Elite Trader's Gambler's Anonymous ETGA

Status
Not open for further replies.
I've been reading this and other threads we are both looking at on the big O and MT (grid scalper). I have some questions if I may (and since I don't know if I may I will ask and if answered then presume I may, neat eh)

1. You are using anti-correlated pairs for your hedge (a good idea I think if you can count on it), but why not do what Sympatico seems to suggest (though never comes out directly and says so, thus forcing us to think for ourselves - personally I love his teaching style, though frustrating), and take trades in the direction of the trend whilst the opposite trend direction trades are opening and then as the retrace occurs you are only left with one at the end of the trend to carry. (I know that this one needs managing as it is hard to know when a minor retrace is a trend reversal, so I always and close at a few pips before dropping below the open trade but have been caught as you sometimes swear "they" know what you are trying to do.

2. I don't quite know what your are setting up initially I presume you pick a range (zero to somewhere below infinity (by the way for a good discussion about infinity read the history of zero)) and then set your positions before hand. So if you are setting up for this week then if the currency pair is in the middle of this range (perhaps determined from a high and a low over the last year or so) then you set buy limit orders below today's price and set up buy stops above and as they are hit take your profits and set them back up below that point.

3. Why the palaver with the Pivot points (which I set up but am not sure I am seeing the value of them) when picking your range then setting up spacing as you see fit for your account size seems adequate. I'm not up to sympatico's skill level yet in doing that and on setting up the daily pivots for a couple of months (1st Feb 05 on) did not see any particular clustering or significant support or resistance as a result of setting them up. Did notice that the USD/CHF seems to be hitting a 10 year double bottom formation though.

4. It's the ranging that does the work for you so picking the swing of the range is my difficulty at this stage, I wonder if you have any thoughts on this, which is really a question about spacing (or cell size at sympatico would say) I suppose.

5. Please don't construe the above as criticism only confusion and seeking knowledge on my part I assure you.
 
I've been reading this and other threads we are both looking at on the big O and MT (grid scalper). I have some questions if I may (and since I don't know if I may I will ask and if answered then presume I may, neat eh)From a fellow-guest, you are most welcome here.

1. You are using anti-correlated pairs for your hedge (a good idea I think if you can count on it), but why not do whatI do this because Oanda does not allow hedging and I use every ounce of there platforms dynamic calculations offered Sympatico seems to suggest (though never comes out directly and says so, thus forcing us to think for ourselves - personally I love his teaching style, though frustrating), Folks, Adowland is talking about the master of System#1, "Pool Cleaner", in a sense Pool Cleaner is Sympatico's system, however many have traded this sort of scaling before him. His explanations and parables are rather enjoyable. He explained this system as a swimming pool with a deck....I dubbed myself a lowly, Pool Cleaner when comparing myself to the character of Sympatico...LOL. Sympatico, is a handle in another Forum (s). He is a rather clever fellow. and take trades in the direction of the trend whilst the opposite trend direction trades are opening and then as the retrace occurs you are only left with one at the end of the trend to carry. (I know that this one needs managing as it is hard to know when a minor retrace is a trend reversal, so I always and close at a few pips before dropping below the open trade but have been caught as you sometimes swear "they" know what you are trying to do.This is a difficult system to explain and visualize, indeed. As long as you believe Flow>Capacity, it does not matter when you start trading this or what direction your bias is...just jump in the cold water and you will become acclimated. The drawdown with the tweaks I suggest will adjust the trade size percent dynamically and let the market tell you what to expect. A cash subaccount is needed to balance with.

2. I don't quite know what your are setting up initially I presume you pick a range (zero to somewhere below infinity (by the way for a good discussion about infinity read the history of zero)) and then set your positions before hand. So if you are setting up for this week then if the currency pair is in the middle of this range (perhaps determined from a high and a low over the last year or so) then you set buy limit orders below today's price and set up buy stops above and as they are hit take your profits and set them back up below that point.Don't get lost in this infinity and zero stuff. I was battling with how to present this system in a clear, concise way...logically. I must respect some of the analytical folk here, and tried to reason with them.

3. Why the palaver with the Pivot points (which I set up but am not sure I am seeing the value of them) when picking your range then setting up spacing as you see fit for your account size seems adequate. I'm not up to sympatico's skill level yet in doing that and on setting up the daily pivots for a couple of months (1st Feb 05 on) did not see any particular clustering or significant support or resistance as a result of setting them up. Did notice that the USD/CHF seems to be hitting a 10 year double bottom formation though.My goal is to get less lines and follow the natural flow of the market. Do you have any other ideas? The Pivots seem to space out the trades during straight down/up moves. A Fixed increment would not respect the natural flow of the market. The recent daily bars High and Low, put too many lines on the chart and makes this too labor intensive, I gotta sleep!!

4. It's the ranging that does the work for you so picking the swing of the range is my difficulty at this stage, I wonder if you have any thoughts on this, which is really a question about spacing (or cell size at sympatico would say) I suppose.I suppose you want to get into the mid point of a ten year range to be optimal. I prefer to quickly have the trade move against me to establish my max investment. This helps to size the trades correctly from the beginning. You need to buy time to capture the flow

5. Please don't construe the above as criticism only confusion and seeking knowledge on my part I assure you.No offense taken, and there are never too many or unnecessary questions in my opinion

Michael B.

