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Building an equity millipede

  • #6,601
  • Oct 11, 2014 6:08pm Oct 11, 2014 6:08pm
Quoting Sherpa
{quote} If you have $100,000 in your account trading 1 full lot is the correct size to trade at 100:1 If you only have $1000 you trade 1/10 of a full lot. Trying to do anything more and you risk a margin call and not being able to be in multiple markets. I think this talk of correct leverage is distracting from the main lesson This line should give you an idea of what you trade size should be relative to your account size Average loss to establish all positions: 235 dollars/trade = 0.2% loss per trade on the initial deposit
Not sure how you are calculating your leverage but 1 full lot = $100,000 - if your acct has 100k balance you are NOT using any leverage.
  • #6,602
  • Oct 11, 2014 6:12pm Oct 11, 2014 6:12pm
Quoting TheRealDeal
{quote} I got it now The only reason would be that i plan to trade up to 100 instruments simultaneously + for some i may use Daily as entry TF, so i will have multiple open positions for longer period before setting them to BE. TRD
Thought so TRD - I tend to focus on one market at a time until I get it into a free trades position.
  • #6,603
  • Edited 6:55pm Oct 11, 2014 6:35pm | Edited 6:55pm
I think we are getting too bogged down in the systems and not focusing on why such a system works.

It has been said by several that the entry method for position trading generally does not matter. The idea is to let positions run longer and stack orders in your direction of price moving to B.E. at some reasonable level or reason. As a result does a particular systematic way of entering the market actually mean that much?

There seems to be edges in the following concepts all by themselves::
- working breakouts (any testing I have done proves this is superior to fading)
- trading with the trend (however you identify that is up to you)
- aim to hold for the longer term to enhance profit
- target larger R (return) multiples
- add to your position if price moves your way
- aligning fundamentals (swap rates) or news events, or whatever you can judge well
- and importantly, by buying when price is up, and selling when price is down, we keep our nose clean by ensuring price ultimately dictates how you trade thereby preventing you from fading lost causes.

The technicals, so far as I can tell, and so long as they are not retarded doesn't seem to matter that much. It is simply a way to pull the trigger on a trade with no second thoughts, Graeme always said that to make profit we had to participate. As a has a result you can choose a strategy that suits you and if you apply some of the unique edge above maybe you will be ok.
  • #6,604
  • Oct 11, 2014 6:47pm Oct 11, 2014 6:47pm
Quoting stewrigh
{quote} Sherpa I understand your concern but I think I understand the system and have been using it for some time now(my version of it anyway) The reason I raise the leverage issue, although not really relevant to the system, MM must be an integral part of the way we trade, it certainly is mine. TRD, in the example he showed used zero leverage on $100,000 account and managed to turn that into 400 k in 2 years. If you use leverage you can, potentially turn a much smaller account into a similar amount. For instance you could still trade full lots...
If you trade 1.0 standard lot on a 10k account and your losses average around 20~30 pips per trade, then your risking 2~3% of your balance per trade.

Since meaningful bigger trends happen approximately 15% of the time. If you begin your stacks at the wrong time (85% of the time), this approach likely to cause insane drawdowns that is beyond what most traders can handle psychologically.

There is a good reason why undercapitalized traders cannot trade this method. Hence there is no evidence of a follower of this thread growing a small account into something big since 2010 where this thread began.

Ask your self this:

If you started trading with lets say 1k, are you willing to trade it this way to turn it into 4k in 2 years time?

The same question applies for 10k turning into 40k in 2 years time using this approach.

Although it is most likely that they wont admit it, those who seek answers in forums want (usually expect) a much faster capital growth.

However the very same people is likely to settle for a 4x growth in 2 years if their trading capital is 6 figures or greater and actually have the proper skills and mindset to trade this way.
  • #6,605
  • Edited 12:41am Oct 12, 2014 12:28am | Edited 12:41am
Quoting yonseo
{quote} If you trade 1.0 standard lot on a 10k account and your losses average around 20~30 pips per trade, then your risking 2~3% of your balance per trade. Since meaningful bigger trends happen approximately 15% of the time. If you begin your stacks at the wrong time (85% of the time), this approach likely to cause insane drawdowns that is beyond what most traders can handle psychologically. There is a good reason why undercapitalized traders cannot trade this method. Hence there is no evidence of a follower of this thread growing a small account...

