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Building an equity millipede

  • #6,961
  • Jan 10, 2015 11:20am Jan 10, 2015 11:20am
Quoting Pipskateer
{quote} Hi Milldo, I would also suggest that you download this Word doc from Danjuma's post a few above. Here is the link: http://www.forexfactory.com/showthre...97#post7973197 His document contains a few more of Graeme's latter charts beyond those contained in the PDF files you already have now. I think we're only missing charts now from the last 20 or so of Graeme's final posts. I'm hoping someone else has archived them and will post at some point so we can have a complete archive. I DID see this thread three years ago, but...
Hi Pipskateer,
Thank you very much.... it's a pdf file now (not Word doc) and indeed completing your files.

And thank you for sharing.

Thanks to all.
Success.
  • #6,962
  • Edited 1:09pm Jan 10, 2015 12:34pm | Edited 1:09pm
Quoting Pipskateer
My personal plan since coming back to the Equity Millipede approach in December was to begin the 3X20 exercise on Monday, January 5th and carry it to completion for six months just as Graeme said to do. I'm not sure how many of those from 2010-2011 who were here when Graeme was actively posting ever completed this exercise, but I suspect the numbers were few. Having the internal discipline to start and complete a task and to follow a simple rule set consistently over time is a necessary element of "participation." This has been a struggle for me...
I don't want you to take this as a personal attack, even if it might sound like it, it is from a place of attempting to help - believe it or now. I am also assuming you only have this demo account.

What you are doing is pointless.

Demo accounts can only be useful under a few scenarios:
-complete novices
-testing new instruments or platforms
-forward testing an automated strategy
-live manual testing provided you can treat the account as actual money.

I bolded the last one for a reason. The loses and gains must feel real to you if they are to mean anything, if they don't you have to go to a live account otherwise you are just wasting your time. When you say you aren't using money management correctly then you aren't treating it like a real account.

I started on a demo account, and I treated all losses (there were no gains) as personal, it insulted my intelligence when I was wrong, and I was wrong nearly all the time. Once I started treating a demo as a game, by ignoring money management rules I knew there was nothing more it could teach me, I eventually moved to a live account even though I still wasn't profitable on a demo.

Since then I have been trading live for several years, finding my way slowly but surely and in that time where I was a constant loser but I only lost a very small % fraction of my account (which I have subsequently recovered) because my money management was tight always. You never ever get used to taking losses, but you do develop coping mechanisms. You won't ever be able to replicate the emotional turmoil of taking real losses by messing around on a demo account. I started with 500 dollars in my live account, and doubled it every time I felt I was ready to commit more money.

You mention: ''Having the internal discipline to start and complete a task and to follow a simple rule set consistently over time is a necessary element of "participation." This has been a struggle for me in the past that I strongly desire to overcome.'' - If following the rules is a problem for you then you probably haven't found a method which you are comfortable with.

You talk a good game, but you aren't trading a live account and by your own admission you aren't even using proper money management. How therefore can you possibly expect to learn anything meaningful from this 6 months endeavor? It will be a waste of your time, time that I gaurantee you won't ever get back.

The guys that seem to have taken G's teaching and made it work are the guys that took some concepts and applied it to their own knowledge. This is what G said all along for people to do. When you have your own entry methods, done the working out by hands, and know that for instance breakouts work better than fading, then you can go off and feel comfortable in the method you have chosen.
  • #6,963
  • Edited 12:42pm Jan 11, 2015 11:24am | Edited 12:42pm
Quoting verv
{quote} I don't want you to take this as a personal attack, even if it might sound like it, it is from a place of attempting to help - believe it or now. I am also assuming you only have this demo account. What you are doing is pointless. Demo accounts can only be useful under a few scenarios: -complete novices -testing new instruments or platforms -forward testing an automated strategy -live manual testing provided you can treat the account as actual money. I bolded the last one for a reason. The loses and gains must feel real to you if they are...
It's entirely clear that you have not read much, if anything, concerning Graeme's reasoning and purpose for the 3X20 exercise. It has absolutely zero to do with money management, of which I have a very good grasp. I has nothing to do with trading live money, of which I have done profitably in the past. I appreciate your attempt to help, but you are quite off-point.

