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Building an equity millipede

  • #5,061
  • Nov 30, 2011 10:39pm Nov 30, 2011 10:39pm
Quoting Pipskateer
Forgot to mention... I would LOVE to have a copy of your book ...
Welcome to this thread. It is sad that we have only 251 views on the zip of all Graeme's post I attached. If you hide images, it is the first to pop in the list

Attached Image


http://www.forexfactory.com/showthre...28#post4761328

"The book is almost complete. Just on that note, I have noticed that the content of the book does not differ much from the content I have contributed in this very thread apart from a planned flow of explanation."
Staying in my lane...
  • #5,062
  • Nov 30, 2011 11:35pm Nov 30, 2011 11:35pm
Quoting VEEFX
Welcome to this thread. It is sad that we have only 251 views on the zip of all Graeme's post I attached. If you hide images, it is the first to pop in the list

Attachment

http://www.forexfactory.com/showthre...28#post4761328

"The book is almost complete. Just on that note, I have noticed that the content of the book does not differ much from the content I have contributed in this very thread apart from a planned flow of explanation."
Vee, that is AWESOME! Thanks for pointing this out. I have a .pdf with most of them, but was really hoping there was a more updated compilation...thanks!!

How are you guys handling the FIFO and non-hedging issues for US broker accounts? That would seem to be a major problem for position trading strategies. I guess Oanda accounts would be one way to resolve it, but what a nightmare to have to keep using different position sizes just to tip toe around these idiotic CFTC nanny rules....
  • #5,063
  • Dec 1, 2011 5:50am Dec 1, 2011 5:50am
Quoting Pipskateer
How are you guys handling the FIFO and non-hedging issues for US broker accounts? That would seem to be a major problem for position trading strategies. I guess Oanda accounts would be one way to resolve it, but what a nightmare to have to keep using different position sizes just to tip toe around these idiotic CFTC nanny rules....
I had the same problem as you. Check out Interbank FX. They are based out of Utah and for some reason they are able to offer LIFO. I've had no problems with them since opening an account.
Twitter: @zusch_ -- Preselecting trending pairs, stocks on a weekly basis.
  • #5,064
  • Dec 1, 2011 5:56am Dec 1, 2011 5:56am
wonderful thread!!

But i'm a little concerned because i dont see anyone using strict rules (which can be tested) for entries.... also i want to know if anyone uses only longer TF for entry?

amazing thread, with amazing people!!
Listen to the Moneytalks
  • #5,065
  • Dec 1, 2011 5:57am Dec 1, 2011 5:57am
Quoting zusch
I had the same problem as you. Check out Interbank FX. They are based out of Utah and for some reason they are able to offer LIFO. I've had no problems with them since opening an account.
Interesting...I have a small IBFX mini account, but haven't used it for quite awhile. I will check this out, thank you much!
  • #5,066
  • Dec 1, 2011 9:54am Dec 1, 2011 9:54am
Quoting Pipskateer
Interesting...I have a small IBFX mini account, but haven't used it for quite awhile. I will check this out, thank you much!
Ibfx was one of the first few mt4 brokers who came out with a backoffice solution to minimise impact of FIFO on EAs. We have discussed this before in the thread along with a link I provided to how they have implemented this. FIFO is not a huge problem compared to hedging limitations for US traders in my opinion.

Citifxpro is the only broker that allows hedging if I am not mistaken, another option is to find a multi-broker trading platform which is still a pain but better than oanda. I did some research last night on this and found fxdialogue.com has a decent solution to trade with multiple my4 brokers.

Hope this helps.
Staying in my lane...
  • #5,067
  • Edited 12:07pm Dec 1, 2011 12:02pm | Edited 12:07pm


Thanks for the info Vee.

All Shorts knocked out. Did anyone manage to get abord the last feew days uptrend (or down trend) using any of Greames methods??
best
RS

Quoting VEEFX
Welcome to this thread. It is sad that we have only 251 views on the zip of all Graeme's post I attached. If you hide images, it is the first to pop in the list

Attachment

http://www.forexfactory.com/showthre...28#post4761328

"The book is almost complete. Just on that note, I have noticed that the content of the book does not differ much from the content I have contributed in this very thread apart from a planned flow of explanation."
  • #5,068
  • Dec 2, 2011 1:05am Dec 2, 2011 1:05am
Hi guys,


In relation to RS s question , i did manage to get a few positions in on the retrace this week however not enough to completely lock my P/L.Equity is slowly starting to creep back up now.

