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Building an equity millipede

  • #7,021
  • Feb 19, 2015 7:43am Feb 19, 2015 7:43am
Quoting Mattrix83
would like to ask, and if someone may answer ... In the thread G mentioned about longing when price close above the open of the candle. However he also speak sbout buying at the wick of the candles. Is he referring to longing above the open but we zoom down to lower timeframe to try to enter at the wicks?
I think that's two separate entry methods he's talking about. Early on he described getting in at the daily open in line with the trend. Later he spoke of smaller TF 'laser' entry methods (flying Buddha, inside bar). The latter will get you in on the wicks of the daily bars.
  • #7,022
  • Feb 19, 2015 8:15am Feb 19, 2015 8:15am
Quoting hollowhead
{quote} I think that's two separate entry methods he's talking about. Early on he described getting in at the daily open in line with the trend. Later he spoke of smaller TF 'laser' entry methods (flying Buddha, inside bar). The latter will get you in on the wicks of the daily bars.
Thanks bro. I m still reading halfway. Will start to come up with a plan later on
  • #7,023
  • Mar 6, 2015 10:08am Mar 6, 2015 10:08am
Hi everyone.
I first read about the 15 jan 2015. I started to trade it around jan 20.
I traded for a number of years, and although my losses got smaller over time, The equity curve gradually went downhill.
When I started to trade this method, I was more or less fed up with FX, but decided to give the method a try, as i had nothing to lose.

I am now ( at the moment of writing this post)
+750pips
+492pips
+497pips
+346pips
+322pips
on a number of Eurusd trades.
I started with a small account, and a little shocked by the results and the growth in the account.
The most difficult part was taking the small losses over and over, but in the end it was worth it.
  • #7,024
  • Mar 6, 2015 10:23am Mar 6, 2015 10:23am
I forgot to post the chart
Attached Image (click to enlarge)
Click to Enlarge Name: Image1.png Size: 25 KB
  • #7,025
  • Mar 9, 2015 9:10pm Mar 9, 2015 9:10pm
Quoting scalpz
{quote} Oh yea Very nice P/L figures, so of course that's not banked. But have got over the 50% ROI in 3 months. Check UJ chart from early Oct and the EU chart from mid Oct. Regrettably I have not been setting my trades regularly (with the hindsight indicator). I am setting my trades based on fundamentals, so UJ up and EU down. Would have liked to also be selling AU and/or buying GJ. But have to watch the increasing Margin. I do not calc my Margin Level (%) against the growing Equity as per crapT4, I calc it against my Balance. If there starts...
Still not banked, so all P/L. Makes nice equity levels.
Have been adding more EU sells than UJ buys. Must have been that big UJ retrace and pennant.
All trades now positive, must be time to get some more trades in but feels like I have 2 tigers by the tails.
Now carrying around 235% ROI over the 6 months.

Time to pull in some SL levels closer for a trade from each of the many groups of 5 or 6.
Then if/when prices retraces again, its "give me my money" for part of the legs.
Not keen on just closing parts of legs at market, in case they immediately continue on.
I think a closer trailing SL for what will be about 20% of a leg will thin out the leg on the next reasonable retrace.
Mmmm thinking - Theoretically could replace some of the later individual trades if/as price continues again in original direction. Cause the gaps in my legs show easily on the charts.

So glad I didn't play with buying GJ
Selling AU would have been interesting. The Jan profit could have easily carried through the rough Feb. March would be icing and still holding.
Got enough to watch with my live EU & UJ.

More convinced than ever to keep calculating my margin against my balance and not equity. Doesn't look good when retraces cause margin level % to crash.
Will have to write myself a little indicator to display it on the charts.
A bit like the 1 I have to get around to for working out my .5%-3% risk level. Currently using excel to work out lot size based on SL risking .5%-3% of balance.
Works for EU, but the UJ (all pairs not xxxUSD) should have an extra move in it. Too lazy to nut it out properly yet.
Anybody got a copy of LTG Goldrocks lot size tool ?


cheers scalpz
Target 2 : Stoploss in the green
  • #7,026
  • Mar 17, 2015 5:16pm Mar 17, 2015 5:16pm
Awesome methodology, something I think I'll play with over the coming months with my own little tweaks and such.

I've started running it, so to speak, on just two pairs -- EUR/USD short and USD/JPY long.

Unfortunately, I'm coming to these games a little late in their respective moves (oh, were I to have entered and held USD/JPY from 103 or so and built on the move ... oh, well; similarly, were I to have held EUR/USD short from 1.4 ... .) But no, I had to go in and out and in and out .... . Not that I haven't made money that way, but I frankly think I missed a lot of the movement, particularly in EUR/USD, which had a tendency to drop and then roll sideways, drop and roll sideways ... , making it difficult to get in on bounces ... .

