being fulltime by using this year's earnings to feed yourself (and kids!) for next year. This phased transition approach is also going to help me prepare if I am able to generate income at my current levels in order to maintain the same level of life style and the amount of trading capital required based on your performance and consistency.

One could also do this on a quarterly basis as well with their legs/diversification just like to mutual find managers. This aspect is actually VERY VERY appealing to my mindset as it eliminates making trades under pressure just to bring food on the table every month! I would rather know how much I made at year-end after taxes that I can budget for next year compared to living paycheck to paycheck to paycheck paid from your trading account every month.
Staying in my lane...
  • #4,965
  • Oct 10, 2011 10:57pm Oct 10, 2011 10:57pm
Quoting MidKnight
There are many reasons why and it will depend on the traders situation. If trading is your sole means of income, then you need a means for generating income. The 1000+ pip moves happen a handful of times a year or less. The smaller the move one looks for, the more frequently they can ring the cash register so to speak. Expectancy AND frequency matter far more than catching a big 1000+ pip move on a single trade. For some people based on their beliefs, lifestyle etc....catching 1000+ pip moves gives them the best expectancy, but this is NOT...
Totally agree, if trading is your sole source income. You would want to generate reward at day end or week.

With this methodology, low risk moving with the market flow. I find that once you have positions moving with the market waves, you will find that one can take profit as required, thus rebuilding your account.

This method is not for everyone, trading is not for everyone.
I had to work on the foundation of my trading and it is the psychological component. I'm STILL WORKING ON IT. Sometimes I think I need a therapist.

But participating here sure helps.

More risk does not mean more profit.
  • #4,966
  • Oct 11, 2011 12:00am Oct 11, 2011 12:00am
Quoting chips
Thanks Farmerellis for chiming in. We can only grow stronger and more assertive if we know others are seeing success with the millipede.

I like days that move sharply in one direction and close in the other after an extreme price movement. Price perception changes when this happens, and I'm looking for a movement in opposite direction. All I can do at this point is how to participate at a low-cost.

I entered late, low cost with the flow, next day the market move to the next level and reward my actions. If the market turned I would have lost a...
I am also trading this long. Have 2 positions at the moment. In your chart the price has moved 400 pips and you have only one position. Is this the way you normally stack positions?
  • #4,967
  • Oct 12, 2011 4:19pm Oct 12, 2011 4:19pm
Quoting Eklavya
I am also trading this long. Have 2 positions at the moment. In your chart the price has moved 400 pips and you have only one position. Is this the way you normally stack positions?

Stacking or adding new positions should be based on ones own perception and availabilty. Some ppl will have more than 2 but with this methodology you can choose when to add or take profit from positions.

The main thing is to give the positions room to breathe or die before attempting again.

Not because you have 2 or 3 shots means you have to use them.
  • #4,968
  • Oct 12, 2011 4:56pm Oct 12, 2011 4:56pm
Graeme,

I just stumbled upon your thread this week and wanted to drop you a personal thank-you. I'm really enthralled with this topic and can't wait to keep reading (I'm only up to page 31 off 330) Yikes!

I have a question that I haven't seen broached, hope it's not in what I haven't read yet.

What would happen if you had some long standing legs set up, maybe 4 or 5 short and a couple long...perhaps thousands of pips. Now for whatever reason you find it necessary to trade brokers.

Couldn't you close out all orders then at the new broker enter a buys and sell for the same number of lots using the original "pips in profit" for your s/l's. Would that put you on an even keel going forward or am I missing something?

Anyone's thoughts appreciated
  • #4,969
  • Oct 13, 2011 2:34am Oct 13, 2011 2:34am
Quoting spyderman
Graeme,

I just stumbled upon your thread this week and wanted to drop you a personal thank-you. I'm really enthralled with this topic and can't wait to keep reading (I'm only up to page 31 off 330) Yikes!

I have a question that I haven't seen broached, hope it's not in what I haven't read yet.

What would happen if you had some long standing legs set up, maybe 4 or 5 short and a couple long...perhaps thousands of pips. Now for whatever reason you find it necessary to trade brokers.

Couldn't you close out all orders then at the...
Seems like a sensible approach although it might affect your mindset as you will start accumulating bigger floating 'fake' loss in your new account as price approaches towards BE levels. It will also skew your trading stats unless you make special considerations in your analysis.

Personally, I could never ever think of letting such a large unrealized profit float with a 'retail' broker. It is important to pick the big ones or atleast the ones who offer their services to institutional clients or prime brokerage. Once your account grows, you should be able to upgrade your relationship/account status with the same broker and not have any impact to our open positions.
Staying in my lane...
  • #4,970
  • Oct 13, 2011 7:44am Oct 13, 2011 7:44am
Quoting VEEFX

Personally, I could never ever think of letting such a large unrealized profit float with a 'retail' broker.

That was part of my thinking as well. That if you had several large, longtime legs you could spread the pairs to different brokers.

Nice problem to have...
  • #4,971
  • Oct 14, 2011 4:09am Oct 14, 2011 4:09am
Emotional part in trading is very important I believe or at least in the beginning of a trading career.

I've been trading according to this method on my live account from last few weeks. I've done a lot of manual back testing and believe me every time on every financial instrument, be it gold, oil, currencies or even stocks, it has proved to be successful if I held the survived positions for long time to grow.

However, knowing all that, when I trade in the live account, SLs and positions dying on BE can be quite frustrating. I know it takes time to develop the legs but I guess it comes with experience. and One must BELIEVE in it to achieve it.

