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| 10.6 EDSEL https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?t=3259 |
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| Author: | orid [ Fri Nov 29, 2013 5:29 am ] |
| Post subject: | Re: 10.6 EDSEL |
here are the others , I told a lie there was a loss of 5 pips. I use 1st account for 10.4 trades, 2nd for 10.6 I was tempted to put on 4 10.4 trades last night before bedtime i didnt but they went on to tp. targets. hope its ok to post this stuff thought might interest more newbies Regards Peter |
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| Author: | James Roscoe [ Fri Nov 29, 2013 7:04 am ] |
| Post subject: | Re: 10.6 EDSEL |
I think you should share this much more liberally, Bob. 10.6 appears to be engineered for this type of money management in mind. Between using the dashboard to identify charts and then using those charts to identify trades, I think this way of money management all but guarantees growth in the equity of the account. We trade almost identically in term of MM. I think another reason traders do not grasp this is because they allow themselves to think about profits they could have had if they went all in. They are not aware of their own cognitive blind spots. At any rate, you have worked quite hard for a number of years on the concept, and the coders here are very helpful too. It is quite a team![/quote] I dont know. It was the main reason I left FF. I got tired of a group of traders following me everywhere posting after my posts and disrupting my train of thought. It is not conventional wisdom to trade like this but it makes sense to me. Guys who have millions of dollars to trade dont trade one trade at a time and use 30 pip SL. They phase in and phase out. They enter and keep adding. They hedge if a story hits the wrong way and protect their winners or keep a loser trade from getting bigger. They arent afraid to keep a long term long and do a short term short. Something now illegal in the USA. When price goes back in their direction they will release the hedge and go on with their move. But they sit on trades for months at a time, which is something I dont do. They know their sh......... when it comes to fundamentals. You wont see these guys posting at FF or other forums but they do exist. You can find an occasional article about them on line at times. If I can find it I once kept an article by a guy who talked about multi-level entrances and how the real big boys that is how they do it. They never commit more than just a fraction of their total funds into a trade and they know how to cover their butts if something goes wrong. If you dont believe me check the COT reports, they seldom go outside a 55/45 or 60/40 split on buys and sells. I mean how could 40-45% of professional traders always be on the wrong side of a trade. That could only happen with millions on the line if they partially hedged and protected their winners and losers. I read an article by a guy who ran a fund of 50 million dollars and never used a SL. He kept pocketing his winning trades and covered the losers with a hedge until he was ready to take some of his winnings and close out the loser trades. He didnt say at what point he hedged but that is what he did instead of taking a loss. His losers were always limited to a set figure and if they came back to his starting point he would unleash his hedge and the trade would be a winner. The hedge was a 0 trade out. Of course that only works with low leverage trading. Otherwise swap costs would eat you up. These guys trade 5:1 or less with leverage. So I have discovered a whole different world outside of the forums. I am not an advocate of hedging but I can see its use on occasion as a time out. You hedge to decide if you want to keep a trade or close it. I call it a time out. Instead of making decision under the pressure of the moment you hedge and come back the next day and see what you want to do with the trade. I also hedge trades if something came up and had to leave my trades. (this was back in my higher lot size days where a wrong move of only 100 pips could seriously do some damage) Those purposes I can see. The one in one out crowd dont like that kind of strategy, so those are some of my crazier thoughts.[/quote] I meandered around FF for a while too before I realized that there are some handles that have the absolute run of the place. I realized that these people are under capitalized, so they HAVE to "bet it all on black". They do not have the mental concept that pennies add up! When I realized that all in made no sense was the day I realized that markets could not function if there were ever more than a 50% chance that a market will retrace 50% after a broken head and shoulders pattern, or some other thing we have all heard. I also noticed that everyone was talking about entries, but almost no one talks about MM. I am almost a believer that there is a group out there on every forum who is actively spreading misinformation. Several have been through FF trying to tell people that it is about accumulation over a period of time. I think most people trade for scratch a gambling itch, and are not so much worried about building a business. I also trade without a hard stop loss. For me it is about building inventory over a period of time. I do not call myself a professional, but I am not worried about retirement from a job either. I will always work at something. Anyways, the people who harassed you there did so out of sheer lack of knowledge, and it is quite appropriate that they should continue to wander about in the dark. You have managed to construct a system that is favorable to the psychology of the average trader. You give them something to keep them busy, and that is a good thing. But if they ever want to get rich, what they will really pay attention to is the last few posts you just made. Cheers. |