 
This was a post that explains what I do the most accuratly. Not because of the kind words given to me, but the shopkeeper thing..


http://www.elitetrader.com/vb/showthread.php?s=&postid=729953#post729953

{slice from above link}
Electric is a Hardware Store owner who purchases inventory, (hammers, nails, faucets, and light bulbs) setting a resale profit margin on those goods, and selling those goods to his customer’s 24hrs a day.
{end slice}

You know Folks...This is sort of being a Retail Market Maker...I have always believed the Floor Traders need flow and volatiity, But I never dreamed of doing this from the retail side...(Oanda makes this possible with ANY amount of start capital)

Michael B.
 
If were lucky, somebody can persuade Sympatico to visit here. Surely, He is most welcome here. Not because I need him for information, because it is a joy to read his posts

Michael B..
 
I have some time, So I made the Trade Ticket more "variable"! I did some cosmetic things to the spreadsheet and added a variable trade ticket column to "Cash Cow"...

Also a new capsule. (we are digging the hole still, for building our swimming pool...lol or....we are increasing inventory for the winter season)

See attached...

I noticed a few of you actually are reading the spreadsheet.

I have had a few PM's about some of the columns. Just fill in the white spaces and the yellow spaces calculate.

Spreadsheets can calculate various things. This spreadsheet however is an integral part of these two systems as it does not just record results, but it gives necessary values to make decisions with.

Michael B.
 

Attachments

I am afraid Electric has too much time on his hands. Many novice traders do not "stick" with their systems.

You folks can help Electric remain interested and teach him discipline.

He is becoming more responsible by posting this Journal...

I have thought that I will simply watch his slow bleed to the day he cannot cover his unrealized and no longer able to replace trades on the other side of the grid...But I think I can see that if there are not any straight down/up moves and he has estabished his perimeters...he might have time to get some realized.

Wifey
 
Set your trade ticket to 1.10%
More...

How did you come up with this? Also, you mentioned at some point this might change, can you talk about what will cause you to change the trade ticket percent?
 


Tripack,

It is directly related to the DD in the last spreadsheet. It is updated daily at around 17:15 (est) and posted here (or simply make your own spreadsheet, I purposly leave the simple formula's for all to see).

Use the new value for the next 24 hours and re-enter all existing limit orders with the new value. This sort of controls the drawdown when there are quick directional moves. During chop, the trade ticket percent will will increase as realized profits are being taken, causing the percent calculation to increase the number of units.

Tripack, there are two accelerations at work here, the percent and the percent's calculation giving number of units.

Thank you for reading and I value your comments. Folks, Tripack has had an awesome Journal, do a search on his name.

Michael B.

P.S. Tripack, I know I have not answered your question. It would be neat if the reverse engineering, I have done could be explaned through a velocity or momentum value. I simply am forward testing with these values and I am holding cash in a sub account to adjust and fine tune with. This is a rather difficult system to visualize any other way. As each day passes, netting realized profit, this becomes less and less gambling....see the parity column in the spreadsheet. I am seeking efficiency and have no doubt that flow>capacity. The labor involved in this system is high, which can be improved upon too.
 
Folks, at a 3.30% trade ticket, the system was making a healthy yield. It would make the ROI AFTER the labor cost still quite healthy depending on how much you pay yourself for your labor. You would need a minimum ROI AFTER labor of 25% per year.

As you know , I do not gamble. I cut back the trade ticket by 2/3rds, then later tied it to a float. This will effect yield. I also maintain a cash subaccount. The idea here is to trade smaller during heavy drawdown without sacrificing the slight martingale effect of trades being put on. This daily percentage float creates stages of the ever so small martingale. Perhaps it should not be done daily...thoughts? ideas? comments? I open this Journal up now to YOU.

Michael B.

P.S. Ponder this: A ball is rolling downhill to infinity. It travels at 5mph and after it travels 2 ft then speed is measured at 7mph. Could you extrapolate a formula to the acceleration even though infinity is a component? Please do not answer this, it is just to illustrate a function of getting time for the flow>capacity to reach positive parity and overflow.

P.S.S. All is well as long as you believe Flow>Capacity. This is an efficiency exercise at this point and needs to be dialed in to calculate on automatic, daily in the excel spreadsheet. The "trial and error" forward testing, could be shortened by one of you clever fella's that believes that flow>capacity. Now the question is, will you share? I am in no hurry, as I got the rest of my life to study this truth. We will not use expensive API's and are constrained to the Oanda platform.


 
I could hire programmers and fill my workshop up with expensive tools and arrive. But this is by far more enjoyable. Folks, I am in no hurry and this anonymous board that ET provides has introduced to me some folks that I have met personally and have become real.

I know this is the internet and an anonymous board with fictitious characters. But it can become real for you too, if you understand what you are dealing with.

I presented this gift for all to read about. Many will not trade it. Many will tweak it further, as I have done.

I get great inner fulfillment by this.

The challenge of intellectual mountains to climb is true growth and pushing ones self to understand.

Michael B.

P.S.S. Please do not despair. If any readers are not understanding this and are too embarrassed to ask, then you lose. Just ask. I only ask you read the opening post of this Journal and abide by it, and speak in "plain speak" as those big words and advanced concepts and theories escape my not so nimble mind.
 
Status
Not open for further replies.
Back
Top