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Building an equity millipede

  • #6,841
  • Nov 28, 2014 7:58am Nov 28, 2014 7:58am
Quoting danjuma
{quote} Also be selective, and trade just trending pairs (I don't believe we have 40 pairs trending right now!).

That is the problem with trends, you never know when they will start or end. I can see this method being very painful if things are not trending. If you get stuck in a 200-400 range you will get multiple pairs in 200 pip loses which add up quick so you might need a 1000 p win to make up for 5 losses.

Quoting MCRotter
As I said on the previous page, I have had break even positions taken out only to run onto big winners shortly thereafter. I am sure that there is an optimum point at which you should move your stop to breakeven, but move it too soon and the position can be taken very easily. One has to consider when moving the stop to breakeven whether it has a net benefit or net cost - I don't have a large enough sample size for my own trades, so I have not crunched any numbers yet. For now however I am moving stops to breakeven, but when the data on my method...

I am thinking my next forward test is have 2 scenarios. In test A alsways move to BE, in test B just leave it alone. I have no doubt drawdowns will be bigger in B, but what we don't know is how many more legs get established, is it enough to cover all the additional losses
I did see that both the OP and TRD do move to BE
  • #6,842
  • Nov 28, 2014 8:51am Nov 28, 2014 8:51am
Quoting Sherpa
{quote} That is the problem with trends, you never know when they will start or end. I can see this method being very painful if things are not trending.
That's only true if you want to enter on every opportunity possible. There's no need to do that.
  • #6,843
  • Nov 28, 2014 10:28am Nov 28, 2014 10:28am
Quoting Barbossa
{quote} That's only true if you want to enter on every opportunity possible. There's no need to do that.
I agree. I think i need to look at the chart and place the entries outside the S/R areas. I will do that on my next test. The OP hinted there were ways to improve this system. Perhaps this is one
  • #6,844
  • Dec 1, 2014 12:49am Dec 1, 2014 12:49am
If you spot an area that you feel is a congestion, consider only entering longs at the very bottom and shorts at the very top and leave the middle area alone.
  • #6,845
  • Dec 5, 2014 7:28pm Dec 5, 2014 7:28pm
Have been missing the opportunities to add to my EU short millipede. Think I have been waiting too long for re-confirmation of a continuing down trend.

Havent had the same problem with my UJ long millipede, has been eating its greens since early November, week before Mr Abe / Kuroda? surprised the markets.
Is now real fat. 50+% ROI.

Very tempted to also try a GJ long, but watching the available margin and risk levels.

Cheers scalpz
Target 2 : Stoploss in the green
  • #6,846
  • Dec 8, 2014 4:00am Dec 8, 2014 4:00am
Thought I would post to give a quick update and answer a question from earlier.

Things are going well at the moment, although it is primarily fuelled by the JPY pairs. Up by around 15,000 pips currently.

Somebody asked whether I had both long and short trades on simultaneously. I do end up having long and short trades open on the same market just by taking the engulfing signals as they appear. I'm in the UK so can do this through my broker.
  • #6,847
  • Dec 9, 2014 6:13am Dec 9, 2014 6:13am
I'm currently looking to build a bundle of shorts on USDJPY. Might be a little premature, but I don't like buying up there.
  • #6,848
  • Dec 9, 2014 7:47am Dec 9, 2014 7:47am
Quoting soco333
Thought I would post to give a quick update and answer a question from earlier. Things are going well at the moment, although it is primarily fuelled by the JPY pairs. Up by around 15,000 pips currently. Somebody asked whether I had both long and short trades on simultaneously. I do end up having long and short trades open on the same market just by taking the engulfing signals as they appear. I'm in the UK so can do this through my broker.
Go Soco!

Go Soco!

