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Pitbull Trader with Position Building

  • #641
  • Feb 2, 2012 2:08am Feb 2, 2012 2:08am
just for fun I put the pitbull script on a new alpari demo and for some reason It only opens sell positions. Anyone else have this problem?

I put the same script on MB demo and it works fine. anyone?
  • #642
  • Edited 7:47am Feb 2, 2012 2:23am | Edited 7:47am
Like most people, I didn't understand all the things that Brijon wrote but he got me interested in this method. Chips is doing a better job at explaining things and CW has been a great contributor to this thread. I decided to learn as much as I could about this method. I read the Simple Trading Method with Trader 101 and the Indicators Development for T101's Not Very Simple Method threads here on FF and things became clearer. Chip got some heat regarding telling people that there is no wrong way to trade, I guess maybe what he was trying to say was to take the principles presented here and make a system that suits you.

I used to love using all types of indicators but after my research I realized that it best for me not to use any indicators trading this method but I do look at my charts when I make my directional trade and also when I decide to TP, SL or activate DD control. I also chose to trade the modified universal 14 pair basket instead of the 10 pairs presented here. Why? The current basket is set to take advantage of the strong YEN. That is why it is recommended to trade the basket indicator in the account along with the directional trades. It is becoming evident that a BOJ intervention might be on the horizon, if and when it happens YEN will be sold ,so it is best for your basket indicator to be YEN short direction and if your directional trade is YEN long then you place a pending hedge order to protect yourself in case of an intervention.

Next, I chose to have a clear business plan and if you don't treat trading as a business then you will fail. Most people ask what is your TP and SL level and how do you manage DD? Most of us have tried a ton of system with clear TP and SL levels and failed. Why? Because trading a system successfully involves using discretion, intuition and having a feel for the market. That is why, you need to demo this method for at least 3 months.

I posted my demo account result on post #623. In my first ten trading days I made almost +20% and then I told myself that this is way too easy so lets make it real hard. In the next 10 trading days, I took directional trades in the opposite direction of my basket indicator so I could test myself handling DD. I grew my account another 3.7% in the next 10 days. I highly recommend to use your demo account not for only making prefect trades based on the system rules but also trades against the system rules and then follow your plan on handling the DD. This is the only way you will learn handling DD by doing it over and over again in your demo account.

I keep a journal of all my trades and the reason I entered with screen shots saved. At the end of each month, I look at the Daily chart of my basket indicator pairs and write down the Average directional pip movement of each pair and was it ranging or trending up and down. This way I could see what type of market behavior is producing optimal results for this method.

It is too early to tell but I am enjoying demoing this method and will continue to do so for at least 2 more months before I go live. I hope this helps.
Trading can't be taught but it can be learned
  • #643
  • Feb 2, 2012 3:20am Feb 2, 2012 3:20am
[quote=chips;5347710]
Quoting tarrini65


Brijon is saying that you can trade to corelated currencies also.

I wont say much...because you will have to load then up on demo and see for yourself

yes i understood that ...for example if usdchs is a strong sell we ca buy eur usd also , or viceversa, but the point i was talking about is when he mention the anchor as eurgbp...what can you do then ?
  • #644
  • Feb 2, 2012 3:55am Feb 2, 2012 3:55am
If it is just a matter of watching various pairs and how they trade during the day, and starting over each day, this spreadsheet tells me that, and with more pairs than PitBull

Attached Image (click to enlarge)
Click to Enlarge Name: 0035.jpg Size: 220 KB
It takes a lot for me to IGNORE you, but you can try.
  • #645
  • Feb 2, 2012 3:58am Feb 2, 2012 3:58am
Quoting Pipsninja
Like most people, I didn't understand all the things that Brijon wrote but he got me interested in this method.

Next, I chose to have a clear business plan and if you don't treat trading as a business then you will fail. Most people ask what is your TP and SL level and how do you manage DD? Most of us have tried a ton of system with clear TP and SL levels and failed. Why? Because trading a system successfully involves using discretion, intuition and having a feel for the market. That is why, you need to demo this method for at least 3 months....
Really interesting post Pipsninja... (great name also..lol).

You make some clarifying points and show there is no right or wrong if we control DD as per Chips.


