Multi-Lot Multi-Timeframe Position trading

Multi-time frame analysis yielding GJ and ChfJpy shorts as best trades on open. I'll usually wait for the market to settle after open for a bit before entering. Sometimes things reverse shortly after open.

GBP/AUD may be worth putting on your watch list
The downtrend on the lower timeframes has worked it way up thro each higher time frame and now looks to be influencing the uptrend on the monthly chart
It may be worth looking for a short trend continuation entry on a lower timeframe (personally I don't look below the 1hr chart)

Take care - we are at strong support as I write this (1.792 zone)

NZD/USD also looks good for a possible long trade
Look for a possible breakout from the trading range on the monthly
Look for a long entry on the lower timeframes

Hi Lizpet, nice to see you back. I was busy stacking up pips and didn't get back for the last couple days. Made about 7% profit this week and very happy with that. I did enter NU long, but it hasn't done well for me. It's currently -15 pips. I have a -23 pip stop on it, so I'm not willing to let it run much further against me. It is looking a little stronger at the moment.

I haven't entered GPB/AUD short because every time I look at it there is something preventing me from taking the trade. At the moment, H1 is trending strongly up and the H4 3ema has crossed a little above the 10 sma indicating a bit of an uptrend there. I'll check back on it later.

This morning, I have added a second lot to NJ long. I also took two new trades in AJ and GJ long. Both of those were taken with only a 1 unit test lot and 18 pip sl, so not willing to risk much on a Friday. Both of the new trades were trending up in weekly, daily and H4. The H4 had been trending up for days. The monthly was not moving in opposition to the trade. I scalped the entry and we'll see if those will make the day.

That's scans complete for the morning. I'll check back later in the day to see how things are going.

Here's the NJ trade. As usual, a second leg is placed on when the first is around 2X sl in profit and the sl set between them. In this case, the first entry is for 2 lots and the second is for 1 lot, so if I stop out, I still get 20 pips for the trade.

An important point is to fight for every pip on the entries. As I've said before, ALL the risk in this method is at the initial entry. After that trades are either risk free or have locked-in profit. Since entry losses are held small anyway, even saving a single pip on entry is beneficial. Only the very best entries should be taken and only the very best entry methods should be used. At least, with this method, if you aren't profiting you know exactly where your problem lies. You are losing too much on bad entries. If you work to make better entries with better w/l ratios and smaller losses on bad entries, the rest is automatic.

This is not a shotgun method. Entries should be as precise as the work of a neurosurgeon. Measure your progress. If you are averaging a loss of 18 pips on bad entries, try to find situations where you can identify a bad trade just a little earlier and exit quicker to reduce that long term average to 17 pips, then work to get to 16, etc. Measure your results. If you are getting 50% good entries, work on better trade selection to get 55%, then work some more to get up to 60%. This is precisely what you must do to guarantee this method will work. If you succeed at making the better entries, the math assures us that this method must work.

No method will work if your entries stink. The advantage with this method is it clarifies just where the problem is with your trading, if there is one. If this method works, you have no problem. If it doesn't, the problem is with your entries, nowhere else. There is no need to waste time looking for a better method. Instead, spend your time working on making better entries. Measure your progress carefully, and when you get the entries down, everything else will fall in place.

Let's have some discussion. Does anyone have any questions or comments?

Hi Graviton

How you exit your positions ?
Any trilling stop method you use (for that market)?
Are you looking for buy and sell opportunity on difference time frame ?

Hi Graviton
first of all thanks for your well grounded explanations and shearing.
Totally agree on the escense, let profits run, cut losses short..add to winners...balance you runs till either BE , win, or big win.
I trade EW, profitable, about 75% winners, and a 0,31 expectancy, which is low....my weakness lies in cutiing profits too short...which is balanced by the high percentage of winners.
So I really study my entries.
So here´s my question: I work with only 6 pairs, with low correlation and low spread.That´s all I trade and study....Understand you look at over 20, do you consider correlation?

I've been busy with buying and moving into a new home, so please forgive my delay in responding to questions.

