ForexMorningTrade System

[PipZombie]

I took it to mean that there wasn't even 20 pips rise in the market after entry, so B/E wasn't triggered and the next exit was 40SL. And therefore he was asking whether there was a way of filtering out trades which were unlikely to produce 20 pips before running out of inertia

That is what I came to belive as well but was not sure.

 

[Deatil]

Adding additional filters will keep you out of some losing trades but it will also keep you out of some winning trades as well. I think this is a difficult task of adding a filter. I like the bias created with the momentum and CCI indicators since it is pretty simple. Where I think we are vulnerable is when we get a pre 6:30 am move right before our entry that is already moving in our intended direction we are late to the trade already by 10-30 pips, not leaving us much chance to safely reach our goal. This is where the debate of when to start the FMT EA begins(i.e. 6:00, 6:15, 6:30). ADR will filter out an overall move for the day prior to our trade but the difficulty will be to find the sweet spot or ADR setting to take or not take a trade since the value of ADR is ever changing each Day, week, month. the GBPUSD can have a ADR of 75 one week and 200 the next. I am sure this is a difficult thing to test and determine.

All in all, I am a fan of some type of filter for those large premarket moves which lowers are chance of success. I think that this is why the breakeven feature was added. Again this is a slippery slope since we already have a successfull EA with a great track record. I think the best setting in the etire EA is your "lot size". Accept what the EA will give us and know the drawdown potential and keep using the EA as it was designed. We always strive for a higher win rate so that we can increase our lot size, at least that is my observation. Trading 1-2% max per trade with this EA with its past track record with compounding you will make a lot of money. Increasing the lot size larger than this you will sometimes be in the position to have to add to your account during those drawdown periods to allow your account to recover from the drawdown as you will not be able to keep trading at the original lot size without fear of margin call.

Some thing else that user's may want to check into themselves, is when ever we have News release out of China before our trading session starts.

Take a look and see if the News release results are in the direction of the FMT trade. Meaning if the News from China is positive then investors in the “short term” seek returns, otherwise know as “risk off” and if we are in a “Short term” trade from FMT and the over night or the days before move is Up like yesterday Dec 29.

The odds of a continue move up is in our favor. Otherwise if the news is against our trade, much like today when China News is release by going back and checking the charts , you we notice the FMT trade has no done well, or taken a deeper retracement of about 62 pips before continuing in the direction of the “short term” trend , but at which point with a 40 pip stop we would have been stopped out.


Like we are see today Dec 30, same event plays out every time, ok maybe beyond the scope. But take into account the above information about trading against the outcome of China news released with a FMT trade, and add to it that the GBP is weaker then the EUR , meaning that the EUR/GBP is up.

That sets up a deeper retracement beyond our 40 pips sometimes,

 

[PipZombie]

Some thing else that user's may want to check into themselves, is when ever we have News release out of China before our trading session starts.

Take a look and see if the News release results are in the direction of the FMT trade. Meaning if the News from China is positive then investors in the “short term” seek returns, otherwise know as “risk off” and if we are in a “Short term” trade from FMT and the over night or the days before move is Up like yesterday Dec 29.

The odds of a continue move up is in our favor. Otherwise if the news is against our trade, much like today when China News is release by going back and checking the charts , you we notice the FMT trade has no done well, or taken a deeper retracement of about 62 pips before continuing in the direction of the “short term” trend , but at which point with a 40 pip stop we would have been stopped out.


Like we are see today Dec 30, same event plays out every time, ok maybe beyond the scope. But take into account the above information about trading against the outcome of China news released with a FMT trade, and add to it that the GBP is weaker then the EUR , meaning that the EUR/GBP is up.

That sets up a deeper retracement beyond our 40 pips sometimes,

I keep having to remind myself when looking at this strategy that it was originally designed to trade manually. With that in mind it was kept very basic in the way you trade it with not a lot of analysis. This is why I like this strategy, it is not a black box. As we add filters to this strategy it moves away from being a transparent strategy because you begin to depend on the computer to make decision for you. If we can add a filter I hope it is still visually easy to determine so that you can still trade it manually. What will be a challenge with all strategies is the need to continue to tweek your Take profit, Stoploss and Breakeven settings. The market will always be changing, what works this year may not work the next. Again, the best setting is our lot size. 1% risk can with stand a 20 loser drawdown. a 5% risk per trade with 20 loser drawdown would blowup an account. Mark has mentioned that a 1-3% max risk per trade is recommened and that recommendation is becasue of the current performance of the strategy. Trading at this level will allow you to be able to change with the market over time. If you do have an extraordinary drawdown period you will still have an account to trade in the future. If we all had a $100K account I think most of us would be happy with a 1-2% risk per trade, but we always strive to get the most out of a small trading account. The best way is compounding and time. Put $1,000 into an account with 2% risk with money management and check it at the end of the year, you will have no stress and your account will have grown. Do this every year and you will be successful.