For me Chips sums it up... this method is a self education process without the usual suspects we are used to using and constantly read everywhere.... SL TP TP/SL ratios 1/1 1/2 1/3 ¼ or whatever.
What I get mostly from this method is the twelve following insights:

 

  1. I used to watch indicators and use TP and SL and ratios, and whilst I did ok I never did great. Plus I found it hard work.
  2. FACT SL give money to the broker. This is THE BIG lesson for me from Chips.
  3. For me I have discovered if I use proper MONEY MANAGEMENT (which I used to think partly involved TP and SL – LOL) you don’t need SL.
  4. I trade the fast moving pair (or two) and avoid greed as much as I can buy not trading higher up the basket.
  5. I manage the draw down via more trades on fast moving pair, wait for cycle, hedge.
  6. I forget about some arbitrary SL, I use DD control and have an exact max % (10%) of DD limit where I will take some pain
  7. I use small lot sizes. This is a big change for me. I always used 1.00 or higher. Now it’s .10 .20 .40 and maybe .50. and 1.00 only in a hard case short trade to claw back DD (and this I know is v risky).
  8. I now realise it’s very possible to make a lot of money with SMALL lot sizes. I used to think differently but printing money with small lots works.
  9. I find I worry far less as I control my DD (overdraft – OPM) and do not have to watch as price seems to remorselessly move towards my arbitrary SL and my equity is still growing
  10. +60% last month and +2.39% yesterday first day is the best performance I have ever booked Live or demo on any system/method. So I intend to master it even more.
  11. I do not trade the whole basket. I trade the bottom pair (or two) only.
  12. I am on Demo and will not go live until I have three months under my belt as per Chips advice. I want to go live now(impatience) because +60 makes me feel confident, but I wait to further master this art, because I know FACT Mr Market is waiting for me to slip on the banana skins of Greed and Impatience!


My top three are 1. Mange DD, 2. Small lots, 3. SL gives money to broker, as Chips sums up every time.

Cheers

CW

  • #646
  • Feb 2, 2012 4:58am Feb 2, 2012 4:58am
Loving this pitbull method. Great post as always Chips. Many thanks to CourtneyWild too for detailing the method as well as other contributors on this thread. Keep it up ppl

I'm learning everyday...
  • #647
  • Feb 2, 2012 9:56am Feb 2, 2012 9:56am
Quoting Erebus
If it is just a matter of watching various pairs and how they trade during the day, and starting over each day, this spreadsheet tells me that, and with more pairs than PitBull

Nice looking spreadsheet can you post a copy here.
  • #648
  • Feb 2, 2012 10:10am Feb 2, 2012 10:10am
I read something a few posts back, that someone states that there is no perfect hedge using correlated currencies.

Please take a look at this page and please read all of the page:
http://kreslik.com/forums/viewtopic....&highlight=fpi, This will shed a light as to how correlation works and how you can achive a neutral position.

A slight clarification is that this system is basically all trading concepts applied. Nothing, not a single concept that is presented by Brian or Chips is against basic principles. Look at the sum of all of the information or each topic one by one and you will see that every pice of information is the way a trader should trade. There are different styles and approached however hence the saying that There is no right or wrong way.



On the topic of stop loss vs no stop loss -

Like in Poker there are a few strategies that good players apply so there are in trading. In poker you will have players that are "loose and tight". While one type may seem like he is raising and calling and the other is only playing premium cards, both are only degrees of a very sensible and sound strategy. There are player too that are simply bad as well.
The loose player will push all his adventages to the maximum. He will you every and all possible tehnique. The solid player will only play the best hands and gain most from those if possible, he will have an easier game there. Both will never risk when risk in not warranted. The difference between using a hedge and using stop loss, is somewhat analogous to the above concept.

The same applies here. You have to have a risk control in place. You need to have good money management skills. Those are the key elements. The pairs that you trade, or the hedge that you form are the short term tools that you use to make profit. I know that for some traders this seems like a foreign concept, where you have been focusing on entry / exit etc. You still have to make good entries ! and you still need good exits, but that is not what prserves you money!.

On the topic of Making Trades (Printing Money) -

Entires and Exits only improve your bottom line. Controlling your EXPOSURE ( Drawdown and Position Size ) is your key.

Stop looking at single trades and start looking at a sequence of trades ( The Basket ) as your overall trade.

If you have reached a gain of 20% on the month, and your drawdown now sits at 30%. CLOSE ALL POSITIONS take the 20% that is your BUSINESS PLAN. Although you will strive not to reach 20+ % drawdown, you will somtimes, because you are human.

