Tom'sEa WPFX LIVE Discussion

   nessa1 posted:

Wow! So your $10000 will be over a million in less than two years. Please keep posting your statements so we can watch this happen.

Nessa, you are obviously of 'the glass half-empty' school of thought. I took at look at several of your posts and your level of pessimism is high. You seem to try and poke holes in anyone that is successfully trading or trying something new. And you don't seem to be sharing any results of your own trades?!?

I am of 'the glass half-full' school of thought. Your comment makes me smile...have you ever thought 'what if my comment is correct?' And it's $2.56 million in two years, mate. If Math is is not your strong point, maybe Forex isn't for you?

Tom's EA is one strategy of many that I am either employing or planning to employ. Diversification is key as is protecting capital at all costs. As I mentioned previously, this is 'another' piece of the foundation for financial independence.

Try and have a more positive attitude and encourage others my friend, after all, you get what you give.

I have just seen too many naive newbies go all in with these martingale systems, promising fantastic results. I truly wish you the best, but surely do have my doubts. Also, I find it very hard to trust a vendor who tells me to act right away or lose this opportunity forever. And two months later, it is still for sale

RE my math: I said 1M in LESS than two years (21 months to be precise)😉

Best of luck to you

Paulrozza, you sound like someone who has considerable experience and have tried many EA's. It is curious that the only account you publish is TOMS, and, with so much background,, you have never posted anywhere else on myfxbook. Also uncanny that your manner of expression is so similar to Dustin's.

paulrozza's gain would be considered non-standard, as the expected gain is ~10%/month and not 23%/month. I just want to take nessa1's comment about the 'million in 2 years' and put it in perspective for everyone. i am going to use 10% as the base to keep the math simple.

In this thought experiment, we are going to say the person started in Nov2011 with a deposit of $10,000. The following are the end of month, closed-trade-account-balance results.

Nov2011-$11000
Dec2011-$12100
Jan2012-$13310
Feb2012-$14641
Mar2012-$16105.10
Apr2012-$17715.61
May2012-$19487.17
June2012-$21435.88
July2012-$23579.46
Aug2012-$25937.41
Sept2012-$28531.15
Oct2012-$31384.26
Nov2012-$34522.69
Dec2012-$37974.96
Jan2013-$41772.45
Feb2013-$45949.70
Mar2013-$50544.67
Apr2013-$55599.13
May2013-$61159.05
June2013-$67274.95
July2013-$74002.45
Aug2013-$81402.69
Sept2013-$89542.96
Oct2013-$98497.26
Nov2013-$108346.99
Dec2013-$110181.69

As you can see....in 2 years with 10% monthy, the return you should expect is around $100,000. Some will be more, some will be less. There are many factors not calculated in and this is assuming you have no pure loss scenarios, such as a strong trend causing a few of the positions to be stopped out. Remeber, protect your capital and keep your risk low. Don't get greedy and jack up your risk. All this does is increase the magnitude of your losses when they do happen, and increase you risk of a margin call if the markets do decide to run against you a long ways. Survivability is all that matters. This is a good system, but ONLY if you give it the room necessary to do it's job.

Hi Nessa1,

I am also of the 'glass full' school and like paulrozza think that an EA should be part of an overall plan, not the only mean to riches :-) Also I agree with fughe when he says that manual trading should be learned before relying on an EA.
But I am also interested in your views on how could Tom's wipe an account?
What would the circumstances have to be?

Currencies do not gap like stocks or do not go limit up/down like future contracts, are quoted 24/5 and stops are guaranteed.

I am not sure, under these circumstances and in this working environment, what could happen where I could not close all my positions at once when my predetermined DD tollerance level (say 40%) has been reached?

(better still would be an option within the EA)

Perhaps you are referring to the phsicology of trading.
The only reason I can imagine could wipe an account would be that, despite witnessing the world emergency which causes the strong trends, despite your account reaching your 40% DD tolerance, you still do not pull the trigger and close everything, hoping for a turnaround. Is that what you mean?

Sorry, I have just noticed myself,

Nessa1, you are not sharing any accounts on myfxbook, live or demo, and you class yourself as 'inexperienced' on your profile??

