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  • #5,361
  • Oct 15, 2012 5:04am Oct 15, 2012 5:04am
Quoting Calculus
Yes, I agree that as positions are put on both sides any large open profit (long) will be offset 'somewhat'.

'Somewhat' is the important word though because IF the market had been in a long uptrend then loads of long positions should have been built up. Now, if the market takes its time to turn around then yes, a trader would probably have time to build a reasonable short position.

But what happens if the markets go crazy and suddenly crater like 2007/08?

Then years of built up long profits would be given back with very few chances to build...

Completely agree. Simple solution = Have more than one strategy. Institutional funds with mandates for low drawdown do this.
  • #5,362
  • Oct 15, 2012 8:15am Oct 15, 2012 8:15am
Quoting Mjolnir17
how can i set vertical lines to the first candle of the day (in hr, 4hr charts), like in G's platform?
FF search feature "Vertical Lines Indicator" directed me to http://www.forexfactory.com/showthread.php?t=256848. try it out.

I use this Daily open Line horizontal line indicator.
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Staying in my lane...
  • #5,363
  • Oct 15, 2012 8:46am Oct 15, 2012 8:46am
thanks verymuch Vee!
  • #5,364
  • Oct 15, 2012 9:50am Oct 15, 2012 9:50am
agreed.

portfolio, when huge, is very difficult to manage, especially in the pathetic MT4. one needs far more statistics to support her decisions when market suddenly goes against her huge positions.

my own feeling is when you have a huge net exposure. for example, 4 short eurusd, 1 long eurusd. so you net exposure 3 short eurusd,. let's say, you short from 1.5, therefore these 3 are very profitable positions/legs now. then today EU 400 pips move up, you loss in 3x400 = 1200 pips??????

what's difference from a hard realised loss of 1200 pips from the 1200 pips evaporated above?

the ultimate step in trading is exit, isn't it? is it holding?

Quoting Calculus
Then years of built up long profits would be given back with very few chances to build a reasonable amount of short positions. Maybe you'd find you had just 1 short for every 10 long positions built up.

For anyone trading this method during the 2007-08 crisis that would have been the ultimate test of your intestinal fortitude.
  • #5,365
  • Oct 15, 2012 9:58am Oct 15, 2012 9:58am
Quoting VEEFX
FF search feature "Vertical Lines Indicator" directed me to http://www.forexfactory.com/showthread.php?t=256848. try it out.

I use this Daily open Line horizontal line indicator.
and if you also want to see Yesterday Close?
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  • #5,366
  • Oct 15, 2012 4:01pm Oct 15, 2012 4:01pm
Quoting Calculus
But what happens if the markets go crazy and suddenly crater like 2007/08? Then years of built up long profits would be given back with very few chances to build a reasonable amount of short positions. Maybe you'd find you had just 1 short for every 10 long positions built up.
you`re really scaring everybody here without even taking the time to investigate your claims.

you make it sound the downturn happened overnight and people hardly had the time to do anything about it.
that downturn in 2007/2008 on the GBP/JPY for instance took 19 months to play out from top to bottom.

to say that somebody would lose all the profits of their longs built up from the beginning of that uptrend lasting until July 2007 is ridiculous.

there will always come a time to get out of your longs when the trend turns and the vast majority of your profits will still be there.

and to say that you wouldn`t have time to build up a short position is ridiculous as well.

I for sure would be stacking like crazy and laughing all the way to the bank.
  • #5,367
  • Oct 15, 2012 5:33pm Oct 15, 2012 5:33pm
Hey guys, especially VEE since he is the veteran here , how was it going with the 3*20 exercise? Did you find success, or gave it up for trying to stack positions? And if you did it for a long time, did your stats improve significantly from the start? Are you feeling more comfortable since then?

Im just asking because I have a hard time doing that as well (like most of the guys, or at least thats what I think) . And after not succeeding Im often finding myself in a mental downward spiral which is extremely hard (and Im on demo - lol) ... at least youth is at my side I can say.
  • #5,368
  • Oct 16, 2012 3:54am Oct 16, 2012 3:54am
Not at all Yonnie.

There were plenty of markets, many of them non-FX that basically turned on ONE DAY. And what a fateful day that was in July 2007, certainly at the moment the most significant financial day this century.

What happened was simple - virtually everyone got their credit lines pulled by the banks, EVEN IF THE FINANCIAL POSITION OF THAT COMPANY WAS 100% OK. This forced mega liquidation of both spec and non-spec positions and as everyone was basically positioned the same way it was ALL SELLERS AND NO BUYERS FOR MONTHS.

