How to make 100%

[4xpipcounter]

Re: Nugget 11--Yearly S&R's

I should have pointed out an exception to the rule that happened on that recent bullish run that stopped just under my YS1. That is the exception. When a move has finshed above the 76.4% mark, then the move, almost everytime, continues to the S or R point.

The accompanying chart is the GBP/USD daily. It is up-to-date. Notice the activity so far this year. The pink lines are YP, YS1, and YS2. The dotted lines in between are the Fibos between each reference point. It is the only time I use Fibos, which are used in conjunction with my S&R's. Notice the full correction after the YS1 was hit the first time. It hit the 38% line then continued its journey. After the 62% of YS1—YS2 was hit, the subsequent move was to the 62% mark of the YP—YS1. That kind of thing happens a lot, because it represents a full range of the yearly range. That range is the distance between each individual S&R with the absolute values of 2 or less. From 2-3, they are approximately 1.61 (No relation to Fibos) the distance of the P-1 and 1-2 levels. The distance this year for cable is 1,158 pips. Once a one-way trip has been hit, it is time to look for a reversal point.

All my S&R's are highly effective, especially on the initial hit. After 2nd and subsequent hits, they lose their elasticity, and then are not as effective. Even so, look at the price action around the YS1 on all the return trips around it.
When the dip was established at 1.4229 was established, it was evident there was going to be a strong move north. It was in the forecast for a full move of the yearly range to 1.5278. There were strong indications on the weekly for a strong move UP, which is why it is important to pay attention to the other TF's in evaluating a position.

These representations are never meant to be presented as if all those pips were gotten, or should have be gotten on that move or moves. Even with excellent indicators that we all have access to (Not just a few of us like some were trying to intoxicate us to believe.), they can all indicate different things. This is why it is best to find the best combination of indicators that works best for you in order to ascertain your trade entries and exits.

 

[Rossini]

Hi 4xpip.

I have a few questions about the Hurst Bands. If I have understood how this indicator works, it essentially looks back X number of bars and then finds the bet fit for this data. After every new bar it uses this new data and changes the indicator including the historic values. This being the case how does this help you/work in real time?

I guess the trade that you are currently in could be useful example. If Eur/Aud continued to rally could the indicator just keep moving its self higher and higher so it still 'fits'? I understand that this is not your entire method but I'm more interested to see how you weight it within your method given that the indicator (if I am correct) could do this...

I got the information below from this site: http://yrtrader.com/janarpscrown.html


''As you watch the Arps Hurst Bands in action on a real-time chart, you will see that the shape of the bands changes on each bar as the first bar of the previous bar’s regression calculation is dropped from the calculation and the new bar is added into the calculation. Thus, the Arps Hurst Bands – Actual indicator plots the progress of the end point of the Arps Hurst Bands – Historic indicator for each bar on the chart. Thus the Arps Hurst Bands - Actual indicator permits a continuous evaluation of how the relationships of the sigma standard deviation bands changed with time and how the end points looked at the time that particular bar was the last bar on the chart.''

 

[4xpipcounter]

Rossini, one of the reasons I will post some of my trades is that I not only will be able to give past examples, but also give a good example of what to look for on a live chart. Your post has inspired me for the next nugget. IMO, it is never safe to try and use these bands are any mathematical based indicator to backtest with because they change over time, actually with each candle.

Having said all that, even with changes happening, a trade can be realtively safe in using the current measurements for the pattern of deviation. As an example, let's say you take candles 1-200 (I use the settings for 150), Measure 1-150, then 2-151, then 3-152, etc. The sigma recordings will still be relatively close to the previous reading. Let's say there ends up being a noteworthy descrepancy with the next candle. Currently, sigma +3 is circa 1.4201. Let say it moves to 1.4250. This means there is that possiblity of the move going that far. Even if my trade does go that far, I will be about -80 on the live trade.

As additional confirmation, my methodology is showing the candle is nearing the bottom of the daily bearish cloud. My S&R's are showing a potential move to 1.4275, but that is very doubtful at this point. The cloud is also what I call a fresh cloud, because it has not been touched in 56 days. Similar to my S&R's the freshness gives elasticity to the (in this case) R.

It should also be noted there is that 2% chance of a close above the +3 sigma band. More on that in my next nugget.

I don't know if I mentioned it in this thread, but I got my Arps Hearst bands from E-Signal. Actually, the entire suite of the Arps indicators are included. I am paying for the monthly service just to get the Hearst bands future and and actual.

Hi 4xpip.

I have a few questions about the Hurst Bands. If I have understood how this indicator works, it essentially looks back X number of bars and then finds the bet fit for this data. After every new bar it uses this new data and changes the indicator including the historic values. This being the case how does this help you/work in real time?