Again, what can generate an account crash will be a US pair. Why then to keep 3 US pairs running ? I'm happy with only one. And I prefer other pairs as EUR/GBP/ AUD/CAD, GBP/CAD, AUD/NZD that don't move a lot but won't give me troubles either. And all of them at risk level # 1. I remember Dustin saying to a webminar that he's comfort level is with risk #1 and I feel the same. Nessa1, I took out EUR/USD just because of that, the potential volatility with what is happening in Europe. It's true that BGP can move strongly as well but it's only one US pair and for my 4K account it's enough.
That,s being said I'm looking at an average profit of 30 $ / day and I'm ok with it.
The developer realized they made a money making machine with this and by selling it they raised capital to enter big in the market. Just think about, to generate 100 K / month with a 1 mil account... That's serious profit here. Good for them, smart guys, Val.

Actually, anything partnered with the USD, EUR, and JPY have a moderate chance of causing a crash. And...technically, since the world is tied to the USD.....If the USD crashes, everything will.

I have been pondering the starting size of my account and the pair choices, given that I will be going live the second week of January. Some thoughts:

1) It is Tom’s opinion that the EURUSD and GBPUSD are the top performers.
2) Regardless of this opinion, Tom still trades other pairs in his account.
3) I assume that the reason for trading the other pairs is diversification/safety (if Tom is reading and I am wrong about this,
    please correct me).
4) If there is a runaway trend on any pair without a pullback, the other pairs will hopefully balance
    out the portfolio. However, the pairs do often move together, as fughe as noted, so this may or
    may not pan out.

Bottom line is there is no magic combination, but it does seem that there is some extra risk associated with just running the EUR/USD alone, given the possibility of a runaway market in the current environment. The size of the account dictates the amount of pairs which can be safely traded, and all of the risk percentages are clearly laid out on the EA members website. Regardless, the choice of pairs and account size is ultimately the choice of the trader. Thoughts?

My thoughts on pairs to run....

I personally recommend running the EURUSD, GBPUSD, USDCAD, and EURGBP in that order. If you can run one, do the EURUSD, if two, add the GBPUSD, etc. Always stay risk 1. The system works, and as I pointed out in a previous discussion, the ONLY way this system will fail is a market collapse. If the collapse is in the EUR, as the fears have been (not going to happen for at least a few more years), then all the EUR associated pairs will hurt you badly unless you close out all opposing positions for a loss and force the EA to only take trades in the direction of the crash.

If it is the USD that crashes, you will lose your account if you have open trades in the wrong direction, so it won't matter. This is true for all trades, EA or manual.

From what i currently know of the system behind TEA, thanks in part to Dustin explaining the logic in an earlier post, I recommend 1 pair per $10,000 USD (assuming you have access to microlots). I do not recommend trading JPY or CHF crosses until the intervention danger subsides. You are asking for big losses otherwise. I don't highly recommend the AUD because it has shown a tendency to trend for extended periods. At this point....I have no experience running TEA on any of these other pairs. My recommendations are based on observations of the market movements.

TEA works well in ranging markets of 200-300 pips. That is what you want to look for. More than that, is fine, but it will increase the duration of trades and drawdown of trades, plus the margin requirement.

Keep in mind, my recommendations are just my opinion. Hope this helps!

   fughe posted:
TEA works well in ranging markets of 200-300 pips. That is what you want to look for. More than that, is fine, but it will increase the duration of trades and drawdown of trades, plus the margin requirement.
Keep in mind, my recommendations are just my opinion. Hope this helps!

Thanks for your recent imput fughe - very helpful observations. How do you think it would work if we saw price looking to break the range and checked our EA to take only trades in the original direction until the price recovered? (Might stop the DD getting too large but would increase the duration of the trade?) Alternatively what about if you untick 'allow trading' until it returns to your comfort zone? Might be helpful for those of us with small accounts.

   nessa1 posted:
   Paulrozza, you sound like someone who has considerable experience and have tried many EA's. It is curious that the only account you publish is TOMS, and, with so much background,, you have never posted anywhere else on myfxbook. Also uncanny that your manner of expression is so similar to Dustin's.

Nessa
Yes, I am an experienced share market trader, I have mentioned elsewhere that I am a Forex newbie, this is my first foray with an EA. Through my personal research, no other EA has shown the propensity for profit and the ability to 'preserve capital' as well as this one has (& does might I add). I tend to sit on the sidelines for a very long time, and analyse the toolsets that others are using. I work full time, so trading the markets (from Australia) is very draining (I did this for a period of months and it was extremely tiring). I learnt about end-of-day trading in stocks some years back and have been employing this strategy successfully for 2+ years now.