Look at some of the Euro and Yen crosses, good uptrends then BAM, prices just dumped for thousands of ticks. No warning and certaily no surrender from the bear move.

THese markets had been in long term uptrends so followers of this method should have built up mega long positions. Now, nobody is going to convince me that on one hand they were averaging say 5 new long positions a month but then suddenly right around the top when the market was in a long term bull market they started adding say 20 net short positions to their account so when the dump came they didn't feel much pain if any as the 2 sides of their account basically cancelled each other out.

So I stand by what I said - a move like 2007 which was basically out of nowhere is going to hit people following this method like a freight train. A move such as this might happen once every 10 years but they happen and will continue to happen.

Don't shoot the messenger for pointing out a big big negative in this strategy. Nothing is perfect, this strategy IS great but like anything in this game it has to come with a sting in its tail and this is it.

Folks, we're dealing with money here in a serious business so why wouldn't anyone look for what kinds of markets/situations can do the most damge to use and THEN PREPARE perhaps by making adjustments to your strategy or to your own psyche.

People in the past have been so hurt by what the markets have done to them that they've had to give up. This happens in sports as well, sometimes when a champion gets really defeated his career is basically over. It's not the skill that got him, it's the physcological aspect.

There was a world champion Gin Rummy player once, he believed because of his past results (a serial winner) he was THE MAN and for many years he was. Then some skanky Jewish kid (Stur Ungar) came along and WHITEWASHED him. Imagine Federer in tennis getting beat 6: 6:0 6:0 by a 17 year unkown in the Wimbledeon final AND NOT EVEN WINNING A GAME. The Gin player could never play again after what happened and retired. Ungar had mentailly broken him.

Sadly, the same can happen in this game, once can build up a MONSTER position in a MONSTER trend over 1-3 YEARS. I admit that in 'most' circumstances big tenacious trends take time to top and turn, BUT NOT IN ALL CASES. So what happens if price does top on one day making a new high then dumps 30% or more in 2-3 months and even continues lower after that popping all your BE stops all the way down.

Who wouldn't realise that this situation while unlikely is still very possible and then try to do something about it rather than saying 'no, it won't happen to me, markets are logical along with the particpants'.

It might be a cliche but fail to prepare and prepare to fail.

To make money overtime in this business, and 'overtime' is the key word, you have to keep stress testing yourself and your method.

If you sit back and think the markets are going to be always kind to you (or at least never really nasty) then you're going to have some physcological problems at some stage in the future.

But if you prepare for something nasty that never happens, in my book you have not wasted your time....
Road To Wisdom? To err and err and err again, but less and less and less...
  • #5,369
  • Oct 16, 2012 4:19am Oct 16, 2012 4:19am
Don't forget the Plaza Accord move of 1985.

Big tenacious long term trends going only one way suddendly reversing over a weekend with price never looking back and giving few entries the other way.

This is one reason I wrote a post a few days ago saying it was better to keep your own balances and never look at your broker's running balance. Only ever add profits to your balance when they're realised.
Road To Wisdom? To err and err and err again, but less and less and less...
  • #5,370
  • Oct 16, 2012 6:22am Oct 16, 2012 6:22am
Quoting Mjolnir17
Hey guys, especially VEE since he is the veteran here , how was it going with the 3*20 exercise? Did you find success, or gave it up for trying to stack positions? And if you did it for a long time, did your stats improve significantly from the start? Are you feeling more comfortable since then?

Im just asking because I have a hard time doing that as well (like most of the guys, or at least thats what I think) . And after not succeeding Im often finding myself in a mental downward spiral which is extremely hard (and Im on demo - lol) ... at...
I think you have found out what Pipeasy wanted you to find. My interpretation was not about the act of being able to achieve 3*20.
From memory I think I recall Pipeasy stating you will find out things from this exercise, you will make your own discoveries. Essentially you have hit the nail on the head about how hard it was to achieve the desired result in the given parameters ie: (20 pip stop 20 pip TP X 3). The pressure to do do this was created by yourself, you always hear if you can make so many pips a day you will succeed blah blah.... The exercise I believe is to create a dawning that the best you can do as a trader is indentify possible areas on longer time frame where there is likely to be strong participation, then zoom in to small time frame to look for weakness and make an entry in accordance with your own criteria. Then walk away. There is no point in adding pressure to achieve X amount of pips as the reality is you still never know where the market will go but so long as you have participated according to your own rules there is nothing more to do. When you have unbiased expectation which is devoid of emotion and understand that ultimately you have no influence over the outcome other than participating in itself, you are already ahead of the pack. Emotion is the largest limiting factor to success.
Once You See, You Can't Unsee But You Will Get The Odd Poke In The Eye
  • #5,371
  • Oct 16, 2012 6:24am Oct 16, 2012 6:24am
Quoting VEEFX
FF search feature "Vertical Lines Indicator" directed me to http://www.forexfactory.com/showthread.php?t=256848. try it out.

