MY Journal-phil13

some more on how view money and its management....

WW table of loss/recovery..

% Loss initial capital-----------------------------% profit required to Recover
5--------------------------------------------------------------------------5.3
10-------------------------------------------------------------------------11.1
15-------------------------------------------------------------------------17.6
20-------------------------------------------------------------------------25
25-------------------------------------------------------------------------33.3
30-------------------------------------------------------------------------42.9
35-------------------------------------------------------------------------53.8
40-------------------------------------------------------------------------66.7
45-------------------------------------------------------------------------81.8
50-------------------------------------------------------------------------100
55-------------------------------------------------------------------------122
60-------------------------------------------------------------------------150
65-------------------------------------------------------------------------186
70-------------------------------------------------------------------------233
75-------------------------------------------------------------------------300
80-------------------------------------------------------------------------400
85-------------------------------------------------------------------------567
90-------------------------------------------------------------------------900

The only goal should be account survival and enhancement, the only rule for doing this is by any means, so we can either book a loss or manage trade drawdown in this partially random market we trade by constantly trying to adjust the risk of ruin that we create for ourselves by entering such a place.


A basic business model as related to the market, making the right mindset work and learning to detach yourself from the money aspect I have found is to view what we do like this


Stock..
This is the pairs that you are holding currently, as with any stock some of it will fly out the door (instant profit) and some you be left/stuck with for at least a while, best thing you can do for your business with this harder to sell/move stock is put it on offer at a discount, to make it more appealing to the potential customer and your bottom line (account) it is best to bundle it with some stuff that is wanted, so this is what I call offsetting, the idea is when you book a profit from a fast move line of stock look at the stock that is not selling and bundle some of it with the set you have just booked to the account to produce a break even or above order.

Running costs..
This is the swaps, your computer and other stuff you pay out to allow you trade, every business has costs associated with its ongoing trade.

Loans..
This is the drawdown, sometimes you must accept you will need take on bigger loans than other times, best business practice is pay down these loans whenever you get the chance especially if you have an unexpected wind fall profit, loans can be hard to deal with in any business at times, that is why we need to sometimes bundle our stock to create sets of offers to offset the loans.

Profit..
This comes when everything you have done and are doing is right and ready (the build it and they will come thing), this means knowing how to manage your money to minimise your losses that you are trading with in many different ways, the by any means thing which can mean anything you need to do to create that break even plus trade set to book to your account, this can include trading both ways at the same time in a pair, offsetting, reverse recoveries and the list goes on really any way you can think of to achieve the business survival and success, there should be no rules about this (so long as they are legal to do), I see everywhere I look people making rules to trade the market pairs but I do not see much about trading your account with the only goal being to make money!!!, the money is just a tool for you to create something with.

If you take out 2 men in loss you can always start your next trade at 2 2 4 (within limits of course).... but in general really good attacking is everything bring back lots of bacon and limit losses is way to go.

Like after streak of bad trades(not had that yet mnnn) to attack with stronger nos to help recover losses - will borrow this - thanks.

Yeh fed up with elections.

Alex

Hi Alex

yes my friend, i have also tried that out, but for me personally increasing the risk at scout size is not something i am keen to do, the scout is there for our feel and if wrong the smaller it is the easier it is for us to make the right decision for the account.

below is also an option i have tried out and does appear to work well... 'by any means'

regards

Phil.

Cheers - I have done this well before but I know what you mean that is why I am gonna borrow your strategy also to go in at scout level 1 too sometimes (depends) and then stronger attack.

Does your spiral mean if 1 is in trouble send in 3 rescue then 8 then 21?

Alex

Hi Alex

just one of a few uses for it.

regards

Phil.

so when it goes our way we add 1 2 5 if we want so 2 * base then 5 * base if 1 2 in trouble we must spiral out to rescue at 8...

I do not really understand spiral within spiral thingy...

Alex

Hi Alex

quote.... 'if 1 2 in trouble we must spiral out to rescue'

This bit you have right, but you are thinking from a directional bias point of view, what matters to us is the money, not whether we are right or wrong, win or lose, so account (the state) survival and enhancement is all that matters in this, it must override what we want to do, that means trading by any means to produce a positive outcome for the survival of the account.