Good luck to all fellow traders.

P.S I am able to put almost 6-7 positions to BE out of 10 and that tempts me to close the position with fixed TP.
  • #4,972
  • Oct 14, 2011 11:53am Oct 14, 2011 11:53am
Hi everyone, 1 month ago. I decided to commit myself to build my milipede by using the most emotionless system which is buying/selling at every .00 taught by Graeme. I however do not take half profit at first 100 pips, i just let it run.
Everyday i would place 5 sell orders and 5 buy orders at .00 pts above and below the price. In the beginning my stop lost was 50pips, i changed to 100pips later on. I try my best to adjust stop lost to BE when the next buy/sell order is triggered.

Since im using Oanda, i have to create 2 sub demo accounts. 1 for selling, 1 for buying. (they do not allow buying and selling positions open at the same time in 1 account) I placed SG$2500 in each account as this is the realistic amount i will put in myself. And i decided to just use 2000 units(something like micro account?) for each position so that i can have many multiple positions without having to worry about margin.

Just to share with you guys my results after 1 month
I have SL a total of -850 pips (some are 50SL in the beginning, closed 2 positions to take some profit)
with a outstanding position of about +1300 pips
If i will to close all position now = 1300- 850= +450 pips
Not bad for 1 month?

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Im a very immature trader but i begin to understand what it means to build millipedes. Even though this system has alot of drawback but it keeps my emotion in control. I also understand that my outstanding +1300 pips might just be stopped at BE. Just try to protect my capital as much as possible until the trend comes? Tell me what you guys think.
  • #4,973
  • Edited 7:34pm Oct 14, 2011 7:23pm | Edited 7:34pm
I do like your method of buying and selling, but as Graeme said, the trend will always grow your positions.

Now lets all get together and figure out all the possibilities of making low risk entries

I have a few positions on the charts below. I simple buy when price is up. ie
If this week is up then I buy if today is UP also. With low risk entry and I allow momentum to move the positions to BE. I lost a couple but I'm looking at the weekly trend. I attempt 2 times per day( only if the first dies).

I have 4 positions currently in line with the weekly, I have already made back those lost pips with just 1 position. the other positions are profit. I can diversify now for realize profit, or let the market decide, I'll watch Price for the coming weeks, but since price is UP during the current month, this could be a long-term move.
I am also expecting a retracement, so my last entry may die at BE.

Take a look at the weekly chart.
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  • #4,974
  • Oct 18, 2011 12:47pm Oct 18, 2011 12:47pm
Hi All,
I have just found this thread, what a revelation .... so thoughtful with logical explanation. Has the book Graeme spoke of been published yet? In the meantime I shall read and digest his posts to this forum.
Graeme, should you view this site soon, I wish you good health and happiness.
Kindest regards
Alan
  • #4,975
  • Oct 21, 2011 8:49am Oct 21, 2011 8:49am
hi,

just wondering if there was any word from Graeme about his trading book??

Thanks all,

A
  • #4,976
  • Oct 26, 2011 11:07am Oct 26, 2011 11:07am
hi,
i just found this thread and came across the 3x20 exercise in page 12. regarding this exercise, after entering the market with a 20pips stop loss and take profit, do we have to keep watching the price move till it hits the 20pips target? or do we set and forget till it hits the target?
  • #4,977
  • Oct 26, 2011 11:36am Oct 26, 2011 11:36am
Quoting happypi
hi,
i just found this thread and came across the 3x20 exercise in page 12. regarding this exercise, after entering the market with a 20pips stop loss and take profit, do we have to keep watching the price move till it hits the 20pips target? or do we set and forget till it hits the target?
IMO, watching PA upon entry would help you gauge compelling momentum and get out with a smaller SL. It also prepares your mindset to move SL to BE. Only one open position is allowed as it will force you to be patient, minimize risk/exposure and wait for good setups/price levels. Use Alerts and don't stare at the screen all day as it will monotonously wear you out very soon after a few weeks.
Staying in my lane...
  • #4,978
  • Nov 2, 2011 9:26am Nov 2, 2011 9:26am
while we are waiting on the book, has anyone extracted all Graeme's messages in this thread into a pdf ? I know there were some old pdfs in here, buyt I am looking for an updated one.
  • #4,979
  • Nov 3, 2011 2:30pm Nov 3, 2011 2:30pm
Hey guys, anyone still building up their millipedes? I started at the end of last week and so far I've established 2 EURUSD short positions from 1.4113. I sure wish I would have aggressively stacked more at the beginning of the week, but there is plenty of time for that. As of right now, both stops are at B/E and I'm well into profit. It's great to know that there is essentially no risk on these positions anymore, yet I'm looking at a potential profit into the thousands. Thanks again Graeme, for engraining this trading mentality into my head through this outstanding thread.

Come on guys, lets get this thread kickstarted again!!!
  • #4,980
  • Nov 3, 2011 10:59pm Nov 3, 2011 10:59pm
Quoting scottymoll
Hey guys, anyone still building up their millipedes? I started at the end of last week and so far I've established 2 EURUSD short positions from 1.4113. I sure wish I would have aggressively stacked more at the beginning of the week, but there is plenty of time for that. As of right now, both stops are at B/E and I'm well into profit. It's great to know that there is essentially no risk on these positions anymore, yet I'm looking at a potential profit into the thousands. Thanks again Graeme, for engraining this trading mentality into my head through...
Here are my two millipedes (zero risk and all losses covered)
I did not stack aggressively due to current turmoil in euro zone.
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Staying in my lane...
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