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  • #541
  • Nov 29, 2014 11:38pm Nov 29, 2014 11:38pm
Quoting Stu Effex
Allan PM me with how you trade and I will assist you to become profitable
A generous offer, Stu, but one I'll decline. I demo-traded 50k to 700k earlier this year. Then, using precisely the same strategy, I blew the account. This will be the unhappy experience of every trader in this market.

I believe, in principle, that small-time traders cannot succeed in the long run, no more than small-time chess players can beat a Grand Master. Extensive testing over many years has confirmed this belief. Dozens of strategies work brilliantly before failing. Truth is, brokers are the casino and we are the punters. We win a lot, then lose a little bit more. Simple as that.

Professionals like FTI seem to make a buck, but even he, at times, has declared small-time trading to be a scam. Also interesting that a careful thinker like Hanover has given up on forex and now trades options.
  • #542
  • Nov 30, 2014 1:20am Nov 30, 2014 1:20am
Quoting AllanS
{quote} A generous offer, Stu, but one I'll decline. I demo-traded 50k to 700k earlier this year. Then, using precisely the same strategy, I blew the account. This will be the unhappy experience of every trader in this market. I believe, in principle, that small-time traders cannot succeed in the long run, no more than small-time chess players can beat a Grand Master. Extensive testing over many years has confirmed this belief. Dozens of strategies work brilliantly before failing. Truth is, brokers are the casino and we are the punters. We win a...
This is interesting. So basically AllanS is saying that all retailers must lose, because his testing indicates this, and the few that don't fall under survivorship bias.

What do you want to bet Allan is staring my chart right now wondering if maybe, just maybe, he can do this?

Frustration does not equal fact, my friend. The tools are all here, but it is up to you to build the business.
If you are good at something, never do it for free--Joker
  • #543
  • Nov 30, 2014 1:27am Nov 30, 2014 1:27am
Quoting srt
{quote} I disagree with this. If you pick 10 pairs & only watch the daily timeframe, you could spend less than 30 minutes a day. Wait for a new high/low and mark the swing-point that was broken. Let price go a distance away from the S/R line. Place a pending buy/sell @ the S/R line with a 30 pip SL. If entry is made, let price get to +30 pips & move SL to BE. Nothing to do now except check it daily. Keep repeating the process with all 10 pairs. Shouldn't happen more than 1-2 times a week that you get an entry & need to act. I think too many are...
What would drive me insane is if my stop gets hit in a fluctuation, and the bar finishes, and it turns out to be THE bar. If you millipede, you absolutely MUST catch that runner. One or two trades can make ( or break) your year!
If you are good at something, never do it for free--Joker
  • #544
  • Edited 1:39am Nov 30, 2014 1:28am | Edited 1:39am
Quoting AllanS
Also interesting that a careful thinker like Hanover has given up on forex and now trades options.
Allan,

Just to clarify, there are forex traders with vastly more market knowledge and hands-on trading experience than hanover. And probably much stronger nerve, self-belief and dedication, too.

I share your view that trading without an edge is a slightly worse than 50/50 proposition, and hence there will always be traders who win big and then lose bigger, as the probabilities eventually catch up with them. But I wouldn’t be so quick as to dismiss the possibility that there are also some very smart folk who have discovered a genuinely durable edge. No disrespect to anybody, but the “if I can’t succeed, then nobody else can either” presumption doesn’t make logical sense to me.

I haven’t completely given up on forex. In my circle that I correspond with, I know 4 traders (albeit not exclusively forex) who have each been successful for periods ranging between 4 and 10 years. The longer that they remain profitable, the more I’m persuaded that each one of them has a real edge.

David

Apologies for the off-topic post. Please rest assured that I’ll disappear now.
  • #545
  • Nov 30, 2014 1:36am Nov 30, 2014 1:36am
Quoting hanover
{quote} Allan, Just to clarify, there are forex traders with vastly more market knowledge and hands-on trading experience than hanover. And probably much stronger nerve, self-belief and dedication, too. I share your view that trading without an edge is a slightly worse than 50/50 proposition, and hence there will always be traders who win big and then lose bigger, as the probabilities finally catch up with them. But I wouldn’t be so quick as to dismiss the possibility that there are some very smart folk who have discovered a genuinely durable edge....

