Building an equity millipede | Page 251 | 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

  • #5,001
  • Edited 4:13pm Nov 7, 2011 3:18pm | Edited 4:13pm
Quoting Eklavya
Thanks for the feedback Vee. Here is what the 5 min chart looked like when I was trading. We were just coming from a 4 Hr Pin Bar right from resistance. We just had a 1 hr engulf bar. There was strong momentum south. It is unfortunate that we ended up making a higher low and that was the end of my stacking for the day. The price did however break the flag on the 4 hr after I went to bed but it bounced back up again which made me attempt once more that went +35 pips before BE.

My hindsight for the first 4 trades was 1hr and for the 5th was 4 hr....
"What entry method did you use" - it was a red aura moment when all TFs were perfectly lined up. It was purely a momentum play with H4/H1/M15 and M5 all flying high.

"What is your goal from those entries?" - Look at the monthly chart... it is obvious I am trying to get on the uptrend that began a few months with a reversal pinbar. Last breakout from 200EMA reaped 10,000 pips, the next bounce from 200EMA in the future is about 6000 pips away.

"When you say locked in you mean Floating profit with all at BE right?" - I meant to trap the price as I have bidirectional interests in mind. If this is just a fake reversal and downward trend continues, then I would have some sells at the top of daily wicks. Just checked and my sell positions are taken out. So, I am still long at this point. This week, I was trying to implement "traping the price when price makes a new high/low". It will touch/bounce the high of last month which is where I plan to send another short probe. One or two more attempts for me this week before I move to the next pair :-

EDIT: Price broke upwards of October high.. will be placing a short soon.
Staying in my lane...
  • #5,002
  • Edited 6:59pm Nov 7, 2011 6:28pm | Edited 6:59pm
Graeme showed a lot of us a new way to see the market. Remember that the market is is an adapting entity - or else it will not survive. The next few years you will not be able to keep a position, restrict your millipedes to maybe 500/400 pips (depending on the cost of getting a position). Capitalism is starting to fail (adding value to the rich while stealing from the poor), forex and other markets are now beeing milked (the "smart money"), before the monetary system as we know it, fails. There is still money to be made, but it is all off balance, it has to correct. Though times ahead....
  • #5,003
  • Nov 7, 2011 10:35pm Nov 7, 2011 10:35pm
Quoting farmerellis
I see a wedge forming on EUR/USD at the moment--a potentially big move coming up. My temptation is to participate prior to the breakout with the weekly hindsight in mind. However, I think Graeme would probably wait for the breakout (confirmation) and then piggyback on other traders. What do you guys think? How best to participate and stack in the direction of the breakout?
No one can answer this question for you Farm. I am assuming you have gone through this thread. There are multiple ways to do it, each with its own pros and cons. You need to decide which one you want to employ. If you want to, you may outline the various methods you are considering and their pros and cons and people may expand on the pros/cons that might help you make a decision.
  • #5,004
  • Nov 9, 2011 7:44am Nov 9, 2011 7:44am
Quoting Eklavya
Here is my first update. 5 Attempts. 2 BE. Total loss 20 pips.
Hindsight still in place. Would look for shorts at 3850 area.
I finally got in short at the top of the range. In the last two days I did make a few more short attempts anticipating a breakout but took small losses.

I have a question. In the current explosive move down, How would Graeme have stacked positions in a low risk way on the 1Hr/4hr charts? He could have entered on candle close but that would have been a high risk entry given the candle sizes.

I could have stacked on the 5 min but I was sleeping when the market was exploding down.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD Update 4.jpg Size: 105 KB
  • #5,005
  • Nov 11, 2011 12:41pm Nov 11, 2011 12:41pm
Quoting Eklavya
I finally got in short at the top of the range. In the last two days I did make a few more short attempts anticipating a breakout but took small losses.

I have a question. In the current explosive move down, How would Graeme have stacked positions in a low risk way on the 1Hr/4hr charts? He could have entered on candle close but that would have been a high risk entry given the candle sizes.

I could have stacked on the 5 min but I was sleeping when the market was exploding down.
Last update on this one. I did not really get an opportunity to go short any more. This one position that I got went +350 pips and now might close at BE. If that happens I would have 10 attempts, -40 pips. NOT BAD AT ALL.
  • #5,006
  • Nov 13, 2011 8:37am Nov 13, 2011 8:37am
Funny how you guys try to catch huge moves, but completely disregard the economic landscape / fundamentals out there.
Wouldn't it be much easier and time-efficient to wait for great fundamental & technical setups, enter with a position and then ride a trend until the fundies change?