A question for Vee. I cant seem to unzip the file for the PDF.any ideas?

Regards

Sir Pips
  • #5,069
  • Dec 2, 2011 6:59am Dec 2, 2011 6:59am
Quoting SirPips alot
Hi guys,


In relation to RS s question , i did manage to get a few positions in on the retrace this week however not enough to completely lock my P/L.Equity is slowly starting to creep back up now.

A question for Vee. I cant seem to unzip the file for the PDF.any ideas?

Regards

Sir Pips
I would try downloading it again...may have been corrupted on your original try. It works fine for me using WinRar to unpack.
  • #5,070
  • Dec 3, 2011 11:28am Dec 3, 2011 11:28am
Doing some usual year-end tax planning for this tax year year and have a simple question to ask as long term position trades can have profound tax consequences to your bottom line.

Without going in how one reports their profit or losses to IRS on their 1040, are we supposed to report realized Profit or unrealized Profit on your tax return?

For example:

Scenario #1:
Starting Account Balance on 1/1/11: $10,000
Ending Account Balance (realized) on 12/31/11: $9,500
Ending Account Equity (unrealized) on 12/31/11: $14,000

Do you report a loss of $500 or a profit of $4000 on your tax returns for this year ???

Scenario #2:
Starting Account Balance on 1/1/11: $10,000
Ending Account Balance (realized) on 12/31/11: $11,000
Ending Account Equity (unrealized) on 12/31/11: $14,000

Do you report a profit of $1000 or a profit of $4000 on your tax returns for this year ???

As Forex profits are generally taxed at the rate of ordinary income by Uncle Sam, tax planning can play a very important role to your bottom line when it comes to timing your diversifications imo.

Edit: This question is open to all US-based Long Term Position Traders regardless of whether they are following this thread or not.
Staying in my lane...
  • #5,071
  • Dec 3, 2011 1:29pm Dec 3, 2011 1:29pm
Quoting VEEFX
Doing some usual year-end tax planning for this tax year year and have a simple question to ask as long term position trades can have profound tax consequences to your bottom line.

Without going in how one reports their profit or losses to IRS on their 1040, are we supposed to report realized Profit or unrealized Profit on your tax return?

For example:

Scenario #1:
Starting Account Balance on 1/1/11: $10,000
Ending Account Balance (realized) on 12/31/11: $9,500
Ending Account Equity (unrealized) on 12/31/11: $14,000

Do you...
Good day Vee and others,
This is my 2 cents on your question base on my little knowledge of account.Going by the realization concept,anticipating/unrealized income/profit is not accounted for.Meaning that you only account for either the $500(loss) or the $1000(gain).Hope this help.
  • #5,072
  • Dec 3, 2011 9:25pm Dec 3, 2011 9:25pm
Quoting VEEFX
Doing some usual year-end tax planning for this tax year year and have a simple question to ask as long term position trades can have profound tax consequences to your bottom line.

Without going in how one reports their profit or losses to IRS on their 1040, are we supposed to report realized Profit or unrealized Profit on your tax return?

For example:

Scenario #1:
Starting Account Balance on 1/1/11: $10,000
Ending Account Balance (realized) on 12/31/11: $9,500
Ending Account Equity (unrealized) on 12/31/11: $14,000

Do you...
Find a PRO and pay the money (one that does Forex specifically because the rest don't know jack). Don't dick around 'trying to figure it out'.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #5,073
  • Edited 12:48am Dec 4, 2011 12:33am | Edited 12:48am
Quoting LasVahGoose
Find a PRO and pay the money (one that does Forex specifically because the rest don't know jack). Don't dick around 'trying to figure it out'.
Thanks Ifebaba94 and LasVahGoose. You are right. The guy who does my taxes doesn't know jack.

If we get taxed only on realized profits which I think is the case, then it further validates my theory why the regulators took away hedging from us. Technically, I could simply freeze my floating profits at year-end and pay zero taxes by opening equal net exposure in opposite direction. One could do this year after year and defer taxes until the next withdrawal.

Same pair Hedging to lock in losses or preventing margin calls (like most people do) is a losing strategy but Hedging to freeze profits like Graeme does is a very effective strategy.