I am about to open another brokerage account (which will be linked here at myfxbook and in my signature) in January 2012. This account will be used solely for manual trades, because I have gained enough knowledge and training to safely manually trade the Forex markets. I will be employing end-of-day trading techniques again, but this time for the Forex markets. I am not risk-averse at all, but I am firmly of the belief that no matter what risk you take, you must have an exit strategy on all trades and capital preservation is my primary concern. To win a war, you need to win a majority of battles, not all of them.

To your comment that my 'manner of expression is so similar to Dustin's' - I'm not sure whether to take this as a compliment or advise Dustin he has been put in the same boat as a newbie Forex trader?!?! I have no links to Dustin, Tom or anyone else on these forums (other than a $2,000 investment in their EA), but I am interested in sharing knowledge and above all else, keeping a positive frame of mind. Do you understand the power of positivity?

   peggy posted:
   

   fughe posted:
TEA works well in ranging markets of 200-300 pips. That is what you want to look for. More than that, is fine, but it will increase the duration of trades and drawdown of trades, plus the margin requirement.
Keep in mind, my recommendations are just my opinion. Hope this helps!

Thanks for your recent imput fughe - very helpful observations. How do you think it would work if we saw price looking to break the range and checked our EA to take only trades in the original direction until the price recovered? (Might stop the DD getting too large but would increase the duration of the trade?) Alternatively what about if you untick 'allow trading' until it returns to your comfort zone? Might be helpful for those of us with small accounts.

Hi Peggy
My observations re: DD is that this EA recovers well from it (I know I and others actually look forward to periods of DD because the recovery brings in great profits). Unfortunately, there are no guarantees on telling the EA to only take trades in one direction and hoping that the trend continues/reverses. From what I can see, you need to be able to let the EA play both sides of the coin to ensure that (most of the time in my personal experience) you recover from DD and in others your loss is absolutely minimised. I have traded small accounts for over a month on minimum risk settings - this is really the key, do not over-risk your capital, play within the confines that Dustin and Tom have recommended, but keep an eye on your trades as well. As long as you are utilising leverage, you should be fine (extremes of the market excluded). You can always manually exit trades should your level of comfort with your accounts level of DD be exceeded. Again, I would not untick 'allow trading' with live trades at risk, as the EA needs to be able to recover with additional or opposite trades.

   tyoung6608 posted:
   I have been pondering the starting size of my account and the pair choices, given that I will be going live the second week of January. Some thoughts:

1) It is Tom’s opinion that the EURUSD and GBPUSD are the top performers.
2) Regardless of this opinion, Tom still trades other pairs in his account.
3) I assume that the reason for trading the other pairs is diversification/safety (if Tom is reading and I am wrong about this,
    please correct me).
4) If there is a runaway trend on any pair without a pullback, the other pairs will hopefully balance
    out the portfolio. However, the pairs do often move together, as fughe as noted, so this may or
    may not pan out.

Bottom line is there is no magic combination, but it does seem that there is some extra risk associated with just running the EUR/USD alone, given the possibility of a runaway market in the current environment. The size of the account dictates the amount of pairs which can be safely traded, and all of the risk percentages are clearly laid out on the EA members website. Regardless, the choice of pairs and account size is ultimately the choice of the trader. Thoughts?

Hey tyoung
In answer to your questions, my personal opinion as follows:
1) I don't think this is just Tom's opinion - I and am sure many others have seen these two pairs to prove to be the most profitable on their live accounts. I think Dustin has mentioned in one of the webinars that he is personally looking to place more of his current capital into those two pairs as they have proven to be the most profitable
2) This is true, so do I and again, many others
3) (my opinion again) I think diversification is key, there is nothing to say that one of the other pairs outside of the main two might not have a great month (I experienced this in November where the EUR/JPY returned a massive gain!). Of course, this can go the other way (as that particular pair did for a significant portion of the month) but the trade and trend reversal logic worked in my favour (in this instance)
4) Your statement here is entirely correct (IMHO), and diversification has helped me here again. Risk factors seem to be key here, don't set your risk too high, trade the correct amount of risk and pairs as suggested by Tom and Dustin on the members site, and you should not have too much to worry about.

I've found that agin, in my personal experience, letting the level of DD increase (whilst keeping an eye on it) has only resulted thus-far in trades coming back the other way with profitability as the ultimate result. Bear in mind that I don't think you should tamper with closing out or opening trades manually here, but you always have the opportunity to close out loosing trades should you maximum level of DD be exceeded. Preserve your capital at all costs...it's always better to be able to come back and fight the good fight again another day!