Yes, I do consider correlations, but not the way you might think. For instance, if the Euro is weak due to fundamental factors, I might look at shorting several Euro pairs. That way, if there is a news spike that drives one up, but it is not related to the Euro, I can still profit. So for instance, If I short EU and EA and there is a news spike that drives down the USD, but the Euro is still weak, just not as weak as the USD, I can still profit from the weak Euro with the EA short. The theory is that not all opposing currencies will suddenly weaken against the Euro at the same time due to a news spike that is not related to the Euro. Of course, this all depends on my original observation of the weak Euro being correct in the first place. If the Euro does prove to be strong, all the pairs could go against me at the same time, so I'm going to reduce the trade size of each trade to stay well within my money management rules, which are very strict. But that would be no different than if I were just in one pair. This is a form of diversification that works well for me. It's not unusual for me to take 3 or 4 trades in the same direction for a weak or strong currency, like 4 Euro shorts, then early exit one or two quickly that don't quickly go in my favor, and ride the 2 or 3 that remain to good profit.

As far as cutting profits too short, if you are profitable, I can't criticize. I trade large stops and large TP's, but I will early exit a bad trade before I hit the stop the vast majority of the time. When I enter a trade I set a wide stop where I am sure the trade will have failed if I hit it, like 100 to 200 pips. But as the trade progresses I have additional information and I may see that the trade is failing after only 20 or 30 pips against me and early exit to cut my losses short. So, for instance, if I was betting that the Euro would be weak and entered 4 short Euro trades with 100 pip stops and 200 pip TP's (for a reasonable 2:1 reward to risk ratio) and all 4 Euro shorts started to move against me quickly after entry, I might exit all considering that the Euro was not as weak as my trading premise assumed. This month I only hit one stop loss and that was a mistake of setting the stop too close. I had a 60 pip stop and a 62 pip news spike took me out. Every other exit was manually taken for smaller losses.

As far as riding a winning trade to larger profits, this is something most traders must learn to do over time. Perhaps the easiest way to learn is to open a second account and trade it at 1/10th your normal trade size and practice trading it to higher profits. I believe some brokers allow you to trade very small sizes. So, for instance if you normally trade 0.1 std lot, open a practice account at 0.01 std lot per trade and let the winners in it run to much higher profits. Of course, you still want to cut losses short, so there is a balance required there. You'll need to consider fundamentals and longer time frame charts to perfect this method, but it's great to make big pips with only a couple hours a day of time. Since those trades run from a few days to weeks or even months, it wont take much of your time at all to manage them and perfect this method. Of course, it will take weeks or months of small investments of time, since these trade durations are so long. In my own humble opinion, it's well worth the time you need to invest to learn this skill. Happy trading!

I study all timeframes. I typically buy when they all or at least most are in agreement, like 8 out of 9 say buy. I pay less attention to the 1 minute as it changes quicker than my usual trade duration of days to weeks, but I still consider it as I don't want to enter a trade that looks bad on the short term timeframes (1, 5 and 15 min) and have it move against me right from the start. I also don't spend much time looking at the monthly, since it changes so slowly, but I do look at it for perspective and to help see major supports and resistance points. I find most of my S/R values from the weekly and daily charts though and while trades are running I'm usually watching progress on the 30 min or H1 or H4. I sort of flip through timeframes to get a sense of how the trade is progressing.

I discussed my exits above some. I typically am looking for a support or resistance point that will yield 200 to 1000 pips profit, and then I'll set a stop at 1/2 the profit target, which is easily enough to see that the trade has failed. Once in the trade, I will collect additional information as it progresses, news releases, chart patterns, indicators, etc. I use a 5ema crossover the 10 sma as an indicator. I also use the CCI14 and 5,3,3 Stoch and a RSI10 based on HL/2 median price and watch the 50% crosses, and a quadratic regression analysis. That's probably overkill, but I like good widgets. Exits are always (almost always) taken early when I see a trade is just not working.

This month all my exits were taken manually for very small losses, except for one that ran away from me while I was away from my computer. It was really a bad trade as I could only get 120 pips out of the short till it hit the TP at a support and so I set the stop at 60 pips. A news spike sent it up 62 pips and I stopped out just before it reversed and went straight to the 120 pip Take profit support I had earlier spotted. I'm hoping to make the remainder of the month with no additional stop outs. It's very good mental discipline to try to never hit a stop loss. But of course, you have to have wide enough stops to absorb small news spikes to make that work, something like the daily ATR to 100 pips or so. If you are going for a very big win, like 1000 pips over the next few months, a 300 or 400 pip stop is reasonable. But of course, if it takes off against you right after entry, you might be right on the trade but just have picked a bad entry, so it's best to cut your losses short and look for a better entry. Some people try to trade without stops, but I consider that a sure path to destruction. I'd rather trade with wide stops and try to manually cut losses as short as possible. That's the way I trade, but you have to find your own method and perfect it.

