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Building an equity millipede

  • #6,981
  • Jan 14, 2015 3:45pm Jan 14, 2015 3:45pm
Quoting 4exNinja
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.

building Equity millipede is not about win rates ( and G`s win rate was less than 5% and i think he`s leaving the dream , giving his start up capital). I think if you focus too much on win rate , you will lose many opportunities . G`s entries were as as simple as taking trades with the direction of the last daily bar, he did that many times per day , using small time frame ( 5 min). the secret is in G`s profile:

  1. Biography:
  2. I will risk/pay $10 for the chance of minimum $100 reward anytime, anywhere as long as I know by statistically that the given 'risk-taking opportunity' has a higher probability in 'potential profit vs time' compared to most given occurrences.

if you believe that your system gives a good entry , use it and retry entering the market again and again from the same point if you get stopped out , the market does not stay in one point forever. that point may be revisited many times but if you keep your risk low , you can survive to see big wins.

  • #6,982
  • Jan 17, 2015 7:52am Jan 17, 2015 7:52am
hi Graeme

I started following with interest your thread for a week now, and i must confess that you changed my view on trading after the first page.

now, i came across the "Open a demo account with 5000USD and leverage 1:100" challenge and i'm really curious to start it on monday, however i didn't quite understand in which way it will give me clarity on market sentiments since we are only supposed to blindly enter (according to the daily open price) one position at the time.

thanks for your help

wait4it
  • #6,983
  • Jan 17, 2015 10:58am Jan 17, 2015 10:58am
I have studied the entire thread by master Graeme up his last post, coupled with Fezmar's tsunami method in building legs. The recent months of USD bull is giving me a lot of good legs and my total equity is several times my capital.

It will be difficult for traders to start building legs at first, as it could be weeks or months away from reaping the fruits. I always imagine each leg is like planting a seed and let the tree to grow. Some of it will turn bad but eventually I will get a big tree which gives me much more seed/fruit for more development. This method is a test of patience. I don't do too much micromanagement to my positions in smaller time frame as what I am looking at is much bigger time frame which hundreds to thousands of pips.

In the recent SNB annoucement, I happens to have a lot of USDCHF longs with SL at BE, few particular pending orders of USDCHF long without preset SL is trigger and caused an accumulated -6600pip float but my account survived this impact, in fact my account grown a bit more from many legs of EURUSD short position 1 day after despite the huge damage caused by CHF position that might otherwise blown my account. Graeme used to mention that this method is of very low risk but the potential profit is huge. This method IMO is very inline with Nicholas Nassim Taleb's theory of maximizing the exposure to positive black swans.

I am just sharing my own experience, is there any other millipedist that has a long term success of trading this method?
  • #6,984
  • Jan 18, 2015 1:09pm Jan 18, 2015 1:09pm
I am still not a long term trader of this method but very impressed of it after 3 weeks of trading. Thanks again to Graeme
Attached Image (click to enlarge)
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Have a nice day
  • #6,985
  • Jan 18, 2015 4:08pm Jan 18, 2015 4:08pm
Quoting Clivethien
I have studied the entire thread by master Graeme up his last post, coupled with Fezmar's tsunami method in building legs. The recent months of USD bull is giving me a lot of good legs and my total equity is several times my capital. It will be difficult for traders to start building legs at first, as it could be weeks or months away from reaping the fruits. I always imagine each leg is like planting a seed and let the tree to grow. Some of it will turn bad but eventually I will get a big tree which gives me much more seed/fruit for more development....
Freedom 30?
  • #6,986
  • Jan 19, 2015 9:17am Jan 19, 2015 9:17am
hi,

may i ask, pipEasy talks about entering when price retraces 50%. is it enter on limit order or is it wait for price to retrace more than 50% then enter a stop order when price moves back in our direction?
  • #6,987
  • Jan 23, 2015 7:36am Jan 23, 2015 7:36am
Quoting Clivethien
I have studied the entire thread by master Graeme up his last post, coupled with Fezmar's tsunami method in building legs. The recent months of USD bull is giving me a lot of good legs and my total equity is several times my capital. It will be difficult for traders to start building legs at first, as it could be weeks or months away from reaping the fruits. I always imagine each leg is like planting a seed and let the tree to grow. Some of it will turn bad but eventually I will get a big tree which gives me much more seed/fruit for more development....


good job
  • #6,988
  • Jan 23, 2015 10:06am Jan 23, 2015 10:06am
Quoting Mattrix83
hi, may i ask, pipEasy talks about entering when price retraces 50%. is it enter on limit order or is it wait for price to retrace more than 50% then enter a stop order when price moves back in our direction?
Hi Mattrix83, I am not sure which entry method is Graeme recommending, but usually stop order works better for me. Sometimes I place manual entry, very seldom by limit order. I find more success in building surviving positions by stop order and break out from SnR levels.

