Disliked{quote} Well this does seem to be going off at a tangent. I'm still not entirely sure that we're on the same song sheet (account currencies, crosses etc) but from your first reply, I can assume that he is trading over 100 / pip on this strategy. In which case, I doff my hat to you, Mr Packham!Ignored
Trading is as simple as ABCD
{quote} Yes, but that fact would make the whole strategy sensless for trader with a smaler account, because with the many often out at BE the profits are very very very small.
Of course, it will occasionally happen that, when he moves his stop loss to break even, price will come back and hit him out, before carrying on in his original trade direction. Those are frustrating trades, but frustrating trades are unavoidable with any system.
I might add that Clive's standard risk per trade is quite high by most traders' standards. As I understand it, he risks 1% per pip, and has a stop loss distance of 10 pips on a trade, which means he is risking 10% per trade. The "commonly advised" amount to risk per trade is 1-2%. Clive might have reduced this risk since I last read a post of his about it, but in the end, the amount that Clive is risking is up to him. You can choose your own amount. With a smaller risk per trade, you will end up with smaller potential profits, whilst also ensuring smaller drawdowns/losses.
The success of this strategy isn't dependent upon the amount you are willing to risk per trade. Well, it might be
Reckless money management can destroy any potentially successful system. If you risk 50% of your account per trade, you will probably find yourself running down your account very quickly. Not least because 1 loss will result in a 50% drawdown. There is also the fact that it takes more wins to overcome each loss, the more of an account you risk per trade.For example, assume 1:1 reward:risk ratio:
Risk 50% per trade -> 1 loss = 0.5 of original account -> 1 win multiplies account by 1.5 -> it takes 1.71 wins to make up for a loss (0.5*1.5^1.71≈1)
Risk 10% per trade -> 1 loss = 0.9 of original account -> 1 win multiplies account by 1.1 -> it takes 1.11 wins to make up for a loss (0.9*1.11^1.1≈1)
Risk 1% per trade -> 1 loss = 0.99 of original account -> 1 win multiplies account by 1.01 -> it takes 1.01 wins to make up for a loss (0.99*1.01^1.01≈1)
Please correct me if I've made any mistakes.
Anyway, I've digressed a bit here on money management. I hope some people found it useful.
The most relevant point to the discussion is that I am pretty sure that Clive doesn't make his profits from break even trades. The vast majority of his profits come from trades which move in the right direction, he moves his SL to break even, but this break even SL isn't even tested, because price simply continues in the trade direction.
- #4,683
- Mar 31, 2015 2:23pm Mar 31, 2015 2:23pm
{quote} Well I can't speak for Clive, but I'm pretty sure he doesn't make his profits by break even trades. On the contrary, the break even trades are purely to protect him from losses. His aim is that he will occasionally catch nice big runners, or at least 10 or so pips, when price goes and keeps going, without hitting him out at break even. Of course, it will occasionally happen that, when he moves his stop loss to break even, price will come back and hit him out, before carrying on in his original trade direction. Those are frustrating trades,...
Somebody knows his R:R? 1:1?
- #4,684
- Mar 31, 2015 3:12pm Mar 31, 2015 3:12pm
- Joined Nov 2010 | Status: Trader | 4,484 Posts
Hi Guys
Just got in and having a quick catch up on thread and I see I've missed quite a conversation here...
I'm afraid to say I'm not trading with a "live" account sorry if I disappoint but I've never tried to deceive anyone here but its just a demo I'm afraid.
Sorry guys if you thought otherwise...
I'm only trading demo for 2 main reasons , the first being I've absolutely no money available to trade , I'm just about keeping my head above water at home.
Secondly I'm still formulating my strategy and still feel I've some issues with my discipline and exits to sort out. I'm not yet 100% happy with my strategy...
But don't worry the new jobs going well and I'm hoping to fund a live account very soon, once I've sorted all the home bills out and I'm 100% happy with my strategy...
Apologies to anyone who feels let down but be patient it won't be long before I'm trading with real money I promise you...
Just got in and having a quick catch up on thread and I see I've missed quite a conversation here...
I'm afraid to say I'm not trading with a "live" account sorry if I disappoint but I've never tried to deceive anyone here but its just a demo I'm afraid.
Sorry guys if you thought otherwise...
I'm only trading demo for 2 main reasons , the first being I've absolutely no money available to trade , I'm just about keeping my head above water at home.