So, that's one reason to exit, the trade isn't working from the start. That's usually the case. Rarely something has changed, like new information is out and the trade basis is no longer valid and it has quit working. In that case I want to minimize give-back on the major reversal, as opposed to a minor retracement that I'll just ride through. Another reason to exit is I hit my TP and I just let the computer take the profit. I can always re-enter if I need to. Happy Trading!

Any more questions? Comments?

Well I finished the month of August with no additional stopouts. It was a very good month for my account. Since there are no comments I'll move on to discuss trend trading a bit. To take full advantage of multiple positions one must catch some large trending moves in price.

If we look around the internet we'll usually find a "trend" as being defined as a series of higher highs for an up trend and a series of lower lows for a down trend. This definition is correct, but it leaves a lot of questions unanswered. For instance, which timeframes are we speaking of? Suppose price is trending up on the H4 and down on the H1, do we call that an uptrend, or a downtrend? Is there any way to know if the trend will continue, or reverse? Why does price trend sometimes, and move in a tight range other times? We'll need to look a bit deeper into market dynamics to find our answers. Let's go back to the beginning where we perhaps answered a bit too quickly when asked, what is a trend? Of course a trend will result in a series of higher highs for an uptrend, and a series of lower lows for a downtrend, but is this just random motion, or can we understand what drives these series of price changes? If we can understand why price is acting as it is, can we apply that understanding to increase our trading edge? There are a lot of questions to be answered here. Let's get to work!

Sometimes a series of higher highs or lower lows can just be created by random chance. This is like flipping a coin and getting three heads in a row. It tells you nothing about the likelihood of getting a heads or tails on the next flip of the coin. In fact, if you flip a coin a very large number of times and plot the results on a chart, you will see long periods where many more heads than tails are coming up. The plot on a chart of these random events will look just like a price chart with long periods of trends, ranging, consolidations and reversals. In hindsight, we could plot a moving average, or any indicator of your choice and think, gee, If I had bet on heads (gone long) when the line on the chart went above the moving average, I could have made a lot of coins. Unfortunately, no matter how sophisticated your indicator(s), there is no strategy that will produce a profit from a completely random event. If you accept this as a fact, you can move on to make progress in developing a trading edge. If you don't, you have fallen for the "gamblers fallacy" and can spend the rest of your days chasing random events which have a negative expectation for your account due to the spread costs of your trades. These are indeed trends by the prior definition, a series of higher highs or lower lows on a chart, but they can't be traded for a profit. Let's call these types of trends apparent trends. We need a way to identify these apparent trends and then we need to avoid the temptation of trading them no matter how enticing they might appear. At least half the trends we can identify from looking at a single chart will be of this apparent or random type. Some very advanced statistical analysis says considerably more than half are just the result of random price movement. Our goal will be to look at other reasons for trending price movements and see if there is a way to tell one type from the other. In the end, any consistent profits from trading must depend on trading non-random trends. Even range trading is just trading small price trends between supports and resistance lines. If price is moving randomly, we are back to the gamblers fallacy and there is no way to make a profit from the completely random price movements. In order to profit, we must find trends that are not driven by completely random price movements, so let's go looking for them. (Deeper down the rabbit hole we go!)

If anyone wants to discuss any of these points, jump in at any time. Otherwise I'll just keep rambling on.

A second reason that trending patterns may appear on a chart is "heard instinct". This is a non-random event and there is much discussion of it on the internet. It's where traders follow the leader and pile onto a trade causing prices to run up ever higher (or lower for down trends), until price reaches an unsustainable level and then quickly collapses as everyone rushes to get out of their trade with some of their profits. Since this price movement is non-random in nature, it is possible to profit from it, but it's difficult due to the rapid price collapse that occurs at the end of the "trend". It's also very difficult to identify a trend that is being driven just by heard instinct vs. one that is being driven purely by random motion of price. Sometimes the character of the trend can provide a clue, like when an exponential rise in price is combined with increasing volume, but the problem of getting out fast enough to preserve profit still remains. Some people seem to have a gift for identifying these situations and can consistently profit from them, but for most traders, depending on the unpredictable character of human nature to make a consistent profit is frustrating if not unattainable. This rabbit hole goes even deeper and there are many branches and blind alleys that lead nowhere. Let's get down to the meat of the matter. Fundamentally driven trends.