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| Author: | fok [ Fri Nov 29, 2013 7:37 am ] |
| Post subject: | Re: 10.6 EDSEL |
Some time ago Bob wrote about MM in his 10.4B manual. Think of it this way. There are traders who do not use their entire lot size in one entrance. They break it up into 3 or more parts and enter on multiple levels. Let us say you like trading 3 lot sizes at one time. Instead of entering all three at once you enter them as 1 lot size at 3 different spots. This allows you the flexibility to find the spot you want to enter in. Let us say you enter one lot but some sudden news story breaks and gives a pair a 2 or 3 day temporary reversal. Well when that run is done you can enter your 2nd lot and then the third at a retracement to get your trade back to breakeven or back into a trend. You phase in your lot size. This also helps in case you are just plain wrong with your trade. Instead of taking a 3 lot loss you now only take a 1 lot loss not having played your whole position. To me this really helps your money management in that you still play your 3 lot size on winning trades but not on your losing trades, unless you have really blown your entrances. If you can grasp the basic principle and follow long term trends then you can make most of your trades profitable. I am a fan of small lot size to account size so as to make trading a relaxing and sometimes boring affair. The concept that you can make pinpoint entrances when you are dealing with a hundredth of a penny move seems ludicrous to me. Give yourself some space and allow trades time to become profitable. Most currencies really only change direction a handful of times a year you just need to give yourself the room to stay with a price trend. Check your monthly charts and you will see what I mean. Good luck. |
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| Author: | nanningbob [ Fri Nov 29, 2013 8:05 am ] |
| Post subject: | Re: 10.6 EDSEL |
As a reminder of what I taught in 10.4 manual. Pairs tend to range or change directions just a couple of times a year. As long as you are on the right side of a long term trend you literally can trade without a SL. The key is being on the correct side of a trend. Here is a nzd/jpy. It has stayed in a range of 1300 pips from 2009 to 2013. Then it UT to a new range which was caused by the JPY depreciating its currency. You can see the rise earlier this year. You can see it has almost reached the same level it was before the crash of 2007. I marked the change of trend direction for each year. 2012 had the most changes with 3 UT, DT, and then the bigger UT. In an ideal trade situation you should have only needed to SL any trades 3 or 4 times in 2012 as long as you traded the trends. Except for May and June, the currency has been in a very slow UT. I dont recommend keeping trades for months but you literally could have made every buy trade a winner. Long term ( I mean those guys who trade for months or even years) they would sit through this whole thing. I know one investor who put a 2nd on his house and put it all on selling the YEN. He plans on sitting on the trade for 2 years. He is absolutely convinced that JPY economy has to depreciate the YEN or collapse. I agree with him but I am not betting my house on it. I have done well this year though selling the YEN and traded small enough to last through several retracements. Anyway a pic of nzd/jpy reminder of 10.4 trading principles. |
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| Author: | fok [ Fri Nov 29, 2013 8:26 am ] |
| Post subject: | Re: 10.6 EDSEL |
A lot of double dummy lights (possible retracements) in todays friday markets. (I did change the colors) |
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| Author: | pgd [ Fri Nov 29, 2013 9:30 am ] |
| Post subject: | Re: 10.6 EDSEL |
eurjpy long hi bob, pl see attached h1 chart. is this a good long entry looking to the fact that the h4 stoc (chart not attached) is still pointing down? thanks. |
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| Author: | nanningbob [ Fri Nov 29, 2013 11:39 am ] |
| Post subject: | Re: 10.6 EDSEL |
Yes. It has been corner cutting the DP for 3 weeks now and has been a strong trend. So far it shows no sign of stopping. Soooooooo this is why I invented 10.6 trades. For these type of trends that you can get back in. I would play this into the USA session and if it doesnt go then bail out around the time of the London close. If it hasnt taken by then it probably wont and you will have to wait until next week Monday eur/usa session or Tuesday. I do expect the JPY to start strengthen but have been saying that for a week. December rules never seem to apply so we will see. Anyway you can see if you can grab some pips on a 10.6 trade during the USA morning session and then quit on the trade. |
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| Author: | nanningbob [ Fri Nov 29, 2013 12:51 pm ] |
| Post subject: | Re: 10.6 EDSEL |
