Elite Trader's Gambler's Anonymous ETGA

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Folks,

There are so many ways to trade this methodology.

As you know, I have often said that "The Holy Grail" is to discover HOW you would like to trade and WHAT works for you.

I now will identify and soon practice what I preach.

I do not like trading in subaccounts the inverse. I want everything to be in one account, other than System #2 and cash. A total of three accounts.

Daily Pivot Point increments does not work for me.

I need a low labor more conservative approach to this method of trading as I hold down a full time job during the day. Therefore wider increments are needed.

Night trading and multiple currencies trading all have to be on one screen on my laptop downstairs on my nightstand, so that I can glance quickly to find replacement trades.

Michael B.
 
I have gone flat in System #1 twenty minutes ago (the opportunity presented itself, so I took the best time to get flat), and continue to trade System #2.

I have $5,215.63 (originally started with $5,006.65 0n 03/29/05) and am able to withdraw the $191.00 (I withdrew $226.24 last month) I had planned for and still have the original 5k started with in this test.

This has been fun folks. I will continue discussing in this Journal and posting the spreadsheet on System #2 (this I have traded since last July, 2004)

System #1 can restart if there are some breakthroughs, when it is clear (But I have "grail requirements" which you may not have).

Michael B..

P.S. 8% on the capital in one and a half months was not that bad for somebody that does not know what he is doing, plus we had all this fun. Even with all the changes, this represents 64% APR....

P.S.S. The kicker for me here...is ALL that labor for so little...
 
where is all the anger coming from? do you expect me to give it all out there for free? spoon feed everybody right? the whole point of not telling all is so that others can the fill the gaps for themselves and understand it better. cryptic clues frustrate me too but isn't it fun when the light bulb goes on?

es, i respect what you are doing here because some of what you've said has helped me conceptualise this system better. i for one don't have the time or commitment to start a project like this.

faure

ps. for the record i am not sympatico, it's a flattering mistake actually. just check my profile at mt and you'll see i've been there for ages.
 
This seems reasonable. If your broker has "one unit" increments or "base ten lots" you could use the 6135 pip example and fill as high as a 10Y pool from the get-go. I actually understand this. My problem with so many of the posters throughout these internet boards is that everything seems so cryptic. Thanks DavidWillis for the example.

Let me see if I get this right:

EUR/USD

10Y High=1.4362
10Y Low= 0.8224
Range= 6,135 pips

We start off at the top buying and building the UnRealized all the way down to the bottom. Ok, now that is 62 entries right? with 100 pippers' Average price =1.1312 current price at 1.2882.

100 units at a time (1 lot which is 100,000 units =$10.00 per pip, so 100 units = 1 cent per pip).

Ok I'm stuck here what do I do now....We have the pool size at this point. (you would not believe how long I have been awake and I am now sick with a sore throat.

So if we were at the very bottom of the range that would be 6200 pips *(1.1312-0.8224= 0.3088 pips) = $1,914.56 unrealized. So a 5k account would be enough to handle 100 unit trades at 100pips apart? (1,914.56*2= $3,829.12)

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Quote from Davidwillis:

Last night at 3:00am I couldn't sleep, so I started thinking about this system (or was it that I started thinking about this system so I couldn't sleep). Any way, the hardest part is filling up the pool right? So why wait months for the price to move all over the place to pick up all the trades? Why not just look at the last 12 months to determine the high and the low, then buy all the longs and all the shorts at the current price. Then you just need to set sell orders at every grid space. You would have your entire pool filled (at least the last 12 month worth), and would have better priced that if you bought them as you went.

Let me give an example, using EUR/USD and 100 pip grid spacing.

1- Look at the last 12 month high and low and current price.
H = 1.3670
L = 1.1759
current price = 1.2850

Note: if you had been following this for the last year you would have short buys all the way from 1.1800 up to 1.2800 at an average price of 1.2300 and long buys from 1.3600 down to 1.2900 at an average price of 1.3250 and your net unrealized pip p/l would be 5500 for the shorts and 2800 for the shorts for a total of 8300 pip loss (this is just an approximation because your lot sizes would probably change over the last year).

2- Buy 10* (your lot size depending on your account size) Shorts and buy 7*(your lot size) Longs.

Now you have the same positions as if you had been filling the grid all year, but at a better price (although you do not have all the gains from the year).

3- set targets to sell one lot size every 100 pips.

4- when a target gets hit fill in the hole with limit orders like normal.

Maybe I am just tired from lack of sleep and am missing something.