Precisely the point I have been making on Risk/Reward versus Time and Effort over the years.

Time' equates duration in months and years required for trends to realize into Equity Growth.

'Effort' equates the contineous participation required to capture such trends AND more importantly, to preserve all the legs by following the direction in both ways to freeze floating profits.

With that said, it is obviously most challenging for US based traders who are forced to FIFO and no hedging limitations requiring some major tweaks to this approach to position building. Perhaps one of the main reasons fewer traders from US are
still around in this thread and on FF in general. I had a blast when I was allowed to trade from FXCM UK in 2010/11 with several 1000+ legs posted during my journey. I now have my own version based on the foundational principles of the 3 key elements of participation / low risk / growth.

This is still the best thread by far on this forum for newbies and experienced traders to pursue imo. Understanding it's strengths and perils within the first few months is important to reset expectations and avoid frustrations during your journey. THIS IS NOT A GET RICH QUICK STRATEGY FOR MICRO-ACCOUNT HOLDERS..

And lastly, I find all these recent discussions on analysing TRD's backtesting results from almost a decade ago absolutely meaningless and waste of 'time and effort'. Backtesting is the main cause of scams in Forex as it is another fallacy to give a lot of weight on any results.

It's just ironic (FOR ME) to figure out in the history what a/b/'c on previous candle and x/y/z actions on current candle did in the past and expect to devise a mechanical system with a similar expectancy. Building a positive expectancy system from historical candle patterns is quite tough based on my immense analytical work over the years. Most traders will usually fail if I were to give a simple system with a 60+% WinRate system. Just my 2 cents.

(as always, my post expires in 24 hours to avoid clutter and distraction)

Edit: I should mention that this post is not directed to anyone in particular.
Staying in my lane...
  • #6,606
  • Oct 12, 2014 3:05am Oct 12, 2014 3:05am
TRD presented a system along with a backtest. The backtest does not follow the system's rules, it contains discretionary decisions. Since the rules are not followed to the letter, we can't judge the integrity of the backtest. Could be an inspired performance or a (subconscious-or-not) hindsight deal. TRD (hopefully) knows which of the two it is and, contrary to Vee's beliefs, I think the backtest results can be very meaningful, at least to TRD. Possibly only to TRD.
TRD appeared to be willing to discuss his method but didn't like it when I asked for some clarifications, no big deal. My observation is you can have almost equal bearish and bullish engulfs in a trend.

On the "entries aren't important" bit my 2 cents will have to disagree. You have to have low-risk, easily BE'd entries, as part of the "participation/low risk/growth" trinity. Very-very technical and skillful entries are required, Graeme endlessly stressed this.

1k to 4k in 2 years is 120% a year. Eckhardt does 25% a year, but newbies are not content with 5xEckhardt performance. "why bother". Reality check.

best trades to all.
aristides.
  • #6,607
  • Oct 12, 2014 3:09am Oct 12, 2014 3:09am
Quoting stewrigh
The other contradiction with the millipede system is IMHO......... Yes it does work and with a large account it is possible to turn 100k into 400k But how many ppl on this forum have that sort of account. Most of the guys on FF have 1k accts or if lucky 10k - Don't know that for a fact but think it's probly accurate. So the milipede system proves that you can turn 1k into 4k over 2 years - most newbies response to that will be ''why bother''. What I am trying to do is adapt this system so that it can be utilised with a much smaller acct.
Refresh yourself again with this post http://www.forexfactory.com/showthre...18#post3864418
  • #6,608
  • Edited 3:36am Oct 12, 2014 3:18am | Edited 3:36am
Quoting aristid
TRD presented ...entries aren't important" bit my 2 cents will have to disagree. You have to have low-risk, easily BE'd entries, as part of the "participation/low risk/growth" trinity. Very-very technical and skillful entries are required, Graeme endlessly stressed this....
It's the method of entry you use that is not important (i.e. you can use inside bars, pin bars, outside bars, even toss a coin. Whatever floats your boat). What is important is when you enter (there must be momentum so you can piggyback on other traders so your entry will at least get to breakeven). Hence you seek conditions favourable to this like only buying when price is above the day open and vice versa, busy sessions like during London and New York sessions etc.
  • #6,609
  • Oct 12, 2014 3:19am Oct 12, 2014 3:19am
Quoting danjuma
{quote} Refresh yourself again with this post http://www.forexfactory.com/showthre...18#post3864418
Thanks D - I was beginning to think I had totally misunderstood millipedes lol.
Deleted my post abt contradiction - there is none.
  • #6,610
  • Oct 12, 2014 3:24am Oct 12, 2014 3:24am
Quoting danjuma
{quote} It's the method of entry you use that is not important (i.e. you can use inside bars, pin bars, outside bars, even flip a coin. Whatever floats your boat). What is important is when you enter (there must be momentum so you can piggyback on other traders so your entry will at least get to breakeven). Hence you seek conditions favourable to this like only buying when price is above the day open, busy sessions like during London and New York sessions etc.
"when" is definitely part of the method. At least for me it is. :-)
thinking about it, "when" IS the method.

