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Rags to Riches in 10 or 20 Trades - Simplicity at its finest

  • #1,961
  • Nov 11, 2015 12:44pm Nov 11, 2015 12:44pm
Quoting jgadefelth
ok nice pic of how you use to trade, tell us how you trade now ? some examples please. Best regards
Absorbing currency risk while capturing long-term interest rate differentials. Here's a chart.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 71 KB
  • #1,962
  • Nov 11, 2015 1:00pm Nov 11, 2015 1:00pm
Quoting Bilstein
{quote} Absorbing currency risk while capturing long-term interest rate differentials. Here's a chart. {image}
Ok dont say so mutch, i think i stay with indicators.

Best regards
  • #1,963
  • Nov 11, 2015 1:05pm Nov 11, 2015 1:05pm
Quoting jgadefelth
{quote} Ok dont say so mutch, i think i stay with indicators. Best regards
I never said not to use indicators. What I did say was:

(1) I don't use them myself anymore.
(2) Don't overdo it with indicators.
and
(3) The indicators that traditionally come with a platform are usually sufficient enough.
  • #1,964
  • Nov 11, 2015 9:26pm Nov 11, 2015 9:26pm
200 MA is my limit in indicators (used I think as a general reference by much money). Find a TL that matches the MA slope (any tf) and you can potentially have a good swing BO trade...
(not my only formula, I also use harmonics/order flow a lot +...)
As the lights go by so too do the shadows move
  • #1,965
  • Nov 11, 2015 9:48pm Nov 11, 2015 9:48pm
Quoting Matts Micro
200 MA is my limit in indicators (used I think as a general reference by much money). Find a TL that matches the MA slope (any tf) and you can potentially have a good swing BO trade... (not my only formula, I also use harmonics/order flow a lot +...)
Oh I forgot I also use Fibonacci (obviously with harmonics). Imo I think it should belong in every traders playbook. Not necessarily to directly trade with but at least as a reference to know where the current lt/st trend potentially stands (top, bottom, mid, continuation, swing).

Here is a potential 200ma setup that I previously mentioned. With Draghi and Yellen later on however, I wouldn't try to get too settled in any directional trades at this time of day(night?).
Attached Image (click to enlarge)
Click to Enlarge Name: cadjpy #2.png Size: 76 KB
As the lights go by so too do the shadows move
  • #1,966
  • Nov 11, 2015 9:48pm Nov 11, 2015 9:48pm
Hi,

So what's the conclusion to this method of money management?
  • #1,967
  • Nov 11, 2015 9:54pm Nov 11, 2015 9:54pm
Quoting CookieMonsta
Hi, So what's the conclusion to this method of money management?
If you don't have a solid consistent 1:2 RR trading method, this MM isn't for you. That was the deal since the very first page ...
MT4/MT5 EAs/Indicators/Alerts coder
  • #1,968
  • Nov 11, 2015 10:03pm Nov 11, 2015 10:03pm
Quoting FerruFx
{quote} If you don't have a solid consistent 1:2 RR trading method, this MM isn't for you. That was the deal since the very first page ...
Hi,Well, I just thought that, this method has potential, but 50% exposure is unnecessary, because with proper pyramiding, 1:5 r&r is easily achievable. Because in this method is a exponential form money management, its power come from compounding and strong r&r, so the tactics to achieve a strong r&r is complementary to this and because of this, 50% exposure can be reduced to 10%, maybe? But I use 1%, to achieve anywhere from 1:1 to 1:20 r&r, depending on how trendy the market is. So this method should have more potential to develop into a more powerful system, in a more risk adjusted manner.
  • #1,969
  • Nov 11, 2015 10:03pm Nov 11, 2015 10:03pm
Quoting CookieMonsta
Hi, So what's the conclusion to this method of money management?
My own personal view is that 9 net trades is too many before a retreat back to -1 net trade. Perhaps in a confident trending market it could be done. A lower number of net trades can be achieved (imo 6 is a high number but do-able). With the same theory and using a withdrawal system with "X" amount of net trades it could potentially be very profitable (as per my previously mentioned thread).

Just my opinion at my current skill level but someone with greater skills could probably achieve.
As the lights go by so too do the shadows move
  • #1,970
  • Edited 11:25pm Nov 11, 2015 10:47pm | Edited 11:25pm
Quoting Matts Micro
{quote} My own personal view is that 9 net trades is too many before a retreat back to -1 net trade. Perhaps in a confident trending market it could be done. A lower number of net trades can be achieved (imo 6 is a high number but do-able). With the same theory and using a withdrawal system with "X" amount of net trades it could potentially be very profitable (as per my previously mentioned thread). Just my opinion at my current skill level but someone with greater skills could probably achieve.
Hi, yep, the thing about this system is that with proper risk management, it can linearize the risk of ruin, and that is the first post of this thread illustrated, but the problem is the fact that you need a robust r&r and u cannot have runs of losses, so I was pointing out that, in my previous post, the strategy and tactics to enhance the r&r and using a more conservative risk exposure can bring out the true potential of this money management strategy. So, the trading method becomes most critical in this case, where you are trying for a r&r that is 5 and more. And pyramiding strategies are a way to go intra trade to complement this strategy, in order to bring the risk level lower while keeping the profits at the same level. One such method is to pyramid pullbacks. For example, you split your entries into 4 parts, on so you end up using only 12%, of the 50% risk, and while the market pullbacks in your favour, you can buy more till you hit the maximum buying power, and have maximum of 12% risk all the while, while ur profits delta keeps increasing with each pyramid, and you take the entire position out when the trend begins to fail, you may have created a very high risk reward ratio of perhaps 5 at least
  • #1,971
  • Nov 12, 2015 12:41am Nov 12, 2015 12:41am
Quoting Bilstein
{quote} There's nothing inherently wrong with using indicators. I don't use them myself anymore but that chart... C'mon man, that's ridiculous, lol. The point I was trying to drive home is that when it comes to indicators, most of the time, the basic stuff that comes with just about every platform is more than enough to trade with. If you get in the rut of using a dozen indicators at a time, it will eventually stop working for you. Then you'll start learning to code. You'll move on to fishing through threads here and on other forums desperately...

I definitely agree with not talking about your business with others. And I too, went through that phase of telling everyone! I think you can most spot a newbie when you see things like a stochastics and a Williams%R on the same chart, or an RSI and CCI on the same chart, and things like that. I use indies because I don't like to spend a lot of time analysing charts. But you are also correct that everything any indie can show can also be seen with the naked eye. The RSI does help me make chart patterns more clear when I am looking for that. But usually I am trading with the ADX.

Quoting mili13
{quote} IMHO indicators tell you what happened. But will never tell you what is gona happen. But honestly I love most frequently used indicators (RSI, MA...etc). Many retail traders use them and lose their money. BIG BOYS (Smart money) know that and hunt SL below/above MA...etc . I do my best to go with BIG BOYS .
Indies telling you about the past is pretty handy actually, because history tends to repeat.
If you are good at something, never do it for free--Joker
  • #1,972
  • Nov 12, 2015 1:11am Nov 12, 2015 1:11am
Just rewrote the opening post of my MM system that is based on this thread. It's no longer a 10 page essay