Good work there lad.
"Never interrupt your enemy when he is making a mistake" Napoleon Bonaparte
  • #6,849
  • Dec 10, 2014 5:05pm Dec 10, 2014 5:05pm
Quoting Barbossa
I'm currently looking to build a bundle of shorts on USDJPY. Might be a little premature, but I don't like buying up there.
One of my positions got stopped out on USD after the 300 pips move down. I'm flat now on all forex pairs for the moment
  • #6,850
  • Dec 11, 2014 2:21am Dec 11, 2014 2:21am
Quoting MCRotter
{quote} One of my positions got stopped out on USD after the 300 pips move down. I'm flat now on all forex pairs for the moment
I've only recently started a forward demo test on 4 pairs. Currently holding 2 shorts on usdjpy, 1 short on gbpaud, 4 shorts on eurnzd. Slightly positive on both balance and equity. Plus pending shorts on gold, should it decide to drop down. However, except for eurnzd, these positions are countering the dominant trends in the recent past, so I expect at least some of them to die soon. Should any survive though, it would win big.
  • #6,851
  • Dec 14, 2014 2:09pm Dec 14, 2014 2:09pm
Hello,

I am curious to know if anyone who has followed this thread from it's opening is still doing this method and if so, could you give some generic information as to how it's going for you?

(or anyone who has been actively building this for at least six months or more...)

Thanks!
  • #6,852
  • Dec 14, 2014 7:29pm Dec 14, 2014 7:29pm
For the benefit of anyone wishing to see Graeme's charts and posts, I am posting the links to MediaFire downloads produced by user flyer415 who put together some PDF files of Graeme's posts through page 233 (last post #2771). Graeme's Imageshack account is apparently dormant or abandoned and that is where he stored all of his charts, so they no longer display in the ForexFactory posts.

Here are the links and I have also posted a Word docx that contains the links so that others can find them in the file lookup.

Posts from page 1 through 102: http://www.mediafire.com/download/r6...3+page+102.pdf

Posts from page 102 through 233: http://www.mediafire.com/download/8s...2topage233.pdf
Attached File(s)
File Type: docx Links To pipEASY Posts thru page 233.docx   12 KB | 966 downloads
  • #6,853
  • Dec 15, 2014 12:26am Dec 15, 2014 12:26am
Hello everyone,

Recently came across this thread and was taken aback by Graeme's concepts.

Have opened a $50 account and attempted what he mentioned about JJoel Rensink's concept of attempting to earn just 1 pip. I quickly earned that 1 pip, and am not quite sure what the point of that exercise is? I can imagine it would teach a lot if you spent your entire $50 account unable to achieve that 1 pip profit, but I didn't really feel I learnt anything by earning 1 pip LOL perhaps someone could help enlighten me about that.

I've kept the $50 account and am trading the 3x20 pip take profits per day. I know this is supposed to be demo, but I hate using a random broker that allows demos for 6 months, and a think a live account might help teach me more anyway. It's my first day and entries are just random, I know many different types of edges and probably more than enough knowledge to be Forex rich, but as most I imagine, I'm unable to apply knowledge to the real world. I find myself just sitting watching stale charts (I am Australian so it's Asian trading for me) and never really see entries. I can always look at examples and nod my head in agreement, but never find them occurring in front of me.

Anyway, just thought I'd introduce myself to this thread and say thanks. Only up to page 11 at the moment
  • #6,854
  • Dec 18, 2014 8:30am Dec 18, 2014 8:30am
I'm curious as to how U.S. traders are able to resolve the FIFO rules which would seem to all but kill an equity building approach of keeping specific older positions open while closing (diversifying) newer ones? Any solution to that?
  • #6,855
  • Dec 18, 2014 8:42am Dec 18, 2014 8:42am
Quoting Pipskateer
I'm curious as to how U.S. traders are able to resolve the FIFO rules which would seem to all but kill an equity building approach of keeping specific older positions open while closing (diversifying) newer ones? Any solution to that?
There are US Brokers that will allow the front end to show hedging while their back end adheres to the FIFO rules setup by the US government.

GREEN pips to all.
  • #6,856
  • Dec 18, 2014 8:53am Dec 18, 2014 8:53am
Quoting SmoothTrader
{quote} There are US Brokers that will allow the front end to show hedging while their back end adheres to the FIFO rules setup by the US government.
Or you can create your own front end and allow the FIFO-restricted broker to "act" as the back end. In this way, you can have any number of trades open (in either direction), close any trade you want (in any order), and allow the broker to handle the FIFO mess. When done correctly, it is as if the FIFO/hedging restrictions do not exist.

