The Coin-Flip Theory

Glad to see you back in action can't wait to read more post from you Jysticim.


Yes I have stated earlier that 1st-2nd year newbie have less chance of succeed while people with 4+ year experience...should do good.

I do have a bit more time to answer Jysticim:

I wasn't sure if you said: " Do you really think that this strategy is a gamble?" was referring to me or to everyone indirectly...

But the reason why it's consider gambling is because "you say to risk your whole balance... high risk is consider a gambling"

But to me NFA 50:1 leverage force me to only risk max 15% so risk 16% is not even an option for me. So in MY case it's just a "HIGH risk system"...


As for the guy picking eurgbp... you are going to lose quit that pair now before you even lose more money. You have been warn....

If anyone here think they can win with non EurUsd pair ... dream on.... You also have been warn... (you will lose most of the time spread cost and sl hit)


Later people,
- Going to work now.

@ victor_ray

I was referring to everyone, sorry for the delusion.

Whoaaaaa. Someone's feeling spunky this morning...

Todays trade is going good

I am on my lunch break right now so I have a bit time to comment.

People who think they can do different from the author will loses and blame on the author's gambling system is bad.

I don't know how many people think that the system is "random" lol.


Do you think we chose the same exact candle to enter and exit random? LolLet me tell you what I think.The author choose 5:00 candle on eurusd because that candle is the most profitable.
Also do you think you will suceed if you choose the 20:00 candle? Loll.
I am not saying everyone to believe what the author say. I markthe candle myself. And I see that the 5:00 canlde win. There is no random in picking the best candle.

@ victor_ray

Yes I partially agree with you.

You can just pick a candle, as I said before you need to pick one arround the opening of a major pair as they have the most random outcome. There is nothing random in picking the candle but the outcome is.

Jysticim,

Been pondering the numbers. Not sure how set you are on the 34 pip s/l.

You referenced the Rags to Riches thread in your first post, so seems the idea is to get at least a 2:1 with some days (smaller stop due to daily high/low getting hit) less of a loss and some days hitting a higher t/p upon close. But you need...on average...that two times tp to sl ratio.

If are trades are now time based (as far as take profit) at 23 hours then it would seem logical to expect, on average, to use the ATR as our expected T/P. Not to close the trade, but just for figuring. After all, that is by definition, the average range of that pair over a set number of periods.

That being the case, we want our set stop to be 1/2 of that amount for an average 2:1.

So perhaps it would make sense to have the set stop of 1/2 of ATR. That would obviously change with the pair chosen.
You would still have days when the previous high/low gets hit before reaching the full s/l and therefore get you out cheaper. And you would of course have the homerun days when you hit a strong move and get more than your ATR.

Changing the s/l to a factor of ATR would also change your leverage used accordingly.

Not saying this would be a better way, but seems to make a certain amount of sense based on the time based nature of your system.
Anyways...for what it's worth.

@ spyderman
I totally agree with you,

Ill explain why I have the hard SL of 34 pips. You probably know that if you use the leverage of 1:200 you need to have the 34 pips hard SL to not have a bigger DD then 50%. Because the candle outcome is random and can go two ways you have 50% of losing/winning.

You are right about that you need on average 2:1. But the problem when using ATR(is it not ADR?) you need to change your leverage accordingly and that is not possible. When you use ATR you would have leverage like 1:186 or something like that and that is not possible.

ATR and ADR are similar. ATR is typically more accurate as it takes into account the "True" range of the instrument for that period, taking into account gaps from the previous close to the current open rather than just the "Daily" range which would not. As the forex markets are not as susceptible to gapping due to their 24 hour nature (most gaps only happen on the weekend), it's usually very close to the same thing.

As to leverage...why can't you use 1:186 or whatever you want. As long as you don't exceed your broker's max, the leverage you used is dictated by the size of the lot you wish to open.

If for example I have a $100 micro account (1,000 unit contracts) and wish to trade the Eur/Usd.
At 1:1 leverage I can place an order of .07 lots ($100/(1,000 x 1.3408)
At 50:1 I can place an order of 3.73 lots ($100/(1,000 x 1.3408 / 50))
The leverage is what I make it.

Now if I want to risk 1/2 my account on a trade such as we're contemplating, I can still vary my s/l by varying my lot size.
If I choose the 34 pip route and want to risk $50 then I make my lot size of 14.71 micro lots (34 pips x 14.70 lots x 10 cents/pip)
If I choose a stop loss of say 45 pips and still want to risk the $50, then I reduce my lot size to 11.11 lots (45 pips x 11.11 x 10 cents/pip)
In the first case you are employing 200:1 leverage (1,000 units x 1.3408) / ($100 account size / 14.71 lots) = 200
In the second case 150:1 (1,000 units x 1.3408) / ($100 account size / 11.11 lots) = 150
You choose the leverage based on the lot size.

so now, not using two trades running at the same time?
Because some posts back you said it will help to make overall balance higher by having TP of 34 pips and having one trade with TP of next days candle close.
Which way are you doing it now? Two trades seemed better ?

hi Jysticim,

nice to see you back in the thread

and yep i was aware you were not strictly going for 2:1 RR in your original post but i was just expressing that this is the ideal ratio we should be going for or at least moving towards going to.

i think we should put in some rules for a TP level. ive seen many times in my backtesting that when sometimes price goes your way it may jump +80pips in your favour and then slowly start retracing back. if you leave the trade open and wait for the next day to close the trade sometimes you end up missing out on +40pips.

i think we need to set some rules where we measure average ADR of a certain period and see if price goes, say +25%, or more past the ADR level in our favour, we should look to TP if price then retraces say 15% or something. it doesnt make sense to give all those pips back just because you are waiting to close the trade the next day.

To cspip,

It's better to split 1 max trade in to 2 trade so that way you at least have some profit if it hit 34 pip and whip back to original order.
When that happen your exposure in risk wise is reduce.. so letting the 2nd trade run for 23 hr sometime can get lucky net 80 or even 100 pip...


To TerryTibbs, obviously you can set the rule how you see fit and ignore the author rule.. but I don't see how the author set a new rule suddenly the market will obey..his new rule.. But way do keep in mind the author risk 50% ...of his balance on a 34 pip SL... that mean if the market goes +34 pip then he gain 50% of his balance... how greedy can you get man lol... you want 80 pip..? to ... gain 100% daily ? lol.

Seriously aslong as everyday the market hit 40 pip... it's good enough for any high risk / gamble trade... you banking the buck..
It's almost the 23rd Hours so I'll be banking a nice % gain today...

From now on I will post log result with my excel because I am lazy.... I rather just take screen shot:
I also attached the "excel file where YOU can record YOUR daily profit/loss and it will calculate the lot size you need to bet with the new Balance.
I hope people can see if you want win you need to put in serious effort like this at least and apply to your OWN TRADING.
If you don't like the gamble system, ok no problem.
But without an excel log like what I created doing % money manage compound is a PAIN...

By the way, the gain 7-29-2014 is a nice 8.73%!! which is expected since I am risking 15% everyday.





Today Bet
Day 3: July 29, 2014
Advance Analysis IS Require for today signal.
The entry candle is still the same 5:00 candle but to determine if it's a bull candle or bear candle you need 4+ Years of trading experience...
Of course the outcome is alway "random... as usual" after the 5:00 candle..

Seems very interesting. Do you have a mathematical background?

My Highest Math Level in College is Calculus III. After that I can't go higher because my brain can only handle up to that level...

That's cool. Beats me.

Victor, may I recommend connecting your FF account with your MT4 platform? That will save you having to do excel and screenshots.

@ victor_ray

Thank you for your Trade Log it will be very usefull, but we the rules you don't use always the 34 pips SL we also look at yesterdays high/lows.

