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  • #1,261
  • Jul 14, 2012 10:37pm Jul 14, 2012 10:37pm
thx Paulus
  • #1,262
  • Jul 15, 2012 10:24am Jul 15, 2012 10:24am
Account standing at = £19,522

Mon – Lost – Acc = £18,545
Tue – Won – Acc = £21,325
Wed – Won – Acc = £24,525
Thu - Lost – Acc = £23,299
Fri – Lost – Acc = £22,134


Im still sticking to the original rules have read and taken account of all thats being said here


It comes down to market volatility



I agree with the 3;1 RR you may get longer losing runs but dont forget big dif here


We are not setting a TP of 50 pips( risk) x 3 ( 15%) = 150 pips


We are taking the risk ,some times 8 pips and aiming for 3 x that = 24 pips


The ATR on EU atm over 20 days is around 100 - 120pips per day


Its the entry thats critical for 3 x RR ..hit the right place wanting 30 pips with an ATR of 100 pips its very doable


P
  • #1,263
  • Jul 15, 2012 10:37am Jul 15, 2012 10:37am
Quoting Paulus
Account standing at = £19,522

Mon – Lost – Acc = £18,545
Tue – Won – Acc = £21,325
Wed – Won – Acc = £24,525
Thu - Lost – Acc = £23,299
Fri – Lost – Acc = £22,134
Seems a bit like a roller coaster no ?
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  • #1,264
  • Jul 15, 2012 10:48am Jul 15, 2012 10:48am
Quoting juicyt
It sounds like people keep forgetting that if you risk for example, 10% per trade and you get 10 lossers, you do not wipe out your account. With every trade after a loss, the lot sizes do decrease when you size your lots by %'s. With every trade after a winning trade, the lot sizes increase.

Keep this in mind when you begin to worry about 10 or 15 losses in a row.

jt
Very true, this is what traders are forgeting. For Pualus' system to work for you, you have to committee 5% of your acc balance in each trade.If you calculate it well, you only need roughly 35% success rate to have a profit on your acc. Anything better than this success rate will give you decent returns. Besides, your acc will withstand 20 straight losses(it will be satanding at about 35%).
  • #1,265
  • Jul 15, 2012 11:03am Jul 15, 2012 11:03am
Quoting Fame of me
Why you use no filter?
Hi Fame of Me

I am very inerested in that filter of yours (stoch 55 15 15). I tried to set it up as you siad but it never looked any where close to yours(with the colouring at the bottom or top). Any where I can sown load it?

Thanks
  • #1,266
  • Jul 15, 2012 11:08am Jul 15, 2012 11:08am
Quoting lhDT
Seems a bit like a roller coaster no ?

No

Look at any trading method in the real world and you will see draw downs

watch the video I posted

Real traders have real draw downs as long as your MM is in place then whats to worry about you have calculated your risk

If you dont like 5% trade at 1% its all down to your personal belief and emotional resilience to draw downs

You may be after a great smooth equity curve but for that your going to need a system that gives you 90% strike rate

There are loads of traders on this forum who boast 90& 80% strike rates taking 10 pips a time but look at thier stop loss 30 or 40 pips I dont want to trade that way

Or traders that average down on trades and end up blowing the account on one trade that went wrong as they kept on buying in to get the average they needed to get out lower

I know on each trade my max loss is 5% if I looked at all the stats out there I wouldnt do a thin in life

Agreed in the stats there may well be a period of 50 losers in arow but that may not happen in my life ..may not happen for 5 years 1 years who knows

So trade with money you can afford to lose take funds out of the account as you make money

To sit back and do nothing because of what my happen is not the right approach

I know if I jump out of a plane I have a 1 in 10,000 chance my chute wont open...it wouldnt stop me jumping because I have calculated my risk.

P
  • #1,267
  • Jul 15, 2012 11:20am Jul 15, 2012 11:20am
the sectetet on 1 trade per day is the entry

we make a few calculaations based on what the market has done since EU opened

Do we think the market will rise or fall based on our findings
We then have to pick the entry to get the max gain

We want the price to move just 3 times more in our direction than 1 times against our direction

Look at the chart for Friday

We picked the correct direction..we just needed to enter in any 1 of the 3 green boxes

Unfortunately we entered at the arrow

Crack that and we have a system that gives us 3 x rr once a day

Dont forget

1 win out of 5 gives us -5%
2 win out of 5 gives us +15%
3 win out of 5 gives us +35%
4 win out of 5 gives us +55%
5 wins out of 5 gives us + 75%

For the week

P
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  • #1,268
  • Jul 15, 2012 12:42pm Jul 15, 2012 12:42pm
Quoting Arctic4x
You are welcome
I hope other people also understand that 10 losers in a row is very normal for a system like this.
Earlier in this thread Paulus posted a video here: http://www.forexfactory.com/showthre...19#post5822519
Around 20 minutes in to that video you will find a formula how to calculate expected numbers of losers in a row if you know the hitrate and so on. Like i wrote in my last post we don't know the hitrate for this system but i guess we are not to far off if we say around 35%. Then that formula tell us that we...

