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Building an equity millipede

  • #5,321
  • Edited 12:32pm Sep 19, 2012 12:21pm | Edited 12:32pm
So what do you do instead of diversifying? Close all the positions somewhere?

P.S.
charvo, I agree that you should decide the exits. I never meant the EA to do that, merely wanted it to provide automated entries for cheap. It didn't turn out as cheap as I had hoped, of course. But the results are still decent so far. Also, I run the test on several pairs, which does improve the results greatly, since not all of the pairs are trending all the time and I don't know which ones are going to be trending in advance.
  • #5,322
  • Sep 19, 2012 8:43pm Sep 19, 2012 8:43pm
Once you look at the weekly/monthly chart of any pair you will see where you should "diversify". I dont think it was intended that people should hold onto a 3000 pip position if price is near a potential reversal area and that area is clearly seen on a HTF chart. Example would be eur/usd moving from 1.5(april 2011) to 1.2(july 2012).

If i had multiple positions in that move and it was nearing 1.2, I would pull a fib from 1.5 to 1.2 and think "ok, price is coming near a massive area, lets liquidate any position above 50 or 786 or maybe even all". why? odds are that you would have SOME type of bounce at 1.2 and therefore can always renter at a cheaper price or add more since you took profit. currently we are near 1.3

I use this type of "trade management" for my positions but on a shorter time basis, days/weeks sometimes months, but not years.
  • #5,323
  • Sep 23, 2012 10:26pm Sep 23, 2012 10:26pm
Greetings to all the participants.

Hope VeeFx , Cameron, leggo and some of the old timers are still visiting this thread.

I have a question on diversification.
Graeme says 'Never diversify for a loss'
What does this mean exactly? Does it mean new equity should always exceed the equity amount during last diversification?

Some hypothetical numbers:
Equity after last diversification : $55000
Draw down since last diversification: $4500
Present equity: $50500

un-booked profit on open trades : $6000

Now if we close some of the minor legs worth $3500 new equity will become $54000 which is less than equity during previous diversification

Is this something Graeme says not to do? If so, what would be our options?


Thanks
TS
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #5,324
  • Sep 26, 2012 12:58am Sep 26, 2012 12:58am
My understanding of this is: if you lost $600 whilst establishing a set of legs (not $600 in total in the account ever, maybe you have a total of $5000 loss in the account) ... when you diversify which means closing some of your positions ... don't diversify too quickly, for example to make only $300 profit, wait until you would make more than $600 (how much you wait is your choice, and should be calculated based on your stats). Keeping stats and statistics allow you to adjust your technique for the better ... information such as "hey I closed this position 4 months ago, but if I let it run it would have still made profits today" or "my position closed at a loss, but then it turned where I wanted and ran for 1000 pips" is important ... could tell you that you need to let your positions run longer, or that you might need a tad larger stop-loss.

The reasoning to what I said in the beginning of this post is: sometimes there are counter-trend moves that you can take advantage of, but most often they are not the huge moves that take you to thousands pips, so if you want to cover all the loss in your account ($5000 for example), you are not going to be able to from counter-trend moves, however, if your reference point is the loss you made whilst establishing that particular set of legs, then you can bring in some profit even from the shorter market moves.

Cheers

Quoting TradeStar
Greetings to all the participants.

Hope VeeFx , Cameron, leggo and some of the old timers are still visiting this thread.
...

Thanks
TS
  • #5,325
  • Oct 1, 2012 9:13am Oct 1, 2012 9:13am
As PipEASY teach in his thread 2 months test on EU 18-7-2012 to 18-9-12
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  • #5,326
  • Oct 1, 2012 11:28am Oct 1, 2012 11:28am
I think the reason there aren't many people posting on this thread anymore (from a trading point of view) is twofold -

1. Most people cannot trade this style. They are so concerned with the tick to tick movement that they cannot handle giving anything back to the market. G said many times that if you cannot handle seeing a position (1 lot) onside by 400 ticks then watching price come all the way back to stop you at unchanged - then you haven't got a chance.

2. The strategy is simple to understand and implement (assuming you can handle point 1 above) so there's little to update apart from 'put 3 shorts on yesterday, stop now unchanged'.
Road To Wisdom? To err and err and err again, but less and less and less...
  • #5,327
  • Oct 3, 2012 12:58pm Oct 3, 2012 12:58pm
Where is the guy that started this forum ??
Did he start a hedge fund??
  • #5,328
  • Oct 3, 2012 2:59pm Oct 3, 2012 2:59pm
Quoting tranco
Where is the guy that started this forum ??
Did he start a hedge fund??
I guess, he's retired now.
True knowledge is knowing that you know nothing. Socrates.
  • #5,329
  • Oct 6, 2012 1:32am Oct 6, 2012 1:32am
Quoting Barbossa
To summarize - around -10% in balance and +30% in equity. This includes a few partial closes, which are done "when time seemed right" - probably meaning they are far from optimal. I'm really curious to see the numbers after another month.

Sincerely,
Barbossa
Hi there Barbossa,

May I suggest that rather than just test it across a couple of months (especially consecutive months), it needs to be tested across a variety of conditions - such as various volatility regimes and various degrees of trend (and non-trend). All of which can last for prolonged multi-month periods.

You'll never find "optimal" that is for dreamers. We do not know the future. The market is imperfect, for it is made up of humans, which in turn are imperfect. The good news is optimal isn't required to turn a profit.

Thanks for your post.

With kind regards,
MK
  • #5,330
  • Oct 7, 2012 4:37am Oct 7, 2012 4:37am
Here are some more
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  • #5,331
  • Oct 7, 2012 4:41am Oct 7, 2012 4:41am
Just a question:
In a term of 2-3 year, doesn't bring more percentage the intra -week tradig than holding position over years?