I want to explain the difference between Martigale and multi-level trading or phasing in and out of trades. Here are my comments about martingale trading. I have studied martingale systems and methods thoroughly over several years. I think I have a very good understanding of how they work and why they fail. In reality and if I explain this right, you will understand why all martingale systems fail if left to them selves. 1 Biggest problem #1. The one problem I could never solve and never did was the taking of a trade at a peak of a move. If you programmed the EA to trade with the trend it would take a trade at a peak of a move and then it would go against you. The same problem if you counter traded the trend. No matter which way you programmed the EA to work, no matter what indies you used, you always ended up with a trade at the peak of a move and then a reversal. I labeled this trade at the time the death trade and that name has kind of stuck at FF. Now you have the problem of: that is the trade you have to get out of because it is the one that will kill you. So the question became when do you bail on that trade or series of trades because it aint going back. 2. This lead to the second biggest problem. The range of the martingale. For example if you trade 1,2,4,8,16,32,64. You are now 7 levels deep. If your reentry is 100 pips you have a range of 700 pips in which to get the re-tracement. If the re-tracement during that 700 pip run is never the amount or 100 pips from your re-entry point to even the trade you are cooked. Remember you could go to 699 and not get to the next re-entry level and it retrace to 501 (198 pip re-tracement) and not hit your clear out. So on some points you need more than 100 pip re-tracement for the martingale to work. 3. So you say no problem- you go 200 pips and your range is doubled to 1400. But now you need a reentry to return 200 pips to breakeven the move and face a potential trade of 398 pip move retracement that would never make it work. Well, you may not get a 200 pip move on one of your reentries so your goose is cooked. Same thing with 300,400 or more reentry levels. 4. #2 and #3 are insolvable. Your range will either be too small and price will over run your range or your range will be too big and never retrace to a solution. Both of these issues cannot be resolved, there will always be a price action move that will beat either scenario. How to solve the problem? In my studies I came to the conclusion that you could recover 3-4 levels deep and still come out ahead even if you took the occasional loss at at level 4 or 5 and you didnt double your lots. If you only kept 3 level maximum going and close a level every time you reentered a level so the max loss you would ever take would be 3 levels. Recovery would work mathematically if you stayed out of the death trade. I never went past 5. I just ate the loss. Because these were so few and far between eating the potential death trade kept me from experiencing it and enough recovery trades made breakeven that my winners would overcome the bailout trade. However ............... The real issue becomes how good of a trader are you? I seldom use recovery any more because I have learned not to fight a trend and be on the wrong side of it. If the trend reverses just close out and you can still multi level trade but only with the trend on your side. That is a discipline that is the hardest for a trader to do. Gee. if I just hang in there a little while longer .............. I will do that if the trend is still on my side, I will hang in there, however, if it is not it is time to eat the trade and move on. I have never seen a Martingale system that has been able to solve problems 1, 2, or 3. Multi level trading or using part of you total lots to enter a trade is used by professional traders all the time but it is to add to winning positions or phasing into a trend direction not to bail themselves out of a bad trade going in the wrong direction. Just my thoughts from someone who really tried to solve issues 1, 2, and 3. |
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| Author: | nanningbob [ Fri Nov 29, 2013 12:53 pm ] |
| Post subject: | Re: 10.6 EDSEL |
Here is my explanation of multi-level trading. I hope you can understand the difference between the two. Think of it this way. There are traders who do not use their entire lot size in one entrance. They break it up into 3 parts and enter on multiple levels. Let us say you like trading 3 lot sizes. Instead of entering all three at once you enter them as 1 lot size at 3 different spots. This allows you the flexibility to find the spot you want to enter in. Let us say you enter one lot but some sudden news story breaks and give a pair a 2 or 3 day reversal. Well when that run is done you can enter your 2nd lot and then the third at a retracement. You phase in your lot size. This also helps in case you are just plain wrong. Instead of taking a 3 lot loss you now only take a 1 lot loss not having played your whole position. To me this really helps your money management in that you still play your 3 lot size on winning trades but not on your losing trades, unless you have really blown your entrances. If you can grasp the basic principle and follow long term trends then you can make most all your trades profitable. I am a fan of small lot size to account size so as to make trading a relaxing and sometimes boring affair. The concept that you can make pinpoint entrances when you are dealing with a hundredth of a penny move seems ludicrous to me. Give yourself some space and allow trades time to become profitable. Most currencies really only change direction a handleful of times a year you just need to give yourself the room to stay with a price trend. Check your monthly charts and you will see what I mean. Good luck. |
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| Author: | Lancaster [ Fri Nov 29, 2013 3:11 pm ] |
| Post subject: | Re: 10.6 EDSEL |
Hey Bob, To your and pgd's point, do the polar positions of the two currencies on the daily CSS cause any concern with regards to buying EJ? I looked at this and thought we were setting up for a sell. Also, your analysis for JPY strengthening is based on your understanding of fundamentals, not anything we're looking at on charts correct? |
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