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Tight Stops can give false comfort
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Tight Stops can give false comfort

  #51 (permalink)
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Profitable Martingaler = someone who just hasn't blown up yet. Give it time.

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"If you must forecast, forecast often."

-- Edgar Fiedler
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  #52 (permalink)
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liquidcci View Post
Surly that is interesting. I suppose if you had massive amounts of capital per say and could continue to add and add you would eventually get a bounce and could get out positive. A matter of sweating it out until bounce happens. But eventually something like CL could black swan on you and will get wiped out. You have to believe guys like that days are numbered and will eventually blow out. I actually heard Hoffman blew his account this year. I cannot confirm as true. But read it on another board. Below is what I read would not surprise me if true.

"Hoffman blew up today. He had Martingaled short about 852 TF contracts and was down about $250K when the system (He uses Infinity) locked the account and closed his position. Total loss about $312K as I guess the Infinity system closed him out with a market order..

I think his ego got to him. There were many times during the 1 1/2 hours he was in the trade that he could have gotten out with a small loss or profit in the $3K to $5K range. He has a number of trend indicators that were all showing down and getting worse, but he ignored them, though he almost never mentions them when he trades."


Funny after Hoffmans alleged blowup. Say alleged because I am reading third hand posts so can't verify.

A poster wrote this

"For the record, in the 2 day online event this week, Hoffman will apparently talk about how he is going to set his stops, instead of keeping his so-called mental stops (I guess his stops are 130 ticks away?). Also, he's going detail how he will trade less contracts."

lol guess blow up taught him a lesson about stops and adding contracts into losing position.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #53 (permalink)
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worldwary View Post
Profitable Martingaler = someone who just hasn't blown up yet. Give it time.

It would be interesting to have redratsal's point of view. I think this is an area where black and white theory does not really match reality with all the nuances it contains.

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  #54 (permalink)
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liquidcci View Post
Surly that is interesting. I suppose if you had massive amounts of capital per say and could continue to add and add you would eventually get a bounce and could get out positive. A matter of sweating it out until bounce happens. But eventually something like CL could black swan on you and will get wiped out. You have to believe guys like that days are numbered and will eventually blow out. I actually heard Hoffman blew his account this year. I cannot confirm as true. But read it on another board. Below is what I read would not surprise me if true.

"Hoffman blew up today. He had Martingaled short about 852 TF contracts and was down about $250K when the system (He uses Infinity) locked the account and closed his position. Total loss about $312K as I guess the Infinity system closed him out with a market order..

I think his ego got to him. There were many times during the 1 1/2 hours he was in the trade that he could have gotten out with a small loss or profit in the $3K to $5K range. He has a number of trend indicators that were all showing down and getting worse, but he ignored them, though he almost never mentions them when he trades."

Thanks - that is interesting news - I shouldn't exult at all (there, but for the grace of god, go I) but after that one morning in his room I realized the guy was a ticking timebomb and that he would never be able to teach me something I could use. There's a whole discussion about it on the TTM forum (where rob works) so I am guessing its true and certainly not unsurprising giving his methodology.

And holy cow - his ego? I've never encountered someone with a bigger ego than that guy. He was so insecure he spent 50% of the time telling everyone what a good trader he was.

Again, his real genius is that he tapped in to what most losing trader's primal fear is: losses. He knew that if he just developed a track record that promised avoiding losses, he'd sell a lot of subscriptions. And while losing $312,000 in a single trade is bad - he's made far more than that every month for the last 1-2 years at least.

Seek freedom and become captive of your desires. Seek discipline and find your liberty. - Frank Herbert
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  #55 (permalink)
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A major problem I think we all have is rather poor measures of volatility. That is just something that hasn't come down from the heights of mathematical finance yet.

Obviously, it would not make sense to use an arbitrarily smaller or larger stop based on your volatility forecast but in general most of us are probably not even making volatility forecast.
For equity index futures, I can't imagine being able to do better than implied volatility on equity index options.

A trader using a martingale system to me is not even worth the effort to think about let alone debate.

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  #56 (permalink)
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monpere View Post
On the CL, I get around 40 to 50 signals per day, I generally trade the first 10 to 20, then quit for the day. I almost never am still trading past noon. Here's a chart of my method. I started testing RJay's bars yesterday with my autotrader. It uses the same method and indicator I use in my live trading. I don't autotrade in my live trading as the indicator is not that accurate yet. But you can see that my entries are designed to be at the apex of a swing, and my stop goes right behind the entry bar.

https://futures.io/vendors-product-reviews/12224-innovative-trading-solutions-online-com-review-2.html#post141873

Thanks for sharing that. And you trade that manually? Sounds stressful...

I usually take 1-5 trades a day, netting 30-100 ticks... It suits me much better....

Looking at your charts, it seems you could let your winners ride more, if you increased your stops a bit. Have you looked into that?

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  #57 (permalink)
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Lornz View Post
Looking at your charts, it seems you could let your winners ride more, if you increased your stops a bit. Have you looked into that?

You obviously are not familiar with monpere. I'm sure he's looked at it 9 ways til sunday...

