Intensive Review Duellatorus review by Eric Alyea

[Eric Alyea]

Presenting my eval

Presenting my eval

First of all I want to thank Josh (FPA id. “jcris522") and Corbin for being willing to teach their methodology and principles to me as a test subject.

I’m was planning on presenting my eval in the following stages:

1. “Zen Trading” This is something every body can do (good for newbie’s) and it’s an enjoyable way to get trading (punching buttons and getting pips) discipline and build trading confidence.
2. “Forex Tester 2" A program intro/eval
3. “Back Testing with Forex Tester 2" Philosophy and practice, What you should get from it.
4. “Counter Trend Pivot Point Trading” overview
5. “Saturday Post’s” What happened during the week with demo and/or live trading.

Learning the philosophy of picking a “Take profit” level was the biggest lesson and reason for my zero losses so far. (Don’t stand on the line. Pick one side or the other and go conservative for the win)
I actually chose to try to get a “Margin call” so we could discuss account rescue procedures. The margin got down to 225% (and was the biggest drawdown). We went over “Margin Call” escape and evasion, but the conservative “Take Profit” level cashed out for a profit.

My priorities are putting what I learned into practice and production i.e. winning pips. The eval will be done, but I’m not the fastest or best writer so bare with me.:err:

That being said you have to re-read my post's after 3 days (the words have changed). On the average I edit/re-craft them 5 times
minimum (ask the administrator) before I let them alone.
(Gee is that what you do to a take profit before a “margin call”... change/edit it???)

 

[Eric Alyea]

“Zen Trading” - stressless pips practice

“Zen Trading” - stressless pips practice

“Zen Trading” is mental training preparation. This was introduced to me as a daily practice to develop the disciple and patience needed for entry and exit of trades, and to overcome the feelings of missing out on big movements.
You may have a demo account or multiple demo accounts already. If not, you will need to open one.
{For fast action and excitement “Oanda” (pronounced “Oh”-“and”-“ah”) has “10 sec” and “5 sec” charts}

Rules:
1. Start with at least a $5,000-$10,000 demo account and use the lowest lot size available or the lot that will equal one pip. If you don’t know any of that stuff, just pick a number and do it. Keep the same units number the whole day. You can figure it out later.

2. Use the EUR/USD or the USD/JPY. The best time to trade the EUR/USD for Zen Trading is 10am-12pm eastern time, however you can trade anytime day or night. The best time for the USD/JPY is 1am-3am eastern time, however this pair can be traded anytime day or night as well.
Pick the center of the trade day for the area you are in.
Ricex posted this:
https://www.forexpeacearmy.com/forex-forum/beginners-bootcamp/8632-time-trade.html
FXMarketHours - Yahoo! Widgets

3. Set the charts for just candlesticks. Do not use any indicators (pivot points, etc.,{O.K. you can do green for "rising color" & red for "falling color",that's it}) just a bare chart, eyeballing and gut guessing is the game plan.
Next get an idea of the currency pairs “price action” (flow). Back out your charts “Time frame” from the drop down box, start with the greatest time period.
Eyeball/guess where the center is of the most candles (bodies not wicks at the ½ way level) in the chart.
(You don’t have to do this next part. I do it for the discipline of taking notes to compare daily changes)
Note it down, Yes, you can use cross hairs and take hand notes or log them into a word processor logbook.
e.g.
Time period: Date: Price:
“1day”. 10-29-09 to 2-24 1.43296
“3 hour”. 2-9 2-24 1.36049
“1 hour” 2-20 2-24 1.35887
“30 min” 2-22 04:00 2-24 1.35909
“15 min” 2-24 06:00 2-24 1.35473
“5 min” 08:00 2-24 1.35500 What I see as the middle level here at “5 mins” helps me determine how I will play for the day, Buy or Sell. Unless I still have open trades from the day before, then I have to stick with what I did yesterday. You (not me) can close them out to start over (but like divorce when you see the cost, you won't do it again).
“1 min” 09:40 2-24 1.35589
“30 secs” 10:55 2-24 1.35468
“10 secs”

