Weekly Millipede Idea

Hi mordre,
I have read your thread a number of times but can't find the answer to my question.
Last week we would have gone short at 1.3400 on EURUSD . This week we should have gone Long at 1.3200 to rule the way I understand them .
Are we exiting our Short or are we going into a hedge position.
Many Thanks for your time and starting this thread.
Ozzie

Good morning everyone,
It seems the weather is starting to get warm and sunny. I hope it says that way because I want to sign up for motorcycle classes.
Let's get down to business

We are going into a hedge because we want to catch trend reversals early. The long term trend will close the counter positions as it develops.

I have some good news. I looked at the screen for many hours since I started this thread and I want to bring some modifications.

The first one would be to narrow the distance between stop orders at the week's open from 100 pips to 50 pips. I have done some math backtesting and it seems that for Eur/Usd at least, it does much better. The SL goes down to 50 pips also, as does the TP for the first lot. The benefits are smaller losses and quicker entry into the move. The downside is a little more fake outs, but we want strong bullish/bearish weeks anyway.

The second modification would be to add multiple buy orders above the week's open and multiple sell orders below it. Be aware some weeks will head straight up or down, some weeks will range terribly bad. The secret is to keep positions open along the trend. Please see chart for visual explanation.



I did the math and this is what you can expect in terms of profit when a trend occurs by placing multiple orders every week.



I will also do the math and post a chart with a ranging period in the next days.

Anyone trading the Millipede this week?

I am trading just AUD/USD to get a feel for it. I made one modification that was helpful. I closed out both level 1 trades @ 50 pips profits each instead of letting one trade run. This way both of the level 2 trades became free trades when hit. And yes, both level 2 sell trades hit their stoploss. So now I am at breakeven with the price having retraced. However, this mod helped to satisfy my primary goal of protecting capital, first. I won't reenter as per the original entry rules, but rather wait for price to move an additional 50 pips down before sell reentries (buy trades remain in place). This will hopefully help prevent a ranging market from triggering multiple losses. But after that I will make all additional entries as per the thread rules.

BC2

Hey Bobcat2,

I understand why you closed both trades, but it defeats the purpose to catch the trend as early as possible. The lower the sell, the less chance it has to survive a retrace next week.

If it works for you go ahead and test it out. Maybe do a backtest for 2011 and share the results ?

Hi Mordre,

Thanks for sharing this system with us. My trading partner and I traded very similarly going back a few years. As you know, the devil is in the details. Small differences in TP, SL, entries and exits can drastically alter the results.

Since capital preservation is job #1 for me, my intent was simply to provide a way to make the level 2 trades free from worry. And it seems to have worked out okay in this singular scenario. I simply netted +100 pips on the level 1 trades, and lost -100 pips on the level 2 trades. The differences between your rules and this mod, is that I am at zero P&L and your rules have you with +50 pips from level 1, but losing -100 pips on level 2 (net -50 pips). However, you now have 1 active trade whereas I do not, and that is a strong point in your favor. You are currently positive about +40 pips on that remaining level 1 trade, but potentially could lose an additional -50 pips if that trade retraces to to the SL.

I probably would not trade my mod if we were still using the original 100 pip increments instead of 50. The earlier version was a later entry for the most part, but was profitable for you, and I don't believe I am getting in all that much later than the initial setup.

Part of my reasoning is to gain some "seed money" and build my confidence.

I will keep you advised with my results...but I hope you win!

Thanks again,
BC2

Is the thread dead?

u need to backtest it, since it is only 52 weeks (if u backtest one yr), this is easy.

backtest is indispensable for ur idea, especially because ur idea takes a much much longer time to see if it is profitable.

I am still trading something similar to this method, only improved with better entries. If the time allows it, I will post the updated method.

From my perspective, the method is profitable on the long-term, as long as the market doesn't stay in a small range for years

Dear Mordre,

very much interested on your method. Love to know more on your updated method. hope you can share the updated soon.

Please...please...please!

hi cicak and bobcat,
if u wanna learn this strategy,go to this thread---»www.forexfactory.com/showthread.php?t=245149 That where we learned this equity building strategy,he's protege of master graeme just as i am,goodluck!

I like this thread. Weekly charts can range a little, has anybody thought of using monthly charts for this?

Hey, I'm glad you guys are still interested in this method. I've been trading the 50 pips version of it with some success, but just haven't posted anything due to lack of time. That is why I've conceived this method in the first place

I think the winrate for monthly charts will be lower since the ATR is higher, but with alot of patience is can be done.

Maybe. I've got lots of ideas going off in my head, maybe heiken ashi could help?

How about opening a buy AND a sell order at the start of the week and putting a 200 pip stop loss on both positions (maybe a trailing stop?)? When one of these stops out the other will be up 200 pips and hopefully will be trending in the direction of the winning trade. Just an idea.

Oh, and you could do this on subsequent weeks just putting any open profit trades to break even and only close them if the following week closes against the trade or if there is a good technical or fundamental reason for closing it. This way you would be building a position as the trend developed.

Ok, I'm obviously thinking while I'm typing here but how about this? You do as I said above but only close all open trades when the heiken ashi changes? On the first week you enter the buy and the sell, on the second week you move the first winning trade to breakeven and forget about it. You then open another buy and sell. If it goes in the same direction as the first trade then you are quids in. Keep doing this until the HA changes against the trend and close everything out. It's a kind of hedged add on system. Of course you could always just add on at every ha candle that closes in your favour, you can get some long runs that way but I like the idea of the above.

It's this earl grey tea, it brings out the ideas

i love diz guy,his brain is filled with ideas,personally i use the heisen ashi stuff on my chart even though master graeme told us we should focus mainly on price action,but i just love colours.i use RADS REVERSE MTF HAS which i downloaded from forex-tsd.com,i dont have a copy here right now i wouldve uploaded it but you can search their site and download it,its based on the heisen ashi candles and t3 moving averages and a smoother stochastic,i found it profitable on longer tfs.

I'm bumping this thread, just wanted to know if anyone is still using it? I'm really interested in this idea, as well as all idea's that are based on the Equity Millipede concept!

Starting at the market open yesterday (Sunday night for us here in the US), I have added this strategy to my ongoing system tests.

I will try to update this thread once per week with the results.

Hey Samarrone, thanks for posting that, good find!