Building an equity millipede | Page 319 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Thegman's Journal (Equity Millipede Concept) 102 replies

Trading an Equity Millipede 23 replies

Equity millipede & Flying Buddha trading journal 9 replies

Build an Equity Millipede with the filtered Flying Buddha 171 replies

Application Development - Journal of Building an equity millipede 14 replies

Attachments: Building an equity millipede
Exit Attachments

Building an equity millipede

  • #6,361
  • Mar 31, 2014 2:16pm Mar 31, 2014 2:16pm
thank you Yonseo, i get it now

Regards

JL
Started a blog: terraceman blogspot com
  • #6,362
  • Mar 31, 2014 2:19pm Mar 31, 2014 2:19pm
I THINK if you zoom out on daily charts and consider the wicks as noise, although you way not get that perfect entry but sure as hell you will get a perfect picture of what is actually happening.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: cadchfmdaily.png Size: 61 KB
Click to Enlarge Name: cadchfmdaily.png 1.png Size: 60 KB
Click to Enlarge Name: eurusdmdaily.png Size: 79 KB
  • #6,363
  • Mar 31, 2014 2:23pm Mar 31, 2014 2:23pm
disagree

pipeasy has something implicitly undisclosed, and it is against your comments

entries do not matter, ONLY if the entries have an edge!

if you using a loser system, you will build no profit but only loss.

the trick is not money management. pipeasy, in my reading, in fact means stoploss should be short and quick, that's all, that's not same as money managing.

Quoting jmn5611
{quote} Graeme stated that entries do not matter. Anyone can bring any system here a try to build millipedes. The trick is indeed money management.
  • #6,364
  • Mar 31, 2014 2:24pm Mar 31, 2014 2:24pm
Quoting VEEFX
{quote} Sorry dude. What you are describing is position/trade/risk mgmt. Got nothing to do with FIFO. It's just simple math that if you reduce your subsequent position size, you will slow down the movement (distance) of average price away from the current price. As I said, risk from multiple stacks cannot be avoided by moving SL to BE on individual trades. The only way to manage risk is to move your net SL to average price level before adding a new stack. If price retraces, your entire stack goes down the drain. Due to FIFO, you either aggressively...
LOL I have no idea exactly what differences you and jmn5611 have regarding FIFO but my post had nothing to do risk management. Risk management is really an individual thing. Hence I have no need to use terms like "only way to manage risk".

What I was talking about however is that there are position traders who want to keep their bigger potential winners and that position is usually their initial position or earlier. Since FIFO forces you to close your first position thus taking away the opportunity to hold on to your biggest winner, the issue of position sizing was mentioned.

All I am saying is that the bigger the positions you trade, the lessser the significance of the 0.01 difference in position size per stack. Since thats the only way you can close your latter positions at BE or small profit, I am saying mathematically its not too big of a deal.
  • #6,365
  • Mar 31, 2014 2:31pm Mar 31, 2014 2:31pm
hedge is psycho thing for everybody

99% situation, it is not worthy. a trader who can hedge well, normally can trade well. then the logical question, if you can trade/read market well, why the heck do you hedge? just cut the losing side, and go with the winning side.

it is usually an illusion for an experienced trader that he can manage to avoid "this loss" by hedging. the outcome is usually still loss, and additionally, loss of time.

a trader who can hedge successfully, usually is in an immature status, this status in his trading career might be temporary and short. he only needs to improve just a bit so that he will never need to hedge again. but only who's been there may understand my point easily.

anyway, for you, don't hedge, it is pointless, mostly.

Quoting stewrigh
That sounds somewhat similar to what I do - I will only add to a position when the previous one is at be. I don't currently hedge coz I just can't sell something if I actually think it's going up - I just wait to add more legs. Never could get my head round hedging - it's a psycho thing with me.
  • #6,366
  • Mar 31, 2014 2:31pm Mar 31, 2014 2:31pm
Quoting stewrigh
{quote} Not sure I agree with this rather glib answer. I would posit that all traders, whether professional or not, have a bias before they pull the trade trigger. If they didn't they wouldn't be able to decide which way to trade. It's how one arrives at the bias that's important, not that you have one.
You have a point. Everyone must have a bias to decide which direction to enter a trade.

I was actually talking about the directional bias that governs our actions AFTER we have positions entered. Professionals are ABLE to enter opposite positions against the direction of the positions they already have in floating profits, amateurs are more often then not UNWILLING to do so.

Thanks for the allowing me to clarify.
  • #6,367
  • Mar 31, 2014 2:38pm Mar 31, 2014 2:38pm
Hi, Yonseo: by "trades much less" you mean G's trades less frequently or with reduced position size(or capital)? thanks. these 2 options are in fact opposing each other.

Quoting yonseo
{quote} What is equally hilarious is that G actually trades much less than he used to but his profitability hasn't really changed much. This really questions whether there was a need to share things like 5min chart based razor sharp entries on this thread.
  • #6,368
  • Mar 31, 2014 2:42pm Mar 31, 2014 2:42pm
Quoting charvo
Hi, Yonseo: by "trades much less" you mean G's trades less frequently or with reduced position size(or capital)? thanks. these 2 options are in fact opposing each other. {quote}
Less frequently. Nothing to do with position size.
  • #6,369
  • Mar 31, 2014 4:04pm Mar 31, 2014 4:04pm
Quoting VEEFX
{quote} All I am saying is the risk model of moving one position SL to BE before adding another position on the same pair is NOT available for FIFO traders. If someone has implemented an approach with FIFO with similar risk parameters, I would really like to hear. Doing it on two sub-accounts adds more risks and introduces inefficiencies and limitations for future growth ( margin call etc) if you are splitting available capital into half. I was (and still) hoping jmn can provide the blueprint.
You will have to accept the use of sub accounts in the US will necessarily cut your capital in half. If you vary your position size you absolutely CAN move a stop to BE before adding another position. You can also, if you wish, place a sell in the other account at entry point of your long. Now if you wish to complain about double commissions, that's fine. But saying that you cannot get around FIFO is just a simple lack of knowledge, and I am NOT going to give it to you gift wrapped.

Why?

Because it has already been given to you. Go back and re-read yon's post. I mean that with no malice.
If you are good at something, never do it for free--Joker
  • #6,370
  • Mar 31, 2014 4:46pm Mar 31, 2014 4:46pm
Quoting VEEFX
{quote} and to add further (since I am on a roll today: -)... Even if you manage your trades on paper, even if you muck around with position sizing (how??) to bypass FIFO, it ill ultimately play a huge role on your psyche when the following scenario happens. - probe goes into +300 pips - second stack goes into +200 pips - 3rd stack goes into 50+ pips - retraces at open price of 3rd stack - if you decide to close 3rd stack, you probe will close with 300 pips of realized profit. - if price retraces further to open price of second position, you will...
You are only stacking in one direction, that's an issue.
If you are good at something, never do it for free--Joker
  • #6,371
  • Apr 1, 2014 3:07am Apr 1, 2014 3:07am
Vee, this a great thread that became inactive for while, and thanks to all of you guys have brought it back to live. We are all adults and will not agree on evetything. One of the things I like most about Graeme is how humble he is. He is a real gentleman and continues to be patient with the 'distractors' and impact his knowledge inrespective. I value all of you experienced 'millepeders' contributions, and please do not let disagreements between gentlemen and petty squabbles discourage you from continuing to participate on this thread and enhance us with your knowledge and experience. Anyway, if you do not come back, I wish you well.
  • #6,372
  • Apr 1, 2014 4:19am Apr 1, 2014 4:19am
Moving stops to breakeven is the easy thing to do which probably means overtime it's the wrong thing to do.

Not moving stops to breakeven, ie keeping the original stop which will result in a loss if executed, is the hard thing to do which means it's the right thing to do.

Also, by not moving them to breakeven you relieve your mind of the all-important decision of when to move the stop. Should it be a 20 tic open proit in say EUR-USD or perhaps 25 or even 50 ticks? Whatever you do, perversity will probably get you. So by not moving stops you've defeated the in-built perversity of the markets by at least 50%.

Summary: Be Bold, Still Be Bold, Always Be Bold.....
Road To Wisdom? To err and err and err again, but less and less and less...
  • #6,373
  • Apr 1, 2014 4:30am Apr 1, 2014 4:30am
Quoting yonseo
{quote} What I can tell you is that G's kind of position trading works most ideally in forex because alot of CFD's have an expiry date and have to deal with daily chart gaps. Also with stocks you usually don't create separate breakeven stop losses for the same company shares you are currently pyramiding. I trade Korean stocks so in my discussion with him personally. his approach to stocks is more like a value investor. He buys bluechip stocks during dips and is willing to hold them forever. He has a dislike for IT stocks and prefers stocks that...
Thanks. Interesting info. Traded ASX CFD's since 2005, never heard that CFD's have an expire date. Maybe you meant options?
  • #6,374
  • Apr 1, 2014 4:31am Apr 1, 2014 4:31am
Quoting Calculus
Moving stops to breakeven is the easy thing to do which probably means overtime it's the wrong thing to do. Not moving stops to breakeven, ie keeping the original stop which will result in a loss if executed, is the hard thing to do which means it's the right thing to do. Also, by not moving them to breakeven you relieve your mind of the all-important decision of when to move the stop. Should it be a 20 tic open proit in say EUR-USD or perhaps 25 or even 50 ticks? Whatever you do, perversity will probably get you. So by not moving stops you've defeated...
Maybe I'm a bit of a dumbass but I thought the objective of trading was to make profits.

The best way of doing that is to lock in profit and reduce risk. The EASIEST way to do that is to move your stops accordingly - If you set a rule to move stops to BE or lock in profit at the soonest opportunity, that almost removes the need to even make a decision and limits the risk to a minimum.

Eurusd is a bad example PA sucks 0on that pair lol.

p.s. I like my trading easy and watching trade(s) in dd is the most debilitating thing you will ever experience.
  • #6,375
  • Apr 1, 2014 4:39am Apr 1, 2014 4:39am
Quoting stewrigh
{quote} Maybe I'm a bit of a dumbass but I thought the objective of trading was to make profits. The best way of doing that is to lock in profit and reduce risk. The EASIEST way to do that is to move your stops accordingly - If you set a rule to move stops to BE or lock in profit at the soonest opportunity, that almost removes the need to even make a decision and limits the risk to a minimum. Eurusd is a bad example PA sucks 0on that pair lol. p.s. I like my trading easy and watching trade(s) in dd is the most debilitating thing you will ever experience....
I think what Calc is hinting is that you can often kill some winners as well as save some losers, and if the winners are much bigger than the losers..... etc etc..

There's no right and wrong in this, it depends on many factors, entry location, entry frequency... exits, RR...

It's the big wins that generate the profit, as long as you're getting enough of them then you're set.
tradewith60
  • #6,376
  • Edited 5:00am Apr 1, 2014 4:47am | Edited 5:00am
Quoting 60minuteman
{quote} I think what Calc is hinting is that you can often kill some winners as well as save some losers, and if the winners are much bigger than the losers..... etc etc.. There's no right and wrong in this, it depends on many factors, entry location, entry frequency... exits, RR... It's the big wins that generate the profit, as long as you're getting enough of them then you're set.
Yeah I'm just happier getting to b.e. soon as.

A 20 pip dd can quickly turn into 200 if ur careless.
  • #6,377
  • Apr 1, 2014 4:50am Apr 1, 2014 4:50am
Quoting Calculus
Moving stops to breakeven is the easy thing to do which probably means overtime it's the wrong thing to do. Not moving stops to breakeven, ie keeping the original stop which will result in a loss if executed, is the hard thing to do which means it's the right thing to do. Also, by not moving them to breakeven you relieve your mind of the all-important decision of when to move the stop. Should it be a 20 tic open proit in say EUR-USD or perhaps 25 or even 50 ticks? Whatever you do, perversity will probably get you. So by not moving stops you've defeated...
"In trading you have to be BOLD and SWIFT"

This was one of the first things G stressed over and over when I first started trading. Of course I didnt understand what he meant at the time.

The real problem of using BE stoplosses is the way most people do it. The typical textbook approach is:

1. You enter at price P and the distance between your entry price and your SL is X pips.
2. If price moves X pips in your favor then move the SL to BE.

Some have something like moving SL to BE if price goes fixed 10 pips or 20 pips in your favor. Of course people who trade like this experience many instances where their SL doesnt get touched but their BE SL does and price ends up going 100s of pips in their favor after their position is taken out.

SL are most ideally placed on what you believe logically invalidates your trades. Either it can be a hardstoploss, time based or even based on gut feel.
This means the ideal time to move your SL to BE is when the price moves far enough in your favor such that even if price hits BE, that is sufficient enough from your own focal intepretation to accept it as an invalid trade.

That perversity Calculus mentions is the very reason why professionals are able to take money away from others in the long run. This also applies to taking losses. Since taking losses also involves an EXIT trade, being able to take losses that others are not willing to take put you apart from the losing herd that allow their floating losing position to grow.
  • #6,378
  • Apr 1, 2014 4:57am Apr 1, 2014 4:57am
Quoting cold chisel
{quote} Thanks. Interesting info. Traded ASX CFD's since 2005, never heard that CFD's have an expire date. Maybe you meant options?
I haven't looked into all types futures but kospi futures does have an expiry date. Of course you have the option to rollover next month. As for options, yes that has an issue of time decay to apply the milipede strategy.

To simply put it. Any market that has the potential to trend long term (weekly/monthly/yearly), doesn't have expiry date issues, doesn't have price gaps day after day is ideal to trade the milipede approach.
  • #6,379
  • Apr 1, 2014 4:57am Apr 1, 2014 4:57am
Quoting yonseo
{quote} "In trading you have to be BOLD and SWIFT" This was one of the first things G stressed over and over when I first started trading. Of course I didnt understand what he meant at the time. The real problem of using BE stoplosses is the way most people do it. The typical textbook approach is: 1. You enter at price P and the distance between your entry price and your SL is X pips. 2. If price moves X pips in your favor then move the SL to BE. Some have something like moving SL to BE if price goes fixed 10 pips or 20 pips in your favor. Of course...
allow their floating losing position to grow

Exactly so...and even if you get stopped at be doesn't mean you can't re-enter at an even better price.
  • #6,380
  • Apr 1, 2014 4:59am Apr 1, 2014 4:59am
Steve

The name of the game is profit but at the same time to make a profit you need to accept risk.

The boys know where/how many people trade and therefore know that if price moves in a trader's direction when/where he will likely move the stop to breakeven. The boys therefore target these areas, ie go get the breakeven stops before the market makes the real move. I trade these setups all the time and they're great, plus they happen A LOT because human emotion doesn't change that much, especially when FEAR is bought into the equation. Here's an example from yesterday in the Euro -

Attached Image (click to enlarge)
Click to Enlarge Name: Euro-breakeven.png Size: 59 KB




My bet, and I'd put a lot of money on it, is that if you take two traders of G's strategy, they both take exactly the same entries over a year, but one moves to stops to breakeven after a set move in their favour whereas the other keeps their stop at the original stop price and never moves to breakeven. The one wo never moves will make more money than the one that moves to breakeven.

Markets punish those that take the easy route IMHO which is why trading is hard. Conversely, markets reward those that do the hard thing and NOT moving stops to breakeven is the hard thing to do. The boys know this, trade against them at your peril....
Road To Wisdom? To err and err and err again, but less and less and less...
2 traders viewing now