Good luck, and I look forward to your results and personal observations over the coming months.

   peggy posted:
Thanks for your recent imput fughe - very helpful observations. How do you think it would work if we saw price looking to break the range and checked our EA to take only trades in the original direction until the price recovered? (Might stop the DD getting too large but would increase the duration of the trade?) Alternatively what about if you untick 'allow trading' until it returns to your comfort zone? Might be helpful for those of us with small accounts.

It all depends on whether or not it already had an open order in the opposing direction, to start. The problem with this is....you are trying to guess the market direction and biasing you opinion on what the market will be doing. Anyone who has a lot of experience trading will tell you (if they are honest 😀) this is a very bad idea and causes lots of bad trades. The proper way to determine market direction is to wait for the market to tell you which way it is going, and then follow it.

My recommendation to look for ranging markets is for use with adding a new currency. I was referring to standard expected behavior of a currency pair. You want to choose pairs that tend to avoid strong trends.

Setting this EA to take trades in only one direction could work, but you would be cutting out huge profits. The DD potential would be reduced (if you ended up being correct). The problem is, the situation is only beneficial if the market doesn't move 600 pips in one direction before making a significant pullback. That is what you would be trying to predict, 'is this going to run more than 600 pips without a break or not'. The CHF and JPY pairs have already proven they can definitely do it.

As for stopping trading until it returns to your comfort zone....That depends on your tolerance for DD. As long as you have adequate equity, and are running minimal risk, I say let it run. this system can handle huge swings and still be profitable. What you have to watch for is a catastrophic market crash scenario. by catastrophic I mean 1000 pips in one direction. The type of crash required to kill TEA has not happened, and probably never will without everyone knowing well in advance.

To address the issue of running on smaller accounts.....as long as you don't over-leverage your account....you have no worries. Even IF...you have to deal with a huge DD, as long as you don't mess with it, the odds are greatly in your favor of surviving the DD. You see, after Dustin explained that the 600 pip stop is not a basket stoploss, but a per trade stoploss, I will no longer close out trades early. I was under the impression that if the group reached an overall 600 pip loss that all trades would be closed. My attempt was to avoid having all trades closed at a huge loss. now that I am aware this EA does not operate that way, I have a much better chance of profitability if I just turn it on and walk away. This is why I am very adamant about full-disclosure. Little things like this make a huge difference. Plus, everyone says to just put the EA on and let it run. Only 99.9999999% will kill your account. TEA is one of the very few that has a very small chance of being a loser when the dust settles.

   fughe posted:
It all depends on whether or not it already had an open order in the opposing direction, to start.

Thanks for the very full answer fughe - sorry I wasn't very clear with my question. I should have said ' if you had a basket of trades on and it had then started to martingale and get close to a range breakout' would that suggestion have been an option. I was curious about what might be the outcome if you stopped it taking extra trades and only let it work through the open trades. However, like you suggest, there's no need really to worry about it - I have seen for myself that this EA trades itself out of trouble if you just leave it alone, as long as you've followed Tom's rules for MM. The more I watch this EA the more confidence I have in it. I am very happy with the outcome so far. I am even thinking of leaving a small account trading the EU at risk 1 right through the holiday period. What would you suggest is the minimum amount that I should have in the account if I do this - remembering that the info suggests that we could expect very large swings at this time? Or would you suggest that we should heed the warning and stay right out till early January. Thanks for the info you've given us - it's good to have experienced people explaining things to newbies.

BTW are you trading this EA with your own broker or with the mirror? At this stage I prefer to use my own platform. It seems a bit complex to put money into the mirror setup, not a simple credit card transaction like with most brokers. The demo I had running alongside my live account (same pairs and capital) didn't do anything better that I managed, so I don't feel like I'm missing much by not rushing to a mirror account.

   paulrozza posted:
   My observations re: DD is that this EA recovers well from it (I know I and others actually look forward to periods of DD because the recovery brings in great profits).