I am merely retraining myself to read PA which I have not done for many months. Also, I have had some issues with sticking to a simple rule-set. In the past, I have been a habitual "tweaker" where trading rules are concerned. This exercise fully suits MY purposes and those as outlined by Graeme for developing focal perceptions.

After reading this entire thread, it was very sad, but not surprising in the least, to see the focus shift in a very short time from those things which Graeme initially said were most important to "entries." Graeme tried earnestly to redirect the audience back to focus on the 3X20 exercise, but to no avail. The onslaught of entry questions never ceased. Yes, sharp entries are important to help reduce leg-establishment costs, but specific "entry systems" aren't THE most important aspects of what Graeme was trying to convey.
  • #6,964
  • Jan 11, 2015 12:29pm Jan 11, 2015 12:29pm
Quoting ProsteJa
{quote} Hi mate, I'll join your journey. I will take only partial profit and rest will leave for growth. We can get in touch on skype or fb and you could explain me what are rules of taking those trades. I will join you on real account if you don't mind... Feel free to send me PM
Hello ProsteJa, I am on Skype under "Pipskateer" username. You are certainly welcome to join me in this exercise. However, please know that all trades must be taken by each person without input from anyone else. They must be your own trade decisions based entirely on PA. I'm happy to answer any questions you have if I am able, but you really need to re-read Graeme's post about the 3X20 exercise. There really aren't any elaborate rules except these:

1. The object is to achieve 3 wins of 20 pips each per day for six months. This is to improve your focal interpretation of price action.
2. You may ONLY trade in the direction of price after the daily open (Asia or London, your choice). If price is above daily open, then you can ONLY trade LONG. If price is trading below daily open, then you can ONLY trade SHORT.
3. Only one position/trade open at a time.
4. Set 20 pip SL and 20 pip TP on each entry. Each trade stays open until TP or SL is hit.
5. No specific entry "methods" to be used. No extra indicators, just price.
6. Rinse and repeat until you achieve 3 20 pip wins for the day.

Here is the paragraph from Graeme's post #174 which describes the exercise:

"Now, if I were to choose which part of my contribution in this thread is worth remembering is the next part Im here to say.

Open a demo account with 5000USD and leverage 1:100. You can watch the market anytime that suits your trading. Only one rule, enter only sell if the price is below the daily open or enter only buy if the price is above the daily open (of asian or london). Stick to this rule. Enter with 20 pip take profit including spread and 20 pip hard stop loss from entry. You cannot close the position unless you take 20 pip profit or you lose 20 pip loss. Also you cannot overlap your positions. Only one position open at a time. If the price was higher than open but later went below open then you would only enter sell. No entry methods to be used. Just enter blindly but only buy if higher than open price or sell if lower than open price. If you blow your demo account open another one at same 5000USD and 1:100.

I want you to achieve x3 20 pip take profits before quitting for the day. You failed if you couldnt achieve x3 20 pip take profits for the day. Do this everyday without fail. After 6months you will be a completely different trader.

What does this exercise accomplish? It conditions you to be an effective trading machine. You will connect with the market on subconscious levels. You will be able to see, hear and smell the market. You will have different look in your eyes. Your trading decision are now almost reflex actions.

Currently this is you,

Market -> Indicators -> Your thoughts -> Your action

After this training,

Market -> Your action

After 6months of this exercise, your subconscious decisions will enter the market for you to the second of market movements.

You will have amazing clarity in market sentiments, and can hear/out think what the other traders are anticipating. Most of the time you do not require a hard stop loss cause you can judge very soon after entry whether its going to work out or not.

