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Building an equity millipede

  • #6,241
  • Mar 28, 2014 10:24am Mar 28, 2014 10:24am
Quoting 60minuteman
{quote} ok so you can guarantee that supply will be there next time? no you can't, supply and demand in the past is a clue, nothing more. Of course buying and selling moves the market we all accept that, but do you really believe that you can rely on what happened in the past to predict the future? If you want to use everyday examples, then go to the shop, see the price of coffee then try and predict the price next year based on that.
No i can't but the big boys who can see the where the demand is ,i am sure they can predict the price of coffee.Anyway,everything remains a theory so let's stay at current thread topic.
  • #6,242
  • Mar 28, 2014 10:31am Mar 28, 2014 10:31am
Sent first scout out on GJ... hoping for a new trend and new highs, will wait and see. Double entry to pay for position, much easier to let free trades run.

H4 GJ
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tradewith60
  • #6,243
  • Mar 28, 2014 10:57am Mar 28, 2014 10:57am
Quoting VEEFX
{quote} Counting pips is meaningless if you are not making money. Having said this, it is important to trade small and trade often to gain the market insight and experience. Just getting into a drill for your eyes to watch for potential low risk opportunities 'quickly' is the key. My favorite still being the 'tip of wick' strategy that Graeme explained so eloquently offering the BEST risk/reward and the opportunity for your probes to survive (better than opening probes at daily open in my opinion) Here's my screenshot from last night at London open....
very nice sir, exactly my thinking on entries, take low cost attempts to find the extreme, accept that you will lose no matter what you use and opt for the best RR.
tradewith60
  • #6,244
  • Mar 28, 2014 10:58am Mar 28, 2014 10:58am
60min, you a star
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  • #6,245
  • Mar 28, 2014 11:09am Mar 28, 2014 11:09am
Quoting pullice
60min, you a star {image}
nice!
tradewith60
  • #6,246
  • Edited 12:25pm Mar 28, 2014 12:01pm | Edited 12:25pm
It's been a while since the last time I visited this thread and I just find it amusing that the purpose of this thread has been dead for a while.

Now the discussion is turning into a Technical Analysis debate or something. LOL

Let's clear a few things regarding TA. Feel free to dispute.

1. If you use TA to base your trading decisions and you PROFIT, then TA would be USEFUL to you.
2. If you use TA to base your trading decisions and you LOSE, then TA MAY BE USELESS.

Now why did I say MAY BE for the 2nd above statement? Because no traders use TA the same way and most retards are unable to use TA that works for them profitably. Now if a trader can profit handsomely without using TA but lets say uses Fundamental Analysis, then perhaps TA IS USELESS for them.

Lastly since I know G personally and had many exchanges regarding how he trades as of late, it may be a surprise to some that he doesnt even use charts anymore. All he needs is the closing price of the 4H chart and even without looking at a chart he can make trading decisions that keeps his position in a trend. Infact he can apply the same approach with only the closing price of Daily chart if he chooses to trade less. But I am sure most do not understand how this is possible without elaboration.

Does this mean G uses TA? Some could argue yes. Others no. It also comes down to what defines using TA and not all traders will agree on this.
  • #6,247
  • Mar 28, 2014 12:24pm Mar 28, 2014 12:24pm
Quoting yonseo
It's been a while since the last time I visited this thread and I just find it amusing that the purpose of this thread has been dead for a while. Now the discussion is turning into a Technical Analysis debate or something. LOL Let's clear a few things regarding TA. Feel free to dispute. 1. If you use TA to base your trading decisions and you PROFIT, then TA would be USEFUL to you. 2. If you use TA to base your trading decisions and you LOSE, then TA MAY BE USELESS. Now why did I say MAY BE for the 2nd above statement? Because no traders use TA the...
The original point was that using previous price alone to predict future price is fatally flawed. That ruffled feathers because most people are relying on that alone.

......but anyway, what were really interested in is position trading and a break from the limiting intra-day 3/1 RR trading that seems to be the only approach that retail traders believe can work...

