optiontimer

It is right there in the first post where I quote Kroll: "... traders who stress accuracy of trade timing, both entry and exit ..." It is all in the timing ... -OT

Awesome! Why don't you post a chart or two showing what you are doing with the fib's? You might end up helping someone else to achive better results!

Here is the link to the contest - you'll need an Oanda FxPractice account to sign up. https://fx2.oanda.com/mod_perl/fxcontest/fxcontest.pl?rm=contestDetails&contestId=2505

Thank you, Bob. I already did show how I do it in another thread here at TL: http://www.traderslaboratory.com/forums/trading-psychology/10158-optiontimers-project.html What I'd like to know is how I am showing a huge max drawdown. I did not have a losing trade this month. When I go back through my activity for the month, I see a low balance of $99,809.21. Before the contest started, I adjusted the balance from 170K +/- to 100K even. This was done before October 1, so that should not have effected the drawdown number. I had a stop loss and profit target associated with each entry order, and the only orders filled according to my activity is entry orders and take profits, so I am a bit baffled by the max drawdown number. My current balance in the practive account is $115,162.13. Rather than adjust it back to 100K even, I will just use that as my starting balance for the November contest.

So Nico is bounced on a 20%+ drawdown from peak, not because he had a 20% drawdown from his starting equity? His drawdown from starting equity is only 13%. That might make it rough on a trend trader like me ... if I do find an entry that runs in my favor, it is not unusual for me to give a good bit of it back before my trailing stop is hit. Would not a 20% drawdown from initial equity be more reasonable?

Am I reading that correctly? Nico went from +1300% to -13% overnight?

So Nico, who has the stones to play it in the open, is craps because of the lame-a$$ drawdown rule, while the phony coward "forextraderX", who demanded the flippin' rule in the first place doesn't even have the stones to register. In real life, if you still have margin enough to trade, you're still in the game.

This contest was run twice in the past. The winner returned over 48% in each contest with max drawdowns of 2.02% and 2.89% respectively. He did this with 10 trades in the first contest and 4 in the second. There was no drawdown restriction in either of the other two contests. It is not necessary.

That 5% rule would have knocked you out early in the one contest in which you participated. Looking at the record, it would seem that your contest could become rather sparse if you bounce everyone who hits a 5% drawdown.

The following Gannian affirmation will allow you to know as much as the OP - If you too want to know the secrets to Gann, read the following out loud, slowly at first, and then increasing the speed until the scales fall from your eyes: I'm Sofa King Stew Pit

I placed my first trade in 1986 at the tender age of eighteen. This is the first I have ever heard of Don Jones in all those 26 years since. I do know a handful of guys who have quietly accumulated fortunes speculating in the financial markets who you will never "know about," no matter how long you wallow in "the trading business." "The trading business" is an industry populated almost entirely by individuals who know not the first thing about extracting a profit from the markets who sell the promise of profits to those who want to know how to trade in order to extract profits from the markets. If you want to be a trader, I suggest you get out of the trading business, because no matter which end of it your on, you will not become a trader. Traders trade. Some also mentor aspiring traders from time to time. I've done it myself, but when I have dones so, it was for no other reason than my desire to help that particular individual. I've taken fees for managing money, but never for helping someone try to figure out his or her trading game.

Here are two very good and relevant posts to the topic at hand from another recent thread here at TL: I do not recall discussing "targets." Stop loss? Absolutley! Profit target? Not here ... and if I did suggest such a thing ... I shudder at the thought. When I day trade, I do often use profit targets. But this thread was not about day trading. This thread is about trading a system where the edge is as zdo stated - catching the outlier and riding a trend, adding to winning positions as the market moves in favorably.

You and I are on the exact same page ... it is all a matter of how much does it cost me if I am wrong versus how much I can win if I am right. OT

How is everyone? I've been exploring a different path for the last few months, and a new project has come to mind. It may be a suitable subject/project for a new thread. I'm not ready to say much right now, but a suitable title for this potential project/discussion thread might be "Leptokurtosis," or perhaps, "Timing Leptokurtosis." Even more accurately "Exploiting Leptokurtosis through Timing and Bet Size" - in other words, something entirely too pretentious and academic to attract much interest. -optiontimer

Strictly speaking, using this method as outlined in this thread, you would have shorted the 6E (EURUSD futures) on 10/26 at approx. 1.3840 and you would have been stopped out the next day at approx 1.3960 (-120 pips). You would have re-shorted on 11/03 at approx 1.4120 and you would still be short with an open profit of approx +800 pips. Strictly speaking, there has been no new signal based on the system and indicators as set forth here in this thread without at least slightly bending the rules.

This strategy, like any, will have periods of drawdown, plateau, and profits. Two weeks or two months or two quarters or two years - it always does the same: drawdown, profit, plateau, profit, drawdown, plateau in some order or other. I have been primarily in cash as far as stock and stock options go. I tend to trade equities mostly from the long side, and current price action has not favored the long side. For commodities and futures, I play both sides. The only position I hold currently in the project account is short coffee. The entry was made on 9/14. In principle it was made in accordance with the system outlined here, though in terms of the specifics of the system the entry would be judged to have been early. Additional short entries were signalled on 9/27 and 10/06, but I did not add any in this account as I have just not paid as much attention to it as I might have. The total equity (open + closed) in the project account is currently $54,157.89. I am thinking that once this coffee position closes I'll split the account and trade two project accounts - one for futures and the other for stocks & options. My largest positions in my main account are short coffee, short copper, and short soybeans. Each is sitting with large open profits and stop losses that should assure profitable closes should the down trends suddenly reverse. I have also had numerous small losses, e.g. sugar, cotton, hogs, and both cattle markets. Drawdown ... Plateau ... Profit ... Plateua ... Drawdown ... Profit ... Drawdown ... Plateau ... In spite of losses in cotton, hogs, and feeder cattle, as well as ealier losses in wheat, bean oil, oats, EURUSD, and OJ, the account is in a nice profit, largely from a long 10yr, short YM, and now short coffee ...

We helped a few and we lost a few ... I wish we could have helped everyone, but one must be ready and willing both to accept help and to help him- or herself in order for any help to be effective. Not everyone is ready and willing. I am happy to have been able to help you improve your trading, but don't forget to give yourself credit - after all, your contribution to your own improvements far surpass any I may have made. -optiontimer

Re-read that post and consider the context in which it was put together. Also, I do not use this system myself as I presented it here. I myself use support/resistance, highs/lows, and volatility as measured by my eyeballs to make trade decisions. I do not think this trade represents a gross deviation from the rules o f the system outlined in this thread. However, any trade I take and share here which may look like a devistion from the rukles of the system will be the result of the limitiations inherent in using mathematically calculated indicators based an average of price measurements over a specified period of time: As SIUYA has sai, "what is the difference between a 20 ema or a 21 ema," and what is the difference between a 21 ema and a 34 ema for that matter, or a 50 SMA and a 65 EMA? I put the system together to help guide people toward considering and recognizing a long term trend, and to help them train themselves to wait for pullbacks against the trend, and to further recognize when those pullbacks may be coming to an end and the major trend is ready to continue. I do not mean any of this to sound as though I am opposed to indicators. I do want to remind you, however, that there is no "secret sauce" to a particular indicator. The important thing is the general strategy, which is to trade in the direction of the major trend and against the minor trend, and to hold our positions for much larger profit multiples than the size of our losing trades. -optiontimer

I'm taking a little end of the summer break that will make my attendance here spotty at best until at least the middle of next week, and possibly until the beginning of the week after next. Good Trading to All! -optiontimer

1) Context: a. Actual chart points, support and resistance, areas where previously dominant buyers were swamped by sellers and vice versa always take precedence for me. b. 1) When the ema's go flat, price has gone into a range. It is best to wait for price to break out of that range. You then have to decide if you are going to trade on the the breakout, or are you going to trade on a pullback that tests the range and then continues in the direction of the breakout. 2) Next to support and resistance, volatility as measured or observed in terms of range - whether the range is contracting and is the range expanding, is the next most important considerations, imho. Flatlining and whipsawing MA's = range/volatility contraction and trending MA's with increasing separation = range expansion. The money is made during the latter and too often taken away during the former. c. This system does not require the use of these particular indicators, or any indicators for that matter, as it is designed to work the way in which markets and market price actually works. If your indicators are telling you one thing, but price is telling an opposite story, then default to price. Otherwise, for those learning this strategy, default to your indicators. 2) Pyramiding: In my own trading, I try to group my positions by three's when risk allows. I like to enter a new position with three contracts, and then add an additional contract as price moves through each of three ATR's in my favor. I use a 10ATR, but a 14 or 20 or what have you will work just as well. As with everything in this thread, and in trading generally, whatever your method, the important thing is to be consistent and always respect the risk. I then add another set of 3 on the next pullback. Sometimes, risk is too great to trade three on the initial entry, so I may do 1 then 1 then 1 at successive ATR's. Other times, the initial risk is such that I can do 6 or 9 or 12 contracts. I then size the add on's accordingly. The key for me (and I want to stress the "for me" part of this here) is that I want a 2 unit position by the time price has moved 3 ATR's in my favor. This allows me to add one unit at each pullback without ever becoming "top heavy," i.e. trading an upside down pyramid. Finally, if any of my contracts are red at a pullback, I do not add additional contracts. I only pyramid when all existing trading units are showing open trade equity. I will now default to SIUYA. -optiontimer

Awesome, awesome post! Whenever some "generous" Guru responds to questions with a "Hey, there's no free lunches," reprisal, I always think, "Right, except for you, Mr. Guru ... and I'll be the one paying!" If you have something to share, share it. If you want $$money$$ for the secret decoder ring that makes it work, say so up front in the very first post. Otherwise, if people have questions, answer their flippin' questions for cryin' out loud! -optiontimer

I think you can find a whole list of available "mentors" in the vendors vendors vendors thread. Though from the sound of it, a mentor at this time is likely the last thing you need as he would probably inflict more harm than good. If I may offer a bit of advice it would be this: 1) carefully identify those aspects of your trading that have supported your success to this point. 2) don't let yourself or anyone else talk you into changing any of those supportive aspects. Good luck! -optiontimer

I'm a free market kind of guy, and my understanding of a free market always included the concept of caveat emptor, buyer beware. But there was always a corrolary concept that the buyer ought to be given as much information up front as possible. I think, in that vein, you ought to consider SIUYA's and thalestrader's advice to provide a simple, obvious method to identify the vendors, so that the buyers may at least know when they are talking to someone of whom they need to beware. In other words, is it fair of you to expect the buyer to beware if the buyer is unaware of the fact that he is being courted as a potential buyer? -optiontimer

TradeRunner ran his data on the EURUSD only. The range on this pair has been much less volatile than for the /Jpy and /Chf crosses. These have been volatile times for currencies, even the EURUSD. Go back and look at a ten week ATR up until 2007 and compare that to 2008-2011. Before 2007, currencies had an ATR between 150-300 pips/week. 2008 to present, that range has been 300-600+ pips/week basis the EURUSD. -optiontimer

It happens ... and then it happens again. But "it" won't bother you too much when you get your next 500 or 1000 or 2000 pip run. It happens too. -OT