Thud

I guess it had to happen after 6 straight wins and happen it did with a real thud. A double loss for a loss of 61 pips after spread for me (I use 35 max loss) and perfectly highlighting Marco’s concerns about poor risk:reward ratio. Marco was one of the few die hard followers along with me who followed the old cash-master method of using two timeframes for a signal. He uses an adapted version of this and I believe he trades it from 6AM-10AM. He stops after two losses which gets around the problem of over trading that seemed to occur in the later stages of the original method. There were days of 8+ trades and I distinctly remember a day of 6 losing trades! Ouch.  He still uses a double timeframe for confirmation but utilizes a trailing stop and based on the daily pivot point and support, resistance areas takes profit where he thinks necessary.  I believe he has had greater success in terms of pips than the new method. I’m still unclear on the trailing stop myself so hopefully he will clear that up for me. I understand using it on the 5 min timeframe but do you use it on the 10 and 15 timeframe also? Also, do you move your stop every time TESS suggests? Thanks for your work, Marco.

Another reader, Mike, did some extensive testing of the new method and this is what he found:

”Hi

for what its worth my two pennyies worth.

trading is long term – just because had bad week – its nothing – keep with the system

had a spare afternoon and went back to 22/2/10 – the earliest tess charts would allow me and recorded every trade from 6am to 10am that qualified using current cm settings – average and parabolic same colour – risking 5% per trade – taking every trade that qualified in that period regardless if already in a trade – using stop loss as indicated by tess – compounding after every trade – starting from £1000 – the profit would be now £4172,80 and the largest drawdown would of been 23%”.

I asked him about the afternoon session and this is what he had to say:

”Seems trading 6am to 10am and then 13.00 to 16.00 produces a profit £2782 and if you remove the afternnon session your profit increases to £4170 – therefore afternoon session seems to produces a lost.”

Another interesting take on the new method. I need to go back to the same date and test the one winner and stop method and compare results to see if the above is in actual fact more profitable.

So a disappointing day and it’ll take 4 winning days to show a profit but fingers crossed yesterday was just a hiccup.

Don’t forget to cast your vote on the poll, would be interesting to get some feedback.

Advertisements
    • Lisa
    • June 22nd, 2010

    I decided not to take any trades yesterday though I was awake and ready to. Although I don’t really take much notice of the news items that come out I must admit that I do check forex factory to see if it’ going to be busy or quiet regarding data coming out (hope that makes sense) There have been a couple of mondays recently when there as been next to no news coming out , and on these days I have decided not to trade and it has served me well.
    Also, following what Marco was saying last week, I’ve changed my strategy. Inow have the ten and 5 minute charts up.

    • Excellent decision, Lisa! I didn’t think it was bad price action, just bad signals! lol.

      I think you also need the 15 min timeframe up also, signals are valid on 5/10, 5/15 and 10/15.

    • Lisa
    • June 22nd, 2010

    Ooops sorry, I pressed the submit comment button to early!
    Anyway, as I was saying, I use 2 charts and similar to the old system, I tend to trade on ptp’s showing on both charts. I aim to let the trades run past the 20 pip mark. I watch the trailing stop and move my SL accordingly. I also watch the volume bars to see if test bars show as this usually shows a turn around in direction of the trade. Last week, I was able to chase a few longer trades, one giving me 80 pips, another giving me 40 etc. I don’t know if this is a good way to trade, time will tell.

  1. Hi Lisa, just a word of caution on volume bars. There is actually no way to determine the actual volume traded on a single candle, only that there is a high/low amount of contracts traded. The best way to determine volume is to look at futures prices.

    • Lisa
    • June 22nd, 2010

    Thanks for that. I’ve still got a lot to learn! That’s where places like your website help so much. It’s great seeing how others are getting on with tess and how they are using it. Thanks

    • marco
    • June 22nd, 2010

    John,
    I was in those 6 losing trades and lost a lot of money and confidence.That day really set me back for a couple of months as i no longer trusted the GG method.But on reflection it was the way i was trading it that was at fault.
    I was overtrading the system ,and taking 6 trades in a very choppy market with signals shooting off in all directions was pure suiciidal.
    GG had given excellent results for 2 years at 25/25 and even better results at 30/20 ,but i had not planned for days like that ,and i did not see it comming.
    With the rule of 2 loss and you stop it will save us from days like that.
    I now trade GG on the 5/10/15 min time frames with an SL OF 30 and a scalp of 20 depending on how close the pivot or support and resitance lines are to the point of entry.Ialso measure the recent highs and lows to ascertain how much room the trade has.For the 5 and 10 minute i use the 10 minute trailing stop and for the 15 minute i mainly use the 10 minute trailing stop, unless the trade is really moving fast.
    I will take the +20 scalp if im to close to the pivot ,but otherwise i will let the trade run.
    One has to use their own judgement on when to take profits as the trade can often go +80 and then drop significantly on the trailing stop ,so i would say anything between +40-50 is real bonus.
    What is important to follow is the SL on the 10 minute trailstop as it can help save you a lot of pips on losing trades.
    marco

    • Many thanks for the confirmation, Marco. One last favour…could you possibly post your daily results for June? That way readers can gauge the difference in profitability?

    • marco
    • June 22nd, 2010

    John,
    Here are results .Please bare in mind that trades dont come every day and friday is a non trading day.
    The results are from june 7 when i began forward testing.
    7/6 -30 8/6 +100 9/6 +24 10/6 -23 15/6 +20 17/6 +20 17/6 +100.
    There is still a lot more forward testing to do. but in my humble opinion ,GG is still an excellent system to trade .One can trade it 30/20 ,25/25 or trail it for the big gains.Just make sure all indicators are moving in the same direction and one must be aware of the pivot ,support and resitance lines .Two loss and you stop ,avoid taking trades in opposing directions (should that occour)at the same time.
    Staying in the 6-10 time zone should keep one out of a lot of losing trades .
    marco

    • julie
    • June 22nd, 2010

    I seem to be doing pretty much what Marco is doing. On Monday I didn’t take the first trade as the parabolic was still red at the entry point, I think it just turned green as it went through,which I didnt like the look of,turned out to be a good decision.
    I know with this system we are supposed to take the 1st signal,if it qualifies, but sometimes it just doesnt look right,with s/r & pivots.
    Nice to read how others are getting on
    Julie

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: