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Building an equity millipede

  • #5,901
  • Jul 9, 2013 11:19pm Jul 9, 2013 11:19pm
Quoting timos
Does anyone knows how Graemes calculates unrealized net profits he adds per week?

It's sad to see this thread collect dust

Here's the post in which Graeme describes how to 'forecast' future floating pips. http://www.forexfactory.com/showthre...86#post4761786

If you are referring to mid/long term legs, there are many detailed posts which describe how he manually labels and groups his medium and long term legs. here's one post as an example.... http://www.forexfactory.com/showthre...24#post3872524
Staying in my lane...
  • #5,902
  • Jul 10, 2013 9:57am Jul 10, 2013 9:57am
Quoting VEEFX
{quote} It's sad to see this thread collect dust
I agree, it's my favourite thread on any trading forum. I'm planning to devote a full 3 month period to the 20x3 method soon. How is it going for you since VEEFX?
  • #5,903
  • Jul 10, 2013 3:21pm Jul 10, 2013 3:21pm
Thank you VEE
  • #5,904
  • Jul 11, 2013 12:31pm Jul 11, 2013 12:31pm
Quoting treguard
{quote} I agree, it's my favourite thread on any trading forum. I'm planning to devote a full 3 month period to the 20x3 method soon. How is it going for you since VEEFX?
It's going quite well. I have my own flavor of "Building the equity millipede" which fits my lifestyle and FIFO/No Hedging regulatory limitations for traders based in USA. It incorporates every possible trading style with bits and pieces leveraged from this and other trading strategies. I trade multiple strategies spanning across multiple timeframes, multiple pairs, multiple market conditions, multiple trading styles (scalp, swing, pyramid, positioning) along with combination of fundamental, technical(only EMAs), market sentiment analysis and taking guidance from pure Price Action for my entries and exits. The only thing constant is my position size across the board. I will never ever EVER increase my lot size in the middle of trading year! From 2007 until 2011, I have seen my account grows 200-300% each year only to be blown due to lot size increase. Those million dollar compounding spreadsheets are just fantasy. Anyone trading more than 2x account balance per trade is looking for a blown account in the near future... it's as simple as that when it comes to managing your greed and fear. I spread my exposure (like Graeme) across multiple pairs, timeframes and strategies. Best of all worlds !!!

p.s. Be careful with 3x20 exercise as it has the tendency to change your perspective in a good way for some and in a bad way for others based on your past trading style. You have to imprint the "participation/low risk/growth" philosophy in your DNA first and foremost. Try to understand the reasoning behind why this exercise is important within the context of this thread. There are many pages of discussions on the value this exercise provides throughout this thread.
Staying in my lane...
  • #5,905
  • Jul 12, 2013 7:51am Jul 12, 2013 7:51am
Vee I like the way you have diversified all areas of your trading

Quoting VEEFX
Be careful with 3x20 exercise as it has the tendency to change your perspective in a good way for some and in a bad way for others based on your past trading style. You have to imprint the "participation/low risk/growth" philosophy in your DNA first and foremost.
I had thought about this, would I get too accustomed to having a 20 pip cushion for every opened trade once I stopped with the exercise. Will see how it plays out.

BTW I have attached a text document which is my complied summary of Graeme's contributions in this thread. I hope it can be helpful to someone
Attached File(s)
File Type: txt graeme_summary.txt   104 KB | 990 downloads
  • #5,906
  • Jul 12, 2013 8:14am Jul 12, 2013 8:14am
Quoting VEEFX
{quote} p.s. Be careful with 3x20 exercise as it has the tendency to change your perspective in a good way for some and in a bad way for others based on your past trading style. You have to imprint the "participation/low risk/growth" philosophy in your DNA first and foremost. Try to understand the reasoning behind why this exercise is important within the context of this thread. There are many pages of discussions on the value this exercise provides throughout this thread.
Thanks VEE for keeping this thread alive. I did this mistake and i burn over $7K at the beginning but now i am being consistent and learning every day.Currently i have 2500 pips floating and today closed 700 pips to cover some loses and add some into the balance.The lot size is not the same as it was when i started but i am learning and will increase slowly.

