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  • #141
  • Aug 18, 2015 3:20am Aug 18, 2015 3:20am
Quoting spyderman
E/N stopped out this evening.
We defined no rule to re-enter nor whether to re-enter or not. The B/O on E/N is still valid to me. Looking at the daily chart 1.6800 is an interesting level. H4 seems to be preparing a bullish engulfer above 1.6800. The SL would be around 90 pips. What do you think?
No greed. No fear. Just maths.
  • #142
  • Aug 18, 2015 7:08am Aug 18, 2015 7:08am
Quoting PipMeUp
{quote} We defined no rule to re-enter nor whether to re-enter or not. The B/O on E/N is still valid to me. Looking at the daily chart 1.6800 is an interesting level. H4 seems to be preparing a bullish engulfer above 1.6800. The SL would be around 90 pips. What do you think?

I agree that we still have a valid trend to be in. In post #92 we addressed the similar situation of entering an already moving trend and I think the principal is valid here.

In the E/N case as an example...If this hadn't been our first entry that got stopped out we would still be in the other positions as the daily DC did not get breached. We would be looking to add a position on the daily (with a modified MM due to the stop loss). I think that approach is in keeping with the general system idea. So here I would be looking to enter at the break of the D1 DC with the stop below the H4 DC, just like on other trades. Or we could use the aggressive entry as you discussed. Since the H4 was broken downward, and the D1 is still rising, we could take the break of the H4 with an H4 stop. In this case though the H4 and D1 highs are the same...at least at the moment.
  • #143
  • Aug 18, 2015 7:22am Aug 18, 2015 7:22am
I don't have time this morning, but I'll sit down and summarize the additions/changes we've discussed thus far so that we have a clean plate moving forward.
  • #144
  • Aug 18, 2015 9:26am Aug 18, 2015 9:26am
Spyderman, thank you for this thoughtful, considered and risk controlling approach. I have a similar daily system that quite closely follows your approach but using the supertrend instead of your DC. Like you to I'm in the mid-stages of tidying up some of the unseen decisions I need to add as the system evolves. But this is your thread so I'll stop now. It is helpful to me to hear you guys think out loud and I am learning new insights and find these insights can stimulate other ideas i can consider. So I am very thankful for all your detailed process.

One of the many good things I think your approach has is the risking a small fraction of your account at the beginning and adding as it goes in your favour. I read somewhere a saying that has been a constant general filter for my own system. "start light and get out obese but don't start a diet on-route" In normal speak enter a trade with light risk and then load up as you move into profit but don't scale out (the diet) as you are moving in the right direction. So many do the opposite, enter with their full risk and as they move in profit they scale out. Well no right or wrong way, we all see things differently and that's a good thing, but for me the adding to a winning position makes for good common sense.

I especially like the 50% of profits being used for a risk free addons. Nice! Pipmeup was very generous a few months ago putting a similar idea into a spreadsheet for me on a 1min fun idea i'm working on. So Daily for growth (hopefully) and 1 min for a micro account bit of serious fun. The first place i heard of this was a internet article years ago about Ed Seykoda the famous trend trader (Market Wizards fame) who use a portion of his running profits to finance his addons so this idea has a sound pedigree.

So this is just, I hope, an encouraging post to cheer you on from the stands since I don't have anything of value to add at this stage it looks as if you are well on your way.

Perhaps though I could tentatively echo something you have said earlier I believe, for this to be a robust system over the longterm I think you need to keep things on the simple side, it makes for a more mechanical approach that I think emotionally is easier. Keeping on the weekly daily and H4 also allows you to not be glued to our screens (my own approach looks at only the Daily EOD). But as I mentioned you have said this yourself so all good.

