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  • #6,421
  • Apr 4, 2014 9:19am Apr 4, 2014 9:19am
Quoting Armacom
Let's get back on track :nerd: Instead of putting all our attention at arguing about everything and nothing we might as well get back at the core of this thread. Position building - Exits - Etc. Negativity is not welcome
Armacom, you're right again of course.

I'm done for the week, have +1600 floating, hope for more moves our way next week
Attached Image



Just gonna post trades on my journal for now, anyone serious about trend trading is welcome there. http://www.forexfactory.com/showthread.php?t=476567
tradewith60
  • #6,422
  • Edited 12:31pm Apr 4, 2014 9:22am | Edited 12:31pm
Quoting 60minuteman
{quote} I don't think anyone on her believes you know Graeme, you're a fraud. Go start your own thread most people here want to trade Graeme's concepts and are not interested in your bile...
It really amuses me how a trader who tries to self promote gets so emotional. I hope those emotions don't kick in when your trading.
Resorting to direct "ad hominem" attacks now. Very unprofessional indeed.

It doesn't matter what you think. I already gave out proof. Infact I have even showed VEEFX my direct facebook conversations I had with G on skype to confirm this. People choose to believe what they want. Some are at least open to reason to give a fair hearing. That is human nature even outside of trading.

You just don't like people disagreeing with you. Hence you don't like my presence here. You are not to judge as to what people are interested in and what they are not interested in. The only person that was complaining was you and is you, and most likely will be you until you get one of your followers smear a campaign against me in this thread.

Personally, it is none of my concern what you decide to contribute here. Whether it is going on about how good your H4 engulfing entries are or posting charts of currently floating profitable trades on demo accounts etc is not my business. Everyone has equal rights to express an opinion and if you don't like people disagreeing with your views on this thread then you can continue to post your demo account charts elsewhere.

It's all up to you
  • #6,423
  • Apr 4, 2014 9:42am Apr 4, 2014 9:42am
Our war on profitability against the markets is hard enough without having to fight each other .. :nerd:

Quote
The results from this experiment confirm and extend those of Lo and Repin (2002) and Steenbarger (2002) - we find a clear link between emotional reactivity and trading performance as measured by normalized profits-and-losses (normalized by the standard deviation of daily profits-and-losses).

So let's be zen, it just isn't worth it
Don’t ever let someone tell you that you can’t do something.
  • #6,424
  • Apr 5, 2014 7:32am Apr 5, 2014 7:32am
Hi Yon Graeme stated shortly before his departure "My showing/teaching is more or less complete in this thread and the book is still on schedule" . Do you know if it is still his intention to publish this book ?

Thanks

Stu


There are only handful of threads on this forum worth reading this being one of them. What seems to be a recurring issue is that a lot of readers just can't accept simple concepts and insist on trying to over complicate every aspect. For any new traders I would suggest reading the first 20 or so pages. Develop an entry strategy and try some basic statistic/probability study. Do not attempt to have an instant millipede, trading blindly just to be in the market ( participating ) this will lead to untold misery. I know Graeme advocates having multiple positions, both ways etc but seriously if you are just trying to get a handle on this concept tread carefully at first. Get the feel for having one or two positions open for a week or so & beyond. You will then have a better understanding of how to manage the associated risk of multiple positions. There has been much debate in this thread & it appears that there are many ways to make the over all principle work. At this stage there seems little point in argumentative banter.
I personally feel the way forward if the thread is to survive is for members to post their trades and how they manage them. Whether their style be aggressive or conservative, it should not matter to anyone but the individual & nobody should suffer criticism for their own flavour of trading. If the trades are placed with best intention of them becoming a "POSITION" trade who cares how it gets there !

. It's all up to you [/quote]
Once You See, You Can't Unsee But You Will Get The Odd Poke In The Eye
  • #6,425
  • Apr 5, 2014 10:42am Apr 5, 2014 10:42am
As you probably know I have a real problem with diversifying(or hedging)

Can someone please explain to me where/why they would diversify in the chart below

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  • #6,426
  • Apr 5, 2014 12:00pm Apr 5, 2014 12:00pm
Quoting stewrigh
As you probably know I have a real problem with diversifying(or hedging) Can someone please explain to me where/why they would diversify in the chart below {image}
I'm not thè expert on the matter, but I wouldn't take profit as long as I see Lower Lows in a downtrend and Higher highs in an uptrend. On the image I would diversify in the green zone to cover losses and take some profits. If you trust your Hindsight for the next few days/weeks, you can leave 1 or 1 &2
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Don’t ever let someone tell you that you can’t do something.
  • #6,427
  • Edited 2:48am Apr 6, 2014 12:01am | Edited 2:48am
Quoting Stu Effex
Hi Yon Graeme stated shortly before his departure "My showing/teaching is more or less complete in this thread and the book is still on schedule" . Do you know if it is still his intention to publish this book ? Thanks Stu There are only handful of threads on this forum worth reading this being one of them. What seems to be a recurring issue is that a lot of readers just can't accept simple concepts and insist on trying to over complicate every aspect. For any new traders I would suggest reading the first 20 or so pages. Develop an entry strategy...
[/quote]

G usually does not remain true to his word if it starts going against his own interests. This trait actually works in his favor when it comes to trading, because it becomes second nature for him to cut his losses quicker without attachment and let your winners run. If a book titled "Building an equity milipede was to be published", he would have to weigh the pros and cons before making the ultimate decision. Anyone in G's shoes should know better why the cons easily outweigh the pros.

Moreover intelligent people can take hints from this thread alone. But intelligence alone does not ensue profitibility in trading. Even the 3x20 exercise that G claimed to be one of his most important recommendation has deeper significance. It doesnt have have to be 3x20. 20 pips is nothing more but an arbitrary number. You can do 3x10, 3x30, 3x50, 3x100 etc based on one's own assigned arbitrary value.

Unfortunately even if many traders do see the light from this thread, it is another matter to put one's new perception into practice. Hence you don't see people talking about or having screen shots of positions thousands of pips in size (not even demo). Rather you actually have more people flooding his private inbox with the "please feel sorry for me and help me because I blew my account and so and so". That alone creates no motive to write a book since you can only expect more hassle and inconvenience in the process.

I would say with a high degree of certainty that he has no intentions to write a book. However I am not a prophet

Who knows? He might have reasons to change his mind again.
  • #6,428
  • Apr 6, 2014 12:07am Apr 6, 2014 12:07am
Quoting stewrigh
As you probably know I have a real problem with diversifying(or hedging) Can someone please explain to me where/why they would diversify in the chart below {image}
If you are curious as to how G diversifies, I have 2 quotes which you may find some hints.

Around October 2011, I had a discussion with him relating to whether I should use some kind of trailing mechanism because I had the frustration period of getting my BE positions hit over and over in stock trading.

"Hmmm yon seo.. Lets talk about equity curve. There is 2 ways to an equity curve (profit curve). If my trading approach focuses on taking smaller 50-100 pip profits I will considerably more win rate then a trading approach where I aim to take 200-300 pip profit. The main difference is that the equity curve of the former is much smoother then the latter however the overall ascending (considering both approach IS profitable over the long run) angle of the equity curve will be lesser. I will find that the latter is significantly less win rate with jigjagged (ripsawed) equity curve with periods of great dips. It is in the best interest of a trader to ensure their equity curve remains as smooth as possible (unless your 1 thing somehow takes advantage of jigjagged situations of the latter trading approach). Having said that, I suggest that you (for now) attempt in taking smaller 50-100 man won. You will find that your equity curve will smooth out and win rate improve significantly. Furthermore, your current focus at the moment is collecting statistic of your trading profile. This profile is your personal win rate%, overall ascending/descending rate of your equity curve and so on. And you can use these numbers to further tweak/improve your trading approach. AND THIS IS EXTREMELY IMPORTANT. "Know thyself" is very important and you need to observe your trading statistics more than the market. Hypothetically I can trade without looking at any price and just the overall statistics of 1000 trades with blind but constant parameters. Most important thing is your trading profile is slowly emerging (might be unnoticeable atm) and most importantly NOT TO BUST out and explode your account before then. I put in alot of effort to this message (had to type it twice as iphone didnt post the first attempy) so please re-read if needs be. Equity curve is a very important factor in anyone's trading. On my webpage there is a equity curve at the bottom of the main page. In the first few days it looked jagged, thats because there was not enough statistics on my profile 'yet' and soon (already) everyone will notice that my equity curve will smooth out. I have purposefully AIMED so that my trading approach matches such outcome. DO you understand all this......"

"You will find that using a trailing stop will ensure a smoother equity curve but lesser potential profit. If you use breakeven stop loss you will encounter greater number (string) of losses but much larger wins. What will you choose? Small wins constantly or occasional huge jumps in your capital? Most traders will choose the first one and I was the same when I was first started but now I only use breakeven. Bruce Kovner once said, "I lose first, I shrug and move on. I lose second time, I smile and move on. I lose yet again, I know Im closer. Then a win.... which doubles my capital...." So so so so true..."
  • #6,429
  • Edited 8:41am Apr 6, 2014 3:50am | Edited 8:41am
Quoting pipEASY
Good morning, all Apologies for my sudden absence. The cold weather has taken its toll on me and I spend much of the time resting for now. However, my thoughts are with everyone. Before my leave, there were few traders messaging me with their progress and questions. Apologies but it will take awhile for me to answer them at my current situation. My showing/teaching is more or less complete in this thread and the book is still on schedule. I plan to invest my efforts in completing the book before anything else for this year hence I may not participate...
Edit:

Based on this post (which was one of Graeme's last ones) and Peter Crowns 41 posts (a trader Graeme has made reference to in the past)... I have come to the following conclusion:

Enter 2 positions. Exit half at 1:1 or 2:1 or 3:1
NEVER change the Stop Loss
Let the other position run forever or until it gets stopped out AT the SL originally set for it.

No "diversification" whatsoever (Graeme initially talked about this and so many hours and questions revolved around this, but in the end, he admitted this could be abandoned). You don't need to take profit from any leg even if it's 3000 pips or more in the green. If it goes back to getting stopped out at the original SL given to it whenever that was... so be it. You would have caught it's counter on opposing trade(s) at some point.

Easy to manage from an execution point of view, since all the instructions you give on your entry order (whenever that was, whether it was 1 hour ago or 3 months ago) will never need to be touched or edited under any circumstance ever again. The market will take care of everything for you. Your only concern is to worry about taking new trades, always at viable locations where you think price might go to next.

Your balance will begin to grow. Close EVERYTHING manually only in the following situations:
You decide to quit trading
Some random large number of time passes: 5 years or 10 years and you decide to quit trading
You need spending money. Then just close a random leg (not to "bank" profits" or "because you see a new trend forming blah blah blah", but simply because you need some cash - it's random)

I personally, do not feel this is hard to accomplish as your running account keeps growing. You don't need to worry if you have 30 positions open through 6 currencies or whatever. They will sort themselves out. You NEVER under any circumstance have to go back to "check" on a position. Eventually, when it all ends 10 years from now, probably 2-3% of every single trade you ever took is still alive. Maybe less. But if you had started with say 10,000USD, cashing out everything would be 20 to 100 fold of that (with a positive running balance quite literally most of the way).

You won't have to worry about what your winning percentage is even.... because you know what..... EVEN you won't know. Your only job is to open new positions whenever it makes sense to you with a TP of half position at say 1:2, and the other half run. After a hundred trades, (of which 80+ were losses), you have a positive balance and you won't even know which hedged what (not that you need to know), BUT your balance is magically... in the green.

After roughly 60 hours of reading, this is my conclusion and in my opinion, the only way to run Peter & Graeme's ideas soundly. Peter Crowns in my opinion, is much easier to execute. After Graeme changed his thinking to no longer worry about "diversification" I believe his life got infinitely better. Peter's execution means he NEVER needs to go back to any trade he ever took ... EVER. Just keep trading and trading and looking for breakouts from pennants and inside bars. In the initial stages it took Graeme hours to keep a log to see how his "legs" were doing.
  • #6,430
  • Apr 6, 2014 3:59am Apr 6, 2014 3:59am
Quoting yonseo
{quote} If you are curious as to how G diversifies, I have 2 quotes which you may find some hints. Around October 2011, I had a discussion with him relating to whether I should use some kind of trailing mechanism because I had the frustration period of getting my BE positions hit over and over in stock trading. "Hmmm yon seo.. Lets talk about equity curve. There is 2 ways to an equity curve (profit curve). If my trading approach focuses on taking smaller 50-100 pip profits I will considerably more win rate then a trading approach where I aim to...
Thanks for this Yon - 2 things I took away from this......

AND THIS IS EXTREMELY IMPORTANT. "Know thyself" exactly so - hedging is a psycho thing with me - if it's(currency pair) going down, why the fcuk would I want to buy lol.

"I lose first, I shrug and move on. I lose second time, I smile and move on. I lose yet again, I know Im closer. Then a win.... which doubles my capital.
Thats why i like to take profit or get out at be - then I'll re-enter at a better price - again it's a psycho thing and improves your equity curve. I've watched too many trades go into huge drawdown and it really screws me up.

Take my chart above of a potential trade - viewed with the benefit of hindsight it's easy I know. But the trend is down, so if you are looking to build a millipede, you want to do it in the direction of the trend, until the trend changes. Having equal and opposite hedges in place would, in my opinion, just over complicate things and reduce the profit potential
  • #6,431
  • Apr 6, 2014 4:55am Apr 6, 2014 4:55am
Quoting chiba_san
{quote} Based on this post (which was one of Graeme's last ones) and Peter Crowns 41 posts (a trade Graeme has made reference to in the past)... I have come to the following conclusion: Enter 2 positions. Exit half at 1:1 or 2:1 or 3:1. Let the other position run forever or until it breaks even. No "diversification" or anything like that (as initially recommended by Graeme). Don't even take profit from a leg even if it's 3000 pips in the green and goes back to BE... because you would be covered the full amount by it's hedging trade. Easy to manage...
What effect would paying overnight interest on your positions have?
  • #6,432
  • Apr 6, 2014 5:38am Apr 6, 2014 5:38am
Quoting chiba_san
{quote} Based on this post (which was one of Graeme's last ones) and Peter Crowns 41 posts (a trade Graeme has made reference to in the past)... I have come to the following conclusion: Enter 2 positions. Exit half at 1:1 or 2:1 or 3:1. Let the other position run forever or until it breaks even. No "diversification" or anything like that (as initially recommended by Graeme). Don't even take profit from a leg even if it's 3000 pips in the green and goes back to BE... because you would be covered the full amount by it's hedging trade. Easy to manage...
wow, someone who actually get's it... money management 101... nice post sir (I do the same on my journal)

I should add you will want to diversify some winning positions to just maintain equity, there will still be costs when the market decides...

Also you have to have good locations for entry... well, don't have to, but is preferable
tradewith60
  • #6,433
  • Apr 6, 2014 6:58am Apr 6, 2014 6:58am
Quoting chiba_san
{quote} Based on this post (which was one of Graeme's last ones) and Peter Crowns 41 posts (a trade Graeme has made reference to in the past)... I have come to the following conclusion: Enter 2 positions. Exit half at 1:1 or 2:1 or 3:1. Let the other position run forever or until it breaks even. No "diversification" or anything like that (as initially recommended by Graeme). Don't even take profit from a leg even if it's 3000 pips in the green and goes back to BE... because you would be covered the full amount by it's hedging trade. Easy to manage...
2 Traders can read G's posts but could draw different conclusions on several instances. What matters at the end of the day is how it benefits your own style of trading. Trading methods that are the most difficult to destroy and stand the test of time are usually the ones with EXIT methods that no two traders will likely trade the same way. There is a good reason why EXIT is infact one of the hardest skills in position trading. Positions that are extreme long tail in nature are usually like 0.5% of your positions and most will choose the psychologically easier path of trailing the stops of their positions instead.

You make an important mention of Peter Crowns approach of exiting positions at 1:1 or better. The most significant drawback of this approach however is that there will be those who might regard this as doubling your initial risk and others might regard this as halving your profit potential. Both statements are somewhat true.

For a position trader however, it is better to think in the lines of the latter because the low winrate (< 50% usually) of position trading makes risk control of position sizing crucial. What is important to take into account however is that "profit potential" is not simply the size of the position currently surviving but ALSO THE LIKELIHOOD of your position surviving. So compared to having just double sized position set to BE, the extra breathing space from the realized profit of 1 position can at times make all the difference in terms of allowing your other position to survive the bigger trend.

If anyone here has experience trading inside bars, you will notice this also. G makes a similar mention of this at http://www.forexfactory.com/showthre...96#post3966496 from post #1168 and onwards. If you consider this carefully, you can actually be more creative on your own and extend the potential of your positions surviving.

I will further address this later to prevent cluttering.
  • #6,434
  • Apr 6, 2014 7:12am Apr 6, 2014 7:12am
Quoting chiba_san
{quote} You close nothing, EVER. Your balance will begin to grow. Close EVERYTHING manually in the following situations: You decide to quit trading Some random large number of time passes: 5 years or 10 years -OR- you need cash NOW.
Very interesting observation and worth of testing too.
Thank you for your post!
  • #6,435
  • Apr 6, 2014 7:49am Apr 6, 2014 7:49am
Quoting chiba_san
{quote} Based on this post (which was one of Graeme's last ones) and Peter Crowns 41 posts (a trade Graeme has made reference to in the past)... I have come to the following conclusion: Enter 2 positions. Exit half at 1:1 or 2:1 or 3:1. Let the other position run forever or until it breaks even. No "diversification" or anything like that (as initially recommended by Graeme). Don't even take profit from a leg even if it's 3000 pips in the green and goes back to BE... because you would be covered the full amount by it's hedging trade. Easy to manage...

Sorry Chiba - think I'm being a dumbass again but I don't understand some of your statements....for instance

Enter 2 positions. Exit half at 1:1 or 2:1 or 3:1. Let the other position run forever or until it breaks even. No "diversification" or anything like that (as initially recommended by Graeme). Don't even take profit from a leg even if it's 3000 pips in the green and goes back to BE... because you would be covered the full amount by it's hedging trade.

On the one hand you are saying no diversification, but then state that you will be covered by the hedge - am I mis'reading this?
  • #6,436
  • Apr 6, 2014 8:38am Apr 6, 2014 8:38am
Quoting stewrigh
As you probably know I have a real problem with diversifying(or hedging)
Can someone please explain to me where/why they would diversify in the chart below {image}
Hi stewrigh,

Trading is really 'whatever works for you', and unique to each individual. Same as yonseo quoted: it is all about finding your individual profile as a trader.

In this instance I will tell you my opinion: on your chart, whenever you wrote 'Took some profit' I saw no reason for taking profit at those points ... there was no significant sign of trend change, like a candle closing above the previous open in an obvious way, also your stop-loss movements did not seem to be at logical points where you would be proven wrong. But all of that does not matter ... if you made profit and you are happy with your performance, 'it's all good brotha' (quote from a movie).

To all: 'Speaking' in general, stop dissing each other ... being an emotional drama queen has no relevance in the trading world.

Cam
  • #6,437
  • Apr 6, 2014 9:13am Apr 6, 2014 9:13am
Quoting cameron1st
{quote} Hi stewrigh, Trading is really 'whatever works for you', and unique to each individual. Same as yonseo quoted: it is all about finding your individual profile as a trader. In this instance I will tell you my opinion: on your chart, whenever you wrote 'Took some profit' I saw no reason for taking profit at those points ... there was no significant sign of trend change, like a candle closing above the previous open in an obvious way, also your stop-loss movements did not seem to be at logical points where you would be proven wrong. But all...
nice post Cam...

The 2 strongest fears are 'fear of missing out' and 'fear of regret' most trading decisions we make are pampering too these strong urges.

In testing you generally make more profit the longer you hold and leave your stops where they originally were.... Having that expectancy helps a lot.
tradewith60
  • #6,438
  • Apr 6, 2014 9:20am Apr 6, 2014 9:20am
Quoting stewrigh
{quote} Sorry Chiba - think I'm being a dumbass again but I don't understand some of your statements....for instance Enter 2 positions. Exit half at 1:1 or 2:1 or 3:1. Let the other position run forever or until it breaks even. No "diversification" or anything like that (as initially recommended by Graeme). Don't even take profit from a leg even if it's 3000 pips in the green and goes back to BE... because you would be covered the full amount by it's hedging trade. On the one hand you are saying no diversification, but then state that you will be...
I think the scenario described by Chiba is something similar to the picture below.

If your buy position was thousands of pips in size and this all happened in a period of several years where the biggest buy position was thousands of pips in size, the greed mentality starts to kick in as soon the the position gets taken out at BE. Such mentality tells the trader that you could have closed the buy for huge profits (in hindsight) despite the fact that the current biggest sell position actually offsets the BE from the buy position.

This then likely creates a psychological impact relating to issue of effort vs time, most likely leading the trader to close the sell position not so long after.

Infact, if the scenario indicated in the diagram happend in a period of several weeks or months, it will still have same affect on most traders. This in itself shows why hedging positions and holding forever is a very difficult process mentally for nearly all traders.
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  • #6,439
  • Apr 6, 2014 9:58am Apr 6, 2014 9:58am
Quoting cameron1st
{quote} Hi stewrigh, Trading is really 'whatever works for you', and unique to each individual. Same as yonseo quoted: it is all about finding your individual profile as a trader. In this instance I will tell you my opinion: on your chart, whenever you wrote 'Took some profit' I saw no reason for taking profit at those points ... there was no significant sign of trend change, like a candle closing above the previous open in an obvious way, also your stop-loss movements did not seem to be at logical points where you would be proven wrong. But all...
Thanks Cam - that was only a hindsight scenario of possibilities which I was using to try to understand why anyone would want to hedge.

Trading is really 'whatever works for you' For me this is key - someone once said that trading is 95% psychological and until I can get my head around hedging I'll leave it out of my MO.
  • #6,440
  • Apr 6, 2014 10:03am Apr 6, 2014 10:03am
Quoting yonseo
{quote} I think the scenario described by Chiba is something similar to the picture below. If your buy position was thousands of pips in size and this all happened in a period of several years where the biggest buy position was thousands of pips in size, the greed mentality starts to kick in as soon the the position gets taken out at BE. Such mentality tells the trader that you could have closed the buy for huge profits (in hindsight) despite the fact that the current biggest sell position actually offsets the BE from the buy position. This then...
Of course the other problem I see with hedging is the opportunity cost of tying all that capital up for what is effectively a flat position.

And the carry costs are gonna mount up as well, although they should more or less balance over time.
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