Unfortunately, USD/JPY seems to have been going sideways for several weeks; I'd prefer not bunching up all my entries within a fairly narrow range, so some care needs to be taken with respect to additions, although it's rangeyness makes it easier to peel off the most at-risk legs as you go, lock in a little profit, and then hold on to the legs that are in the green.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #7,027
  • Mar 17, 2015 5:27pm Mar 17, 2015 5:27pm
Quoting ZebraSquirl
Awesome methodology, something I think I'll play with over the coming months with my own little tweaks and such. I've started running it, so to speak, on just two pairs -- EUR/USD short and USD/JPY long. Unfortunately, I'm coming to these games a little late in their respective moves (oh, were I to have entered and held USD/JPY from 103 or so and built on the move ... oh, well; similarly, were I to have held EUR/USD short from 1.4 ... .) But no, I had to go in and out and in and out .... . Not that I haven't made money that way, but I frankly think...
With EUR/USD, I'm targeting parity -- quite frankly just to have a target there ... . Who knows where that party will stop ... .

With USD/JPY, I'm targeting 123.50 for now, which frankly isn't that ambitious, but it just seems to be awfully hesitant in clearing 122, so who the hell knows.

The other major I'm keeping an eye on is GBP/USD. Currently it is in a protracted downtrend, but I'm waiting for it to turn around if the BOE starts to tighten ... . Naturally, this could be weeks or months away, but we could also reach a bottom in the next 500-750 pips or so (I'll know it when I see it; all this Carney talk about tightening has me skittish to go short ... ).

And if GBP/USD does turn around, it is possible that the ordinarily mundane and slow moving EUR/GBP might become attractive as a candidate for this method (although, again, I missed a lot of the move already ... ).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #7,028
  • Mar 17, 2015 9:23pm Mar 17, 2015 9:23pm
As far as entries are concerned, I've traditionally used Fib levels for the previous day's high/lo (from the .764 for shorts; .236 for longs), but it may be more productive to use one of the MT4 scripts I've got to measure the average length of a ZigZag over a preceding number of Zigs and Zags ... .

Here's a script written by Hayseed that shows the ZigZag's average length over a set number of Zig's and Zag's:

Attached File(s)
File Type: mq4 quick zigzag script.mq4   2 KB | 492 downloads


Attach it to your chart and it'll show you (in the upper left-hand corner of your MT4 chart) the average length of a ZigZag. This could be a good guide to figuring out where you should place an entry, although you'll have to calculate that manually from the last ZigZag pivot.

For example, here's the 1H GBP/USD with the Quick ZigZag Script attached to it. In the upper left-hand corner, you'll see that the average ZigZag retrace for the previous 12 Zig and Zag's is 111 pips:

Attached Image (click to enlarge)
Click to Enlarge Name: GBP:USD 1H.jpg Size: 757 KB


Assuming that the last pivot (at 1.4723) doesn't repaint and using the average retrace length of 111 pips, you would fashion an entry order to sell at 1.4723 + a percentage of the 111 pip average retrace ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #7,029
  • Mar 17, 2015 9:31pm Mar 17, 2015 9:31pm
Quoting scalpz
{quote} Still not banked, so all P/L. Makes nice equity levels. Have been adding more EU sells than UJ buys. Must have been that big UJ retrace and pennant. All trades now positive, must be time to get some more trades in but feels like I have 2 tigers by the tails. Now carrying around 235% ROI over the 6 months. Time to pull in some SL levels closer for a trade from each of the many groups of 5 or 6. Then if/when prices retraces again, its "give me my money" for part of the legs. Not keen on just closing parts of legs at market, in...
So, can you give me an example of the lot size you'd use for legs if you had $10,000 equity ... . I tend to figure my lot sizes as a factor of equity (e.g., .25 x equity) as opposed to the potential loss I would experience were price to move x number of pips against the position.

My brain would begin to hurt if I had to calculate lot sizes based on percentage-of-equity risk ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #7,030
  • Mar 17, 2015 11:13pm Mar 17, 2015 11:13pm
Quoting ZebraSquirl
{quote} So, can you give me an example of the lot size you'd use for legs if you had $10,000 equity ... . I tend to figure my lot sizes as a factor of equity (e.g., .25 x equity) as opposed to the potential loss I would experience were price to move x number of pips against the position. My brain would begin to hurt if I had to calculate lot sizes based on percentage-of-equity risk ... .
I use my balance figure, so at $10,000 balance, sticking to my 1% of that at risk at any 1 time, makes $100 max at risk.
That would be over 2 trades, say 1st trade SL of 33 pips, plus 2nd trade SL of 66 pips by the time I place it. Assuming sells on EU, mine would be 0.1 lot each trade.
I don't place 3rd trade until 1st is able to have SL at BE. That frees up some of the "1% risk" for the 3rd trade. Same 0.1 lot size.

If a SL hit would hurt too much, or you worry about SL's open over night/ open over weekend, trade smaller lot size.
I took a break after 5 trades were loaded, but that was just me pausing. Then started my 2nd group of 5 then pause again then 3rd group of 5 etc.

Not sure on the GBP pairs, they have elections coming up, still reeling from Scotland Independence turmoil, Their financial markets highchair just got a reprieve from some EU court ruling... Just too much for my head

I'm having a look at EUSTX50 for a long term millipede trade. All this Euro QE should push it up for some time. Holding off for a little better retrace, and FOMC tomorrow may just shake the markets enough. I know its a CFD, so there is no "other" currency to help move things. Maybe use 0.5% risk.

cheers scalpz
Target 2 : Stoploss in the green
  • #7,031
  • Mar 18, 2015 12:48am Mar 18, 2015 12:48am
Quoting scalpz
{quote} I use my balance figure, so at $10,000 balance, sticking to my 1% of that at risk at any 1 time, makes $100 max at risk. That would be over 2 trades, say 1st trade SL of 33 pips, plus 2nd trade SL of 66 pips by the time I place it. Assuming sells on EU, mine would be 0.1 lot each trade. I don't place 3rd trade until 1st is able to have SL at BE. That frees up some of the "1% risk" for the 3rd trade. Same 0.1 lot size. If a SL hit would hurt too much, or you worry about SL's open over night/ open over weekend, trade smaller lot size. I took...
Thanks tons. As with all methodologies, best to start small and work up to what you're comfortable with ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #7,032
  • Mar 20, 2015 7:35pm Mar 20, 2015 7:35pm
Probably not the best week to start out trying to work into a millepede with EUR/USD short ... .

On the other hand, the bounce experienced here in all likelihood will allow for the addition of a good leg or two at better prices than what I've got on the line now (which is some distance below current price; hey, had to play through FOMC on the chance that EUR/USD could implode further; not sure what the net value of these legs is; broker is down for maintenance; I do know that the color of the pips for the net position is red ... ).

Because I'm subject to FIFO, I will probably peel off the first leg and the second leg for the net value of those two legs together + 20 pips, thus locking in a little bit of profit, while reducing the size of the position and keeping some legs that were entered at a more favorable price ... . The alternative is (a) to never add a leg above legs you've already entered or (b) to add legs only when price strikes a value below all of your current legs ... . I don't like either of those choices really if you're entering a trend mid-stream (which is likely to be the case a lot of the time; hard to catch a trend exactly at or very near the point it starts ... .)

Ideally, I don't want to necessarily peel stuff off as opposed to just letting it run (defeats the whole purpose of the thing), but my thinking is that the legs should be quite small in size -- on the order of .20 times equity, and I may have started out with larger lot sizes than ideal for being able to carry more than 5 open legs at a time without getting unduly nervous. Naturally, it is less nerve-wracking when price moves somewhat beyond the net value of your legs, such that you can place an SL with enough breathing room for the millipede to crawl properly, but when you're just starting out to form the millipede, price may, in the short term, move against your position even though you're correct in calling the longer-term trend ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #7,033
  • Mar 22, 2015 3:21pm Mar 22, 2015 3:21pm
Waiting on a setup for a good GBP/USD long millipede ... .

Here's the weekly chart ... . What I've done is drill out to the monthly, draw Fib lines from the high to the low, then drawn a Fib line from the .5 to the zero, etc. to subdivide the historical price into sectors. I don't necessarily put a great deal of weight on Fib lines in general, but this process does help me visualize where price is at in terms of significant highs and lows and to see whether there has been a tendency of other traders/algos to use particular Fib levels as S/R:

Attached Image (click to enlarge)
Click to Enlarge Name: GBP:USD Weekly.jpg Size: 604 KB


Right now we're between the .236 and the 0 line for the pair for the line drawn from the 6/2001 low to the 11/2007 high. A level that sticks out to me is the one outlined by the blue box, which appears to be a double bottom of sorts. Other than that, looks like a good deal of air below here and the "0" line.

In any event, what I'm looking for to start assembling a long is for price to start bottoming out at somewhere above the Monthly 0 line at 1.3674 but below the Monthly .236 line. This will naturally occur on shorter time frames before it occurs on the larger ones, but I can't see any evidence of that occurring yet on Daily or above (I use price in relationship to EMA's as a guide, as well as EMA crosses). There is a lot of noise below the 4H time frame, most of it caused by FOMC.

It's also possible we could see good long, multi-week millipede set ups in other Cable crosses, like GBP/JPY in the coming weeks and months ... . Not there yet, though.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #7,034
  • Mar 22, 2015 7:52pm Mar 22, 2015 7:52pm
I've considered setting up a USD/JPY long millipede, but it looks to me that this won't be that productive in the short term unless it's merely to grab the pippage between here and 121.50-122 and run ... :

Attached Image (click to enlarge)
Click to Enlarge Name: UJ 1H.jpg Size: 606 KB


That would be a lot of goofing around for 150-200 pips ... . On the other hand, 150-200 pips is 150-200 pips ... .

In the grander, longer-term scale of things, the pair has plenty of room to run assuming that certain fundamentals remain in place (i.e., Greenback strength and Yen weakness):

Attached Image (click to enlarge)
Click to Enlarge Name: UJ Monthly.jpg Size: 648 KB


I've read of varying targets for the pair, the nearest of which is 123.5-ish (6/2007 high), so I might be wrong about the limitations of this pair to the topside ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #7,035
  • Mar 22, 2015 8:08pm Mar 22, 2015 8:08pm
Quoting ZebraSquirl
I've considered setting up a USD/JPY long millipede, but it looks to me that this won't be that productive in the short term unless it's merely to grab the pippage between here and 121.50-122 and run ... : {image} That would be a lot of goofing around for 150-200 pips ... . On the other hand, 150-200 pips is 150-200 pips ... . In the grander, longer-term scale of things, the pair has plenty of room to run assuming that certain fundamentals remain in place (i.e., Greenback strength and Yen weakness): {image} I've read of varying targets for the pair,...
USD JPY long millipede ? Should be setting up the opposite on that pair, it'll probably go back to 105-110 levels over next years. Maybe have a spike to 124 before then...
  • #7,036
  • Mar 22, 2015 8:20pm Mar 22, 2015 8:20pm
Quoting Ck87
{quote} USD JPY long millipede ? Should be setting up the opposite on that pair, it'll probably go back to 105-110 levels over next years. Maybe have a spike to 124 before then...
Yeah, it's not one of my faves to go with ... . A long doesn't have that much room to run in my mind, so I would agree with you there. Plus, it tends to doink around at given levels, seemingly for weeks at a time before moving anywhere ... . Remember 110? Screwed around at that level for eons (it seemed like).

Just kind of thinking aloud, I guess ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #7,037
  • Mar 22, 2015 8:23pm Mar 22, 2015 8:23pm
Quoting ZebraSquirl
{quote} Yeah, it's not one of my faves to go with ... . A long doesn't have that much room to run in my mind, so I would agree with you there. Plus, it tends to doink around at given levels, seemingly for weeks at a time before moving anywhere ... . Remember 110? Screwed around at that level for eons (it seemed like). Just kind of thinking aloud, I guess ... .
Also, just plain ass hesitant to short the Greenback ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #7,038
  • Mar 22, 2015 9:33pm Mar 22, 2015 9:33pm
Quoting ZebraSquirl
{quote} Also, just plain ass hesitant to short the Greenback ... .
Yes, it's dangerous, super strong trend, but it seems like it may be time to start doing that on retracements..... EURO might not fall any further than it has for months and months now.... if you want a millipede long USD vs a currency, I'd go with GBP. It can fall to low 1.4's (maybe 1.42) in coming months, who knows, wish you well.
  • #7,039
  • Mar 22, 2015 9:37pm Mar 22, 2015 9:37pm
Quoting Ck87
{quote} Yes, it's dangerous, super strong trend, but it seems like it may be time to start doing that on retracements..... EURO might not fall any further than it has for months and months now.... if you want a millipede long USD vs a currency, I'd go with GBP. It can fall to low 1.4's (maybe 1.42) in coming months, who knows, wish you well.
Thanks tons!
Fireworks are fun ... as long as you don't blow your fingers off.
  • #7,040
  • Apr 9, 2015 5:53pm Apr 9, 2015 5:53pm
Finally, got a decent set of entries for a EUR/USD short millipede:

Attached Image


Right now, though, it is unclear as to how much room the pair has to run. My TP is at 1.0510 and, given the rip today, that's not that far below. Pre-FOMC, lot of folks were talking parity; now, I'm not so sure.

I'll naturally move it out of the way if it looks like that might be productive ... . We're basically at pre-FOMC levels now, so I'm hoping for a bounce to add.
Fireworks are fun ... as long as you don't blow your fingers off.
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