Extracted Post (per poster's request)

“Beauty is condensing the complex into a simple structure.”
~CrucialPoint

Behind every simple thing, lies a very complex structure. Since I was a young boy, it was in my nature to simplify my world. I love to find the simplicity within the complexity. To present it simple, yet not to neglect and admire the complexity of its structure. When you neglect its complexity, you lose its structure and you lose its meaning. And without meaning, the simple becomes incomprehensible.

It has always been my objective to simplify my trading system. Not for the sake of simplifying things, but for the sake of working with something to its highest efficiency. This is where most traders get it wrong; they try to simplify their trading for the wrong reasons and wrong working order.

Two things can occur; 1. Simplify and efficiency will decrease or 2. Simplify and efficiency will increase.

My approach in creating my trading system was different to the herd, but I educated myself first to the herd’s knowledge and/or way of trading. Only by gaining a solid foundation can we move forward. Little knowledge is as harmful and dangerous as having no knowledge at all (as the saying; an idiot with a butter-knife).


“There are two types of people in this world; one can absorb information and that’s as far as they can go. The other can absorb information and create something new.”
~CrucialPoint

My objective in creating my trading system was to eliminate as much subjectivity and discretion. Over the years my trading system developed and matured in its own. I’ve simplified my trading system to its simplest form yet highest efficacy. After years of research and study, my system did a whole U-turn. Most of the things I learned are in the rubbish bin. Most, I have redefined and simplified.

This is how my trading system developed into:

· I don’t do any analysis.
· I don’t try to predict the market.
· I don’t draw lines; I don’t deal with support/resistance and channels.
· I don’t draw shapes like descending/ascending triangles/wedges.
· I go where the market goes.
· My system is “selective scalping” (Term I use. I’m very selective of my trade; I mean my indicators are very selective pin-point entry and exit. Trades can last from 1min-1hr, generating between 10-20 signals within 12hrs.
· My system is clear cut and leaves no room for any subjectivity or discretion (enter now and exit now).
· My system is made of two parts: Offensive and Defensive.
· Defensive system is to spot every scalper’s worst enemy (consolidation and exhaustion). No, it is not the DMI or ADX indicator. People create systems for entry signals; I wanted to create a system that signals for consolidation because the ADX and DMI indicator just doesn’t cut it.
· I work with only 2 timeframes: 1 minute and tick.
· I only use 3 indicators: Moving Average Envelope, True Strength Index and (I won’t disclose)
· Money management: Lot sizes are calculated accordingly, when balance decreases to a certain portion so does the lot size.
· Works on all market condition (ranging and trending).

Charts, technical analysis and indicators are elegant and beautiful mathematical equations:

7 + 7 + 7 + 7 + 7 + 7 + 7 = 49
49 / 7 = 7
7 squared = 49
Square root of 49 = 7
3.6593 cube = 49
(7 x 3) + (4 x 7) = 49
(3 + 4) x (5 + 2) = 49

When you have a working knowledge and understanding of the complexity, you can simplify it to 7 x 7 = 49.

Good morning CP. I have read almost all your post and it has changed some of my views in the trading world. I know your stand on not sharing your system/ secret with others and I respect it. I have learnt a lot over 2 years now and I am heading the right direction I guess. I have attached one of the images I found on your thread. Could you be so kind to point me to were I can get that envelop or how I can make one for myself. Any clue will be very apreciated because i think we have that in common, dropping clues.You said you only use 3 indicators and moving average envelop is one. And i think the below indicator is the envelop you are referring to. I think that indicator can remove the subjective part of my trading which is my major problem since I trade almost naked. I will be glad to hear from you sir. Until then, I wish you all the best and will continue to pick those brilliant little clues you drop here and there. Thank you
Emmpoli

A

B

C

Hello Emmpoli, do you know a TSI with an alert when crossing an upper / lower level? I have long searched but found nothing.
Best regard
Raimund

Actually you try to predict. And from your posts it results also that you made backtesting.


You predict that after 50 pips in 7 minutes there is high probability of the retracement. How do you know that? Because you have made backtests on history data.