Also I am not quite understanding how it can be "hindsight" to look at a weekly chart to "anticipate" the next few hours or days of price action. Doesn't hindsight refer to things that already happened and then say in hindsight that would have been a good trade.

Just throwing these questions out there, I am not looking for a fight. Just some discussion.
  • #5,007
  • Nov 13, 2011 10:29am Nov 13, 2011 10:29am
Quoting Custos
Funny how you guys try to catch huge moves, but completely disregard the economic landscape / fundamentals out there.
Wouldn't it be much easier and time-efficient to wait for great fundamental & technical setups, enter with a position and then ride a trend until the fundies change?

Also I am not quite understanding how it can be "hindsight" to look at a weekly chart to "anticipate" the next few hours or days of price action. Doesn't hindsight refer to things that already happened and then say in hindsight that [b]would have...
The belief is that economic landscape / fundamentals already reflects in price or will reflect in price as they occur. One can never predict what fundamental situation will unfold. However one could do a scenario analysis that if A happens then price should respond one way and if B happens then price should respond another way and using this hindsight plan the trades. The key premise is to stretch winning when we are right and to minimize losses when we are wrong. This is the same with any profitable approach.

I tried to short EURUSD last week based on weekly charts. The europe situation could have gone any direction. I entered a few time, anticipating short, not knowing how the political situation will unfold. You can see the results in my past few posts. Can you see how much I could have made if then events favored my direction of trade?

Regarding hindsight, lets not get into semantics but understand what is being done here. The key is looking at a higher timeframe chart, guess what the next few bars is likely to do. Then using that knowledge, enter long or short with low risk. If the higher timeframe scenario analysis turns out to be correct then you would have have made huge profits by way of adding to your positions while keeping risk at a minimum. If other hand, the higher timeframe analysis turns out to be wrong, it would be your job to minimize losses.

As an example, lets say you get a great looking weekly pin bar with size 200 pips. You might say, if the PB has to work, the price should reach the target 100 pips away. Using other methods on this forum, you will enter for a Risk:Reward of 2:1. If you follow this approach, depending on how the PA unfolds on a lower timeframe, your could enter a few times and close out a few positions at the target and leave the rest at breakeven for infinite profits. This approach will be so much better in the long term.
  • #5,008
  • Nov 13, 2011 11:16am Nov 13, 2011 11:16am
Quoting Eklavya
The belief is that economic landscape / fundamentals already reflects in price or will reflect in price as they occur. One can never predict what fundamental situation will unfold. However one could do a scenario analysis that if A happens then price should respond one way and if B happens then price should respond another way and using this hindsight plan the trades. The key premise is to stretch winning when we are right and to minimize losses when we are wrong. This is the same with any profitable approach.

I tried to short EURUSD last week...
Thanks for explaining your point of view. Yeah, that is what I meant with doing a scenario analysis, cause in my experience, if the fundies are aligned with the technicals, you have a win-rate that is not achievable with just using technicals. Obviously stretching the winnings is important, maybe the biggest advantage we have over other games, like roulette, poker and so on (where you have to bet big beforehand to get a bigger return).
Quoting Eklavya
Regarding hindsight, lets not get into semantics but understand what is being done here. The key is looking at a higher timeframe chart, guess what the next few bars is likely to do. Then using that knowledge, enter long or short with low risk. If the higher timeframe scenario analysis turns out to be correct then you would have have made huge profits by way of adding to your positions while keeping risk at a minimum. If other hand, the higher timeframe analysis turns out to be wrong, it would be your job to minimize losses.

As an example,...
okay, makes sense. However, I personally would prefer to have the fundies on my side as well. Like right now entering in eur/usd doesn't make much sense to me, cause the fundies are so unclear and it is difficult to say which economic room is weaker: USA or EUROPE.
  • #5,009
  • Nov 13, 2011 11:16am Nov 13, 2011 11:16am
Quoting Custos
Funny how you guys try to catch huge moves, but completely disregard the economic landscape / fundamentals out there.
Wouldn't it be much easier and time-efficient to wait for great fundamental & technical setups, enter with a position and then ride a trend until the fundies change?

