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Extreme TMA System

  • #10,021
  • Apr 27, 2012 12:28am Apr 27, 2012 12:28am
Quoting Ever E. Man
The best thing about your posts, Mike, is that you keep everybody honest! It's important to be honest, as a trader, не правда ли?
Точно! Exactly!


Quoting Ever E. Man
Not like used car salesmen, or politicians, who can get away with smoke and mirrors, eh?
As a good citizen I think we should have a hunting season on politicians to thin them out a bit. And I'm sure a hunting season on used car salesmen is a very good idea too!
Gentlemen always play by the rules. If they can't, they change the rules.
  • #10,022
  • Apr 27, 2012 12:48am Apr 27, 2012 12:48am
Hello all

First thanks Al and the rest for this great system. Today end the last page , 5 days reading. I would like to setup correctly this ind, I am using hotforex as my broker.

Regards

Jose Rumbaut
  • #10,023
  • Edited 10:20am Apr 27, 2012 1:16am | Edited 10:20am
Quoting Alorente
I bet you he was between 20% and 40% per month. Of course, it depends on how good his trading system is and how small is small. His small may be a lot smaller than my small.
Quoting Favorite
Al, I think that his small was a lot smaller than your small, and I'm sure your system is much better than his system, that's why I asked this question!

Let's see what Riddermark will answer!
No, his returns on his Forex Fund were less than yours for 4 reasons I can think of.

First the factual;

1. Liquidity - When you start trading the numbers that he was you start to hit that "glass sealing" as the saying goes. Even though the Forex broker could handle each trade that size there were limitations and he had to start doing a dance around the limitations to continue to make it work.

It's Similar to large mutual funds in the billions like Fidelity or Vanguard have (or had before the downturn), it's harder for them to take a position in a stock because of their humongous capital having to scale into a position and scale out else huge buys or sells will effect the stock price itself.

Where smaller stock funds typically outperform with higher risk profiles but greater return. It's the Titantic versus the speed boat analogy. Not a perfect analogy because Forex is a trillion dollar a day market and this guy couldn't effect price but you get the general idea on large capital challenges.

He mentioned that when you get to a certain equity size you can start to deal with powers that be in the currency markets and bypass the forex brokers entirely and become a market maker, not for clients but for yourself. That way you can totally skip the spreads charged by the broker.

He mentioned that one month he paid over $1 million dollars in spreads alone. Yikes! Happy broker I guess but Yikes for him.

Do those brokers drive Ferrari's?

He never mentioned if he actually became a market maker/broker or not but he did mention he was thinking of doing it.

2. Smaller positions. Al's in the 4-6% range. This guy is smaller being more conservative hence not as high returns. Al = Speed boat. Forex Fund = Titantic. Pros and Cons to both. Greater capital less return versus higher return more agile.

The next two are my assumptions.

3. Risk - How well can you sleep at night trading increased risk with that kind of money? Personally if I were trading that kind of money (wouldn't that be neat) I would want a more conservative trading method.

Also, it's not just his personal funds he's trading it's his money plus others peoples money. I assume he needed to adjust his expectations for returns. His thought process was "this is a marathon not a sprint" so I think he gets it. The one positive thing about trading other peoples money is your getting a piece of the action on someone else dime.

From what I can tell reading this thread Al is comfortable in his trading experience to trade other peoples money with some level of added risk (I think anyway) and achieve the superior returns he does. I guess that's one of the rewards of trading for 30 years. Hats off to you on that Al.

4. Trading ability - It's not impossible that Al's 3 decade trading ability is a factor. The Fund manager only taught me a basic trend following method with two indicators just to get my feet wet to introduce me to Forex.

Nothing fancy believe me compared to what's in this thread from Al as well as Nanningbobs Recovery method. But it was his philosophy of small positions and smart use of margin (like Al's/Nanningbob) that was key. He, like Al, had years of experience and I believe it is very likely he was far more sophisticated in his actual trading techniques than what he taught me.

It's like the blind lady of justice statue holding two scales arms extended weighing the observations. It's possible.

This guy also is similar to Al in that he doesn't put all his eggs in one basket either. Al mentioned to remove 90-95% of your profits from Forex and put it into other investments. The fund manager didn't have all his money in Forex either but in other investments as well.