Looking at it just to see where it was and where it is now, not worrying too much about it, eyeball it.
The goal is to pick a direction of movement that you will stay with for the trading session that day. What we are wanting to do is to make our “PICK of the DAY” either to stay with buy or with sell; not flip flop back and forth. The reason for this is that some brokers don’t let you do both “Buy” and ”Sell” at the same time. One wipes out the other and you lost some money.
Trade as many times as you want. Don’t try to over analyze the market and figure out, just trade for the sake of trading.
On Tuesdays and Thursdays trade the opposite way that you want to trade, if you want to buy it- sell it, if you want to sell it-buy it. This forces you to practice against what you think is going to happen (which is what the market does sometimes). You will see that you can work it both ways. Ride the flow of the charts, you can’t fight it so just learn how to place an order and get a pip.

4. Reset your “Time frame” put your charts on the smallest time frame available (usually 1minute, unless you are with Oanda then 10 secs)

5. OK, time to hit the buttons:
Find the easiest way to bring up a “Market order” window. For some brokers just right click anywhere on the chart:
Pick, “Market Buy” or “Market Sell” depending on which way you think the day will go. You are going to stay with this direction all day. You’ll get used to tapping in the units numbers fast.
This is where the first part of disciple and patience comes in.
Normally things go pretty fast. Have a “Market order" window ready with the units in it.
Timing is critical when hitting the “Submit” button. The Price action will yo-yo around; hit it at the down of the swing for “buy”; at the top of the swing for “sell”. Don’t stress over it; just do it. Watch out for Fat finger oops’s when hitting the buttons. Just laugh when you do it.
Exiting is different–you’ll have plenty of fat finger oops’s (Laugh at them too). Learn to put the curser just below the “Submit” button until it’s above “0.0" .
What we are looking for is to make “1" just one pip. When you get that, hit “Submit”, do not let them run on. You are ”ONLY” looking for at least 1 pip, if the market jumps up and gives you 2,3,4,5 pips before you can close the trade then great, but do not wait for it to give you more than one pip, as soon as it shows a pip you are closing the trade.
If things start going away from the direct to get your pips.
Make some coffee, clean the microwave, wash the dishes, feed the dog's/horse's, whatever.... you have to understand that “IT WILL CHANGE”, Deal with your immediate “Reality”, and come back to "IT", don’t stress.

6. Do not use any take profits or stop losses, if you have trades open at the end of your trading session, leave them open. Check on them later if you want or wait until the next time you trade, but the rule still applies that as soon as any of them show profit they must be closed. Often this will result in a 20 pip gain instead of 1 pip, this is okay, but the point is that you close every trade as soon as it shows a profit of 1 pip or more, the goal being 1 pip.

7. You can take daily notes like:
time started
beginning balance
your guess of the mid chart numbers
time finished
ending balance
Number of trades
etc.
At the end of the trading week, Practice writing a report of your results as well as on what you learned, new things you saw and your feelings on the market that week.

Also:
Trading is a personal mind space. Leave it in “Ether Space”. Don’t take it to unknowing people that can and want to love you in the real world, you’ll screw it up.

If any of this is unclear please post something quoting the part in question so I can make a correction for easier understanding.

nuff said:22:00 CST 2-25-10

 

[jcris522]

Stop Losses

0 losing trades? I have no doubt you're telling the truth, but 21 winning trades per month with no losers...
It's not dealing with massive stoplosses or no stoplosses at all, is it?

I wanted to respond to this and finally got a chance. We have multiple strategies that we can teach and all that work, but the most successful method does not utilize stop losses. I know the general attitude is that proper money management requires stop losses, but we have come to a different understanding of it. During the first years of trading I found it so peculiar that regardless of where I put my stop loss, 9 times out of 10 the market would hit it and at that exact spot turn around and go right where I expected it to go in the first place. Our solution? We use a margin call as the stop loss which of course means that we do not put all of our risk capital in one account, instead we have multiple accounts, called sub-accounts. We also lower our lot size significantly so that we can withstand significant drawdown. I have no problem being up front about these things because I have seen them work, live and historically. I have come to realize that the general ideas that people currently have about trading the forex market are not going to make them the money they want to make.