Stick around and share some opinions/ideas it would be great to see the thread survive.
tradewith60
  • #6,248
  • Mar 28, 2014 2:13pm Mar 28, 2014 2:13pm
IMHO there is nothing wrong with predicting future price based on previous price. To me, terms like forecasting, guessing, estimating, speculating, anticipating etc seems to be the same in the realm of trading and this is something traders do one way or another. Even if a person makes a prediction on future price based on past price, the question really comes down to risk control when your prediction is wrong.

This is not to say that I try to predict of course. The problem with most people is not the prediction itself, but the EXPECTATION that follows from their prediction due to their strong desire to be right. And as we all know, such expectations can lead to behaviors like oversizing positions, widening stoplosses and averaging down.

I would say with quite a bit of confidence that, none of the traders who come across this thread turned into professional level of trading where they can purely make a living out of trading alone. Sure some may gain insights here and there from G's writings but does G's personal focal intepretation of the markets suit your own trading personality? If you are a professional trader that has read this thread, it is likely you were a professional already who simply have "I also agree" moments rather than the "AHA" moments. If your still a losing trader then despite those "AHA" moments, it simply means you don't have the patience to build positions that make profits for you. Who knows? Maybe short term trading suits your personality better where you can rapidly and aggresively compound a small account with high winrate of 80~90% or better alongside a R:R of 1:1 or better. Of course less than 1% of the trading community has such short term trading skills based on experience and discretionary gut feel, since there is no mechanical flowchart defineable system to achieve this.

If a trader however is religiously convinced that position trading is "the ULTIMATE WAY" for them, all one needs to do is open a MONTHLY chart on ANY pair and observe the most ideal places to have your positions stacked over time. Now if you draw horizontal lines on every candle where you would like to have your positions, the outcome is as follows:

1. In an uptrend, positions closest to lower wicks or closest to the open price of a wickless bold candle has the greatest potential to survive
2. In a downtrend, position closest to upper wicks and closest to the open price of a wickless bold candle has the greatest potential to survive

Now given the above OBVIOUS observation and perhaps one of the most important observation since survival of your positions is the primary aim of a position trader, another question and perhaps one of the most important question follows:

What can I do to exploit an opportunity so that my entry has the potential to end up being positioned ideally at the end of month so that it has the potential to survive the next upcoming months and so forth?

This is where the individual's trading technique, risk threshold and psychology comes into place. You need to your OWN research by looking at the lower timeframes where those ideal positions near wicks and open price of monthly candles have occured, then choose a timeframe and approach that works best for you to have the chance of getting such positions.

But sadly, most choose they linger around forums such as these trying to find the answer from someone else.
  • #6,249
  • Mar 28, 2014 2:46pm Mar 28, 2014 2:46pm
Quoting yonseo
IMHO there is nothing wrong with predicting future price based on previous price. To me, terms like forecasting, guessing, estimating, speculating, anticipating etc seems to be the same in the realm of trading and this is something traders do one way or another. Even if a person makes a prediction on future price based on past price, the question really comes down to risk control when your prediction is wrong. This is not to say that I try to predict of course. The problem with most people is not the prediction itself, but the EXPECTATION that follows...
It's all guessing, predicting, question is wether the trader is aware of that or not...

Not sure religion comes into trading position trading or not, but the math say's it is the most profitable.

Yes, you need to pick tops and bottoms, trade the extreme, and keep the costs as low as possible... agree.

