$TRILLION STRATEGY

trading strategies and money management discussion, code, results

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Gert Frobe
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Postby Gert Frobe » Fri Feb 23, 2007 1:42 pm

Hi AP, Avery in his personal trading dose not use stops. this is why he tells people that you have to come up w/ your own stops. i use stops and set them @ 63 pips in the $TRILLION STRATEGY.

hope this helps,

airball

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Stop losses

Postby humble1 » Fri Feb 23, 2007 2:06 pm

I just wanted to comment on stop losses in general and hope you all don't mind;

Stop losses are a balance of "account" risk tolerance and price volatility. If you have a small acount balance, then your risk tolerance is way lower than someone with a large account. Right now the average true range on the daily chart is about 126 pips. To stay outside the market noise, you would need a stop of 375 pips. This is probably way too much for most due to account size. on the 25 tick chart, the average true range right now is about 12 pips, so a good safe stop to stay outside of the noise in that time frame is36 pips minimum.

15 pips may or may not work over time, but in my opinion any stop that is larger than the profit taken on the trade has to be offset by an extremely high win rate to have a positive expectancy.

Markets change over time and the stop price will have to move with it or you will lose in the long run as the expectancy goes negative. This is a good strategy but only if you monitor the expectancy closely and understand how to change the stop loss levels to balance your risk tolerance with the market dynamics as both change over time. If you do not understand expectancy, then you should read Van Tharp's books.

Don't just leave the position open without any stop at all. There may be a world incident that wipes out your account. Also, if you are running this strategy on auto, there are pitfalls there as well with network, isp, and eletric power outages.

So, in light of the above, the question of stops can not be answered correctly for each individual. Backtesting the strategy may help determine if your account can tolerate the stops loss level that does work well.

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TheRumpledOne
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Postby TheRumpledOne » Fri Feb 23, 2007 2:17 pm

$TRILLION

IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

Please do NOT PM me with trading or coding questions, post them in a thread.

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TheRumpledOne
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Postby TheRumpledOne » Fri Feb 23, 2007 2:32 pm

Gert Frobe wrote:Hi AP, Avery in his personal trading dose not use stops. this is why he tells people that you have to come up w/ your own stops. i use stops and set them @ 63 pips in the $TRILLION STRATEGY.

hope this helps,

airball


YOU TRADERS ARE SCARING ME...

because I am reading about SL > 50!!

Now, please PAY ATTENTION...

I POSTED THE MONEY MANAGEMENT SPREADSHEET IN THE VERY FIRST POST OF THIS THREAD... IF YOU HAVEN'T DONE SO, PLEASE DOWNLOAD IT RIGHT NOW.

Let's analyze what happens with a 63 pip SL:




You have to win 90% of trades to make a profit with a 10 pip target and 63 pip SL.





You have to win 80% of trades to make a profit with a 20 pip target and 63 pip SL.

Even though $TRILLION usually wins 90% of the time, I do like wiping out that much profit at once!

Look at this:



Even better:



Before you start posting about the SL getting hit more often, look at what happened today:

Here's a EURUSD winner:



Here's a GBPUSD loser:



Notice in the chart above, the LONG ENTRY was triggered at the SOLID GREEN line... note the price action.

Here's how the long turned out:



Money management takes the "guesswork" out of trading.

Please use the spreadsheet and post your setup here.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



Please do NOT PM me with trading or coding questions, post them in a thread.

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TheRumpledOne
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Re: Stop loss???

Postby TheRumpledOne » Fri Feb 23, 2007 3:18 pm

BP wrote:
TheRumpledOne wrote:
BP wrote:TRO,

So, just trying to understand the spreadsheet...if we are 70% of the time hitting our TP and we set the "moving against" or the SL at 15, then we see that we should bring in on average 19 pips profit a week? Is that right?

I guess my question is that it seems that we would be stopped out quite a bit with such a small stop loss....

I understand that you are hesitant to have us do what you do...but could you give an example, with this strategy, as to what you would set your SL at?

I am confused on this matter. Please help me....

Thanks,

BP

Sounds like you understand the spreadsheet.

Look at a 1 minute chart and tell me how many times you would have been stopped out this week had the entry triggered.


TRO,

I greatly respect you and your knowledge, but I am getting flustered on this one account.

I. and others, have asked several times for a more concrete answer on stop loss for this strategy....i.e. give me a sample day, tell me what your entry was, and what you put as your stop loss...to teach me/us...

Right now some of us are using no stop loss, others 100 pips, others 50 pips....I hear of no one who is successfully using 15 pips...yet that SEEMS to be what you are promoting without saying it....yet, as I looked back on the charts, 15 pips SEEMS to wipe me out many occassions.