I guess the trade that you are currently in could be useful example. If Eur/Aud continued to rally could the indicator just keep moving its self higher and higher so it still 'fits'? I understand that this is not your entire method but I'm more interested to see how you weight it within your method given that the indicator (if I am correct) could do this...

I got the information below from this site: http://yrtrader.com/janarpscrown.html


''As you watch the Arps Hurst Bands in action on a real-time chart, you will see that the shape of the bands changes on each bar as the first bar of the previous bar’s regression calculation is dropped from the calculation and the new bar is added into the calculation. Thus, the Arps Hurst Bands – Actual indicator plots the progress of the end point of the Arps Hurst Bands – Historic indicator for each bar on the chart. Thus the Arps Hurst Bands - Actual indicator permits a continuous evaluation of how the relationships of the sigma standard deviation bands changed with time and how the end points looked at the time that particular bar was the last bar on the chart.''

 

[Martinghoul]

4xpip, all I have to say is that all this "nugget" stuff about probability sounds horrendously silly...

Mainly because it's a well-known empirical fact that mkt price distributions are leptokurtic, i.e. exhibit distributions with fat tails (pls let me know if you want references). That's one of the reason options are priced the way the are. Your blithe assumptions about standard deviations etc are at best naive and, at worst, plain wrong. Your description of what stock portfolio managers do is laughable.

At any rate, all this doesn't matter, if your methodology produces a good Sharpe ratio. Will you be posting actual trades?

 

[tomorton]

Will you be posting actual trades?

Now that would be worth reading.

 

[meanreversion]

Re: Nugget 10-- Quick thought on deviations

I thougbht it might be appropriate to make some addiitonal comments with regards to standard deviations.

There are 2 basic ways to look at them. First, when price reaches the 2 or 3 sigma, it is the obvious ultimate entry to enter a trade.

4x, do you have any educational background in statistics (beyond the age of 17)?

Have you carried out backtesting and/or Monte Carlo simulations to test your hypothesis?

Care to answer the question about how much of your account you risk per trade?

 

[Shanghai]

Now that would be worth reading.

Yes and I would be particularly interested about stop loss placement and what that would imply re risk per trade.

 

[Martinghoul]

Yes and I would be particularly interested about stop loss placement and what that would imply re risk per trade.

I think 4x has stated, vigorously and repeatedly, that he doesn't use stops. Rather paradoxically (to me), it's 'cause he doesn't like losing money.

 

[Shanghai]

I think 4x has stated, vigorously and repeatedly, that he doesn't use stops. Rather paradoxically (to me), it's 'cause he doesn't like losing money.

I took that (perhaps wrongly) that he doesn't use hard stops. Does that mean that it would only take one trade to go wrong for him to be wiped out or is there a point at which he will close a bad trade? Perhaps he can comment. Is it a 100% winning strategy, the true holy grail?

 

[trendie]

4x has already said that he risks 10% on a trade. That 10% represents 100 pips.
So, a 1000 pip move would be an account killer.
BUT, he has a separate cash fund, which he would add to his trading account to bail that loser out.

This is my understanding.

So, you would need to see an aggregate account going 1000 pips offside before calling 4x out on this.
I am still less concerned about fixating about riding out losers (because I am a sentient being and can decide for myself that I can CHOOSE to take a loss), and more interested in how he triggers a trade in the first place. If this reversion-to-mean has legs, taking the occasional hit is small price to pay for something that works.

Anyway, you might also decide to only trade 5% per trade!
I want to see how a trade is triggered. backtest it. Add my own risk analysis. Define my own variant. But, to start with, I need to see something that is nett positive "on my terms".

4x should spend less time answering the same question over and over again, and get to the entry-methods!

 

[Martinghoul]

I took that (perhaps wrongly) that he doesn't use hard stops. Does that mean that it would only take one trade to go wrong for him to be wiped out or is there a point at which he will close a bad trade? Perhaps he can comment. Is it a 100% winning strategy, the true holy grail?

I sure hope so... That's why I keep asking for actual trades. The "nuggets" make no sense to me, but I would happily adopt 4x's strategy if it's effective. However, to me, effectiveness has to be demonstrated first, before I am ready to wade through the "nuggets". To establish if these are true golden nuggets, Chicken McNuggets or creamy butt nuggets, so to speak.

 

[LiamH]

4x has already said that he risks 10% on a trade. That 10% represents 100 pips.
So, a 1000 pip move would be an account killer.
BUT, he has a separate cash fund, which he would add to his trading account to bail that loser out.

This is my understanding.

So, you would need to see an aggregate account going 1000 pips offside before calling 4x out on this.
I am still less concerned about fixating about riding out losers (because I am a sentient being and can decide for myself that I can CHOOSE to take a loss), and more interested in how he triggers a trade in the first place. If this reversion-to-mean has legs, taking the occasional hit is small price to pay for something that works.

