Elite Trader's Gambler's Anonymous ETGA

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heya electric

how things going?

I believe the grid idea can work with directional input (and not mechanical direction, I am talking about fundemental / experienced trader directional input)

The USD index is now approacing 92, a major resistance level

at this point I will begin Grid trading short USD only

The pairs I am considering are GBP and EURO, but I am leaning more to GBP due to the interest rate of GBP, and te fact that EURO is in a bad economic and political slump

I will be trading long GBPUSD with very low gearing, I believe the maximum low we should see on GBP this year is the band from 1.69 to 1.72, somewhere in that region

on GBP I will be using a 33 pip SL / TP on the grid

I don't think the USD will fall into oblivion like the bears eventually think will happen, but I think at these levels and stronger USD is going to cause some serious issues. The fundamental reasons the USD weakened in the first place are only getting worse.
 
hey jasonjm!

Hello there.

I humbly believe the key is to just trade 6 or 8 currencies with no overlap. Size your trades small enough to build the pool w/no replacement trades and trade 1-3 times a day. The hedge with the sub account going long and short is all thats necessary. Then its just to wait, fill and survive. Now, you can let the unrealized dictate to you which side you want to place your trade on..you don't need to put the hedge on immediately...This is a directional bias, I guess..but purely on price action and condition.

Traditional Directional input I abandoned....But if you have figured something that works for you...congrats at least if your wrong with this method it will eventually come back to you...

I have abandoned the Volatility Grabber live trading in this Journal.

Without bragging, I am not new to trading and I know when to get out...The method is valid, but a rather long commitment to take. I will probably take it in live Journal Trading, but for right now, this method I am illustring live currently is keeping me busy and challenged.

Good Trading To you...

Michael B.
 
I took my rate here
http://fxtrade.oanda.com/fxtrade/interest_calculation.shtml#
in the little line
FXTrade's Interest Rate Form

They just give you country by country rate. I calculated the cross-rates myself. Anyway i get more interest than what the FXmath calculator tells me. Weird...

My spreadsheet is for gross-estimate purposes anyway.

43% drawdown! Wow! But guess that's because you only have 3 pairs. I got 13 (various sizes), i should get less than that. We shall see. Of course ROI is also dramaticly affected, that's the problem.

For leverage i'm always at 50:1. But i play with my size position to always have money left to cover my P/L. Guess my effective leverage right now is 30:1.

For the size adjustement, i can for exemple close a small trade of 1000 units with 10$ of profits to offset 1/10 of a trade of 10000 units with -100$ of loss. That's how i work. I can then re-enter immediatly 2 trades of 1000 units if needed. (i say units in exemple but i work in % with 1% increments every time).
 
I have a question: Why 10,000 units?

It seems that you'd want to dollar balance your exposure with such a methodology. That is, say two long positions at $5,000 USD each, against one short position of $10,000 USD. Adjust as necessary to maintain a US dollar balance. To elaborate, 10,000 units of GBP will take $17,500 to put on.

10k units of say GBP/CHF will have a higher dollar value than 10k units of EUR/HUF. A 1% move in each will not balance, for example. My implicit assumption is that you desire to stay hedged so that your positions can earn leveraged returns.

I'm just curious...
 
Where are you getting 10k units from? I plugged that amount into FX math just to come up with a rank. I could put in 5k..1k...just so I entered the same thing on all pair to find out the yield...

Are we on the same page?

As far as the base proportion, I have simply tried to equal out the volatility. Tripack earlier eluded to what I think you are, with how a percentage trade ticket calculated, which I do not use.

Please explain, as I need to understand.

Michael B.


Quote from DaveN:

I have a question: Why 10,000 units?

It seems that you'd want to dollar balance your exposure with such a methodology. That is, say two long positions at $5,000 USD each, against one short position of $10,000 USD. Adjust as necessary to maintain a US dollar balance. To elaborate, 10,000 units of GBP will take $17,500 to put on.