With this amount of skill any sensible method becomes deadly and you will listen to your inner voice than what you see on s/r lines, trendlines. Price action becomes slow motion in your focal interpretation.

Here is the link to post #174:
http://www.forexfactory.com/showthre...01#post3885501
  • #6,965
  • Edited 1:09pm Jan 11, 2015 12:41pm | Edited 1:09pm
Quoting Pipskateer
{quote} It's entirely clear that you have not read much, if anything, concerning Graeme's reasoning and purpose for the 3X20 exercise. It has absolutely zero to do with money management, of which I have a very good grasp. I has nothing to do with trading live money, of which I have done profitably in the past. I appreciate your attempt to help, but you are quite off-point. I am merely retraining myself to read PA which I have not done for many months. Also, I have had some issues with sticking to a simple rule-set. In the past, I have been a habitual...
I went back and made sure I read G's post on the 3x20 before responding to you - specifically I wanted to see how it would relate to what you are doing. Everything of what G said must be taken within the context of the entire thread, and specifically how it applies to you.

If you have been here from 2006, (first posted in this thread in 2011) and after 8-9 years you still don't have a handle on your entry, or any understanding of how the market moves, then more of the same is not going to help you in my opinion.

So I was somewhat surprised to see you back patting yourself when you managed to stick to a method of trading for one week, even when you acknowledge you weren't respecting risk - G's stressed serious demo experience or live accounts btw.

My point to you is that after such a length of time, if you do not have a handle on your entry method, or only seriously stuck to a strategy for 1 week in 8 years, or are no were closer to to understanding the market in that time, then what's the point of doing it now unless you weren't very serious before?

My suggestion is that you take a few of G's concepts, the important ones, and applying it to how you need to work it in your life first. If you have to struggle to stick at a method then it isn't fit for you.

To give myself as an example again (I'm no guru btw) - when I first stumbled upon this thread I already had many of the pieces together and was implementing them. But it was only when I read G did I put the entire puzzle together. Things I knew in isolation:
-Most short term traders fail
-Long term trading maximises chances of profit
-The survival rate of purely technical methods drops to zero if traded long enough
-Fading price by itself has no edge
-Breakouts do have an edge
-Long term trend trading works
G helped put that all together for me and give up on the short term trading stuff, the most important thing I got from this thread was to do what I believed was working for me (which incidentally was what G was doing), previously I had been doing what others were doing and failing.



Also one other thing, that often gets overlooked, in fact I have never seen it mentioned. Is this:

Quoting pipEASY
When outsourcing overseas contact the foreign exchange rate plays a vital role as it has a direct impact on profit margin and the competitive edge. In a sentence, I had to forecast an expectancy of rise/fall in the price of goods in lieu with growth/decline of inventory demand. I had a constant tab on politics, and economics of both the country I reside and the country of our interest. Exchange rate effects the overall operation of an import/export business..
I don't want to put words in G's mouth, but the simple fact is that this was a guy highly skilled at what he did, as evidenced by the fact that many have tried to mimic what he did and few have succeeded. He doesn't talk about it much but he clearly had a very solid understanding of economics and politics, something he didn't touch on much in this thread. I can tell you that which pairs to millipede on is also a very important consideration.

Additionally I see on your profile that you subscribe to 'TheRealThing' - I suspect you have read his blog at infiniteyield? I read the whole darn thing, all 300 posts. There is one blog post (and only one) where he mentions that most technical traders also have some fundamental rules for entering and exiting positions, in other words the technicals although a very important part of the picture, where corollary on other fundamental factors being in alignment as well - which he didn't name. If you look at his results on that blog, you will realise that his biggest winner was a silver position, which he selected based on his belief that silver prices would never return to their 2008-09 levels. The first strike and one night stand methods didn't add to much to the account balance. TRT also mentioned in another post about there being a 60% chance that a pair with a positive swap will finish higher that year.

