Richard Hill Forex Net Trap

[insidergates]

I've tried trailing stops in the past and its tricky. Quite often the market would retrace after going your way and you'd get stopped out before seeing the market continue its merry way. Frustrating.
I think one of the most appealing aspects of this system is the ability to leave it in place. Watching the 15 minute candle move every second is not conducive to a relaxing breakfast!! I think there is a proven track record for this system so let it work, it can't win everytime. If in a couple of months my monthly pips are not in line with past performance then the alarm bells will start to ring but right now for me it looks perfect

 

[mark120169]

what was the weeks total loss going by the book

Wont know until RH update monday, If he mirrors us should be somewhere around 25-30 pips loss this week 4 days trading, with Monday being a BH so no trade day.

Not a good week to compare MNT though, and not in a bad way. MNT won 10 pips on every trading day so would have ended this week +40 pips.

Like others have said maybe the long term average will be no better than normal NT.

M

 

[BigBrassBalls]

Wont know until RH update monday, If he mirrors us should be somewhere around 25-30 pips loss this week 4 days trading, with Monday being a BH so no trade day.

Not a good week to compare MNT though, and not in a bad way. MNT won 10 pips on every trading day so would have ended this week +40 pips.

Like others have said maybe the long term average will be no better than normal NT.

M

Time will tell, i think in this current climate it's a winner, but when things even out, whenever that may be, perhaps it'll under perform, who knows. It'll take at least a few months comparison with the NT system to compare. Worth a dip though!

 

[goldfinger777]

Hi I'm new to Net Trap and I've been using it for just over a week so far. We've had a disappointing week no doubt but as others have commented, only time will tell as to long-term profitability. Certainly the track record of Net Trap is very good overall.

Mark120169 I like your ideas and have been thinking similar things. Although I think your idea of placing consecutive orders for 10-15 pts at a time is flawed because the combination of the dealer's spread and slippage would make it very difficult to make the full 50 pts by 8:30, due to the number of trades you're making and the spread and slippage on each one really adds up.

My approach is to look at the MA spread as a potential indicator to improve the performance of the Net Trap system. The MA spread is the difference between candle 1 and candle 10. It is a good indication of momentum, and generally speaking the more momentum the more you are likely to gain. Conversely, a small MA spread often (not always!) indicates low momentum and therefore a lower probability of gaining decent points. What I've been doing everyday with my Net Trap spreadsheet is recording the 10 MA figures and also the spread. I intend to use it to prove a theory of mine, which is basically that the limit you set on Net Trap should reflect the MA spread. So:

MA spread = 1-2 pts, set LIMIT to 10 pts
MA spread = 3-4 pts, set LIMIT to 20 pts
MA spread = 5-6 pts, set LIMIT to 30 pts
MA spread = 7-8 pts, set LIMIT to 40 pts
MA spread = 9-10 pts, set LIMIT to 50 pts
MA spread = 11 pts+, set LIMIT to 60 pts

NOTE: Since the NT system requires that we round up or down the MA to whole numbers, there is no need to round the MA spread as it will always be a whole number if you've already rounded all the MA numbers.

All other NT rules and trading approach remains the same.

I have not been Net Trapping long enough to have backtested this yet, but I'll continue to record the MA spread and once I've got at least a month's worth of data I'll post the spreadsheet on this forum so that people can use the data to analyse any trends occuring from the MA spread, because I believe this could be key to improving the NT system.

 

[mark120169]

Hi I'm new to Net Trap and I've been using it for just over a week so far. We've had a disappointing week no doubt but as others have commented, only time will tell as to long-term profitability. Certainly the track record of Net Trap is very good overall.

Mark120169 I like your ideas and have been thinking similar things. Although I think your idea of placing consecutive orders for 10-15 pts at a time is flawed because the combination of the dealer's spread and slippage would make it very difficult to make the full 50 pts by 8:30, due to the number of trades you're making and the spread and slippage on each one really adds up.

