I was already asking questions about Renko on this thread - 301 Moved Permanently. Maybe there is something here we could explore.
While I’m thinking of organisational issues, can everyone put down what, in their mind, are acceptable answers to the following …
- How much capital will you individually be putting in towards the joint venture? ($US)
- How much total capital do you see as the venture starting with?
- What are your time goals for the venture. in other words, how long do you see yourself being part of it? and how long till you expect it to be taking regular payments? etc
- What are your value vs time expectations for the venture. after 6 months you expect the total equity to be what, after 1 year? after 2 years?
- Would you prefer to start taking monthly payments from the system when it is viable to do so, or would you prefer it carried on building till a fixed date and then ended with members getting their share?
- Would you say that 1 single person acts as the “Trader” after discussion with the others or that multiple traders have access and can take action on the account?
- Out of interest. What leverage does everyone feel is the best to use in this venture?
[QUOTE=“BlueHenry;619734”]While I’m thinking of organisational issues, can everyone put down what, in their mind, are acceptable answers to the following … 1. How much capital will you individually be putting in towards the joint venture? ($US) 2. How much total capital do you see as the venture starting with? 3. What are your time goals for the venture. in other words, how long do you see yourself being part of it? and how long till you expect it to be taking regular payments? etc 4. What are your value vs time expectations for the venture. after 6 months you expect the total equity to be what, after 1 year? after 2 years? 5. Would you prefer to start taking monthly payments from the system when it is viable to do so, or would you prefer it carried on building till a fixed date and then ended with members getting their share? 6. Would you say that 1 single person acts as the “Trader” after discussion with the others or that multiple traders have access and can take action on the account? 7. Out of interest. What leverage does everyone feel is the best to use in this venture?[/QUOTE]
Good questions. I’m going to sleep on it, and think about it some. Will post my answers in the morning. Keep up the good work.
After reading this whole thread yesterday evening I had a really bad night, and now I am very tired.
In my dream were Asterix and Obelix who planned to lure the Romans into a big financial scheme, a game called Forix.
They set simple rules as
- only 2 Romans can sit at the table
- they will bet 3 times each
- they can’t see each other’s bet
- the profit is the other player bet minus self bet
They went at home, gathered all the coins and met in a secret place to perfect the game.
Asterix had 6k and Obelix a 30k account, and played 3 rounds of betting as follows:
1st round: Ast: 3k, Obel. 20k
2nd round: Ast: 2k, Obel. 5k
3rd round: Ast: 1k, Obel. 5k
They had no charts and candlesticks to evaluate how bad they did, so began to calculate the profit with their initial rule, the other’s bet minus own bet as follows:
Asterix = (20-3) + (5-2) + (5-1) = +24k
Obelix = (3-20) + (2-5) + (1-5) = -24k
Asterix entered with 6k, and scored +24k profit. Final balance=+24k.
Obelix leveraged too much with 30k, lost -24k of it. Final balance=+6k
They summed up their accounts status as:
-before the game = A:6 + O:30 = 36k
-after the game = A:24 + O:6 = 30k and 6k was still left on the table.
Then they figured out, no matter who wins or loses among the Romans, after each game there is money left on the table. So they become brokers, collected after each game, became crazy rich, and eventually led the Roman Empire to financial ruin.
They coined also a lot of technical terms along the way, and I will only mention their definition of volatility, which happens when at the table sits only 1 Roman, who continuously keeps playing and losing money.
Now I can start to work, but I am still very tired of this nonsense.
Thanks BlueHenry! These are definitely questions which would have to be considered and answered when taking that first “next” step on the time-line when trying to nail down an operational structure.
This collaboration wouldn’t exist without this babypips forum and we have all gained much knowledge on the site so i am all for keeping things as public as possible. If anything we come up with can make anyone some money or just give them a good laugh then thats fine by me. The more rich happy people the better! Some members of the group however might prefer to answer some of your questions in a more private setting and maybe they are right?
I will give these questions some serious thought. Any ideas on concensus/ conflict resolution issues etc?