 

[wiseambitions]

The best way is compounding and time. Put $1,000 into an account with 2% risk with money management and check it at the end of the year, you will have no stress and your account will have grown. Do this every year and you will be successful.

In my elementary calculations:

If you started with 1000 on 1.1.2009, achieved the same results as Mark and compounded your lot size monthly, (in reality you might be doing it more frequently than that), with a risk of 2% per trade at standard SL settings, and until the end of November (December 2010 results won't be long coming), you could have grown your 1000 into 4040.

At 5% risk per trade, the effect would be more dramatic because in those 23 months you could have grown your 1000 to 24,400.

 

[Deatil]

Some thing else that user's may want to check into themselves, is when ever we have News release out of China before our trading session starts.

Take a look and see if the News release results are in the direction of the FMT trade. Meaning if the News from China is positive then investors in the “short term” seek returns, otherwise know as “risk off” and if we are in a “Short term” trade from FMT and the over night or the days before move is Up like yesterday Dec 29.

The odds of a continue move up is in our favor. Otherwise if the news is against our trade, much like today when China News is release by going back and checking the charts , you we notice the FMT trade has no done well, or taken a deeper retracement of about 62 pips before continuing in the direction of the “short term” trend , but at which point with a 40 pip stop we would have been stopped out.


Like we are see today Dec 30, same event plays out every time, ok maybe beyond the scope. But take into account the above information about trading against the outcome of China news released with a FMT trade, and add to it that the GBP is weaker then the EUR , meaning that the EUR/GBP is up.

That sets up a deeper retracement beyond our 40 pips sometimes,

Well it happen again with the China affect,even with the -1 pip loss reported here by members and also on Mark's website yesterday.

This now makes 7 losses in a row today,with today's loss from the Long trade triggered earlier , which just got stopped out 10:30 London Time.

One more loss and we complete the 8 losses in a row for a 70% win rate system?

 

[brucer]

Well it happen again with the China affect,....

It is an interesting hypothesis which may or may not have merit -- but is far from proven cause/effect...

...This now makes 7 losses in a row today,.....

Yesterday was a win? 'Consecutive-loss tally' reset to zero, and now one due to today's losing trade.

 

[PipZombie]

Well it happen again with the China affect,even with the -1 pip loss reported here by members and also on Mark's website yesterday.

This now makes 7 losses in a row today,with today's loss from the Long trade triggered earlier , which just got stopped out 10:30 London Time.

One more loss and we complete the 8 losses in a row for a 70% win rate system?

I am not sure on the math as far as 7 losses in a row but it looks like 5 wins and 9 losses for december as of the 30th or net draw down of 4 for the month. Another loss for tomorrow and it will pretty much be the same results as last december the only difference is the 35 TP vs the 40 TP last year affecting the totals.

 

[PipZombie]

In my elementary calculations:

If you started with 1000 on 1.1.2009, achieved the same results as Mark and compounded your lot size monthly, (in reality you might be doing it more frequently than that), with a risk of 2% per trade at standard SL settings, and until the end of November (December 2010 results won't be long coming), you could have grown your 1000 into 4040.

At 5% risk per trade, the effect would be more dramatic because in those 23 months you could have grown your 1000 to 24,400.

I have not checked the math but I will take your word for it. I wanted to comment that put an amount in the account and put it on 2% with no worries and sleep well. If you had started with $10K you would have $40K. The point I was making just get the snow ball rolling no matter how small it is and when you get to the bottom of the hill it will be huge. The hill being=time...

 

[PipZombie]

Well it happen again with the China affect,....

It is an interesting hypothesis which may or may not have merit -- but is far from proven cause/effect...


Yesterday was a win? 'Consecutive-loss tally' reset to zero, and now one due to today's losing trade.

I would not get hung up on the math of consecutive losses. It can be interpreted in many ways, what is a fact is that we have had 5 winners and 9 losses per Mark's log when Mark updates the trade log today for a 4 net loss drawdown for december. This is in line with last year. Most traders quit trading the week of December 13 and still had positive gains for the month. I turned off the FMT on my live account on 12/14 so I was up over 100 pips for december. If I had kept trading I would be down over 180 pips for the month.

