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Building an equity millipede
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Sep 18, 2010 11:15pm
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crede quod habes, et habes
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Good morning, all
Thank you for the continued interest and the compliments.
Apologies for my abrupt absence from this forum as I had personal complications with health.
I thank all the participants in contributing in this thread during my absence. I have read all the posts after my last post and the private messages/emails.
From what I have read and noticed, it compels me to step in and adjust/confirm what is currently said or believed.
This post is not a rebuke to anyone or any post in particular so please do not feel disheartened or discouraged.
We are all capable individuals of intelligence and aptitude. This forum consists of a vast variety of individuals each with its own and unique capabilities which can be applied to trading universally for a profitable outcome.
However, as long as means of communication remain there will always be a group think, group discussions that might seemingly look positive progression however the opposite in effect.
When I opened this thread 3 months ago, I pondered which category does my intended thread belong to. And I carefully/purposefully chose 'strategy'
And with all earnesty I have presented my trading strategy in detail. I must admit it is somewhat cumbersome to pass on my own thought process into a readers mind through typed words. How does a reader know where I place my emphasis in a sentence? Hence, I kept it simple by underlining/bold captioning the sentences that I am literally screaming at the top of my lungs as it has a critical factor of importance.
Now, it is a common human behaviour/characteristic to choose what you wish to believe. And this is evident in every aspect of communication between two entities that co-exists.
You are out drinking with friends, and for the first time you chose not to ring your girlfriend as it is already late in the night. But the main reason you chose not to ring is because she has an important meeting early in the morning and you do not wish to disturb her sleep with any petty talk.
However, your girlfriend chooses what she wishes to believe.
Your girlfriend believes that you didnt ring out of negligence because you were having such a great time with friends or new girls. She is clearly upset and feel let down. Her meeting is distracted by her thoughts and when she finally rings you after the meeting, she sounds bitter and distant. However, you do not know this and you act cheerful and ask how the meeting was which ofcourse will be met with a sharp rebuke from her. Then there might be a argument which could lead to far greater demise. And this all starts from 'humans choosing what they wish to believe.'
It happened when:
330BC, Aristotle finally proved that earth was spherical and not 'flat.' What do you think the vast majority chose to believe? But then Aristotle thought Earth was the centre of our solar system..
1800 years later, Galileo disagreed with the famous Aristotle and stated that the sun was the centre of the solar system. The vast majority chose to believe otherwise and Galileo was tried by the Roman Church and found guilty of heresy. Served a life imprisonment till death for something that was found to be correct after all.
So whats all this history lesson has to do with your trading. It has everything to do with your learning of how to trade as you are also human and also bound by common human characteristic. It is your nature, unfortunately.
Why do you think there are countless numbers of traders on this forum that has been here for years still here? Its only a personal assumption and I speak in broad sense when I say that they are still here cause they are still searching. If this forum was a blank A4 piece of paper and black dot represents a trader still looking for answers and white dot represents a true professional trader. That paper will look like the sky of a dark night in a crowded polluted urban city.
And why do I believe that? Its because the intricacies of trading is same to any other struggle/pursuit that humans pertain. And to become the top of anything you need to step outside the physical/psychological bounds of the average peers.
Everyone cannot be a billionaire. Then there is no such thing as rich person. If everyone is billionaire than soon an exceptional human being will break the bounds of impossibility and step outside the circle to become a trillionaire setting new standards. Billionaire becomes the support and a new trillionaire will become the resistance or the new higher high.
Perhaps Im talking too much and I know less is always more but believe me when I say that Im genuinely interested in everyone's trading success. And this very post is for you. I dont know you but if everything is all relative than whatever difficulties you are experiencing can be solved by any universal solution under the same context. Trading is one arena that Im happy to assist as your profit does not effect into mine (perhaps it will if we are both scalpers on a very low time frame). The currency market is so unimaginably huge and structured in an intricate layers of multi-layered push and pulls that no one or any entity can manipulate/understand/control it. And that includes you and me
Im not surprised to see that many are struggling especially with flying buddhas. I was hoping that the few traders I do manage to touch on deeper understanding might have stepped outside the boundaries of normal thought process.