I must thank Greame or whatever his real name is for this golden thread.
Since i am a new trader,i started and continued with his approach of "low risk,participate and growth" so i can say that this is getting injected into my "DNA" as you mentioned.

Thanks for your time again.

P.S If you don't mind ,send me your Skype id via pm.

Best regards,
Tim
  • #5,907
  • Jul 12, 2013 9:37am Jul 12, 2013 9:37am
Quoting treguard
Vee I like the way you have diversified all areas of your trading {quote} I had thought about this, would I get too accustomed to having a 20 pip cushion for every opened trade once I stopped with the exercise. Will see how it plays out. BTW I have attached a text document which is my complied summary of Graeme's contributions in this thread. I hope it can be helpful to someone {file}
3x20 is great if you are research oriented as it opens the door to many related discoveries which only you can come up after watching price action and different price levels. I am currently using a similar approach with positive directional dollar-cost averaging scheme at every 5-cent level extracting as many pips as market will give me during each 500 pip move. To me, aiming for long legs and unrealized profits is equivalent to extracting 5x or 10x out of a 1x directional move. It meets the requirement of the 3rd pillar i.e. Growth. You grow deep insights in a pair's behavior with screen time.

njoy
Staying in my lane...
  • #5,908
  • Jul 13, 2013 3:54am Jul 13, 2013 3:54am
[
Quoting pipEASY
Good evening, all Thank you for the continued interest and the private messages. I will get around in the next few days to reply to all of them. Preparation for the book is truly on its way to keep the schedule as promised.


Is there any one that knows the link to the book by pipEASy in his post 4379, as highlighted above? kindly direct me to the link

  • #5,909
  • Jul 16, 2013 2:01pm Jul 16, 2013 2:01pm
Quoting VEEFX
{quote} No word from Graeme or his book since his last post on this forum. While I am here... my recent 7 stacks this week from yesterday. AUDUSD Monthly Chart (felt like catching a falling knife initially). Hopefully paying off so far after 2/3 failed attempts with minor loss and several failed at BE. Anticipating a bounce off EMA(5) on monthly TF Inevitability.... breakouts, EMA bounce, candle retrace, Major 000 lines etc.... it's all in this thread! {image}

Looking Great Vee! Thanks for the charts
Best
RS
  • #5,910
  • Jul 19, 2013 11:46pm Jul 19, 2013 11:46pm
Hi,

Out of curiosity, with the FIFO rules in the US, are you allowed to have 2 accounts with your broker where you can make long trades on one account and then make short trades on the other account in order to simulate the trading in both directions nature of this system?

I live in Australia so I don't have to worry about FIFO (yet), but I'm pretty much convinced that the rest of the world will follow suit with the US at some point, so this concerns me.

edit: Actually, how are you meant to diversify with a FIFO system anyway? Closing a trade will close the first one (possibly made years ago) rather than the most recent one.
  • #5,911
  • Jul 20, 2013 1:53am Jul 20, 2013 1:53am
Some brokers have software or scripts that overcome the limitations of FIFO, but if you are American, I'm not so sure.

The only real solution for Americans is to set up an offshore company/business structure so that you can open broker accounts in Australia or elsewhere, theres no laws in America against it as long as you declare your taxes (as if you would be so dumb).
In the days of old when sailors were bold, and seldom if ever contented.
  • #5,912
  • Jul 20, 2013 12:42pm Jul 20, 2013 12:42pm
Quoting Cujo2
Hi, Out of curiosity, with the FIFO rules in the US, are you allowed to have 2 accounts with your broker where you can make long trades on one account and then make short trades on the other account in order to simulate the trading in both directions nature of this system? I live in Australia so I don't have to worry about FIFO (yet), but I'm pretty much convinced that the rest of the world will follow suit with the US at some point, so this concerns me. edit: Actually, how are you meant to diversify with a FIFO system anyway? Closing a trade...
Yep...'building' an equity millipede becomes extremely difficult for US based traders due to FIFO. Probe > stack > Move SL to BE > mini-diversification > freezing > follow the price > etc > etc becomes very tedious with doing buy and sell in two separate sub-accounts that most brokers offer (FXCM, Oanda, MBT etc). Even with instantaneous sub-account funds transfer, margin is cut in half therefore requiring US traders to have more trading capital and sleepless night trying to prevent margin calls :-(

