Holy Grail!!!

[klastica]

Everyone talks about the 'Holy Grail' of trading.

I came up with some ideas before - am I on the right track as far as money management/trading tactics is concerned.

Example:

I'm swing trading the FSTE and I'm waiting for some price action on 1 hour TF that may suggest a trade.
The price is just below 4000 and here I come across a perfect candlestick pin suggest a buy (long).
My order is triggered at 4000 (£10 bet) my stop is 1pt below pin at 3955.
My trade goes well and over next few days the price rises to 4150 (potential £1500)
The price fall back and goes back up to 4150 revealing another fine hourly pin.
I decide to buy long again but this time I bet £40 making my stop below the pin at 4120.
I raise my original bet up to 4120 as well locking in £1200 for this bet.
I would be risking £1200 on the £40 bet so if it goes wrong the overall trade will break even.
Anyway it doesn't go wrong. Over the next few days the price rise to 4300. We're on a real Bull run. At this stage I could stop the trade and collect £9000.
BUT the price has bobbed about and all the analysts are suggesting that the markets are fighting back and the FSTE has much further to run.
Another perfect pin suggests the price is gonna rise from 4300. Stop below the pin at 4250. This time I bet £100 per pt (risking £5000). And I raise all the other stops to 4250. Meaning that if the price falls I will end up with a poultry £1500 profit.
BUT if it raises another 100pts I could take over £20,000.

Am I thinking along the right lines or is this trading madness?

Mike

 

[KillPhil08]

That's called pyramiding. Pretty sure dante posted that this is the real holy grail on another thread yday.

Well, using 100% equity with no risk.

 

[klastica]

That's called pyramiding. Pretty sure dante posted that this is the real holy grail on another thread yday.

Well, using 100% equity with no risk.

I think I read that post.

That's what got me thinking about this tactic.

Are there any threads/links about this style or trading?

 

[KillPhil08]

Let me google that for you

Basically, say you think we're at the top of gold. Short at the top. Add to it when breaks it's uptrend, add to every sbr on the way down.

Adding aggressively is what i hear a lot of traders do though.

 

[klastica]

Let me google that for you

Basically, say you think we're at the top of gold. Short at the top. Add to it when breaks it's uptrend, add to every sbr on the way down.

Adding aggressively is what i hear a lot of traders do though.

That google thing you have there is great, I must use that more

 

[KillPhil08]

stole it off shadowninja, give him the credit .

 

[klastica]

Would this be a good way of looking at this type of trading?
Example
Over two month period
100 trades at £10
50% losing trades average stop 50pts = £25,000 lose
30% trades BE = £0
17% trades get to second level gaining average £1000 *17 = £17,000 gain

3% of trades act as main thread. Using the pyamiding system you have 3 trades with an average of £20,000 per trade. £60,000 gain

Overall £52,000

Would these be realistic statistics for how this could work?

 

[Mr Squirrel]

100 trades at £10
50% losing trades average stop 50pts = £25,000 lose
30% trades BE = £0
17% trades get to second level gaining average £1000 *17 = £17,000 gain

3% of trades act as main thread. Using the pyamiding system you have 3 trades with an average of £20,000 per trade. £60,000 gain

My question is what are the %s based on? Are you saying that you have a method where x% of trades would behave as you have described?

 

[Mr Squirrel]

My question is what are the %s based on? Are you saying that you have a method where x% of trades would behave as you have described?

And what stock/index/etc will you be using this on? Whatever it is, it would have to have a lot of movement, no? Not to mention the stock or whatever being able to give you five trades per day... Am I missing something?

 

[klastica]

And what stock/index/etc will you be using this on? Whatever it is, it would have to have a lot of movement, no? Not to mention the stock or whatever being able to give you five trades per day... Am I missing something?

Yes the senario is a little hypothetical.
In 2 months that would be about 40 days of trading which would equal 2.5 trades per day.
It would involve me watch up to 60 different markets from indices to currencies and commodities.
The results are guess work (but an educated guess) based on results of traders trading and back testing on trader_dante's thread 'Making money'. Also I have looked back thru many charts looking for entry points on 1 day and 1 hour TF's.

The results I have estimated are actually worse than most performances and back testing on TD's thread.
Obviously the X factor here is could you find 3 Holy Grail movements in 2 months which would allow for the pyramiding technique.

 

[Mr Squirrel]

Yes the senario is a little hypothetical.
In 2 months that would be about 40 days of trading which would equal 2.5 trades per day.
It would involve me watch up to 60 different markets from indices to currencies and commodities.
The results are guess work (but an educated guess) based on results of traders trading and back testing on trader_dante's thread 'Making money'. Also I have looked back thru many charts looking for entry points on 1 day and 1 hour TF's.

The results I have estimated are actually worse than most performances and back testing on TD's thread.
Obviously the X factor here is could you find 3 Holy Grail movements in 2 months which would allow for the pyramiding technique.

All sounds good in theory. Sorry about the trades per day - I misread your post. I've just finished reading TD's thread and it was great reading. I guess the key to finding the three Holy Grail movements is letting your winners run and run. I'm sure quite a few wins could be that type of movement if we didn't get scared and take the profits early. TD's great at explaining this.

I'm still doing major reading and learning at the moment...

Best wishes, S