I wonder if anyone really considered that some of these guys are doing things that they don't even realise. It's not that they are deliberately leaving out information, but rather because they have been involved in the market for so long, they have a wealth of unconscious knowledge which they draw upon. That is why I believe that what G said initially is very important, you take the powerful concepts he presents, and apply them to your own methods - very few do that. I can tell you that if you have sat for several months backtesting very specific entries (which I have), and then apply them in real time, then you will know them inside out and will know how and when they work. Don't underestimate the importance of the stuff that G didn't get round to saying, he tried to tell everyone to take what they needed from this thread and apply it to their own entry method or style, but most don't listen to that.
  • #6,966
  • Jan 11, 2015 4:16pm Jan 11, 2015 4:16pm
Quoting verv
{quote} I went back and made sure I read G's post on the 3x20 before responding to you - specifically I wanted to see how it would relate to what you are doing. Everything of what G said must be taken within the context of the entire thread, and specifically how it applies to you. If you have been here from 2006, (first posted in this thread in 2011) and after 8-9 years you still don't have a handle on your entry, or any understanding of how the market moves, then more of the same is not going to help you in my opinion. So I was somewhat surprised...
Verv...
Thank you for your excellent and learned advice. I really want to believe you mean well, but in addition to your pompous tone, you are amazingly off course...again. I'm not going to spend much time trying to correct your statements, but just suffice it to say that you have apparently read things into my statements that are purely presumptions on your part. I assure you, these presumptions and conclusions you have made have nothing to do with the reality of my past experiences and why I'm doing the 3X20 exercise. I'm sorry if you felt some primal need within your psyche to try and "take me down a notch or two", but the only "backpatting" I was doing was based on the fact I was able to take raw PA entries in a positive manner after not even looking at charts or live PA for a year. Just thought that was cool. I guess I'm a substandard punter compared to you, though. But that's a reality I'll just have to deal with.

Again, thanks for your sound advice. I'll be getting back to my flawed, ill-conceived plan now.
  • #6,967
  • Edited 5:56pm Jan 11, 2015 5:33pm | Edited 5:56pm
Do you know why there might be a tone?

Because this board is filled demo gurus handing out advice.

There are too many people talking about doing stuff rather than just doing it.

Anyway, I'm sorry that you were offended, my intention is not to offend anyone, but at the same time you don't sound serious.

Maybe I'm wrong. Good luck.
  • #6,968
  • Jan 11, 2015 6:10pm Jan 11, 2015 6:10pm
Quoting verv
Do you know why there might be a tone? Because this bored is filled demo gurus handing out advice. There are too many people talking about doing stuff rather than just doing it. Anyway, I'm sorry that you were offended, my intention is not to offend anyone, but at the same time you don't sound serious. Maybe I'm wrong. Good luck.
There was a time when I would certainly have been offended at statements such as yours, but not at this stage in my life. Annoyed? Yes, but only because you seem to posit yourself as the superior, advice-giving guru you seemed to disdain. I have strong ideas about what works for me, but I have not handed out any advice to my knowledge. I have only stated what I am actually doing, have done, and intend to do, which is to become more consistent in following my own rules and sticking to plan. Somehow, that translated into me being an embicile who wasted his last ten years with nothing better to show for it. Yeah, some of that time was definitely wasted. Can you or anyone else say any differently about your own last 10 years? My last ten years has been filled with battles on many fronts. Quite honestly, I'm just happy to be alive right now, Verv. Life is good and every day above ground is a GOOD DAY.

I cannot improve upon the foundation that Graeme laid out, at least not for anyone else. I just know what will work for ME. Some of what you suggested (taking elements of Graeme's approach and making it mine) is exactly what I've had planned since before I made my first post in this thread in 2014. These elements Graeme offered so freely are precisely the elements I've been missing and have been looking for. I just wasn't smart enough to see it back in 2011, so to that degree, yes, I was an embicile.

