GBP/JPY Equity Building Profitable trading strategies

mytwopips · July 9, 2008, 1:39pm

Nevermind… It is about half the guppy. We are going to have to pay that trade tax until this cashes in.

4xStar · July 9, 2008, 1:48pm

I have had very good luck shorting it so far. It is the one I short, instead of the guppy. It is also Andrew’s 2nd favorite pair after the guppy.
Glad I could give you the tip … could you tell me how this fits into your criteria since you took the trade? And what would negate the trade for you?

mytwopips · July 9, 2008, 2:17pm

Price way above 50 ema, 50 ema way above 200.
This is a 15m chart zoomed all the way out. I also use a 15m chart at normal view with a 5 and 10 sma used the same way for best entry.

Simple huh.

mytwopips · July 9, 2008, 2:20pm

hmmm…:mad:

My attachment won’t open. Oh well, you get it. Just set up two charts the way I described and you will see what I see.

mytwopips · July 9, 2008, 2:22pm

Ok. We will try this one.

rrram2 · July 9, 2008, 2:25pm

[ol]
[li]Well at least you can still post large text!
[/li][/ol]

mytwopips · July 9, 2008, 2:25pm

Now, the more it move up the more shorts you grab. Just don’t martingale, that is a stupid way to blow your account. When price goes back to the other side of 200 ema, close out all orders at profit or loss.

rrram2 · July 9, 2008, 2:30pm

you could have sold it counless times at 212.20
Patience is also very hard for me because just when I think I have patience I show myself I have very little patience, each time I sell myself short
and take way less pips I always realize later that had I waited I would have been alot better of pips and faith wise.

mytwopips · July 9, 2008, 2:37pm

This post is for my gbp/chf stuff.

If you also look at the chart you will see that we are at minor resistance. I have learned that a breakout will most likely never happen when price is “overbought by my strategy” already. If we were below 200 and 50 and moving up, then the breakout would most likely happen and a nice rally too after the breakout.

So this is a safe contrarian trade. I said safe, not guaranteed.

rrram2 · July 9, 2008, 2:39pm

Those 3 books are really good books. And I have to admit a few of them I have reread and continue to reread. Inner space is a bit more complicated
and Kaplans previous book was bigger and written in a way as to be understood more by the reader. Some books like the Bahir you could read 5 times and still not understand what you just read. Different books at different times are able to bring things out of you. Those who study torah after midnight are they who uphold the world.

Its been a while since I published articles there, and other articles there I had to remove because I had published them elsewhere or someone else published them elsewhere. It is funny when I publish something, sometimes people use it and modify it and it ends up replicating on servers all over the world. And I really cant keep up on all the sites I publish stuff on.

mytwopips · July 9, 2008, 2:44pm

Ok. Because I am a virgin to that pair and I have to go to Houston for a meeting, I decided to scalp 10 pips and close. Otherwise I would still be in.

I am trying to produce a show where I bring Colby O’donis and Akon to houston. I am going to put up half of the production budget and another well known promoter is going to grab the other half.

I will catch you guys on the late Asian early London.

This one is for Elijah…

[B][I][U]GO GUPPY GO!!![/U][/I][/B]

rrram2 · July 9, 2008, 2:54pm

I dont guess I dispute any of that, that about sums it up.
I am looking for the bottom now so I can get one cheap

Andrewunknown:

That’s just it, and I’m assuming Elijah knows it, but he has never stated it fully. In fact, the method has never been expressed systematically, for which I think there is good reason.

My thoughts on the method:

The method’s given title features the phrase “equity building”, which refers primarily to the rolling collection of positive swap on long positions. However, a used margin percentage spilling over into double digit numbers is bordering on excess. This means any rational, experienced practitioner of this method will derive swap on a maximum of 10% (lower or higher at any given time depending on usage) of the position they command while they hold it. The realized “equity building” impact? Positive, but nominal. What keeps this from playing a larger role? More swap requires a larger position which requires greater margin usage which heightens the risk of a call on a drawdown which may be very shallow.

This method is really about buying bits and pieces as the pair declines, with the expectation of liquidating later at B/E or slightly higher. If there is a massive drawdown, negligible use of margin ensures a call does not occur. While waiting for the pair to resume an uptrend or waiting for it to bounce back, positive swap is earned. Again the benefit is small; but if the waiting period back to break-even is long, the swap can accumulate to a significant amount. The downside inherent in that strategy, however, is that trading capital is tied up earning pennies because eventually the pair will (well, is expected) to return to former higher levels. Too many too high (TMTH as rrram has referred to it) can result in a very long wait. A quick review of the last years GBP/JPY chart shows that longs picked last July are still thousands of pips from B/E. There is an implicit commitment to a 100% win percentage (or as close to as possible), which may entail waiting for years to zero out positions at no loss.