I've made this point plenty of time.
I don't try to predict the market. I FOLLOW the market.
There is a big difference between Predicting vs Following.
There is a big difference between "it's shit weather outside" vs "it's raining outside".
Trying to predict where the dog is going to go left or right....
It is totally different from standing behind a dog (or person) and following it.
May Divine intervention help you if you can't distinguish between the two

Regarding backtesting...
I made a finite backtest and the result is 50/50 probability. And that was the end of backtesting.
Anyone who backtested and never got a 50% probability, don't know what they're doing.
You can always backtest tremendous amount of data and get different outcomes/results and variables...
Curve fit whatever it is you are backtesting oblivious of what you are doing.
If you were in the year 1000 and you were backtesting diseases and illness all your backtesting is futile because you haven't discovered bacteria.
You will end up curve fitting as much variables, oblivious of going nowhere and going in circles.
Oblivious of the flaw, because "You don't know, what you don't know."
Because in trading, people are trapped in a Newtonian physics of thinking; 1+1=2

I SAID:
Has price hit 50pips in under 7minutes (7min is not any random number for my trading system)
...Yes > Exit
...No > proceed

YOU SAID:
You predict that after 50 pips in 7 minutes there is high probability of the retracement. How do you know that? Because you have made backtests on history data.

I said: It's raining outside.
You think: CP said it's shit weather outside

I love the rain. I meditate when its raining. I love rainy weather as I find it peaceful and I sleep like a baby.

LET ME SIMPLIFY IT FOR YOU:
1. It is very easy to make an assumption about how I trade.
2. I have not revealed my full system... and thus, you don't have a single clue how I trade.
3. You can contradict and counter-argue everything I say to align it to your limited belief/assumption (because I haven't revealed my full system).

I'll illustrate these 3 points for you:
I received a marketing call pedaling a PAMM account. I told the guy I'm not interested, not interested in his services and what he has to offer.
Long story short he asked me how much I make in %.
I replied, "I make an easy 100% each year."... he hanged up the phone.

If I told you I make an easy 100% each year on a $8M account, it is very easy to make the following assumption:
1. Nobody makes 100% a year and 100% a year is impossible.
2. If such feat is achievable, the account would be in the billions... so I guess I'm talking to a billionaire.
Conclusion: BULLSHIT ARTIST

"You don't know, what you don't know." So if I ask you to come up with an argument to make this story valid, you will never be able to, no matter how smart you are, as your knowledge is limited to your experience.

So here is the reality:
6M is my margin as your broker will not allow you to trade high amount without the margin. Because any loss you incur, slippage, flash crashes, etc... the broker has to bear the grunt and they will go under without the margin. Unless you have a bucket shop broker or a scam broker, they will allow you with no margin at such high trades, because they are not really sending your trades to the market.
So trading 2M with 100% return each year without compounding. 2M this year, 2M next year, 2M the following year and so on. A consistent 100% yearly return without ever compounding. At this point the idiots are saying "Why don't you compound it into billions?" Again, if I asked a person who doesn't trade in the Millions, they won't be able to answer it because they don't have the experience.
The answers is
1. You need to provide the margin.
2. Can you handle the stress involve?
3. Your broker will front run your orders/ trades. Even if you have a legit broker. Your broker will front run your trades at such high amounts.
4. Unless you are a psychopath, why would you put yourself at such high risk?
Now, any idiot can google "front running in trading" and can counter argue that it is illegal and not possible. Again, argument coming from no experience from real life.
"Why don't you work for a bank or start your own investment firm if you are such a great trader?" because I work 20hr a week on a yearly average. I don't want to work 80hrs a week. Note that these arguments are coming from people who has no experience in running a business.

Can you see how easy it is to make your own twisted assumptions/conclusions?
When I say I don't predict, I don't backtest, I don't use history, etc... it is very easy to come up with the wrong conclusion that sounds plausible.
Nevertheless... you don't know what you don't know

50pips in under 7 mins???? you made your assumptions (without knowing anything about the 6dimensions).
You are no different from a medieval doctor who made an assumption about the diseases and illness, without ever knowing anything about bacterias

I thought you'd want to know:

Oh SNAP!