I use this Daily open Line horizontal line indicator.
I use the same indicator myself.

The only problem I have is different brokers showing different daily charts. This makes 4hour charts different when you use different brokers. Of course its not a problem for people like myself who is currently trading DIBS on the 1 hour charts since you can edit the indicator to set the open time. (e.g 6:00am GMT)

Heres another picture "you know who" showed me last year for his intraday trading. Of course at the time, I didn't understand how one could see the opportunity at the time.

I think the KEY in this trade comes from the daily open line where you jump into the opportunity while other traders wait for confirmation. When others confirm their reasoning, they will jump in and you piggy back off them.

The last part of the puzzle is to get out before they even start to think:

"When should we get out?"

This is probably the hardest part. Especially if your a new like me. lol

Yon
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  • #5,372
  • Oct 16, 2012 12:16pm Oct 16, 2012 12:16pm
Quoting VEEFX
Hope you guys caught the compelling momentum from the Asian session last night. Added another 375 pips 4 more pairs. Just trying to encourage folks to maintain their focus when we have such ...
Nice results VEE ! How many time do you spend staring at the charts? Just for me to have an accurate expectation, how much time do I need to study charts before I can reach your level.

I have approximately 2-3 hours per day, after that either I have no time or tired mentally.
  • #5,373
  • Oct 16, 2012 12:55pm Oct 16, 2012 12:55pm
Quoting Calculus
Not at all Yonnie.
........
But if you prepare for something nasty that never happens, in my book you have not wasted your time....
We should encourage healthy discussion on pros and cons of this trading method. I feel the cons are not discussion openly on this thread in fear of discouraging Graeme and other participants. I have exchanged similar concerns in private with Graeme. On this specific issue, it has also been brought up in this thread. Graeme's approach is to not consider unrealized profits as his own money. One has to have that mindset and perhaps it is easy for Graeme as 7+million of unrealized profits is not a big deal for him. In my opinion, it is pure stupidity to let such a large profit float in a market that is so unregulated and prone to broker scams. Perhaps it is ok with FSA regulation as they force segregation of client funds but that is not the case with US clients.

While we are discussing this, I am more concerned about SLs not honored by brokers in volatile markets or on weekends than market taking a fierce turn wiping out our profits. I hope folks realize that no retail broker can and will guarantee execution of stoploss orders. Your account could potential be wiped clean with margin call if your BE orders are not fulfilled. Keep in mind that Graeme also uses leverage based on his account equity and not account balance so sudden reduction in account equity could have a exponential impact on available margin if your BE orders are not honored. I am toying with an unconventional idea in demo at the moment to address this 'vulnerability'. Unfortunately, there is no holy grail here as anything we do have it's pros and cons.

My solution to this issue as I have been 'addicted' on this strategy for over 2 years now:

- Know your uncle point (pain threshold)! Mine is around 1000 pip move totally under 5000 pips across open positions per pair or 25,000 pips total across all pairs. My analysis is based on looking at yearly ranges across 23 pairs. Once I reach this level, it is ok for me to take some profit off the table. Graeme also recommends this by leaving your largest leg and diversify after 2-3 weeks of growth. There is nothing wrong with this approach imo. I never close all open positions on any given pair at once....leaving the largest leg floating open acts as a reference point for my focal interpretation. I will always let it die on BE.

- Prepare for the worst case scenario by trailing pending orders in the opposite direction after frequent bouts of growth.. something like 250 pips away from current price should be fine to protect/lock your large unrealized profits from sudden moves when you are away on vacation or sleeping. I am sure there are some Trade Management EAs that one could also leverage for this purpose. Just need to be creative about it and figure out what works for you :-

- Alternative approach... Plan your pairs in both directions to 'diversify' your currency holding across all major pairs. Calculate your net exposure for each major currency (USD, EUR, GBP etc) across all your pairs and space out your positions. This should reduce your portfolio volatility to a certain extend (but also limit your growth potential). Try and strike a balance based on your risk profile.

Hope this helps. This is all part of risk management that we should be discussing in a respectful manner. One should be always open to learning...even from a kindergarten child
Staying in my lane...
  • #5,374
  • Oct 16, 2012 1:12pm Oct 16, 2012 1:12pm
Quoting VEEFX
Yep...Once you learn not to factor your open positions in your hindsight analysis, you will have a fabulous light bulb moment! It really isn't rocket science once you close your eyes for 30 minutes and visualize positions in both directions and explore your creativity in finding ways to prevent the drain on your floating profits. Graeme has done a fantastic job of explaining all this with his charts also.

