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#1 Feb. 8, 2005 17:32:00

Mark VH
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My latest strategy

Here is what I have been doing the last 3 weeks with my very small account (because after 4 or 5 years, I still suck at this). But it has been fun.

Imagine a chart of the AUD/USD. Above and below the current price, place small limit buy orders at 15 pip increments (05, 20, 35, 50, 65, 80, 95). The take-profit is set for 15 pips on each limit buy order. Reset each order that takes profit.

Flipside. Imagine the chart of the EUR/USD. Above and below the current price, place small limit sell orders at 15 pip increments (05, 20, 35, 50, 65, 80, 95). The take-profit is set for 15 pips on each limit sell order. Reset each order that takes profit.

Now imagine for the moment, just the AUD/USD chart with all those little buy limit orders. If price climb steadily up, you are buying and cashing in every 15 pips. If price is choppy, you are collecting on dips and selling on peaks. However, if price steadily declines, you are accumulating positions and drawing down margin.

The EUR/USD sells are a kind of hedge, taking profits on the reverse moves. I do these two pairs because of the small spread and they often move together. I happen to do the AUD/USD long, since it gains interest. Keep the limit orders small. Occasionally liquidate position and reset orders above and below market.

Tripled the account in 3 weeks. I know that the alarm bells are going off in folks heads, because big gains could indicate disaster down the road. But we're just talking dinner money. I want to find out just how it will succeed or fail spectacularly.

1:50 leverage. Say, with a $20 account, the orders are 100 units. Once it gets to $40, 200 units per limit order. Maybe less would work better.

Happy trading, everybody. Thanks for the great posts over the years.

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#2 Feb. 8, 2005 19:10:00

GutBlood
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My latest strategy

Nice. What time frame are you using for the limit orders?


Often the right thing to do feels very wrong.

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#3 Feb. 8, 2005 20:10:00

Mark VH
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My latest strategy

I leave the time frame at a week. I just hang orders above and below the action until they get filled. Once a filled order takes its profit, I hang one back out there in the same place.

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#4 Feb. 8, 2005 20:31:00

chaffcombe
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My latest strategy

As a strategy, what you are saying makes sense, although you could, of course, do exactly the reverse! The real problem is that a strategy has to be exceptional not to nose-dive at 50:1. You'd be better off evaluating your technique at say 15:1.

~chaffcombe

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#5 Feb. 8, 2005 20:34:00

rethanov
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My latest strategy

Mark, your strategy sounds familiar, I think there are already some traders here who are trading that way successfully. Can't remember who though.

Why don't you concentrate on just 1 pair, limit buy orders in primary account and limit sell orders in sub-account? Would eliminate any deviation since AUD/USD and EUR/USD are not perfectly correlated, neither do they move the same number of pips within a fixed period.

Added: You also do not seem to use stop losses or have any other exit strategy in case of a huge spike that took out all your TPs on winning positions, while leaving your losing positions?

[ February 08, 2005, 08:40 PM: Message edited by: maxlim ]

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#6 Feb. 8, 2005 20:37:00

Mark VH
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My latest strategy

Chaff, I see what you mean. The key will be adjusting either the leverage or the unit-per-trade so that the inevitable bad periods won't be so bad. It will take time to observe.

Edit: the 2 account strategy may be something I try later, after peering into this latest thing for a while. The strategy polices itself pretty well so far. For example, last Fridays big spikes went very well with me. Exit strategies will be implemented and tweaked as I catch all the weaknesses in the system. That will take time.

[ February 08, 2005, 08:44 PM: Message edited by: Mark VH ]

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#7 Feb. 8, 2005 23:25:00

rwilliams
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My latest strategy

Adjusting units/trade is effectively adjusting leverage, since you're varying the amount of margin in use given your total available margin.

As said once before, I set my maximum leverage to 50:1 and then trade smaller or larger numbers of units to vary effective leverage, obviously from very low to about 40:1.

Unless you're using margin calls to simulate a disaster stop at max leverage, as one poster was talking about doing, I don't see the sense in using less than 50:1 leverage at Oanda.

[EDIT:
Lest the above be misconstrued, I meant 'I don't see the sense in using a leverage setting of less than 50:1'
]

At other MMs with 'contracts' of full 100,000 unit lots, setting leverage low could be essential, though.

[ February 09, 2005, 12:07 AM: Message edited by: rwilliams ]


_ _

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#8 Feb. 8, 2005 23:40:00

GutBlood
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My latest strategy

Same here rwilliams, 50:1 and limit the unit size. Just because the leverage is there, doesn't obligate it's usage.


Often the right thing to do feels very wrong.

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#9 Feb. 9, 2005 04:34:00

chaffcombe
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My latest strategy

I trust that it's obvious that I was referring to usage not setting. Like Ron and Gutblood, I have all my accounts set to 50:1. I don't use it all though, since I plan to be still be in business next week!

~chaffcombe

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#10 Feb. 9, 2005 08:24:00

disposable hero
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My latest strategy

what about using EUR/USD and USD/CHF ??

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