Simplicity is the Ultimate Sophistication

Today
first sl taken

Trade sell stop at 1.0610
1.0625
SL taken

Both trades fail today.
Done for today.

That's the way trading goes. Come back to fight another day. All about trading the edge consistently! Could be due to FOMC this evening and lack of volume as people await the decision. MMs clearing out the stops either side.

Hi all,

I understand the philo behind this method is to Profit from liquidity before it gets into the market. It sounds good. But experience teachs us that everything works and everything Fails.
To me the method sounds plausible. Besides, Zen is sharing freely. I have just one big doubt. Martingaling the first trade just once it is ok in Terms of risk. The blindpoint I see is how to manage several days in a row with the method failing, and it will for sure. Martingaling the next days to compensate one day is in essence a Martingale. Martingale works most of the time quite well. But it only Needs one wrong sequence to blow out the account. It has no mercy at all that only one time.

I see a lot of fear because of Banks seeing Limit orders as if they were able to move the market everyday just to catch 15 pips from some retailers. I am not denying it nor stateing the opposite. I just simply dont consider it as a trading factor. Why? because if Banks do so, you can easily track them. Then, by doing the same, you make easy Money . No way!

If whoever of you take a look at how banksInvestment funds do, youll easily see that they are not that good. Many of them with annual negative Returns.
Money is made from commisions!!!.
To Banks, and other big Players, making Money in the markets is just as hard as it is to any of us. Exception made of following tje trading rules by their workers(Traders) which is easier for them than for us because of hierarchy structured power.
My question is why to care about what other (Banks but also us-other retail traders) players do? My answer: Interiorise the wisdom of "trading in the Zone". (feel it, grasp it, melt it as part of your being..). If you fear the Banks, though they are not our friends to say it politely, then the battle is over.

The market can only do 2 things (either your trade is right or it is wrong) and it cant always do it the same way. Thus, IMO it is vital to work with outcome distributions of a certain pattern or method, not only the pattern, method itself.

Ive done extensive trading and Ive found out that in many many cases the Long term percentage of rights vs wrongs of a certain 1to1 method, system, pattern is funnily 50%. This is my case i know. Each of us is different, but what I observed is that the high probability trades come from trading the System, method, pattern AT the right time.
To trade AT the right time means trading the method, System, pattern when the Odds are in favor of the method, System, pattern to work as it forecasts BUT also when the Odds are in favor that the method, System, pattern will fail. Thats why knowing the outcome Distribution is extremely important(to me).

This is so according to what Ive experienced in 1to1. I am currently working on a pattern that Looks for 3to1. I wish it produced 50% LoL, but not. Funnily, as i feed the pattern with more and more fresh data (I dont backtest, I take the values in real time as days pass by) it seems that it tends to Show a 25% success. So, in the famous Long run, it does not give an edge either. However, I am finding the outcome Distribution to Show "Windows of opportunity" to catch a 50% in a 3to1. We can call it as we wish, but to me that is exactly when I want to trade. I am quite new to this way of perceiving the market. So Im still in the learning process. But promising results.

I am currently working on finding a better MM technique to avoid martingales cause I use something similar to your method, Zentrader8, but applied to DAX (first candle with volume, most of the time the 1st hour). I know that if I apply Martingale everyday to my method it will be profitable almost every day. The big Problem as I mentioned before is those "almost days".
Eg. Today the 2 orders of your method failed. Tomorrow you are gonna tripple the opening trade, if SL, you triple to compensate. If SL, then on Friday you triple the triple of triple..... if you know what a mean. I know it is weird to happen, but it is possible. As any other Martingale, it just Needs an occurrance to boom the account. I sadly know cause I did it a few times.
I think I read you are Aware of. I will follow this method of yours from now on, as I am interested in simplifying trading. Maybe we can come out with an alternative to Martingale. At least, avoiding a pure Martingale.