CP you spanked 'em good and hard.

Cheers, Mate!

CP, thank you for your time and your answer.

Following the price in my point of view:
If momentum is up/price is rising then I buy. I don't close it until loss of momentum/price retracement. Analogous to the opposite side.

So closing an order just because it has reached 50 pips in several minutes in my comprehension is a rejection of following the price.
How can you know that the price would not go without any loss of momentum next 40 pips? It can even accelerate after your target because of filling stop losses.
Determining targets is opposite to the following price.

A lot of people started to observe this thread. If you guys disagree with me could you please say it loud and clear where I am missing? Thanks in advance.



Regarding very high volume scalping you didn't mention the biggest obstacle which is liquidity.
If UHNWI needs to solve problem with low leverage he can do this very easy, however liquidity is not infinite and even many accounts and brokers won't help because they are connected to common Liquidity Providers. This is the main reason why few pips scalping doesn't work on yards.

So Michael Jordan and his team practiced their game plan, strategies and system...
According to their game plan they should do the following A B C D E, etc...

During the game, Michael Jordan was free and open, with no one guarding him...
Tell me, should Jordan follow the system A B C D E ?
or Should Jordan shoot the ball instead?

A Master/Professional knows when to break his rules at the right moment and at the right time.

50pips is somewhere between 5:1 to 10:1 (reward:risk) ratio for my trade.
At this point, I don't need an indicator to tell me I have a profitable trade ready to be banked.
At this point, it can go another 50to100+pips .... Booohooo!!! I make the million mark a year... Do you really think I care if I miss out on an extra $50k-$200k? To keep my sanity and stress level down, I don't care about it. Plus, I don't have a extravagant lifestyle to maintain.
I don't set random 50pip exit... but there comes a time when "enough is enough".
There comes a time to know when to break certain rules.

Here is a game deal or no deal:
Walk away with $500k or take a 50% chance to make $1M or $0?
Walk away with $250k or take a 50% chance to make $1M or $0?
Walk away with $150k or take a 50% chance to make $1M or $0?
In any of these 3 circumstance your best bet is to take the guaranteed money and not take any chances.
The only time you should take a chance in this scenarios is if the money on offer is less than 2 years of your yearly income.
Any money offered to you over 2years of your yearly income you should bank and not take any risks.

You see, your mentality in this situation is about profit >>> what if it goes 40pips more?
My mentality is; I wouldn't be happy if the trade went south and I had to close it with 25pips, breakeven or a loss.

Did I close the trade early? Well, it is 5:1 to 10:1 reward... I can safely say it is well beyond cutting my winners short.
Why not 40 pips... why not 60 pips... or 70pips exits... Why not swing for the fences?

In any forum, nobody talks about Psychological fatigue and how it affect your performances in decision making and trading.
The simplicity of closing a 50pip trade is really a complexity of: Trade Management, Risk Management, Psychological Management, System & Rule Management, Technical indicator Management.

And where is this argument coming from:
1. Are you having problems with liquidity on your million dollar account?
2. Are you a million dollar scalper having this problem?
(we are still talking about Forex, right?)

If you are... you have a valid point. And you are getting scammed by your broker.
If you are not... why are you making such claims? or reasoning without personal experience?

I've never had problem with liquidity... Maybe, just maybe when you reach the $20-50M and higher, you might experience liquidity problems with your broker (but I don't know because I don't have a $50M account). If I did have a $20M account I wouldn't be trading with a broker.
Again, like I said, if you reach that amount, you are going to get screwed by your broker. If you have that much to trade, you are better off to leave your broker and get to the front row seats of trading.

[quote=CrucialPoint;11177972]{quote} ....
Thanks for these occasional posts CP.
They help to box my monkey brain and get me back on the right path.

Hi JD. There are plenty of points in CP's posts that look like predictions to me. However, after conversations with others I understand that everyone's definition and perception of "prediction" is quite different.

