Hi Muddbuddha
In reading through this very interesting thread, i noticed something about the kind of trades you take.
It seems that you take several trades simultaneously and that those positions use highly correlated pairs sometimes. I was just curious how you manage those positions from a money management perspective
Thanks for the input and keep on posting…it’s great to read your stuff
Well, I’ve had a MM scheme for quite a while that I use and has kept me out of trouble. I realized a few years ago that I would use sound judgement on lot usage and if I lost a few times in a row, I would throw my MM aside and attempt to force a trade at a higher lot usage.
I like to try new ideas and see how they work out…and sometimes they don’t work out at all. I always use a live account because while I believe that demo accounts are good for some, I NEED to feel the loss of the trade when I make stupid or quick decisions. So I always use a live account but adjust my lots accordingly.
Equity Balance =
< $50, lots = 200 units (.02)
< $100, lots = 500 units
< $250, lots = 1000 units
< $500, lots = 2000 units
< $1000, lots = 3000 units
< $2000, lots = 4000 units
< $3000, lots = 5000 units
< $4000, lots = 6000 units
< $5000, lots = 7000 units (.70)
< $6000, lots = 8000 units
< $7000, lots = 9000 units
< $8000, lots = 1 mini lot
< $9000, lots = 1.2 mini lot
< $10,000, lots = 1.5 mini lot
< $12,000, lots = 1.8 mini lot
< $14,000, lots = 2 mini lot
< $19,000, lots = 3 mini lot
< $23,000, lots = 3.5 mini lot
< $25,000, lots = 5 mini lot
> $35,000, lots = 7 mini lot
> $50,000, lots = 10 mini lot
> $75,000, lots = 15 mini lot
> $100,000 lots = 25 mini lot
And that is my MM scheme straight from the little piece of paper in my wallet I wrote it down on over three years ago…
Now, when I was recalling my Oanda margin call a few posts ago, I was left with a whopping $28 in my account. Frustrated, I quickly blamed Oanda for my margin call and opened a $250 account with Forex.com trading full mini lots. Within three days, my account was $78. Blaming Forex.com, I hopped from broker to broker until I finally accepted ME as the problem and not the broker. Since I had never closed my Oanda account, I told myself that I would start trading that $28 and wouldn’t deposit any further funds until it was $250 equity. It took me two months…but I did it. Accepting myself as the problem and writing down my lot usage helped drastically.
Now, how many trades do I take? A maximum of five. I adjust my trades screen on Oanda to allow only four trades at any given time to be viewable and if the screen is full, then I don’t take any others. That keeps me with plenty of free margin and also keeps me from having to do any % math.
I regularly monitor 7 pairs + gold, but only allow myself to take 5.
Now, here is the first reason for the highly correlated pairs. Earlier in this thread I said that I wanted the most for my margin and the most probably based on the method I trade; that said, the JPY crosses typically provide that. I trade the CAD because on the three hour charts and up, it’s an easy pair to trade as it the GBP/USD and EUR/USD.
Here’s the second reason. I use a charting package to monitor six of the seven pairs for a cross of the 68ma. When there is a cross and close, the charting software sends a text message to my phone and I can log in from work or wherever I may be and tend to my trades. I don’t chart the CAD/JPY as it moves practically pip for pip against the GBP/JPY, so I don’t really need the CAD/JPY signal. The GBP/JPY moves the farthest, the fastest; so it’s a good first indicator that direction is changing and I know to start paying attention to the others.
Interesting that the EUR/USD did not react as much as the other pairs during this abrupt dollar push. Whether that means anything is left to the future. But it moved about 250 pips Vs. several hundred by the GBP and over a thousand on the YEN crosses.
I’m currently LONG the EUR/USD based on a re-cross and close of the 68.
I had closed my CAD SHORT yesterday based on little progress for -48. Would have been positive today, but I didn’t know that yesterday.:rolleyes:
Took a couple of small EUR/JPY trades this morning on the 30 minute chart for +10 and +19. I normally hold for 65 on the 30 minute chart, but these trades showed litle momentum and I decided to bail on them. Been quiet today so far. The one thing I learned from Dr. Elder that stands true is this, “A man can jump up quickly from a fall off the second rung of a ladder. He gets up slowly and staggers often after a fall from the top rung”.
Now, where is the market going to go? I have no idea, and personally don’t care. This may be a correction with another run to dollar lows, or this could be the “dead cat bounce” and lead to further dollar strength.
I’ve found it best to just trade the charts with an eye on the fundamentals and not speculate as to market direction. Every time I’ve tried, I’ve made trading decisions that typically lose.