I viewed the video. Like you and Paulus implied, we will have a losing streaks. It’s good to see they could be prolonged and are just a matter of statistics. Just use your system, sit back, and let it work for you. Losses are part of the process.
Thanks

Frank
  • #1,269
  • Jul 15, 2012 12:51pm Jul 15, 2012 12:51pm
Quoting Arctic4x
That is correct.
And something else many traders also forget is that it will take far more time/trades to recover after a drawdown when you use % of the acc for lot size. (I am not saying % of the acc for lot size and MM is bad. I use it myself)
For simplicity lets say you trade a system with R/R 1:1. And lets say you have a very bad period and after 20 losers in a row you are down 50% of your acc. You will not be back where you started after after 20 winning trades because you have to make 100% profit to get back.
If you have several losing streaks...
Use dynamic position sizing and you do not need to think this. Just know your pain limit and put the risk for that level.

Example:

If you risk 2%/position and you have a 10 trade loosing streak then if you want to get back your capital you have to have 10 trade 2% winning streak (or the aggregated result of +10R).

Now if you rise your risk to for example huge 10% then it is the same. After having 10 trade loosing streak you will need 10 trade winning streak (or aggregated) to get it all back.

This means that there is no difference is your risk bigger or smaller (of course if your trading capital goes too low you do not meet your margin requirements).
  • #1,270
  • Jul 15, 2012 1:13pm Jul 15, 2012 1:13pm
Ok. As long as people don't worry about it i guess all is good...

Just remember it is very different to trade to trade a system like this (and most other systems) with the same lot size on every trade (like Paulus do in his examples) compared to % risk of the acc. It is two completely different MM that have dramatic different effect both when the losing streaks come and when you are trying to recover from the DD. It is VERY different. And the difference shows far more and faster the higher the risk you are using of course. If you are not aware this it can really hurt you.

Arctic4x
  • #1,271
  • Edited 2:06pm Jul 15, 2012 1:54pm | Edited 2:06pm
Quoting Arctic4x
Ok. As long as people don't worry about it i guess all is good...

Just remember it is very different to trade to trade a system like this (and most other systems) with the same lot size on every trade (like Paulus do in his examples) compared to % risk of the acc. It is two completely different MM that have dramatic different effect both when the losing streaks come and when you are trying to recover from the DD. It is VERY different. And the difference shows far more and faster the higher the risk you are using of course. If you are...
Simply adjust your used risk to the required level. If there is a great probability to see longer streaks then take that into account if it pains too much.

The message is that it will take the same quantity of success to earn it back if you use dynamic positions no matter the risk size (except margin requirements).

The system itself does not have any influence to this the streak length is the key.

Anyway the dynamic positions are worth to look.

Just my opinion and definitely will not work for all as anything else either
  • #1,272
  • Jul 15, 2012 3:00pm Jul 15, 2012 3:00pm
Very interesting stats....


1 win out of 5 gives us -5%
2 win out of 5 gives us +15%
3 win out of 5 gives us +35%
4 win out of 5 gives us +55%
5 wins out of 5 gives us + 75%

For the week


I am going to read the whole tread....with statistics like these
it looks interesting...
  • #1,273
  • Jul 15, 2012 3:50pm Jul 15, 2012 3:50pm
I have been reading both your posts over and over again and for some reason i don't understand what you are saying.
Quoting Prosentti
If you risk 2%/position and you have a 10 trade loosing streak then if you want to get back your capital you have to have 10 trade 2% winning streak (or the aggregated result of +10R)
I guess you are talking about is R/R 1:1 trades here right?
Well.... if you risk 2% pr trade and you have 10 losing trades then you will not win back your lost capital after 10 winning trades. For that to happen you have to use the same size on all trades. And you call it dynamic positions.? I would call that static positions if i should give it a name. But the name does not matter. What matter is i don't get it..
Quoting Prosentti
If there is a great probability to see longer streaks then take that into account if it pains too much
And what are you saying here??
The way i read it you make it sound like you can tell before it happens that there is a "great probability to see longer streaks" ?
Losing streaks or winning streaks. Does not matter if it is one or the other but are you saying you know when they come?
  • #1,274
  • Jul 15, 2012 3:57pm Jul 15, 2012 3:57pm
Quoting giraia_br
do you trade live with this broker?

thanks for answer.
yes i do
  • #1,275
  • Jul 15, 2012 4:01pm Jul 15, 2012 4:01pm
hy fame,
can you all tell us our new Filter(indicator) with settings?

steve
[qu

ote=Fame of me;5841446]fxprimus had most time 0.2 and i do really good with the strategy from p.
but i filter more and i have just one looser in round about 5 weeks.[/quote]
  • #1,276
  • Jul 15, 2012 6:10pm Jul 15, 2012 6:10pm
I guess you are talking about is R/R 1:1 trades here right?
Well.... if you risk 2% pr trade and you have 10 losing trades then you will not win back your lost capital after 10 winning trades. For that to happen you have to use the same size on all trades.