So, I just dont understand why you cannot elaborate and be much more specific on your SL strategy within this Trillion strategy? You have explained your entries and your TP? Please explain the SL....

Please..... :cry:

I make this request humbly....hoping that you can explain so that my lack of understanding in this regard may reverse itself.....

Thank,

BP :)



I can't tell you what your SL should be.

I can teach you how money management works.

But YOU have to decide what your risk tolerance is.

Trading is a GUESSING GAME. I don't care how much science, math, logic, astrology, etc.. you throw at it, it is still a GUESSING GAME.

From STATE 0 to STATE 1 there are three possibilities: UP, SAME, DOWN. That's it. You don't know what STATE 1 will be until AFTER it happens. You do NOT know the probability of the future STATE. You may know the statistics of the history. But statistics is NOT the same as probability.

Michal and I have been running FOREX statistics for weeks now. We know what the profitable entries have been at many price levels. BUT THAT DOESN'T MEAN THINGS WILL CONTINUE IN THE SAME FASHION.

So just use the MONEY MANAGEMENT spreadsheet I provided to help you determine your SL.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



Please do NOT PM me with trading or coding questions, post them in a thread.

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Postby BP » Fri Feb 23, 2007 5:45 pm

Thanks!! That helps me tremendously. I have a lot to munch on, to view, and to think about.

Thanks to the other traders who put in their stop loss information as well....it helps me to look at what others are doing so I can understand the(ier) strategy better.

Thanks again,

BP

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Postby TheRumpledOne » Fri Feb 23, 2007 6:33 pm

You're welcome, BP.

What is happening is that your brain uses what it knows to attempt to make things work. Sometimes that works out just fine. But in a few cases, what you ( think you ) know winds up working against you.

The hardest people to teach are the experienced ones!

Have to learn when to turn the brain's thinking switch to "off" and let it just collect information without filtering.

Do you know how hard it is to teach someone to trade just ONE INSTRUMENT using a few horizontal lines and candle colors on ONE chart?

Talk about a REBELLION! They want squiggly lines all over the charts!! That because they read about this indicator and then that one and the others...

And what is REALLY FUNNY is... NONE OF THAT MATTERS AT ALL!!

If you know how to trade, you can make money using ANY indicator or NO indicators.

See people have been duped into focusing on the TOOLS instead of the SKILLS. That's one reason why I give my indicators away for free. So instead of paying for tools, you can use that money to pay for skill development.

An auto mechanic can have state of the art tools in a state of the art garage but if the mechanic doesn't have the skills to use them, the tools are not going to help.

Is the IMAGE getting clearer?
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



Please do NOT PM me with trading or coding questions, post them in a thread.

jhtumblin
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Postby jhtumblin » Fri Feb 23, 2007 6:45 pm

There are 3 ways to make money regarding stops and profit targets:

1) You need a high percentage win, high yield trade setup with moderately large stops.

2) You need a low percentage win, high yield trade setup with close stops.

3) You need a high percentage win, low yield trade with close stops.

Those are the ONLY setups that will make money consistently in the market. There is no other option. The $TRILLION strategy falls under #3.

Now in reality, despite what the statistics look like on a daily chart, the price does bounce off new highs and new lows quite frequently. This is where money management becomes a necessity. Even if you get stopped out a couple of times before the price runs straight through the new high or low, it doesn't matter because as long as the statistics hold up, you will hit your streak of winning trades that outweighs the losers because you are taking SMALL LOSSES!

I know Avery is trying to stress that, because if you are using a huge SL one day you will come in to find that the last 6 months of profit have been wiped out in one trade. Even though you may come out on top at the end of the fiscal year, losses like that wound a psyche and cause people to make other dire mistakes.

Keep your losses small. The 3:1 risk reward ratio was not a fathom of the imagination.
Last edited by jhtumblin on Mon Feb 26, 2007 4:48 am, edited 1 time in total.

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TheRumpledOne
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Postby TheRumpledOne » Fri Feb 23, 2007 11:40 pm

$TRILLION



I missed the EURUSD long entry today.. DANG IT!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby jfx2 » Sat Feb 24, 2007 3:38 am

[quote="TheRumpledOne"]

An auto mechanic can have state of the art tools in a state of the art garage but if the mechanic doesn't have the skills to use them, the tools are not going to help.

Is the IMAGE getting clearer?[/quote]


Words of a true Master, This is just a quick thank you TRO, for your patience and persistence helping everyone understand the essence of trading.

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