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  • #201
  • Edited 1:03pm Nov 23, 2014 12:52pm | Edited 1:03pm
The student asked, 'What if a person loses his sight? And the master replied, 'as long as he doesn't lose his vision'.
  • #202
  • Nov 23, 2014 1:53pm Nov 23, 2014 1:53pm
Quoting fezmar
{quote} It's 5 pips plus spread. My trading platform allows me to choose whether I want the stop to be executed at the bid or the ask. So I set the stop at entry price -5, and always exit at the bid. I must admit however, your question troubles me slightly. I really do wish that participants understand when I say it isn't about the entries. Use whatever stop allows you to get trades to breakeven (obviously within reason). You can use a moving average crossover if that works for you. You can use ADX, or RSI, Stochastics, MACD, Price action, Elliot...
so you can set it to breakeven and forget about it
Great post Fez - For me that single phrase is the most important lesson to absorb - the sooner I can get my trades to BE the sooner I can forgedaboutit and move on to the next one. The market will decide which trades survive - I only have to decide on my entries.

Great thread also - I've been hanging around FF for abt 7 yrs now(off and on) and have come across a few traders/methods that really stand out from the crowd, in a class of their own - TRT, TRD, Peter Crowns, Pipeasy, Millipedes, Infinite yield - BRILLIANT - and this is obviously one to add to that list - Well done.
  • #203
  • Nov 23, 2014 2:03pm Nov 23, 2014 2:03pm
Quoting PipMeUp
Hi, I've been eagerly reading all the posts since this morning. When I was reading the millipede thread my only regret was that the OP was gone since long. I tried the millipede. Three times. I failed. Three times. The mistake I made: over leverage. The accumulation of little losers was such that the 700 pip winners weren't enough to cover. Anybody who read my posts should already know that I'm objective and very math oriented. That's why I'd like to correct two misconceptions I found here and which I wish I knew when trying the millipede. First:...
So ture Pipmeup,
But I can't understand why you emphasize on low-leverage this much. If one is risking %1 per trade he's risking that %1 no matter his leverage is 10 or 500. Or I may be missing something here?
Yours
  • #204
  • Edited Nov 24, 2014 6:28am Nov 23, 2014 2:19pm | Edited Nov 24, 2014 6:28am
Fezmar,
first of all, Thank you very much for sharing this freely, and I really know how costly this can be in time and effort...

I carefully read all the thread till now, and I think I understood quite well let's say 99% of what you kindly exposed.
As a practice, I tried this method already on a simulator, mainly on EUR/USD and GBP/USD, just to start it out ...

The routine is quite "simple" and very fascinating: on a "decent" situation (e.g. break-out / pullback / swing r&s, whatever..) I enter both long and short, SL=5 , TP=200, which is 1:40 ... Ok, all good.

I got to some point where I'd ask you how do you proceed with these two situations:

A) do you ever move you SL, after BE, let's say to +20 ? I assume not, otherwise this can lead to getting kicked-out earlier than possible max expansion of the trade, and would ruin our stats, correct?

B) Let's say I entered long and short @1.2500 on E/U (I do not count spread for simplicity) SL=5 / TP=200

  1. Price reaches 1.2520, my short gets stopped out -5, my long is at +15, I set my SL to BE(+1)
  2. If i then see another setup I like, I keep doing the routine (buy/sell....)
  3. If price reaches, say, 1.2650 (which is +150pips from my first entry) I would probably also have another long entry let's say running +50 ... and in the mean time, I had to short stops (-5 and -5 for a total of -10) .
  4. At this point, prices retraces down to 1.2600 so I get stopped out with the second order +1, and I have a +100 running on the first long.
  5. Do you close the first one and you cash-in the first +100 or simply going to hunt another entry-setup once again ?

Many times, I noticed that trend-swings are not vast enough to run to my take-profits, and I quickly see a +100 or +150 turning into a +1 and get stopped out.
Very rarely I got my TP hit at +200 - Hence, potentially, with open running trades I am quite/very profitable, but only when I am "in between" some swings, once the PA retraches I get slowly to BE.

