Multi-Lot Multi-Timeframe Position trading

NJ top two lots stopped out for +30. The first lot survived and a new 2nd lot placed on with stops to yield +30 if all stops out. I'm happy to continue to trade this range for a profit until it breaks out, and hopefully when it does break out it will be in the long direction. So, the structure now looks like the below:

Reduced 1st entry stop loss settings to around 12 pips today just because I didn't want to take much loss today. It was a good decision allowing me to get in some trades cheaply.

No comments or discussion? Is it that simple or that confusing?

I'd say "it's that simple", but maybe that's just me.
It doesn't have to be complicated by the way.

Hi, Graviton,

Your position trading style is very good, thanks a lot for sharing!

I do have a couple of questions: 1, as a position trader, how many hours do you spending in the market per day? 2, do you ever use pending orders?

Thanks so much!

george

Hi George. I spend about 2 hours a day, mostly scanning for new entries before and after the NY session. I have tried to use pending orders, but they didn't work for me. If they work for you, go for it! Thanks for the questions.

Thanks Graviton for your answer. myself don't use much pending orders. But I think that a pending order as a tool, can it be used by position traders? A pending order hints a predefined notion or a guess work, these are not agreeable with the trend following approach. That is the reason why position traders do not prefer its usage. This is my interpretation regarding this, do you agree? But somehow, I am thinking, maybe there is a good way to use it since it has some good advantages, it is just a tool. I need to study this more...

I'll continual read this thread, this multi-lot, multi-timeframe position trading is indeed a good one strategy.

Thanks again!

Hi again George. In the past, I have used the pending orders to put a trade on or add another lot to an existing trade at a pre-determined point while I was away from my computer. That works well and I've made some pips with it. Position trading is a very slow process though and I've found I don't need to be that precise about adding new trades and new lots to be successful. I do need to be very precise about exiting trades to see that I am taking profits and minimizing risk to my capital, but exits are taken care of with carefully placed stop loss orders. I'll post some thoughts here as I trade next week. Once again, thanks for your comments.

Hi Graviton,
I think everyone is waiting for you to have a 10 position trade, to see typically the $ potential return for the initial risk taken.

Why not just show us your last 10 position trade and your management for it?

That should get some response

Keep up your good work

Thanks for the comment Lizpet. I don't have screenshots from previous trades saved, but as soon as I have something to post, I'll put it up here. Hope to be back soon.

Here's a 4-Lot trade to think about. There is a lot of strategy built into this trade. Initial entry was small for 0.2 Lot and 18 pip risk. This is a test. If it goes against me I call it a bad one and bail out quickly. If it goes in my favor more than spread cost, about +5 pips, I call it a good one and quickly put on another lot for 0.3 lot and 18 pip risk. This is because the spread cost is what imposes a negative expectation on a trade. It's the "house advantage". Once spread cost is covered, most of the negative expectation is out of the trade. Nothing succeeds like success. We add to good ones and kill bad ones. It's Darwinistic trading. Survival of the fittest trade.

I average the entry point for those first two lots to treat them as one 0.5 lot entry and put each of those stops to average BE when the average profit equals just a little more than 1X sl. All risk is now out of the trade and it will remain risk free for the remainder of the trade.


When price is a little more than 2X sl from original entry, I add a 3rd lot of 0.2 to this successful trade. I set all stoplosses to the midpoint between the 2nd lot entry point and the new 3rd lot. Now if the trade reverses, the 2nd and 3rd lot cancel out at BE and the 1st lot closes for a little more than 1X sl profit. This is the minimum profit the trade will earn.

When price is a little more than 1sl above the 3rd lot entry price, I move the 3rd lot sl to BE. That locks in a minimum of 2X sl profit.

After a good night's sleep, I wake up to see I'm up $800 and add a 4th lot for an additional 0.1 lot. We add to winners, even if it makes us so nervous we can only stomach adding a little. Third and fourth lots stoplosses are set to near midpoint between the two. Since 3rd lot is twice the size of the 4th, this locks in another 1X sl profit into the trade for a total of 3X sl profit locked in.

2nd lot sl is moved up to 2X sl profit point. That locks in 5X sl profit for this trade.

1st lot sl is left at 1X sl profit point locking in 6X sl profit for the trade. This sl is left intentionally low in case of a major reversal taking out those above for a profit. In that case, I can re-enter those trades as price recovers, but I want to let as many lots to continue to run and be affected by this trend as long as possible, while taking reasonable profits along the way. I may exit for BE and profits and re-enter many times over weeks or months for a trade such as this. The point is, once the trade has gone risk free, I NEVER take a risk in it again. Also, I NEVER move a sl against the direction of the trade, or give back locked in profits from a trade. That's important!

I will continue adding lots to this trade at 0.1 at a time as long as it continues in my favor. Typically, every time I add a new lot, I set the sl of that one and the one before it to stop out at average BE for the two, so no loss is ever taken on a reversal after adding a new lot. If I need to sleep, I sleep soundly knowing my trade is set up to profit no matter what. More often than not I'll wake up with a nice profit as the trend worked on my trade as I slept.

So, if price reverses, I don't have to do anything. If it continues in my direction, I continue adding to it in small lots and adjusting stops of the last two lots to BE each time I add, keeping profit constant, and move the latest stop up to BE as soon as it's profit is up about 1 sl locking in another 1X sl profit each time. At this point, it's pretty automatic and simple. I like simple. I'll answer any questions if anyone has any. Otherwise, I'll try to post more detailed screen shots as I put these trades on to explain it better.

Just for information, if you look at the monthly chart on ECad, you'll see this trend has been running for over a year, so anyone who tells you that you must get into a trend early to profit is wrong. In the markets, anything can happen at any time. The trend could run for another year, or it could end today. We just trade what we see as it happens. We don't trade the past, we don't try to tell the future.

Shorting AN. It's a very risky trade as AN tends to suffer huge retracements in it's otherwise long term downtrend. Still, I want to see if I can trade the downtrend in that pair. It's all about getting a good entry so I can move quickly to a risk free position. If I can find an entry on one of the high points you can see on the weekly chart running back a year or so, there are pips to be made. As they say, no guts, no glory.

Of course, this trade is 100% in agreement with my entry requirements. I don't take wild flings with real money.

Graviton - the above example screenshot & clear explanation is awesome. I've been following & testing charts as time allows but this clears up most of the questions I had about this process. I've been trading price action (micro account) for a while now but hadn't figured out how to handle the build up to larger $$. This method allows just that, with still just the basic risk on the first small lots. Following structure zones from price action offers an additional confidence of getting in at the right spot.
Thanks much for sharing.

Dmostpips, that's great to hear. I'm excited to see what results you have with this method. If you can, post a chart of one when you get it going risk free or some pips locked into it so we can all enjoy. This method is rather like playing a musical instrument. You can know all of the mechanics of it, but it takes lots of practice to do it well. After a while though, you get the hang of it and just sort of start flowing with the market's rhythms.

I'd advise to be very careful with your entries. It's not a shotgun approach. It wont work that way since all the risk is concentrated in the first entry. Some days I take one entry, some days I take none. Sometimes I go days without an entry. My limit is three in a day, but I haven't hit that this week. If it looks like there are more than 3 good entries in a day, I just rank them and only take the best. Almost always it works out that only the best was really good in the end. The most profitable traders I know make one or two good trades a month on average and fund a very nice lifestyle. It doesn't take many entries to make those. It just takes a tremendous amount of patience.

[quote= I'd advise to be very careful with your entries. It's not a shotgun approach. It wont work that way since all the risk is concentrated in the first entry. Some days I take one entry, some days I take none. Sometimes I go days without an entry. My limit is three in a day, but I haven't hit that this week. If it looks like there are more than 3 good entries in a day, I just rank them and only take the best. Almost always it works out that only the best was really good in the end. The most profitable traders I know make one or two good trades a month on average and fund a very nice lifestyle. It doesn't take many entries to make those. It just takes a tremendous amount of patience.[/quote]

Yes you're absolutely right about the entries. That's the point I was intending to make when I talked about following price action structure to find a more confident starting point. I'm much more patient at waiting for a good entry than I was a year ago. I used to follow the indicators but not follow pure price action. So with this method of adding lots - it's nicely structured to capitalize on a good move when one is found. I will post a screenshot when I have something to show. Job still restricts trading time somewhat, but am finding ways to fit it in.
Cheers.

You can adapt this fairly easily to work with two scans a day, one in the morning before work and one in the evening. Most of the best trends run for weeks or months, so it doesn't matter that much if your best entry shows up in this morning's scan, or this evenings, or next weeks. Only take the best though. The rest are just a waste of pips. Happy trading!

Now at +427 pips profit on the ECad long trade. The max risk was 18 pips on the first lot, but I quickly added another to it, so call it 36 pips total. That yields about a 12:1 reward to risk ratio so far. I'd like to make 1,000 pips on this trade. Just one more month like the last one and I'll be there. If anyone has any comments or questions, feel free to post them. It is a discussion forum, so let's discuss.

Hi Graviton,

Please correct me if i'm mistaken but this is how i understand it.

1. You test the market with your initial entry... if it's not good you get out quickly.
2. If the initial entry is good and you are in profit you effectively start scaling into your market.
3. You position your stops so that if the market was to go against you you would at least take out a small profit while still trying to get your initial order(s) to keep running.

In the worst case scenario you would be stopped out of all your trades with at least a small profit.

I've read through your posts and your explanations are clear and i really like your method.

I just wanted to mention some points.

- Do you think something like this can be automated, by an EA. So if you were to enter a trade it would manage your stops and possibly scale in for you.
- What do you think about having more precise rules for the entries. So far you've mostly talked about managing your trades. I've seen on some charts that you've gone long when the price has reached a top, instead of waiting for a pullback which would be more profitable when trading a trend.

Just some thoughts... By the way, how long have you been using this method and how profitable has it been for you?

Hi Caldera. Yes, I think you have summarized the essence of my method. I'm sure the method can be automated, though I have never tried to do so. I do make changes on the fly, such as trade size, spacing between lots and stop loss size, which I vary with the volatility of the markets at the time. But I suppose those adjustments could be made automatically as well off atr or something like that.

I'm sure some people can do much better at entries than I do. Since all of the risk of this method is concentrated in the entry, better entry methods would pay off well. I've been trading this method for about 5 years and it has gone through many revisions in that time. These days I average about 1 to 3% increase in account per week in profits and I rarely have a drawdown over a weeks period. I'm sure if one was willing to accept more drawdowns, they could do better with it, and as you suggested, better entries could improve results a great deal.

Thanks for the comments. Happy Trading!