This a good post, as usual, from hanover. The question then is, what is an edge. For me, edge is trader behavior. To stay on topic with this thread, fez has a methodology that he follows. He apparently follows it religiously. That's his edge. I can relate to this because I have a routine that I follow to the letter also. What I think kills a trader is system jumping, and MM jumping. Now I may be doing some things that are subconscious, like a baseball player bats, or a driver drives, but even so, all of that begins with a structured routine. Fez/Graeme has given a few more ideas for this structure, and we thank him.

PS, I don't know if Fez is Graeme or not, they do seem to have similar behaviors. All traders get bored.
If you are good at something, never do it for free--Joker
  • #546
  • Nov 30, 2014 2:44am Nov 30, 2014 2:44am
Quoting AllanS
{quote} Of course it will work for some. Of the many thousands who have tried the millipede method, a few punters will still be active, and some will be successful. It's a statistical artifact. The same would be true of a perfectly random entry/exit strategy. Anecdotes are not evidence. If a simple strategy really is better than random (eg: buy the break of highs and wait for the miracle run), then every man and his dog would be using it. Dead easy to program. Truth is, over different market conditions, a simple strategy like this not only doesn't...
You're right, only few people can make it work. But, even fewer people can make profit in FX at all. All you said can be right about all systems, methods, analysis & etc.
You are too newbie to try to teach someone something here.
  • #547
  • Nov 30, 2014 3:34am Nov 30, 2014 3:34am
Quoting hanover
{quote} Allan, Just to clarify, there are forex traders with vastly more market knowledge and hands-on trading experience than hanover. And probably much stronger nerve, self-belief and dedication, too. I share your view that trading without an edge is a slightly worse than 50/50 proposition, and hence there will always be traders who win big and then lose bigger, as the probabilities eventually catch up with them. But I wouldn’t be so quick as to dismiss the possibility that there are also some very smart folk who have discovered a genuinely durable...
This debate about whether retail traders can make any money trading forex seems t be a recurring theme on FF and it gets a bit tedious after a while.

I would agree that there are some ppl like Alan prbly that will never make any money trading bcos their psyche and skills are not up to it - conversely I believe(although I cannot prove it) that there are lots of guys on FF who make a living from trading retail FF.

You should have included the Jarratt link Hanover - someone who obviously has an edge and made it trading retail forex.

https://www.youtube.com/watch?v=C4C2d5fr-H4
  • #548
  • Edited 5:11am Nov 30, 2014 4:39am | Edited 5:11am
Quoting hanover
No disrespect to anybody, but the “if I can’t succeed, then nobody else can either” presumption doesn’t make logical sense to me. I haven’t completely given up on forex. In my circle that I correspond with, I know 4 traders (albeit not exclusively forex) who have each been successful for periods ranging between 4 and 10 years. The longer that they remain profitable, the more I’m persuaded that each one of them has a real edge.
Given enough traders tossing a coin, half will double their accounts in the time taken for the other half to lose theirs. If the average time to do so is 12 months, and we begin with 10000 traders, in four years we would expect 600 winners who have doubled their accounts four times.

News of their dazzling "success" will be more than enough to create an illusion of hope where absolutely none is warranted. Magical "edges" like this are seductive because we want them to be real, but given the sample size, they're virtually impossible to prove.

But hey, perhaps the occasional genius does exist who can consistently beat the odds, the spread, the noise, the bots, the neural networks, the pattern recognition algos coded by the smartest quants on the planet. This person would be one in a million, which (I suspect) leaves the rest of us out in the cold.
  • #549
  • Nov 30, 2014 6:20am Nov 30, 2014 6:20am
Quoting AllanS
{quote} Given enough traders tossing a coin, half will double their accounts in the time taken for the other half to lose theirs. If the average time to do so is 12 months, and we begin with 10000 traders, in four years we would expect 600 winners who have doubled their accounts four times. News of their dazzling "success" will be more than enough to create an illusion of hope where absolutely none is warranted. Magical "edges" like this are seductive because we want them to be real, but given the sample size, they're virtually impossible to prove....
Stop day trading and start position trading.
  • #550
  • Nov 30, 2014 8:29am Nov 30, 2014 8:29am
Quoting AllanS
{quote} Given enough traders tossing a coin, half will double their accounts in the time taken for the other half to lose theirs. If the average time to do so is 12 months, and we begin with 10000 traders, in four years we would expect 600 winners who have doubled their accounts four times. News of their dazzling "success" will be more than enough to create an illusion of hope where absolutely none is warranted. Magical "edges" like this are seductive because we want them to be real, but given the sample size, they're virtually impossible to prove....
I like this, let's call it statistical, exercise. It's true it could happen that 600 winners would make an amazing success. I do not think it is thought correctly. I'd agree in case that traders make only one trade a year which is a huge winner or account loss. If trading on daily basis we can be almost sure that randomness (coin toss) will make us to be losers after 4 years of being lucky. All those lucky traders would die very quickly if sample is high enough which is when trading every single day for 4 years.

I agree we need some edge. But let's think about it little bit deeper. In case of Fez' trading there is not edge of having 7% (or some different) win rate.. His edge is to be able to lock let's say 40% on BE. The rest is up to the market. It's not your edge. Then winners can occur. They will happen from time to time for sure.

This method is highly independent of randomness (in long-term) however return of single trade is total random. Hard to explain, hard to understand...
I'd suggest to read fooled by randomness and Antifragile from Taleb to understand concept of this method. Once you get it this method will be your holy grail if you're able to manage risk properly and you're not dependent on your trading income from beginning. This method is psychologicaly difficult to trade for many as many people like to be right. If this is your case it's better to leave this thread and not to come again...
Lose small, win BIG
  • #551
  • Nov 30, 2014 10:34am Nov 30, 2014 10:34am
Quoting ProsteJa
{quote} I like this, let's call it statistical, exercise. It's true it could happen that 600 winners would make an amazing success. I do not think it is thought correctly. I'd agree in case that traders make only one trade a year which is a huge winner or account loss. If trading on daily basis we can be almost sure that randomness (coin toss) will make us to be losers after 4 years of being lucky. All those lucky traders would die very quickly if sample is high enough which is when trading every single day for 4 years. I agree we need some edge....
If its true that random entries could work just as well, it'd be a simple matter to test via EA back testing. Just build one with a totally random entry with 5 SL and 5 TP. Of course due to spreads the account has a negative expectation, but we'd purely be focused on the win/loss rate. The "wins" in this EA would be entries with SL moved to break even.If the entry has a tradeable edge, then it should have a better % than the random EA, without optimization, and across multiple tests with different date ranges.
  • #552
  • Nov 30, 2014 10:54am Nov 30, 2014 10:54am
Very interesting discussion on Fez and his Millipede trading. Here's my take.

Regarding Fez's credibility, on one of his earliest replies on another thread he said he spent a couple hours trying to code an indicator without success. Would a wildly successful trader who is short on time who wouldn't even use such an indicator do such a thing? I highly doubt it. He's a newby in my mind.

I just hope no one gave him money to trade.

Regarding the Millipede method which I find very interesting and which I followed avidly a few years ago.

Unfortunately in order to get those 1000 pip moves you certainly will have to give up many more 200 pip moves which go to break even, four or five minimum. That means you give up (5 x 200) = 1000 to get 1000. That's not a good idea since those 5 smaller ones can be compounded. Further the 1000 pip win will undoubtedly not be your full trading capital, probably 1/5 or 1/3 if you are very good at establishing multiple positions early. If 1/5 of your capital gives you 1000 pips that's the same as a 200 pip win when you're all in.

Graeme was a master at the entry and employed this strategy starting in 2008 when the markets were trending (crashing) beautifully. The EUR/USD fell 3600 pips in just 15 weeks. The E/U recently has fallen 1600 pips in 29 weeks. That's 1/4 the speed and 1/4 the profit potential.

At best this should be something you try when you see a great setup with a small position and get to breakeven fast, then forget about it. I wouldn't make this my main strategy.

Good luck to you all.
Enter Signature
  • #553
  • Edited 12:47pm Nov 30, 2014 11:34am | Edited 12:47pm
I will do my best to stay on topic. I don’t want to help derail the thread into a discussion of whether it’s possible to be long term profitable, or not.

@AllanS, @stewrigh: I understand where you’re coming from. Agree with Stew that the “is it possible to be profitable?” theme can get tedious. It's impossible to know how many FF members are actually profitable, and how many are merely idle boasters. Allan, you might find this blog (http://grailtrading.blogspot.co.nz/) to be an interesting read, if you haven’t already done so.

@jmn5611: I don’t think sticking to just any system is enough; I believe it has to be a winning system. For example, every EA unfailingly sticks to a given system, but very few retail EAs are long term profitable. Hence every successful trader, apart from having the necessary personal qualities (patience, nerve, discipline, self-belief, etc) must also have a winning methodology. And if a strategy proves to be unprofitable, what choice does the aspiring trader have, but to 'jump' to a different one?

Many systems depend on (a minimum level of) volatility for their profit, and their rollercoaster success/failure through different years of changing markets reflects that. However, as an example, a savvy trader might be able to turn a mediocre system into a significantly profitable one, by continuously seeking out the most volatile, and/or strongest trending, markets.

IMHO the extent to which the millipede/DIBS/infinite yield concept is profitable depends on two things:

1. Whether central bank policies/macroeconomics/money flows (http://www.forexfactory.com/showthread.php?t=334165)/etc create trends in long term (daily/weekly/monthly) charts that last for long enough, and occur often enough.

2. Whether it’s possible to get enough surviving entries, to create overall positive expectancy. Sure, if you average (for example) 50:1 RR winners, you need only 1 survivor for every 50 losses, but that is still problematical, especially as the more low risk entries there are, the greater the relative effect of the spread (given the tight SLs, it makes every loss significantly bigger). Entries need to survive both ‘noise’ in the short term, and pullbacks (including spikes caused by news) in the medium term. (Obviously having multiple surviving entries all profiting simultaneously, and thus creating exponential account growth, is the power, and the appeal, of the millipede type system).

Resolve those issues, and mathematically, you have a winning system. Given that winning trades remain open for several weeks, taking only trades that offer positive swap, may be significant (although I understand that the millipede, specifically, takes trades in both directions). And finding a br0ker with the lowest spreads.

Infinite yield is potentially a great concept, but it doesn’t work for me personally, for at least two reasons:

1. I can’t satisfy myself statistically, that it has an edge. Because winning trades are very rare, it’s necessary to have a massive amount of historical data to gain any kind of statistical validity. What is the worst case number of losses that my account must be able to survive? 50? 100? 200? This makes it extremely difficult to calculate how tiny position sizes must be, to ensure that drawdown stays within personally acceptable limits, while waiting for that one problematical ‘black swan’ winner.

2. My emotions fail me: I don’t have the nerve to persevere, after a large number of losses.


I will try a little harder to disappear this time. It's difficult to resist responding to intelligent and civil discussion, though.
  • #554
  • Nov 30, 2014 1:06pm Nov 30, 2014 1:06pm
Quoting hanover
I will do my best to stay on topic. I don’t want to help derail the thread into a discussion of whether it’s possible to be long term profitable, or not. @AllanS, @stewrigh: I understand where you’re coming from. Agree with Stew that the “is it possible to be profitable?” theme can get tedious. It's impossible to know how many FF members are actually profitable, and how many are merely idle boasters. Allan, you might find this blog (http://grailtrading.blogspot.co.nz/) to be an interesting read, if you haven’t already done so. @jmn5611:...
Hi Hanover, Certain techniques will make this style of trading nearly impossible - they include moving stops quickly to b.e and treating all surviving entries as equals.

It's natural to consider saving a 5 pips loss as only being a good thing and it is unless it reduces the number of winners - especially when a winner is worth 20 (or more) losers

If gold went short for 300 pips last week where logically would be the place where our entries are most likely to survive the retrace, if indeed there is one?