Can you please give me/us some tips on how to manage this ? do you regulate your manual closes based on the ATR/ADR or swing-size average ?
It mustn't be very hard, it's actually pretty straightforward as a method, an I sincerely thank you once again for sharing this with us.

cheers

UPDATE: I hadn't read post #114 by mistake - probably I you already explained this in that post, but any additional info is very much appreciated. thanks

Lorenzo
  • #205
  • Nov 23, 2014 2:22pm Nov 23, 2014 2:22pm
Quoting fezmar
{quote} I use a 1:1, so I set to breakeven when I'm 5 pips in profit. Naturally the quicker you set to breakeven the more trades get taken out at breakeven but the less losers you have, so it's in essence a trade off. As I've stressed, the entries do not make the method. I've shown above that all you need is to get atleast half of your entries to breakeven ( obviously the higher % you get to breakeven the higher the profitability & lower the drawdown) - the market does the rest of the work for you. Fez

Well, if "the entries do not make a method", it is relatively easy to create an EA around the theory and the backtests will immediately prove or disprove the viability of this approach.
  • #206
  • Nov 23, 2014 2:32pm Nov 23, 2014 2:32pm
Fezmar, thank you for starting your thread, I look forward to learning and opening my mind to possibilities!
  • #207
  • Nov 23, 2014 2:36pm Nov 23, 2014 2:36pm
Quoting Paracelsus
{quote} Well, if "the entries do not make a method", it is relatively easy to create an EA around the theory and the backtests will immediately prove or disprove the viability of this approach.
It would be interesting to see the results of this.


Wouldn't it make sense to place most trades on days when the price is bound to make a big move, e.g. ECB, BoJ rates decisions and policy statements, governor speeches?
  • #208
  • Nov 23, 2014 2:42pm Nov 23, 2014 2:42pm
Hi Fezmar,
Thanks for everything so far.
I've always been confused about time frames. May I ask on what time frame do you spend doing most of your chart watching/analysis? And as I understand you enter on the 1 hour down to the 5 minute, but on which timeframe are the majority of your entries?
Thanking you in advance.

Sylvia
  • #209
  • Nov 23, 2014 2:56pm Nov 23, 2014 2:56pm
Quoting lorbax
Fezmar, first of all, Thank you very much for sharing this freely, and I really know how costly this can be in time and effort... I carefully read all the thread till now, and I think I understood quite well let's say 99% of what you kindly exposed. As a practice, I tried this method already on a simulator, mainly on EUR/USD and GBP/USD, just to start it out ... The routine is quite "simple" and very fascinating: on a "decent" situation (e.g. break-out / pullback / swing r&s, whatever..) I enter both long and short, SL=5 , TP=200, which is 1:40...
Thanks for the detailed questions. Might I suggest that you perhaps read the thread again, the answers are in there. I do not mean to offend you and I'm sorry if I have, it's just that I have dedicated posts regarding this.

For example it seems you've grasped the concept slightly wrong. I do not enter long and short at the exact same time. I cleared this up earlier. What I meant by "long and short at the same time" is that even though the longer timeframe i.e monthly might be rocketing downwards, if I switch to a 15 minute chart and see a valid long setup, I will still take it. If a person trading pinbars saw a bullish pinbar on the hourly, they should still take it, regardless of whether the trend on the longer timeframes are down.

This is because we aren't trying to predict large market swings, we just want to be prepared for them when they do come.

Also I'd like to clear up that currently I do not aim for a hard 200 pips. I explained this earlier also. Like I said, I'm entering positions long and short as the opportunities arise. Should the market drop 100 pips, I will have sells in place, as my buys get stopped out. Should price then decide to climb up, i'm still entering bidirectionally, but due to the natural movement of the market all of my sells will get stopped out (and so will a large number of my buys) but some buys will 'stick'. So as the market climbs back up to where it was, it is true that those sells I had got stopped out for 0 gain. But, I now have buys in the market of roughly the same value, which I rode on the way up. So I was in effect 'hedged' if you like.

I've also addressed the issue of when to exit. I've stated that I differ with Graeme in that I decide when to close out based on simply what is enough for me. Like I've said I've yet to write about trading psychology, in which I will go into the two driving emotions of the market that every trader is familiar with: greed and fear. Sometimes even I struggle with fear, but fortunately I've managed to learn how to keep my greed in check. So if I close out a trade at +500 pips and tomorrow it would've been sitting on 600, I really don't mind too much. Most likely I made 5 digits off the move which I can feel more than satisfied with.

