so Sufiansaid
we are waiting for the procedure
for me am interested
hi sufian, i wonder how u manage yo account.
Given that we are never to risk more than 3%, at most 5%
of our equity. From what i see & demo of macfibo,
the fibo38 level as a SL would violate the risk rule (3%-5%)!
If i set the stop loss within the risk parameters, that would be somehow close to the open price, sometimes around 61fib level.
so how do u manage yo trades in terms of risk?
[B]Given that we are never to risk more than 3%, at most 5%…
… the fibo38 level as a SL would violate the risk rule (3%-5%)![/B]
In setting your SL at 38.2%, it means you are doing a 1:1 Risk/Reward ratio management. So perhaps if your TP is say 35 pips, then your SL would be 35 pips. I don’t understand how can ANY amount of pips in a SL can ever violate your maximum 5% risk rule.
Assuming that you have $1000. If you have 5% risk rule, meaning you are willing to lose $50 per trade. Now… you are in a Macfibo trade and you set your SL at 38.2% (R/R 1:1) and it was in the amount of 35 pips. Now you need to determine your volume/pip value. So since you are risking no more than $50 per trade, you calculate Volume = $50/35 pips. So for this case your volume would be $1.4.
See where I am going with this? So if you ought to lose 35 pips in this trade, 35 pips X $1.4 = $49. I don’t see how even setting your SL at 38.2% would violate 3-5% risk rule. If your risk 3%, then you don’t want to lose beyond $30 of your trade. Then do the same thing. Let me know if I misunderstood your earlier statement (on how setting SL at 38.2 violates the 3-5% risk rule) but I hope i shed some light on how you can calculate your risk and money management.
[B]If i set the stop loss within the risk parameters, that would be somehow close to the open price, sometimes around 61fib level.[/B]
I don’t quite understand what you mean on this statement…??
p/s : Risk/Reward ratio is equally important.
Are you ready to work hundreds of hours backtesting, logging it and analyse each trades?
Interesting! I think i would like to know more about volume. But here is what happens when i demo/back-test macfibo: I enter a trade, set the SL at 38.2%, TP usual as the system recommends.But the amount i lose if the trade goes against me is more than 5% ($50) of my equity! That bothers me. So it appears i am lacking some knowledge in risk management and volume setting. I am even sure what exactly volume means?
[B][I]If i set the stop loss within the risk parameters:[/I][/B] what i do or used to, is to set my SL at the amount of pips that would equal $50. whenever i did that i realized i was somewhat close to the entry price, moreover far way below the 38.2% fib-level.
[I]Risk/Reward ratio is equally important:[/I] i think i am lacking in this department.
Post a chart so I better understand your problem. I still can’t figure how can you lose more than 5% if you manage to calculate it correctly.
MACFIBO $EURUSD PERFORMANCE UPDATE
Please see attached PDF
For September 2012 as of today, there have been 15 valid Macfibo signals, 12 main signals and 3 secondary signals. Of all the trades, 11 have been a profitable trade (73% winning rate so far this month). The biggest accumulated loses is 68 pips (over 2 consecutive losses) and the biggest accumulated profit is 130 pips (over 5 consecutive wins). It has been a good month so far interms of winning ratio. The net pips harvested as of today is 122 pips, 40+ pips away from equaling last months net profit tally.
Overall statistics, the winning ratio now stands at 67.1% and this year the worst accumulate loss over consecutive losses are 82 pips, 18 pips below 100 pips. This explains how my trading friend was confident to set his money management calculatation in a way that would maintain his capital loss to the maximum 50% should he suffers accumulated 150 pips loss. something to ponder.
Macfibo_Update_23092012.pdf (61.2 KB)
Hi Suffiansaid,
1st of all, thanks for your generous that sharing us your trading method.
I’ve read thoroughly your trading system, i read every single words carefully and understand it.
But i’ve some confusion on 2nd signal. When is the time we need to using the 2nd signal?
Why we need to use 2nd signal? Your 1st method already covered all.
Asian Open until London time is it - 8am to 9pm ? (I’m from malaysia) i think same as yours also.
Sorry for my bad english.
Thanks, i will. Later though cos i have some papers coming.Gotta burn those books. Meanwhile, i have just realised that i need to learn a lot about risk management. I’ve been demo’ing yo system.Its promising. But without proper knowledge on risk management… well? i have been losing whatever i make & then some.
I have come across van Tharp game [I]position sizing game [/I]i wonder if u’ve heard of it.
But i will be following yo posts …
thanks
How I add the Fibo Tool as Indicator on my Chart? 