Certainly very few if any have become profitable from any thread on this site, very few do. But, that is true for most business, not just trading.
tradewith60
  • #6,250
  • Mar 28, 2014 5:19pm Mar 28, 2014 5:19pm
Quoting yonseo
It's been a while since the last time I visited this thread and I just find it amusing that the purpose of this thread has been dead for a while. Now the discussion is turning into a Technical Analysis debate or something. LOL Let's clear a few things regarding TA. Feel free to dispute. 1. If you use TA to base your trading decisions and you PROFIT, then TA would be USEFUL to you. 2. If you use TA to base your trading decisions and you LOSE, then TA MAY BE USELESS. Now why did I say MAY BE for the 2nd above statement? Because no traders use TA the...
I think what makes G such a good trader is he looks at the market from a very different perspective, I noticed that he mentioned open and close of candle sticks quite often in his posts. Subconsciously looking at open and closes on higher timeframes such as 4h and daily would filter out the "highs" and "lows" (NOISE) thus giving a smoother bigger picture of the market. I know he would enter at wicks and also mentioned in a few posts how he loved entering on wicks but the primary or foundation aspect was open and close.
Just my 2cents
  • #6,251
  • Mar 29, 2014 2:06am Mar 29, 2014 2:06am
Hi all. Its no matter what your predictions and your analysis but the main idea is how you act with your predictions. Example - you predict that G/U will go from 1,5000 to 1.6000.
A. You can take 100 pips in general instead off 1000 pips
B. You can loose money, despite your predictions were right
C. Or you can take 500-2000 pips in that 1000 pips move
90% traders makes good predictions on bigger timeframes but neverheles loose money. Why? Is it problem of predictions or that is problem of dealing with own predictions.
Lets back to the idea of building millipede and not TA.
The main question that worries me, its the time to start. I see the big move but starts to early. Markets are in good impulses very little time, all the other time - correction.
Examples
1. I was doing the one from 1.68 to 1.62-1.53 on g/u. At least 2 positions ware closed on in profit this week. 13 be. 5 s.l. In general little profit.
The predictions are the one side and the trading is the another side.
2. Now I am trying to sell S&P500 at least to 1500. No matter what are my predictions. But the posion from 1870 still in the market and this week I had 2 be and 2 sl. Because the market makes huge corrections. And possible doesnt start yet. And predictions can be wrong. 2 monthes I had done nothing! Why? Because the markets in corrections. And its hard from the pschological side. I am looking on daily and weely timeframs and enter 15-1h timeframes. Sometimes thiks, How much money could I make if I close every position.

The idea is that to build good millipede the trader need to know the exact time when to start
  • #6,252
  • Mar 29, 2014 2:28am Mar 29, 2014 2:28am
Orbital Decay..... http://www.forexfactory.com/showthre...96#post3899196

"Im pleased to see that the thread is now evolving on its own pace by the contribution of the public. Unfortunately, just like orbital decay of a roulette ball, all public discussions will soon decay in size and quality. Hence, I request all new readers to please consider reading the material I presented from the beginning of the thread.

I dedicated my time and efforts for the learners. I pushed aside my own agenda and invested personal time to bring this thread to the benefit of all.

All the answers you are looking for are in the first 21 pages of this thread. You can base your perception around the facts that I presented to you. You do not need to follow my method however there are facts embedded in my posts which will be of great help. I wish I had someone who presented the facts like I did when I was learning. It would have definitely saved me alot on my learning curve. Ironically, even if someone with the knowledge taught me the facts of the market when I was learning, I would have most likely chosen not listen to what they say. Just like parents telling their children what to do and it sounds so sensible to an adult ear but just nonsense to the children.
There is no need to reinvent the wheel and this is especially true in the markets. Traders fail cause they try to create a way to make money. It is so much easier when you just action the obvious. "
Staying in my lane...
  • #6,253
  • Mar 29, 2014 4:19am Mar 29, 2014 4:19am
Quoting VEEFX
Orbital Decay..... http://www.forexfactory.com/showthre...96#post3899196 "Im pleased to see that the thread is now evolving on its own pace by the contribution of the public. Unfortunately, just like orbital decay of a roulette ball, all public discussions will soon decay in size and quality. Hence, I request all new readers to please consider reading the material I presented from the beginning of the thread. I dedicated my time and efforts for the learners. I pushed aside my own agenda and invested personal time to bring this...
well done Vee... you're right of course, and Graeme summed it up perfectly

"If its up then BUY, if its down then SELL. You would be amazed at what secrets are behind that sentence."

So I have short positions in EA and GOLD for now and long positions on SP500 and GJ... onwards and upwards!... unless it's downwards of course
tradewith60
  • #6,254
  • Mar 29, 2014 5:32am Mar 29, 2014 5:32am
Quoting 60minuteman
{quote} It's all guessing, predicting, question is wether the trader is aware of that or not... Not sure religion comes into trading position trading or not, but the math say's it is the most profitable. Yes, you need to pick tops and bottoms, trade the extreme, and keep the costs as low as possible... agree. Certainly very few if any have become profitable from any thread on this site, very few do. But, that is true for most business, not just trading.
For a "small account" holder, I disagree that position trading is the most profitable "mathematically".

