PhilipLangford wrote:I have read the entire thread and internalized the concepts. The repeated explanations by Mighty One, in his vast patience (infinite?) actually helped to drum in the understanding.
The eights/lines trading reminds me very much of TRO's traplines (first mention thereof in this thread), though the money management is homogenized across all time frames.
I wonder what changed the idea of maxing out leverage and riding on ever bigger timeframes while space expands to colossal levels, to reducing size as you move up the time frames? Was it not as profitable?
My broker offers me 5000:1 leverage. If I maxed that out and rode a multi month rally, I might just buy peace on earth.
I have never heard of 'trap-lines', do you have a link?
Size is only reduced so that the money per line is the same:
Let's say that you are trading the H1 with 2 lines of risk, you take profit, and then you notice that the D1 chart of another pair looks like an amazing short; according to EIGHTS strategy you would reduce your position size by 75%, multiply your line width by 4, and then trade the D1 as you would the H1 chart for the same amount of money per line (you could also start at H1 size and close 75% of your position when a D1 entry line is hit).
At this stage of the game you are not trying to maximize pip gains, you are simply trying to make a few lines and then absorb the profits so that you can increase your position size.
Once you understand why you might alter your position size you can begin to come up with your own strategies.