Quoting sabrys5769
Thank you Riddermark, I learned a lot from your words.. really
Your welcome friend.

Quoting beto21_cwb
You nailed it !!! =D

Where is the LIKE button ??? FF should implement it one of these days... =p


Quoting nanningbob
Dang, almost sounds like me
No, it is you, It's Al too.

Quoting Alorente
OK. You just detailed my entire trading method down to the letter. Yes. I also never take a losing trade. Well, almost never. Sometimes I will take one if circumstances have radically changed and the wait would be too long.
Great minds think alike.

Quoting Alorente
Donīt forget that daily swap charges add up also.
Spot on (as always). Can't get anything by you can we? Yes daily swap charges can add up over extended open trades. This is one reason I am just a little leary of trading the "wrong" direction of AUD. I think forexfactory lists the annual interest rate at around 4.5% . Break that down daily and it's a little less fun when having extended draw down time on a trade and paying the swap than being on the "right" side of the swap when you are getting paid instead. Not a total limiting factor but just something I consider when trading it.

Quoting Alorente
If you pick your trades correctly with Extreme TMA and you use small positions and the Recovery Method, you too can have 40 winners in a row and continue trading with your spare margin while you wait for your trouble trades to recover.
Exactly. The focus now is not how to not lose money but maximzing gains by becoming a better trader. That's why were are all here, hence Extreme TMA. 40 winners in a row ain't nothing to sneeze at either. Exceptional trading to say the least.

Quoting Alorente
PS- I failed to mention what having 80 winners in a row does for your confidence...
Nirvana. Noun; Any place of complete bliss and delight and peace

Quoting Ever E. Man
I would also add from my own pantry of mistakes, the desire to make more money than you have capital to make safely. The other is forcing yourself to trade a system that is not right for you, bores you to tears, for example, because you believe that it's a successful system that makes money. It only makes money if you can trade it!
Yes, it's one of the reasons I am currently having a hard time with the higher time frames like 1H and 4H. I have that "gotta be in a trade more often" feeling. It gets me into trouble. Al's advice on patience is something I need to learn. It can pay off in the higher time frames with less stress and similar or better returns than the lower time frames.

Quoting Ever E. Man
"I know this system can work! Why am I falling asleep at the computer? Oops! Missed another signal!
Yeap. Incompatible systems (trader versus system) have made me do that. Were you looking over my shoulder?


Best regards.
  • #10,024
  • Apr 27, 2012 1:34am Apr 27, 2012 1:34am
Quoting Forex Girl
[color=Blue][b]Al and Friends,

Iīve been used the semafor_3 indicator as shown by SCOTT-ibm.
Searching the MQL4 page I saw the indicator MTF Zigzag with 3 level created by rockyhoangdn.
3 TF Zigag Level with same settings as shown in the figure below. I think it very interesting.
Maybe, we could set to show only level 3 (matches multiple TF), but i donīt...
I changed the Semaphor to show only level 3. This is what I use on my charts now.
Attached File(s)
File Type: mq4 ! $ 2012 SEMA4X - White Only.mq4   9 KB | 816 downloads
Observation is the path to discovery.
  • #10,025
  • Apr 27, 2012 1:37am Apr 27, 2012 1:37am
Quoting Riddermark
Thanks for the reply Al.

This aspect of Forex takes me back to how I got introduced to Forex. The guy was a Forex Fund Manager/Realestate investor etc., he taught me not so much a system but a solid foundation of the judicial use of margin and position sizing.

I can't go into his personal trading with full details unfortunately but his primary tenets were;

1. Never take a losing trade
2. Never use a stop loss
3. Never get a margin call

How do you manage this?

