Richard Hill Forex Net Trap

[langmeadman]

Bloody frustrating for Ig'ers really, stopped out by 0.4 of a pip.

On ETX it gives the mid price, but I make my entry -5 off this on sell orders, just to match IG's entry, and I've been adding the extra 3 to the stop on sell orders ever since you pointed this out, though I keep the limit at 50.

The thing is, where do you stop? Annoying as it is to just get stopped out by the odd 1/2 point, you do have to have a limit, and not be tempted to keep upping the stop when you get near it. It's a matter of long term discpline I suppose, over a year, we could easily have a few losses of 33 pips, though without the backtesting I wouldn't know if those extra 3 pips losses are made up for by the days when it got to between 30-33, then went back in your favour.

Certainly this morning, the potential 3 extra pip loss, was rewarded hansomely for a +45 (for me anyway) profit.

It may all be swings and roundabouts in the end.:?:

The most important point you make is the last one: I don't think it is swings and roundabouts : i actually think its important. My system is going to be 75 pips worse than yours and over a period of time that could tip the success of the overall performance of the sytem from good to bad....

 

[Denman]

Ok, now I am confused. I thought I was one of the 'True Trappers' (playing by the rules) but some here are saying that NT made a loss today yet I am + 50. Now I know some might think this is a good thing but, long term, its not. Did any other 'True Trappers' make a profit today?
Thanx

 

[BigDunc]

What did you enter at Denman? And what was your stop loss, 30 or 33? And which company are you trading with?

 

[Trader333]

Bloody frustrating for Ig'ers really, stopped out by 0.4 of a pip

In my view this is why it is important to have some volatility measure used in calculating position size and the profit and stop levels.


Paul

 

[mark120169]

Hi Mark,

Interested on whether you have any stats on whether this is more profitable long term. Obviously on a day like today it has a massive gain, but on days when price sails though the stop, it will just cost an extra 3 pips each time, which will obviously rack up in the long term. I would be interested to test this over a long period, but if you've got some stats on this, I wont bother.

Only got the last 5 weeks of data but so far you would have greatly benefited from a 33 stop gaining you a fair few pips over the extra loss on -30 max days.

M

 

[peterf1966]

Ok, now I am confused. I thought I was one of the 'True Trappers' (playing by the rules) but some here are saying that NT made a loss today yet I am + 50. Now I know some might think this is a good thing but, long term, its not. Did any other 'True Trappers' make a profit today?
Thanx

By Nt rules, the system stopped you out as it went 30.4 above entry. 0.4 of a pip. That's if you were on IG and entered at the no slippage price of 14691.

If you were on a SB provider with a 2 pip spread, you were not stopped.

If you did as you did, and went in higher at the 6.15 candle high of around 14700, you were Ok, and actually banked 50.

If you were on NT, but raised your stop to 33 as per Marks posts (as I did) Nt would have nearly but not quite stopped you out (2.6 pips to spare!) then took you into about a 44 pip profit by around 8.15, before settling back to around +26 by the official 8.30 close.

If, like me and a few others, you could be at your screen, you might have seen the +44 at 8.15, and trailed your stop, just in case it fell again, as it would have little time to revover by 8.30. My final trailed stop was +30 over entry, other's had different trails - 20 for Mark for example.

All these if's, and's and but's, have made for an ecclectic set of results this morning - some -30's, some +50's and some in betweens. No system can ever be perfectly consistent, given all the variables that people will tweak.

As for the 33 pip stop on sell orders - the benefit is psychcological as much as anything - ask yourself:-

1) how annoyed are you at losing 33 pips versus 30?
2) how annoyed you'd be at losing 30 pips today , compared with the extra 3 pips risk, as per this morning.

1) mildy miffed
2) really pi55ed off !

Now having said that, there WILL come a day, when we have a 33 pip stop and we get to 33.4 for a stop out, it's statisitically BOUND to happen at some point in the future...hence you have to stick to the stop once you have decided on what it is, and very strictly speaking, for a 33 stop loss, your stake must decrease by a bit to ensure you are keeping to MM principles. Which we all do..:whistling

 

[fulham1985]

So am i right in thinking that those on IG will have lost 30 pips today but those on other platforms will have made a health pip profit?

 

[peterf1966]

In my view this is why it is important to have some volatility measure used in calculating position size and the profit and stop levels.