Finally I've also mentioned that I don't close out all of my positions. For example if the market is trending downwards and I have 3 sells in place, once I feel I've made enough profit I'll close out one or even two of the sells, but never the last. I'll always have atleast one position waiting to take up any movement the market offers. If it gets stopped out I couldn't care less, I didn't lose anything and I made 4 digit pips off the other two positions and that's all we're here to do - make money.

I do hope you don't feel insulted and this isn't directed specifically to you, I'm just clarifying that I've dedicated posts to these issues as I know they're important components, and should you look from the start onwards you will hopefully find the respective answers.

Fez
  • #210
  • Nov 23, 2014 3:12pm Nov 23, 2014 3:12pm
Quoting fezmar
{quote} Thanks for the detailed questions. Might I suggest that you perhaps read the thread again, the answers are in there. I do not mean to offend you and I'm sorry if I have, it's just that I have dedicated posts regarding this. For example it seems you've grasped the concept slightly wrong. I do not enter long and short at the exact same time. I cleared this up earlier. [....] I do hope you don't feel insulted and this isn't directed specifically to you, I'm just clarifying that I've dedicated posts to these issues as I know they're important...
Fez,

I am absolutely not offended, and indeed hope you are not either, as I sincerely missed a whole page, #6, with your post #114 and onwards, totally my fault.
I must have skipped it by mistake during my late night reading of the thread. I have now re-read all the missing part to my knowledge, and it's all, finally very clear.
Please forget my questions, they cover well explained topics in the previous pages. My apologies.

kind regards, and once again thank you for sharing and for your patience.
Ciao!
Lorenzo
  • #211
  • Nov 23, 2014 3:29pm Nov 23, 2014 3:29pm
Hi Fez,

As a retired Academic Surgeon I can well appreciate the enormity of your undertaking while pursuing your studies.

Really well done!! I am sure that Graeme would be very pleased to see another practitioner Participating as you are.

Best, AG
Do not dwell in the past, do not dream of the future, concentrate the mind.
  • #212
  • Nov 23, 2014 3:34pm Nov 23, 2014 3:34pm
Quoting AlbinaGrande
Hi Fez, As a retired Academic Surgeon I can well appreciate the enormity of your undertaking while pursuing your studies. Really well done!! I am sure that Graeme would be very pleased to see another practitioner Participating as you are. Best, AG
Thankyou for your kind words, they really mean a great deal to me coming from somebody as knowledgeable as yourself.

Fez
  • #213
  • Nov 23, 2014 3:58pm Nov 23, 2014 3:58pm
Quoting Kouroushi
{quote} So ture Pipmeup, But I can't understand why you emphasize on low-leverage this much. If one is risking %1 per trade he's risking that %1 no matter his leverage is 10 or 500. Or I may be missing something here? Yours
I'm not putting emphasis on the leverage but on the percentage. Indeed 1% is 1% whatever the leverage. I'm just saying that for this method 1% is just too much.