Plus, correction, Eckhardt does 14.8% a year, not 25%.
  • #6,611
  • Oct 12, 2014 3:26am Oct 12, 2014 3:26am
Quoting aristid
TRD presented a system along with a backtest. The backtest does not follow the system's rules, it contains discretionary decisions. Since the rules are not followed to the letter, we can't judge the integrity of the backtest. Could be an inspired performance or a (subconscious-or-not) hindsight deal. TRD (hopefully) knows which of the two it is and, contrary to Vee's beliefs, I think the backtest results can be very meaningful, at least to TRD. Possibly only to TRD. TRD appeared to be willing to discuss his method but didn't like it when I asked...
See D's post above lol.
  • #6,612
  • Oct 12, 2014 4:36am Oct 12, 2014 4:36am
Quoting Goldminer
{quote} The idea of Vee is that backtesting is a scam and not persons. And I agree with Vee about time and efforts. My personal idea to trade impuls. And when the market rushing you should work hard. But in reality the market rushes only 20-30% of time. All the other time it doing nothing in the range http://clip2net.com/s/j4x18a
Now here is the irony.

You don't know whether the market is trending or ranging until after the fact. This is why range traders lose when trend kicks in against them or they end up limiting their profits (due to exiting on the other side of their defined range) when trend kicks in for them.

Trend traders on the other hand either have to:

1. Make entries like a range trader by using a pullback approach (buying dips or selling rallies) hoping that trend kicks in by breaking out of the otherside of range.
2. Trade the breakouts of their defined ranges and hope that the move continues.

This milipede approach mentions the term "participation" or "the power of participation" and places alot of importance in this concept. This is actually a concept G (aka TRD) derived from Joel Rensink (aka TRT) in post:
http://www.forexfactory.com/showthre...687#post220687

Where the term "the power of being IN" is used instead.

If you think carefully, this concept alone explains why entries are not important.
  • #6,613
  • Oct 12, 2014 7:20am Oct 12, 2014 7:20am
Quoting yonseo
{quote}...This is actually a concept G (aka TRD) derived from...
If TRD is indeed Graeme. Then we want the manual you promised.

"And I assure everyone once again I have no financial motivation behind my deeds here. I would just like to complete the reading material to seal off what I have started 6 weeks ago and not leave too many loose ends behind. I have always completed the project i have started in my professional life"
  • #6,614
  • Oct 12, 2014 7:24am Oct 12, 2014 7:24am
Quoting danjuma
{quote} If TRD is indeed Graeme. Then we want the manual you promised. "And I assure everyone once again I have no financial motivation behind my deeds here. I would just like to complete the reading material to seal off what I have started 6 weeks ago and not leave too many loose ends behind. I have always completed the project i have started in my professional life"

If you can't see that the manual is already here then you are beyond help. You are posting in the manual.
  • #6,615
  • Edited 9:45am Oct 12, 2014 7:29am | Edited 9:45am
Quoting MCRotter
{quote} If you can't see that the manual is already here then you are beyond help. You are posting in the manual.
Sorry m8, I think you are the one that has missed the point! Graeme promised a manual as a structured concise compilation of all the gems scattered in the thread. It was his idea, not anyone's!
  • #6,616
  • Oct 12, 2014 8:01am Oct 12, 2014 8:01am
Quoting danjuma
{quote} Sorry m8, I think you are the one that has missed the point! Graeme promised a manual as a structured concise compilation of all the gems littered in the thread. It was his idea, not anyone's!
Do you need everyone to hold your hand? There is a PDF version of his posts, everything is here for you already.

