Good morning (again)!!!
Initially I was working on one half of Wilder's money management rules i.e. 7.5% of capital per instrument / position and 30% of total capital. I then decided to be slightly more conservative and start using one third of Wilder's money management rules i.e. 5% of capital per instrument / position and 20% of total capital. After I started thinking about GCI's leverage and position sizes and after I got John's response I then re-worked things out so that I was sure that the same money management rules would work at both brokers i.e. GCI and Delta and, after drawing up that table, it would appear that I was (LUCKILY) not far out to start with i.e. using EXACTLY his money management rules with 50:1 leverage is ALMOST exactly the same as using one half of his money management rules with 200:1 leverage.
As I said before: using a decent money management system has definitely made all the difference and is yet another reason that I have now uncovered for my shortcomings last year. If you can remember: sometime back I actually said to you (I think it was you anyway) that it seemed to take me a LOT longer to wipe an account at Delta than it took me to wipe an account out at GCI. Only NOW do I see the reason for this i.e. money management. At GCI the COST of the lot is fixed and the lot SIZE is varied by GCI whereas at Delta the lot SIZE is (can) be varied by the trader and the COST of the lot is then varied accordingly. What this means is that at Delta as I would run out of margin I'd be able to reduce the lot size whereas at GCI I would always be trading the same lot size while the captial was being reduced!!! May sound simple and logical NOW with hindsight but at the time I could not really figure this out. Now I know and 'the sky is the limit' I reckon!!!
Now that I'm trading off the 4 hour charts my SI System trades seem to run on average for about a day and a half, maybe two days, from the time of opening a position until the stop and reverse.
Just one thing you need to consider when trading the same instruments with multiple systems: at GCI this could be done no problem i.e. opening multiple positions on the same instrument in either direction is possible because the positions do not offset each other (this is the 'hedging' capability they 'bang on' about). At Delta though this would NOT be possible because if you have a few positions open on an instrument (let's say going long for example) and you then try to open some short positions on the same instrument (this would happen sometimes if the systems were giving conflicting signals) then the short positions would immediately close some of the long positions (unless you use the 'Trades with Logical orders' option which 'sucks' in my opinion i.e. not the same as GCI's 'hedging'). Delta's method is indeed the correct method i.e. enables you to perform a 'proper' stop and reverse i.e. without having to place a stop on one position and another order for the reverse on the other position as you would have to do at GCI. I am not familiar with the way Oanda operates as far as this is concerned but just 'check it out' first is all.
Somewhere in the book, hidden away in a dark corner, you'll find that Wilder actually says that if the ASI have a negative value then the trend is down and if the ASI has a positive value then the trend is up. How powerful is THAT knowledge my friends??? A MATHEMATICAL way of determining the long term trend direction!!! Point is: yes you will get positive and negative value for the ASI i.e. it is correct.
As I said to you before: I've left the limit number in the equation and kept it at 3.00 i.e. my ASI calculations are exactly the same as the original BUT I added the 'PIPFACTOR' at the end and divide the ASI by the 'PIPFACTOR'. As I also said before: you'll note that PARTICULARLY with forex pairs the TISAR is ALWAYS the closes stop and reverse point i.e. I have yet to see when the last HSP or LSP was the closest stop and reverse point on a forex pair. Also remember that Gold, USD/ZAR, EUR/ZAR, and GBP/ZAR are 'special cases' i.e. the 'PIPFACTOR' for Gold is / must be 0.10 and not 0.01 as you might expect and the 'PIPFACTOR' for the ???/ZAR pairs is / must be 0.0010 and not 0.0001 again as you might expect. I'm sure I've been through this before, but anyway, I use GCI's tick value from their Contract Specifications page to get the 'PIPFACTOR' (found here:
GCI Financial Ltd - Online Forex and CFD Trading) (see all the '0.1' and '1.0' and '0.01' figures. Those are the 'PIPFACTORS' that I use). If you're still having a problem then email me at
dpaterso@forexbrokersonline.net and I'll send you another spreadsheet (or a couple) for you to have a look at (I don't want to attach the spreadsheets here anymore because as one of our 'thread members' quite correctly pointed out to me a little while ago: by posting the spreadsheets I'm possibly 'giving away' the systems to 'hangers on' who are not prepared to do the 'slog' and are just here 'for the ride' i.e. not prepared to even buy the book like the rest of us. Not to mention the copyright issues again of course).
By the way: as I'm replying to you now I just thought that you would like to know that since my last post to you earlier this morning one of my accounts (for example) is BACK up to 20% on yesterdays and climbing steadily and that's after two positons have already been stopped and reversed at losses in the preceding 4 hours. 'Hang in' with these systems and you can't go wrong in the end!!!
And by the way: to keep myself 'occupied' I'm think I'm going to give the VS a 'run' on GBP/JPY 1 hour i.e. been tracking it since last night waiting for an entry. I was also looking at the Reaction Trend System yesterday again (as you can see trading the 4 hour timeframe is giving some 'spare time' now). It occured to me that you could trade that system WITHOUT going through all the 'B', 'O', and 'S' 'mumbo jumbo' i.e. you just 'go for it' i.e. in a ranging market you place a stop order to sell AFTER S1 has been penetrated and the price is still above S1 and you place a stop order to buy AFTER B1 has been pentrated and the price is still below B1 (pretty much the same thing that you would do when CORRECTLY trading with Pivot Points). It appears to work EVERY TIME!!! Take a look. That's probably the second most complicated system in the book i.e. very high maintenance if you follow the 'B', 'O', and 'S' 'thingy' but if you use it the way I just desribed it's 'quick and easy'. Will probably 'demo' my 'theory' sometime during the course of the day / week. As a matter of fact I have used the HBOP's and LBOP's from that system on their own quite successfully in the past. Not many trades though i.e. you're always waiting for a breakout so I got impatient and moved on.
Linear Mode
