davewooldridge
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dreadnought, how is the alternat exit strategy working out for you? Also, anyone using forex day monster?
pipsmasterone
Junior member
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Hello all
Been trading this system for 6 months now, started trading in mid October/2009 just before the big draw dawn in November.
Here are my observations:
The core of the system is composed of two indicators - Slow trend indicator which is nothing but MACD indicator and fast trend indicator which is a Yurik RSX indicator(an "improved" version of RSI indicator), it also uses 50 period moving average for entry and sell signals as long as two above indicators line up.
It gives you entries when both MACD and RSX values go above zero for buy and below zero for sell.
That is the basis of the system.
This system will probably make you some money in the end, however I am convinced this is not the best approach to trade. Its a trend following system and gets killed in sideways markets, especially with trading eight currencies as the vendor advertises on his web site. It is definitely not for the beginner since most beginners will not be able to take the pressure of having 1500-2000 pips drawdawns or being up 1000 pips and giving it all back sometimes in a matter of hours.
Market moves in two ways - prolonged trends with shallow retracements and trends or sideways action with big retracements. With this system if the second scenario occurs too often you will always get in too late and get out too late (according to the system) and get wasted in the process.
Markets are not synthetic but organic and any attempts of profiting from a synthetic approach will for most, lead to failure. In other words these prolonged trends will eventually come but it may be too late for you, since you don't have any money left in the account. Money management will minimize the damage and will allow you to be profitable in the end, however there is always a chance of wiping out with a synthetic (mechanical) approach - always. Just look at some of these EA's that were curve fitted to back data and are definitely synthetic (mechanical) in nature.
Indicators or systems are just tools to help you see things clearer and perhaps aid in consistency but unless they are applied at the right time they are no good whatsoever. For example if you use a stochastic indicator to initiate long positions in a downtrend you will eventually get wasted. Fibo and pivots are what I call "trendy" or "in fashion" indicators. They will work as long as everybody believes and uses them but when traders discover something "better" they will not work so well anymore.
Been trading this system for 6 months now, started trading in mid October/2009 just before the big draw dawn in November.
Here are my observations:
The core of the system is composed of two indicators - Slow trend indicator which is nothing but MACD indicator and fast trend indicator which is a Yurik RSX indicator(an "improved" version of RSI indicator), it also uses 50 period moving average for entry and sell signals as long as two above indicators line up.
It gives you entries when both MACD and RSX values go above zero for buy and below zero for sell.
That is the basis of the system.
This system will probably make you some money in the end, however I am convinced this is not the best approach to trade. Its a trend following system and gets killed in sideways markets, especially with trading eight currencies as the vendor advertises on his web site. It is definitely not for the beginner since most beginners will not be able to take the pressure of having 1500-2000 pips drawdawns or being up 1000 pips and giving it all back sometimes in a matter of hours.
Market moves in two ways - prolonged trends with shallow retracements and trends or sideways action with big retracements. With this system if the second scenario occurs too often you will always get in too late and get out too late (according to the system) and get wasted in the process.
Markets are not synthetic but organic and any attempts of profiting from a synthetic approach will for most, lead to failure. In other words these prolonged trends will eventually come but it may be too late for you, since you don't have any money left in the account. Money management will minimize the damage and will allow you to be profitable in the end, however there is always a chance of wiping out with a synthetic (mechanical) approach - always. Just look at some of these EA's that were curve fitted to back data and are definitely synthetic (mechanical) in nature.
Indicators or systems are just tools to help you see things clearer and perhaps aid in consistency but unless they are applied at the right time they are no good whatsoever. For example if you use a stochastic indicator to initiate long positions in a downtrend you will eventually get wasted. Fibo and pivots are what I call "trendy" or "in fashion" indicators. They will work as long as everybody believes and uses them but when traders discover something "better" they will not work so well anymore.
dreadnought101
Newbie
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Hi Pips..
I understand what you are saying but don't agree with it. Every trader has a different style that suits there personality and pschyological make up. A trend based system is tough, very tough, as you will generally only be looking at a win rate of 30-40%. That being said the currency markets provide great opportunities for a trend based system of which FPM is just one. There are many legendary traders such as Seykota, Dunn, Dennis, Eckhardt, Henry etc.etc. who have demonstrated superb performance figures going back over 25 years and more using simple trend based mechanical systems. What all these traders readily admit is that most individuals simply cannot handle the mental strains that this trading methodology creates. Just because you've found it difficult to stick with the FPM system over a relatively short period of time does not in itself make the system bad or invalid, rather it simply illustrates that you are perhaps not suited to this trading style. I would urge you to to spend some time exploring the thoughts of the true giants in this field before writing off this or any other trend based strategy.
I've been successfully trading with this sytem for nearly 2 years and although there are other strategies I also utilise I feel that this does educate new traders on some of the most important aspects in successful trading
As they say, amatuer traders get wiped out by taking too many large losses and professional traders get wiped out by taking too many small profits. The tiny percentage of traders that have long term success adhere to the motto "cut your losses short and let your profits run". This strategy, if followed with consistency and proper risk control can provide an excellent platform for long term trading success.
davewooldridge
Junior member
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hello Dreadnaught. How is the alternative exit strategy working for you? I am considering using it also, as I exit on the white arrow most often right before it turns back in my direction. Also, is dreadnought for the battleships? Just curious
dreadnought101
Newbie
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Hi Dave
It is often said that in the grand scheme of things entry points are unimportant, it is when you decide to exit from the trade that will determine your long term success. Yes, I am still using my exit point rules, but that is not to say that they are necessarily the best or optimum solution going forward. The key is choosing a methodology and rigorously and consistently applying it. If you are continually meddling and adjusting your trading rules in response to market events you will not be successful. I have found this out to my cost over time.
The reason I have my rules is that Jim still has a discretionary element in his trading, particularly with regards to re entries. I don't like discretionary elements and as I have had my own EA coded to trade the FPM system it was important for me to lay down a set of clear entry and exit rules.
However, at the risk of repaeting myself I would urge you to decide how you are going to use the system and then stick with it. Review things on an annual basis perhaps but no more frequently.
pipsmasterone
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hello Dreadnaught
Point well taken, however, I have gone over all of the trades of Gbp/Usd since June 2009 up to now. Vendor indicates on his blog that this pair has made about 2500 pips during that time but my results following all the rules and exiting at white arrows (exiting at fast trend cross didn't make that much difference) show a loss of about 2500 pips. That"s quite a difference, wouldn't you agree. So I guess the difference is discretion when to exit and when to re-enter. Well, when discretion is involved to make a system profitable - It is not a mechanical system anymore but a discretionary system and its not designed for new traders. Let's use March Gbp/Usd results for example, vendor indicated that pair made 682 pips profit that month - I would like someone to show me with a screen-shot or otherwise how could you have achieved anything resembling that performance within 200 pips over or under.
Last week the system was 6000 pips in profit at the highest point but in the end made only about 1500 pips - that's after having severe drawdawns in April. I don't consider this riding the trend to the end. I took 3000 pips out of it (felt bad for a while, especially at 6000 pips lol, but in the end felt much better) I find the only way I can make money with this system is when I take my profits when I "feel" I should take them.
Look guys, I have been trading for a while now and I went over every indicator/system/book/e-book, I could get my hands on, I found the only way to be consistently profitable by technical analysis alone without order flow information or advance knowledge of some news that would have an obvious effect on a particular currency pair is to fade retracements in the direction of the main trend once its well established and making sure there is enough volatility. Whether you are a scalper, swinger or long term trader depend only on the main timeframe you are using to trade.
Most of great trend followers you mentioned trade purely mechanical trend following systems without discretion for entries or exits, however, most of their money was made by managing money for others with performances of 20-30% per year. It will take you a long time to make a living from trading having these kind of returns unless you have a lot of money to begin with or are making it off management fees.
When it comes to different trading approaches, some of them used to be effective but are not and will not be effective for a long time, the most profitable approach of all time on the Dow for example is going long when the Dow closes above its 5 day moving average and reversing the position when it closes below its 5 day moving average, you would be a billionaire if you followed this approach since 1920, however since early 90's its not effective, why, because too many people started using this method, same thing with breakouts, pivots etc. Turtle trading method is not as effective as it used to be, so a lot of the turtles had to modify the system to the point its probably not a turtle system anymore. I can go on and on. Fibonacci trading can and is effective at the moment especially when applied properly but again once majority of traders will become convinced that fibo is the way to go, it will stop being effective. Its like anything else in life, you have to be in the right place at the right time - in other words you have to be lucky to trade the "right" system trading the "right" market and make all of your money before the system becomes too popular, therefore obsolete, better yet design your own and don't tell anybody about it, then hope not too many people figure it out either. You see what happened last week - no bids, all the high frequency systems happened to signal "no trade or sell" at exactly the same moment and lot of traders got slaughtered, probably even some consistently successful ones.
In closing, I would like to be philosophical and say that we will never be able to completely box or figure out the human mind or human spirit. Markets are their reflection, largely unpredictable, you can never figure them out with statistics alone, and that what mechanical systems are - statistics of the past if you think about it. In addition, I think that existing price of anything at any given moment is the result of "stupidity" of interested parties, however this "stupidity" will always be smarter then your individual emotional "wisdom". In other words you will never be able to "outsmart" the markets they will always be smarter than you, you can only "outdum" them
Regards
Point well taken, however, I have gone over all of the trades of Gbp/Usd since June 2009 up to now. Vendor indicates on his blog that this pair has made about 2500 pips during that time but my results following all the rules and exiting at white arrows (exiting at fast trend cross didn't make that much difference) show a loss of about 2500 pips. That"s quite a difference, wouldn't you agree. So I guess the difference is discretion when to exit and when to re-enter. Well, when discretion is involved to make a system profitable - It is not a mechanical system anymore but a discretionary system and its not designed for new traders. Let's use March Gbp/Usd results for example, vendor indicated that pair made 682 pips profit that month - I would like someone to show me with a screen-shot or otherwise how could you have achieved anything resembling that performance within 200 pips over or under.