If this were a conventional business and you brought some stock you could not shift, the 'best outcome' scenario would be to bundle it with something that is profitable and selling now for an overall profit, this is what the spiral over a price move shows, this came to me when fti said about trading without any charts and how could you achieve this in the beginning of thread (not the first read but a good few times later), reading AOW made me understand it better, the only objective is survival and enhancement of the state 'by any means', so the blue are long entries (then market reversed quickly) and the red are short entries, it can also be thought of a stop loss but this one has benefits as it will make money, a bit like the collar our friend on the thread has spoken of. The art of money management is using it as a tool with no attachment to its value then you get to see beyond the conventional ways everyone talks about using it.

look at the skew/spiral numbers, just say the gap between each spiral is 10 pips..... it can be adjusted further if price was to then move back up by continuing off the last sequence it hit but really you should never let that happen once you see a profit.

regards

Phil.

I totally agree with protecting book - remember FTI rule 1 oh and rule 2.

I know we have to manage the average by spiralling out (ie if 1 1 2 3 in trouble I can use 5 + 8 ie 13 to rescue some or all to bring our average closer to price.

Spiral thingy I do not get.

Spiral start at base 1 start of fib progression.

From spiral flip is always the same number of men you have in the other direction.

From spiral attack/rescue are always next number + 1 in fib progression - what you can rescue will depend on how far it run in our direction though? Although I would have thought rescue is better moving up the progression more than linear attack.

So I am long scouting 1 man (base) following spiral choices are go long 1 or short 1 for flip So 2 men in long.

So I am still long - following spiral choices are attack 2 long or flip 3 for short so attack 2 - have 4 men in.


Then 4 get in trouble. If I follow the spiral the next nos after 2 are short 3 for flip or long 5 for attack/rescue then add long 13 if still going my way long or to add to rescue - again in rescue how far it moves will determine what I can rescue.

This does not take account of fast in/out rescue(s) against trend - the above assume we are with trend when we trade.

Still do not really get the spiral thingy. I know if I get in trouble say 1 1 2 3 in trouble using the next 2 in progression 5+8 ie 13 - will be able to take out some of my men if it pulls back say 25%.


Alex

Hi Alex

The spiral is the basis of the money management.

Note the bigger numbers are below, price was moving up, the reverse recovery is stronger to enable a quicker exit and re-group, you could flip or let it cancel itself out which would produce an overall profit as price continues the move. I have documented a couple of reverse recoveries here already but I used the PA to enter not a set figure.

This is purely to demonstrate how money if managed correctly will take care of itself, while price is ranging it may trigger both longs and shorts, eventually price will move off more in one direction and produce an overall profit (the ‘bundled’ package offer) but as I said depending on the way price moves the numbers should be adjusted, I still re-read the thread and still find other things that ‘click/make sense’ as my experience allows me to understand more, recently (last year) I found something else that I did not fully understand before, using ‘N’ as they do in the pdf below as the gap for the spiral is I think what is hinted at/a clue to discover in the thread, I have seen fti say to someone are you still using candles for entries, this confused me for many years and as I say last year I think I may have found what fti meant, read the document below, also I have uploaded the indy to calculate the amount of pips we need to know to use this tool, on the first page in fti’s thread it also states we need to have a good understanding of ‘hip and lop’, this would be the basic set up to start the process. of course this is my personal view from what I found/read in the thread.

The other thing to add is this can snowball very quickly so we must ensure that our capitalisation is adequate to allow for this, it has many variations for different situation we find ourselves in.

Settings I use to calculate the pips are the same as they do for daily which pretty much gives a monthly average, H1 is set to 24 (daily average), M15 is set to 32 (8 hour average= 1 session).

If I get time this week I will set it up in a demo account and post the charts so you can see it working, which will make things clearer.

Regards

Phil.

Thanks some examples will be great - I will have a look at what you have written and provided.

The way I see it is that I am managing my average - adding more men will bring me closer to market - so in rescue I want to add more to bring me closer to break even safety. In attack I only want to add more when existing men in profit as I want to keep my average behind me say when going long so I can stay in trend ride longer - taking some men out will allow others to ride.