Maybe someone else can share their experience too?

It's great to see a lot of people really achieve success from millipede building. This made Graeme's effort worthwhile. Right now I am focusing on major pairs but I am looking forward to try building on indices and commodities.
  • #6,989
  • Jan 23, 2015 11:49am Jan 23, 2015 11:49am
Quoting Clivethien
{quote} Hi Mattrix83, I am not sure which entry method is Graeme recommending, but usually stop order works better for me. Sometimes I place manual entry, very seldom by limit order. I find more success in building surviving positions by stop order and break out from SnR levels. Maybe someone else can share their experience too? It's great to see a lot of people really achieve success from millipede building. This made Graeme's effort worthwhile. Right now I am focusing on major pairs but I am looking forward to try building on indices and commodities....
I think Graeme meant to wait until price retraces to about 50% of the last candle. He said that the best trends with powerful momentum don`t need to retrace very much, perhaps up to 23-38%. He told us to not take retraces bigger than 50%.
Concerning handling the orders it depends on the traders trading behavior - if beeing able to sit in front of the pc almost all the time or beiing often away from it by doing a job or something else. Everyone has to find its own style by adapting it to his daily cycle .....
For me buying/selling in retraces which seem to end have most success. I like 1.2.3-entries where the SL can be set rather tight.
To encourage new readers and those doubting about this millipede method I attach the current screen of my live account.
About 55% growth of my equity in about 3 weeks I never, never had before!.
Thanks again to Graeme and all the others helping to get another sight at trading.
Attached Image (click to enlarge)
Click to Enlarge Name: works.png Size: 108 KB
Have a nice day
  • #6,990
  • Jan 23, 2015 4:49pm Jan 23, 2015 4:49pm
Dear fellow traders,

During the present weeks all pairs are trending hot. I also managed to build tons of legs on these pairs like you did. In fact, I tripled (x2,8) my account in 40 days. However, I am by no means a successful trader, an accomplished millipeder or anything like that. Anyone can add dozens of positions during these periods.

So we should be happy? But what can easily happen is that one month from now price will stuck in a 200-300 pip range for the next 6 months or so. You (we) will lose a lot ofsmall positions during that period. Will you then be happy?

I think the most important point in this method is that you must be able to withstand the bad periods emotionally. The present weeks are very exceptional, keep that in mind. In the bad rangy periods, why dont you post how cheaply you could withstand the stall? Thats probably a greater achievement than the easy position building of these weeks.

Thats just my take. Happy trading!
  • #6,991
  • Jan 24, 2015 5:19am Jan 24, 2015 5:19am
Quoting arifa00000
{quote} good job
Hi arifa00000. your aggressive millipede on trade explorer looks impressive. Just out of curiosity, what entry method(s) are you using? Yes I know the entry method is not the crux of this method, and I am not asking you to give me a chapter and verse of your method. I was just curious as to which entry method you are using, as Graeme outlined quite a few. I have mine that I am still honing (volatility/momentum breakouts) but still have a while to go (practising it) before I can say I am happy and confident to use it as my main entry method. I have trialled the .00 briefly, which is fantastic on runaway trending pairs, but huge drawdowns even in slight ranging periods. Any tips to reduce drawdowns will be highly appreciated. Many thanks
  • #6,992
  • Edited Jan 25, 2015 6:25am Jan 24, 2015 11:54am | Edited Jan 25, 2015 6:25am
Question guys, anybody trades futures with the millipeded method (i.e. will this method work with the futures market in terms of its infinite yield concept, as futures have expiration date I believe)?
  • #6,993
  • Jan 25, 2015 10:16am Jan 25, 2015 10:16am
Quoting Mjolnir17
Dear fellow traders, During the present weeks all pairs are trending hot. I also managed to build tons of legs on these pairs like you did. In fact, I tripled (x2,8) my account in 40 days. However, I am by no means a successful trader, an accomplished millipeder or anything like that. Anyone can add dozens of positions during these periods. So we should be happy? But what can easily happen is that one month from now price will stuck in a 200-300 pip range for the next 6 months or so. You (we) will lose a lot ofsmall positions during that period....
Hi M,
there are always pairs trending, others don`t (Look @ USDJPY ,GBPJPY for example ). Its up to the trader to find the most lucrative ones......
If you are in a pair where price stucks in a 200-300 pips range- ok, that`s enough to get most of the positions to BE.....
Sorry but I have another opinion: The charts look like every other period you choose.....some are strongly trending, some are normally trending and some are in a range. Look for good entries, move stop to BE as fast as possible and reasonable and go away looking for other occasions.
That`s my opinion. Nice trading!
Have a nice day
  • #6,994
  • Jan 25, 2015 10:25am Jan 25, 2015 10:25am
Quoting danjuma
Question guys, anybody trades futures with the millipeded method (i.e. will this method work with the futures market in terms of its infinite yield concept, as futures have expiration date I believe)?
If you are trading via the CME, rather than the futures on your broker, you can rollover from one contract to the next for a fee.

