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  • #421
  • Nov 25, 2014 10:05pm Nov 25, 2014 10:05pm
Quoting RedLineFred
A suggestion only, not to deviate from the concept, but if we have a fair percentage of trades moving to BE and then on to healthy R levels only to turn back and close out at BE, why not slide the SL up 5 pips once we reach a point we are happy with and at least when they do close out we offset one of the earlier loosing trades. This should increase performance overall.
I've thought about that as well. Since the trade is "safe" (before possible slippage) then taking some extra off the table would be prudent. Since the goal is to have "runners" we'd want to get less aggressive about moving the stop after BE.
  • #422
  • Nov 25, 2014 10:28pm Nov 25, 2014 10:28pm
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,542 Posts | Online Now
Quoting RedLineFred
A suggestion only, not to deviate from the concept, but if we have a fair percentage of trades moving to BE and then on to healthy R levels only to turn back and close out at BE, why not slide the SL up 5 pips once we reach a point we are happy with and at least when they do close out we offset one of the earlier loosing trades. This should increase performance overall.
Great point. I would say above 1:20 (at least), secure the equivalent of a loss (commission included).
MT4/MT5 EAs/Indicators/Alerts coder
  • #423
  • Nov 25, 2014 10:59pm Nov 25, 2014 10:59pm
Quoting MAM.Trader
the concept is correct and may be its one of the correct concept for Longtrem Forex Trading. the issues are; a) when you look at charts how many 1,000+ pips run you can see. not much means rare b) SL and moving SL to BE levels should be determined with BT to find the optimum value c) the thread original value 5 pips sounds little too tight to me d) while system will have consistant losers the MM is very important or you can lose the account before you hit the big run GL
You have raised some interesting points. Thankyou for your input.

a)I request that you open a monthly chart of your favourite pair. Draw 2 lines, 1,000 pips apart. See the distance? That is all you need to catch. I have attached a chart of EURUSD. The 2 horizontal lines are precisely 1,000 pips apart. Not so far after all you see? We often conform our minds to the lower timeframes, forgetting the true volatility of Foreign Exchange.

b)You are free to do so should you wish. I have no interest in that personally, as my current method works for me and as long as it continues to work I have no interest in 'optimisation'. Please forgive me if I sound narrow minded.

c)I have stated enough times in this thread that the 5 pips stop loss is discretionary to my own trading style. If this is too tight for you, you are free to change it. I find it is quiet enough for my purposes.

d) Very true. As I stated earlier, I do fully accept that I may have become lucky that I did not blow my account in it's initial stages with my foolish risks of 3% per trade. Patience is key.

Thankyou for your input, especially with the backtesting results, it was interesting to say the least.

Fez
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  • #424
  • Nov 26, 2014 12:39am Nov 26, 2014 12:39am
Quoting fezmar
{quote} You have raised some interesting points.
Thanks for the different perspective.
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  • #425
  • Edited 2:27am Nov 26, 2014 2:14am | Edited 2:27am
I have been contemplating for the last two days to either make this post or not… but here it is anyway… so forgive me you all and fez for this humble suggestion, but it just might worth you a while.

Fez… if your confident about your entry hit at +5 for 50% of times which gives you a breakeven chance play… then the better way to go at is to take ¾ of position out at +5, then set the stop at BE as you do already and have ¼ running for you at no cost. This way you have eliminate ¾ of all losses not carrying it to be compensated down the road and later with much "dependability" of significant market move... you will carry only about ¼ of all losses… if you’re hitting 60%, then even less.
It’s logical (at least to me) to get something out of that +5 run work and use it to your advantage just in case.

Now, if the load may not seem enough for large running positions, well, since your using one time scaling early on by creating a risk free situation, you can up your risk a bit to fit the appetite... of course all that works if the 50% at +5 hit is consistent.
This way would ease the overall pressure, perhaps to help on trade management down the road, calmer psyche throughout the whole process and to really go after humongous RR when the cost is already mostly recovered.

Just a humble suggestion.
Passion, Persist, Patience, Protect
  • #426
  • Nov 26, 2014 2:30am Nov 26, 2014 2:30am
Congrats on a great thread Fezmar.

I've been taking a similar approach to trade management, though admittedly I take profit on part of the position early, and leave the rest to grow.

I'm curious about how you deal with weekends, or rather the risk of Gaps on the new week open. E.g. Couple of months ago GU opened about 160odd pips down from the close.

So lets say you had a position open at BE, and up 60 pips on the friday close. The opening gap would close your order for -100 at the first available price, even though you had SL at BE.

Do you close smaller orders on the Friday to avoid this risk?
Or just hope you have enough open positions in the other direction that would benefit?
or just wear the risk?
  • #427
  • Nov 26, 2014 2:31am Nov 26, 2014 2:31am
Quoting PipMeUp
{quote} http://www.forexfactory.com/showthread.php?p=7893687#post7893687 Fez said he has approximately a winrate of 7% and a RR of 40. I made the maths in hit-or-miss, no SL trail to BE.
Thanks! That's what I was thinking.