I have preached that the market is universal and neutral. You will fail without a shred of doubt if you trade with any pre-defined actions. This is why we have traders still searching for answers after years of searching. And these traders are more than capable in intellectual capacity. Its a shame to watch them ask the wrong questions and look for the wrong answers. They may know every little thing about trading to the finer detail but they are confused to see that they are still not profitable. You have to ask yourself why is that...?
Ask yourself, you have read most of the threads in this forum. Countless published articles, hundreds of hours of screentime. Why is it still not working..? Perhaps the answers you are looking for are in different context.
Joe trades FB profitably. With that type of trading approach I can guarantee that he will be also successful in trading inside bars, pin bars, engulf bars and any other type of price action setups. There is no such thing as a professional trader trading flying buddhas profitably but loses money on other setups. Think about this.
Its not the FB that creates you proft. FB is a potential opportunity. Potential opportunity.
What is opportunity?
Opportuntity is a selected period of time that allows the individual to partake in a given scenario that might yield a positive or negative outcome.
In trading, there are only 3 tangible ingredients to profitable trading.
1. Low risk-entry
2. Participation
3. Growth
Other factors are negligible in pursuit of profitable trading. Negligible factors include: continous small losses, continuous breakevens, prolonged periods of no growth or profit decay. These factors are minor struggles in the bigger scheme of your goal. If you worry about 15 continuous small losses then trading is not for you... You will never find a system with high win rate WITHOUT compensating one or both terms: TIME, RISK SIZE (stoploss size). Market is universal and if you take 2 from it, it will also take 2 from you. And thats the problem with trading, you need to take more than you are willing to give. This is called risk:reward.
Excellent risk:reward can be encoded into your trading habits by simply taking entries on lower timeframes but aiming at profits of the higher timeframe. And thats it.
Consider this for me. And this is reverse engineering and creating your own system but backwards. Its like playing the maze game but starting from the end not the start. This is what many business analysts do, more or less.
If Joe, spends $50 per day on every weekdays to buy x10 $5 lotto scratchy tickets. Then this would cost him $250 per week, $1000 per month, $12000 per year. But his total winning over the year is $5000
His risk:reward is $12000 : -$7000 which is 12 : -7. He is expected to lose -$7 for every $12 spent. This is very common scenario in gambling.
But we are not gambling but trading. We certainly do not want to spend $12 to lose -$7.
Lets create our own r:r
I have a day job that pays me $850 per week after tax. Unfortunately Im still single (till I succeed in trading and god knows what thereafter) and live with parents. I can set aside $50 per day in trading expense (note I used the word expense).
So I choose:
Taking only 1 trade per day
$50 = x8 $5 pips + 2 pip spread
Risk 10 pips for the reward of.... 1000 pips? Sounds good.
1:100 is good. Now...
1:100 is only viable IF 1000 pip rewards happen more often that 1 per 100 cycle.
100 rounds in trading is 5 months of trading if I only take x1 trade per day. 5 per week, 20 per month, 100 in 5 months.
Now I got all the numbers in the field and all I do is input them into empty fields, then I create a theorem:
Im looking for, opportunities that are less than 10 pip risk, one per day, that will run for 1000 pips take profit but the occurences of such opportunity must be less than 1 per 100 cycle.
Then you open your charts or whatever EA you can encode and plug in the data until a trading method sticks and proves your above theorem correct over a prolonged length of time (at least a year).
When you find a 'method' that is constructed from your own theorem you will find a related discovery... What do you think this might be?
There will be an irregularity in the sequence of the numbers. I will come back to this little later.
Lets create a theorem together and all you do is fill in the gaps:
Taking only ___ trade per day
$__ = x__ $__ pips + __ pip spread
Risk __ pips for the reward of.... ___ pips?
_:___ is good. Now...
_:___ is only viable IF ___ pip rewards happen more often that _ per ___ cycle.
___ rounds in trading is _ months/weeks/days of trading if I only take x_ trade per day. _ per week, __ per month, ___ in 5 months.
Theorem:
Im looking for, opportunities that are less than __ pip risk, ___ per day, that will run for ____ pips take profit but the occurences of such opportunity must be less than __ per ___ cycle.
Now, open your chart and find it by using your theorem as a guide. Once you find a method, your theorem will be confirmed profitable over a prolonged period of time (more than 1 year).
You are now creating your own systems and do not need to refer to other traders system/methods. This reverse engineering is used all the time for myself. I devise and create new methods but the difference between me and you is that you look at indicators, shapes, sizes of candles or patterns whilst I look at hard statistical numbers first. And I know that shapes and sizes of candles might lie but numbers do not lie.
I have few theorems and with the help of my son and his team, the theorems are emulated into correct form of data and plugged into years of price history across the whole board. EVEN theorems have periods of range/consolidation then a volatile profitability. Its amazing to see a graph of line chart of a particular theorem backtested on past 10 years of price history and without the heading on the chart I couldnt tell if it was 4hr, daily, or 5min before my son pointed out that it was not a timeframe of a currency market but the profitable equity curve of one of the theorems I have presented. Everything really is all relative.
I would love to see your theorem in this thread and then you place effort into searching for answers to prove your very own theorem correct. You have found a profitable trading niche that fits your own psyche/financial levels.
I currently have a profitable theorem on eur/usd that risks 10 pip for a take profit of 1000 pips that has been profitable for more than 2 years but backtested over last 10 years. It brings net 28.7 pips per week so far for the last 2 years. So every $100 spent is bringing in $128.70. If you know investing well, this is an outrageous return.
Another theorem is based on price action on daily charts at 200 ema exponential close and take profit is at least 1000+ pips and taking profit at extreme points of price expansion and re-entering when price contracts and re-tests the 200ema.
I will not elaborate any further in the above 2 theorems as I know this will lead to no progress in your learning phase. What works for me is for me.
Now coming back to what I briefly mentioned before; which is irregularity of sequence of numbers. Statisticians also call this Law of uneven distribution.
If you grab a coin and toss it 100 times, at the end of 100 rounds you will have a result that is 'almost' 50% heads and 50% tails. If you write down the outcome of each round you will notice few things. There are periods of 'consolidation' where heads win once then tails then back to heads and so forth. And then there is periods of volatile breakout with long streaks of more than 6+ wins on either heads or tails. This is the law of uneven distribution and this applies to all matters that exist in same plane of physics. You will see that even with a 'genuine' 50% win rate (coin toss) you will run into inevitable streaks of losses. There is no way to intervene and stop what happens against you. And this happens in all matters of scenarios that has pending random outcome. Just accept it as it is. You cannot avoid the losses with your indicators and eas but you can minimize it whilst keeping your potential profit much much larger. Everything has a seasaw effect. One comes up while one goes down.
Whats interesting is, no matter what you deploy as a betting strategy you will not make money from 50% win rate with 1:1 risk reward. you will be more or less breakeven after few thousand rounds or the technical phrase would be 'sooner or later.' However you will become very profitable once you adjust the potential reward greater than 1 and try lower your potential loss below 1. The further you rip apart these two numbers will be the holy grail to your profit making then the only essential element that is required is 'time' to exercise the inevitable outcome. Its not an easy road to go against the path of nature. You either get mercilessly punished or rewarded stupendously.
This post alone took me few hours to type as I keep editing and re-typing. I hope the inner meanings of my words reach far into your thought process and not buried on the outskirts. Everyone is a potential professional trader and everyone is very close. Close but not close enough. That last special enlightment is not found in forum or indicators. Its already inside your knowledge but a different angle to the understanding you currently perceive. Different angle.
This thread has expanded to almost 160 pages but I can assure you everything is in this one post. Condensed and hidden, not purposefully by myself, but unfortunately by the reader and their choice to understand what they wish to understand. It is just human nature,.. unknowingly and unfortunately.
Sincerely,
Graeme
Last edited Sep 19, 2010 5:35am
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Sep 19, 2010 12:12am
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crede quod habes, et habes
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Quote:
Originally Posted by thx1139
Hi Graeme,
Good to see you back. That one quote you made above pretty much sums up this entire thread. Thanks again for your continued wisdom.
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Good afternoon, thx1139
Yes.
Absolutely.
Sincerely,
Graeme
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Sep 19, 2010 6:51pm
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crede quod habes, et habes
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Continued from yesterday post at http://www.forexfactory.com/showpost...postcount=2374
Thank you all for the compliments. It is greatly appreciated.
And just a correction that needs to be addressed first. Copernicus was the first scholar to present that the sun was indeed the centre of our solar system about 100 years before Galileo took any further initiative. Apologies for the misrepresentation but my focus was the connection between Aristotle and Galileo.
In the course of next 2 days I will reply to all private messages/emails. My reply might be short but it will be direct and concise.
I hope all readers had some time to digest and soak what I have posted yesterday. If you are looking for answers, Im confident you will find something of value in the information. Rest assured, none of the information I represent is something that I have personally created but it is a 'set course of trading habit/ideology/principal' that has existed amongst the succssful traders over the course of centuries. Technology have advanced forward but the principal of trading remains the same against the test of time.
If you are still searching for answers like a flow chart of solutions then you will need to fail (and hopefully only once or twice) before realization. Your failure is not my best interest however to learn how to run, falling few times finally gives you enough impact both physically/emotionally to never make the same mistake. However, what saddens me is to see potential professional traders, repeating mistakes that is costing them dearly and then to move onto what they believe as a new method seemingly in their perception but then to ofcourse fail again. And they wonder why and how? Perhaps you 'repeat' to fail cause you are 'repeating' the same failed trading principal. Changing timeframe, indicators is not trying a different appraoch. That is basically doing the same as just before that has failed. And ofcourse you know this already but then why would you do it again?
Passing on information about trading is a honour for me. I feel obliged to help fellow traders as I too have received unconditional help when I first started my i/e/d business. Help that has propelled me forward financially that has created a very comfortable life for myself and my family. There is nothing more one could wish for. I feel complete when I review my life endeavours however there is one small knot at the end of my line which I will earnestly complete.
Yesterday, I mentioned the law of uneven distribution. Hope everyone understands that even with 'genuine' 50% win rate (coin toss) you will encounter streaks of losses against you. Please try it. Select heads or tails before tossing a coin 100 times. Keep your choice from the start till end. You will notice:
Amount of wins and losses are similar (there is a reason why it is not exactly 50% head and 50% tail at end of 100 tosses but irrelevant information to trading) after 100th toss. BUT the 'occurences' of your wins and losses are unevenly distributed. Huh? So..?
Well.. its the same in trading.
Even with a 50% win rate you will still face streaks of losses and streaks of wins. They are grouped together and then dispersed evenly then grouped together again. It is these groups of 'streaks' that professionals take advantage of. And this groups of 'streaks' is called an irregularity of price movement. Market is neutral and universal which is true over the course of thousands of candles, months, years, decades, centuries. But on given selected time period there are 'moments' that lasts days, weeks, hours (pending on your chosen 'scale'. Remember scale?) that can be taken advantage of. When this given moment/opportunity is 'depleted' then the market will swiftly make up for it and balance the upset (a.ka price returning to MA).
If streaks of wins on a coin toss is translated into our forex charts, it would be the compelling mometum/trend of the price.
If consolidation (head wins once, then tails and then back to heads) of wins/losses of a coin toss it would be translated into our forex charts as range/consolidation of price.
Its the exact same.
Irregularity of price movement is your edge. Large financial institutions plug in countless models into their data to find this edge/irregularity. They macro control the movement of the markets. And you will be pleased to know you could do it also.
I would like one volunteer who has the time and patience to assist me for the next week or two in bringing something important for the rest of the readers.
This volunteer must be able to post charts and edit them and have the time to place trades accordingly.
First come, first serve basis and I will let this volunteer know what is required in the thread. All charts and results will be posted by the volunteer live into the thread for the viewing of all.
Hope this intended project keeps the explanation tight and direct to the rest of the community.
Please place your hands up if you wish to participate with me.
Sincerely,
Graeme
Last edited Sep 19, 2010 7:10pm
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Sep 19, 2010 7:15pm
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
Count me in SIR !!!
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Good morning, VEEFX
Thank you very much for your prompt reply.
For the sake of all readers please state which timezone you are currently residing.
Im Sydney, Australia and currently it is 09:18 of Monday morning.
Sincerely,
Graeme
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Sep 19, 2010 7:27pm
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
I am based in Sunny California (Pacific Time Zone)
EDIT: it is Sunday 4:17pm PST at the moment
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Thank you.
I know we have recently completed a 2 week project which had ups and downs. By the way, today or tomorrow I will post results of the partcipants.
My intentions are; through the public interaction between myself and VEEFX, I will show the rest of the community, directly and concisely the principal of profitable trading.
Continuing on..
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Sep 19, 2010 7:37pm
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crede quod habes, et habes
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Quote:
Originally Posted by geoffrod
Hi Graeme,
I am sydney time zone as well 9:30am monday morning
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Good morning, Geoff
Thank you for sharing and I greatly appreciate your offer of assistance.
For now, unless a dire change of circumstances, I have agreed the assistance of VEEFX first.
Your input is always appreciated.
VEEFX,
Please state your intended starting balance (demo or live) and fixed lot size.
Sincerely,
Graeme
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Sep 19, 2010 7:48pm
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crede quod habes, et habes
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Good morning, tjfxtrader
Thank you for your prompt offer of assistance.
It is greatly appreciated and your input is highly regarded.
For now, until dire change of circumstances, I have agreed the assistance of VEEFX.
VEEFX,
May I please request that you open a separate account with $5000 USD or any realistic amount. So the rest of the readers will not get confused when viewing your statements. I would like to keep this simulation attainable for other readers as well.
$5000 USD and 0.1 lot size? Is that ok with you?
Sincerely,
Graeme
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Sep 19, 2010 8:28pm
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crede quod habes, et habes
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Good morning, Tradpat
Yes, im happy to recommend few tips and I will PM you within 2 days. Apologies for the delay.
VEEFX - I was awaiting your reply however it seems that you were awaiting mine as well. Apologies.
VEEFX, you and I will be taking a set course of trading actions over the course of days/weeks.
Before we even begin, I would like to create a theorem with you and the numerical data is at your discretion.
We will be taking hindsights on 4hr TF and taking trades from 1hr.
Please suggest your
1. R:R
2. Fixed stop loss size
3. Fixed take profit (for now)
Sincerely,
Graeme
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Sep 19, 2010 8:49pm
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
1. Risk:Reward: I choose to go with 1:4
2. Fixed stop loss size: 20 pips (since we will be taking trades on H1 timeframe)
3. Fixed take profit (for now): 80 pips
- Vee
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Thank you.
All good. Sensible and realistic.
The program I use to capture and edit is Snagit.
Please allow me 30 minutes from now for my next post.
Sincerely,
Graeme
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Sep 19, 2010 9:01pm
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crede quod habes, et habes
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VEEFX,
Our mission statement is very simple.
Im looking for, opportunities that are less than 20 pip risk that will run for 80 pips take profit but the occurences of such opportunity must be less than 1 per 4 cycle.
We will leave the above statement as it is for now but I would like to alter it as we progress. There is a reason for it and I will only reveal it later.
Now that you have your theorem, may I please request that you open any pair on 4hr chart and please place
1. 10 ema exponential close - red
2. 5 ema exponential close - blue
3. 200 ema exponential close - yellow
Please post a chart to show the above setup for the clarity of our readers.
Sincerely,
Graeme
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Sep 19, 2010 9:47pm
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
Here's the chart with the above mentioned settings.
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Excellent work VEEFX
For all readers and VEEFX, does everyone know the purpose/functionality of moving averages.
It calculates the average price of last X amounts of periods. More or less without the indepth technicalities.
If moving average 5 shows us 100.00 that is the median price for the 5 previous periods.
Hence, if MA 200 shows us 100.00 that is the median price for the 200 previous periods.
What is the difference between 5 MA and 200 MA?
If you said time or period that is only half correct. Correct answer is the scale. They both serve the same purpose however the scale is different. Jsut like the scale difference between the lower and higher timeframe it is the same principal behind lower and higher MAs as well.
You will have price always fluctuating around the MA line. Obviously as the line itself represents the history of previous price. Many traders have a common myth/belief about MAs. They think greater the period of MA, it is slower... This is not correct. MA doesnt actually move slower or faster. It represents what it is suppose to represent on the chosen SCALE. Obviously the higher the MA then higher the scale you are choosing to analysis.
If you trade 10 EMA then you are choosing a smaller scale and hence your potential profiting grounds are 'expected' to be smaller.
If you trade 200 EMA then you are choosing a larger scale and hence your potential profiting grounds are larger than expected.
Please do not forget what I have posted many times in this thread. Your holy grail to profit making is when you skillfully adjust the R:R so your loss is always smaller and wins are always larger. This R:R doesnt have to be just entries it can be applied to all aspects of trading, even on MAs to the same positive effect.
We are basing our profits on 200 EMA profiting grounds and using price action/5,10EMA of 1/4 hr TF to skillfully enter.
What does this accomplish?
The very same thing as I always talk about. Taking trades on lower risk for potential rewards on higher and different scale.
VEEFX, it is very important you understand this completely as you will be the one showing us all.
There is little more I would like to discuss but for now, any questions?
Sincerely,
Graeme
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Sep 19, 2010 10:05pm
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crede quod habes, et habes
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VEEFX,
Im aware that you have good price interpretation.
We are looking for price that is currently nearing 200 EMA on 4hr chart. Usually I place alerts so I will be notified when price is about 20-40 pips away from 200 ema.
Our point of entry is around the 200 ema line. There is no special reason apart from the fact that we are basing our profiting grounds on the scale of 200 EMA.
What you will find is 2 scenarios time over time over time.
Lets consider the area above the 200 ema line as the + territory and area below the line as - territory.
1. Price will volatile breakthrough the 200 ema and enter the opposite territory like hot knife going through butter.
2. Price will stall and re-test the 200 ema few times before moving away from ema.
We are interested in either options however there should not be more than 4-6 attempts per opportunity in a given pair of currency and 4 losses is the absolute maximum per given scenario.
Whilst price approaches the 200ema, it is time to zoom into 1 hr and use your own price interpretation for tight entries. Please remember your ammo is only 20pips (lets not include spread and there is reason behind this which will be revealed later) per shot. You only have 4 shots per opportunity.
Profiting grounds of 200 ema
Price action of lower timeframe
Tighter entries off 1hr timeframe (or lower if you can)
We have encoded excellent r:r into 'every' aspect of successful trading.
Any questions?
Sincerely,
Graeme
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Sep 19, 2010 10:20pm
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
Thanks Graeme. I guess you would shed some light on how to make tight entries based on EMAs? Apart from that, I do have one question:
1. Wondering why you mentioned "...4-6 attempts per opportunity..." instead of just 4 attempts knowing that each attempt would result in either an positive or negative outcome. Based on our R:R rules, shouldn't we allow only 4 entries on H1 or lower TFs on any given pair?
Regards,
Vee
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Good questions, VEEFX
Entries are done by your own price interpretation. Wicks, engulf, pin, any setup you classify as low risk. Entries are not based on EMAs. EMA is just there to signal that the price is drawing closer to the favourable area.
Correct, since we are aiming at less than 1 per 4 cycle. Im assuming some of our attempt will be breakevens. They are free costs. Maximum 4 losses per opportunity on any given pair of currency.
Any other questions?
Sincerely,
Graeme
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Sep 19, 2010 10:36pm
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
No questions for now Graeme.
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Thank you, VEEFX
Please do not worry as I will give plenty of guidance.
Now we wait.
Please scan all 4hr charts to see if any price is approaching 200 ema.
We will take action when it does.
Please do not worry if we miss one or two whilst we are unavailable or sleeping.
Sincerely,
Graeme
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Sep 19, 2010 10:51pm
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crede quod habes, et habes
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Good questions, VEEFX
I promise to be back in 3-4 hours from now as Im due for a meeting in my office now.
If you are unavailable please do not worry as I will leave plenty of guidance for you.
Please do not feel pressured as there is no need to.
Speak to you soon
Regards,
Graeme
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Sep 20, 2010 2:59am
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crede quod habes, et habes
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Good afternoon, all
Thank you for your patience.
Let us continue, but first I will answer VEEFX questions
(1)
- On H4, we are looking only at 200 EMA as a early alert/warning setup.
- On H1/M15, we completely ignore where 200EMA is located and just focus on PA/focal interpretation/candle patterns to trigger tight entries?
Yes. 200ema is only a reference guide to the 'area' we will start trading. It is ignored when looking for entries.
(2) Is it considered a false alert if price has pierced 200EMA several times like in the attached chart? To me, we have arrived a bit late on GBP/NZD pair
Price stalls often around 200 ema. It is just part of trading and we will minimize/avoid the range period together and I will show all how.
(3) You mentioned hindsight on H4. Did you mean hindsight 'direction' on whether 200 ema is above or below the current price and then only take trades in the direction of hindsight?
200ema will signal the area we are interested in entering and does not dictate any direction. Price action on 4hr/1hr will determine the direction and I will guide you more.
In regards to the question that surrounds less than 1 out of 4 cycle.