Last week the system was 6000 pips in profit at the highest point but in the end made only about 1500 pips - that's after having severe drawdawns in April. I don't consider this riding the trend to the end. I took 3000 pips out of it (felt bad for a while, especially at 6000 pips lol, but in the end felt much better) I find the only way I can make money with this system is when I take my profits when I "feel" I should take them.
Look guys, I have been trading for a while now and I went over every indicator/system/book/e-book, I could get my hands on, I found the only way to be consistently profitable by technical analysis alone without order flow information or advance knowledge of some news that would have an obvious effect on a particular currency pair is to fade retracements in the direction of the main trend once its well established and making sure there is enough volatility. Whether you are a scalper, swinger or long term trader depend only on the main timeframe you are using to trade.
Most of great trend followers you mentioned trade purely mechanical trend following systems without discretion for entries or exits, however, most of their money was made by managing money for others with performances of 20-30% per year. It will take you a long time to make a living from trading having these kind of returns unless you have a lot of money to begin with or are making it off management fees.
When it comes to different trading approaches, some of them used to be effective but are not and will not be effective for a long time, the most profitable approach of all time on the Dow for example is going long when the Dow closes above its 5 day moving average and reversing the position when it closes below its 5 day moving average, you would be a billionaire if you followed this approach since 1920, however since early 90's its not effective, why, because too many people started using this method, same thing with breakouts, pivots etc. Turtle trading method is not as effective as it used to be, so a lot of the turtles had to modify the system to the point its probably not a turtle system anymore. I can go on and on. Fibonacci trading can and is effective at the moment especially when applied properly but again once majority of traders will become convinced that fibo is the way to go, it will stop being effective. Its like anything else in life, you have to be in the right place at the right time - in other words you have to be lucky to trade the "right" system trading the "right" market and make all of your money before the system becomes too popular, therefore obsolete, better yet design your own and don't tell anybody about it, then hope not too many people figure it out either. You see what happened last week - no bids, all the high frequency systems happened to signal "no trade or sell" at exactly the same moment and lot of traders got slaughtered, probably even some consistently successful ones.
In closing, I would like to be philosophical and say that we will never be able to completely box or figure out the human mind or human spirit. Markets are their reflection, largely unpredictable, you can never figure them out with statistics alone, and that what mechanical systems are - statistics of the past if you think about it. In addition, I think that existing price of anything at any given moment is the result of "stupidity" of interested parties, however this "stupidity" will always be smarter then your individual emotional "wisdom". In other words you will never be able to "outsmart" the markets they will always be smarter than you, you can only "outdum" them
Regards
forextor
Newbie
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I bought FPM in 2009.
I studied the indicator, followed the instructions, and had a few email conversations with the author (the author does reply to emails, so there is support).
However my trading results were nowhere as good as what is published on his blog, in fact I was losing pips.. there is occasional profit but the losses were greater in number.
I emailed the author asking him to publish his trade histories on http://www.myfxbook.com so that everyone could study his entries and exits, it will also be a great testament for his indicator and will definitely boost his sales.
I never receive a reply from him though. I re-emailed the email again just in case he missed my earlier email, this one too went un-replied.
That speaks volume don't you all agree? If his indicator can really make pips like he claims, then I see no reason why he is not publishing it on myfxbook.com.
I have since moved on and have a trading method of my own.
I studied the indicator, followed the instructions, and had a few email conversations with the author (the author does reply to emails, so there is support).
However my trading results were nowhere as good as what is published on his blog, in fact I was losing pips.. there is occasional profit but the losses were greater in number.
I emailed the author asking him to publish his trade histories on http://www.myfxbook.com so that everyone could study his entries and exits, it will also be a great testament for his indicator and will definitely boost his sales.
I never receive a reply from him though. I re-emailed the email again just in case he missed my earlier email, this one too went un-replied.
That speaks volume don't you all agree? If his indicator can really make pips like he claims, then I see no reason why he is not publishing it on myfxbook.com.
I have since moved on and have a trading method of my own.
pipsmasterone
Junior member
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In the long run probably not, since it trades of 4hr charts, however if you want to use the same GMT as the vendor try to download a demo MT4 that uses the same GMT.
You can figure it out just by looking at chart examples on his blog.
You can figure it out just by looking at chart examples on his blog.