David
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Quote from ElectricSavant:



Obviously the use of Pivots calculated every day to draw lines (grid spacing) with is not the best use of time. The thinking was to capture the "natural flow". But, there are other ways to capture flow through "floating" static, fixed increments spacing from simply keeping track of the the 1Y range. This is done now in this "Forward Test" and called "minimum pip increment". Why use the Pivot Points at all then? Just use the minimum calculated from some method of accounting for # of entries with a rolling forward 1Y range. Use wider increments so that sleep and multi currency management is possible.
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It seems to me that from a pure tradability standpoint, keeping up with a whole bunch of levels that could occur at any time, or calculations, or lines etc., doesn't really add value as you observe. An idea I had is to just have a fixed amount - let's say 50 pips (this assumes you're using TPs of more than 50 pips) and a given time interval - let's say 4 hours. So every 4 hours you would check in on your pairs and replace any orders that need replacing if the market has moved 50 pips or more from the last 4 hour close. The good thing about this is that it requires less maintenance. The bad thing is that your targets could be hit but a huge move might blow through and leave you unhedged. So a second idea is to not use take profits during extended out periods, like when you're sleeping but rather when you do your check on the 8 hour sleep cycle, if your hedge positions meet your take profit target you exit at the current price. While this will limit some of the profits the added value of having a full hedge in place while you snooze might be worth it. During the night you could just check before bed then check again when you wake up, and during the day if you can check in every hour, then maybe you shorten your levels down from 50 pips to 20-30 pips.

If you are working a news report you will want to determine the best strategy to take profits and hedge against a large one directional move if it doesn't snap back. I'm not sure what the best strategy is, I guess it depends on whether the news causes a big one directional move that might leave you filled on lots of inventory but possibly increasing your unrealized loss, or if the news causes many back and forth gyrations that can be taken advantage of.

Anyway, just thinking out loud.
 
As your positions are now flat, let me interject this idea here - apologies if this is way too far away from the intent of this journal. If I were designing your system here is what I would do: (untested and just in concept, so the usual caveats apply)

Use a long term system as a filter for long term direction - like a weekly or monthly system that has a positive expectancy on its own. It doesn't have to be much, just positive expectancy over time - obviously the better the system the better the rest of this system will work. When I say weekly or monthly system I mean a system that will not reverse positions for extended periods of time.

If your long term system goes long enter a long position at the current level. If you are not flat, get flat then enter the first position where the system says to enter. This will be your pivot position. Don't use a stop or profit target on your pivot position.

If the market goes in your position's favor then add additional positions at given increments (like if it has extended 25 pips or more above the last level within the past hour, you add another) and use a large take profit (like 100 pips). If the market goes under your pivot position, add at given increments (like if the market goes 50 pips or more against you within your time period) and use a smaller take profit (like 25 pips). If the market is really going against you, increase your increment from 50 to say 100 to reduce the amount of capital you have to allocate to that position.

If the long term system switches, like from long to short, then go flat and start over.

Pros: you can use a higher % leverage on your positions because you go flat every so often and you can exactly calculate the historical max drawdown of your system and then position size accordingly. And you add more positions as it moves in your favor, and less positions as it moves against you. Long term systems tend to be a bit sloppy in their entries so using multiple levels should help to average out better.

Cons: Your fortunes are tied to the long term system's fortunes. However you will still get the benefit of smaller bounces even if it trends against your position. You also won't be hedged so your long term system getting the direction correct is really the hedge. If the max drawdown of the long term system is 1000 pips over the past 10 years, for example, you could then figure out the % of capital you can use based on the levels you will be adding.
 
How could you imagine "average trade price" could enter into this to "systemize" it. (I think I got an idea, but I want to hear from you a little)

Tripack, I invited you to participate, and I cannot not tell you in words how much I appreciate what you are doing here.

I am just taking a pause, to gather a new breakthrough and jump into the next plateau.

I am shaking your hand with both of mine....

Michael B.

P.S. Folks the thought processes here should be captured and enjoyed, like a fine wine. Savor it, Cherish it... Just strip naked and wallow in it.!



Quote from TriPack:

As your positions are now flat, let me interject this idea here - apologies if this is way too far away from the intent of this journal. If I were designing your system here is what I would do: (untested and just in concept, so the usual caveats apply)

Use a long term system as a filter for long term direction - like a weekly or monthly system that has a positive expectancy on its own. It doesn't have to be much, just positive expectancy over time - obviously the better the system the better the rest of this system will work. When I say weekly or monthly system I mean a system that will not reverse positions for extended periods of time.

If your long term system goes long enter a long position at the current level. If you are not flat, get flat then enter the first position where the system says to enter. This will be your pivot position. Don't use a stop or profit target on your pivot position.

If the market goes in your position's favor then add additional positions at given increments (like if it has extended 25 pips or more above the last level within the past hour, you add another) and use a large take profit (like 100 pips). If the market goes under your pivot position, add at given increments (like if the market goes 50 pips or more against you within your time period) and use a smaller take profit (like 25 pips). If the market is really going against you, increase your increment from 50 to say 100 to reduce the amount of capital you have to allocate to that position.

If the long term system switches, like from long to short, then go flat and start over.

Pros: you can use a higher % leverage on your positions because you go flat every so often and you can exactly calculate the historical max drawdown of your system and then position size accordingly. And you add more positions as it moves in your favor, and less positions as it moves against you. Long term systems tend to be a bit sloppy in their entries so using multiple levels should help to average out better.

Cons: Your fortunes are tied to the long term system's fortunes. However you will still get the benefit of smaller bounces even if it trends against your position. You also won't be hedged so your long term system getting the direction correct is really the hedge. If the max drawdown of the long term system is 1000 pips over the past 10 years, for example, you could then figure out the % of capital you can use based on the levels you will be adding.
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