Sorry we ruined your nights sleep 
I hope the nightmares weren’t too severe. I will issue a disclaimer.
[B]DO NOT READ THIS THREAD BEFORE BED. IT MAY CAUSE SLEEP DISRUPTION ISSUES. NORMAL DAILY DOSE = MAX 2 PAGES TWICE PER DAY. CONSULT YOUR DOCTOR REGARDING ANY PRE EXISTING ISSUES AND HOW THIS THREAD MAY AFFECT THEM![/B]
Thanks Mihk
Before i embark on cramming my head full of Renko and start studying, not watching, but studying Tyrones video and renko thread i want to put down some thoughts before i lose them and any potential value they may contain. Hopefully you will already have answered my questions.
MoneyNVR i am counting on you to use that level headedness of yours and pull me back if i start over-reaching 
Ok, following on with the game designer theme.
lets say we the that the game of forex we designed works perfectly. Everyone is looking at what we want them to look at and the loose ends are hidden. The Noobs are looking at the Highs and lows of the last trend trying to catch the next high or low and the intermediate players are looking at ways of getting the “meat” of the next trend and getting into automation. Our players have a 95% loss rate measured in hard cash and a pretty decent win rate measured in wins per trade made. Yes some are complaining but …they are coming back. All is good in forexville!
So assuming all works as it should…
What if we forget about [B]trends[/B], what if we forget about [B]indicators[/B], what if we forget about [B]support and resistance[/B] what if we forget about old father[B]time[/B]. Lets forget about [B]price action[/B] and all the other stuff too. Lets call all of those things noise and lets turn it off. We have silence
Bear with me guys…I’m going to talk in laymans terms as much as possible here because if i use the traditional forex language you are going to attach it to some of usual forex stuff we might be trying to avoid.
Here’s what i’m thinking. I want to attach my money to a trade that goes from point A to point B in the shortest time possible. I don’t want anything to do with the market at any other time. I dont want the trade i attach my money to; to get blown around in the wind, to stop for lunch or to get distracted by a good looking woman. I just want it to go straight to point B. The longer it takes to get to point B the more risk there is that something will go wrong and i dont want that.
Now, if you were standing 20 metres away; and i threw a ball to you… as long as i put enough force behind it we should be golden. If i tried to throw the ball too hard it might go off target and end up through the couple next door’s kitchen window instead of in your hand. If i didn’t throw it hard enough…well you can guess the rest.
So all i want is to attach my money to a trade that has the right amount of force behind it to reach point B in the shortest time possible.
Where do we get the force from to send it on its way? We need a trigger. Something that will create an amount of force that we can handle.
What triggers movement? How will we recogonise that things are right so we can attach our money to the trade? Do we have to sit and wait for this trigger or do we know when its coming?
[B]Leg0nd[/B] I’m going to ask you a few questions here at a conceptual level. I want you to fight your corner here because i think there might be value in something you are doing. Any assumptions i make that are incorrect please correct me remember i’m taking on a very basic level here.
Now, from what i understand… you use your time exit strategy to basically remove an unknown. Using a daily chart you are effectively saying i want to know what i am going to be paid for the day. If i get my entry and direction right then i will get the best payment i can for that day. I might work 8 hours, 13 hours or i might just work 30 minutes. Regardless… when the time is up i will have a sum of money in my hand which i prefer to a possible promise of some money when something that may or may not happen; happens irrespective of how much i might have earned.
Now this is important and i think there might be something in your answer. Why do you have to work everyday?
I’ll carry that line of questioning on when i have received an answer.
[B]Tyrone[/B] If we identify a trigger that repeats and analyse its behaviour pre, during and post “being thrown” if you like… and select the right amount of potential and then break that down to how the trade performs in flight can we backtest only the ones that that got half way in x amount of time… meaning that trigger produced the right amount of force and see how they worked out while getting rid of; or exiting any trades that didnt show at the half way point that they posessed the amount of force we were after regardless what happened next? Could you come up with a set of rules for this type of scenario to build a mechanical system?
MoneyNVR… if you haven’t pulled me back into reality yet by the scruff of my neck… Do you have any ideas on entry based on what you are doing now?