Also I am not quite understanding how it can be "hindsight" to look at a weekly chart to "anticipate" the next few hours or days of price action. Doesn't hindsight refer to things that already happened and then say in hindsight that [b]would have...
Welcome to this thread Custos. This is one of the few threads in this forum where we are respectful of each other and encourage intelligent discussions within the context of Graeme's trading philosophy.

I have stayed out of E/U for past few weeks purely for fundamental reasons. In my opinion, one has to consider economic and political fundamentals on weekly and monthly timeframes during their hindsight analysis in choosing which pair to trade. Hindsight to me is nothing more that implementing certain 'rules' whose outcome is a strong directional bias as part of the trading plan. This thread advocates a combination of PA and TA in hindsight analysis. I personally also include currency strength, COT and pure economic numbers (not focusing on news/blogs reports etc but pure numbers used by the big boys) but only during my weekend and end of month currency analysis. Entries are purely PA/TA based.

Having said the above, my background for over a decade has been quite successful in stocks and corporate fundamentals play a huge part in stock selection. When I moved into forex in 2007, I failed miserably applying the same approach of corporate fundamentals into economic/country fundamentals for currency pairs. Since you are buying and selling a currency simultaneously when trading a given pair, fundamentals of both the countries HAS to agree with your hindsight analysis.... very very hard and confusing as there are so many conflicting parameters going on in the global economy.

It took me over 18 months to toss the fundamental hat in trash and transition my approach towards PA. I am not a firm believer of "Price is King" either. Atleast not yet! In my experience, it is the confluence of various factors (PA/TA/FA/mindset/attitude/patience/fear/greed/etc) that creates the red aura moment to strike and squeeze decent profits out of this market.

This thread is certainly not the Holy Grail but if you read and fully understand the core universal principles (most of which is just simple common sense) conveyed by Graeme that are applicable to any market, it will bring significant improvement to your trading results. It has to me and at the end of the day, that is what matters
Staying in my lane...
  • #5,010
  • Nov 13, 2011 11:31am Nov 13, 2011 11:31am
Quoting VEEFX
Welcome to this thread Custos. This is one of the few threads in this forum where we are respectful of each other and encourage intelligent discussions within the context of Graeme's trading philosophy.

I have stayed out of E/U for past few weeks purely for fundamental reasons. In my opinion, one has to consider economic and political fundamentals on weekly and monthly timeframes during their hindsight analysis in choosing which pair to trade. Hindsight to me is nothing more that implementing certain 'rules' whose outcome is a strong directional...
thanks for your explanation. yeah fundies on a country level can get quite confusing. I personally look for medium-term to long-term fundamentals to make my decisions. Like heavy borrowing and trying to bail out the weak countries is generally bad for europe / US. On the other hand we have china that is still experiencing growth and recognizing their problems and are actually doing something about them (inflation) and precious metals that are seen as a safe haven for most people. From that point of view it only makes sense to participate in the precious metal trend and aud (china and commodities) and chf (safe haven) trend until things change.
I think such fundamental analysis will weed out a lot of pairs/instruments that won't produce +1000 pip runners.
  • #5,011
  • Nov 13, 2011 3:23pm Nov 13, 2011 3:23pm
Quoting Eklavya
Hi Farm,
If I may, I would recommend to keep it simple. Yes, there are ascending wicks on the daily and is in conflict with the weekly. I would suggest pick one hindsight and stick with it for a few candles.
......your hindsight is long. If hindsight is long, and you have wicks, your entries will need to be in the areas of the lower wicks or once the price breaks out higher of the top wicks.

Here is the Graeme post I believe you are talking about.
http://www.forexfactory.com/showthre...42#post4000242
Sorry Guys, if this is a dumb question, but I seem to be going round in circles.
Trying to make sense of the reference to "ascending wicks", " top wicks" etc. Have read the first 35 pages of the thread and tried to search for an explanation. What is their significance and their impact on entries.
Only found a passing mention by Graeme in post # 239 P 16.
Now even more confused with the talk of 'hindsight' ," conflicting Tfs" "conflict of interest ".
Can someone please point me to posts where it is all clearly explained?
I believe this is vital to fine tuning Entries and it could also help others just joining the thread.
Thank you kindly,
EP
  • #5,012
  • Nov 13, 2011 3:33pm Nov 13, 2011 3:33pm
Quoting EaglePip
Sorry Guys, if this is a dumb question, but I seem to be going round in circles.
Trying to make sense of the reference to "ascending wicks", " top wicks" etc. Have read the first 35 pages of the thread and tried to search for an explanation. What is their significance and their impact on entries.
Only found a passing mention by Graeme in post # 239 P 16.
Now even more confused with the talk of 'hindsight' ," conflicting Tfs" "conflict of interest ".
Can someone please point me to posts where it...
Avoid the confusion caused by listening to what others are saying. Conclusions made on your own will stick for a long time ...