The more we know of everything the more we know about ourselfs. Increased knowledge brings increased perspective, bestows greater appteciation, and we honor the universe by inderstanding it.

Thank you, CrucialPoint.

Because you trade relatively low volume to experience slippage.
Your daily average is 15-50 pips. You don't compound and your yearly target is 2M.
During calm market on DOM around 1 pip lies much more than your ticket size.

Also you don't have to be millionaire to experience lack of liquidity. The simplest way I think is to try to catch news spike using 1 lot and 30 lot tickets at the same time and compare price of the execution.

If you started to scalp thousands of lots by "market order" (using your own capital or connecting investors by PAMM) you would start to move market and your average price of execution would become unsatisfactory. At some point your system would stop making money and start to lose (on simulation with infinite liquidity it would still make good profits).

If you give up middleman and connect directly to interbank you lose leverage, so you would need 13000 pips on GBPUSD to make 100%. Maybe someone would credit you but still it is ineffective. It still doesn't resolve limited liquidity.
Regarding stress, losing 10% from 1M is much less stressful than losing 50% from 50k.


And two more things: (if you don't mind)

1.

Sounds like backtesting for me.


2.
You say that you do everything what increases your edge and get rid of everything else.
You claim that everything is more or less correlated (I agree with that).
You trade only one pair (GBPUSD) because trading multiple instruments is ineffective for you (due to correlation).

My opinion:
The most effective is looking for buy signals on the strongest instrument at present time and looking for sell signals on the weakest instrument at present time.
They generally move in the same direction but our fixed pair can move 5 pips after breakout while the other can move 15 pips at the same time.
Observing few most liquids instruments helps to choose the one with the higher probability of success.

Example:

Daily ranges

14.06.2018
GBPUSD: 180
EURUSD: 280
DAX: 380

15.06.2018
GBPUSD: 86
DAX: 160
GOLD: 270

LOL
Because you have this idea (or a picture in your head) that I'm busy running models of various systems on these data sets.

I Don't... I don't run models of various systems on these historical or future data.
I got these records for research on other things apart from trading.

I suggested to plot these on a graph, maybe... just maybe... people may get a small edge out of it.

The last time I backtested a system on historical or future data was like 10years ago.

Like I said, I backtested a finite set once...
After those backtesting, I understood the crucial points, and then never backtested anything else again.

Like I said in my other post...
Anyone can tell me their system, and I can tell them WHEN, WHERE and HOW it will win or lose.
I can tell if a system is profitable or not without ever using a computer.
I don't need a historical data set to run a trading system.

Or vice versa:
Give me a historical chart, tell me your system,
And I will manually plot on the chart when and where your system wins and loses.

If you have this skill and knowledge... You won't be backtesting anything.

When I said I had it at 90% probability... it was due to other parameters of my system.
You think I just made a prediction... Nope. I was merely stating what I was following.
Example:
Prediction: The dog is going to bite
Following : The dog is barking ferociously

Prediction: The dog is going to bite the arm
Following: The dog is charging toward the burglar

Prediction: The dog is going to tare the arm apart.
Following: The dog bite the burglar on the leg.

Curve fitting your trade management

Consistency pays off. How many times have you read this statement. A lot.
I don’t care whatever system you are using, whatever indicators you are using, but don’t curve fit your trade management.
What does it mean?
You have a system that produces 5 different entry signals, from A to E.
Each entry has it’s own behavior, its exits, its trade management.
You run your system taking only long trades with entry A.
After a couple of good trades some bad trades kick in. And you start wondering, what did I change? Let me see how I can adjust this loser and turn to a winner.
When you adjust your losers to winners you realize that your previous winners became losers. WTF! What am I missing?
Having a system that puts you on the right side most of the time is useless if you are not consistent with your trade management.
When CP says “sometimes I break my rules”, he is not breaking his rules because his rules already count for extreme situations. He is only executing his trading plan.
Close your trade if price spikes 20 pips in 5 seconds is a rule. This rule is as important as all other rules of a system because if you break one of them you screw results.
Fact is that he is good at executing his rules.

Who cares what will happen, you should be ready to tackle extreme situations, and as long as you execute your rules you will be in profit (if you have a working system etc).
What most people don’t realize is they think there are a set of rules that are most important, and then on the side there are little rules less important. No.
All rules are important because they all tackle different situations.
Sometimes your entry A produces a 5 pips profit and sometimes your same entry A produces 13 pips profit. It’s not because of you, it’s the market. It is what it is.
Don’t adjust your 5 pips profit trade to produce 13 pips because you will screw your results.
Your net profit or loss is a combination of all trades, not just one trade. So why would you adjust every single trade to make everytime 20 pips each? You can’t, it’s insane. (20 pips is just a random number).

“I don’t throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought.” Gordon Gekko from Wall Street.
Every battle is won before it is ever fought it doesn’t mean you will always come out on top for each round. It means whatever happens you know before what to do and in the end you will win the match.
“Don’t run when you lose, don’t whine when it hurts. It’s like first grade. No one likes a cry baby.” Gordon Gekko from Wall Street.
It is inevitable, you will lose here or there and don’t get me wrong. Losing here or there doesn’t mean losing 10 times out of 20. Even losing 1 out of 20 is part of the game.
So what should you do instead of adjusting every single trade?
Take 100 trades that have same entry signal. Learn how they behave under certain conditions, learn to know what to expect from them. And the law of large numbers will do his job.

Alex

Welcome back CP. You know I have immense respect of everything you have shared thus far. I also believe 100% every year is doable by anyone with your stature of focus and descipline with execution. I have repeatedly said there are only two superman here at the factory when it comes to knowledge and understanding. Could you please do us all a favor and provide evidence of your 100% repeat annual performance? That would shut all the naysayers imo. Besides, I have not seen any "successful" trader (using a non-tick based strategy) last for more than 3 yrs. I am also of the opinion that scalping is the way to go.

If you see some of my posts (which I doubt it), I have become a non believer of price and a believer of time. For exits, do you also use any element of time (as in trade duration or time of the day etc) ? Your reference of 7mins is making me wonder. Personally, I have completely removed analysis of Price from my Exits.

Go to my profile page.... then read all my posts. (I'm not talking about my journal, I'm talking about ALL my post)
I've answered your question in my other posts... I think you replied once that you don't have time to read all my post.
The only reason why I am replying to this post is because I'm procrastinating right now.

Point 1.
Time is just a communication tool (we humans use). We also use it as a measurement tool.
But if you truly understand the concept of Time >>> Time is simply a "Location" in Space.
Maybe Copernicus can write a whole post on it or maybe he already have.

Point 2.
If NO ONE enter and exit the market in 1min... price will not move.
If NO ONE enter and exit the market in 1hr... price will not move.
If NO ONE enter and exit the market in 1day... price will not move. (and so on, day week year etc.)

TIME has no bearing on Price Movement. Price move because people enter and exit the market.
TIME just happens to be there, and people correlates TIME with Price movement.
TIME is CORRELATED with price movement. TIME IS NOT A CAUSATION OF PRICE MOVEMENT.
People can disagree with me on this, but this is as objective as it can get.

===========
So to answer your question... I don't trade Time per se as the hand of the clocks.
I trade the location in space... Which is my 6D model.
I don't trade the session >>> I just happen to trade during those session.

When I say 7mins or 1hr... I am talking about a location in my 6D model.
And since it is 6D... 7mins is not the same as any other 7mins.
7mins in the 1st, 2nd, 3rd dimension is not the same. Price behaves differently in different dimension.
My exits have always been in accordance to my 6D model. And NOT due to duration of time.
Of course, my 6D model is BS and I respect people who believes that 1+1=2 in trading.

Yes, there are more trading volume during London and New York session.
Hypothetically speaking, if Trump said that no one is to trade during London and New York, the market condition during those times will change.
The Market condition would change, yet Time session has not changed. All time-base-algo during those session will go crazy.