Once again thanks for what you are doing here.
  • #145
  • Aug 18, 2015 9:35am Aug 18, 2015 9:35am
One last thing, don't know if this contains the n% of profits/addons info but it should be interesting reading if you like me love all things risk and MM http://www.seykota.com/tribe/risk/
  • #146
  • Aug 18, 2015 9:48am Aug 18, 2015 9:48am
Quoting silverpuma
One of the many good things I think your approach has is the risking a small fraction of your account at the beginning and adding as it goes in your favour. .......we all see things differently and that's a good thing, but for me the adding to a winning position makes for good common sense. I especially like the 50% of profits being used for a risk free addons. Nice!
I agree silverpuma. The preciseness of placing the add-ons using MM is very appealing to me and is a nice change to standard more haphazard pyramiding that often compromises a nice long profit run. Spidey and PipMeUp's thought processes here have made me hone my own approach and I really appreciate it :-)
  • #147
  • Aug 18, 2015 10:18am Aug 18, 2015 10:18am
Quoting Copernicus
{quote} I agree silverpuma. The preciseness of placing the add-ons using MM is very appealing to me and is a nice change to standard more haphazard pyramiding that often compromises a nice long profit run. Spidey and PipMeUp's thought processes here have made me hone my own approach and I really appreciate it :-)
Copernicus I read the full thread a few days ago so am I right in thinking you mentioned something about have a swing approach within the overall major trend you are riding. Especially at the end (though i appreciate only hindsight can see that) when perhaps the position size is significant so that there is some simple way to not let a large % leg/swing of the unrealized profits slip away. I just mention this again because you have opened up another avenue of consideration for me that I had not considered.....thanks. Maybe I'll open a thread to get some help probing and pulling at the possible merits or otherwise of this since i am more of a short term swing trader within trends than spydermans more pure trend trading approach here and so its over and out from me
  • #148
  • Aug 18, 2015 11:46am Aug 18, 2015 11:46am
Quoting silverpuma
Spyderman, thank you for this thoughtful, considered and risk controlling approach. I have a similar daily system that quite closely follows your approach but using the supertrend instead of your DC. Like you to I'm in the mid-stages of tidying up some of the unseen decisions I need to add as the system evolves. But this is your thread so I'll stop now. It is helpful to me to hear you guys think out loud and I am learning new insights and find these insights can stimulate other ideas i can consider. So I am very thankful for all your detailed process....

Thanks for the words of encouragement SP. Feel free to chime in any time.
I'll definitely take a look at that Seykoda article.
  • #149
  • Aug 18, 2015 11:47am Aug 18, 2015 11:47am
E/C closed at partial loss. In keeping with my new "Trading in the Zone" mindset, it's like water of a duck's back...
  • #150
  • Aug 18, 2015 4:29pm Aug 18, 2015 4:29pm
Hey guys,

I've edited the trading rules in Post #1 in line with our discussions. See if I missed anything or if I need to change the wording to make more clear. Some of it's a bit tangled without staring at a chart.
  • #151
  • Edited 1:08am Aug 19, 2015 12:56am | Edited 1:08am
Quoting silverpuma
{quote} Copernicus I read the full thread a few days ago so am I right in thinking you mentioned something about have a swing approach within the overall major trend you are riding. Especially at the end (though i appreciate only hindsight can see that) when perhaps the position size is significant so that there is some simple way to not let a large % leg/swing of the unrealized profits slip away.
Given the inevitable volatile equity curve that trend trading delivers, you can overlay alternate approaches on top of trend following systems to stabilise returns. While you can diversify trading approaches simply through the adoption of a portfolio of different systems offerring different trade profiles (eg. running seperate systems in tandem), it is preferable to integrate these various alternate systems (such as mean reversion strategies or swing trading strategies) into an underlying trend following system to ensure that when one system is entering a drawdown phase, another system element is delivering returns. This way you can better manage portfolio performance and configure this portfolio of systems to deliver required investment objectives. CTA's such as Campbell and Co use these techniques to specifically structure performance objectives to meet required objectives.

However despite the apparent ease of the theory, the practice of achieving an optimised equity curve is a difficult exercise. Of course it is quite easy to flatten the equity curve if you are prepared to sacrifice returns delivered by the underlying trend trading strategy by effectively subsidising the shorter term mean reversion of swing trading strategies.....however this is not an ideal method but often necessary when dealing with cantankerous investors.
  • #152
  • Aug 19, 2015 1:03am Aug 19, 2015 1:03am
Quoting spyderman
Hey guys, I've edited the trading rules in Post #1 in line with our discussions. See if I missed anything or if I need to change the wording to make more clear. Some of it's a bit tangled without staring at a chart.
Looks good but the ultimate arbiter needs to be PipMeUp. :-)
  • #153
  • Aug 19, 2015 4:03am Aug 19, 2015 4:03am
Quoting Copernicus
{quote} Looks good but the ultimate arbiter needs to be PipMeUp. :-)
That's Spyderman's thread. He is the only arbiter...
No greed. No fear. Just maths.
  • #154
  • Aug 19, 2015 4:55am Aug 19, 2015 4:55am
I'm trying something in demo with E/CAD. To explain it you shall have a look on E/J weekly first. As you can see, E/J W1 closed below the DC in January and again in March. It didn't broke the top of the DC yet. Therefore the down biais is still there. But the price retraced 1350+ pips since it broke the channel. I'd like to find a way to catch this "minor retracement". And more importantly avoid to enter short again and again by following the rules when it is abviously wrong. I'd like to not add any indi.