Never buy into expected strength, nor sell into expected weakness. Trade the charts.
Unexpected movement is 80% of this market. If it weren’t, we’d all be rich!
Well, the EUR/USD LONG did pan out on the re-cross and I closed it just shy of 1.47 for 76 pips.
A GBP/JPY SHORT off a 38ma bounce panned out for 37 pips. All in all, a bit more productive than yesterday.
The EUR/USD struck just above 1.47 and held for a bit and has drifted down about 50. While the GBP/USD made substantial movement to the downside. One would be tempted to SHORT that EUR @ 1.47 and hold for the long term… I’ll just wait for the charts! 
I took off work this week as I had too much PTO time to burn prior to the end of the year. So, other than cleaning the house non-stop, I’ve been watching quite a bit of CNBC. One of the things I’ve always found amusing about any business related broadcast is the implication of correlation in their comments.
Here’s one: “Oil climbs on the back of a plunging dollar.”
Now, at first glance, that statement would seem to imply that oil prices are a direct result of the dollar. Hmm… Yet during Katrina, both the dollar and oil rallied together. As well, the only currency the dollar has given substantial ground to this week is the YEN. Against almost all other pairs, it made headway; but because of the slide against the YEN (which can be directly connected to the subprime mess), the dollar has been the topic almost every 12 minutes on CNBC and Bloomberg.
Not to say that oil and the USD are not connected at some level, because they are; but if you were to trade based on statements made by the “analysts”, you’d quickly be margin called. Hell, you could trade based on doing the complete opposite of Oanda’s [U]LONG/SHORT Ratio Charts[/U] and be successful over 40% of the time! Why? [B]Because the herd is often for slaughter.[/B]
All things economic are connected at varying levels, but rarely on a 1:1 basis. The connection is proportional and varies often depending on other key factors that may be weighing in at the given time. So, while it’s easy to say oil is climbing as investors move away from dollar assets…that doesn’t necessary mean they are putting it into oil, gold, silver, pork bellys, or spam futures. Where it goes is anybodys guess as investment funds/hedge funds and their respective managers diversify into several areas based on techicals, fundamentals, personal bias, taro cards, etc.
I think, personally, that all the old paradigms changed when hedge funds came into the picture. Now, whether they stand the test of time is debatable. The concept is logical…it’s the men who manage them that are loose cannons at times.
I must say that I really enjoy that Cowabunga system. Of all the blogs I’ve read so far, that one is my favorite currently. 
And welcome to Friday!
Fairly good week on the Fx market. Almost makes me want to quit my job and trade full time!
It’s funny that during these weeks of high volatility how there are two distinct groups that emerge. Those that are elated over the market movement and the profits generated, and those that feel the market has gone crazy and shout out in the forums in disgust, “This is the worst trading week I’ve ever had.”
The difference between the two groups is plain and simple. Experience.
The Achilles heel of many new traders is that they become too comfortable in their routine and refuse to see, [I]based on historical fact[/I], that market ranging is limited to small periods of time before the volcano erupts and the market corrects.
So many of the 2-6 month traders get washed out of the market in a quick flood of margin calls and flow those funds right into the accounts of the more experienced and common sense traders who didn’t have a hard time seeing the finger of god writing on the walls of the exchange floor.
While I can say that I have been in both groups myself, the one thing that I have never done is proclaim my inexperience in public forums and ask the inevitable, “What’s happening with the GBP?!!” as though three of the four horseman of the apocalypse had just arrived at Denny’s and were waiting to order till Death arrived. 
Those are the would-be traders that I feel will never make the crossing to real traders. If, with ALL the information venues available on TV and the internet, you could not answer you’re own question and absolutley have to post your naivity on a trading forum…then you are 1000% il-equiped for what Fx has in store for you in the coming year(s).
Prior to becomming a project manager, I was in HVAC and automation controls for several years. The smartest piece of advice anyone had ever given me while growing up in those fields was, “Never say you can’t do it, and never say [I]I DON’T KNOW[/I]”. The first part of that sentence is a death blow right away, both to you and your client. The second being a confirmation of knowledge. If you really don’t know, fine; but never say it. Say, “I don’t have that answer for you, but I’ll find out.” In reality, you’re saying the same thing, but in a completely different context that keeps the clients faith in your job knowledge and shows that you are eager to make them happy.
Now, change [B]client[/B] to [B]you[/B]…and you’ll be a much more resourceful person in life and will never feel inclined to doom yourself to failure by your own words and deeds.