I requires more "working" style than an investment ( buy and hold), but theoretically it should provide less stress, more revenue: it can be traded the retracements too. No weekend fee.

EUR/USD soon will be at the same level as 1 year now.
XAU/USD raising over 20 years, but once will collapse.
I want to buy PATIENCE
  • #5,332
  • Oct 10, 2012 8:23pm Oct 10, 2012 8:23pm
Quoting hanselfx
Greetings fellow traders

Being this my 4th post, I'm not what you can say a regular in this forum, but this thread is the only I've ever participated in. Due recent posts here in this thread, I thought I have to step in.

It really saddens me this news about Graeme. I consider this thread enough to become a real trader for the dedicated reader, and eventhough the author might not be who all we thought he was, all his teachings are, and will be, invaluable not just for me but hundreds more to come.

The only question still around my head is......

Strangers come to create marketing hype for themselves or names they keep on referring.
You can easily tell by the style in their writing.

People here should just concentrate on only PipEasy's original posts.

Then see whether the Millipede method make sense to them or not.
And how would they implement it for themselves.
  • #5,333
  • Oct 11, 2012 1:22am Oct 11, 2012 1:22am
Been a bit busy trading the heck out of EURAUD and to keep my mind clear and focussed. Just a quick note to all news readers out there. I was LMFAO'g when I read this article from Sachs
http://www.forexfactory.com/news.php?do=news&id=388826

Wall Street and CNBC gurus want you to loose your shirts/skirts

True power of stacking... over 30% increase in my live Account Equity just in past 3 days extracting over 1200 pips from a 300 pip move!!!

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Staying in my lane...
  • #5,334
  • Oct 11, 2012 5:52am Oct 11, 2012 5:52am
Soon i will start trading this with $50,000 live account
0.1 lot per position,will keep you guys updated once i start out with it.
Tim
  • #5,335
  • Oct 11, 2012 10:44am Oct 11, 2012 10:44am
Quoting VEEFX
Been a bit busy trading the heck out of EURAUD and to keep my mind clear and focussed.
True power of stacking... over 30% increase in my live Account Equity just in past 3 days extracting over 1200 pips from a 300 pip move!!!

Attachment
are there any longs left in play?
I still have a few legs from 1.20
  • #5,336
  • Oct 11, 2012 4:41pm Oct 11, 2012 4:41pm
Quoting Holy Cow
I do not give a damn about his logic. I follow same logic as him by letting trades run as long as they make money.
What i say is that he has not shown his trades but only was talking and everybody was listening.
He showed up some ways to take trades with minimum losses and maximum profit. He didn’t ask for anything in return and is not necessary to show stats, you are free to follow or leave. Simple as that.
  • #5,337
  • Oct 12, 2012 1:46am Oct 12, 2012 1:46am
Quoting timos
He showed up some ways to take trades with minimum losses and maximum profit. He didn’t ask for anything in return and is not necessary to show stats, you are free to follow or leave. Simple as that.
however he was talking about some outrageous results and tight stops do not often coincide with low risk... pyramiding is also not an easy thing especially in FX market. I myself have been thinking of how to increase size of my winners not only pips wise, but so far have not been able to come up with solution which is safe. pyramiding is dangerous when approached in wrong way and what is right way? take for example current market conditions. whipsaws cannot be avoided unfortunately. He showed some things but the most important is let profits run. he however brought it to extreme. Runs that happened in 2008-2010 is not a usual thing. In most cases pairs give 500-100 pips and then reverse. i have to agree that 200 pips is nota leg. Looks like a toe to me
  • #5,338
  • Edited 3:02am Oct 12, 2012 2:22am | Edited 3:02am
Guys, firstly I'm not G. I call myself Calculus because I like Tintin and my favourite character is Prof. Calculus. Also, check my IP, it's always been UK based.

Let's try to leave any speculation out as to who G really is, where he lives and what he likes to do etc.

Never forget that G gave us this thread AND WHAT A THREAD IT IS. For that we should all thank him and leave him alone unless he wants to talk with us or share any other informtion.

G, if you're reading this, thank you so much for teaching me more about the workings of the markets and myself than all the other people I've listened to over the years, combined.
Road To Wisdom? To err and err and err again, but less and less and less...
  • #5,339
  • Oct 12, 2012 5:08am Oct 12, 2012 5:08am
Whether G was his real name, whether Marion existed, whether he owned a casino or not, whether he's in the 'hostile takeover' game (the year by the way is 2012, not 1985) - IT DOESN'T MATTER.

All that matters is the TRADING INFORMATION contained in this thread, that's why we're here and why we all read it.

So let's not judge him on the fluff, which may or may not have been true. Let's judge him on the CONTENT and specifically for offering up a way to crack this trading game, that being -

1. Participation
2. Low risk entries, and
3. Growth

Those 3 points are where we should contine to debate and not as I said before on the irrelevant fluff contained in the thread.
Road To Wisdom? To err and err and err again, but less and less and less...
  • #5,340
  • Oct 12, 2012 5:51am Oct 12, 2012 5:51am
Quoting Calculus
Whether G was his real name, whether Marion existed, whether he owned a casino or not, whether he's in the 'hostile takeover' game (the year by the way is 2012, not 1985) - IT DOESN'T MATTER.

All that matters is the TRADING INFORMATION contained in this thread, that's why we're here and why we all read it.

So let's not judge him on the fluff, which may or may not have been true. Let's judge him on the CONTENT and specifically for offering up a way to crack this trading game, that being -

1. Participation
2. Low risk entries, and
3....
Exactly,lets get focusing in trading and share ideas.
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