ATCBrokers allows bypassing of FIFO and hedging as an IB for FXCM. It's just an accounting game they have implemented in the front office trading platform. Netting brokers also skew up the trading stats as their back office reports are quite different than MT4 reports... hard to explain unless you have traded live with these brokers. The net effect and end result is all the same whether you do accounting in sub-accounts or single account or in a excel spreadsheet. It is just a matter of how much effort you want to put into your trading endeavor.

Regarding taxes and moving out of USA.... it is foolish to even make a comment like that unless you have more than US$200K of annual trading income. Taxes are a necessary evil and I see no point in leaving USA just to save taxes. One has to report their global income to IRS regardless of where they reside.... otherwise you are breaking the law to save pennies!

I consider FIFO and no-hedging regulations to be wonderful thing... FIFO prevents letting a losing position run longer than necessary! Hedging introduces BAD trading behavior (i.e. HOPE!) imo. I have stopped trading with ATC even though I have a account with them.

Unfortunately, there are not many US traders following this thread otherwise I would share my own tweaks to this strategy... just not worth my time
Staying in my lane...
  • #5,913
  • Jul 20, 2013 9:38pm Jul 20, 2013 9:38pm
Quoting VEEFX
I consider FIFO and no-hedging regulations to be wonderful thing... FIFO prevents letting a losing position run longer than necessary! Hedging introduces BAD trading behavior (i.e. HOPE!) imo.
I find this interesting. I view it the other way around: If I'm physically unable to close out / manage a vulnerable trade because I have other profitable trades that I'm required to close before I can close that vulnerable trade, then I'm closing a good trade while keeping that exposed, vulnerable trade open. But anyway, that's a whole other topic. I would have thought FILO would be more appropriate. It would certainly be beneficial for this system anyway lol.
  • #5,914
  • Jul 22, 2013 4:01am Jul 22, 2013 4:01am
I have been on FF for a while and read all the great threads, somehow I missed this one. This is a diamond, thanks to Graeme for his kindness for sharing his knowledge and for communicating so effectively.

I was thinking about the issue of having a bias based on higher TF charts. Given the trend can change at any time and the advice from Graeme to go with the flow. Wouldn't it be an idea to focus on getting into positions based on say Daily 4/hr and to reduce the risk as quickly as possible, then let the market have it's way with you positions? So the focus should be low risk entries and moving to BE.

Is anyone from the UK using spread betting brokers to trade this? Was thinking about starting with Alpari UK MT4 spread betting, with the 0% tax rate that gives you a excellent advantage.
Economists have forecast 9 out of the last 5 recessions
  • #5,915
  • Jul 22, 2013 12:09pm Jul 22, 2013 12:09pm
Quoting markmm
Is anyone from the UK using spread betting brokers to trade this? Was thinking about starting with Alpari UK MT4 spread betting, with the 0% tax rate that gives you a excellent advantage.
Baby steps ... firstly trade profitably, then worry about how to deal with the taxes.
  • #5,916
  • Jul 22, 2013 12:32pm Jul 22, 2013 12:32pm
Quoting cameron1st
{quote} Baby steps ... firstly trade profitably, then worry about how to deal with the taxes.
Of course you are correct.

I am still deciding on a broker. I wan't to be able to trade micro lots and hedge in order to trade with low risk on the higher time frames.