It seemed to me after reading the entire thread that very few even mentioned the 3X20 exercise after Graeme had placed so much initial emphasis on it. It will not be a waste of time for me and Graeme said everyone should do it. I see it as the "wax on, wax off", seemingly boring exercise that I need to do to get myself back in shape for many reasons. It's been a good while since I've had any live money on the table and I want to be RAZOR SHARP when I start up my live trading again.

Good trading to you and welcome to ForexFactory.
  • #6,969
  • Jan 11, 2015 6:16pm Jan 11, 2015 6:16pm
Quoting Pipskateer
{quote} There was a time when I would certainly have been offended at statements such as yours, but not at this stage in my life. Annoyed? Yes, but only because you seem to posit yourself as the superior, advice-giving guru you seemed to disdain. I have strong ideas about what works for me, but I have not handed out any advice to my knowledge. I have only stated what I am actually doing, have done, and intend to do, which is to become more consistent in following my own rules and sticking to plan. Somehow, that translated into me being an embicile...
fair enough

i was never able to get precision sharp entries, so I had to take the whole thing live warts and all
  • #6,970
  • Jan 11, 2015 6:21pm Jan 11, 2015 6:21pm
On the issue of stacking positions when momentum is in your favor... I've been reading a thread by Graviton which has some excellent strategies for position stacking, if anyone is interested.

Here's the link to the specific post #71 where he outlines his stacking process. But the entire thread is a good read.
http://www.forexfactory.com/showthre...35#post7350535
  • #6,971
  • Jan 11, 2015 6:23pm Jan 11, 2015 6:23pm
Quoting verv
{quote} fair enough i was never able to get precision sharp entries, so I had to take the whole thing live warts and all
Are you talking about the Millipede strategy here or some other method?
  • #6,972
  • Jan 11, 2015 6:29pm Jan 11, 2015 6:29pm
Quoting Pipskateer
{quote} Are you talking about the Millipede strategy here or some other method?
Yes, the entries were always user discretion, though since I use daily charts I get less entries. I use my own methods not G's. G said most of his legs died, mine do too, I'm working off 40% win rate meaning 60% of legs either lose or at be.

i don't pyramid as aggressively as I maybe should - i fact I know I don't
  • #6,973
  • Jan 11, 2015 6:53pm Jan 11, 2015 6:53pm
Quoting verv
{quote} Yes, the entries were always user discretion, though since I use daily charts I get less entries. I use my own methods not G's. G said most of his legs died, mine do too, I'm working off 40% win rate meaning 60% of legs either lose or at be. i don't pyramid as aggressively as I maybe should - i fact I know I don't
To be sure, when you say you're working off 40% win rate...are you saying that 40% of your LEGS make it past BE to survive long term?
Not sure how you are qualifying your successes here.
  • #6,974
  • Jan 11, 2015 7:24pm Jan 11, 2015 7:24pm
Quoting Pipskateer
{quote} To be sure, when you say you're working off 40% win rate...are you saying that 40% of your LEGS make it past BE to survive long term? Not sure how you are qualifying your successes here.
Yes 30-40% run to longer term, I don't have exact figures to hand but I actually think it could be low 30%s.

Success is measured simply by bottom line on account, if I'm profitable I'm doing something right I figure, needless to say winners are much bigger than losers.

Much room for improvement from more entries and holding longer. Holding for longer term is very challenging mentally.
  • #6,975
  • Jan 11, 2015 7:46pm Jan 11, 2015 7:46pm
Quoting verv
{quote} Yes 30-40% run to longer term, I don't have exact figures to hand but I actually think it could be low 30%s. Success is measured simply by bottom line on account, if I'm profitable I'm doing something right I figure, needless to say winners are much bigger than losers. Much room for improvement from more entries and holding longer. Holding for longer term is very challenging mentally.
I don't have the figures memorized, but I was thinking Graeme had said that maybe 2% of his entries made it beyond a loss or BE to survive long term. I could be entirely mistaken though. What would you consider as a "long term" pip profit run from entry?