My approach is to look at the MA spread as a potential indicator to improve the performance of the Net Trap system. The MA spread is the difference between candle 1 and candle 10. It is a good indication of momentum, and generally speaking the more momentum the more you are likely to gain. Conversely, a small MA spread often (not always!) indicates low momentum and therefore a lower probability of gaining decent points. What I've been doing everyday with my Net Trap spreadsheet is recording the 10 MA figures and also the spread. I intend to use it to prove a theory of mine, which is basically that the limit you set on Net Trap should reflect the MA spread. So:

MA spread = 1-2 pts, set LIMIT to 10 pts
MA spread = 3-4 pts, set LIMIT to 20 pts
MA spread = 5-6 pts, set LIMIT to 30 pts
MA spread = 7-8 pts, set LIMIT to 40 pts
MA spread = 9-10 pts, set LIMIT to 50 pts
MA spread = 11 pts+, set LIMIT to 60 pts

NOTE: Since the NT system requires that we round up or down the MA to whole numbers, there is no need to round the MA spread as it will always be a whole number if you've already rounded all the MA numbers.

All other NT rules and trading approach remains the same.

I have not been Net Trapping long enough to have backtested this yet, but I'll continue to record the MA spread and once I've got at least a month's worth of data I'll post the spreadsheet on this forum so that people can use the data to analyse any trends occuring from the MA spread, because I believe this could be key to improving the NT system.

Maybe, But being sad too I have being recording the MA spreads each day since 17/5/10 and I can tell you that Wednesday 19/5/10 causes a problem for above. MA spead over 10 candles was -16, but it still end up as a -30 pips loss. Mini netrap would have banked 10 pips though.

But interesting ideas.

M

 

[peterf1966]

Hi I'm new to Net Trap and I've been using it for just over a week so far. We've had a disappointing week no doubt but as others have commented, only time will tell as to long-term profitability. Certainly the track record of Net Trap is very good overall.

Mark120169 I like your ideas and have been thinking similar things. Although I think your idea of placing consecutive orders for 10-15 pts at a time is flawed because the combination of the dealer's spread and slippage would make it very difficult to make the full 50 pts by 8:30, due to the number of trades you're making and the spread and slippage on each one really adds up.

My approach is to look at the MA spread as a potential indicator to improve the performance of the Net Trap system. The MA spread is the difference between candle 1 and candle 10. It is a good indication of momentum, and generally speaking the more momentum the more you are likely to gain. Conversely, a small MA spread often (not always!) indicates low momentum and therefore a lower probability of gaining decent points. What I've been doing everyday with my Net Trap spreadsheet is recording the 10 MA figures and also the spread. I intend to use it to prove a theory of mine, which is basically that the limit you set on Net Trap should reflect the MA spread. So:

MA spread = 1-2 pts, set LIMIT to 10 pts
MA spread = 3-4 pts, set LIMIT to 20 pts
MA spread = 5-6 pts, set LIMIT to 30 pts
MA spread = 7-8 pts, set LIMIT to 40 pts
MA spread = 9-10 pts, set LIMIT to 50 pts
MA spread = 11 pts+, set LIMIT to 60 pts

NOTE: Since the NT system requires that we round up or down the MA to whole numbers, there is no need to round the MA spread as it will always be a whole number if you've already rounded all the MA numbers.

All other NT rules and trading approach remains the same.

I have not been Net Trapping long enough to have backtested this yet, but I'll continue to record the MA spread and once I've got at least a month's worth of data I'll post the spreadsheet on this forum so that people can use the data to analyse any trends occuring from the MA spread, because I believe this could be key to improving the NT system.

Hello Goldfinger,

What's the stops though on your different limits, are you keeping the same R/R ratio?
For example, when the limit is 10 your stop would be 6, and I suspect you'd get stopped every time, especially on this one, where the spread would really tell. Also it looks a complex system, and I try to abide by the KISS principle in all things, which attacted me to NT in the first place.

I also had some thoughts about the free ETX £250 offer. Becasue it's essentially betting with other people's money, you might end up placing trades you might not dare do otherwise - it's a bit like drug dealers offering you the first couple of hits for free, just to lure you in, so I'll use it, but ~ I must be careful and try not to get into bad habbits/addictions

Pete

 

[goldfinger777]

Maybe, But being sad too I have being recording the MA spreads each day since 17/5/10 and I can tell you that Wednesday 19/5/10 causes a problem for above. MA spead over 10 candles was -16, but it still end up as a -30 pips loss. Mini netrap would have banked 10 pips though.

But interesting ideas.

M

I agree it does not always work out. For example, I think it was friday before last the spread was only 1-2 pts but it ended up being a +50 pt day!

I think the key thing here is that we're not trying to invent the perfect system with 100% success because such a system doesn't exist. But I think its worth looking at improving Net Trap, even if it only ends up being a marginal improvement

 

[goldfinger777]

Hello Goldfinger,

What's the stops though on your different limits, are you keeping the same R/R ratio?
For example, when the limit is 10 your stop would be 6, and I suspect you'd get stopped every time, especially on this one, where the spread would really tell. Also it looks a complex system, and I try to abide by the KISS principle in all things, which attacted me to NT in the first place.