Seek freedom and become captive of your desires. Seek discipline and find your liberty. - Frank Herbert
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  #58 (permalink)
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Lornz View Post
Thanks for sharing that. And you trade that manually? Sounds stressful...

I usually take 1-5 trades a day, netting 30-100 ticks... It suits me much better....

Looking at your charts, it seems you could let your winners ride more, if you increased your stops a bit. Have you looked into that?

I looked into various stop/target management, and the most advantageous for me was 2:1 reward/risk. My trading motto is 'Never sit through a pullback...trade them both ways! '. Overall, my trading style is primarily governed by my personality. I can't sit in a trade for 3 minutes, let alone 20 minutes. I want to be in and out of the market as quickly as possible. I also don't want to require the market to be in a certain mode, or perform a certain infrequent action in order to capitalize. So, I don't want to have to wait for a trend in order to trade, and I don't want to ask the market to move 50 ticks so I can make money.

I tried to find setups to trade any market environment, not just the 20% of the time it is trending, or 80% it is not. I also like to trade a lot, I find that if I am getting 5 signals a day, I will miss 3 of them, because the amount of time I have to wait for the next trade, I will certainly get distracted enough that I'll be shooting pool, or fiddling with some code, or doing something else, instead of staring at the screen.

I also want a method that is systematic, when I trade, I don't have to think about anything, once I pull the trigger, I can virtually walk away, I don't want to have to keep thinking while I am in the trade as to where to exit, how to exit, when to move my stop, all that is too subjective and stressful, so I make the most awefull discretionary decisions in these circumstances.

I think in almost all occasions, if a market moves 100 ticks from top to bottom for the day, when I markup my charts at the end of the day, if I had traded all the signals the whole day, I would generally make more then the 100 ticks that the market moved tip to tip, because I am trading every swing. If a trader holds on to a trade for a 50 tick move, I want to get 30 to 70 ticks out of that 50 tick move, then I want to get another 50 ticks in the ranging period after that move, while the previous trader is waiting for the next big move. In essence I am trading the wiggles that most traders would consider noise.


Last edited by monpere; August 4th, 2011 at 08:34 PM.
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  #59 (permalink)
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worldwary View Post
Profitable Martingaler = someone who just hasn't blown up yet. Give it time.

To add to what i already expressed. A Forex trader once explained to me his money management. He was using the well known Martingale using no more than three steps . In other words, he would double his position up to three times if he were to lose a trade. He calculated his position size for an average risk of 25 or 35 pips i don't remember exactly. The result of this calculus represented around 2% of his entire capital. At that time he was using Oanda as a broker to be able to use fractional lot size.

So all he needed to do is to divide his calculated position size into seven parts and trade the first attempt with one part, the second attempt with two parts and the final and third attempt with four parts. So three attempts to win and never risking more than 2% of his capital. Psychologically this money management tactic is seducing even with a poor winning %. You may not become rich fast but to blow your account using this scheme would certainly be an out of ordinary event.

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  #60 (permalink)
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monpere View Post
I looked into various stop/target management, and the most advantageous for me was 2:1 reward/risk. My trading motto is 'Never sit through a pullback...trade them both ways! '. Overall, my trading style is primarily governed by my personality. I can't sit in a trade for 3 minutes, let alone 20 minutes. I want to be in and out of the market as quickly as possible. I also don't want to require the market to be in a certain mode, or perform a certain infrequent action in order to capitalize. So, I don't want to have to wait for a trend in order to trade, and I don't want to ask the market to move 50 ticks so I can make money.

I tried to find setups to trade any market environment, not just the 20% of the time it is trending, or 80% it is not. I also like to trade a lot, I find that if I am getting 5 signals a day, I will miss 3 of them, because the amount of time I have to wait for the next trade, I will certainly get distracted enough that I'll be shooting pool, or fiddling with some code, or doing something else, instead of staring at the screen.

I also want a method that is systematic, when I trade, I don't have to think about anything, once I pull the trigger, I can virtually walk away, I don't want to have to keep thinking while I am in the trade as to where to exit, how to exit, when to move my stop, all that is too subjective and stressful, so I make the most awefull discretionary decisions in these circumstances.

I think in almost all occasions, if a market moves 100 ticks from top to bottom for the day, when I markup my charts at the end of the day, if I had traded all the signals the whole day, I would generally make more then the 100 ticks that the market moved tip to tip, because I am trading every swing. If a trader holds on to a trade for a 50 tick move, I want to get 30 to 70 ticks out of that 50 tick move, then I want to get another 50 ticks in the ranging period after that move, while the previous trader is waiting for the next big move. In essence I am trading the wiggles that most traders would consider noise.


This is an example of why there is more than one way to play this game, monpere knows his strengths and weaknesses, this a good example of knowing what works for Y-O-U. I think I remember you posting your chart a few posts back and I immediately thought as Lornz did about letting your profits run more.

Cheers Monpere for doing it the way that works best for you and I wish you many years of profitability, and many should learn from this post and learn themselves before they worry about learning the market or systems, I keep preaching this, hummm maybe there is something to that, I wonder!!!!!

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