In a market that oscillates more so with no catastrophic decline, the opportunity exists to buy drops and exit for small profit - these are the “scalps”. The position sizes opened for the buys are very small relative to the account balance, so the profits are minimal, but multiple lots are typically opened and closed at profit. These are where the profits (the overwhelming majority) derived from the method are generated.

The virtue of the method, correctly applied, is that one’s analysis can be pathetically wrong but where margin is effectively managed, realized losses won’t be incurred unless a truly catastrophic decline results in a margin call.

The crux of the method is not swap/rollover or the carry component: at least, not in the real world. In actuality, “scalping” many small lots for their small profits is where the money is to be made, whether in an uptrending market, or in a ranging market.

This is however, where it becomes tricky. Does it matter where you buy? In a ranging market, not as much - unless you buy in at an absolute top, you’ll be able to buy and then sell at some point relatively soon for a profit. But in a more widely oscillating market or in a strongly trending market, it is very important. Relentlessly buying every 10, 20, 50 pips sounds easy enough, but over hundreds of pips, that a lot of drawdown and a lot of margin used. No matter, you say, it will return. But when?

To avoid potentially weeks/months - years? It’s not impossible - sitting in a massive drawdown is key, even though you’ll earn some swap. What does this mean? It means that buying cannot occur at random, but will require analysis so that you concentrate positions “low” (toward an objective market bottom) rather than just “lower” (buying lower buying lower buying lower buying lower buying lower with no real end in sight, margin permitting).

This is very important, and the most difficult part of the method to grasp because success here is almost purely discretionary. Buy a lot of orders up high and then go into a 1000 drop? Bad call on your part. Tough luck until the market brings you back to B/E 4 months later. Usually if you screw up, you’ll be fine: this method does not require an astute analyst. What it does require is the willingness to wait out and weather massive drawdowns for as long as it takes for them to aright themselves. Stops are out of the question because they negate the purpose of using tiny lot sizes. The margin call is your only stop, and your margin should be managed to avoid that at all costs.

Could you use that capital elsewhere to make money, rather than simply dig yourself out of a loss? Would the money made elsewhere outstrip the rate of return derived from the swap you’re accruing? Yes; and almost certainly yes.

So is the method viable? Yes, if managed appropriately, just like any other method. The essential difference here is that method adherence, other than not going short, is solely a matter of money management.

Is the method trading? Kind of. More like a dense series of tiny investment positions, bought at a alleged discount (“GBP/JPY will go UP UP UP”) and sold at fair value.

That’s a lot to read, but thought it was important to condense what’s has evolved over the last 136 pages and to clarify or dispel some notions that may be unclear or incorrectly held. I guess it’s ironic that I have not and do not trade the method.

rrram2 · July 9, 2008, 3:10pm

That is how the universe is for me becuase that is what my conciousness is.
Now my father has confirmed it for me. And swears this is the way it is
I guess I am just taking advandtage of it. I hope my lazy or easy way of making $ in forex is acceptable to some. I am not as advnaced as Andrew.
I am not a trader and never have been. But there is no question what I do works and I make lots of pips. We all do. I so appreciate everyone here.
As my reflection off you is how I am able to see myself. It is the reflection off you that defines me and shows me what I really am.

Other great books I have read are from Rav P.S. Berg, That man writes an awesome book and without his influence I would not be where I am now,
at least not this quickly. What was key for me was always questioning everything, Berg is very thoeretical, and I used to read and wonder wow what did he just say is possible!)(&!#*(^!@!! Then I started wondering if he was just kooky, but further reading revealed no no no I was wrong, what this man was saying he actually believed and it was a reality for him and it is what he thought and believed to be true, it was his conciousness, it is what he is, HE wasn’t just saying crazy things, the things he was saying were true for him and a reality in his life. Extremely thoeretical is how his books are perceived and I have read more of his books than anyone elses.
I admire and crave theoretical books, which contain ideas which I can literally bring to life and make a reality in my life.

Again the light of the creator literally does exist in suspended animation at EVERY point in the universe, weather or not someone believes this or not does not change the reality. The reality is that when it is overcast and raining the sun is still there even though you cant see it. When the Earth rotates and the sun appears to rise and set, while you cannot see it, it is not gone or missing on non existant, but because you cant see it your mind defaults to the thought of if I cannot see it, it isnt there.