I also had some thoughts about the free ETX £250 offer. Becasue it's essentially betting with other people's money, you might end up placing trades you might not dare do otherwise - it's a bit like drug dealers offering you the first couple of hits for free, just to lure you in, so I'll use it, but ~ I must be careful and try not to get into bad habbits/addictions

Pete

Sorry should've mentioned, the stop is always 30 pts still. Admittedly this affects the risk/reward ratio. And many traders would be uncomfortable with a reward:risk ratio of worse than 2:1 (even though the Net Trap system is already worse than 2:1) !

 

[peterf1966]

Sorry should've mentioned, the stop is always 30 pts still. Admittedly this affects the risk/reward ratio. And many traders would be uncomfortable with a reward:risk ratio of worse than 2:1 (even though the Net Trap system is already worse than 2:1) !

? If risk is 30 and reward is 50, then that ratio is, 0.6/1, or 1.6/1 if a reward/risk! Not sure why net trap is worse then 2/1??

 

[peterf1966]

I think the key thing here is that we're not trying to invent the perfect system with 100% success because such a system doesn't exist. But I think its worth looking at improving Net Trap, even if it only ends up being a marginal improvement

Agreed there..I will just trail the stop as and when I think it's needed, but I admit, I work from home from 7.45/8 am onward, and so I have the opportunity to do so, others won't. So one thing that suits one person, wont suit another.

 

[goldfinger777]

? If risk is 30 and reward is 50, then that ratio is, 0.6/1, or 1.6/1 if a reward/risk! Not sure why net trap is worse then 2/1??

So to be 2/1 reward/risk, Net Trap would need to be a 30 pt stop, 60 pt limit. So currently at 1.6/1 it's worse than 2/1.

 

[Trader333]

Sorry should've mentioned, the stop is always 30 pts still

That in itself is a issue in my view because it does not factor in the current volatility of the market which could be anything from 2 pips to 50 pips and that will impact the likelihood of being stopped out.


Paul

 

[peterf1966]

So to be 2/1 reward/risk, Net Trap would need to be a 30 pt stop, 60 pt limit. So currently at 1.6/1 it's worse than 2/1.

Sorry I see what you mean.

I wonder how many times has +50 been hit, when it could have gone on to 60? That might be too ambitious a target, and why NT has it's target at 50. It's a researched system, and -30 and +50 are there for good reason (I would hope)

 

[goldfinger777]

Sorry I see what you mean.

I wonder how many times has +50 been hit, when it could have gone on to 60? That might be too ambitious a target, and why NT has it's target at 50. It's a researched system, and -30 and +50 are there for good reason (I would hope)

Very true! In addition to the "MA Spread" I also record the "Peak Profit" in my NT spreadsheet, which basically states the maximum amount of points we could get if we entered the market at the usual NT time but didn't specify a LIMIT and exited the trade manually at the BEST possible opportunity, by 8:30am at the latest. The reason I record this figure is so I can see a) how many times NT is missing out on profit due to its fixed STOP and LIMIT and set and forget nature, and b) how many times NT "only" gains 50pts when it could get 60, or maybe even more.

Of course, it's impossible to ALWAYS exit the market at the BEST possible opportunity, but I'm hoping to discover (like "Mark120169" and a few others on this forum) that a lower LIMIT might get us a few more profitable trades ON AVERAGE, as NT is a little bit of an "all or nothing" system it seems. And when the market goes to, say, +35 points and then goes back down again to hit the -30 stop it's gut wrenching!

 

[peterf1966]

And when the market goes to, say, +35 points and then goes back down again to hit the -30 stop it's gut wrenching!

.

The discussion on this started off when we had +49 about a month a go and it went to -30 stop. I trailed the stop to a +20 profit on that occaision, only after I'd read about in the free book I got from IG. I think the trailing is the easiest method of preventing this

 

[goldfinger777]

Another way in which I think we might be able to get more profit out of NT is to sell half our stake when we hit, say, +25 points. That way, we grab some of the existing profit and we're still in the market (albeit with only half our stake) to grab any further profits. This would help to solve the "gut wrenching" issue I mentioned in my previous post of getting into positive points, only to not quite make the +50 LIMIT and then go back down to -30 and be stopped out. Here's how to do it:

1. Immediately after you've placed your order or trade, set a "Price Alert" to email or SMS you when the market hits +25 pts in your favour.