Obviously the entries nearest the high would stand the most chance of surviving. Therefore, if we had managed to get 3 shorts surviving last week on gold then a good option maybe to keep the entry nearest the high open and close the other 2 shorts to cover our costs.

At the end of the month in the same manner we could diversify again keeping the highest entry/s open and diversifying the entries less likely to survive the retrace/s (one thing we can quantify is how often a bar will retrace - a lot!)

To me these two elements are the important parts of position trading (along with selecting the right markets)- but alas everyone seems to thing they will solve all the problems just by playing with entry techniques...
tradewith60
  • #555
  • Nov 30, 2014 1:53pm Nov 30, 2014 1:53pm
Quoting 60minuteman
Obviously the entries nearest the high would stand the most chance of surviving. Therefore, if we had managed to get 3 shorts surviving last week on gold then a good option maybe to keep the entry nearest the high open and close the other 2 shorts to cover our costs.
I completely agree with this.
No greed. No fear. Just maths.
  • #556
  • Nov 30, 2014 2:29pm Nov 30, 2014 2:29pm
Quoting 60minuteman
- but alas everyone seems to thing they will solve all the problems just by playing with entry techniques...
Here lies the key when you are retail.

The OP's method relegates the singular most important aspect of a retail, or loner trader's 'edge', I would say perhaps his only edge over the Bookmaker - his ability to choose the entry.

The bookmaker (sometimes called a broker) is forced to react to your choice, he cannot run away.

Get this right, concentrate on it, make it priority number one, it IS your edge, it IS your time of choosing, you can be flat when the time is right, you can be a bull when the time is right, you can be a bear when the time is right - be these as a result of your learning.

The notion that the broker must always win is true only when a person sitting behind a computer decides that the entry is unimportant, get the MM or the RR right and all will be well - the market has little regard for MM or RR, it's interested in only two things - immediate price direction and for how long.
  • #557
  • Nov 30, 2014 2:40pm Nov 30, 2014 2:40pm
Quoting epson
{quote} Here lies the key when you are retail. The OP's method relegates the singular most important aspect of a retail, or loner trader's 'edge', I would say perhaps his only edge over the Bookmaker - his ability to choose the entry. The bookmaker (sometimes called a broker) is forced to react to your choice, he cannot run away. Get this right, concentrate on it, make it priority number one, it IS your edge, it IS your time of choosing, you can be flat when the time is right, you can be a bull when the time is right, you can be a bear when the...
the market has no regard for your future predictions on price movement either - delusional
tradewith60
  • #558
  • Nov 30, 2014 2:46pm Nov 30, 2014 2:46pm
Good evening to you all. Thank you Fezmar for this thread. Nice to see you all who understand him. I trade this style already and have more thousand pips collected. Please find attached AUDUSD chart with my entries and comments.
Attached Image (click to enlarge)
Click to Enlarge Name: 30-Nov-14 20-26-25.gif Size: 53 KB
  • #559
  • Nov 30, 2014 2:49pm Nov 30, 2014 2:49pm
Quoting 60minuteman
{quote} Hi Hanover, Certain techniques will make this style of trading nearly impossible - they include moving stops quickly to b.e and treating all surviving entries as equals. It's natural to consider saving a 5 pips loss as only being a good thing and it is unless it reduces the number of winners - especially when a winner is worth 20 (or more) losers If gold went short for 300 pips last week where logically would be the place where our entries are most likely to survive the retrace, if indeed there is one? Obviously the entries nearest the high...
This ^^ .
  • #560
  • Nov 30, 2014 2:54pm Nov 30, 2014 2:54pm
60 has hit it precisely, think a step higher, think as the market does, forget predictions, they are delusions promoted by the bookmakers.

So it happens that you have placed your order with a SL of 6 pips on a buy of Oil, maybe based on the hunch that OPEC would agree a deal and there would be a knee jerk, well you di read that it might happen.

As 60 suggests, this is delusional, having done his/her learning the trader knows well that in the past these guys have agreed little, so why should he give the bookmaker 6 pips, why should he not take maybe 60 pips from the broker.
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