http://www.forexfactory.com/showthre...85#post5105285
Staying in my lane...
  • #5,013
  • Nov 13, 2011 3:42pm Nov 13, 2011 3:42pm
try from here
http://www.forexfactory.com/showthre...92#post3936792

cheers
geoff

Quoting EaglePip
Sorry Guys, if this is a dumb question, but I seem to be going round in circles.
Trying to make sense of the reference to "ascending wicks", " top wicks" etc. Have read the first 35 pages of the thread and tried to search for an explanation. What is their significance and their impact on entries.
Only found a passing mention by Graeme in post # 239 P 16.
Now even more confused with the talk of 'hindsight' ," conflicting Tfs" "conflict of interest ".
Can someone please point me to posts where it is all...
  • #5,014
  • Nov 13, 2011 7:06pm Nov 13, 2011 7:06pm
Thanks, Geoffrod. That flagged a perfect part of the thread, for a systematic understanding and has saved much jumping around.
VEEFX, thanks for your response and link to summary of posts. I can now focus, and reach better conclusions.
ep
  • #5,015
  • Nov 15, 2011 4:46am Nov 15, 2011 4:46am
Big thanks to Graeme, the superman of wisdom.
All the Best wishes.
  • #5,016
  • Nov 15, 2011 4:10pm Nov 15, 2011 4:10pm
Hi Cameron,

I saw your post for a brief moment which I believe you deleted soon after. I don't recall the full extent of it as I was distracted and tied up when I read it.

You raise a very good question whether victorious folks posting 1000+pips legs are really making money as their account could very well be in drawdown while having a few 1000+ pip legs going for them. It is a possibility and I am currently in that situation (in the spirit of full disclosure).

I am responding to your post as I have struggled a little bit in my thought process on the importance between account balance and account equity. Which one takes precedence? To me, it is Account Equity (floating!) because that is what determines available margin i.e. buying power (and account distruction i.e. margin call). On the flip side, most reporting tools like in MT4 calculate drawdown on realized loss (i.e. Account Balance) drawdowns/equity curve which CAN be deceiving imho.

Here's my current stats:
DRAWDOWN (ouch I must be doing something horribly wrong!)
Attached Image (click to enlarge)
Click to Enlarge Name: Snap126.jpg Size: 25 KB


With a profit factor of ONLY 0.37!!!! (Not ready to quit my job yet!)
Attached Image (click to enlarge)
Click to Enlarge Name: Snap127.jpg Size: 11 KB


perhaps just a big illusion??

Attached Image (click to enlarge)
Click to Enlarge Name: Snap124.jpg Size: 28 KB


and here's my starting balance funded on August 8th:
Attached Image (click to enlarge)
Click to Enlarge Name: Snap125.jpg Size: 11 KB


That's PnL of 25% per quarter and not annual based on your comparison of 14% in the index fund.

Now, having shared these stats, what I really want to know is what do the fund managers and big boys do every quarter? I doubt they liquidate all their positions every quarter to publish their quarterly profit to their investors. They do marked to market accounting as best practice (i may be wrong as I am no accountant by any means!). Would that translate to unrealized floating equity if I were to charge performance based fees to myself? I bet it will :-

With Greame's approach, we have focussed far more on account balance and diversification, drawdowns etc to recover lost pips. Do I really have to get down to counting pips per pair on a weekly/monthly basis? Certainly from a Trading Statistics standpoint but not so much from a overall profitability standpoint. It should not matter as long as your floating equity is more than your account balance!

By no means, I am measuring my ego here. Your post triggered something that has been going on in my mind for a while now so had to put it out there.

I have been lately thinking a LOT of money management as part of my trading plan and this topic fits right into my thought process.
Staying in my lane...
  • #5,017
  • Nov 15, 2011 5:36pm Nov 15, 2011 5:36pm
Indeed Vee, I removed my post thinking "bah...what's the point ?". After all, my opinions are mine, and yours are yours, and nothing the other one says is likely to change anything.