I can trade any time of the day, in low volume, in low volatility... it just basically means less profit for me.
I don't trade the TIME >>> I trade MONEY COMING IN and MONEY COMING OUT.
You can randomly choose/limit my trading window to any random time and I will still be profitable.

I respect anyone who disagree with me on this, because I know that people don't know what I know.
Am I pedaling some magnificent secret knowledge to feed my ego???
Actually I've told people to piss off, not to bother me, don't ask me because I will only share I want to share... Of course at certain times, there is really no way to answer some question without ever talking about my unicorn 6D. Whether people believe or not is not my concern. What I offer is take it or leave it.


On this thread, further up the post, I posted regarding on "how easy it is to make up the wrong assumption, if you don't have the real life experience to go with it."

Point 1.
Can you just randomly walk up to anyone and ask for their end of year Financial tax return.
The next time you are at your GP, ask him, "Hey Doc, can you show me how much you make each year?"
Why is it a double standard in trading, what makes people think they can just do that?

If I was selling... then YES, A buyer has the right to see legit evidence.
In my case, I'm not selling (on a side note, why in the heck would I sell?).
I don't even let people contact me and I tell people that anyone who proclaim to know my shit is a scam (to prevent people from getting scammed).

Point 2.
I don't care whether people believe me or not. It is not my concern.
Do you really think it's my concern of trolls and haters when I'm making that much?

If I had a different agenda; If I was trying to sell, trying to build a cult following, if I need some ego boost...
then maybe YES, it would be my priority to flash my blings (just like Floyd Mayweather Jnr as a businessman).

I can start a small business in FOREX, teaching newbies as there is a simple system that anyone can replicate and can bring an extra income of $5k-$10k a year. If you've read my story, I've done a lot with my limited 37 years of my life. I've operated and owned my own business, and done some crazy shit in my short lifetime.
And in all honesty, at 37yo... I'm FUCKING TIRED.
I've lived the fast life and I'm burnt out. That's why I want my peace, quiet and serenity. There was a member here on the forum who said that I am wasting my talents and fortune, living a quiet life. I didn't reply and the truth of it all is that I'm FUCKING TIRED

Point 3.
I had this great idea one time;
I was going to start a thread here on FF and name it "The greatest thread in FF history."
And in this thread I was going to quote every hate comment and trolls.
And each hate comment and trolls, I'll post my accompanying monthly trading report over the past 12years.

And these are the reasons why this didn't happen:
My trading report are saved on PDF over the years.
On each trade, my account number is showing so I have to edit it out. It's going to take a long time to edit 12years of record.
On the normal PDF there are no option of editing this out which means, I have to Printscreen them and then edit them >>> THE PROBLEM it is an easy argument of being Photoshoped.
On the premium version of PDF there is an edit button, but again the time consumed to edit, my main concern with the PDF way of programming it edits and can undo my edits to show the underlying pdf document.
If transferred on Excel the same easy argument of being edited and not legit.
If I don't dump all these report in one sitting, it is an easy argument of not being legit and can be argued as edited on a time per basis.
I looked at some of the end of year report from my broker, but it can still be easily argued as Photoshoped and then backed to pdf.
And the other superficial arguments as it is a waste of my time, editing, posting, transferring, printscreen, edit, post, and the counter-argument is very valid that it is Photoshoped.
There is not one proof of evidence that CAN NOT be counter-argued as Photoshoped.
The Printscreen record I keep every trading, which some I posted on this forum... Even if I post all of them, it can be easily argued that I didn't post the losing days which resulted to a non-profitable year.

I had a friend who insisted to show him my trading account and my bank account (that it did go to my bank).
I showed him and he asked me to teach him... I replied that I really can't. I told him to read my post here in FF and that's as much I am willing to offer.
My good old friend (friends since highschool) never spoke to me ever again.

Any form of digital document can be manipulated.... its a fact.
After all of that, we are back to square one >>> Is CrucialPoint talking BS or not?

Is CrucialPoint some psychopathic troll, misleading people to disarray?
The logical deductive reasoning is simple >>> Don't listen to me and simply ignore me
...but lets agree with one thing; My BS is not your typical BS you see everywhere else