Remember, the bottom line (equity) is the same whether using FIFO or not. In many ways the Account Balance does not really matter...it's all about the Account Equity.
  • #6,857
  • Dec 19, 2014 12:31pm Dec 19, 2014 12:31pm
Quoting zznbrm
{quote} Or you can create your own front end and allow the FIFO-restricted broker to "act" as the back end. In this way, you can have any number of trades open (in either direction), close any trade you want (in any order), and allow the broker to handle the FIFO mess. When done correctly, it is as if the FIFO/hedging restrictions do not exist. Remember, the bottom line (equity) is the same whether using FIFO or not. In many ways the Account Balance does not really matter...it's all about the Account Equity.
How would you accomplish this? With FIFO, how could you ever retain an entry position long enough to let one grow to 10000 pips unless you never had any other trades of the same size in that same pair? The only way I can think of is to have a broker that will allow you to open positions of variable position size with fine granularity like at Oanda. You would have to be very careful on building your "legs" on each pair to make sure each trade was of a slightly different position size. Do you have another solution I am unaware of?
  • #6,858
  • Dec 19, 2014 12:39pm Dec 19, 2014 12:39pm
Quoting empowers90
Hello everyone, Recently came across this thread and was taken aback by Graeme's concepts. Have opened a $50 account and attempted what he mentioned about JJoel Rensink's concept of attempting to earn just 1 pip. I quickly earned that 1 pip, and am not quite sure what the point of that exercise is? I can imagine it would teach a lot if you spent your entire $50 account unable to achieve that 1 pip profit, but I didn't really feel I learnt anything by earning 1 pip LOL perhaps someone could help enlighten me about that. I've kept the $50 account...
Hello Empowers90,

I gave this thread a look back in 2011, but got (foolishly) distracted with other things and systems and never did anything with it. But I'm back, hopefully more the wiser this time. Keep reading...Graeme is a genius! Would LOVE to hear from him and see how he is getting along. Hope you are doing WELL, Sir Graeme! Thanks again for sharing your wisdom here!
  • #6,859
  • Dec 21, 2014 7:23am Dec 21, 2014 7:23am
Quoting TheRealDeal
Hello Traders! I am sorry to interrupt your hot discussion about who i am, but i decided to backup what i said in my last posts with some backtesting. In no way i am trying to prove myself, however i will try to prove my point. Unfortunatelly i cannot provide you backtest data of thousands of trades, because i am relatively busy. 420 Trades overall: 90 Wins, 156 BE, 174 loses. Test Time: 2 years (2005-2006) Method: On H4 TF wait until engulf or outside bar forms (bullish or bearish - we enter both sell and buy regardless of the trend) Entry: On...

That's very impressive and very encouraging!

I took the liberty of adding some summary calculations at the bottom, the focus of which was to show the effects of the swap on performance and bottom line. I also modified the date fields to Excel format so I could use the data to figure total time in trade. In my calculations, I took the assumption that the win/loss count could be altered after the swap was considered. Thus, many pre-swap BE trades became losers and winners after swap was added. Of particular note was your short EURUSD trade of 3/17/2005 which was held for over a year which accumulated a very large negative swap, turning the trade from a large winner into a small losing trade. However, this was anomalous and the overall effect of swap proved to be exactly as Graeme has said all along....of trivial importance in the big picture. No big surprise there to see that Graeme's statements are proven correct. His model is SOLID...but I'm sure he doesn't need anyone else to verify that for him.

Anyway, thanks for doing this. I am encouraged and will do my best to work at a similar test, but using smaller beginning balance and smaller position sizes to demonstrate how it might work for an investor on a scaled-down scenario.

Attached Image (click to enlarge)
Click to Enlarge Name: Excel_Screenshot_EquityMillipedeStats.png Size: 47 KB
Attached File(s)
File Type: xls Equity Millipede Stats_Modified.xls   222 KB | 775 downloads
  • #6,860
  • Dec 21, 2014 7:44am Dec 21, 2014 7:44am
Quoting Pipskateer
{quote} How would you accomplish this? With FIFO, how could you ever retain an entry position long enough to let one grow to 10000 pips unless you never had any other trades of the same size in that same pair? The only way I can think of is to have a broker that will allow you to open positions of variable position size with fine granularity like at Oanda. You would have to be very careful on building your "legs" on each pair to make sure each trade was of a slightly different position size. Do you have another solution I am unaware of?
It is just simple arithmetic. It all boils down to how you manage your net position. Given identical entries/exits, there will be no difference in Account Equity given the different account types: Hedging, Non-hedging, FIFO, non-FIFO. And the net position in each of those accounts will always be the same.

There have been numerous threads about hedging/FIFO that include explanations of the math involved...some of those explanations might give you a better understanding.
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