 

[PipZombie]

For those that are ultra conservative and want to gradually raise their trade size here is a strategy i have on one of my large live trading accounts. For example say that .5% risk on your account is $250 per trade. With a 70% win rate system you will have the possibility of 8 losing trades in a row. So in order to go to the next trade size I have a rule that you can't double your trade size until you have the equivalent of 8 winning trades at the next higher trade level. In my example I could not go to 1% risk until I have $4,000 in profits ($500x8=$4000). This way I have built a drawdown reserve to protect my original capital position. It will take 16 net(wins-losers) winning trades at a 1:1 risk to reward ratio to do this (most likely up to 4 months) but you will be trading on what I call in in gambling terms "house money". So with a $50K starting account with a .5% starting trade size I would have to have $58,000 in my account before I go to 1% risk and so on. Just an Idea.

 

[Deatil]

Well it happen again with the China affect,....

It is an interesting hypothesis which may or may not have merit -- but is far from proven cause/effect...


Yesterday was a win? 'Consecutive-loss tally' reset to zero, and now one due to today's losing trade.

From 21 of Dec to 29 of Dec have been nothing but losses, Which equals 6 losses. The loss yesterday was reported has -1, still a loss.

Today there was a Long trade trigger that did not get to break even and got stopped out , making 7 losses in a row.

Check the stats on the site.

http://www.forexmorningtrade.com/trading-journal/december-2010/

 

[wiseambitions]

For those that are ultra conservative and want to gradually raise their trade size here is a strategy i have on one of my large live trading accounts. For example say that .5% risk on your account is $250 per trade. With a 70% win rate system you will have the possibility of 8 losing trades in a row. So in order to go to the next trade size I have a rule that you can't double your trade size until you have the equivalent of 8 winning trades at the next higher trade level. In my example I could not go to 1% risk until I have $4,000 in profits ($500x8=$4000). This way I have built a drawdown reserve to protect my original capital position. It will take 16 net(wins-losers) winning trades at a 1:1 risk to reward ratio to do this (most likely up to 4 months) but you will be trading on what I call in in gambling terms "house money". So with a $50K starting account with a .5% starting trade size I would have to have $58,000 in my account before I go to 1% risk and so on. Just an Idea.

The most dangerous increment is when you go from 1 lots to 2, because that is a 100pc increase in your lot size, but in normal situations where the jump is small eg from 2.5 microlots to 2.6, then I have calculated mathematically that the best thing to do is to compound your lot size with every trade, even if that means to reduce your position after a losing trade. I have satisfied myself that if the belief exists the winning rate is 70%, it doesn't matter significantly in what order the wins and losses come, eg 7-3, 14-6,70-30, you'd get to the same end balance. Some people might work on the system of increasing lot size after a loss (or even multiple losses), however they could easily come unstuck just for the reason that their increment is too high and puts them in a poorer position after the next trade if that also goes wrong. Just remember that with 35TP and 40SL and 2% risk, you might find you need 5 wins to compensate for 4 losses if you are growing your account in the way I have outlined. Anybody who wishes to discuss can privately message me by all means and I'll share my calculations.

 

[bluedancer]

Hi guys, For December I have 10 wins and 4 losses and 1 BE so far. Not all of the wins gave me 40 pips. losses were-50, -50, -40, -38. Today was a win. Net is + 174p. The losses were a result of letting the EA do it's thing. And realize I prefer to add my filters which I used some days but not all. I am using FMT but with filters and when warranted I take a reverse FMT trade on a turn of fmt indies and other verification.

I have a few easy visual filters that may be of interest. One is a great currency strength meter which works well with the 15 min chart. The others are custom indies I got from various system promoters.

One more trade and the year is over!! time to do a total evaluation!

 

[PipZombie]

The most dangerous increment is when you go from 1 lots to 2, because that is a 100pc increase in your lot size, but in normal situations where the jump is small eg from 2.5 microlots to 2.6, then I have calculated mathematically that the best thing to do is to compound your lot size with every trade, even if that means to reduce your position after a losing trade. I have satisfied myself that if the belief exists the winning rate is 70%, it doesn't matter significantly in what order the wins and losses come, eg 7-3, 14-6,70-30, you'd get to the same end balance. Some people might work on the system of increasing lot size after a loss (or even multiple losses), however they could easily come unstuck just for the reason that their increment is too high and puts them in a poorer position after the next trade if that also goes wrong. Just remember that with 35TP and 40SL and 2% risk, you might find you need 5 wins to compensate for 4 losses if you are growing your account in the way I have outlined. Anybody who wishes to discuss can privately message me by all means and I'll share my calculations.