EDIT: And if you are good in planning your trades and have a high degree of confidence, you could let your account balance go into drawdown (i.e. not diversify in the last quarter or so) and use those realized 'loses' to bring down your gross income (even if you have decent floating profits gained during the year!!!)

EDIT1: Perhaps you could also implement this in a self-directly IRA using a custodian as Spot FX is a leveraged instrument.
Staying in my lane...
  • #5,074
  • Dec 4, 2011 7:43am Dec 4, 2011 7:43am
Quoting VEEFX
Thanks Ifebaba94 and LasVahGoose. You are right. The guy who does my taxes doesn't know jack.

If we get taxed only on realized profits which I think is the case, then it further validates my theory why the regulators took away hedging from us. Technically, I could simply freeze my floating profits at year-end and pay zero taxes by opening equal net exposure in opposite direction. One could do this year after year and defer taxes until the next withdrawal.

Same pair Hedging to lock in losses or preventing margin calls (like most...
Following up on my thought in previous post a bit further and assuming that I don't have the need to withdraw from my account for the next 5-10 years, I could possibly test my nerves and do the following....

- Once my initial account balance is doubled, I withdraw the original deposit. Now the account is pretty much risk free playing with market's money
- As long as I have %rate of growth greater than % rate of drawdown, I really don't have to ever diversify (i.e close my legs). From that point on, it simply becomes a mechanical style of PA trading and moving SL to BE.

I wonder if my broker would let me trade if my account balance (realized) is approaching zero but my equity is growing exponentially

EDIT: I think it should as available margin is based on account equity and not account balance.
Staying in my lane...
  • #5,075
  • Dec 4, 2011 12:44pm Dec 4, 2011 12:44pm
Hi Vee !
Im just curious, what are your results so far? And do you feel that your trading has developed since Graemes coming?
Thanks, Zol.
  • #5,076
  • Edited 3:12pm Dec 4, 2011 1:46pm | Edited 3:12pm
Quoting Mjolnir17
Hi Vee !
Im just curious, what are your results so far? And do you feel that your trading has developed since Graemes coming?
Thanks, Zol.
Thanks to Graeme, this is going to be my first profitable year in FX.. not by a whole lot but decent for a start.
Staying in my lane...
  • #5,077
  • Dec 4, 2011 1:51pm Dec 4, 2011 1:51pm
wow, thats impressive! have you done the 3*20 pip challenge Graeme requested? Im asking because Ive just started doing that and Im struggling with it.. but btw best thread by far.
  • #5,078
  • Dec 4, 2011 3:22pm Dec 4, 2011 3:22pm
Quoting Mjolnir17
wow, thats impressive! have you done the 3*20 pip challenge Graeme requested? Im asking because Ive just started doing that and Im struggling with it.. but btw best thread by far.
Even If I become a million dollar trader, demo will remain an integral part of my trading career. I use demo mainly to gather statistics and more importantly control my greed when I should stay away from the market. 3x20 is crucial to success in price interpretation and finding low risk entries. This exercise is by design forcing traders to struggle initially imo. I it is not working out, you need to take a step back and revisit your approach to market from a different perspective. Export historical OHLC in excel and run some stats on different price action setups Graeme mentioned for your preferred pair and align your mindset to the statistical success rate of the setup (i.e. 40% success rate of flying Buddah like Marion). At the end of the day, it all boils down to controlling risk until your achieve at your opportunity cycle.

Hope this helps.

BTW: For past two years, I have been profitable by Sept/Oct each year only to blow up my account by December due to greed taking over. My 'limited' success this year also attributes to low risk and taking a break from this crazy market driven by Euro crisis and NOT raising lot size.
Staying in my lane...
  • #5,079
  • Dec 4, 2011 10:23pm Dec 4, 2011 10:23pm
Good morning VEEFX and every millipede builder.
  • #5,080
  • Dec 6, 2011 3:47pm Dec 6, 2011 3:47pm
I am finding IBFX to offer the best options for position trading. They have a backoffice workaround to the FIFO regulations which has been in place for about a year now, shortly after CFTC came out with that RIDICULOUS reg (I a SOOO tired of being "protected" by my intrusive govt!). FIFO is fine for futures markets that trading on an intra-day cycle where you are generally closing positions before market close. But it is ridiculous for position trading...

Anyway, I just wanted to mention they also offer nano, micro, and mini lots to help you with position sizing options for this method. Hope someone finds this useful.
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