I plan to scale in microlots as the price trends to slowly build a larger position over weeks. I would have no initial stop loss initially, only later to BE once a position is established. I would close out if it was obvious the main trend on weekly was changing. Having legs in both directions on weekly retraces of the main trend to lock in some profit.
Economists have forecast 9 out of the last 5 recessions
  • #5,917
  • Jul 22, 2013 4:44pm Jul 22, 2013 4:44pm
Quoting markmm
{quote} Of course you are correct. I am still deciding on a broker. I wan't to be able to trade micro lots and hedge in order to trade with low risk on the higher time frames. I plan to scale in microlots as the price trends to slowly build a larger position over weeks. I would have no initial stop loss initially, only later to BE once a position is established. I would close out if it was obvious the main trend on weekly was changing. Having legs in both directions...
Good luck with your journey Mark.

no initial stop loss initially -

only later to BE once a position is established - this needs some further tweaks if your plan is to scale in with microlots (like I do in my aggressive stacking account to build my capital base... yep! microlots and capital appreciation is possible). If I may add... you will need to develop good interpretation skills to gauge the strength of retrace in order to add to your positions. I am currently focussed on building my 'edge' in gauging retraces (after building an edge in gauging strength from compelling momentum following releases i.e. strong/week currency strength and near major price levels) to complement each other.
Staying in my lane...
  • #5,918
  • Jul 22, 2013 8:24pm Jul 22, 2013 8:24pm
Quoting cameron1st
{quote} Baby steps ... firstly trade profitably, then worry about how to deal with the taxes.


It's like "you won't get the right answers if you keep on asking the wrong questions" :-

Glad you are still around pal !
Staying in my lane...
  • #5,919
  • Edited 5:02am Jul 23, 2013 4:32am | Edited 5:02am
Quoting VEEFX
{quote} Good luck with your journey Mark. no initial stop loss initially - only later to BE once a position is established - this needs some further tweaks if your plan is to scale in with microlots (like I do in my aggressive stacking account to build my capital base... yep! microlots and capital appreciation is possible). If I may add... you will need to develop good interpretation skills to gauge the strength of retrace in order to add to your positions. I am currently focussed on building my 'edge' in gauging retraces (after building...

Thanks for the reply VEEFX. I think it's good to add on retraces to get a good price and avoid drawdown however I don't want to get into trying to forecast where price is going. One of the most important ideas that I think greame tried to communicate was in the following post.

Quote
No one or any one entity can ever influence/forecast the movement of price. It is somewhat possible in markets with limited/smaller volume (pork belly, orange juice, platinum) of transaction however 'definitely' not in foreign exchange.

So give up using indicators to forecast the next 50 pip movement. The last 50 pip movement you have correctly forecasted was just a random ripple in the ocean in which you 'chose' (unknowingly) to believe that it happened as per your calculations. That is the biggest fallacy in trading.

Once the above finally sinks in, you will look at things completely different because your paradigm has now shifted. And this is a very important phase in your trading career. Some traders agree to the above but they are unknowingly clingling onto the 'notion' of 'trying to forecast' once again. Paradigm shift is vital as it 'finally' opens your 'eyes' in which with the new sense of understanding, you are finally able to ask the right question and seek the right answer.
Economists have forecast 9 out of the last 5 recessions
  • #5,920
  • Jul 23, 2013 6:50am Jul 23, 2013 6:50am
Quoting VEEFX
{quote} I consider FIFO and no-hedging regulations to be wonderful thing... FIFO prevents letting a losing position run longer than necessary! Hedging introduces BAD trading behavior (i.e. HOPE!) imo. I have stopped trading with ATC even though I have a account with them. Unfortunately, there are not many US traders following this thread otherwise I would share my own tweaks to this strategy... just not worth my time

I ran across this thread a few weeks ago and am very interested long-term position trading. pipEASY's method of trade management is like nothing else I've seen. However, I am in the US and struggling to figure out how to implement without hedging capability. I am just one trader, but would be happy to read about your "tweaks" to overcome the hedge problem, if you ever have the time.
"A is A"
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