If Tyrone can train us up with his testing, and MoneyNVR can get me in the bank after hours i think i can open the safe but i’m probably going to need you to get us out with the money Leg0nd. Hopefully BlueHenry will have the logistics and flights taken care of and maybe a drink or two so that when it’s all over we can disappear:18:
Ok guys videos and Renkos for me now.
I’ll be perfectly honest. Im not looking to open or join a fund. What im looking for is a combined effort in producing a system that we all currently don’t trade. Early I was talking about funds because they diversify with many strategies. I want to operate like a fund. There for over a few years I will have a steady growing portfolio to land me a job working for a large hedge fund. Then I can add far more to my own portfolio building it realistically. Long term plan for me.
Who knows if we all work well together then we have a possible team for a future business, but certainly not yet.
I do like the enthusiasm though.
Hmm I’m not 100% sure I know how to answer. Brief overview of why I trade dailies and use time instead of price as an exit.
I treat Forex like a test. I can decided to “test” myself as often as possible, so can anyone lol. In order to increase my chances of passing these so called tests, I have to pick which level student I am if that makes sense. The more tests I take, the more often I have a chance at failing (risk). I decided I am a mid, lets just say middle school level student when it comes to the market. With that being said I have 5 tests a week, well 6 if I trade Sundays. I split this up over 1 test per day, so I have one chance to pass or fail per day. Since I want my results to really count, I want my 1 test per day to be worth as much as possible so that my time spent enduring the test itself is worth the most amount via return. That being said, If you look at the chart for any pair, the most amount of money one can make in a single candle is typically the day candle (month and year candles are taken out because they do not meet the requirements for a 1 test per day). My goal is to get in at open, that guarantees me a chance to pass or fail the test, any price above or below open voids my result unless I get in below open going long, or above open going short. Reason for this is because a day can close anywhere from .1 pips to hundreds of pips up from open, down from open, or completely flat in which I wouldn’t win or lose. What makes this approach to Forex as fun as it is, Is because I can choose whatever test I want to take per day (any pair I choose). After a lot of research, I narrowed it down to a handful, roughly 10 or so.
I wanted days that typically had the least statistical draw down from open as possible on the day chart, but had the highest amount of linear movement from open (the hundreds of pips right?). Originally I created a risk reward model of 40 pips loss worst case, and a 100 pip tp. The problem with this approach I realized was I was still getting stopped out at times, and most times I wasn’t achieving my 100 pip goal, PLUS several days I noticed the market went beyond my 40 pips stop only to completely reverse and go in my direction above or below open and close for the day. So I scrapped the idea all together. Which as you can see is why I use time as an exit rather than some predetermined price.
Several pairs like EN I have seen drop over 100 pips, completely reverse and close above or below open by an additional 100 or 200 pips. These trades are not desirable to me unless I can some how spot the high draw down before It happens, then get in way after open to take advantage of such big moves. Which is why my system now is a continues work in progress at the moment. I have been getting much much better at picking good trades via low draw down and high return as you can see in my trade journal. Yesterday was a prime example of a trade that went 60-70 pips against me to close 10 or 20 pips profitable at the end of the day. That trade was not desirable, but I didn’t realize it until after I was able to fix a major flaw in my spreadsheet.