The Market "Cycles" - (Profit Loss Profit )
Not always tho, on your time!. Look at long term cycles USDJPY, but within that cycle there is another cycle and another etc. As long as you keep your hedge neutral you will have plenty of time to exit your failed trade. Please look at wave theory and market cycles. And you can test it fairly easy. Pick a time say feb2 2007. Switch to 5 Min view. Decide on a trade. Now scroll to the right tick by tick... You may realize that you were wrong and the market is not going your way... Now draw a center line through the price range that you see on your chart, expand the time zone to 15 30 1hr + How many times do you see the same price cross that center line. Statistically that average is 11 times, but !!!!! not always !!!!. And for thos times you must apply correct money management and drawdown. You cannot just sit there hoping that it will come back, that is where you manage your trades. That is why you have a hedge!

On the topic of the demo pairs-

While the pairs given in the demo are a great starter it is best for anyone trying this system to establish there own hedge, just to understand how this works. Read the link posted at the top of the page then go to
http://www.forexticket.co.uk/en/tools/01-01-correlation and look at the daily correlation, and try to create your own hedge. Run that for a while on a demo, and see how it performs.


Finally -

If you ever have time, watch the videos posted by brijonjoanna on youtube, they are not in a good order. You will see sthat the concepts presented there are those that are tought in mpost professional courses, and these can only help you.
  • #649
  • Feb 2, 2012 10:14am Feb 2, 2012 10:14am
At the week start if you are heavy with jpy + chf pairs and price is moving down..Place a buy stop on the pairs above the start of the week, continue trading with a piece of mind...

In case theres a spike...intervention whatever..you DD position will be frozen, then continue trading the spike...

you will be surprise at what happens..use proper position sizes in your trading.

Bal the DD using Tripple swap runup....it's a GIVEN....BIG MONEY LIKE INTEREST.

cheers
  • #650
  • Feb 2, 2012 10:25am Feb 2, 2012 10:25am
Quoting chips
At the week start if you are heavy with jpy + chf pairs and price is moving down..Place a buy stop on the pairs above the start of the week, continue trading with a piece of mind...

In case theres a spike...intervention whatever..you DD position will be frozen, then continue trading the spike...

you will be surprise at what happens..use proper position sizes in your trading.

Bal the DD using Tripple swap runup....it's a GIVEN....BIG MONEY LIKE INTEREST.

cheers
Hello Chips,

This works well for same-pair hedging. For US brokers we need a little more work, since we have to pick something else to do a correlated hedge with.
  • #651
  • Feb 2, 2012 2:27pm Feb 2, 2012 2:27pm
Arbitrage Basics for FOREX Traders
It takes a lot for me to IGNORE you, but you can try.
  • #652
  • Feb 2, 2012 2:50pm Feb 2, 2012 2:50pm
Is everyone closing out the basket on Friday and restarting on sun?

I'm off work for a few more months so I decided to give this a shot on demo. There is so much negativity toward this pitbull thingy, and the tread is very confusing so I've never given it a fair shot.
But since I'm still not allowed to go back until my doc clears me i might as well see if I can figure out this game.
I'll use the pitbull script on Sunday and let it roll all week.

Now if I can just figure out how to freeze a loss ... never got my head around that idea. I must be slow.
  • #653
  • Feb 2, 2012 10:55pm Feb 2, 2012 10:55pm
Quoting tommbstone
Is everyone closing out the basket on Friday and restarting on sun?

I'm off work for a few more months so I decided to give this a shot on demo. There is so much negativity toward this pitbull thingy, and the tread is very confusing so I've never given it a fair shot.
But since I'm still not allowed to go back until my doc clears me i might as well see if I can figure out this game.
I'll use the pitbull script on Sunday and let it roll all week.

Now if I can just figure out how to freeze a loss ... never got my head around that idea....
Tombstone, since you have some time, yes, demo this method. Open positions on the bottom 1 or 2 pairs. DO NOT micromanage! Give the positions breathing room. Watch how the different pairs react with one another. See how some of our fellow traders use this method. Think about how you control draw down. Think about the timing of opening or closing positions. Watch your equity increase. Practice controlling DD. You will begin to get comfortable with this over time. You will see what Brijon & Chips mean about profit, loss, profit cycles. What this does for your thinking & psychic is incredible. Big up or down moves used to be a big negative for me, now it's only another opportunity to make $$. Once you begin trading and learning with the bottom 2 pairs, think about how you can use the TOP 1 or 2 pairs to make $$. YOU WILL develop your own comfort levels and mm styles over time and I would suspect they might change from what yours currently are now. YOU WILL learn alot about your current trading psyche. I think the biggest problem would be to NOT get too greedy and open up too large of positions. Stay conservative at 1st and see how to make $$ and control dd. Think of other ways to make $$ using this system. Share your thoughts & ideas with others here. Ask questions. Watch your equity grow over the days. If you practice these techniques, the light will come on. Good luck!
  • #654
  • Feb 2, 2012 11:45pm Feb 2, 2012 11:45pm
Quoting Marlin Man
Tombstone, since you have some time, yes, demo this method. Open positions on the bottom 1 or 2 pairs. DO NOT micromanage! Give the positions breathing room. Watch how the different pairs react with one another. See how some of our fellow traders use this method. Think about how you control draw down. Think about the timing of opening or closing positions. Watch your equity increase. Practice controlling DD. You will begin to get comfortable with this over time. You will see what Brijon & Chips mean about profit, loss, profit cycles....