It will be exciting to watch Eric as he finishes his backtesting and starts a live account because I know all of the regulars on this site trust and respect him. I know that I can talk myself blue in the face and it will not have much affect. This was the whole reasoning behind this project, to establish some credibility on a credible site. We have started managing some funds for a few friends and family members that was set up 2 weeks ago. To date we are up about 30%, this is using a $5,000 account. Just for kicks I will post the statement on here later today or this weekend.

 

[Ricex]

It will be exciting to watch Eric as he finishes his backtesting and starts a live account because I know all of the regulars on this site trust and respect him. I know that I can talk myself blue in the face and it will not have much affect. This was the whole reasoning behind this project, to establish some credibility on a credible site.

Very astute marketing, and I don't mean that sarcasticlly.

Your idea for trading without SL is intriguing and original, I look forward to seeing how Eric gets on with it.

 

[jcris522]

Wild Man Method

During my last emails with Eric it occurred to me that we have really only presented one of our trading methods so in this post I just want to give everyone an idea of what we are capable of. Prior to the training we knew that Eric was what one might call an "over-achiever" and from the things he has been involved in his life, he a was a bit of a wild man, constantly living on the edge and gettin high on adrenaline. This led us to believe that he would be a prime candidate for our personal trading method, the Counter Trend Pivot Trade or CTPT. That said, the majority of people we have trained would never be able to handle this type of trading and we have other methods that are successful and enjoyable, just not as much as the CTPT. Lastly, because we don't just offer another trading technique, but the whole trading package, we offer a money back guarantee on all of our trainings, so long that you follow the trading guidelines set up for you during training. This is outlined in our website as well, but basically if you do not make at least a 10% return in the first year, we don't want to keep your money. In our minds you are probably not cut out to be a forex trader and we are not here to make money off of you, if you cannot make money off the market, end of story.

 

[Eric Alyea]

Stop loss

Stop loss

I wanted to make sure I had the stop loss thing down correctly to answer Ricex. So, I had to wait for Josh to get back to Hawaii. This is a paraphrase of what he wrote to me:

The reason we use the margin call as our stop loss, is:
#1 our trading is extremely aggressive, we go for broke every time, all or nothing.
#2 is that we hate, hate, hate watching a pair come down to our stop loss, tap us out by a few pips and then go back up to where we wanted it to go in the first place, but this happens time and time again regardless of where we put it.
Lastly, this method is more successful by using the margin call as a stop loss, this we found from hours of back testing because often it will draw down our accounts 50% or more, but 9 times out of ten it will come back and give us ten percent gain on that trade.

Now, you should also know that we picked this method to teach you because we knew you would be able to handle and to me it seemed not just handle it, but thrive off of it.
Furthermore, we always set aside part of our trading funds so that we can replenish our account in the case of a catastrophic loss.
Nevertheless, through various money management strategies, we have fine tuned our methodology so that it is extremely rare.

For those we deem unable to trade such an aggressive strategy, we have other safer methods that utilize stop losses. I want to stress here that we do not just teach a strategy, technique, method, etc. We teach the most important aspects of Forex trading--proper psychology, money management, back testing, and accountability.

 

[boaz]

You are donig a great job here Eric. I;m glad FPA picked you for this forum. I have always enjoyed reading your post(s) throughout the various threads found on this site and look forward to your commentary and posted results on your current endeavor.

 

[Eric Alyea]

Thanks,

Thanks,
I thought I made a few to many analogies that civilians wouldn’t understand. Some times just one smile in a lonely world can keep you going. They have a good "Highland" games in NC. Oak Ridge, TN, is the Mecca for long range rifle shooting in US. {No I’m not a nut.. I looked up his profile.. I do that on EVERYBODY.. If your’s isn’t filed out yet, than your not real yet, and Oh well...}
Just for some feed back,:
and I had to correct my self here....
I initially asked: “Do you understand what is going on with the “”Zen Trading”“ post.
My correction is: “Have you even played with it... trying to work it and understand ... it is about “”hitting the buttons”“.:
Zooming in and out on the time frames. What was then ain’t now. Drawing a new line.... go for it....PRACTICE reality.
Get a practice demo: and Right or Wrong and “pull the trigger”
Tell me the problems you have and I will answer.