Time is critical for my exit because I give the market a set time interval that is identical for every single trade for me to “Pass” or “Fail.” Anything can happen in a day and that’s what makes trading so much fun to me… I can be hella wrong (not desirable of course) and then instantly the market goes in my favor and I pass for the day… Sometimes it can happen in the last 5 mins, you won’t believe how many times I have seen this. If I give the market some sort of distance as an exit instead, my accuracy would be sh** because distance is not predictable (at least not yet, I have several models I worked on in the past that gave me insanely close predictions on movement, will be getting back into that in some time). But what is predictable? Direction! Direction is predictable as long as you eliminate the variable that is not constant… movement. Like I said I wanted to take tests and be rewarded for passing or failing. If I pass I am guaranteed a reward that can vary from .1 pips to 100’s (which is why I do not set tp’s… I want my test to be worth as much as the market makes them worth, not set some predetermined value via TP). So there must be a lot of time invested in figuring out which tests are likely to pay out the most, and which tests are least likely so I know what test is “hot” for the day so to speak. That’s where my statistics come in :). Fortunately excel does all the work for me, I just paste the data I require into my premade excel sheet, scroll down and read the results, then decide which test I would like to take… Take it and be rewarded or scolded hehe. The time doesn’t go into making the trading decision and analysis, that literally takes me at most 10 mins a night. The time goes into finding the high probability patterns in the spreadsheet I use as my guide, and determining which of those patterns constantly repeat themselves over time. As you can imagine I have spent over a year testing and trading 1000’s of patterns, at some point I was bound to have some sort of breakthrough you would imagine. I didn’t just trade bogus patterns either, I determined what I thought had value in the present to trade the future. It just took a long time to figure out what the “market” values, not necessarily what I thought. And to me the answer is as clear as day. The market values Money. Money drives price, people drive money, thoughts and emotions drive people, news drives thoughts etc. It’s a chain reaction… My focus is on the money, I could care less about the sh** that that influences it, hint the other chain links above. Most traders focus on the those things other than the money, and do not succeed… so why should I do what they do?
Thanks for that explanation Leg0nd, you have clarified a few things. I made some wrong assumptions through lack of digested info.
Ok, so what your are basically saying is that you are a trawler. Your put the nets in the water at open and pull them out at the end of the day. You trawl to the end of day when you weigh your catch. If at the end of the day your boat is empty you lose…expensive fuel and crew costs, nightmare. If you pick up a few scraps here and there on the way back to shore the expenses get covered and its break even. if on the other hand the boat is full jackpot!
So the most important factor in your set up is figuring out which stretch of sea to trawl that day (which currency pair)
Increasing your $ per pip is like sending 2 boats out either on the same or 2 different stretches of sea. Both come back empty you take a hella battering …1 full 1 empty = a sort of hedge then there is everything in betweeen.
Find that expanse of water where the fish constantly hang out that you can keep going back to and you are golden!
You sir are not a fisherman with a rod, you are a commercial fishing company:18:
Questions will follow. I am all Renko’d out right now 
Solid! I love the analogy. That is exactly what I do! I get to pick which boat to send out (trade size), how many boats (overall account risk), which seas (pairs) and what times (almost always open price) send some out later than others (trades made during American to capture drawdown + open to close movement) saving fuel and other costs. I treat it exactly like a fishing company lol. Feel free to ask away whenever you are ready.
Thanks for making that video Tyrone, I understand why you suggested that system. The over extension and divergence do make sense and it’s easy(but potentially time consuming) to backtest. I have traded a similar idea but in my case the over extension was an over reaction to the news or a speech.
What i am scepticle about is the value and importance of the preceding moves which form the basis of entry, our trigger, and the after effects they have on our move. Think of it as already being in the trade before being in the trade so to speak.
Although the 2R potentially compensates for lack of quantified velocity.
Will hit it from a few more angles later, am totally Renko’d out right now.
I would like to write an equation for entry. Price consolidation (usually support and resistance levels) should be the trigger. The flatter the consolidation (I would prefer to stay away from whipsaw consolidation) the more likely for breakout and a large one, which would be an ideal goal. I would have to look at a chart and come up with the equation but it would go something like this: Consolidation must be present at current time and price must have been consolidating for x amount of time prior to entry in order to increase the probability of a large move/breakout. Now the next step is determining the directional bias, stops come after and TP’s which I wouldn’t use I would just get out, but I know you guys probably would.
I shall re evaluate & see what else I could come up with. Going to be busy next few days so I will take another look next week. Keep the suggestions coming.
If it makes sense then I will back test it. See what you can come up with.
Going to be hard to back test. It’s going to take some time to determine the logic behind the entry eq. For example, do we want price to have consolidated for 1 hr before entry? 2 hours? 20 mins? How big of a move are we looking for? what is the acceptable range from high to low for the consolidation period? Without these answers. I can’t really progress forward.