A. Small positions
B. Keep your account healthy. Limit the number of...
Riddermark - Very insightful and def food for thought... Thank you !
  • #10,026
  • Apr 27, 2012 1:39am Apr 27, 2012 1:39am
Quoting Ever E. Man
Excellent story, Mark! A great explanation of why recovery works in forex. I really felt it, so I think it will stick. It also ties in with what I said earlier about not using recovery for non-pairs/spreads trading. (#9996)

I would also add from my own pantry of mistakes, the desire to make more money than you have capital to make safely. The other is forcing yourself to trade a system that is not right for you, bores you to tears, for example, because you believe that it's a successful system that makes money. It only makes money if you...
Exactly. What is the correct position size? The one that you will be able to comfortably hold, stress free without a stop loss. It will be different for each individual, but there is a right size for everyone. Once you find it, you are on your way to becoming a successful trader.
Observation is the path to discovery.
  • #10,027
  • Apr 27, 2012 1:46am Apr 27, 2012 1:46am
Quoting nanningbob
You know I have spent years learning the lessons so eloquently spelled out here in one simple page. You get mocked, laughed, ridiculed for holding such beliefs and it wasnt like you got there because people are writing this stuff out there. You wont find this at any broker nor will you find any books on it. However, you will find an article here, a word there and sooner or later you learn the hard way that trading small, low leverage or no leverage, with multiple levels is how many of the big boys do it. Interesting that many have come to similar...
Bob, I wonīt say I learned Recovery from you, because I had been using it for many years without calling it that, but I will say you validated the concept for me. When I first read what you so intelligently called the Recovery Method, I was able to step out of the closet. I stopped feeling like a pariah in the way I traded. I thank you for so bravely exposing to the world what me and hundreds of other pro traders who treated stop losses like the plague, would not dare talk about.
Observation is the path to discovery.
  • #10,028
  • Apr 27, 2012 1:49am Apr 27, 2012 1:49am
Quoting astral77
I can second that. Only when a trader realizes this truth profits come in and you would be surprised how those small trades add up. If you are looking to turn $5000 to $10000 in 3 or 6 months you are doomed. By using smaller lots you can make a healthy profit of 30%, 40% or more.

kind Regards
The moment you discover this, you begin to feel hope. Once you master it and truly believe in it, your life will have changed forever.
Observation is the path to discovery.
  • #10,029
  • Apr 27, 2012 1:51am Apr 27, 2012 1:51am
Quoting nanningbob
Al says 80 straight hmmmmmmmmmmmm ................ gonna try for 81 then
Bob, you and I donīt compete with each other. We stimulate each other. There is a difference...
Observation is the path to discovery.
  • #10,030
  • Apr 27, 2012 2:06am Apr 27, 2012 2:06am
Quoting Riddermark
No, his returns on his Forex Fund were less than yours for 4 reasons I can think of.

First the factual;

1. Liquidity - When you start trading the numbers that he was you start to hit that "glass sealing" as the saying goes. Even though the Forex broker could handle each trade that size there were limitations and he had to start doing a dance around the limitations to continue to make it work.

It's Similar to large mutual funds in the billions like Fidelity or Vanguard have (or had before the downturn), it's harder for them to take a position...
You have done this thread and its members a great service by posting this story and expressing yourself so well. Every word rings true and reaches the reader. I thank you for this.

You know the way. Now you only have to fix:

Yes, it's one of the reasons I am currently having a hard time with the higher time frames like 1H and 4H. I have that "gotta be in a trade more often" feeling. It gets me into trouble.

Solving this problem is just as important as the others we talked about. You must understand that staying out of a bad trade is actually the BEST trade that you will probably ever take. It is not the money you make that is critical, it is the money you keep from losing that changes your life for the better.
Observation is the path to discovery.
  • #10,031
  • Apr 27, 2012 2:10am Apr 27, 2012 2:10am
Quoting Alorente
OK. You just detailed my entire trading method down to the letter. Yes. I also never take a losing trade. Well, almost never. Sometimes I will take one if circumstances have radically changed and the wait would be too long. Donīt forget that daily swap charges add up also.

If you pick your trades correctly with Extreme TMA and you use small positions and the Recovery Method, you too can have 40 winners in a row and continue trading with your spare margin while you wait for your trouble trades to recover.

I have to admit that I am surprised...
Al (and to the others who do not take losing trades) : I know this is a very subjective question and the answer would depend a lot on the circumstances supporting a trade at the time - just out of curiosity, based on your past experience what has been your average time (aprox) per trade before closing a losing one?

