Thought I check-in with you guys. I’ve been busy lately trying to come up with a method which could aid me with my entries. COT report is great for following the ‘smart’ guys but is not a timing indicator.
Hi guys.
I’m fortunate enough to be home on a Friday afternoon before the NY close. And I just checked my numbers now for the month of May. A quick total looks like this.
I’m up. +17.1%
Week one = +5.1%
Week two = +3.9%
Week three=+3.2%
Week four =+ 3.7%
I don’t understand how it doesn’t add up, but my beginning and ending numbers are that.
I’m happy.
Mike
Hi Mike,
I think I do understand why the numbers do not add up. From the beginning balance to the end balance your increase was +17.1%. However the weekly gains are compounded. So the +3.9% gain on week two is actually more than 3.9% gain. The 3.9% gain is not based on the original 100 value but the already increased 105.1 value, so it is compounded. I hope you got it.
Wrote you PM.
FE
BB, I mentioned to a trader friend yesterday evening that I intended to buy Eur/Usd this morning.
To enter such a trade often I would not use a chart or an indicator, I would have a fair idea of the level or price that I would use the night before.
I posted a few times about these levels for entries, they are very simple - just use the Asian session, most times the SL requirement is zero (as I have mentioned).
Here shows Thursday and today, the green line is the buy entry, chart hr1 Eur/Usd - pink lines Asian.
By coincidence that Asian low today is the Asian high on Wed, also by coincidence my entry level happened to be today’s mid Asian - so seems there was buy orders there also - anyways the buy stop takes advantage of buy orders placed at Thur’s Asian high, those orders provide the momentum.
(there is no such thing as coincidence in the market, just buy and sell orders - it’s where those guys place their orders that counts)
I don’t know how you figure out things like that 
I guess it comes with experience 
If there’s a book though on being awesome, feel free to share it with me. You seem to be in synch with the market 90% of the time.
Hi Guys,
after a longer period it is time to get back for me to the rotts and do a little work which has to do with the name of the thread.
I did my COT analysis and there is not much to mention from it. Maybe BB can add something. All I found is that Silver and Copper has a good chance to go further down.
Maybe the technical department can look into these two commodities if the assumption makes sense or not.
Have a great weekend,
FE
Yen commercial longs report a high jump, though not near any kind of extreme, but interesting nonetheless.
So share with us what you have been doing. That’s only fair!
I’d thought someone would never ask.
This weekend I’ll get it out there what I’m up to.
Mike
Hi BB, Philip and Peter,
I need a little help. I try to find in the Williams book where he describes the Willspread indicator but I do not find it anywhere. The name is also not listed in the end by the words list or in the table of contents. Can someone help me out with a page number?
Thanks,
FE
Long-term secrets to short term trading, page 141. Chapter title is Will-Spread and the S&P 500 Index.
Thanks. If I search it in the wrong book then it is hard to find
“UK exports are likely to be helped by renewed momentum in the Euro area” - one sentence in the latest Confederation of British industry report.
This is what is happening on the ground in UK business:
UK growth accelerates to 12-month high - Growth Indicator - CBI
Hey guys.
Well, here it comes.
Feel free to cut me up.
But, something must be working here if I have had such a good month.
Let’s see. Many changes. So, let’s look from the top down.
You could say I trade a diversified trend methodology. It’s what has always felt right with me, from a long time ago. It looks like the mastergunner method. Which is multiple pairs running. Which of course are trending high. I only put on 1k position sizing on each. That is the first months level. If I make my monthly goal it increases every month.
But, anyway, as you know I always keep track of them all. So, I only will trade the pairs that are trending high, on the weekly time frame determination. (as opposed to the monthly, or daily tf’s that I keep track of also ).
So, every weekend I have those as my only options to go into. And I can see which currencies are stronger than the others due to how many pairs each currency has trending high against. And I won’t automatically trade them all, (but I do keep track of those ones to see what would’ve happened if I would auto traded them).
I use discretion before I pick which ones to pull the trigger on. Mostly will be looking at ‘buying dips’, ‘selling rallies’. I’m also looking for the flow. Also looking at where the levels are at in which they will not technically be trending high anymore (which I have documented).