Leg0nd, if you are closing trades at end of day, are you doing so irrespective of position, so if for whatever reason the currency moved dramatically against you, you take the loss at end of day?
does that meaning you are NOT using stops at all? or are you using stops and the trades may have stopped at some stage?
WinPsych, yes - I have some ideas on co-operation, conflict res and agreement and so on, but it depends a lot on the nature of this experiment.
Question
assuming the experiment is set up and underway , now ask about motive.
Are you(the team) co-operating because you now have a fund building up in an account (joint money)
or do you have money in an account BECAUSE you are co operating.
Think about that again
- Are you making money because you are co-operating
- or are you co-operating because the account has money.
The motive in (1.) is that traders like co-operating on strategy and refining the strategy
The motive in (2.) is almost a captive one. you have money invested, or the account has grown to some point where you feel you MUST co-operate.
WinPsych I am sure you are totally set on motive 1, and no-one wants to find themself part of something where they dont have the same motive as other members. (One would assume you wouldnt take part if there was any suggestion of motive 2 but its is still a real consideration)
Member number 3 now feels he would like his money out, but agreement was reached that the team would go for 2 years. Member 3 is trapped, Members 1 and 2 not happy
Its just an example but it leads to my suggestions on setup/
Considering the legal, tax and account setup implications of a joint account I will then strongly suggest that the experiment is joint in communication only, but not in any other way.
Let each person use their own account, own starting capital, no money transfers, no payouts between members, no sharing of funds,
No unhappy members, no conflict to resolve except possibly during the strategy discussions.
The phrase “Keep it Simple” was used early on, and I guess this is therefore the simplest.
This certainly avoids any unhappiness, and no disputes on who is entitled to what.
It simplifies anyone joining or leaving at any time.
start with any money you want.
Opinions?
So then the next question is …
for someone NOT taking part in the actual strategising, like myself, and other visitors who may want to take part (if that was your vision) does this mean that after discussions between startegy membersm you will post a daily trading suggestion?
With entry often being quite time specific, would it be legitimate for anyone following to randomly open the browser, read the post, and place a trade?
If you do this - probably need to make a disclaimer that this is an experiment and by no means a free indicator.
If this is the way to go - then it could work because even members who ARE part of the strategy - would not be bound to actually place the trade themself, Though this does loosen the system up somewhat in the sense that if folks were a bit busy at times and no-one places trades, is the system still an experiment or just a trading discussion that happens every now and then.
So I think everyone needs to put down some thoughts on all of this and see how we can refine this to something good.
[QUOTE=“BlueHenry;619927”]Leg0nd, if you are closing trades at end of day, are you doing so irrespective of position, so if for whatever reason the currency moved dramatically against you, you take the loss at end of day? does that meaning you are NOT using stops at all? or are you using stops and the trades may have stopped at some stage?[/QUOTE]
I normally use a 100 pip stop as an oh sh** stop. There have been days I closed a position early and did not hold til close because either: I knew I was wrong due to human error or I just knew I was wrong via I traded a pattern I was unfamiliar with. I haven’t gotten stopped out yet (nice). And my worst trade trading this way has only been roughly 50-60 pips or so I believe (not including 1 trade I made this week off an unfamiliar pattern and I kinda used it as a hedge).
Normally I do not lose very often, and if I am losing, I do prefer to hold until the end of the day to see if I get another signal in the same direction as I got for the original trade. The former happened to me this past week I believe… Had two bad trades on Monday I think, held til Monday night… Got the same signal for one pair for the following day (was actually a much better signal than I had gotten the previous day), the other pair I took a risk on (unfamiliar pattern)… Held the trades, and lost on my low risk (the one I hadn’t traded the pattern before), and made huge gains on the other pair ( this was the EJ trade I took 130 pips from). So this option works kinda like a trade recovery option. However, it’s not like a “revenge” trade. Had I closed the losing positions I would I have made the same trade anyways… Just with less margin. So it works to help lower some risk, preserve capital, and give me another chance to “pass” the test.