Either way, the point I was trying to make is: take your case for example, chfjpy +1000 pips, well... what's next ? Are you going to close that position at ten thousand pips ? Or will you let it die at BE if that's its fate ? Or do you want to diversify by splitting 0.1 into 0.05 ?

I think that with the setup you have currently have you cannot quite apply the mechanics of this thread... the whole idea is to have fixed risk: open a position, it works, move SL to BE, open another one (because you covered the previous risk) and so on, whilst the reward increases exponentially. You do not have that with one position... that is not exponential increase of the reward. At least...I haven't seen Graeme entering with two lots, then trying to "diversify" by closing 1 lot and letting 1 go. What I have seen were stacks of orders of two lots each, constant risk, exponential reward.

Cheers,

Cam
  • #5,018
  • Nov 15, 2011 6:23pm Nov 15, 2011 6:23pm
Quoting cameron1st
Indeed Vee, I removed my post thinking "bah...what's the point ?". After all, my opinions are mine, and yours are yours, and nothing the other one says is likely to change anything.

Either way, the point I was trying to make is: take your case for example, chfjpy +1000 pips, well... what's next ? Are you going to close that position at ten thousand pips ? Or will you let it die at BE if that's its fate ? Or do you want to diversify by splitting 0.1 into 0.05 ?

I think that with the setup you have currently have you cannot quite apply the...
Agreed. Stacking is an important tool and I will get to that once I close one of my legs and bank some profits. I didn't want to fall in the 'trap' on stacking on the onset of new account until I have some floating profit to go with. Just a bit conservative approach 'initially'. Not afraid of stacking at all.... it is better on the mindset to have floating profits first. If there was no CHF intervention, it would close one leg (as per my trading plan) and explore into other pairs and start stacking more aggressively. For now, this is almost a risk-free trade with very high confidence these two won't end up in BE. Regardless, I have alerts set to take profit if these two pairs drop.

I did stack several times though... here's my history of all trades (sharing this for the last time)
Attached Image (click to enlarge)
Click to Enlarge Name: Snap128.jpg Size: 96 KB
Staying in my lane...
  • #5,019
  • Nov 16, 2011 1:38am Nov 16, 2011 1:38am
Quoting VEEFX
Stacking is an important tool and I will get to that once I close one of my legs and bank some profits. I didn't want to fall in the 'trap' on stacking on the onset of new account until I have some floating profit to go with. Just a bit conservative approach 'initially'. Not afraid of stacking at all.... it is better on the mindset to have floating profits first. If there was no CHF intervention, it would close one leg (as per my trading plan) and explore into other pairs and start stacking more aggressively. For now, this is almost a risk-free...
Just to clarify, when I mentioned "stacking" I meant actually having more positions alive and growing together. What you were showing were some tries to enter the trend that died at BE or so... tries are fine, but not exponential growth. You will have difficulties closing one of these legs because it is only one position per currency, so you can't diversify it will be all or nothing kind of thing.

Also, trading with just one position is going to make your account grow very very slowly, I don't think this way you can reach a time when you can live off from trading.

This debate is kind of pointless, you have the duty to follow your own trading plan and your train of thoughts, I was just stating my opinion based on the past experience when I thought exactly the same as you: "I'll be extra conservative...get a few positions in, close them, and with the profits I will start the millipede".. no my friend, there is no better time than the present to start growing your multi-legged millipede.

Cheers
  • #5,020
  • Nov 16, 2011 1:56am Nov 16, 2011 1:56am
Quoting cameron1st
Just to clarify, when I mentioned "stacking" I meant actually having more positions alive and growing together. What you were showing were some tries to enter the trend that died at BE or so... tries are fine, but not exponential growth. You will have difficulties closing one of these legs because it is only one position per currency, so you can't diversify it will be all or nothing kind of thing.

Also, trading with just one position is going to make your account grow very very slowly, I don't think this way you can reach a time when you can...
Agree on all counts and it is no debate by any means.... just taking a conservative approach on the account I posted earlier. I have another account tagged tagged for 'aggressive' approach. Here are all my current open positions in profit (and ofcourse got some realized loss to recover as well):

Attached Image


As always, I enjoy your posts and perspective
Staying in my lane...
5 traders viewing now