Also when u do close, I would assume the loss will be several times that of your average profit per trade ? I guess since the frequency of closing a losing trade is less (and the ratio of winning number of trades to losing trades is heavily weighted towards the winnings) , losing trades (when they do come along) won't make a big hole in your a/c......
  • #10,032
  • Apr 27, 2012 2:10am Apr 27, 2012 2:10am
Good going Al, I've done 14 days of consecutive winners, the account is up of this morning at 51% in 2 weeks it will have doubled again. No losing trades

Quoting Alorente
PS- I failed to mention what having 80 winners in a row does for your confidence...
Tracking the Specialists.
  • #10,033
  • Apr 27, 2012 2:12am Apr 27, 2012 2:12am
Quoting Alorente
You have done this thread and its members a great service by posting this story and expressing yourself so well. Every word rings true and reaches the reader. I thank you for this.

You know the way. Now you only have to fix:

Yes, it's one of the reasons I am currently having a hard time with the higher time frames like 1H and 4H. I have that "gotta be in a trade more often" feeling. It gets me into trouble.

Solving this problem is just as important as the others we talked about. You must understand that staying out of a bad trade is...
OK. Thatīs well and nice, you will say, but how do I solve this problem?

The same way I was able to solve it. By immersing yourself in research in between good trades. I learned this from Market Wizards, a great book. It was one of the common messages of a lot of the great traders interviewed. Keep yourself busy on the research side and you will, not only learn constantly and find many great opportunities, but you will also fill the dangerous time productively and you will stay out of trouble.
Observation is the path to discovery.
  • #10,034
  • Apr 27, 2012 2:16am Apr 27, 2012 2:16am
Quoting abqkidd
Dr Dave, can I ask what data feed you a using with currencies for NinjaTrader and are you satisfied with them? I'm looking to convert this system to NinjaTrader and will be looking for good data feed.
Thanks,
Brian
I use PFG. One of these days I'll evaluate Kinetic. But so far, I am satisifed with PFG. I noticed that I tend to get ticks arriving several seconds before my MT4 feed from Forex.com

DrDave
To free Gazans of Hamas, use whatever it takes.
  • #10,035
  • Apr 27, 2012 2:27am Apr 27, 2012 2:27am
Quoting Connected
Good going Al, I've done 14 days of consecutive winners, the account is up of this morning at 51% in 2 weeks it will have doubled again. No losing trades
Wow very nice Connected ! I've stucked with 2 trades but I hope they will close with nice profit soon
  • #10,036
  • Apr 27, 2012 2:29am Apr 27, 2012 2:29am
Position sizing strategies could very well be the most important aspect of a trading system . . . Position sizing methods can be the key factor in whether or not you stay in the game or whether your gains are huge or minimal.

Dr. Van K Tharp
Master Your Setup, Master Your self. (NQoos)
  • #10,037
  • Apr 27, 2012 2:32am Apr 27, 2012 2:32am
Quoting nanningbob
Al says 80 straight hmmmmmmmmmmmm ................ gonna try for 81 then
Traing wheels are off the bike, right?
To free Gazans of Hamas, use whatever it takes.
  • #10,038
  • Apr 27, 2012 3:06am Apr 27, 2012 3:06am
Good going Penet Hope it turns out nice!

Quoting penet
Wow very nice Connected ! I've stucked with 2 trades but I hope they will close with nice profit soon
Tracking the Specialists.
  • #10,039
  • Apr 27, 2012 3:10am Apr 27, 2012 3:10am
Bearish Evening Star (Evening Shooting Star)

• Direction:Bearish
• Type: Reversal
• Reliability:Strong

EU Evening star on resistance on D1
Attached Image (click to enlarge)
Click to Enlarge Name: eu d1.gif Size: 29 KB
Master Your Setup, Master Your self. (NQoos)
  • #10,040
  • Apr 27, 2012 3:19am Apr 27, 2012 3:19am
It gives me great pleasure to introduce a new EA that will handle your Recovery trades automatically. The author is beto21_cwb. For his great work, I have vouched for him and added him to the Extreme TMA Hall of Fame.

Thanks, Beto.
Attached File(s)
File Type: ex4 TheRecoverySystem.ex4   29 KB | 1,176 downloads
File Type: pdf The Recovery System EA.pdf   196 KB | 2,897 downloads
Observation is the path to discovery.
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