Congratulations to those studying Multiple Trades in Multiple Time Frames.

If you have a large enough cost basis per trade (a fair amount of cash to manage) then this can be a very effective approach to Money Management when you get the Ratios (Cost Basis Per Trade to Time Frame) nicely balanced and you develop a good dominant market bias type of indicator(s).

Having multiple accounts is the best set-up. Dedicated accounts to the specific time frames that your algorithm deems appropriate. Then percent allocation into each account based on the mandates of your method. Your "Individual Cost Basis" is the percentage of each account used to make each trade within its own mandated time frame. Your "Total Cost Basis" is the sum of all "Individual Cost Basis" amounts and is set to not exceed "X" percent of the sum of all accounts (a value set by your risk model).

The idiotic FIFO Rule that came direct from Retail Bucket Shop FX Brokers in the United States will prevent some of you from trading in this way using a single pair. Thus, the need for establishing as many individual accounts as necessary to fulfill the mandates of your multi-time frame multi-trade model. Use a broker that will allow you access to each account under a single login and through the same trading platform. Once you have the platform set-up correctly with access to your multiple accounts, this methodology becomes a lot easier to manage in practical terms. I don't follow retail FX brokers that much anymore, but if FIFO is a problem for you, you may have to open multiple accounts under the same platform.

For those of you who live in free countries (unlike the United States where I live anymore), this won't be a problem for you. I love my country, but often times we do the dumbest things. The Bucket Shops will lie to you and tell you that it was Dodd-Frank legislation that brought FIFO into existence but they will never tell you that they supported FIFO behind the scenes AND they will never tell you the real reason WHY they did it. If you know what you are doing, you don't need a technical trading system to be consistently successful in retail Forex. All you need to do, is become a Master at Hedging (rescue trades, extended trades, acceleration trades, synthetic hold trades, etc.). That eats away at Retail Bucket Shop profits and they want to remove every single edge they can from retail Traders.

Multi-Trade Multi-Time Frame methods are worthwhile spending your time on - if you have the requisite cash on hand to work the methods correctly. This is quite different than merely adding to or subtracting from positions in the same time frame.

I'm really not here to participate in this thread. I'm just a ghost. I only wanted to highlight a good thread topic when I saw one.

Thanks for the feedback DoubleStoch. Yes, Oanda allows multiple sub accounts and I have multiple brokers, so I can do just about anything I need to. I doubt the brokers are taking the other side of my trades, but if they can afford the losses that's fine with me. I do have multiple price feeds so it would be easy for me to catch anything funny happening with price movements.

The conclusion we have reached so far is that there is no way to trade completely random price movements for a profit. That effort leads to the "gamblers fallacy" which is worth reading about. Furthermore, the best statisticians using the best methods available say that most price movements are completely random. So, to profit, we need to carefully pick out the few price movements that are not random in nature. An example of non-random price action would be when the Swiss National Bank said they would not let the Eur/Chf fall below 1.2000 and established a floor there. If you look at the Eur/Chf monthly chart you'll see the flatline that price has traced out for the past 2-1/2 years as a result. This was widely announced with headlines in the press at the time. Another example is when the Japanese government and the BOJ decided the Yen should come down in value. This was also widely covered with headlines in the press and the Yen has fallen over 2,000 pips (UJ has increased since Yen is on bottom) in the last 2 years. These trends last a very long time, they are driven by fundamental factors that are easy to understand and they are widely known and easily researched. Yes, it might take just a little more work to identify fundamentally driven trends, but not much more. Winning is usually just a little harder than losing, but it doesn't have to be much harder if done right.