I am sorry for the "Testament" I just wrote hahaha .... particularly to be my first message in FF.
Cheers

Allthings

Nice post. I get the sentiment and experience. I'm not sure Martingale Squared is the way to go either. I think Zen is saying that you only do this once in the day. So, as exampled today if you lost 1% on trade 1 and then lost 3% trade 2 you are down something like 3.4% overall for the day. Next day is a clean slate. You trade your 1% again. From my manual backtesting I can see that more often than not, the second trade (3%) gets you out of trouble. Days like today have been rare from the past 6 months of manual backtesting that I conducted. As I mentioned previously the system also works well on the 1430-1500GMT candle for the US open. Same rules but using a 30 min candle.

As you can see from the attached chart from 2 Feb thru 3 Mar there was only one other day like today that didn't win. So a day with a 3.4% loss is soon recovered over the long run. The key, as the vertical lines show, that if Trade 1 fails, you MUST execute trade 2 to come back. Small sample I know, and I'm sure this could be backtested more systematically, but that's beyond my capabilities! It also shows that having to execute trade 2 is not common. There are 4 instances of Trade 2 being used here out of 14 trades, so it seems to work.

Yes, thanks and cheers to your first post.
hope you can learn something here that can improve your trading or even your life.

Yup. i agree that sometimes martiangle can work in most of the day.
But it only need a consecutive losses(which can happen) to wipe all the pips you gain before.
Thats why i suggest only trade martiangle for the day and the next day start from 1 lot again.
Accept the loses, is accepting the winning.
As long as we win in the long run. then we have an edge.
As long as the statistical in our favour in the long run, then we can profit in the market.
Trading is like flipping a coin , whether it is tail or head.
By looking at the statistic we try to guess the outcome, but we never can predict it 100%.
WE can be wrong, we can be right.IT maybe 50-50 . But i think if you found a method that can predict most of the trade, 70% (winrate) or above winrate is good enough.
because trading is zero minus game. You have to pay commision and spread.
so actually retailer trading was in losing position compare to others(banks,hedge fund, institution).
A failed trade doesnt means that the strategy doesnt work, a failed trade is just a part of the system. and we have to accept it.
But i am open to a better Money management if you have, you can share it here.
Because i am also thinking and considering how to handle consecutive losses as well.
Right now, im considering to open two lot on the second trade to minimize the risk.
But if you have better MM and come with better idea, i am very open for it,
we can discuss it to improve our trading.

Yes, thanks griwmweasel.
i think you got my point already.
But in this method if we lose, the first trade we lose approx 1.55 %
and the second trade we will lose aprroximately 4,75%
which means we loses around aprrox 6%.
we do need consecutive wins with this kind of strategy, we need a high win rate.
and i get the statistical data for last year, yeah we have a high win rate.
But still.Im thinking how to improve the money management,
Maybe you have better idea to improve the money mangement?

today i wont be in front of the computer to post the chart when i do trade.

Will post the chart later maybe in the night.
Hope you all can trade profitly, and end the days with green pips.

Worked as planned this morning;

Entry at 1.0720
Stop at 1.0735
TP at 1.0710

I have been using the 0600-0700 GMT candle and seems to work fine. The key is the liquidity and volumes around the UK/US opens.

Ref the stops, I think your %s are wrong Zen. If I have a 5k account and I risk 1% then that equates to 50. Divide this by the SL (15) gives you pip size of 3.33. So if you lose then loss = 50. A win would mean a gain of 33.3. If you lose 1% then the next trade you have equity of 4950. Divide this new sum by 3% and you have 148.5 to trade @ 3% meaning 9.9 per pip. If that loses (as like yesterday) then total loss is 50+148.5 = 198.5 = Loss on day of 3.97%. Equity for next day would then be 4801.5. New 1% then equals 48.01/15(SL) = 3.201 per pip. TP win would then be x10 (32) - added to start balance =4833.This doesn't account for the usual bid/offer spread and slippage either!

I think your aim on a loss day is to get out of the day at break even. Trying to still win by 3% would be sub-optimal over the long run. The martingale trade should only be risking 2% max IMHO.