Hi Paul
Just wondering what you mean by this?
My experience is that heavy DD, ie; keep doubling in in the hope it'll come good doesn't net huge returns as when it does eventually decide to close out half the trades are closed at a loss and the other half at profit?
Whilst there is the odd reasonable profit it is usually eaten up by the opposing losses?
Essentially, a winning trade (under normal circumstances) with a risk setting of 1% is profit of 0.03%, ie; $3 in every $100 (theoretically) risked.

   fughe posted:
  Just to help expand the understanding a little here, let me address the DD. For most systems that use martingale, the SL just keeps getting bigger and bigger as the trade set runs negative. Dustin explained, in a previous post, something that changes the outlook radically. What Dustin noted was the SL is not set for the group of trades, but for each trade individually. So, if the whole group runs -630 pips before making a serious reversal, ONLY the very first position would be closed at a loss. If the market continued down past the -650 area, then the second position would end up being stopped out. From what i have seen, you will get another SL for every ~50 pips the group goes negative until it it bounces enough to hit the TP for the group.

I was not aware of this until Dustin made the comment about how the SL behaved. That said, assuming you are using proper risk management of 1%, and a high enough equity (I would recommend $10,000/pair).....the only scenario you will ever get wiped out is if the market has a major crash where a pair moves in the order of 1000 pips or greater without a significant pullback. I can't say this will never happen, but the chance is so small as it is safe to safe it will never happen. Plus, the chance is even smaller that you wold not at some point be able to get out of the group at breakeven long before it wiped out your account.

I am fairly certain that you were not aware of this, and i figure there will be others who are not. Knowledge is power. Know the system and you will know what to do when an emergency occurs. Keep in mind, a SL on this system is not an emergency. The ONLY emergency with this system is a market crash.

Good explanation Fughe

I think the only thing that isn't covered though when we talk about risk is that no matter what you set 'risk' at it is largely ignored isn't it?
ie; if the s/l is a mandatory 600 pips and lets assume that with a trade size of 0.01 you achieve this 1% the whole process goes out the window when it starts taking other trade sizes, as in, 0.02 is 2% and 0.1 is 10% and in the case of one of my largest trades of 0.27 that is 27%.

Now, the trade size has got that big because its in a losing siutation and just keeps adding to it, and adding, and adding......, so with multiple entries in that currency its not hard to have a total exposure of 0.9, or 90% in my case. I'm not sure if it will just keep opening positions infinitum or if it eventually gives up??

I haven't actually figured out, or seen explained yet what the 'risk setting' is actually there for other than to set the maximum trade size for the very first entry only?

So in reality, whilst unlikely, it is probable to have the 'overnight wipeout' that people are asking about don't you think?

   peggy posted:
 Thanks for the very full answer fughe - sorry I wasn't very clear with my question. I should have said ' if you had a basket of trades on and it had then started to martingale and get close to a range breakout' would that suggestion have been an option. I was curious about what might be the outcome if you stopped it taking extra trades and only let it work through the open trades. However, like you suggest, there's no need really to worry about it - I have seen for myself that this EA trades itself out of trouble if you just leave it alone, as long as you've followed Tom's rules for MM. The more I watch this EA the more confidence I have in it. I am very happy with the outcome so far. I am even thinking of leaving a small account trading the EU at risk 1 right through the holiday period. What would you suggest is the minimum amount that I should have in the account if I do this - remembering that the info suggests that we could expect very large swings at this time? Or would you suggest that we should heed the warning and stay right out till early January. Thanks for the info you've given us - it's good to have experienced people explaining things to newbies.

BTW are you trading this EA with your own broker or with the mirror? At this stage I prefer to use my own platform. It seems a bit complex to put money into the mirror setup, not a simple credit card transaction like with most brokers. The demo I had running alongside my live account (same pairs and capital) didn't do anything better that I managed, so I don't feel like I'm missing much by not rushing to a mirror account.

Well....my opinion with TEA is....run it at minimum possible risk at all times. Allow 1 pair per $10,000 if you have access to microlots. If you have access to nanolots, you could do this on $1000. Not much profit in it, but it would work safely. I do expect a huge amount of wild moves this month. I do not expect to see any 1000 pip moves without a reasonable pullback. I could be wrong. Of all the EAs I have seen, this one is probably to safest to trade during this time period (IF using proper MM). If I were going to make a recommendation of the pairs to trade....i would still go with my previous idea, EURUSD, GBPUSD, USDCAD, and EURGBP, in that order. I don't generally trade EAs. i make more money trading manually without tying up my capital.

I am mainly coding some new indicators today. Just a quick glance over the charts....I would guesstimate that if I had taken all the trades I have had signals for.....I would be up around +200 or +300 pips for the day so far. It is rather ironic because the indicators i am coding are intended to keep me from missing any signals if I am not paying attention to my charts. 😁