Secondly I'm still formulating my strategy and still feel I've some issues with my discipline and exits to sort out. I'm not yet 100% happy with my strategy...
But don't worry the new jobs going well and I'm hoping to fund a live account very soon, once I've sorted all the home bills out and I'm 100% happy with my strategy...
Apologies to anyone who feels let down but be patient it won't be long before I'm trading with real money I promise you...
Feel the Fear and do it anyway!!!
- #4,685
- Mar 31, 2015 3:21pm Mar 31, 2015 3:21pm
Hi Guys Just got in and having a quick catch up on thread and I see I've missed quite a conversation here... I'm afraid to say I'm not trading with a "live" account sorry if I disappoint but I've never tried to deceive anyone here but its just a demo I'm afraid. Sorry guys if you thought otherwise...
We are greatful to have you here around and that you share your strategy with and help us.
- #4,686
- Mar 31, 2015 3:56pm Mar 31, 2015 3:56pm
- Joined Nov 2014 | Status: Trader | 1,300 Posts
I'm afraid to say I'm not trading with a "live" account sorry if I disappoint but I've never tried to deceive anyone here but its just a demo I'm afraid. Sorry guys if you thought otherwise...
Still, it has led on to an interesting area of discussion regarding money management
- #4,687
- Mar 31, 2015 4:32pm Mar 31, 2015 4:32pm
- Joined Nov 2010 | Status: Trader | 4,484 Posts
{quote} No disappointment from my side. Your candidness was one of the 2 reasons I started to read your thread. Still, it has led on to an interesting area of discussion regarding money management
Yes it has and its a major part of any strategy and mine is pretty simple, at the moment I'm using 1% across 10 pips and use a 20 pip stop initially so maximium risk per trade is 2% however I'm looking to close out around 10 pips as I'm taking trades within 10 pips of a good level so if I see a close across that level I'm out. I have 20 as an emergency against any crazy sudden moves... But vast majority of time as soon as I see my level broken I'm out....
I also use 1% of outstanding balance so can put up with a lot of losses in a row before I'm in trouble, in fact it is impossible to blow an account with money mangement like this as you could lose every trade for the rest of your life and still have some money left, however would like to think after say 10 to 20 losers in a row one might pause to think through their strategy again...
I will say it is my intention when I'm happy with my strategy to go back to something like 5% across my 20 as its practically impossible to blow it as long as you use the "outstanding balance" for your calculation....And of course if you suffer say 10 losers in a row then re-examine your strategy..I don't think I ever suffer more than 3 losers in a row ever nowadays...In fact I'm thinking of making that a golden rule 3 losers and out for the day....Baseball rules " 3 strikes and out"
As for my RR well I'm always aiming for more than 1:2 if I can and a lot more wherever possible as I beleive the secret of succesful traders is bigger winners than your losers and if possible a lot bigger. However its the market that determines that not me I'm afraid so I just take as much as I can from each move...Of course trading with strong trenders helps there and also getting in as early in the move as possible say first 2 CCI signals only..
The other area I'm working on to help achieve these bigger RR's is trading higher timeframe signals but entering on the 1 min charts, like my EURUSD trade setup by my friend cuchuflito with his hrly first LH... Entering on 1 min and holding on hrly, daily charts....
Back to money management for a moment as the other thing I'm keen to do is control my losers to as small as possible say 5 pips then 10 pip winners become 1:2RR and 20 pip winners become 1:4RR... Looking to trust the CCI signal and place stop above last high/low of the CCI signal...I'm also looking for safe entry areas with tight stops behind key levels..
One last thing I'm thinking is to take every CCI signal in a strong trender under a sloping 100lwma rather than try to pick our winners... might get a 50/50 hit rate but with a good RR will run out a winner at end of the day... Have a look at my next post regarding entries and the risk to see what I'm talking about...
Like I've said above my strategy is not yet complete and all of the above are in the melting pot waiting to see what comes to the top.....
Feel the Fear and do it anyway!!!
- #4,688
- Mar 31, 2015 4:53pm Mar 31, 2015 4:53pm
- Joined Nov 2008 | Status: Trader | 2,141 Posts
Talking about MM:
R should be your clearly defined Risk, $ risk not pips, pips don´t buy food, money does.