http://www.forexfactory.com/showthread.php?t=557430
As the lights go by so too do the shadows move
  • #1,973
  • Nov 12, 2015 3:13am Nov 12, 2015 3:13am
Which broker allows to open position 0.01 for 1$ ?
0.02 for 2$
  • #1,974
  • Nov 12, 2015 7:14am Nov 12, 2015 7:14am
Quoting CookieMonsta
{quote} Hi, yep, the thing about this system is that with proper risk management, it can linearize the risk of ruin, and that is the first post of this thread illustrated, but the problem is the fact that you need a robust r&r and u cannot have runs of losses, so I was pointing out that, in my previous post, the strategy and tactics to enhance the r&r and using a more conservative risk exposure can bring out the true potential of this money management strategy. So, the trading method becomes most critical in this case, where you are trying for a...
It's probably true there are better MM systems around but imo the whole idea of the thread is to show the potential power of leveraged trades. All it could take (for me) is a month or two of certainty when the markets know where they are going and how they're getting there aside from the crap this year; of the Fed umming and arring about rates and earlier whether a Grexit was coming. Confidence is rare but when it happens it's a thrill to trade and it makes up for much of the bs in between.
As the lights go by so too do the shadows move
  • #1,975
  • Nov 12, 2015 7:29am Nov 12, 2015 7:29am
Quoting CookieMonsta
risk of ruin
Shhh... Dont give away the secret!
  • #1,976
  • Nov 12, 2015 7:34am Nov 12, 2015 7:34am
Quoting Matts Micro
{quote} Oh I forgot I also use Fibonacci (obviously with harmonics). Imo I think it should belong in every traders playbook. Not necessarily to directly trade with but at least as a reference to know where the current lt/st trend potentially stands (top, bottom, mid, continuation, swing). Here is a potential 200ma setup that I previously mentioned. With Draghi and Yellen later on however, I wouldn't try to get too settled in any directional trades at this time of day(night?). {image}
Thought I'd give the trade a whirl and Draghi didn't disappoint the TA. Now it's up to Yellen to finish it off.
Attached Image (click to enlarge)
Click to Enlarge Name: cadjpy #3.png Size: 67 KB
As the lights go by so too do the shadows move
  • #1,977
  • Nov 12, 2015 9:43am Nov 12, 2015 9:43am
Quoting Matts Micro
{quote} It's probably true there are better MM systems around but imo the whole idea of the thread is to show the potential power of leveraged trades. All it could take (for me) is a month or two of certainty when the markets know where they are going and how they're getting there aside from the crap this year; of the Fed umming and arring about rates and earlier whether a Grexit was coming. Confidence is rare but when it happens it's a thrill to trade and it makes up for much of the bs in between.
Well, u missed one point though, pyramiding is a technique to manage a trade, which means what I'm saying is, we pyramid properly to get the positive side of leveraged trades and while not being exposed to the negative side effects of leverage, imagine what pyramiding can help u do in a 500x leverage broker, in a trendy environment, u can keep the risk constant while employing more and more leverage and higher position size, because as you pyramid, your net position size lags behind the market's price, u don't even need to put a cap on a 1:2 r&r system. Which effectively means, success is a function of ur ability to employ leverage while keeping ur risk constant and small, by pyramiding, in a risk adjusted way. For pyramiding, the money management extends intra trade only, while this is for a inter trade money management, so they complement each other, pyramiding and this method
  • #1,978
  • Nov 12, 2015 10:08am Nov 12, 2015 10:08am
Quoting CookieMonsta
{quote} Well, u missed one point though, pyramiding is a technique to manage a trade, which means what I'm saying is, we pyramid properly to get the positive side of leveraged trades and while not being exposed to the negative side effects of leverage, imagine what pyramiding can help u do in a 500x leverage broker, in a trendy environment, u can keep the risk constant while employing more and more leverage and higher position size, because as you pyramid, your net position size lags behind the market's price, u don't even need to put a cap on a...
Sounds like you're describing a Reverse Martingale system. A trending market is difficult to find these days with much range and consolidation. Look at the AU for example on the 4hr/D, up 440 pips and back down 370 not to mention the st nfp spike being obliterated by AU employment figures today. I'm not trying to down your system or anything because I think there is potential for it to work but it's what I mentioned before about a confident market. A confident market is when the PA is going places and it knows why it's going there, unfortunately it rarely happens, especially this year.
As the lights go by so too do the shadows move
  • #1,979
  • Nov 12, 2015 12:11pm Nov 12, 2015 12:11pm
I have found that 9 trades in a row really is too many to shoot for for most traders including myself. I developed a different approach under the rags concept which keeps me in the game longer. made a thread about which i abandoned due to lack of time.
  • #1,980
  • Nov 12, 2015 12:12pm Nov 12, 2015 12:12pm
Any ways, here is my simplified approach which I think more traders would be successful with if they have the patience.

After attempting the rags to riches method I came to the conclusion that I was better suited to a more patient route to building my account with a small initial balance. I call it the Slow Double Method.

After several attempts I have fallen short of the goal but made money with the rags to riches approach. I believe 4 trades is the best target. let me explain my new approach based on the success rate of my trades for the experiment:

You will of course need your own system to trade with.

I can easily get to the 4th level most times so with this in mind I will approach my goal in increments of 4 stages and then start over as such:

I will start with $50 and double 4 times:

Initial 50
100
200
400
End 800

If successful I start the process all over again but this time with $100

Initial 100
200
400
800
End 1600
New balance after 2 rounds 2300

I will keep going in increments of 100 if the round fails I start over from the previous round. Below is how it should look. Keep in mind I also do this with binary options and not spot though it may be possible to do this with spot.

50
100
200
400
800 ending balance

100
200
400
800
1600
2300 ending balance

200
400
800
1600
3200
5300 ending balance


300
600
1200
2400
4800
9800 ending balance

400
800
1600
3200
6400
15800 ending balance

500
1000
2000
4000
8000
23300 ending balance

600
1200
2400
4800
9600
32300 ending balance
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