I also found movies “what the bleep do we know” VERY useful
the secret was a movie very much like it that was also very good.

4xStar:

… and very much needed.

I agree, this is the heart of the ‘method’ and the part I did not get although I was doing it in my demo account because I was strictly following the rules of ‘just keep buying’. And the demo acct is on fire.
This was also the heart of bunnygirl’s method … her method itself, the bunnygirl cross, was just one of thousands that can work, or not, fairly consistently over time … but what made her rich was the money management, in her case always buying 4 positions, and taking profits at +10, +20, +30 and let the 4th run as long as possible.
So once again, mm is the key.

One way to play this (rrram’s) method is to open a micro acct with $1k or a mini acct with $10k and just play strictly by the rules. If at some point she moves down so far that recovery could be months or years away, as Andrew points out, you just leave that account to run on its own, assuming it will never drawdown to zero, fund another account and start active trading again. At some point the first acct with return to b/e with tons of interest in tow. But you would lose big time if that was the only account you could afford & it gets blocked by drawdown.

Correct … but there is another component that drew me to this thread & probably many of you as well … and that is the … for lack of a better term, spiritual overlay on all of this. Elijah does not just think the guppy will go up up up … he is ‘willing’ her to or maybe better, he is creating a Universe in which that is what she will always do.
That’s where the Kabbalah, or any kind of metaphysical or mystical philosophy comes into it.
A few years ago, this would have been sheer ‘woo-woo’ talk and definitely not belonging to any sort of serious trading discussion. However, in the past few years, physicists have begun telling us that “creating our reality” seems to be precisely what happens, that there could be ‘infinite’ parallel universes … take your pick which one you want to inhabit & change it at will.
Wild stuff … but this is what Elijah is tapping into in his own way & bringing to this thread as part of a trading methodology.

I believe it, but need to find my own way of making it work in my trading. My solution so far is to only go long the guppy (the few times I have shorted it I got slammed big time). For shorting, I have found the GBP/CHF – the 3 times I have shorted, it worked out perfectly. So I have one to play long, one to play short and the focus is not divided – when I see guppy I think up, when I see the swissy combo I think down

However this is still trading & until I get this “creating my own universe” thing nailed, I need to be really careful in choosing my entry points, which means patience, patience, patience

4xStar · July 9, 2008, 3:16pm

Ah, too bad … she just dropped so beautifully. This is my 4th successful short with her … I likey

Thanks for the info on 15’, I have a couple of questions that can wait until tomorrow. BTW, I had to google Colby O’Donis Yeah, I’m a bit out of the music scene.
Houston, eh? I have some family there & my youngest daughter went to Texas A&M at Galveston (Marine Biology major). I enjoy visiting.

rrram2 · July 9, 2008, 3:19pm

However If I had 90K I would buy 3 or 4 houses fix them up and rent them.
it is a wise man that preserves his money and buys property at the bottom,
when everyone is foreclosed, the banks arent loaning out $, and they are looking for a house to rent.

You can make a fortune in interest, but the key for me is scalping as this yields way more money than the interest. The interest is a back up, a bonus which justifies holding the lots as long as I need to to sell them for a profit.

vincent333:

Hi to you all - this is my first post and i have been following this thread with great interest.
i am a newbie - been following the GY for a few months.

Thanks especially to Andrew and 4xstar and of cousre rram and others - i have looked at Zulutrade but someone warned me off them - i have tried to email 4xstar but can’t seem to get an email to her.

I was toying with this very simplistic idea - say you were to trade 10 lots and went long. This is an average of usd200 per day - with about 90,000 in your account you would get margin called at about-900 pips - i could afford to put in another 900 pips to cover.
This is effectively tieing up say 200,000usd - but you are earning 200usd a day interest - NO bank pays you this interest on 200,000
The downside - as we all know …is if the market goes against you more than 1,800pips, back down to 194.00region and you get margine called (i would still have reserves though) - if the market does go up to the mid 230’s and beyond in the next year or so, you collect the interest and 10,000usd for every 100pips.
i realise it is risky, but would very much appreciate your opinions - or just calling me a fool is ok!
thanks and keep up the good work.

rrram2 · July 9, 2008, 3:47pm

Start trading your demo account like that was real money.
Be careful not to get too many too high GJ has been very rangy lately.
bank as many pips as you can and always limit your risk by avoiding TMTH and always maintain a safe margin %age useage level of WAY less than 10%
I really like to be under 5% at all times. I am not a gambler really. At this point this is not much like gambling anymore. Yes it is small profits.
If I was advanced as market savy as Andrew I could confidently swing trade GJ and pick the tops and bottoms and reverse, but I dont have the trading knowledge or skill Andrew does so my way is maybe a sort of lazy way,
but if you closely follow what I perscribed, anyone should be able to make a consistant profit if they can handle thsi trading style. I was so safe with NJ
even when I had 30+ lots that price could have run down to 60 to get me sold out. I dont know if NJ has ever been lower than say 67 at least not in the 5 years or so I see.