I guess you are trading through a forex broker, in which case I don't think there is a rollover option - certainly their wasn't for my broker.

So when the contract expires, it really ceases to trade
  • #6,995
  • Jan 25, 2015 11:25am Jan 25, 2015 11:25am
Quoting verv
{quote} If you are trading via the CME, rather than the futures on your broker, you can rollover from one contract to the next for a fee. I guess you are trading through a forex broker, in which case I don't think there is a rollover option - certainly their wasn't for my broker. So when the contract expires, it really ceases to trade
Thanks for the response.
  • #6,996
  • Jan 26, 2015 1:59am Jan 26, 2015 1:59am
Hey folks!

I thought I shared my thoughts on this thread. I've read it twice and thought the material presented is priceless.

This is definitely one of the threads on FF that has the biggest impact on my trading.

One thing clear is that no 2 traders will trade the same. Their principles may be similar, but entries, exits position sizing, money management etc will differ from trader to trader.

The key principles that I follow closely from this thread are these

1) Low risk entries - Graeme talks about flying buddha, breakout etc. The smaller the timeframe you drill down into, the tighter your stops and the better your risk to reward. However it comes at the expense of low winning %. You need to find a mode of entry you are comfortable with and stick with it. Personally most of my entries are off the 1&4 hour trading pullbacks and breakouts. These are my low risk entries.

2) Trading both sides of the market - He trades both the long and short side. But for me i choose to stay with the trend only. Thus i trade from one side of the market only.

3) Diversification - I guess this aspect is what makes most traders confused. Where to exit and diversify away? Exit is very important as eventually you need to realized your profits. To replenish capital from your losing trades. How do you exit is entirely up to you. Some could use moving average, trailing with previous bar high/lows etc
For me i use moving average to trail my stops and exit when price trades beyond it.

4) Money management - this style of trading has low winning %. Thus each trade you put on needs to be a fraction of your equity. Graeme recommends 0.1 lot per 5k account. For me i choose to risk no more than 1% a trade. Again it works well for me, and the principle is the same. Risk a fraction of your equity.

5) Identify the weakest/strongest market - If you read through, i believe graeme would prefer trading the strongest or weakest markets. This is because his legs have a greater chance of surviving compared to trading a choppy one. Similar theme from Peter Crowns as well from the 'inside bar' thread.

In essence the gist is this, you will incur cost to establish your positions. However your cost of establishing these positions must be lower than your profits, if not it will be a losing proposition.

Below are my current open positions and the cost of establishing them is about 15% of my initial equity. If i were to close all of them now, i'm looking at >100% return on my initial equity.

Attached Image (click to enlarge)
Click to Enlarge Name: pnl.png Size: 107 KB


Feel free to ask any question, i'll be glad to help.

fartist
Whether you can or you can't, you are both right.
  • #6,997
  • Jan 26, 2015 8:41am Jan 26, 2015 8:41am
Hi Fartist,

You said you use moving average to trail my stops and exit when price trades beyond it.

What MA's and timeframe do you use for this?

Regards,
EZ
  • #6,998
  • Jan 26, 2015 10:13am Jan 26, 2015 10:13am
Quoting fartist
Hey folks! I thought I shared my thoughts on this thread. I've read it twice and thought the material presented is priceless. This is definitely one of the threads on FF that has the biggest impact on my trading. One thing clear is that no 2 traders will trade the same. Their principles may be similar, but entries, exits position sizing, money management etc will differ from trader to trader. The key principles that I follow closely from this thread are these 1) Low risk entries - Graeme talks about flying buddha, breakout etc. The smaller the timeframe...
wonderul work, I wish I was paying attention to oil a few months ago
  • #6,999
  • Jan 26, 2015 10:23am Jan 26, 2015 10:23am
Quoting ezcurrency
Hi Fartist, You said you use moving average to trail my stops and exit when price trades beyond it. What MA's and timeframe do you use for this? Regards, EZ
Hi ez,

I typically enter on the 1&4 hour time frames.

the 2 moving average i use are the 20&50 EMA. I just happen to find them useful and no reason why.

fartist
Whether you can or you can't, you are both right.
  • #7,000
  • Jan 26, 2015 10:24am Jan 26, 2015 10:24am
Quoting verv
{quote} wonderul work, I wish I was paying attention to oil a few months ago
Hi verv,

thank you for your kind words, let me know if there's anything i can help with.

fartist
Whether you can or you can't, you are both right.
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