Okay, enough ranting…
Thursday positions closed:
-65 AUD/JPY
+45 EUR/JPY
+215 GBP/JPY
+131 EUR/JPY
Friday positions closed:
+55 GBP/JPY
+24 EUR/JPY
+11 EUR/USD
I don’t plan on holding any positions going into the weekend as I stand right now. Usually it’s not a good idea after a volatile week as there are sometimes corrections during the weekend. We’ll see…
I realized that I didn’t explain any of those closed positions…
-65 AUD/JPY [B]Failed Retrace[/B]
+45 EUR/JPY [B]Successful Retrace[/B]
+215 GBP/JPY [B]Break of the LOW[/B]
+131 EUR/JPY [B]Break of the LOW[/B]
+55 GBP/JPY [B]Successful Retrace[/B]
+24 EUR/JPY [B]Successful Retrace[/B]
+11 EUR/USD [B]Shot in the dark…[/B]
Doesn’t really help anyone if I don’t explain why I took the trades in the first place…:rolleyes:
I haven’t had many good trades on the AUD/JPY…not sure why…possibly because I have no related pair to judge direction from. Think I may take it off the platform for a while and just concentrate on the pairs I find easier to read.
Had (2) positions from late day Friday…yes, I know I said I probably wouldn’t keep a weekend position…
GBP/JPY was up +54 at the 5PM close. It wandered back to the open for an exit at break even.
EUR/JPY was up +43 at the 5PM close. It wanered back to +24 before I closed it to lock it in.
There’s no fault for locking in profit!
The GBP/JPY looks as though a LONG may be setting up. Going to keep watching the GBP/USD, EUR/USD, and EUR/JPY before committing though.
May just wait to see how the Dow futures start shaping up prior to taking a position though. If I miss the chance for the GBP/JPY, at least I know there’ll be one on the EUR/JPY opening soon.
hey muddbuddha just caught onto your thread, great commentary and insight. What do you think now (sunday 545pm est) the gbp/jpy is heading, you think its having a small correction now but will reach the high on friday for 228.28??? the 4hr has buy signals all over it right now
yeah, I trade off the 3 hour chart and my entry was signaled @ 227.42. But with the lack of momentum on the other pairs, I’m not sure whether I’m going to take it.
I’ll probably decide sometime between 7-9PM if the market starts to show some more interest in a LONG.
when in doubt stay out!!! here is a little piece of info that has helped me and hopefully you and your viewers on this thread. It helps identify trends and profit targets its helped me tons def worth the read!!!
Alright, in three LONG:
EUR/USD @ 1.4675
EUR/JPY @ 162.59
GBP/JPY @ 227.61
Had to pay 40 pips in spread total due to the market hours, but the two YEN crosses are already crossing into positive territoy by a hair.
Somtimes that’s the price we pay for Sunday market movement…:rolleyes:
Oh, and Green Bay won so I’m feeling a bit more generous!
Oh, for PackerPip and others…there’s something you should know…
You know those vanity front license plates you can buy that say, “#1 XXX FAN”?
Yeah, they got nothing on me!
I see you like to go mudding hence your handle…youd have tons of fun down south in the everglades…
Mud and snow…Gods greatest gift to both 4x4’s and football!
at 8:15 pm est if the trend continues im going long looking for profit target of 229.25 short term and 230.00 for long term, just waiting for now!!! If factors change I will adapt my approach but this is my strategy for now looking from the sidelines…
im actually embarrassed to say im a die hard dolphins fan…:mad: we need to get rid of the our coach already he has poor judgement calls and even worse clock managment…
Is Miami playing this year? 
I agree. Coach needs to go.
I think you’re continuation of the trend is taking place right now. Up nicely on those YEN crosses.
Beautiful truck, muddbuddha. And it’s a Ford, too. My favorite.
Terry
yes it did now when the new trend is formed after the break of 228 level, use the mouteki method i posted and see if you can hit some nice gains…Yea and unfortunately miami is playing and I hope the f@#$ up the patriots “perfect” season…lol alot of trash talk coming from shula lol see in our home games we hold up signs at the stadium that say “shula didnt need cameras”!!!
Here’s what I’m looking at:
EUR/USD: persistently closed above the 68.
EUR/JPY: Crossed; has yet to close (20:00 EST), but momentum and trend are building and the EUR/USD has persistently closed above the 68 and is also showing signs of upward momentum.
GBP/JPY: Hugging the topside of the 38MA. Typically breaks to the side it hugs. As well, EUR/JPY is showing upward momentum and EUR/USD as well. If EUR/JPY successfully closes above the 68 and holds overnight…then all be good.
by the way how do I take a screenshot from my platform(vt trader) to post in this forum??? I wanna show the nay sayers on my thread (high probability trading)