10k units of say GBP/CHF will have a higher dollar value than 10k units of EUR/HUF. A 1% move in each will not balance, for example. My implicit assumption is that you desire to stay hedged so that your positions can earn leveraged returns.

I'm just curious...
More...
 
Quote from ElectricSavant:

Where are you getting 10k units from? I plugged that amount into FX math just to come up with a rank. I could put in 5k..1k...just so I entered the same thing on all pair to find out the yield...

Are we on the same page?

As far as the base proportion, I have simply tried to equal out the volatility. Tripack earlier eluded to what I think you are, with how a percentage trade ticket calculated, which I do not use.

Please explain, as I need to understand.

Michael B.
More...
OK, I see. I think you've answered it by saying the 10k was the amount that you used strictly for yield rankings.

I'm still curious though, how do you "equal out the volatility" on the three pairs? Are you using some std dev. volatility type calcs or more of an eyeballing approach?

Thanks for any info!
 
In the spreadsheet, I am attempting to level the volatility across three pairs. See the base proportions formulas in the spreadsheet that look at the 1Y range. I am open to suggestions...

Today a limit order hit in AUD/JPY and now I am at base 13. Perhaps another limit order will hit (very rare that two hit in one day especially on the same pair). We are tanking and the system is getting hit hard, currently it is at minus $381.66 in unrealized. I need this extreme testing to learn to "slide' correctly...At my current exposure and the way it accelrates geometrically, I do not forsee more that 10% drawdown. The earlier 17.1% drawdown, was when I was experimenting with over-exposure...

Michael B.

Quote from DaveN:

OK, I see. I think you've answered it by saying the 10k was the amount that you used strictly for yield rankings.

I'm still curious though, how do you "equal out the volatility" on the three pairs? Are you using some std dev. volatility type calcs or more of an eyeballing approach?

Thanks for any info!
More...
 
Knock it off Electric!

"Experimenting with over-exposure"

I have heard everything now...You screwed up!!!!!!!

Now to get 1:4 max risk to Profit ratio, you have to chase it the whole year!!!! If you only had 10% to work with, you would achieve your goal much easier and earlier...

So sweat it out and deal with it! (you better inch up your exposure NOW as you are now committed, because of the earlier screw up.) If you do not "get with it" you will only achieve 1:2, this first year of live public trading.

And another thing, when the next 365 day period comes and you are holding that 10% max drawdown...then I better not here you bragging! Remain humble and be all that you can be. I married you and I know what you are capable of.

Any Wifeys of traders out there, this is the kind of strength and support your man needs, that I am demonstrating.

Wifey
 
I will NOT change the way, I trade, just because I am behind on my goals. What is paramount is to control drawdown through exposure. The system attempts to achieve this though the multiple sliding scales that are being illustrated.

The system has come a long way and the current way that I trade it, only leaves room for discretion on those rare occasions when profit taking is presenting itself, rather than position balancing.

The change that I am making is to reduce the # of trades that the system makes when profit taking presents itself. I will take $1.00 per thousand units....instead of the earlier $0.50 per thousand units. This will reduce the # of trades and allow the system to trade less and take more of the trend at each interval and waste less spread and costly re-entries...

Folks if you are completely lost, you are not the only ones. This system is difficult to splain' but rather simple when you understand. Hint: The spreadsheet is an integral part of this system...read it, study the formula's...then you will be on the way to a better understanding. I know this is a lot of work, but if you can become interested and let your passion for trading take over, you too can see how consistently profitable this system is 365 days a year. And the best part of it is....it is growing in the field of the "Not Gambling" crop.

Max has grasped it, BECAUSE HE ASKED QUESTIONS!

But Max has not understood correlations yet....I too, am having trouble with adding pairs and weighting them correctly to net out the desired exposure according to each pairs volatility and long term correlations.

It is a fact that pairs move:
  • Together
  • opposite from each other
  • independently

For research you can try here:

http://www.mataf.net/en/analysis-correlation.htm

Some say you can use the correl formula command in Excel also...


Michael B.
 
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