If you have a professional short term "trader A" with winrate of 80~90% at a R:R of 1:1 better compared to a professional long term "trader B" who can execute this milipede approach, I contend that trader A can turn 1k into 10k faster than trader B.

Higher winrate of short term trading allows for faster compounding by taking bigger 5~10% risks, compared to a position trader who will take 0.25%~2% risks where you get more violent unrealized equity swings as surviving positions build up.

Only when you are managing millions or billions where trading a large position size impacts the market movement of a currency pair is when position trading becomes more viable "mathematically".

However by the same token you could say that an amatuer short term trader is more likely to wipe his account much faster than an amatuer long term trader.
Many retails blow their accounts using some intraday scalping stragies early in their trading career (probably learnt from forums such as these). Hence what this milipede approach may achieve is try to get the new trader to stay in the game longer so that he can understand the market better rather than become a gambler anonymous who is focused on nothing more but profit/loss.
  • #6,255
  • Mar 29, 2014 6:25am Mar 29, 2014 6:25am
Quoting yonseo
{quote} For a "small account" holder, I disagree that position trading is the most profitable "mathematically". If you have a professional short term "trader A" with winrate of 80~90% at a R:R of 1:1 better compared to a professional long term "trader B" who can execute this milipede approach, I contend that trader A can turn 1k into 10k faster than trader B. Higher winrate of short term trading allows for faster compounding by taking bigger 5~10% risks, compared to a position trader who will take 0.25%~2% risks where you get more violent unrealized...
Yonseo, if I may ask what is your your definition of a "small account", What would be the minimum to build a millepede?
  • #6,256
  • Mar 29, 2014 6:32am Mar 29, 2014 6:32am
Quoting yonseo
{quote}Only when you are managing millions or billions where trading a large position size impacts the market movement of a currency pair is when position trading becomes more viable "mathematically".
Would you care to elaborate on that a bit more, please? I am interested in the "mathematically" part.
  • #6,257
  • Mar 29, 2014 6:36am Mar 29, 2014 6:36am
Quoting yonseo
{quote} For a "small account" holder, I disagree that position trading is the most profitable "mathematically". If you have a professional short term "trader A" with winrate of 80~90% at a R:R of 1:1 better compared to a professional long term "trader B" who can execute this milipede approach, I contend that trader A can turn 1k into 10k faster than trader B. Higher winrate of short term trading allows for faster compounding by taking bigger 5~10% risks, compared to a position trader who will take 0.25%~2% risks where you get more violent unrealized...
the statement was "mathematically position trading is more profitable"... that is a fact.

Were not talking about who can do this or that faster or who may or may not have 90% win rate, just the math.
tradewith60
  • #6,258
  • Mar 29, 2014 6:41am Mar 29, 2014 6:41am
Quoting bluefish
{quote} Would you care to elaborate on that a bit more, please? I am interested in the "mathematically" part.
it's not true at all. You can scale it down to trading the extremes of daily on h1 then diversifying at the end of the week, there is no math that can say you need millions to do that anymore than to trade intra-day in and out of the market.

Take the concepts of participating in trends however small or big and then diversifying your position.

Don't let someone elses opinion twist the math based on their cognitive bias
tradewith60
  • #6,259
  • Mar 29, 2014 6:47am Mar 29, 2014 6:47am
Here is gold's move last week.

Clearly a down trend - you could use the ma to define it, upto you.

Then sell the high of each day on H1.

Then at the end of the week close out the days most at risk and leave the weekly high.

Simple and effective position trading - no millions needed and always more profitable then getting in and out of the trend.

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tradewith60
  • #6,260
  • Mar 29, 2014 6:54am Mar 29, 2014 6:54am
You can even do it on M15, pick a trend, wait for it to break the Asian range and sell the highs...

Don't let anyone tell you it can't be done, most people lose trading intra-day with small RR...that is a fact.

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tradewith60
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