I think though that it's worth to say it outperforms when use the same % risk per trade for both compared systems (e.g. 0,5%), but in fact for a system with Risk/Reward 1/2 and W/R 55% we can use more aggressive MM (e.g. >2% risk per trade) and the result would be different.

Best regards,
Artem
Let's go with the flow
  • #428
  • Nov 26, 2014 2:41am Nov 26, 2014 2:41am
Forgive me if I am wrong, this is what Warren Buffet practiced "Value investing" for long term huge returns. Entry criterion and asset class may be different but the principle is same. Lose the losers quick and nurse the winners.
  • #429
  • Nov 26, 2014 3:05am Nov 26, 2014 3:05am
Quoting shiva
Forgive me if I am wrong, this is what Warren Buffet practiced "Value investing" for long term huge returns. Entry criterion and asset class may be different but the principle is same. Lose the losers quick and nurse the winners.

shiva, IMHO you can’t compare fast moving big currency market with stock holding, where buff man enters as a single largest stock holder with all kinds of control over the company/market... you got no such control in currency market.
That is why it's wise and rather vital, when doing currency holding, to get a grip on negative control and create risk free situation for floating hold on large rr goal.
Passion, Persist, Patience, Protect
  • #430
  • Nov 26, 2014 3:19am Nov 26, 2014 3:19am
Quoting FXEmpire
I have been contemplating for the last two days to either make this post or not… but here it is anyway… so forgive me you all and fez for this humble suggestion, but it just might worth you a while. Fez… if your confident about your entry hit at +5 for 50% of times which gives you a breakeven chance play… then the better way to go at is to take ¾ of position out at +5, then set the stop at BE as you do already and have ¼ running for you at no cost. This way you have eliminate ¾ of all losses not carrying it to be compensated down the road and later...
Keep in mind that the key of the method is the huge RR. When you close 3/4 of the position the RR is divided by 4. A tradeoff between smoothing the result and growing the account.
No greed. No fear. Just maths.
  • #431
  • Edited 3:34am Nov 26, 2014 3:24am | Edited 3:34am
Quoting PipMeUp
{quote} Keep in mind that the key of the method is the huge RR. When you close 3/4 of the position the RR is divided by 4. A tradeoff between smoothing the result and growing the account.
I understand.. it's better tradeoff though.. more realistic and doable.
Passion, Persist, Patience, Protect
  • #432
  • Nov 26, 2014 3:35am Nov 26, 2014 3:35am
Quoting FXEmpire
{quote} sure.. that is why I mentioned your up your risk, perhaps by 4 times... and it's not a extra risk since your +5 hit rate is 50%.
So, divide R/R by 4, increase risk by 4. What is the goal?

Edit:
Quoting FXEmpire
{quote} I understand.. it's better tradeoff though.. more realistic and doable.
I think, question is closed now )

Artem
Let's go with the flow
  • #433
  • Nov 26, 2014 3:45am Nov 26, 2014 3:45am
Quoting FXEmpire
{quote} shiva, IMHO you can’t compare fast moving big currency market with stock holding, where buff man enters as a single largest stock holder with all kinds of control over the company/market... you got no such control in currency market. That is why it's wise and rather vital, when doing currency holding, to get a grip on negative control and create risk free situation for floating hold on large rr goal.
I am not comparing markets or position sizes. I'm finding similarities of holding policy.
  • #434
  • Nov 26, 2014 4:48am Nov 26, 2014 4:48am
Very interesting thread.
This could be tested with an Ea that works with baskets and can set break even for each trade after x pips in money. Each order gets a 5 pip sl and basket tp is a number of pips which will be later on adjusted.
As entry reason we can use anything and still be profitable we can set Ea to open under differ circumstances and see how it goes without manually testing for x months before we can actually see if it works or not.

Recently tested something similar and the results were bad therefore testing stopped.
  • #435
  • Nov 26, 2014 4:51am Nov 26, 2014 4:51am
Quoting FXEmpire
{quote} I understand.. it's better tradeoff though.. more realistic and doable.
Like AlbinaGrande said you can be trained by the best surgeron you'll become another surgeron. We will all have to own the method and adapt it to our personality, our goals and let's face it to our trading skills! Systems are fragile. Changing just a bit can crash it. For now what bugs me the most is that my lab rat (demo account) is slowly but surely converting the money into unrealized profits. Should they disappear the account is in the loss. I also try variants. First I'm just too bad a trader to use 5 pips SL. I use 10. The 3 positions I have above 100 pips are locked at +30 pips. The rationale behind is that they are 3 free bullets for a market that can only go up or down. Will see if this works or breaks everything apart...
No greed. No fear. Just maths.
  • #436
  • Edited 6:19am Nov 26, 2014 5:01am | Edited 6:19am
Ok guys here is what troubles me with such method and approach as fezmar has presented… it be a good one to talk about and grow from, so don’t take it all as negative or skepticism, that’s the last thing I am and perusing here… take me as a humble student here for all it takes.