Well said..

No need to panic when running the business...and stock go bad...
At some point you have to do an inventory and write off bad stocks..

Main thing is to maintain at least 2 : 1 sales to dd ratio
  • #655
  • Feb 3, 2012 1:25am Feb 3, 2012 1:25am
Thank you Marlin and Chips,
but what exactly do you mean when you say open "positions on the bottom 2 pair?"
Do you mean you move the neg positions to the top of the list and stack winners on the 2 positive positions at the bottom of the list to help improve equity as the top of the basket is in negative territory?

I will ask my other questions after I figure out this fist step. I will spend more time reading the beginning of this tread as well but its 11:15 here so its time for a pain pill and bed.

thx for your help and more important your willingness to deal with noob questions on this methodology. I really want to see whats going on here and turn off the negative in my mind about SL and DD so forgive an old dog for not seeing past his old training.
Throwing out old habits even for a few months will not be easy. but maybe I'll learn something.
  • #656
  • Feb 3, 2012 1:46am Feb 3, 2012 1:46am
Quoting tommbstone
Thank you Marlin and Chips,
but what exactly do you mean when you say open "positions on the bottom 2 pair?"
Do you mean you move the neg positions to the top of the list and stack winners on the 2 positive positions at the bottom of the list to help improve equity as the top of the basket is in negative territory?

I will ask my other questions after I figure out this fist step. I will spend more time reading the beginning of this tread as well but its 11:15 here so its time for a pain pill and bed.

thx for your help and more...
Quoting chips
THIS SYSTEM IS REALLY NOT FOR THE GUY WHO is starting out trading.
You answered your own question, yes, trade the bottom 2 pairs after sorting.

See picture from Post # 5

Attached Image (click to enlarge)
Click to Enlarge Name: bottom_2.jpg Size: 153 KB
It takes a lot for me to IGNORE you, but you can try.
  • #657
  • Feb 3, 2012 1:54am Feb 3, 2012 1:54am
Quoting esprit
I read something a few posts back, that someone states that there is no perfect hedge using correlated currencies...
Great post.
  • #658
  • Feb 3, 2012 1:55am Feb 3, 2012 1:55am
Quoting Marlin Man
Tombstone, since you have some time, yes, demo this method. Open positions on the bottom 1 or 2 pairs. DO NOT micromanage! Give the positions breathing room. Watch how the different pairs react with one another. See how some of our fellow traders use this method. Think about how you control draw down. Good luck!
Another really insightful post and bang on the money.... read INTO it.
  • #659
  • Feb 3, 2012 2:05am Feb 3, 2012 2:05am
Erebus,
ok thx

so after i put the pit bull script on I let it run for a bit few hours I'm guessing so the market moves a bit, then sort the basket and then I stack trades on the bottom pair to cover the DD on the negative pair correct? Of course use small lots etc etc

Also are we closing the basket (with profit I hope) on Fridays?
thx guys

I'm going to bed now I swear.
  • #660
  • Feb 3, 2012 2:22am Feb 3, 2012 2:22am
Tommbstone, yes, you answered your own question. Just click on the word "profit" and it will sort the negative on top and positive on bottom. Concentrate on the bottom 2 for now. Don't concern yourself too much if and when you open a larger trade (.4) does not continue immediately in the desired direction. Check back in another hour or so. Start to manage drawdown or profit. This is a little more difficult for you US guys with the hedging rules. If you want to lock in some profit (add equity) consider closing part of your position. You may want to add to your inventory at some point. This is where your ideas start to take hold. This is why most people cant wrap their brain around this, there are no hard and fast rules that most are looking for.



Quoting tommbstone
Thank you Marlin and Chips,
but what exactly do you mean when you say open "positions on the bottom 2 pair?"
Do you mean you move the neg positions to the top of the list and stack winners on the 2 positive positions at the bottom of the list to help improve equity as the top of the basket is in negative territory?

I will ask my other questions after I figure out this fist step. I will spend more time reading the beginning of this tread as well but its 11:15 here so its time for a pain pill and bed.

thx for your help and more important...
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