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Low Risk, High Reward Trading Experiment

  • #181
  • May 18, 2006 7:20pm May 18, 2006 7:20pm
itme,

Thanks for giving such a candid and articulate response about the development of your system. My hats off to you for your efforts. Just taking the time to post every trade and then updating as market conditions change is a feat in itself; not to mention attempting to create a system that has the potential for such a high reward/risk factor. Keep up the great work.

The post by some is a good reminder that each one of us is responsible for our loses as well as our wins. How exhilarating is that?
  • #182
  • May 18, 2006 7:29pm May 18, 2006 7:29pm
I think it's pretty certain that FXNewbie is the only one who feels any sort of negativity about this system.

I stated previously, and I'll state it again...the win/loss ratio on the system is almost 90% but I have yet to reach a profit target. With that said, good position management has allowed to handomly capitalize on the system just by employing standard trailing stop/profit target routines. With that said, I probably haven't realized the fullest potential of the system because of my actions, but I sure as hell feel quite confident about it. I can't boast a 15000% increase in my account because of the signals...but I'll take a 90% win ratio and a 2:1 reward/risk ratio any day...which is about what I'm getting so far. i'm still not betting a lot of money on the trades just yet, but believe me, the temptation to go all out here is incredible. I'm just trying to find a happy medium in determining why some trades go very well, and some start to do well and then reverse quickly (and subsequently either take the position out on the recommended stop before continuing in the right direction). However, knowing that I can make 15+ pips AT LEAST a trade gives me some solice to advancing my account at a faste pace than I ever thought.

Itme, please continue what you're doing. Let the rest of us manage our own accounts.
  • #183
  • May 18, 2006 11:11pm May 18, 2006 11:11pm
The following trade was conveyed in the above comment when the market was in a perfect sell situation, and we had to send out the signal to the readers immediately due to the tenuousity of the situation:

Thursday 5/18/2006 20:08

TS#64

Sell EUR/USD at 1.2858

Stop was originally 1.2886

Now that market has declined to 1.2830, bring Stop Loss to break even level.

Target #1 is 1.2670

Target #2 is 1.2590

Reward is about 185 pips (265 pips for Target #2)

Risk was about 31 pips

Reward : Risk ratio is about 6 to 1 (and 8.5 to 1 for Target #2)

For testing and research purposes only.
  • #184
  • May 19, 2006 2:04am May 19, 2006 2:04am
The following trade was conveyed in the above comment when the market was in a perfect sell situation, and we had to send out the signal to the readers immediately due to the tenuousity of the situation:

Thursday 5/18/2006 20:08

TS#65

Sell GBP/USD at 1.8953

Stop was originally 1.8972

Now that market has declined to 1.8915, bring Stop Loss to break even level.

Target #1 is 1.8780

Target #2 is 1.8582

Target #3 is 1.8430

Reward is about 168 pips (366 pips for Target #2, and 503 pips for Target #3)

Risk was about 24 pips

Reward : Risk ratio is about 7 to 1 (and 15 to 1 for Target #2)

For testing and research purposes only.
  • #185
  • May 19, 2006 2:09am May 19, 2006 2:09am
Thanks for the open and frank report on progress and aspirations.

If Fxnewbie lost 2/3 of his account in one go, he still has enough capital to invest in a large pack of paper tissues, can crawl into a corner and cry his eyes out!! When he has finished sulking, he can then adddress his real problems like money management and greed.

This experimental system has great potential and needs a lot of testing. If you reduce the targets and increase the stops slightly, you can still make a handsome profit on nearly every trade but each trade needs to be backed by the results of your own system.

Timing is also a problem. In France we are 6 hours ahead of ET which gives us a fair window during our working day to track London and US trading hours - pity some of the best alerts come out when we are tucked up in bed!!!

Will watch these threads with interest!!!!!

Keep
  • #186
  • May 19, 2006 3:24am May 19, 2006 3:24am
At last we achieved a picture perfect trade. Our account has increased dramatically in the past few hours as we ride the precipitous fall of GBP/USD and EUR/USD from the very peak. The big question now is - where will it end?

Any educated guesses?
  • #187
  • May 19, 2006 5:06am May 19, 2006 5:06am
itme - you certainly called it right on EUR/USD.

this thread is fantastic, keep it up.
TRADE FOR SWAP
  • #188
  • May 19, 2006 7:20am May 19, 2006 7:20am
With cable dropping 200 pips and euro about half that, it made for a nice profitable evening, well worth the loss of sleep. Eventually I will build up enough capital to be able to trade more than 1 mini lot at a time.

I had been expecting this to happen ever since last weekend. Thank you for pinpointing the fact that it was happening tonight. I might have fallen asleep and missed it and I would have been very upset with myself if I had missed getting all of those pips just waiting to be collected.
  • #189
  • May 19, 2006 8:19am May 19, 2006 8:19am
Friday 5/19/2006 9:00 ET

TS#67

Sell EUR/AUD at 1.6878 or higher

Stop is 1.6896

Target #1 is 1.6690

Target #2 is 1.6650

Target #3 is 1.6585

Reward is min. 172 pips

Risk is max. 33 pips

Reward : Risk ratio is min. 5.4 to 1

This is a trade that might not be tradeable by others, as the market is moving very fast, however, it is system compliant and appears like a good trade if it is tradeable and meets the system criteria of independent traders as well.

For research and testing purposes only. Trade at your own risk. Trade risk capital only.
  • #190
  • May 19, 2006 9:04am May 19, 2006 9:04am
Market did move fast on that one. Timing and scheduling are the challenges clearly... for most trading systems apparently. I was away from keyboard when GBP and EUR peaked yesterday... was a good time to sell.

Futuristic

Quoting itme
Friday 5/19/2006 9:00 ET

TS#67

Sell EUR/AUD at 1.6878 or higher

Stop is 1.6896

Target #1 is 1.6690

Target #2 is 1.6650

Target #3 is 1.6585

Reward is min. 172 pips

Risk is max. 33 pips

Reward : Risk ratio is min. 5.4 to 1

This is a trade that might not be tradeable by others, as the market is moving very fast, however, it is system compliant and appears like a good trade if it is tradeable and meets the system criteria of independent traders as well.

For research and testing purposes only. Trade at your own risk. Trade risk capital only.
  • #191
  • May 19, 2006 10:04am May 19, 2006 10:04am
Friday 5/19/2006 10:46 ET

TS#68

Sell GBP/JPY at 209.70 - 209.80 or higher

Stop is 210.20

Target #1 is 205.40

Reward is min. 421 pips

Risk is max. 59 pips

Reward : Risk ratio is min. 7.1 to 1

This is a system compliant trade and appears like a good trade if it is tradeable and meets the system criteria of independent traders as well.

For research and testing purposes only. Trade at your own risk. Trade risk capital only.
  • #192
  • May 19, 2006 10:21am May 19, 2006 10:21am
Revise stop in the following trade:

TS#68 Sell GBP/JPY at 209.80 - 210.10 or higher


Friday 5/19/2006 11:15 ET

TS#68

Sell GBP/JPY at 209.80 - 210.10 or higher

Stop is 210.45

Target #1 is 205.40

Reward is min. 421 pips

Risk is max. 74 pips

Reward : Risk ratio is min. 5.8 to 1

This is a system compliant trade and appears like a good trade if it is tradeable and meets the system criteria of independent traders as well.

For research and testing purposes only. Trade at your own risk. Trade risk capital only.
  • #193
  • May 19, 2006 10:42am May 19, 2006 10:42am
Hi itme, I'm new to this forum and I've been trading spot forex for about 2 months now. I've been following this thread and I can't help but notice that a good portion of your recommended trades are very accurate and the risk-reward ratio very good. I can't help but ask this question: are you a witch?
  • #194
  • May 19, 2006 10:58am May 19, 2006 10:58am
No, Mandarin, no witchcraft here. But thanks for the compliment. You might note that we had about 15 losing or almost losing trades recently, as we are tuning up our system and developing our capacities. But we do have a remarkable model that we are employing that is virtually flawless in its reliability and accuracy. The only problem is that it is extremely complex and demanding.

It was developed based on a combination of both inductive and deductive reasoning, following the scientific philosophy of Goethe, the great German scientist and philosopher. He was the author of Faust.

The system is pure logic. There is no subjectivity, no judgement. No intuition. No personal experience.

By the way, if you sold GBP/USD right now at 1.8751, you could make at least 50 pips with a very small stop.
  • #195
  • May 19, 2006 11:06am May 19, 2006 11:06am
We would like to draw the attention of the traders here to the beneficial nature of the market. Take the TS#67 as an example. Even though the market shot up to the high at about 1.6883, it returned to almost exactly the same price two more times over the following 1.5 hours. This is quite common. Therefore we advise traders who have approved in principle and personally validated a trade concept to employ a limit order with entry limit, stop and take profit to take advantage of this typical market behaviour. That way you don't have to watch the charts.

Our goal is to generate signals that can be entered as limit orders and which require no personal management. This is a tall order, but we believe we can do it and make a good return on capital. But there are still a few bugs, obviously, in our system, so be careful what you do with what we tell you. Be skeptical and think for yourselves.

Original trade signal:

Friday 5/19/2006 9:00 ET
TS#67 Sell EUR/AUD at 1.6878 or higher
Stop is 1.6896
Target #1 is 1.6690
Target #2 is 1.6650 Target #3 is 1.6585
Reward is min. 172 pips Risk is max. 33 pips Reward : Risk ratio is min. 5.4 to 1
This is a trade that might not be tradeable by others, as the market is moving very fast, however, it is system compliant and appears like a good trade if it is tradeable and meets the system criteria of independent traders as well.

For research and testing purposes only. Trade at your own risk. Trade risk capital only.
  • #196
  • May 19, 2006 11:45am May 19, 2006 11:45am
There is a strong trend underway. I have no idea why it is happening, but the patterns in the charts told me it was coming, and the current patterns in the charts tell me that it is happening. Some of the losses last week were because we were premature in predicting this trend, which caused us to go in the wrong direction with alot of our trades. We got the small trends right, but we were wrong about the larger encompassing trend. We will try to find a way to avoid doing that in the future.

If you are long USD/CHF, then today's target is 1.2252 to 1.2300. Longer term target is 1.2425. (Current price is 1.2180)

If you are short GBP/USD, then today's target is 1.8625 to 1.8595. Longer term target is 1.8430. (Current price is 1.8760)

If you are short EUR/USD, then today's target is 1.2660 to 1.2645. The longer term target is 1.2525. (Current price is 1.2750)

If you are long USD/JPY , then today's target is 112.86. A longer term target is 113.65 approx. (Current price is 111.75)
  • #197
  • May 19, 2006 12:20pm May 19, 2006 12:20pm
Quick question from an interested side line reader. Do you keep positions over the weekend or do you liquidate before market close and then enter the market again at the best possible place on monday?
Always wait for the opportune moment… just be careful not to miss it.
  • #198
  • May 19, 2006 12:45pm May 19, 2006 12:45pm
The model we employ is impervious, to our knowledge, to everything short of non-farm payroll data releases. Even then, if we totally ignore the massive data releases - about 75% of the time it makes absolutely no difference to the beginning and endpoints of the larger trends. The trick is to enter the trade at the extremity of the trend, and then exit at the opposite extremity. Then all the oscillations in between are simply noise. It doesn't seem that the endpoints of the medium term trends are effected much by world events and decisions. It seems that they are pre-determined by the banksters who rule the world, or by natural forces beyond the power of anyone or anything to alter.

Even when the bombs went off in London on July 7 and GBP/CHF moved 550 pips in 24 hours, it went precisely to where we had predicted it would go - to the pip! It just went there much faster than it otherwise would have done.
  • #199
  • May 19, 2006 3:12pm May 19, 2006 3:12pm
It is a truly impressive feat for a system to be so accurate that major disasters do not affect its predictive ability but only the rate at which the outcomes occur. This says a great deal about the ability of the system to uncover the most basic level of the marketwhich is essentially independent of day-to-day events.

Your system seems to be really very good, although I agree that some fine tuning is needed. The basic system seems sound, and timing has at times been an issue. I, for one, am willing to accept a reasonable percentage of losses as long as the drawdown is not excessive. What causes most newbies to end up with margin calls are large drawdowns, and the same could happen to anyone if the drawdowns are too large.

The creators are clearly trying to create the ideal system: one with small drawdown, and a high percentage of profitable trades. They are to be complimented. This is the sort of system that anyone creating a system would want to make. The reason it has not already been made is that it is either an impossible task or an extremely difficult one.

Keep up the good work. It is obviously difficult but should ultimately prove worth the time and trouble. As you can see from the majority of people contributing to this thread, most of us understand what you are trying to do and appreciate your sharing it with us during the development phase.
  • #200
  • May 19, 2006 4:07pm May 19, 2006 4:07pm
Quoting itme
The model we employ is impervious, to our knowledge, to everything short of non-farm payroll data releases. Even then, if we totally ignore the massive data releases - about 75% of the time it makes absolutely no difference to the beginning and endpoints of the larger trends. The trick is to enter the trade at the extremity of the trend, and then exit at the opposite extremity. Then all the oscillations in between are simply noise. It doesn't seem that the endpoints of the medium term trends are effected much by world events and decisions. It seems that they are pre-determined by the banksters who rule the world, or by natural forces beyond the power of anyone or anything to alter.

Even when the bombs went off in London on July 7 and GBP/CHF moved 550 pips in 24 hours, it went precisely to where we had predicted it would go - to the pip! It just went there much faster than it otherwise would have done.
I agree absolutely. I employ e-wave structure to my over all direction of the long/mid term and news never affects it. Reason being is technical analsys is the study of human behavior. After all it is humans behind the buying and selling.

my 2cents


Dave
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