The idea I had is to draw a horizontal line at the last DC break. When I'm not in the market (usually because kicked out from my first entry) and the price is the other side of the line, I use the same rules but to go opposite. I want to play the upthrust. I'd like to see if the H4 DC is wide enough to not be washed and rinsed if the market forms a congestion. I opened a short (counter-trend) on E/CA at the break of the DC-H4 because the price is now below 1.4495. H4 broke at 1.4435, the SL is 1.4614.

Following the rules, I also entered a long on U/C. Aggressive entry. Right on the top! rofl. The price is now below the line in the sand (at 1.3100) but I've not being kicked out thus far. Therefore the long is still running (and under water by 85 pips).
No greed. No fear. Just maths.
  • #155
  • Aug 19, 2015 7:04am Aug 19, 2015 7:04am
Have an aggressive H4 entry on the Aud/Usd.

Daily channel (gold) has been moving down steadily. H4 (light blue) pushed up without hitting the daily and then broke the bottom.

Attached Image (click to enlarge)
Click to Enlarge Name: AUDUSDiH4.png Size: 68 KB
  • #156
  • Aug 19, 2015 7:09am Aug 19, 2015 7:09am
Quoting PipMeUp
I'm trying something in demo with E/CAD. To explain it you shall have a look on E/J weekly first. As you can see, E/J W1 closed below the DC in January and again in March. It didn't broke the top of the DC yet. Therefore the down biais is still there. But the price retraced 1350+ pips since it broke the channel. I'd like to find a way to catch this "minor retracement". And more importantly avoid to enter short again and again by following the rules when it is abviously wrong. I'd like to not add any indi. The idea I had is to draw a horizontal line...

Keep us posted. My concern would be that the movement within the bounds of the Weekly DC would be a "ranging" environment and could move back and forth indefinitely. Taking the weekly breakout (or sticking with it until the daily break) would be a trade with momentum on our side.
Will be interesting to see what you discover.
  • #157
  • Aug 19, 2015 7:24am Aug 19, 2015 7:24am
Quoting spyderman
{quote} Keep us posted. My concern would be that the movement within the bounds of the Weekly DC would be a "ranging" environment and could move back and forth indefinitely. Taking the weekly breakout (or sticking with it until the daily break) would be a trade with momentum on our side. Will be interesting to see what you discover.
I agree ... In this kind of long term strategy, we must first be pretty sure price went outside the weekly range ...
MT4/MT5 EAs/Indicators/Alerts coder
  • #158
  • Aug 19, 2015 7:50am Aug 19, 2015 7:50am
Quoting spyderman
My concern would be that the movement within the bounds of the Weekly DC would be a "ranging" environment and could move back and forth indefinitely.
This is the very reason I choose this pair. I want to see how the system behaves when it is caught in a "washing machine" PA.

case 1 - I get kicked out every time I swap the direction, so many losers I won't recover
-> my idea is proven wrong

case 2 - DC-H4 is wide enough to keep the number of losses in a managable size and the breakout gives me just a bit more than I lost
-> my idea may be considered with the addition of discretion/fundamentals...

case 3 - DC-H4 is wide enough to keep the number of losses in a managable size and, thanks to the MM, even a moderate breakout gives me an interesting profit
-> my idea can be added to the rules
No greed. No fear. Just maths.
  • #159
  • Aug 19, 2015 7:58am Aug 19, 2015 7:58am
Quoting FerruFx
{quote} I agree ... In this kind of long term strategy, we must first be pretty sure price went outside the weekly range ...
I hear you Ferru. But look at the chart. According to the rules it is a down trend. Do you really want to keep entering short positions in this market?
Attached Image (click to enlarge)
Click to Enlarge Name: EURJPY-W1.png Size: 16 KB
No greed. No fear. Just maths.
  • #160
  • Aug 19, 2015 8:27am Aug 19, 2015 8:27am
Quoting PipMeUp
{quote} I hear you Ferru. But look at the chart. According to the rules it is a down trend. Do you really want to keep entering short positions in this market? {image}
Yeah, wouldn't want to be adding shorts here. But we would have been taken out of our positions at the break of the upper daily DC, thus ending our "series". Then we wouldn't enter again on that pair until we had another weekly break...up or down.
That's what I intended, perhaps I didn't intimate that clearly in the post 1 rules.

So if we get a series ending Daily DC break, we don't go back in on that pair until we have another "series" setup as in Rule #1.
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