One… dependability.. depending on market to make significant run to compensate and make profit.
Two… missing out on “THE” run.. due to tight stop and aggressive TS to BE.

All in all when your carrying out whole bunch of losses to be compensated in the feature on a few major winners, all that, while watching market being stuck in tight ranges for weeks and months or losing out on the eventual run, for sure could be tough to handle and hard on the psyche… and I am a guy that can and have coped with losses without flipping out too early.

The fact is market goes through cycles and could stay in such cycles for long enough to deplete an account if not before traders flipping the heck out, lol.
so it could not be said that out of a sample of 200 trades 4 or 8 will become the major winners, it could and very well may not even produce one or two, or basket of a few short of 200... same could say that in a sample of 200 trades 20 will become winners, it very well could happen on catching a major trend, which will average it all to be profitable annually or 5yr period... it will all depend on two factors... one, the cycle and two, the trader, to actually bear through the difficult time, and that's if risking low on a sound MM in-placed.. or if the couple cycles run for a long course could wipe or dent the traders account for a good mass to claim out of by sticking to the very same methodology.

I think if fezmar could elaborate more on such situations and overall management base on his hands on experience of the past and current would be great and more useful than much else.

Anyways this is the main point I wanted to hit home.
Passion, Persist, Patience, Protect
  • #437
  • Nov 26, 2014 5:17am Nov 26, 2014 5:17am
Quoting jmn5611
{quote} 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,...
This is exactly what i have been thinking. the writing style is very similar. Reason havent figured it out yet.

however the subsequent maths discussions bought out have been gold.
  • #438
  • Nov 26, 2014 8:53am Nov 26, 2014 8:53am
Quoting FXEmpire
Ok guys here is what troubles me with such method and approach as fezmar has presented… it be a good one to talk about and grow from, so don’t take it all as negative or skepticism, that’s the last thing I am and perusing here… take me as a humble student here for all it takes. One… dependability.. depending on market to make significant run to compensate and make profit. Two… missing out on “THE” run.. due to tight stop and aggressive TS to BE. All in all when your carrying out whole bunch of losses to be compensated in the feature on a few major...
At the beginning it is very true. We can only accumulate losses and unrealized profits. We expect a 500 pip runner to pay the debt. Not even sure it will happen. I think I'll have to kill some "potential" to pay for the "survivability".

As I see it, after some time, if I can get one 500 baby and a few smallers ones, the small ones grow the account and the 500 pip profit will now finance the next batch of seeds. With my 10 pip SL it makes 50 attempts. Let's imagine that I can catch two 500 pip runners plus a few smallers fishes with these 50 attempts (4% fully successful). It means that next time I have 100 bullets to shoot. And I can expect 4 runners and a little bit more small fishes in my net. Of course the 4 runners will catch the same 500 pip move. That's not important. I now have 200 bullets. This would exponentially increase the number of attempts. Free attempts because the smallers fishes are banked. Up to a point where we'll have so many ammos that we don't have enough target to shoot at. At this point is will become pointless to close a 500 and we'll let it run to the 1000. Of course, best of luck, this won't happen before at least two years.

Increasing the frequency instead of increasing the lot size. That's a new way of seeing the compounding... I never thought about that before.
No greed. No fear. Just maths.
  • #439
  • Edited 9:47am Nov 26, 2014 9:25am | Edited 9:47am
First I want to thank you Fezmar for sharing your wonderful method.

From when I started trading up to today such methods were always bearing in my mind.
Never had the courage to take such concepts in my daily trade plan. But with your post, the possibilities are amazing.

Maybe this was already answered, but depending on the volatility of the higher timeframes you pick up a suitable RW? For example your chart on EU:

1000 pips range, so with a 5 pip stoploss your target is a 200 RW. Is this correct?

When do you decide to set your initial SL to BE? edit: I found this answer earlier on the forum, thanks.

Normally, I wouldn't reply that much to a thread but for this one I felt I got to.
While finishing this post, I'll hit the subscribe button.

Thanks for sharing.
  • #440
  • Nov 26, 2014 9:36am Nov 26, 2014 9:36am
Quoting PipMeUp
{quote} At the beginning it is very true. We can only accumulate losses and unrealized profits. We expect a 500 pip runner to pay the debt. Not even sure it will happen. I think I'll have to kill some "potential" to pay for the "survivability". As I see it, after some time, if I can get one 500 baby and a few smallers ones, the small ones grow the account and the 500 pip profit will now finance the next batch of seeds. With my 10 pip SL it makes 50 attempts. Let's imagine that I can catch two 500 pip runners plus a few smallers fishes with these...
Hi PipMeUp,

That's correct.
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