But as you only want to gain max 15% a day you need to change the SL of 34 pips accordingly. When you take 34 pips hard SL you will have max DD of 12%. If you want a max DD of 15% your SL should be 41 pips. But because you have a max gain % a day you need to get that 2:1 ratio and you can only afford to lose 7.5% and that is 20.5 pips.

No that's not an option as I am risking 100$ within a bigger balance... Meaning I am playing a 100$ small account in a big account...

So that's why I have to keep all track by excel and use "hard stoploss" to make sure it doesn't over risk to my big balance...

And beside: I like doing screenshot it's easy for me...

Well Jysticim, that's why if you or other people need to "change the daily 34 pip sl to 12 ..they can do it for that DAY ONLY. The lot size will calculate automatically if you change the sl pip to 12.

So if Today you want to risk 50% on 12 pip. Just change the "SL Pip number to 12 pip" and you will have the correct lot size.

Tomorrow if you want to to back to 34 pip sl. just change it back. the lot size will automatically calculate to the correct lot size.

The excel I created is flexible. I do notice that when you change the sl pip all the "previous date lot size change too" Well you can alway just erase the math formula in the previous date lot size box and put in the manual lot size you bet at that day. So that way the whole excel column doesn't change previous date lot size.

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Also Jysticim, I do get that if i set the lot size for 34 pip and I set my sl to say 20 pip, then I don't risk the maximum 15%.
However, if I do gain 34 pip then I will get 15% gain. That's the goal. 15% or Higher if the 2nd trade run beyond 34 pip.
If some day the sl is only 10 pip then It's a small risk WHILE i still keep the same volume that can allow me to get 15% profile while maintain risk that's below 10%. Although not it's not everyday you get a lucky candle signal that is near the previous daily High/Low.

Also the like to do risk that way because time you go against the "trend randomly" and you don't want to be risking 50% on a SL of say 15 pip for the reward that's beyond like 75%... that's too greedy.

I like play constantly high risk. Not greedy risk. I have said before to everyone ... If you make 2% daily on "average daily" then you will be millionaire very fast.

Ofcourse if you "aim for max 2% daily average" Well guess what ... some day you get 0.01% to 2% randomly...

While if you aim for 15% daily average you might get day like this:
Day 1: +0.01% , Day 2: +1% , Day 3: -5% , Day 4: 15%, Day 5: 4%, Day 6: -2%, Day 7: 12%

So let add it all up = 25.01% total in 7 day.. Which is WAY better than

7 Day straight win of 2% = around 16% gain.. The sad thing is we are talking about average which mean you do NOT get 7 straight day of 2% win..

That's why high risk is better because OVERALL those "LUCKY RANDOM 15%" day will make up for the 4 days loss at 2% goal....

I hope this is clear enough for people who think...they can aim 2% daily average which is like not possible unless you risk around 15% daily average.

----

There is a saying:
"Aim for the moon. If you miss, you may hit a star" quote by W. Clement Stone

@ spyderman
Ye, I forgot that. Always used an lot calculator.

@ Victor_ray
I totally agree with you, I only wanted to point out that if you change the SL the previous days would change also. Plus I made a wrong calculation we still need to use the 34 pips SL to calculate the lot size only. We set the SL on for example 20 pips with the calculated lot size on 34 pips SL.

A useful tool to calculate lot sizes http://www.babypips.com/tools/forex-...sitionsize.php. Always use the 34 pips SL.

Sell Day 31(Yesterday, closed today):
Open 1.34339
Close 1.33996 Gain: 343// 34.3 Pips
343 Pips x (0.00001/1.33996)x(643$ x 200) = 329$ +643$ = 972$

Buy Day 32(Today):
Open 1.34016
Close xxxxxxx

SL 1.33943

But with the upcomming news I doubt this trade will make it, we will see.........stick to the rules.