 

[Eric Alyea]

Daily Zen Trading 3-1 to 3-5

Daily Zen Trading log 3-1 to 3-5
just made it before midnight

Mon. 3-1-10
I forgot to log down my starting balance. I need to get my log book procedures down better. I have been using a paper notebooks, and now I have to switch to the word processor because I have to post this stuff.

I found the stuff I forgot to log down in the site data log though. (Now If I could learn how to publish it for you to see I wound be OK. I’ll do it retroactive.)

I did my time frame back out, saw the fall and that I had orders open from Friday. I thought I would be stuck with them and remembered I was doing Sell. They all had from 70-90 pips on them. I closed them out as fast as I could. So much for not getting caught up in excitement.
I started placing Buys around 09:16 EST as things started falling, spacing them out and trying to time then bottom of each candle. I have 5 open in the 1.3506 to 1.3483 range. I was doing good on hitting bottom candles and getting my 1 pip and getting out as it bottomed around 1.3463 and worked it up. It’s an hour after the report and hanging at 1.3480. Here comes my retrace. 11:04 all my trades are closed, stopping at Balance $108,020.89.

$107,150.64 @ 09:16 CST 3-1-10
$102,499.05 @ 15:00 CST 2-28-10
$4,651.59 930 pips (what an accident, it could have been the other way)

$108,020.89 @ 11:04 CST 3-1-10
$107,150.64 @ 09:16 CST 3-1-10
$870.25 2:12 hr’s: min.’s, 174 pips (these were using the 1 pip rule)
Wed. 3-3-10
EUR/USD
I going with Sell today.

$108.896.19 @ 13:02 CST 3-3-10 (Sell trades still open, )
$108,021.76 @ 08:38 CST 3-3-10
$874.43 174 pips
Got stuck with open orders. Have to let them sit, may check on them tonight. Closed some out to night, think it will go back down tomorrow.

Thurs. 3-4-10
EUR/USD
I had business in town but before I left I logged in and had pips and closed every thing ( 15 to 30 pip range) out. I violated the rule and left a top end “Market order” open for fun. It closed at:
$111,329.02 Interest payment .342 pips ($1.71)
$111,330.73 09:18 3-4-10 125 pips ($627.03)
$110,703.70 pay
$625.32 125.06 pips

This may be impressive but was just an experiment!!!
The thing you have to know here is that I was experimenting with what I:
“”THOUGHT”“ was the top end 3 times before and didn’t get my “1" pip. I was stuck with them and almost margin’d out. It was stupid, but I knew it was practice and I learned from it.

$108.896.19 @ 13:02 CST 3-3-10 (Sell trades still open, )

$110,703.73 @ 3-4-10
$111,330.73 @ 09:18 3-4-10
$111,329.02 interest payment
$374.71 75 pips

I knew it would come back down but tried to monitor and close things out as the hit. Just letting them sit and getting on with the tangible world chore’s would have been better. I had three different times I thought it would be the top one and got stuck with them hanging. Waiting for the retracement.
I guess my comment would be, “Work the sure deal when it is there. The “I wish, I would have” leaves you stuck to often to not have a sure closing.”

(Was that a rule for investing in “Love” or Forex... Forex, I don’t date, too unsure a deal).

Fri 3-5-10
I started late and as preoccupied. That’s life. I’m sure they will come in Monday, but I won’t make the same mistakes again. Learn from them.
Stuck with trades open

$111,975.42 @ 14:48 3-5-10
$111,923.70 @ 11:44 3-5-10
$51.72 10 pips

had to post as promised. Will edit Sunday

 

[RahmanSL]

Eric, I am following your journal with fascination..and your logic for NOT setting SL, and using margin call in place, makes perfect sense to me. Good work!

“11:04 all my trades are closed, stopping at Balance $108,020.89”
This was from your starting account of usd100,372.87; right?

Thanks and all the best.