Paul

I agree, but that takes some additional analysis above than what is prescribed under NT rules...maybe NT's ultimate usefulness is to start you on a path of learning, and acting as a comfort blanket for newbies.

 

[langmeadman]

Ok, now I am confused. I thought I was one of the 'True Trappers' (playing by the rules) but some here are saying that NT made a loss today yet I am + 50. Now I know some might think this is a good thing but, long term, its not. Did any other 'True Trappers' make a profit today?
Thanx

I'm a true trapper: I lost today by entering a sell: order at 1.4691, but I entered it on ETX: I'm not sure if true trappers were stopped out on IG: I had the impression they were?

 

[peterf1966]

I'm a true trapper: I lost today by entering a sell: order at 1.4691, but I entered it on ETX: I'm not sure if true trappers were stopped out on IG: I had the impression they were?

And me on ETX, but with the slightly increased stop at 33 on sell orders, as per above.

On ETX, are you using the price off their chart and knocking off 5 to get to what would be equal to 2 off IG's bid price chart? (thats for sell orders btw) And are you still covered by their £250 loss scheme - mine ran out yesterday, but in the end I didn't need it.

 

[langmeadman]

And me on ETX, but with the slightly increased stop at 33 on sell orders, as per above.

On ETX, are you using the price off their chart and knocking off 5 to get to what would be equal to 2 off IG's bid price chart? (thats for sell orders btw) And are you still covered by their £250 loss scheme - mine ran out yesterday, but in the end I didn't need it.

I think this is where I go wrong: I used the IG bid price chart and knocked off 2: i guess this is silly? My ETX £250 net finished yesterday and I'm pleased to say I didn't need it either.

 

[Melb]

So am i right in thinking that those on IG will have lost 30 pips today but those on other platforms will have made a health pip profit?

Glad I opted for the 33 pip SL this morning... Those 3 pips made a big difference...

 

[mark120169]

Now having said that, there WILL come a day, when we have a 33 pip stop and we get to 33.4 for a stop out, it's statisitically BOUND to happen at some point in the future...hence you have to stick to the stop once you have decided on what it is, and very strictly speaking, for a 33 stop loss, your stake must decrease by a bit to ensure you are keeping to MM principles. Which we all do..:whistling

Yes this will happen but I think what you will do is just shrug and think, hey ho would have been stopped out on the sell order with vanilla NT anyway so it's only cost be 3 pips more.

But on the gaining days like today and the 7/6/10 you will be thinking thank fook I did that to give me 30 pips stop travel it gained me a heap of pips.

Just comapre this month alone.

Monday 7/6/10 -30 pips stopped sell order by 0.6 pip.

Thursday 17/6/10 -30 pips stopped sell order by 0.4 pips.


Monday 7/6/10 +9 pips win will 33 pip sell stop

Thursday 17/6/10 +20 pips win with 33 pip sell stop.

So -60 vs +29 , thats an +89 pip difference.

You will need 30 trading loss days at -33 pip to be worse off than this. That is actually a lot, and this is just for a 10 day trading span in June, let alone if this has happened in the past.

I'm sure yet again RH results will show vanilla NT really struggling in June 2010 again because of today.

Is an extra 3 pips stop on a sell order "such" a gamble? I think not. I would even go so far as to say this is such a small change one day RH will add this adjustment to NT to even up and have a 30 stop travel limit on buy and sell orders.

M

 

[peterf1966]

I think this is where I go wrong: I used the IG bid price chart and knocked off 2: i guess this is silly? My ETX £250 net finished yesterday and I'm pleased to say I didn't need it either.

No, on ETX or IG the 'problem' today was the stop loss of 30 not being quite enough. If ETX had a spread of 2 pips, it would have been in profit today, according to the entry at 14961. It just needed the extra on the stop loss, 33 not 30 - technically 30.5, not 30!!

 

[peterf1966]

Is an extra 3 pips stop on a sell order "such" a gamble? I think not. I would even go so far as to say this is such a small change one day RH will add this adjustment to NT to even up and have a 30 stop travel limit on buy and sell orders.

M

Dunno if it will change as such now, but I agree on the extra 3 on sells. Even at £1 pip, I am ahead of 'Vanilla' NT by + £75 just for this morning, in fact £76.50 thanks to my extra click on the MNT stake!