First of all, we don't care about the vast majority of fundamental information. If we only research trends that first meet all our technical criteria, that only yields a few that qualify. There should be a very good and easily identifiable fundamental reason price in a pair is moving in the direction it is for it to qualify as a good long-term trend trade. At any particular time, probably half or less of the pairs appear to be trending in the multiple timeframes we are considering, and half or less of those have a very good fundamental reason for their trending behavior. In the end, that only yields a few pairs to trade and since so few trades are taken very little time is required. It not hard at all to learn why the Eur/Usd has been trending down for the past several months, dropping about 900 pips since May 2014. The European banking problems and high unemployment has been all over the news. The surprising good numbers in the US economy have also headlined the news. Weak Euro, Strong USD, Technical E/U down trend confirmed by fundamentals. There were probably hundreds if not thousands of pieces of fundamental information reported in the past few months, but we only care about that information that either confirms or refutes our technical setup. If we eliminate any apparent trends with no good fundamental reason behind them, we eliminate most of the random trades with a negative expectation due to trade costs and the majority of the trends left should present good pip-making opportunities. Of course, if you take this trade, you want to be able to withstand a large retracement. In early June there was a 200 pip retracement day, in Early may there was a 150 pip day, so it stands to reason to take the trade one would want a stop-loss in that neighborhood. You don't have to lose that many pips on a retracement, you can exit anytime you want, but trading with a smaller stop might take you out before you were really ready to exit. Of course, trade size must be adjusted to make sure the stop loss isn't too large a percent of account. Study money management if needed, or just set the trade size so that stop loss isn't more than about 2% of account and move on. You can't set stop loss based on your trade size and account size. That's backwards. Price doesn't care how big your account is or how much leverage you trade with. If it can shake you out with just a small 60 pip retracement, it will.

So we have changed the question of what is a trend to what is a trend we can profit from? We know we can't profit from random price movements, so we have identified a sub-type of trend that is not random, a Fundamentally Driven trend, and concentrated on trading it for profit. Typically these trends run from weeks to months to years, so you'll have lots of free time to enjoy life while they are playing out. I like to take bites out of such a trend. I'll try to sell lots at the peak of a retracement on the EU and then close a lot when there is a big drop in price, rinse and repeat. Trading multiple lots and selling only the fattest one on a big dip gives me the opportunity to continue participating in the trade with newer lots and still take big bites out of the trend. The trend will usually continue until the fundamental reason driving it changes. For instance in the EU short, that means much better European economy or much worse US economy. I will usually miss some of the beginning of the trend, since my criteria is the trend has to line up on most if not all timeframes for me to enter, and I will usually lose some at the end since I am waiting for it to end, but that nice fat middle can run for months or years.

I'd like to get some feedback if anyone has a comment.

Ok this thread is interesting, Graviton you seem to be an intelligent guy and an experienced trader, but i think there are misconceptions here in this thread.

First of all, i think your MTF method is logical, but the way its executed it's not.Do you realize that there are no timeframes in the market? The market is only a stream of BID/ASK price.What you call timeframe is only an imaginary grouping of price to filter the noise or to let the price fit the screen, because a tick chart would be really big.

So because of this, if you check for trends on multiple timeframes its almost like (minus a little error due to missing days and weekends) if you were to plot moving averages on a M1 chart, or a Tick chart.But lets assume that M1 chart is the basis, then i think the M1 should be viewed, so we should plot those MA on the M1 chart.



This is how your method would look like on M1, where those moving averages represent the "higher timeframes".But that being said, why M5,M15,M30?

Why are the timeframes grouped like they are, why not we use the M3,M27,M88, H3-M15 timeframes.What rational reason you have behind choosing those timeframes, because if a trend is a trend on all of them like you said, we could any custom timeframe we want and make profit on it.

And that being said, we could plot any MA on the M1 chart, so starting from PERIOD 1 up to PERIOD 1440 for example.

And this asks the question , how do you objectify your trend or is there an objective method to detect the trend ?

If not, or there is no answer to that question, then your method is a fallacy itself because you choosed a "timeframe" with no logical explanation behind it.

If there is an objective explanation, then what is the threshold trigger of a trend being a trend and a trend being just a fake signal ?

I`ve been studying trends in the near past but so far nobody gave me an objective answer to what a trend is.If there is no objective answer, then there is no trend ,only in the mind of the trader it is.
Oh an trendlines dont count, they are subjective too. I await your response, thanks