Yes that is the point, originall 2% stays as postion size for the 10 trades.
Say you risk 100$, next time another 100$, which is a bigger percent as you continue loosing...
I´ts the only way of coming back straight with this idea...
My problem is 35 % winners on a constant basis with this" idea..."
Just that, constantly, should make you a billionare...above that...well...a big billionaire...
good luck...snicerely

And you call it dynamic positions.? I would call that static positions if i should give it a name. But the name does not matter. What matter is i don't get it..
And what are you saying here??
The way i read it you make it sound like you can tell before it happens that there is a "great probability to see longer streaks" ?
Losing streaks or winning streaks. Does not matter if it is one or the other but are you saying you know when they come?[/quote]
  • #1,277
  • Jul 15, 2012 6:24pm Jul 15, 2012 6:24pm
Thanks for this wonderful strategy, paulus..
I have read this thread for a long time, and traded on a demo account as well.

I began with $1000 on the demo account and now 1 month and 14 days later the account is up in the $2500.. I risked a maximum of 5% per trade and my take profit was on 15%..

This strategy works really well, and I love that there's only 1 trade a day.
Combining this strategy with the stoch indicator gives me a strike rate of 48%.. Which I believe is pretty good.

The longest row of losses I have had is 3 in a row.. So an advice to the others following this strategy is to not worry very much about having a lot of loss trades in a row.

Also, try to take the first signal when it comes. Waiting too long and trading long after London Open will not give that good results..

Of course 1 month and 14 days is not enough time to say if this strategy is stable or not, but we'll never know if we don't test it!!

Good luck with this strategy..
I am sure everyone following the rules will get good results..
  • #1,278
  • Edited 8:32pm Jul 15, 2012 7:55pm | Edited 8:32pm
Quoting cuchuflito
Yes that is the point, originall 2% stays as postion size for the 10 trades.
Say you risk 100$, next time another 100$, which is a bigger percent as you continue loosing
Yes that is a MM you can use if you want to get back from a DD with the same number of trades as you went in to the DD if you trade R/R 1:1 and it can also be used for this system of course. I have used that MM myself and some variations of it in the past.
But that is not what people are talking about here. They say risk 5% pr trade. The MM you are talking about is risk some set % for every all time high on the equity curve, and for all other trades use the same position size as the previous trade.
I guess that is what Prosentti calls "dynamic position sizing". Maybe that is the name of it. I don't know.
Anyway it sounds like a gamble (that are doomed to fail) to me to use 5% pr trade on a "low" hitrate system with a MM like that, but that is just me. I guess for other people it is ok..?

Early days yet so it is hard to say but so far the system itself look like it may be a winner. Thanks to Paulus for sharing it.

Arctic4x
  • #1,279
  • Jul 16, 2012 12:39am Jul 16, 2012 12:39am
Quoting -YoungMoney-
Thanks for this wonderful strategy, paulus..
I have read this thread for a long time, and traded on a demo account as well.

I began with $1000 on the demo account and now 1 month and 14 days later the account is up in the $2500.. I risked a maximum of 5% per trade and my take profit was on 15%..


Well done its simple but quite effective not perfect and will adapt I feel,

just dont try to over complicate things

P
  • #1,280
  • Edited 3:25am Jul 16, 2012 12:57am | Edited 3:25am
Quoting Arctic4x
Yes that is a MM you can use if you want to get back from a DD with the same number of trades as you went in to the DD if you trade R/R 1:1 and it can also be used for this system of course. I have used that MM myself and some variations of it in the past.
But that is not what people are talking about here. They say risk 5% pr trade. The MM you are talking about is risk some set % for every all time high on the equity curve, and for all other trades use the same position size as the previous trade.
I guess that is what Prosentti calls "dynamic...
This is correct. It is all about the frequency. If you trade only once per year then you can use big risk percentages (5% or even more). But if you do 30 positions per day your should definitely use smaller values. Very often it takes for awhile until you understand the real resons for the things happened so you can adapt but if you have only few days to do this then it is too late. Also it is not wise to adapt after every small streak of losses. Loosing is a part of this as we all well know.

It is so system dependent what % you should use.

Let's say you trade 30 times per day. In a very bad day you can go all wrong and after the day you are in the -20R situation. So, how much do you stand the pain with your -20R ? If it was 2% risk then it means you are down 40%. Way toooo much. But if it was 0,1 % you are down 2%. This may be acceptable ? No right or wrong listen to yourself, know your system and use your common sense.

btw. I do not know this system what this thread is all about so I cannot say the correct values. Even thought I know you allways have to take into account yourself. People are different. They perform differently the same trading rules etc.

btw2. Yes I was talking about the DYNAMIC POSITION SIZING where you calculate your position again every time you are going to open your position. The size is a calculation of your pip risk and current trading capital. You adjusting your position size so that if you will meet the stoploss the end result will not exceed your risk % per trade. By this way if you for example lose 10 times in a row and then you have a 10 time winning you are back to the original situation. Put up some spreadsheet or take a calculator and check.

BUT if you do not know where you are going to get out of your position (=pip risk) then things will get little a bit tougher. Must be calculated another way. I read this thread from the beginning (few pages from the start) and it seems this may be the case...

Guys do not take this as an attack to this system or anything. Just an idea which can be very useful for someone.

Be happy and trade well.
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