Anyway, you might also decide to only trade 5% per trade!
I want to see how a trade is triggered. backtest it. Add my own risk analysis. Define my own variant. But, to start with, I need to see something that is nett positive "on my terms".

4x should spend less time answering the same question over and over again, and get to the entry-methods!

My thoughts exactly.

I'm very keen to see where this ends up and the points re risk are completely useless - Risk is personal, work out your own risk and leave 4x to do what he wants. The rest of the strategy is what you should be interested in.

 

[Martinghoul]

My thoughts exactly.

I'm very keen to see where this ends up and the points re risk are completely useless - Risk is personal, work out your own risk and leave 4x to do what he wants. The rest of the strategy is what you should be interested in.

I have to respectfully disagree with you there...

Scaling is personal, while the risk parameters of a given strategy certainly aren't. There are so many examples of this (for instance, consider a strategy that systematically relies on selling options). Therefore, one can't claim that one strategy is better than another solely on the basis of return. It's all about return per unit of risk taken, hence the various statistics that measure that, such as Sharpe ratio etc.

 

[LiamH]

I have to respectfully disagree with you there...

Scaling is personal, while the risk parameters of a given strategy certainly aren't. There are so many examples of this (for instance, consider a strategy that systematically relies on selling options). Therefore, one can't claim that one strategy is better than another solely on the basis of return. It's all about return per unit of risk taken, hence the various statistics that measure that, such as Sharpe ratio etc.

This is true if you want to take the strategy as a whole and judge it's performance. If you want to do this though you're reading the wrong thread because he has already stated he uses no stops. This being the case, the point at which he closes a trade for a loss is down to his own discretion. Almost impossible to judge then.

I'm interested in the entries more than anything else... I can work the stops out for myself.

 

[Splitlink]

How much of the new "nuggets" thread have you read? It's heavy going for me, I admit. Maybe less so for others, but now that it has been separated from a very tedious thread (and I'm not blaming 4x for the tedium) I intend to withhold my opinion until I finish it---even if it does take me 'til Christmas!

Whatever he does for living is not my concern. Whether I can get some ideas out of his thread is.
I suggest others take the same view. Read him or leave him alone.

 

[LiamH]

Whatever he does for living is not my concern. Whether I can get some ideas out of his thread is.
I suggest others take the same view. Read him or leave him alone.

One of the most sensible posts I've read for a while!

 

[FX Bandit]

How much of the new "nuggets" thread have you read? It's heavy going for me, I admit. Maybe less so for others, but now that it has been separated from a very tedious thread (and I'm not blaming 4x for the tedium) I intend to withhold my opinion until I finish it---even if it does take me 'til Christmas!

Whatever he does for living is not my concern. Whether I can get some ideas out of his thread is.
I suggest others take the same view. Read him or leave him alone.

Split, I'm sorry to hear that you're chasing after 4Xpip, scooping up his "nuggets". Trust me, there's not even edible bits of sweetcorn you can pick out of these nuggets.

How do you know that they're even his "nuggets". Aside from the fact that he almost certainly doesn't exist, it could be Tucker leaving these nuggets you're trying to chew on.

 

[Splitlink]

Split, I'm sorry to hear that you're chasing after 4Xpip, scooping up his "nuggets". Trust me, there's not even edible bits of sweetcorn you can pick out of these nuggets.

How do you know that they're even his "nuggets". Aside from the fact that he almost certainly doesn't exist, it could be Tucker leaving these nuggets you're trying to chew on.

I don't know anything about him, only that he is writing them and I'm reading them, regardless of what you think.

Trust you? Come on, man!

 

[FX Bandit]

I don't know anything about him, only that he is writing them and I'm reading them, regardless of what you think.

Trust you? Come on, man!

No problem, don't trust me, it ain't no hair off my balls.

But trust your own bullsh1tometer, the one that's telling you that all you get from icking through these nuggets are smelly fingers.

 

[meanreversion]

I have to respectfully disagree with you there...

Scaling is personal, while the risk parameters of a given strategy certainly aren't. There are so many examples of this (for instance, consider a strategy that systematically relies on selling options). Therefore, one can't claim that one strategy is better than another solely on the basis of return. It's all about return per unit of risk taken, hence the various statistics that measure that, such as Sharpe ratio etc.

Excellent post.. I would go a little further and say that no one strategy is universally better than any other, which is why each trader needs to find the system best suited to them, in terms or % win rate, drawdown, risk per trade, frequency of trades, Sharpe ratio and so on.

I doubt anyone is really paying attention though.

Show me how to make 100% in a month!!!! (or was it in a week, I forget)