I know what hip and lops are so happy with that and I use em.

Thanks

Alex

managing the money not the entries.

this one was a pretty standard easy one using some stuff in that pdf i posted above only i used my way of protecting the trades and not the 2N stop they use, will post some more and you will see more complex managing of the money as both sides may/will be triggered.

used H1 for this so it will not affect my live trading, this is small demo account so i can show all the figures.

may not be able to post some other trades of these for the next couple of days as have to go out for a while during the day and i do/will not trade any account without the full intention of showing +profit even demo's.

another pure money management trade.. again in demo so i can show the whole picture and on H1 as all these will be so as not to interfere with my live stuff.

a better one for showing 'the bundle' i referred to in posts above....

got to go out in a while for a short time but managed to sneak this one in, will not be posting any tomorrow as i have to go out for a couple of hours earlier in the day.

I get this - will need to study in detail ... very powerful this is where I had a feeling FTI was trying to get us to go.... MM. Thanks so very much.

Alex

Hi Alex

no problem at all my friend happy you understand it , i will post a few more of these and then i will finish/conclude my journal with a few words about capitalisation and what it takes commitment wise to do this as a job and get a wage from it, after that unless someone asks/posts anything here i will just post now and again on our friends fti's thread i guess. i do not think i can be of anymore use to anyone here after that as i think i have shown all that i have learnt from fti's thread now, and if some finds they can use something to help themselves along their own journey great.

just to add do not forget i had no personal training or communication (not even a pm) from/with fti apart from what everyone can see on the TAF thread, this is just my findings from the things on his thread.

regards

Phil.

Do you think FTI does as you have described - I actually think he does not do that quite - if you look at his example he gave he does not trade 2 ways. I actually avoided reading about the turtles as he seemed to tell us not to but have often wondered about them.

What I do think is that he uses MM with feeling of how market flows very wisely and can flip easily -he can also put men in and out when required fully composed (mostly) I think he is very flexible although I have never been able to follow him live trading for myself and when I look back at what he has written re his live trades it does not seem that helpful to me in arrears. I have also wondered from what he has written if he is getting in at the next level rather than for some other reason.

From his example impulse he gave us he uses the hips to go short (following the hip/lop pattern eg abcde in the right formation) + when price takes out critical levels I think he puts in scout testers/markers so he knows when he attacks full on he is good to go at least to the next set of orders. My MM is clumsy but has improved no end since I focus on attack with rescue at back of head. I am trying to be more flexible re MM. Think I have always understood about the maths of it in terms that if I had unending dosh then I can never lose - but we are not like that.

Thanks so very very very much my friend.

Alex

Hi Alex

no i do not think fti trades like i am showing in the demo's of how money can take care of making its own profit if managed correctly, i believe he trades more like i have shown in the live trades i have posted previously, the difference is fti uses M5 a lot and prefer M15 to trade from, he has said M5 or M15 is ok to do this in.

the rest of what you have said i agree with, except about the turtles thing, i believe he wanted us to look at it but not carbon copy it or him in our trading.

what i am doing here now is showing the/my money management i often use, but i have no other option than present it in a rigid way with set values and N serves this purpose as i know (suspect) it is part of the spiral thing, normally the opposite trades would not feature but if i do not show them like this i cannot explain myself properly.

the un-ending dosh thing is the key to anything, that is why we must tailor the money management to our personal account level, if you look at that demo account it is 10k and so far in those two trades i have made nearly 0.5%, if you have counter trades in like i am showing you will be neutralising your drawdown until you can see a profit..... the stem the bleeding thing, the only other way to do it is with the use of long sword (options), which fti does not recommend. the way fti does it i think is hedging it off in the 3K's or crosses, this is just a simpler way to show the effect.

regards

Phil.

Hi... no I meant the MM not the rest of it.

Alex

Hi Alex

yes, i believe he uses it in a similar way, i have not seen this personally so i am just guessing here, the difference is as i have highlighted in my post above i believe.

regards

Phil.

Great lesson on the power of scouts too.

Alex

another money managed trade in the demo to show the whole picture completed.