In my example I was starting with .5% risk with a maximum target of 2%. Instead of starting with 2% from the beginning. Just a conservative starting example..to get up to 2% max risk per trade with minimal drawdown.

 

[PipZombie]

Hi guys, For December I have 11 wins and 4 losses and 1 BE so far. Not all of the wins gave me 40 pips. losses were-50, -50, -40, -38. Today was a win. Net is + 174p. The losses were a result of letting the EA do it's thing. And realize I prefer to add my filters which I used some days but not all. I am using FMT but with filters and when warranted I take a reverse FMT trade on a turn of fmt indies and other verification.

I have a few easy visual filters that may be of interest. One is a great currency strength meter which works well with the 15 min chart. The others are custom indies I got from various system promoters.

One more trade and the year is over!! time to do a total evaluation!

Im not clear if you are trading FMT or just using it for a signal. Can you explain further. How many of the 11 wins were genuine FMT signals and how many of your losers were genuine FMT signals. Just trying to evaluate your filters for the FMT signal. Thanks in advance. Great concept.

 

[bluedancer]

Im not clear if you are trading FMT or just using it for a signal. Can you explain further. How many of the 11 wins were genuine FMT signals and how many of your losers were genuine FMT signals. Just trying to evaluate your filters for the FMT signal. Thanks in advance. Great concept.

I am using it as a signal. Some days I was lazy and set SL and TP with FMT rules and let it just go, ie to a loss. I tried 50p sl a few times as someone suggested that.

3 of the losses were genuine fmt losses. A few were fmt wins as well.

I am comparing to Mark's here:

Same as Mark: 8 days
3 wins, dec 2, 7, 10
1 no trade, dec 14
3 losses, dec 9, 15, 21

Different than Mark: 14 days
My wins: dec 1, 8 (mark BE) dec 17, 22, 23, 30 (mark lost) dec 6, (mark NT)
My BE dec 13 (mark NT)
My loss: dec 16 (mark NT)
My No Trade: dec 3, 20 (mark win) dec 24, 28 (mark lost) dec 29 (mark BE)

I had 10 wins, 1 BE, 6 no trades and 4 losses
Mark had 5 wins, 3 BE, 4 no trades and 9 losses(including today dec 30)

Basically I used the filters either to not trade or to take the opposite direction trade. The days of no trade I was there ready to trade, I did not just ignore the market. On the trades that I won and FMT lost, I stayed out of the trade to wait for filter confirmation and then I took the opposite direction trade.

The filters I use are pre-trade range, QW lines (which I can't explain). But other filters I use that I like are; Currency Strength Meter (from Steinitz), MACD Complete (from Vladimir), and HTID, Hama and GBP ultra (from I don't know who) These are visual filters, so a few minutes of looking at them can tell me whether to take the FMT trade or not.

 

[PipZombie]

I am using it as a signal. Some days I was lazy and set SL and TP with FMT rules and let it just go, ie to a loss. I tried 50p sl a few times as someone suggested that.

all the losses were genuine fmt losses. A few were fmt wins as well.

I am comparing to Mark's so will get back to you on exact differences.

thanks.

 

[ihelfman]

I have a few easy visual filters that may be of interest. One is a great currency strength meter which works well with the 15 min chart. The others are custom indies I got from various system promoters.

Where can I get the currency strength meter you use? Hector DeVille includes one in his system, but it's too costly.

Also, without all the filters, you could have done well during the holiday volume lull by just using the FMT signal as a reverse indicator. I've asked Mark to add a reverse trade entry to TMT, which, if it ever happens, I plan to use next Christmas.

 

[bluedancer]

Where can I get the currency strength meter you use? Hector DeVille includes one in his system, but it's too costly.

Also, without all the filters, you could have done well during the holiday volume lull by just using the FMT signal as a reverse indicator. I've asked Mark to add a reverse trade entry to TMT, which, if it ever happens, I plan to use next Christmas.

I edited my previous post to explain.

I use the Steinitz Strength Meter, it came with his system that cost $180. The other ones I mentioned were all free. Not sure if it proper to give them away here. The strength meter does not give away any of Steinitz system and is probably a standard one.

 

[ihelfman]

I edited my previous post to explain.

I use the Steinitz Strength Meter, it came with his system that cost $180. The other ones I mentioned were all free.

Hector DeVille is offering his system, which includes a strength meter, as a bonus to the supposedly garbage $150 Leo Trade EA. If Hector's system were simpler and more practical, I would buy it. His tend indicator, which he sometimes offers for free, is a nice lagging indicator during the FMT timeframe.