So R is the money you would loose if your stop is hit...regardless if your stop is 5 pips, or 100...cause you adjust your units size accordingly...remember you are free of lots.
Open a real account with 100 EUROS (or US..etc..)
Check this little game:
(OANDA only, cause you need to trade free of lots!!!!!) They are not my friends....but nobody else as far as I know let´s you trade UNITS...NOT LOTS!!!!
INITIAL CAPITAL: 10 EUROS.(yes, 10 lousy EUROS....)
RISK 10 % on every trade.yes 10 % ...that´s 1 lousy EURO.
Compound both ways...(loose or win, meaning if you loose you risk again 10% of what´s left...)
With Oanda, if you loose say 70% of the 10 EUROS, you can still risk 30 cents... 30 lousy cents.
If your edge produces an expectancy of 0,30...meaning you earn, on average, 30 cents per Euro risked.
THEN: you should at least double your capital every month, (averaging 2 trades a day.)
1 lousy Euro : doubling every month, makes:
4096 EUROS after 12 months
AND: about 16 million in 24 months.
The math works, provided your expectancy is positive.The better your expectancy, the sooner you will be inviting Warren (Buffet), for lunch....and taking Clive along with you...
PS: just try to double 1 Euro, in a week, a month or a year, CONSISTENTLY....and you will be rich...
R should be your clearly defined Risk, $ risk not pips, pips don´t buy food, money does.
So R is the money you would loose if your stop is hit...regardless if your stop is 5 pips, or 100...cause you adjust your units size accordingly...remember you are free of lots.
Open a real account with 100 EUROS (or US..etc..)
Check this little game:
(OANDA only, cause you need to trade free of lots!!!!!) They are not my friends....but nobody else as far as I know let´s you trade UNITS...NOT LOTS!!!!
INITIAL CAPITAL: 10 EUROS.(yes, 10 lousy EUROS....)
RISK 10 % on every trade.yes 10 % ...that´s 1 lousy EURO.
Compound both ways...(loose or win, meaning if you loose you risk again 10% of what´s left...)
With Oanda, if you loose say 70% of the 10 EUROS, you can still risk 30 cents... 30 lousy cents.
If your edge produces an expectancy of 0,30...meaning you earn, on average, 30 cents per Euro risked.
THEN: you should at least double your capital every month, (averaging 2 trades a day.)
1 lousy Euro : doubling every month, makes:
4096 EUROS after 12 months
AND: about 16 million in 24 months.
The math works, provided your expectancy is positive.The better your expectancy, the sooner you will be inviting Warren (Buffet), for lunch....and taking Clive along with you...
PS: just try to double 1 Euro, in a week, a month or a year, CONSISTENTLY....and you will be rich...
- #4,689
- Mar 31, 2015 5:42pm Mar 31, 2015 5:42pm
- Joined Nov 2014 | Status: Trader | 1,300 Posts
A couple of good money management articles that were posted up on another thread:
(need a little adjustment for forex, but the material is good)
(need a little adjustment for forex, but the material is good)
- #4,690
- Edited 5:56pm Mar 31, 2015 5:43pm | Edited 5:56pm
- Joined Nov 2010 | Status: Trader | 4,484 Posts
Can you exaplin your entries ? I cant understand it still... {image}
Hi Mariodrugs
I will try to explain my entries for you from this chart below. Remember I'm referencing the previous CCI signal against the one I'm trading to see if the market structure is holding up and of course ensure you're trading a strong trender with the 100lwma sloping nicely and if possible price clearly below it for a downtrend or clearly above it for an uptrend...
when I'm comparing my CCI signals I consider a wave to be when the CCI is one colour so an up wave is when the CCI is green, I want to see red CCI before I assume the up wave is over, so when looking at chart below remember a green wave can have a dip in it but as long as it stays green then I still consider it the same up wave.
Lets look at these signals one at a time and see whats what...
- This is one that you asked about well its a non qualifier as it wouldn't hit my 2 pip pending order so no trade.
- I would consider this the same wave as signal 1 as the CCI hasn't gone under the zero line yet or turned red so the same wave. Referencing it against the previous wave up its slightly higher so a HH so for that reason not a qualifier. However I do like the 100lwma kiss trades so might consider it and it works either way.
- Now this is an out and out HH so does not qualify plus its above the 100lwma so a no go.