Don't get why you can't just go and read those posts. Most of it is in the first couple of pages.
  • #6,617
  • Oct 12, 2014 8:03am Oct 12, 2014 8:03am
Quoting MCRotter
{quote} Do you need everyone to hold your hand? There is a PDF version of his posts, everything is here for you already. Don't get why you can't just go and read those posts. Most of it is in the first couple of pages.
I am reading the posts and the pdf. Get off my case! Thank you.
  • #6,618
  • Oct 12, 2014 9:14am Oct 12, 2014 9:14am
To those still having expectations of a book being written,

Ask yourself this question if you were in G's (aka TRD, LexKim, KppFinance) situation.

1. Reasons to write a book
2. Reasons to not write a book

Which option has more reasons? That alone explains why a book will never be published.

Also remember this. The moment noobs start flooding his PM inbox with noob questions, the more quickly he will leave this thread to never return.
Unless he becomes bored/lonely/depressed and decides to contribute again.

If you wish that he stays in the thread longer, then I am sure you know better what you should and should not do.
  • #6,619
  • Oct 12, 2014 9:31am Oct 12, 2014 9:31am
Quoting yonseo
To those still having expectations of a book being written, Ask yourself this question if you were in G's (aka TRD, LexKim, KppFinance) situation. 1. Reasons to write a book 2. Reasons to not write a book Which option has more reasons? That alone explains why a book will never be published. Also remember this. The moment noobs start flooding his PM inbox with noob questions, the more quickly he will leave this thread to never return. Unless he becomes bored/lonely/depressed and decides to contribute again. If you wish that he stays in the thread...
If ppl actually participated in the method and posted what they were doing, rather than asking the same questions over and over again in an endless circle jerk without ever actually applying the methods themselves, then I think the good guys would be more likely to hang around. For example TRD first post was a reply to mine because i suspect there was a recognition that I was actually trying to apply the method - btw I have no idea who TRD is and it doesn't matter because the advice was good.

I participate on another forum where there is a thread on investing and trading, all we do is post interesting articles, general chit chat about what we are doing and the methods we are applying. The attitude of learning is vastly different compared to here. Here by contrast threads are just crammed full of people asking really specific questions, everyone over here wants something for free.

Anyway, this is very off topic so I will shut up now.
  • #6,620
  • Edited Oct 13, 2014 12:14am Oct 12, 2014 10:38am | Edited Oct 13, 2014 12:14am
On a final note before I disappear again, stop focussing on what retail traders do in forums like these. You will go nowhere chasing your tail. Anything that does not pass the 'common sense' smell test, just run away and do something else. On an average there are no more than 40 traders reading this thread when activity picks up. On an average there are no more than few thousand lurkers on such forums. Retail FX has a lot of perils so if you think you can quit your stable job and earn a decent living from retail FX , you are in for a rude awakening . Do yourself a favor and do not jeopardize your children's future with risking your life savings. It's a rocky road for all professional traders too . Those who make it sound easy either train traders for secondary income, bloat their trading stats in order to trade OPM or encourage traders to generate signals so they are get kickbacks from brokers in the form of rebates. If you are legit successfull, go with a prime broker and target institutional investors and run away from retail. If you stick around here for long, you are considered a loser by most lurking here...lol

With that said,I am very successful in my primary job. My goals from FX is completely different from most out here trying to succeed. I am looking 5-10 yrs ahead and putting the framework in place so I can retire, travel the world with my wife and enjoy my passion of trading when I can and from where ever I am. I have no desire to stare at the screen for hours waiting for a setup. I have no desire to lose my sleep over one position. I compete when there is a level playing field in the market with legit currency moves. I understand the DNA behind any market move and not just one pair. Understand the bigger picture of any move and you will succeed. Follow the price but make sure you are not chasing it endlessly. Understand the characteristics for a move , it's strengths and feel the first signs of weakness. Understand how a retrace happens, it's strength and rigor . There are tell tale signs in every move. Trading is like driving. You have to keep track of all your senses and actions should become second nature towards greed, fear, risk etc. Use your rear view mirror for confirmation but don't drive in reverse gear on a freeway and crash your account.
Staying in my lane...
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