Knowing my own mental makeup, I can definitely say I would have no problems holding a residual position long term (my definition = 5000+ pips), provided that I was able to stack positions sufficiently to take short term (200+ pips) and medium term (1000+ pips) profits, ensuring that the costs of the leg establishment were well-covered and then some.
  • #6,976
  • Jan 11, 2015 7:59pm Jan 11, 2015 7:59pm
Quoting Pipskateer
{quote} I don't have the figures memorized, but I was thinking Graeme had said that maybe 2% of his entries made it beyond a loss or BE to survive long term. I could be entirely mistaken though. What would you consider as a "long term" pip profit run from entry? Knowing my own mental makeup, I can definitely say I would have no problems holding a residual position long term (my definition = 5000+ pips), provided that I was able to stack positions sufficiently to take short term (200+ pips) and medium term (1000+ pips) profits, ensuring that the...
Ok I see what you mean now.

I would say most of my positions that I left running where short to medium term by your definition.

I take positions off if there is something that happens that doesn't make sense or some fundamental change affecting the pairs. It's only with hindsight do I realise if that was a mistake or not.

G used to close positions regularly in the short to medium term to keep equity smooth, but what he did was to also elevate certain positions to those really long term positions that you describe. I think 2% might be about right for those legs! I remember him saying that somewhere as well.

btw, there was a guy called therealdeal who posted in this thread - don't know if you managed to catch him. Most believe that was G, search him up, because he talked a bit about this stuff.
  • #6,977
  • Jan 13, 2015 2:17pm Jan 13, 2015 2:17pm
Hello All,
I have been reading this thread for the last month , and I have to say that G is a great trader and he knew how to decode the market DNA. i wish i knew about this before losing many k`s in the market using martingale and no SL strategies . but hee i am still alive and i can turn this around as long as i am trying and learning from mistakes .

G`s secret is this :
- low risk entries ( small SL or move to BE quickly)
- trying everyday( many times to enter and renter ) --------> participation
- big TP

well someone will say that this is obvious and that i did not say anything new here:

if you want to test this theory here is the steps you will take :
- choose two levels , 1st level is where you think the market will go up ( any technical indicator will help or just your eyes)- the 2nd one is where you think the market will go down.
- place 2 pending stop orders with a tight SL ( risk 1%) and open TP
- if the SL is Hit , renter the market at the same level with same parameters.
- repeat until your equity is increased by 10%

this may be costly if the market is in tight range ...but once it`s trending , you are going to enjoy the benefits.

this just the core of G`s strategy and it make sense. a lot of sense , knowing that the market will go in on direction or the other.

in conclusion , entry is not very important... risk and money management are.

here is the result of my experience : Note the win % - less than 4%
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  • #6,978
  • Jan 14, 2015 5:30am Jan 14, 2015 5:30am
Quoting ollaya
in conclusion , entry is not very important... risk and money management are. here is the result of my experience : Note the win % - less than 4%
Hi ollaya, thanks for the simple but effective conclusion.
One thing i miss in your post however is when to exit, i think with this type of trading is very important to. Can you tell me how you did exit in the test you made?
Persistence will get it. Consistency will keep it.
  • #6,979
  • Jan 14, 2015 6:10am Jan 14, 2015 6:10am
One of the best threads on this forum!

Cut losers short and let winners run...that's basically the key message.

I partially disagree with the statement that entries aren't important. Well-timed entries can significantly decrease the size of your initial stop loss and of course win rate.
  • #6,980
  • Jan 14, 2015 3:22pm Jan 14, 2015 3:22pm
Quoting Chake
{quote} Hi ollaya, thanks for the simple but effective conclusion. One thing i miss in your post however is when to exit, i think with this type of trading is very important to. Can you tell me how you did exit in the test you made?
in this test I used 1000 pips TP for trades with the trend and 500 pips against the trend . i close all orders once the equity is increased by 50%.
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