I mostly have been picking the ones early on in the week. But, if during the week I see a definitive flow, then I will get in then. And pretty much everything is hinged on one most important aspect. My trading is centered around this.
(get ready to slice and dice me to shreds)
—I am looking for 100 pips profit on every trade.
: Every decision I make is for that goal. When I pull the trigger, I won’t get out of the trade till that is hit. Or my stop loss is hit. All technical and fundamental reasons are with that in mind.
—I have a 200 pip stop loss.
: That is the other side of the coin. I want the room for it to run in order to achieve the 100 pip goal.
I’m playing the probabilities for it to hit [B]Moreso[/B] than who’s the strongest or weakest for a given time period. Things change so much. And I think it’s pointless trying to guess who’s gonna be strong, stay on top, come back from the dead, etc…
—I use 1k position sizing, with an average of about 10-15 pairs running at a time. And this makes me able to diversify the field. I try not to be heavy on one particular currency. Cause if it is going the other way, then I’m screwed exponentially.
—My goal is 1000 pips a month. Which comes out to be about…well it changes every month… the first month it is 5% increase of my account.
Here are my results of this month.
Won 25///Loss 5 ----30 closed trades -----3 still running presently
+17.1%
1,694.4 pips
So, this month I’m gonna be in a higher level. It will be 2k sizing on every trade. (I do have a good cushion)
My goal therefore now, is NOT to try for more pips, but moreso running this method to see if it will be conducive for achieving consistently profitable results.
I have always liked compounding. So I am going on a month by month method. Still having a 1000 pip set bar, but increasing size. It’s like I’m hoping to see if this system will be the vehicle for me to reach a monthly goal. And if there’s anything I won’t budge on, it’s not jumping out of trades unless my tp or sl is hit. Mostly all of them hit within the week. Some goes 2 or even 3 weeks till hit.
I also have another account that I’ve been running also. (acc #2) All the same except on little detail.
Take profit of 200 pips and a stop loss of 100 pips. I favor acc #1 though.
Here’s the results of this month.
14 total trades. Won 7, Loss 7. +5.4% +1,075.4 pips
I also ran the numbers for this scenario. Placing every trade that is trending high at the open of the week. Not opening any more throughout the week. Running them till they take. 100 pip profit///200 pip stop loss.
April—46 trades. W = 27 L = 19 Pips = -1100
May—54 trades. W = 41 L = 13 Pips = +1400
So, that is just interesting to me. That would be without any discretion.
I am aware of the whole fact of the risk/reward rules everyone shoots out there.
But, just think outside of the box on this one.
Remember, the ones trending high have an edge. Buying dips, Selling rallies is an edge. 100 is closer than 200. Diversification is an edge also.
Talk to me.
Mike
Me again.
So, let’s talk about this week. This is what’s going through my mind about the players.
[B]CHF[/B] --Trending high against 6 of them, all except the GBP. Looking good to go high against the USD and EUR, [B]if[/B] I see weak weakness in USD and EUR. Don’t look good against JPY/NZD/CAD. Haven’t seen much retracement lately. The CHF will breaking highs against those 3, if the trends continue.
[B]GBP[/B] --Trending high against 3 of them. (JPY, AUD, NZD) All of those trends are at a top. Will be new territory if continue. So, I will not really consider the Pound, unless there is a definitive flow (for a very possible 100 ).
[B]CAD[/B] --Trending high against 3. (EUR, JPY, NZD) This looks good going high against the EUR. And that would only be if the EUR is diving. They are stretched against the other 2. So, it doesn’t look good, unless of course CAD and oil break out going high.
[B]USD[/B] --Trending high against 2. (JPY, NZD) They are stretched against them 2. Are at tops and I would prefer to see a retracement first.
[B]EUR[/B] --Trending high against 2. (JPY, NZD) These are iffy, because they are close to tops. I’m not counting them out though. I would have to see the EUR continue on this flow they have going now. I’ll bring you up to date on what the EUR has done this past month. Very interesting. Must note that they are back in bed with the CHF. Where there is one there is the other (in any line up). They have been on extremes. The first week they were towards the bottom. Second week on top. Third week dead last. Fourth week on top. And now we begin a new month. We just do not know what will happen until it unfolds.
