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MightyOne
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Postby MightyOne » Wed Jan 05, 2011 5:43 am

PebbleTrader wrote:The only concept that is still a little "muddy" (unclear) is the "pincushion" concept.

You defined it as:

"The space between your purchase price and your position in the market"

When I look at the previous post chart (23 Nov 2010) with your example "4 Pip Pincushion", it doesn't seem to match that definition?

The box for the "4 Pip Pincushion" isn't drawn around the PURCHASE PRICE.

Is that what you describe as the LOS (Line on Sand)?


From the current price to your maximum risk level is your pincushion AT THE TIME OF the adjustment.
If price starts moving down then your cushion becomes smaller and that is what is being shown in that picture; you had a 10 pip cushion, you lost 6 pips, and 4 pips of cushion remain.

If you expand, 5/4 etc, then your cushion becomes larger.

If you contract, 5/6 etc, then your cushion becomes smaller.

Your position, the price you consider yourself long/short from, is your maximum exposure + any space gained.

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bacoazul
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Postby bacoazul » Wed Jan 05, 2011 12:44 pm

I have some trouble doing it for Oanda so
i try to make as simple as i can, so let me
know if i'm doing something wrong.

this is just for the example so:

1. I want my pipcushion to be always the
same amount of pips

2. I want my pipcushion to be 200 pips

3. I want my risk to be 2%

4. My initial capital is $300


so my risk is $6

(6*200)/10000 = 300

so my intial units will be 300

Image

its that ok?
These are my principles. If you don't like them, I have others.

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PebbleTrader
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Postby PebbleTrader » Wed Jan 05, 2011 4:58 pm

Thanks MO,

I can now successfully follow through what you have wrote and shown in illustrations!

I bet I spent 10 hours studying just one of your illustrations alone!
Life is just a journey

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MightyOne
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Postby MightyOne » Wed Jan 05, 2011 8:16 pm

"... But I see one problem, if you get one full SL, then you are again at the beginning..." -Manta

If you let price make a 100% RET on high leverage then you did not think things through.

I draw I line through the pincushion, no deeper than 40%, where if price closes beyond it then I must exit.

As long as I have plenty of lots I can manipulate space for the win.

Your are right that you will be back at the beginning using another 2% of your account if your space becomes unmanageable.

I start on the hourly with space sized for the exact chart that I am trading (I adjust default) and try to absorb as much space as possible.
On the hourly I like to set 70-80% RETs as price moves in my favor and then expand my space after liquidation.
The greater my space the more likely I am to make deeper cuts before a move for some really :!: gains.

If things don't work out then I am left with a smaller box...
so I just expand the space and move on to the next trade, it is no big deal.

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bacoazul
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Postby bacoazul » Wed Jan 05, 2011 11:57 pm

MightyOne wrote: The greater my space the more likely I am to make deeper cuts before a move for some really :!: gains.



Pure gold :D

but yes with this kind of MM you have plenty
of cushion to wait for a big move, and repeat with
bigger size.

Manta: one thing MO say is "you'r pipscushion
is not you stop loss" so if i loss all my
pipcushion in one trade i'm doing something really
wrong
These are my principles. If you don't like them, I have others.

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MightyOne
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Postby MightyOne » Thu Jan 06, 2011 5:18 am

PebbleTrader wrote:Thanks MO,

I can now successfully follow through what you have wrote and shown in illustrations!

I bet I spent 10 hours studying just one of your illustrations alone!


:shock:

Suggestions are welcome

:wink:
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newark18
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Postby newark18 » Thu Jan 06, 2011 12:40 pm

MO, What is different in this version? I can't seem to tell at first glance.
Failure is an opportunity to learn.

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PebbleTrader
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Postby PebbleTrader » Thu Jan 06, 2011 4:52 pm

I saw that Sledge had posted an Excel version.

I couldn't open the file with Excel so I installed OpenOffice.

I can't see any of the formulas in OpenOffice, like in the Excel version Sledge posted.

Is there a show formulas setting in OpenOffice?

I'd be glad to offer suggestions as soon as I can understand it :D
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MightyOne
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Postby MightyOne » Thu Jan 06, 2011 6:41 pm

PebbleTrader wrote:I saw that Sledge had posted an Excel version.

I couldn't open the file with Excel so I installed OpenOffice.

I can't see any of the formulas in OpenOffice, like in the Excel version Sledge posted.

Is there a show formulas setting in OpenOffice?

I'd be glad to offer suggestions as soon as I can understand it :D


TOOLS ---> PROTECT DOCUMENT ---> Click on SHEET ---> lol is the password.

You should be able to click on a cell to reveal the formula when it is unlocked.

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MightyOne
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Postby MightyOne » Thu Jan 06, 2011 6:44 pm

newark18 wrote:MO, What is different in this version? I can't seem to tell at first glance.


I have not seen the Excel version but I made a few minor fixes with decimal places, colors, and column A.

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