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Set it and Forget it, Dollar Cost Averaging

  • #101
  • Aug 20, 2012 9:44am Aug 20, 2012 9:44am
Yes, looking back I am confusing myself too. I added too many zeros. But yes it makes sense now, thanks.

Quoting jaws810
Ok, your numbers are confusing me, your talking about 50 pip moves but your numbers show a 500 pip move. The longs and shorts are independent for TP calculation. Here is how it would work.

Longs: open a position at 1.5000 with TP at 1.5050, TP is hit open a second position at 1.5050 with a TP at 1.5100, then at midnight you would add a position at 1.5070 which would give you an average position of 1.5060 with a TP for both positions at 1.5110

Shorts: open a position at 1.5000 with a TP of 1.4950, come back at midnight since the TP hasn't...
  • #102
  • Aug 20, 2012 11:20am Aug 20, 2012 11:20am
Quoting jaws810
I've tried the pip dependent averaging and it didn't work out because when there is increased volatility too many positions would be opened, however a pending order at the TP sounds like a good idea. I appreciate new ideas don't worry about sharing them, I'm not easily offended.
I did just that last night. 2 accounts. Both bought and sold EU @ 1.2350 Placed pending orders at the respective TP's. Woke up late this morning. Closed out the 2 sets of trades and orders for +47 pips.

The dynamic of taking a profit on one account while dollar cost averaging the opposite side in a ranging market worked very nicely. Question is...would you have taken the profit @ +47 or would you have waited to accumulate more pips?
  • #103
  • Aug 20, 2012 12:20pm Aug 20, 2012 12:20pm
Quoting Bobcat2
I did just that last night. 2 accounts. Both bought and sold EU @ 1.2350 Placed pending orders at the respective TP's. Woke up late this morning. Closed out the 2 sets of trades and orders for +47 pips.

The dynamic of taking a profit on one account while dollar cost averaging the opposite side in a ranging market worked very nicely. Question is...would you have taken the profit @ +47 or would you have waited to accumulate more pips?

So Bobcat...How did you place a long and short (a hedge) on E/U and come out with 47 pips profit. Did you get a second order in on the short side. Not sure from your numbers.
  • #104
  • Aug 20, 2012 12:24pm Aug 20, 2012 12:24pm
Quoting jaws810
I've been thinking about all the suggestions in the posts and I think I have a possible solution to make this profitable in the long run. Most of the time I could run this system in either direction and make money. So if I modify the rules a bit and run it in both directions most of the loses would be covered by the other side. Here is how it would work.

1)Open one trade in each direction no sl, and 50 pip tp using 2 separate accounts.

2)Come back and check accounts throughout the day if one of the trades hit TP open a new trade in that direction....

So obviously if you just placed one short and one long per day you'd have an offsetting hedge. So you're counting on the extra TP hits to tip the profit in your direction? Is that your idea?
  • #105
  • Aug 20, 2012 12:27pm Aug 20, 2012 12:27pm
Jaws,

What if your pair flatlines. To you keep adding positions each day. Guess it wouldn't hurt.
  • #106
  • Aug 20, 2012 12:55pm Aug 20, 2012 12:55pm
Quoting spyderman
Jaws,

What if your pair flatlines. To you keep adding positions each day. Guess it wouldn't hurt.
yep at midnight every day no matter what the movement is a new position is opened if TP is not reached.
  • #107
  • Aug 20, 2012 3:17pm Aug 20, 2012 3:17pm
Quoting spyderman
So Bobcat...How did you place a long and short (a hedge) on E/U and come out with 47 pips profit. Did you get a second order in on the short side. Not sure from your numbers.
Hi Spidey,

I use 2 separate accounts with Oanda.

The "Buy" account is where the +50 pips were realized. Price moved -50 pips and triggered my pending 2nd buy order (dollar cost averaging). Price climbed back upward to the original 1st trade entry. I closed all trades and orders to gain the +50 pips on the 2nd buy trade and close the 1st buy trade at BE.

The "Sell" account both won and lost 50 pips at the time of closing to essentially BE.

My closing of all trades and orders was happenstance as that was not programmed, but I will take +50 pips all day long...

Good trading!
  • #108
  • Aug 20, 2012 5:01pm Aug 20, 2012 5:01pm
Quoting Bobcat2
Hi Spidey,

I use 2 separate accounts with Oanda.

The "Buy" account is where the +50 pips were realized. Price moved -50 pips and triggered my pending 2nd buy order (dollar cost averaging). Price climbed back upward to the original 1st trade entry. I closed all trades and orders to gain the +50 pips on the 2nd buy trade and close the 1st buy trade at BE.

The "Sell" account both won and lost 50 pips at the time of closing to essentially BE.

My closing of all trades and orders was happenstance as that was not programmed, but I will take...
Hey Bobcat,

Well maybe I'm doing this wrong. I thought the 2nd order would only be placed if price went in our favor and hit 50 pips TP.

In other words buy & sell placed. Price moves up 50 pips. Buy TP hit and new buy placed. No change to sell.
New day, new buy and sells placed and adjust TP's to average.

So have I got that mixed up?
  • #109
  • Aug 20, 2012 6:42pm Aug 20, 2012 6:42pm
Quoting spyderman
Hey Bobcat,

Well maybe I'm doing this wrong. I thought the 2nd order would only be placed if price went in our favor and hit 50 pips TP.

In other words buy & sell placed. Price moves up 50 pips. Buy TP hit and new buy placed. No change to sell.
New day, new buy and sells placed and adjust TP's to average.

So have I got that mixed up?
You have it right, I think Bobcat placed limit orders at his TP so he didn't have to be there to open a new position after his TP hit and he's adding to the losing trades every 50 pips instead of doing it at midnight.
  • #110
  • Aug 20, 2012 6:43pm Aug 20, 2012 6:43pm
Spidey,

I believe you have the rules correct. In my discussion with Jaws, I had stated that I had allowed for price action to determine my entries rather than his time entry. So...when the 1st buy trade went -50 pips. it kicked in my subsequent 2nd pending buy order because I was dollar cost averaging the losing side. I simply didn't wait until midnight to complete the next sequence. The 2nd buy order was automatically placed as soon as price moved -50 pips against the 1st buy order.

I'm not suggesting anyone follow what I did last night as I was dead tired after a grueling 6 hours of driving. I wanted to automate the process a bit, and it worked last night. My advice would be to stick to the rules ala Jaws.

  • #111
  • Aug 20, 2012 7:18pm Aug 20, 2012 7:18pm
So for instance, we went long and our TP was hit. Now the question is, after the TP is hit, do we close that position and immediately place another trade in the same direction? Or are we just simple adding another position to the first one after we reach 50 pips? Closing the first position wouldn't make any sense since you are opening a new position anyway right after closing it and are just losing money on spread.



Quoting jaws810
You have it right, I think Bobcat placed limit orders at his TP so he didn't have to be there to open a new position after his TP hit and he's adding to the losing trades every 50 pips instead of doing it at midnight.
  • #112
  • Aug 20, 2012 9:10pm Aug 20, 2012 9:10pm
Quoting tropics
So for instance, we went long and our TP was hit. Now the question is, after the TP is hit, do we close that position and immediately place another trade in the same direction? Or are we just simple adding another position to the first one after we reach 50 pips? Closing the first position wouldn't make any sense since you are opening a new position anyway right after closing it and are just losing money on spread.
It would make sense if you want to lock in your profits. The goal is to close an average of one position a day in each direction to make over 5% by the end of the week. In theory if you use limit orders you could make much more than that on big moves.
  • #113
  • Aug 20, 2012 10:08pm Aug 20, 2012 10:08pm
However, that is exactly the same thing as just keeping that profitable position open instead of closing it and then reopening it yet again. I just don't see a point of closing the trade and opening another trade at the same exact level in the same direction. And you are paying for the spread again. So for instance you might get +50pips since your first long hit your TP.
But now if you open another long position at the same level and it goes down 50 pips you are now breaking even for your LONG account. But you gave up a couple of pips due to spread twice instead of only one time. So in theory, it is the same exact thing as just keeping the first position open, but at least you aren't paying for the spread again.

Quoting jaws810
It would make sense if you want to lock in your profits. The goal is to close an average of one position a day in each direction to make over 5% by the end of the week. In theory if you use limit orders you could make much more than that on big moves.
  • #114
  • Aug 20, 2012 11:05pm Aug 20, 2012 11:05pm
at least your equity rises for margin purposes
  • #115
  • Aug 21, 2012 12:05am Aug 21, 2012 12:05am
hey jaws are you long or short this week? i would think long as last weeks candle was a bull candle. im i right?
  • #116
  • Aug 21, 2012 12:36am Aug 21, 2012 12:36am
Oh wow, Oanda has allowed for publishing of their trades again.
  • #117
  • Aug 21, 2012 2:01am Aug 21, 2012 2:01am
Quoting treadline
hey jaws are you long or short this week? i would think long as last weeks candle was a bull candle. im i right?
I'm actually short atm, I entered near the weekly high figured it was ready to drop, but as soon as my TP is hit I'm going to split my account and trade in both directions. Looks like I'll be waiting for a couple days. My current positions are posted at the top of this thread at least they should be.
  • #118
  • Aug 21, 2012 6:23am Aug 21, 2012 6:23am
Quoting tropics
However, that is exactly the same thing as just keeping that profitable position open instead of closing it and then reopening it yet again. I just don't see a point of closing the trade and opening another trade at the same exact level in the same direction. And you are paying for the spread again. So for instance you might get +50pips since your first long hit your TP.
But now if you open another long position at the same level and it goes down 50 pips you are now breaking even for your LONG account. But you gave up a couple of pips due...
Another option is not to close the +50 trade...trail it. But you still need to open another ever 50 pips (plus the standard addon both buy & sell once a day). The only way you can be profitable trading both ways is for the number of orders one way (the way price is moving) to outweigh the number of trades that are moving negative.
  • #119
  • Aug 21, 2012 7:03am Aug 21, 2012 7:03am
I was doing a little rudimentary math on this system, and the problem with 20 equal positions is every time you average away from the initial position, your breakeven point moves farther. I did a quick chart to show what I mean. I also figured what would happen if you doubled your position every time eg. 1 euro, 2 euro, 4 euro etc. After 4 times your breakeven is 100 pips closer when you double the size each time. I think if each position is not too close to the previous, maybe 75 100 pips this should work okay.
Any thoughts on the matter?





































Price
Breakeven
Breakeven

Equal pos.
Double pos. 1.22
1.22
1.22 1.23
1.2250
1.2266 1.24
1.23
1.2342 1.25
1.235
1.2427 1.26
1.24
1.25
  • #120
  • Aug 21, 2012 7:13am Aug 21, 2012 7:13am
Quoting priceedmund
I was doing a little rudimentary math on this system, and the problem with 20 equal positions is every time you average away from the initial position, your breakeven point moves farther. I did a quick chart to show what I mean. I also figured what would happen if you doubled your position every time eg. 1 euro, 2 euro, 4 euro etc. After 4 times your breakeven is 100 pips closer when you double the size each time. I think if each position is not too close to the previous, maybe 75 100 pips this should work okay.
Any thoughts on the matter?...
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