Could someone please point me to the post where Graeme mentions his statistical average weekly/monthly realized loss? I faintly recall being...
Hi Vee,

I don't remember which post it was; but he says 300 pips per week max;
but again I am not sure whether 300 per pair OR for all ccys put together.

TS
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #5,375
  • Oct 16, 2012 1:13pm Oct 16, 2012 1:13pm
Quoting Mjolnir17
Nice results VEE ! How many time do you spend staring at the charts? Just for me to have an accurate expectation, how much time do I need to study charts before I can reach your level.

I have approximately 2-3 hours per day, after that either I have no time or tired mentally.
Mjolnir - No offense but you are asking questions that is quite irrelevant. You simply cannot judge/compare my journey with yours or anyone else here in order to set your own expectations. I fear it would cause a lot of frustration if you go down the path of peer-comparing the experience/results.

I did that in the initial stages and it was very discouraging to my emotions and just NOT helpful. I had to take 2-3 months break from this thread to find my own journey.

I have made over 11K demo and over 2000 live trades since I run into this thread and even after so much dedication, I feel I am less than half way through finding success in FX trading!

Staring charts is just not necessary. Please read post #422 from Graeme on spacing out entries. I would say this... i tried hard to change my lifestyle to become slave of cellphone alerts like Graeme. I did NOT work for me as I already carry a Blackberry for work (which I am sick of) and did not want to go down that path again!

Most of my trades now are now done via mobile smartphone on a random/infrequent basis as time permits (waiting in parking lot which my wife shops at Macys, trade while taking a dump, watching a nice movie etc). I only stare at charts after taking a position at M5 TF to confirm quantitative force/velocity/momentum to drive my position to BE.

Hope this helps.
Staying in my lane...
  • #5,376
  • Oct 16, 2012 3:37pm Oct 16, 2012 3:37pm
I find the only weakness in this thread is to take profits when price is in a consolidation period. what it does is that a lot of trades along the trend have been closed out for a small profit.
on the other hand if you let those trades grow with hopefully a long trend, you`ll have a massive amount of profits.

I dont see the purpose of having a nice moving equity graph unless you need the money: is not the end result far more important?

what I do is this: in a uptrend I keep buying at certain intervals and bring my trades to BE.
in a retrace my last trades will be taken out at BE and when the trend resumes I will start stacking again.
I will only close my position after the trend changes.

You could make some profits along the way to counter the losses establishing your position.
Just take the A1 trades where the probability is high as in S&R areas for instance.
  • #5,377
  • Oct 16, 2012 3:45pm Oct 16, 2012 3:45pm
Quoting yonnie
Just take the A1 trades where the probability is high as in S&R areas for instance.
Curious what would constitute an "High Probability A1 trade in S&R area"? An example with screenshot would be nice :-
Staying in my lane...
  • #5,378
  • Oct 16, 2012 3:50pm Oct 16, 2012 3:50pm
Hello Vee,
The next days i will start with real money.Any suggestion for the starters?
I've been doing well with demo
  • #5,379
  • Oct 16, 2012 4:01pm Oct 16, 2012 4:01pm
high probability trades:

one example is the test of a support area in an uptrend - if its the 1st test the chances are high that the support line wont be broken and you can try with a small SL. go to the 5M chart and see how the market reacts when price gets there. if it goes down fast, get out fast before your SL is hit.
G has plenty of charts for this setup.

before attempting this, look if there`s any news coming out for this pair.
  • #5,380
  • Oct 16, 2012 11:32pm Oct 16, 2012 11:32pm
Quoting Calculus
Yes, I agree that as positions are put on both sides any large open profit (long) will be offset 'somewhat'.

'Somewhat' is the important word though because IF the market had been in a long uptrend then loads of long positions should have been built up. Now, if the market takes its time to turn around then yes, a trader would probably have time to build a reasonable short position.

But what happens if the markets go crazy and suddenly crater like 2007/08?

Then years of built up long profits would be given back with very few chances to build...
Speaking of "advantages" and "disadvantages"

If you compare the advantages of building positions for long term growth when compared to other forms of intraday trading, The charts speak for itself.

Even if I choose spots carefully according to my simple signal, stacking low risk positions at those spots provide an uncomparably greater R:R than any other forms of intraday systems long term.

Of course there will be periods of frustration as indicated by a box on one of the daily charts.

Yon
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