 

[MikesDirect]

G'day Sirs!

A couple of observations/comments if I may.

According to NT rules, it was a SELL entry at 14691 with the maximum low on the 8.30am candle being 14663 giving a maximum +28 pips profit (IG Charts).

Firstly, I question RH's strategy of going for +50 pips profit with Net Trap. In my humble experience of 12 years in the Forex, this seems a way too optimistic/unrealistic goal for a system that is designed to be 'set & forget' (until 8.30am). Perhaps a +25 or +30 pips goal would be more realistic for 'set & forget'? If one is able to sit at one's computer and follow the trade, then it's a very different ball game to NT as manual closure when in good profit comes into play.

Secondly, I am curious why Net Trap is designed to close on the 8.30am candle. Again, in my experience, the FTSE100 opens at 8.00am and usually kicks off quite wildly in any direction. Today was a case in point when the FTSE100 began a considerable upward trend (after the usual high jinx dead on 8.00am). The FTSE100 invariably affects the GPB/USD and the pound rose following the FTSE100 as usual! This is going to have a positive/adverse effect on NT depending on whether it's a BUY or SELL signal. I can't help but think that RH has NOT considered the effect of the FTSE opening at 8.00am on the NT strategy???

Just some mumblings from a Forex 'wandering muse!'

Good day Sirs,
Mike

ps: for those not familiar with the 'behaviour' of the FTSE100 (and it's effect on the GBP/USD), just go back-check the charts at 8.00am for the FTSE100; 8.00am = 'showtime' when it all kicks off!

pps: When I refer to an unrealistic +50 pips profit on a 'set & forget' system I am of course referring to 'short term' Forex strategies ie in NT's case 4.5hrs. A +50 pip profit may well be 'easily' achievable on 'longer term' strategies.

 

[greenraiderskee]

Hi all. I`m new to the forum and have just started using the net trap. Lost out this morning because for some reason ig index kicked in the stop loss 3 pips below my level, not sure why, does anyone know? my entry at 6.30 , was xxxxx minus the 2pips spread so xxxxx. With the 30stop limit loss that should of been 14721, it stopped at 14718?
, have missed something? Regards Pat

 

[Claviceps]

G'day Sirs!

A couple of observations/comments if I may.

According to NT rules, it was a SELL entry at 14691 with the maximum low on the 8.30am candle being 14663 giving a maximum +28 pips profit (IG Charts).

Firstly, I question RH's strategy of going for +50 pips profit with Net Trap. In my humble experience of 12 years in the Forex, this seems a way too optimistic/unrealistic goal for a system that is designed to be 'set & forget' (until 8.30am). Perhaps a +25 or +30 pips goal would be more realistic for 'set & forget'? If one is able to sit at one's computer and follow the trade, then it's a very different ball game to NT as manual closure when in good profit comes into play.

Secondly, I am curious why Net Trap is designed to close on the 8.30am candle. Again, in my experience, the FTSE100 opens at 8.00am and usually kicks off quite wildly in any direction. Today was a case in point when the FTSE100 began a considerable upward trend (after the usual high jinx dead on 8.00am). The FTSE100 invariably affects the GPB/USD and the pound rose following the FTSE100 as usual! This is going to have a positive/adverse effect on NT depending on whether it's a BUY or SELL signal. I can't help but think that RH has NOT considered the effect of the FTSE opening at 8.00am on the NT strategy???

Just some mumblings from a Forex 'wandering muse!'

Good day Sirs,
Mike

ps: for those not familiar with the 'behaviour' of the FTSE100 (and it's effect on the GBP/USD), just go back-check the charts at 8.00am for the FTSE100; 8.00am = 'showtime' when it all kicks off!

G'day again ,
useful observations and something for us to watch out for -although
perharps a little atypical this morning following the sudden partial recovery of the BP
share price . many thanks.

 

[tjw]

Today was my second day of traiding and I came out with 21 pips. So far so good but i think todays luck was only because i set the order to sell at 14692.5.

Following the rules of NT, the lowest point of the 6:15 candle was 14694.5. As I understand it, this should be rounded off so would become 14695, less 2 pips = 14693. What I am not understanding is where the entry point that many of you had of 14691 comes from and would be very grateful if someone could explain.

Am new to this, so please be gentle with me.
T

 

[Rugby Trader]

did you have your chart set to bid price?