- Now referencing back to signal 3 this is clearly a LH, so confirmation that the down trend has resumed, also back under the 100lwma but the CCI doesn't quite go overbought (+100). however its clearly at a key level and touching the 100lwma so I might be tempted even though its not over the +100 level on CCI. Remember its the waves we want to trade and this is clearly top of a wave. A winner and runs about 17 pips...
- Great signal this, a LH at a key level and a great CCI overbought signal so I would definately hit this... But its a loser I'm afraid, shit happens nothings gauranteed. Interesting enough it doesn't hit a 10 pip stop or close above my key level so might survive my 10 pip stop rule and then go on to win.
- This is the same up wave as signal 5 (no move below zero line) its basically an extended pullback to a key level again and referencing back to previous upwave signal 3 or 4 its a LH so tradable and I would definitely trade it. Winner and runs 25 pips..
- Definately a LH compared to wave 6 so tradable. Winner runs 15 pips.
- Another LH compared to wave 7 and at a key level so tradable but a loser...10 pip loser but again doesn't close 10 pips down so might survive my 10 pip stop rule, but difficult to say for sure as didn't trade it live...
- Still part of wave 7 another extended pullback to a key level and lower than our last up wave 7 so tradable and a winner runs 22 pips..
Now I'm not saying take all these entries as I am a firm believer in just taking the first 2 or 3 signals in a move as the later ones have a tendency to fail more often than not, but hopefully that helps you to understand my entries a little better . I'm afraid I don't trade by hard and fast rules but if I did they'd be something like this for selling and obviously the opposite for buying...
So to sell...
- Market opens only first 4 hours max.
- Strong trender with steep sloping 100lwma and price clearly below or touching it.
- CCI must be overbought (+100) and turning back down.
- Reference last wave up(CCI+100 signal) and the one you're trading must be either level with it (a double top) or lower than it( a lower high).
- Signal candle is the first candle back with the trend so for selling a red candle after the first shorter green CCI candle.
- Entry is place a pending sell stop 2 pips below the signal candle. ( i normally have a sell stop sitting nearby and just drag it into place) or use the new trailing entry EA kindly denoted by Katktrader.
- Once hit move to BE quickly usually within 3 pips or just after retest..
- Exit is up to you but I'm closing soon as I see price falter at point D.
Generally I'd say remember we are selling wave tops in a downtrend and buying wave bottoms in an uptrend so very important to reference those CCI signals that signify the waves... Remember a wave has to go below zero to define an end to that wave. Eg a wave up , all green CCIs will have to drop down below zero line and go red to define end of wave up.
Not guaranteed to win every time by a long shot but with small losers and bigger winners you will have a winning strategy for sure. Like I was saying in post above maybe we should take every qualifying CCI signal rather than try to pick the best...with tight stops..
Feel the Fear and do it anyway!!!
- #4,692
- Mar 31, 2015 6:27pm Mar 31, 2015 6:27pm
- Joined Nov 2014 | Status: Trader | 1,300 Posts
{quote} Hi Mariodrugs I will try to explain my entries for you from this chart below. Remember I'm referencing the previous CCI signal against the one I'm trading to see if the market structure is holding up and of course ensure you're trading a strong trender with the 100lwma sloping nicely and if possible price clearly below it for a downtrend or clearly above it for an uptrend... when I'm comparing my CCI signals I consider a wave to be when the CCI is one colour so an up wave is when the CCI is green, I want to see red CCI before I assume the...
i.e. it wouldn't have been appearing on your TTindy as having >30 until that point.
Your trend definition is actually proving to be a good benchmark for the M1
- #4,693
- Mar 31, 2015 7:32pm Mar 31, 2015 7:32pm
- Joined Nov 2010 | Status: Trader | 4,484 Posts
{quote} Just an observation: using your >30 threshold for a trend, the EURUSD didn't really become tradeable until 7-8-9 i.e. it wouldn't have been appearing on your TTindy as having >30 until that point. {image} Your trend definition is actually proving to be a good benchmark for the M1
heres an idea for you if you fancy coding it up, based on my referencing one CCI to the previous one and buying HL's DB's and selling LH's DT's. Lets forget about the 100lwma for a minute, although it could be a filter, but how about having an arrow signal which CCI signals to buy or sell based on just that, the market structure by referencing one to the other??? Then you could have say 8 charts open the top trenders or biggest daily movers and when it alerts go and have a look to see if you like it or not???
leave that one with you but could be interesting...
Feel the Fear and do it anyway!!!
- #4,694
- Mar 31, 2015 7:50pm Mar 31, 2015 7:50pm
- Joined Nov 2010 | Status: Trader | 4,484 Posts
{quote} Just an observation: using your >30 threshold for a trend, the EURUSD didn't really become tradeable until 7-8-9 i.e. it wouldn't have been appearing on your TTindy as having >30 until that point. {image} Your trend definition is actually proving to be a good benchmark for the M1
Can't be a bad way to trade when you think how many times the CCI signals in a day... How about having an alert that just tellss us whenevr a CCI goes overbought or sold on our top movers and then we just have a look and if we fancy it risk 5 pips to see what we get???? maybe it should alert us when CCI goes overbought/sold not when it signals so we have a chance to analyse if its going to be a signal worth trading or not???
Feel the Fear and do it anyway!!!
- #4,695
- Edited 9:08pm Mar 31, 2015 8:25pm | Edited 9:08pm
{quote} Yes and your indy shows them up a treat....nice one..
And also, my version of the TTindy has the setting to alarm you, if CCi goes under 100 or over -100 on the top pairs.
You realy have to take a look at my TTindy, it has all you want.
- #4,696
- Mar 31, 2015 8:47pm Mar 31, 2015 8:47pm
- Joined Nov 2010 | Status: Trader | 4,484 Posts
{quote} Clive, you are funny. Did you already forget, that I already did that kind of indi? {image}
Basically just signaling from market structure alone regardless of 100lwma..
but no worries I am getting tired now so time for bed I think...
By the way I just banked 166 pips from my eurusd trade and its flown up nearly 50 pips since so if I can get another sell back on and to BE then I'll be laughing...but that will have to be tomorrow morning ...
Feel the Fear and do it anyway!!!
- #4,697
- Apr 1, 2015 3:41am Apr 1, 2015 3:41am
- Joined Nov 2010 | Status: Trader | 4,484 Posts
{quote} Not quite my friend......so time for bed I think...
Would of worked if I'd of caught the slope change and added first 2 CCI signals, but can't win em all..
Now thats how I think we should be trading strong daily, hrly moves up or down, just wait for the 1 min 100lwma to turn your way and jump on board with first 2 CCI signals that stick... The perfect entry for the Equity millipede boys to be using... Build up large positions in strong trending daily pairs... Enter every time the 100lwma turns your way after all it can only go up or down......
Definately going to look into automating that system, eg identify a strong trending higher timeframe pair on say 15min , hrly or daily then whenever the 100lwma turns your way get 2 CCI signals to stick and see what happens....I've got an EA coded for it but since I've updated my mt4 platform to latest version they don't appear to work, anyone fancy having a look at them for me????
Feel the Fear and do it anyway!!!
- #4,698
- Apr 1, 2015 3:50am Apr 1, 2015 3:50am
- Joined Nov 2014 | Status: Trader | 1,300 Posts
{quote} Yes and your indy shows them up a treat....nice one..
- #4,700
- Apr 1, 2015 3:59am Apr 1, 2015 3:59am
- Joined Nov 2010 | Status: Trader | 4,484 Posts
{quote} Didn't get a chance to look earlier but heres what I was talking about last night, banked 166 pips on down run and then was waiting for 100lwma to turn red again and rejoin the daily trend back down, but got tired and went to bed instead... Would of worked if I'd of caught the slope change and added first 2 CCI signals, but can't win em all.. {image} Now thats how I think we should be trading strong daily, hrly moves up or down, just wait for the 1 min 100lwma to turn your way and jump on board with first 2 CCI signals that stick... The...
Have a look a bit closer at that EURUSD turn down this morning and it would of worked quite well assuming we had an EA that trades each signal just after100lwma turns red and goes to BE say at 3 pips maybe 5.....
Then entries 1 and 3 end up at BE but 2 and 4 stick nicely.....
Just need to identify strong trending say hrly, 15 min or even daily charts and whenever price turns our way this EA automatically trys to get 2 entries to stick. Once its achieves that stops taking entries....until the next time it turns back with the trend...
might need a timer on it to only trade at certain times of the day, basically market opens...
EDIT: Actually entry 2 probably gets pipped out by that little green spike, almost looks deliberate doesn't it?????
Feel the Fear and do it anyway!!!