Regarding the leverage: 1% on a 5 pip SL that's already 20:1 leverage (2 minilots for each $1000). After you trailed your SL quickly to BE you are no longer at risk on this one position. So you can open another position with 1% risk. You're now 40:1 leverage. Let's say you open 5 such positions and all of them are locked to BE. Your leverage is now 100:1. You will also accumulate a lot of little losers on the way. If you don't take care you may start opening positions using your floating profit to finance the margin of the new "seeds". A very little retracement demultiplied by the accumulated leverage will dramatically reduce the floating profit. You no longer have enough margin. The account is MC'ed. Usually in loss. When the trend resumes it is without you.
No greed. No fear. Just maths.
  • #214
  • Nov 23, 2014 4:19pm Nov 23, 2014 4:19pm
Quoting PipMeUp
{quote} I'm not putting emphasis on the leverage but on the percentage. Indeed 1% is 1% whatever the leverage. I'm just saying that for this method 1% is just too much. Regarding the leverage: 1% on a 5 pip SL that's already 20:1 leverage (2 minilots for each $1000). After you trailed your SL quickly to BE you are no longer at risk on this one position. So you can open another position with 1% risk. You're now 40:1 leverage. Let's say you open 5 such positions and all of them are locked to BE. Your leverage is now 100:1. You will also accumulate...
Hi Pips, fellow millipeder here. Like you, I tried and failed a time or two trying to build millipedes. I build them now, but my leverage is zero. I trade 3 cents per 1000 dollars. Now I can enter up to three positions at any one time, but I do understand and agree with your assertion. Fez I am thinking uses much higher leverage but his stops are very very tight, whereas I do not use stops. There are a lot of ways to build a millipede, or ride the Tsunami. And to another point, I think a lot of people don't think that Fez is the new Gramae, I think a lot of people think that he IS Gramae. No matter, what he is putting out is good stuff!
If you are good at something, never do it for free--Joker
  • #215
  • Nov 23, 2014 6:56pm Nov 23, 2014 6:56pm
Nice approach and excellent result Fezmar. Very inspiring. Thank you for sharing with us.
Everything you can imagine, is real - Pablo Picasso
  • #216
  • Nov 23, 2014 7:51pm Nov 23, 2014 7:51pm
I'm doing a forward test on two demo accounts using a simple macd EA on all the majors on 1hr. All the entries, 5 stoploss, and 5 breakeven are automatic. I am leaving the take profit open and will close them manually. One demo is all buys, the other is all sells.
Should be interesting at least.
  • #217
  • Nov 23, 2014 8:16pm Nov 23, 2014 8:16pm
Quoting Jeysun
I'm doing a forward test on two demo accounts using a simple macd EA on all the majors on 1hr. All the entries, 5 stoploss, and 5 breakeven are automatic. I am leaving the take profit open and will close them manually. One demo is all buys, the other is all sells. Should be interesting at least.
Not sure how your EA is coded but keep in mind that it must allow opening new positions even if the previous one isn't closed.

'Building' is the goal ...
MT4/MT5 EAs/Indicators/Alerts coder
  • #218
  • Nov 23, 2014 8:40pm Nov 23, 2014 8:40pm
Quoting FerruFx
{quote} Not sure how your EA is coded but keep in mind that it must allow opening new positions even if the previous one isn't closed. 'Building' is the goal ...
Good point, there's always something I forget. I do have some coding ability, so shouldn't be too hard to fix.
  • #219
  • Edited 10:09pm Nov 23, 2014 9:36pm | Edited 10:09pm
Hi Fez awesome thread

I spend the latter of my working life in the gaming industry on several continents and this is exactly why hedging is not allowed in the USA but it is in Europe.
American roulette has two zero's instead of French roulette only one. Why?..to double the chance of the house. In the USA card counting in Black Jack if suspected (purely by the brain) will lead to a ban from the venue. In Europe most of the courts ruled if no other means than the brain is used it is allowed hence the sudden need to keep at least 7 decks in play at all times with a (Swiss) Shuffle Master.

I know USA citizens are not allowed to open trading accounts with Dukascopy in Swiss for the reason of hedging. USA citizens can only hedge with two opposite accounts or in case of the EURUSD against the USDCHF. Why because SMART hedging can give you the leading (h)edge. Fez his method to get a high % of 5 pip BE trades in any direction perfectly makes sense. The market will do the rest. The focus is shifted from a winning entry to BE entries as every extra BE trade against a SL trade is already a WIN in the long term stats. It is absolutely also true that his 3% (from start capital) continued risk taken is bonkers and Fez got a bit lucky but his method is one of the true winners. Well done Fez I am subscribed

Must add that most currencies trend way below 50% of the time and the BE's scooped up can be overwhelming in a prolonged ranging (distribution / accumulation) period but as Fez already said in previous posts you will still highly likely BE during this period overall as you will keep the longest leg of the breakout that will cover most of the SL taken.
  • #220
  • Nov 23, 2014 9:57pm Nov 23, 2014 9:57pm
I'm not sure how trading with a U.S. account will play out. I believe I'm also limited by the FIFO (first in first out) rule. My broker appears to put all positions in a single pair with one stoploss- I believe because of the FIFO rule. Aside from opening an offshore account, anybody know a workaround for this?
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