Maybe scaling in/out would be better? TP1 at 5 pips and TP2 at 10 pips. Stop trailed to BE once TP1 hit?

Maybe the static TP @ 10 pips is too rigid? Maybe look at ATR and adjust depending on the 5 or 24 period volatility? Trying to shoot for more than ATR is sub optimal, so when ATR(24) is less than 10 pips then reduce TP and stop accordingly?

Sorry my fault. Then, it is ok. As you say, just accept losses and carry on having a life
I fully agree with the rest of your post.

I am having Trouble finding the exact candle of your method, but once I find it a will start dissecting the outcome Distribution so I could find some clues on how to apply MM. (These days I am not working hard as my father got cancer and he is in the last stage of the illness )

As a General idea to work with I am considering to define a sample period, let´s say a trading month, and increase trade size each sample period until you get the results you expect on a daily Basis. The increase step equals the trade size of the first period. In this case, 1 lot. Thus, the second period is a 2 lot. The third period is a 3 lot trade size, and so on. Eventually this is a Kind of a Martingale as well, but not squared (the ones I avoid)
The idea behind is to catch, nobody knows where it is, the profitable sequence of the method. At the same time, keeping trading simple by trading one trade a day and complicating life to Banks in case they care of us
That´s why the outcome Distribution is important to me to unveil. At least to have an idea of how the method has displayed its outcomes (in the past of course)

One question Zen, when you talk of 70% or higher winrate, is it including the second trade? If not, 70% in a 1to1 is God, not good, God. If so, I guess as the sample increases you´ll find to face a funnily 75%.

Hi Grimweasel, great work!

I´ll follow your recommendation, in study mode, to the 30min candle. Just to know where to look at "1430-1500GMT candle" is the one usually US data is wired or is it the one when US stock markets open? Thanks
There´s an old saying that states" four eyes see more than two"

Yes, the US open candle. US opens at 0830. So 1430 GMT, but that might be 1330 at the moment due to daylight saving being out of sync. Basically, whatever the first 30min candle of the US equity markets opening is in your time zone!

US Open - Same method but using the US opening first half hour. 30 min candle. Mark high/low. Orders at the next .00 levels above/below (OCO orders best).

Open - 121.50
SL - 121.65
TP - 121.40

Hit TP. 2 successful trades today. Cheers Zen. Nice and simple.

Hi Grimweasel, nice trade.
But are you sure you used the right NY open candle?

NY Open is 9:30

First buy stop SL touched,
open second trade, TP.

Ended the day with green pips.

Im sorry for your dad, and i hope all the best for him.

Yes, i checked on the last year data, just found that this method hitrate is above 80% for the first and second trade.
So you means that , random martiangle?
Like today open 1 lot, then tomorrow 3 lot and the day after tomorrow 5 lot?
then after that open 1 lot again, and repeat?
so we loss and profit randomly , did you mean like this?

looks like you using the wrong candle again, you took the candle 3 hours before London open as candle to mark high/low.
If you had used the candle 2 hour before, you would have tp at the first trade

Yup,your calculation is right.
But what i usually use is i open 1% from the balance, means example if it is 1000.
i just open 0.10 then if it wins it means i win 1% (minus commision) and if i lose is 1.55%
and second trade usually i open 0.30 which means 3%(if i win) and if i lose is 4.5%(plus commision)

Honestly i still prefer use 10 pips ,because its simplier, and its not so big either. sounds a little bit complicated to me if we have to use 5 pips, because we dont have difficulty in winning, we just have difficulty for losing streak.in fact if we use trailing stop to BE, many chances of profitable will end in BE only.

Btw,Nice trade today !

But is it the right time? because the eurjpy chart i think the time is not correct, i think its not the new york open.
Please correct me if im wrong.

[Quote = Forex Leone; 9674134] {quote} sembra che si utilizza di nuovo la candela sbagliato, si prese la candela 3 ore prima di Londra aperta come una candela per marcare alto / basso. Se si fosse usato l'ora candela 2 prima, si avrebbe tp al primo commercio [/ quote]

Right