2. Go to your open position and sell/buy (as appropriate) HALF your stake. For example, if your original stake was £1/pt, sell/buy £0.50/pt.

3. Leave the position open until 8:30am as usual, or when your +50pt limit is hit.

NOTE: this is based on IG Index. I don't know if other spreadbetting companies offer this feature.

Of course, this means that your overall profit is POTENTIALLY less as you've only got HALF your stake in for the remaining 25 potential profit points. But ON AVERAGE this might be more profitable than the standard NT system, as you are avoiding those "gut wrenching" days when the market takes you into profit, only to then go back down again and hit your stop.

As with my "MA Spread" idea this is not an approach I've had a chance to test so far, it's just an idea at the moment!

Does anyone have any past data that they could backtest this against?.

 

[missionary]

RE: Msg 1198 and an apology to P1966. (Sorry to be behind with the deiscussion but have been doing other things!). I appear to given the wrong impression promting you to re-affirm the value of the NT system. It was not my intention to rubbish it and say it was not worth paying for. But that it was not as simple as the premise on which it is sold, and that is apparent to those of us with some spread trading experience. Witness the constructive applications that have been described since, well done chaps.

But the main feature of NT is 'set and forget' and I am just suggesting that we should observe the general parameters of trading when setting our figures at 6.25 in the morning. Just look at the chart for the past 6 months and there is a clear declining channel of support and resistance. Then look at mid-May when the last touch on support was made, and it now appears there is a new resistance line above and parallel to it in the horizontal. OK, I know this can change at any time, but the point is, as others have mentioned, that the 50 pips plus is not always attainable when the resistance line is close, and trading in the hope it will go 50 is pointless. Again, back to Friday, it was plain that the 50 would be above resistance, hence I did not trade.

We have had some wonderfully constructive alternatives suggested, and a lot of brain power has been input into this. But I suggest that we start at a simple calculation to estimate the influence of the support/resistance on whether we should trade or not, and if we should, then at what level. Especially when the candles are already trending in the opposite direction to the MA as has happened.

cheers

mish

(sorry, now away from the PC for a bit).

 

[Melb]

Especially when the candles are already trending in the opposite direction to the MA as has happened.

Most successful systems use a long period ma as a support/resistance level or a cross with a lower period ma... It is very much a lagging indicator reflects the average of the market over the last 40 (in our case) periods (candles)... As pointed out above you can see a reversal candle pattern (more powerful signal) whilst the ma is still trending in the same direction... The nice concept of NT is great and ticks lots of boxes regarding fitting in with lifestyle, emotionless trading etc... There are 2 angles of approach to modify (improve the system)...

1. Reduce the profit targets by reducing the limit order or taking half profit at +25 etc..

and/or

2. increasing indicators or using candle rules within the last 10 periods to gain a clearer picture of trend and strength of trend... Looking at the longer time periods for 'the bigger picture' may also have merit even during the quiet Asian session...

1. will reduce potential daily profits but increase win ratio...
2. will reduce the number of losing trades...

I am sure with a little thought NT++ would be far more profitable and more suitable to changeable market conditions - whilst not losing that 'set and forget', 'easy' approach to trading...

 

[stevepatt]

I'm sure when Richard trades his system he doesn't just target 50 points without taking other factors into consideration. It would be very difficult to add these factors to the system and keep it simple enough for everyone to use, so opts for a happy, and so far profitable, medium.

I think looking for support and resistance levels near to entry points and setting limit orders to these levels is one way to go. It's down to personal interpretation though where these levels are on Thursday there was resistance at around the 1.4740 level and the price hit an high of 1.4745 at 7.30 which would have given a profit of about 18 pips instead of a loss of about 5 pips at 8.30. On Friday there was resistance at 1.4647 and the price hit an high of 1.4653 at 7.45 which would have meant a profit of about 10 pips instead of a loss of about 12 pips at 8.15.

I have back tested this to the beginning of January and, just going with my interpretation of support and resistance levels, would have made about an extra 85 pips up to Friday.

I think the bottom line is you've got to use your brain and not just follow a system
without any thought if you want to make the most from it. Which is what's happening on this forum with everyone using their experience to try and improve what is already a profitable system.

 

[pseudo straddle]

Can someone say when this system first became available ?


Paul

I got his forex round up email on the 10th December 2009 which pointed me to this -

sales letter

:clover: