Volatility Trader - 1:4 Demo Discussion

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pc8multifx posted:
    

tbuitendyk posted:
    

pc8multifx posted:
    Sorry T.B., it makes no sense..

Perhaps not to you.

Option 1:

a) 1:5 leveraging risk: 100 pips earned today, 150 pips lost tomorrow, 200 pips earned the next day.
b) 1:5 leveraging reward: eat bread today, tomorrow, and the next day.

or

Option 2:

a) 1:400 leveraging risk: 100 pips earned today, 150 pips lost tomorrow, quit trading because your funds are gone.
b) 1:400 leveraging reward: eat steak today and go on a diet tomorrow.

We earn pips.

We use Option 1 to convert pips to $ at a rate that is safe, not at a rate that is necessary to win a contest like this. To make 500% in one month (or whatever non-real-world rate) implies the risk of margining the account like in this contest. That's all I'm saying.

Any monkey can convert pips to $. The hard part is converting currency movement into pips. That's why I maintain that a better contest would measure success in pips, not $. This is not 'sour grapes' - it's simply my philosophy of trading, which apparently does not make sense to you, but it does to me and to our clients who earned around $100k this month...

I knew the rules when trying it out and really, I don't mind the result -- it's just that I'm not interested in seeing how far I can push the risk to win a contest as that does not reveal system performance. That reveals who gets lucky in the end, that's all.

Option 3:

8670 pips lost, 7.000 bucks profit😄 not even a smart chimp could convert these negative pips to $$ to buy bananas...
https://www.myfxbook.com/members/pc8multifx/xpipstrendmulti/15435

BTW I do hunt for pips with other systems too, like you do. Its just to demonstrate there are several ways to win the race..and I'm NOT referring to a childish contest😉

May the pips always be with you!

Interesting. I see where you are coming from more now...

I had thought about the possibility of losing big pips with small orders and winning small pips with large orders. That's why I said that it's easier to easier to manipulate % gain than pips, as it occurred to me that someone could do what you're doing and win big $ on the small pips. (I.e., I did not think that a pip manipulating approach was impossible - it's just something that is completely foreign to our way of trading, which is why I thought manipulating pips is difficult, but probably not impossible.)

From our standpoint, focusing on a single pair for the most part, and running a system that uses uniform order sizing based on account risk ratios, big pips does equal big returns. For our recommended mm the way to calculate returns is simply:

daily rate of return = daily pips / 100

For example, we've been averaging 126 pips a day, so it easy for those who use our system at 1:1 mm to calculate daily compounding at 1.26% per day.

Those that want to increase gain % (and risk of course) can run at 1:2 money management and that makes our 126 pips per day equal to a daily compounding rate of 2.52%. Our system is still safe like that. In fact, you can run with relative safety at 1:4 mm (more like 5% per day) with our system on a 1:100 leveraging account.

That said, when I when I cranked up that demo by 150% to 1:20 (from the 1:8 I was previously running it) for the fun of it and then forgot about taking on the extra positions with a new signal set, that's when I margined the account. If I had not been busy working on real money account details I might have remembered and reduced the risk on the demo account.

Anyway, that's just a game and not real world investing as you say.

Turning neg pips into profit is something that is completely outside of our way of trading, but if it's working for you, more power to you! 😱 We will just keep things rolling on a pip growth basis on our end as that's how we beat the bank. The important thing is that some of us little guys are beating the system, however we do it!

forexample posted:
    

tbuitendyk posted:
    Hmm...

It appears that we've taken a margin call in our demo account. That's what happens when you focus on % gain too much and forget about pips.

No, its what happens when you focus on % gain and forget about RISK.

Yes, I agree, but I think you misunderstood me, because that's exactly what I am saying. And I'm not forgetting about risk where it matters... I just don't consider play money to be 'risk'.

emiliolopez333 posted:
    

tbuitendyk posted:
   My opinion is that net pips gives a more standardized performance measure than gain% in $ as the latter can be easily manipulated; while it is harder to fake the former

That is only true if you were forced to trade the same lot size in the same pair, because different pairs with the same lot size represent different pip value of the currency of the money in the account.

I understand what you mean about the amount of pips, if one guess the direction of the trade by longest distance, he gets more pips meaning that he was more right but if that one is so sure before, why doesnt he risk more than the one gaining more for less pips???

in sumary, i think all of the details, money management, risk reward analysis and pip distance are all very important, not one more than the others.

By the way, how can you manipulate the gain%???

That's why it is true for us -- we focus primarily on a single pair and a singe 'base order size'. Our trading engine works with that continuity for maximum pips, as maximum pips means maximum returns. So for us it is that simple. I see now however that it's not that way for everyone's way of trading, which helps me to understand why nobody else seems to be getting it! ;-)

I agree with your assessment that all of the details are important; and in retrospect I think that just focusing on pips is not the solution either as others have pointed out that losing pips can still be earning $.

To answer your question, for us we make x number of pips in a day on our trades of a single pair mostly. All we need to do is increase the money management rule from our standard '1:1 ratio base order sizing' to 1:2 or whatever and we've just doubled the gain. Very easy to increase the gain and the associated risk: we just increase the order sizing.

In retrospect, seeing that pure pips gain is not necessarily a good measurement tool for everyone, as other systems rely on different methods to gain that are not pure pip growth related, I take back my suggestion to run it all based on pips in the bank, as that would not be fair to other ways of trading that win $ while losing pips, etc.

I suppose that if and when we do this again I'll just have to pay more attention to the money management and not get lost in the workload and forget about the demo account. Really, I only have myself and my busy schedule to blame for getting margined, as I simply had more important things to deal with yesterday when this happened. If I do this again I will try to be more consciencious with the demo account.