Problem Solved.
but is it possible to compute manually the FIbo?
if yes, what formula for this?
thanks in advance. :))
[B]But i’ve some confusion on 2nd signal. When is the time we need to using the 2nd signal?
Why we need to use 2nd signal? Your 1st method already covered all. [/B]
You mean which trading session is best to take secondary signal or when can we take the secondary signal? In terms of trading session, it is best to trade between Asian Open and London Close (7am til 12 or 1am… take note of Daylight savings). When can we take secondary signal? When there’s a valid signal ofcourse… honestly, I do not understand your question.
Why do we need secondary signal? The best way I can answer this is to take advantage of the continuation of the 20sma breakout. When 5ema cross 8sma according to the direction of the breakout (for eg 5ema breaks 8sma downside whilst under 20sma : SELL continuation), we can intpret this price movement as a ‘trend continuation’.
If you find secondary signal as unnecessary, then by all means just ignore the signal. I even mentioned it in the PDF that focusing only on the main signal IS NOT a big deal.
You can google this.
G’day Sufian,
Today I’ve a bad day, I’m using your method to trade. Is almost i can achieved TP. But unfortunately it turns back to SL.
I don’t know is it my method got anything wrong. Please correct me if I’m wrong.
My Entry Point is at
FIBO = 100 and FIBOLINE TP = 168
Any wrong in my method? Please refer to the attachment.
So far, this week has been bad to open any trades on EUR/USD, I would restrict myself from opening any trade using ANY system when the market doesn’t seem to go any direction. Just wait, after some consolidation there will be a strong trend. If might start today it might start tomorrow or the next day.
Firstly, losses happen, no matter how ‘powerful’ a trading method can be. Secondly, your PT A and PT B were spot on so well done for that. Thirdly, those things (few pips short to TP) happen as much as sh*t happens so don’t worry about it. Finally, you shouldn’t wait for the price to hit TP inorder to exit the trade as 5x8 exit mechanism occur WAY WAY before price hits SL… in which if you had exited then, you would have some profits there or atleast if you entered quite late… would have smaller loss.
Let me get back to you on that. I am not on my trading desk right now. As of now, based on your chart, I could made a typo on the ‘Signal Type’ as the second trade for that day could be a secondary signal. Let me get back to you. But based on your chart, yes, there is only one Main signal. Thanks.
Setting SL at 38.2 whilst TP at 161.8 will always be a 1:1 R/R ratio, as I’ve mentioned numerous times in the past. If you find your SL, like in this case, 1 or 2 pips more than your TP (which I find it strange mathematically), then just simply set your SL equal to your TP.
The R/R
Now, for this case the TP and SL is both 43 pips… so your R/R is 1:1 because 43 = 43. If you put your SL at say 61.8 or 50.0 then your R/R will be different as your SL will smaller than 43 pips.
Risking 3%
Assuming you have $1000 capital and you set yourself earlier that you don’t want to lose more than 3% per trade. Simply calculate 3% of $1000 which is $30 and so on. If you ought to lose 10 times in a row, you will lose $300, which is 30% loss over 10 trades which is still OK. *this is assuming you want to risk fixed $30 in your first 10 trades. Some people change it fluidly based on their capital, for example say he lost his first trade ($30), then his second trade he will only risk $29.10 resulted from this calculatatuion : 3% of ($1000 - firstloss). I personally use the first one, do not ask me why. There is no right or wrong way… it just suits me.
Volume
So you know how much you will risk per trade ($30), now its time to define what is your volume. For this trade, your SL is 43 pips. Simple calculate $_risked divide by SLpips… which for this case $30/43pips equals to $0.70.
How it is impossible to lose more than your pre-defined risk using Macfibo
If your SL hit before 5x8 exit occur, you will lose maximum $30 because thats how you set your volume and SL earlier. If 5x8 exit mechanism occur BEFORE hitting SL, you will lose less than $30.
Even If Close position when MA cross, that can also lead to a big loss!
I assume that 43 pips is too big for you? Then move your SL tighter to 50% or 61.8% if you must… but it still doesn’t change the fact that you WILL still lose $30 anyway BECAUSE your calculation will be the following :
Assuming SL at 50% will give you 30 pips… then $_risked divide by SLpips ($30s/30pips). Your volume will be $1… if your SL hit at 50%… you will lose how much? YES… $30. The only difference is you will RISK LESS WITH MORE REWARDS this way… and that is the only difference. You will still lose the same amount.
what will be the judgement trade if we had different signal in 1HR & 4HR Frame?