Building a fortune is done much safer by doing it slowly. 3 rental houses will make me wealthy, does it matter if it takes 10 year? or 20 years or even 30 years? I dont base my financial needs on any one thing. I am not trying to get rich scalping but I did make 8000 pips last month VERY safely. Laugh because I only played 10 cents a pip. If I was trading $100 a pip I would have safely MADE 800,000.

What is being missed here is the significance of this whole thing.
I never promised anyone they would get rich quick here. And if there is someone here that can afford to trade $100 a pip I can safely trade no matter what is at stake or at risk, as I am disciplined enough and experienced enough to experientially know what a safe level of margin is.
The way I play now will weather a catastrophe much worse than mar 17 or the previous around the end of last summer, we may get a crash after the summer but nothing like what the doom and gloom club is selling everyone.
It is all a bear trap so they can fee you to death and buy your house for pennies on the dollar and make you trade your dollars in for some even more devalued Amero.

So for me I am concerned with Today, NOW. where GJ will be in 3 weeks or at the end of the summer really isnt for my speculation. I have thousands of consecutive trades that have allowed me to become fully persuaded in my own mind that I can do this, and I can continue to do this and that this works for me too VERY well. I guess it wont work for everyone.

Like they say if you want to change your life you are going to have to change some things in your life. I bring a certain level of optimism that cannot be easily found. But this does not make me any more or less or better or worse than anyone else. And as far as I am concerned we are all one anyways, and separateness is an illusion. I know My wife and I are one.
Often we say the same things at the same time, think the same thoughts at the same time, no matter how far we are away physically we remain as One in two places.

trav72:

i agree with all comments.
I think this has been the most entertaining thread for me with rram2 as the spiritual leader…we the followers…
i always avoided the guppy before as i read something that it was volatile so to me that made me not even consider it…i didnt even look at it. i only been studying 4months, and i wish i new at the start what i now know.

i have tried many methods, from the BGX to candlesticks patterns which all work to a point…but it wasnt fast passed, and no method is 100%
this method you are constantly collecting profits.
(i still have a lot to learn, but that is why i like fx, if i knew how to do it all already i would have stopped doing it and learning- i am never getting bored with fx really).
This method
i have not been doing it long enough to experience a long period of drawn down…i would be interested to here feedback from the guy who was bouncing off rram in the start of the thread cause he seemed to go through some stessful times.
for the time being i find it the best method for me.
it is erractic, wild and fast and lots of action, if you apply those actions with other methods you will fail - here you can succeed.
just an example, i have numerous practice accounts, one i set up one week ago with $100,000 (of unrealistic). has made 37,000 in one week. one week means nothing, but if i was using any other method i wouldnt of done that. I have used the same lot size on every trade there and kept the margin at 5% or less and banked the profits…$50 pips
another account i started with 2500 and it has made 1000 profit the last week, just with trading this method and using the same lot size and using one dollar pips and managing marging…
if I… ME! (not saying you!) had been using any other method this would not happen, it would be slow and painful with little wins and bigger losses.
So they say find a method that suits you.
I think this method does suit me, but i can see it could be disasterous too.
i enjoy it thats the main thing.

rrram2 · July 9, 2008, 3:52pm

There may be at the end of the chart but in the beggining those two pairs go opposite often.

And GJ has no obvious connection to EUR/CHF!

And I dont even agree that GJ and GC correlate oppositely,
theyg o together I think. And maybe thats security to short GC and go long GJ. That way if GJ goes down GC will go down and you will have draw down on GJ but GC will have paid for it. But you also could get caught with your pants down.

As to someone going short at 210 something (@&$(#^$*& and wondering why they got whipsawwed? I coudl see going short at 212.50 or 40 for a few pips but going short LT while always trying to be long is self defeating.

4xStar · July 9, 2008, 3:52pm

How can you have so many positions open and still be undeer 10% margin. I am at 200:1 leverage now with 15 positions open and already over 12% margin.

rrram2 · July 9, 2008, 3:58pm

I thought maybe it was anew HYIP LOL.
NOt mytwopips!

rrram2 · July 9, 2008, 4:02pm

But I dont get it!

It would have been a good Gj short too