[B]AUD[/B] --Trending high against 2. (JPY, NZD) These look good (for me, on my method) if the AUD decide to break out across the board this week.
The Majors vs. Comms have been so slanted lately. The entire month of May went to the Majors. April saw the 2nd and 3rd weeks favoring the Comms. But that’s about it in the last 9 weeks. See, I’m sure you all know that almost every one of the Majors have had their time. The GBP came back from the dead. The USD came back from a pretty deep retracement. The CHF has been the strongest currency. May went to them. April went to them. March went to the USD, then them. Feb was shared with the USD and GBP (all 3 of them).
And the EUR, as you all know, are breaking out higher. The JPY has tailed the USD, until this past week. A divergence has occurred now. But for how long, we don’t know. (reminds me of the EUR and CHF)
Do I need to talk about the NZD? Well, I’ll tell ya. I haven’t seen such a dive, without a good retracement.
Actually, if I would look back, the NZD did drop very much. (Not this much though) And came back with a vengeance. …OK…I’m gonna be watching them. See, I won’t trade with them long, cause their not gonna be trending high anytime soon, on the weekly tf determination. But, I can avoid them!
Well fellas. That’s what I got.
Talk to me.
Mike
I have weak info. About COT, anyone can help me by link or somthing… please
Hi Mike,
I see you have been working a lot. It does seem to me you make nice steps and learn a lot. I comment in your own post with bold letters where I see something differently. I believe you wanted to get our opinion so it is no problem that I add some comments.
In the end, money management is more important than the strategy itself so keep that in track.
FE
Yeah Mike its funny you should mention that. Throughout the past two weeks I have been looking into a similar topic.
I was frustrated that I would hold a really profitable position for a month but for a relatively small position size. So I decided to test what if I increase the lot size while aiming to take out only 100 pips?
Now the thing is, no matter how good or bad the performance of a system in the past, a future trade always has a winning % of 50.
In other words, the longer you trade the system, the closer you get to having winners and losers equal. There is actually a formula for it: W – [(1 – W) / R]
W is winning % and R is Risk:reward. A winning system will yield a positive number.
Now the funny thing I got the winning % up to 70% but the system was still unprofitable. Only when I moved the risk:reward to 1:1 did I get a slightly profitable system. And that’s with 70% wining %.
I decided to stick with my current money management. But the point of view of maths suggests that the reward to risk has to be more than 1:1 for any system to be profitable.
That means that you would yield more profit making your stop-loss to only 90 pips.
Now diversifying only makes more sense when your reward to risk is higher than 1:1.
For example let’s you decided to Buy EURUSD and GBPUSD. Let’s assume you lost both, losing a total of 180 pips.
Now, if you shorted EURUSD but bought GBPUSD, you would make 10 pips no matter what. If your stop loss was 80, you would make 20 pips no matter what. And so on. Now if you buy both and win you make 200 pips which is the best scenario. So that is the thing, would you rather win 10 pips every time for sure or have a 50% chance of winning 200 pips? Math again argues that winning the 10 pips everytime is more profitable.
That was my conclusion but I’m still working on the subject.
I like Mike’s way. I sure as hell would not shoot for that kind of R:R, but hey, it is his method and it seems to make sense. Well, from what I managed to understand. Good job, keep the updates coming!
So let’s apply the latest idea practically to my system.
I notice that buy signals across the board are developing for the US, telling me its the strongest currency at the moment on the 4hr time frame. It is followed by Eur which is up against everything except dollar (based on my trading strategy that is).
So I stay away from those!!
To me the perfect currency to trade at the moment is CAD. It is up against JPY, NZD and AUD. But down against Eur, USD and GBP.
So what I do is look to sell NZDCAD and buy EURCAD. Now if I see a CAD rally I’d win since my risk to reward in my system is higher than 1:1 (sometimes up to 5:1). If CAD falls I’ll catch that in my EURCAD long.
This is what, at the moment, I think is the safest way to trade.