Just check in on this Journal from time to time to see how its going. Trade size is based on 10Y ranges. I don't care about the unrealized, except for margin call territory.. Straight down/up moves define the borders early on, I actully prefer that. Nothing drops or rises in a straight line forever and for every action there is a reaction.. Michael B.
for an exmaple, in the worst one way move I found you guys, GBPUSD I calculated that at BEST using the 20 pips short / long spread every 20 pips, the most profit you could have posssibly raked in is 27 000 pips and that is a generous number the downside: 290 000 pips!! and that is a GUARANTEED number!!! so I dont see how this system survives long term? in its current forms its a train wreck waiting to happen
Electric, I wish you the best of luck but I have to agree with Jason. By trying to prove that trading is not gambling you are trying to prove that it is possible to make money without risk. There is no free lunch in the market. You mention yourself you are not worried about the unrealized losses until the margin call risk approaches. But what happens when it does? KABOOM! No money.
Maybe you should read the story of LTCM. They had what they thought was a sure thing, they had diversification, and they had money management.
Jason and Futures, I appreciate your input. You could be saving my trading capital. But I am not convinced yet. Michael B.
Electric I have been trading FX for many years, and I have also followed this grid type of thread for many months.... yes, in my projections of the GBPUSD AUG 2003 scenario, I counted profits on daily moves in both directions (both long and short) the rough calculations I used were generous, I dont think real world results would yield as many pips. So I came up with 27 000, but lets even raise that to 36 000 pips, which is a large number , we now talking 300+ pips per day on GBPUSD - very unlikely after reviewing 5min data in my opinion. So now you have a 27k to 36k pip profit, and a 290 000 unrealized pip loss.... (assuming 20 pip staggering) its the same story in the other USD crosses...... so diversification would have amplified the problem, not helped it - all USD pairs got killed, AUDUSD, USDCHF, EURUSD, NZDUSD, USDCAD, USDJPY I would love for this idea to work, but it really just doesn't when i look at the extreme moves Other people will then talk about "hedging" the system when a pair breaks a range or level... now this part becomes discretionary - its no longer a "system"... also you now run the danger of your hedge being whipsawed etc etc So I stand to be corrected, but looking at the numbers this system has never made sense to me. It will run great until a big moves breaks the ranges and starts a big one directional run
10Y range GBP/USD (approximations, used crosshair) Lowest: 1.3677 Highest: 1.9561 0.5884 pips 196 entries at an average of 30 pips apart, waiting for their take profits and the other side to fill back up with a like amount, when they do.
I agree with those numbers BUT check the move I am talking about - didnt even happen 2 years ago, check your chart from AUG 2003, when GBP ran one way from 1.55 until 1.90 3500 pips oneway ride 3500 +3480 +3460 .... total drawdown? about 300 000 pips unrealized profit of -300 000 pips? even trading on an account with $300 000 of capital, $1 per pip would give you a margin call and thats just 1 pair throw in the other USD pairs and you get massive losses accross the board