Quick mathematic question:
What happens if, you have 20 SL and 80 TP but after 100 rounds you find that you had 1 (win) out of 5 cycle occurence??
What happens if, you have 20 SL and 80 TP but after 100 rounds you find that you had 1 (win) out of 3 cycle occurence??
My 1 out of 100 cycle example @ post http://www.forexfactory.com/showpost...postcount=2374
shows that I currently trade 10 SL and 1000 TP. This is 1:100 r:r. What happens if the win occurence is higher than 1:100?? What happens in the long run?
Sincerely,
Graeme
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Sep 20, 2010 3:08am
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crede quod habes, et habes
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VEEFX,
I know you now have alot of responsibility and I will guide you thoroughly.
Please see these charts.
This is what we want to achieve together.
eur/chf 4hr
gbp/jpy 4hr
We are going to do it live together and show it to rest of the readers.
Any questions?
Sincerely,
Graeme
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Sep 20, 2010 3:14am
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crede quod habes, et habes
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Quote:
Originally Posted by Fun Demental
... cont from post 2400
Here is my algorithm, says the newb, as he's trying to make sense of all that's been said: Im looking for, opportunities that are less than 1 pip risk, 50 per day, that will run for 1000 pips take profit minimum but the occurences of such opportunity must/should/can/may be less than 1 per 10 cycle/session/set/trades.
Any ideas ? asks newb because he hasn't the faintest idea how or wher to even start looking. Crossing of the 200 ema? where did I hear that pop track around in this forum?
fun_demental
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Good afternoon, fun_demental
Thank you for your posts.
I understand where you are coming from and I understand what you are really asking.
Unfortunately, I might not have the answer you are looking for but I do have answers to questions you might ask in the future when your trading does not progress to your expectation. Im not looking down on you nor any disrespect but Im happy to assist to hasten your learning curve.
There are too many posts in this thread which I apologize and it is mind boggling for any reader to start reading it all and then to digest the information before more is posted.
Perhaps, this new project between myself and VEEFX for the viewing of all add enlightment to your learning.
Sincerely,
Graeme
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Sep 20, 2010 3:23am
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crede quod habes, et habes
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Quick mathematic question:
What happens if, you have 20 SL and 80 TP but after 100 rounds you find that you had 1 (win) out of 5 cycle occurence??
What happens if, you have 20 SL and 80 TP but after 100 rounds you find that you had 1 (win) out of 3 cycle occurence??
My 1 out of 100 cycle example @ post http://www.forexfactory.com/showpost.php?p=4031871&postcount=23 74
shows that I currently trade 10 SL and 1000 TP. This is 1:100 r:r. What happens if the win occurence is higher than 1:100?? What happens in the long run?
Apologies, but I will answer myself and you can verify it for yourself.
20 SL and 80 TP but after 100 rounds you find that you had 1 (win) out of 5 cycle occurence??
You lose money in the wrong run. That is negative expectancy.
20 SL and 80 TP but after 100 rounds you find that you had 1 (win) out of 3 cycle occurence
You win money in the wrong run. That is positive expectancy.
What happens if the win occurence is higher than 1:100?? What happens in the long run?
You lose money if the reward is x100 but you find that you are finding 1 win occurence in more than 100+ rounds.
This is simple statistics.
VEEFX, do you understand this?
Sincerely,
Graeme
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Sep 20, 2010 3:43am
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
Welcome back Graeme. I have no questions so far. While you were gone, I was busy looking at all the pairs in my platform and came up with my watchlist for the following pairs that are 'near' the 200ema.
eurnzd, eurchf, eurhuf, cadchf, audchf, gbpnzd, gbpcad, gbpchf, usdmxn
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Good afternoon, VEEFX
Please do not hold back any questions in the thread and also any other readers as well. For the other readers, please feel free to ask however may I please request to send me the questions through private messaging.
VEEFX, so it begins.
May I please suggest leaving the exotics out for this project as FXCM does not support them for now. Is that ok?
cad/chf 4hr - Looks like we just missed it.
cad/chf 1hr - This is my price interpretation
However, VEEFX I would keep this pair close.
Why?
Do we really need to be at the exact pip value of a good opportunity? We can take a slice of the good action near the area.
If this setup works then we could be entering around the area of the green area.
Never rush. We are always too early.

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Sep 20, 2010 3:51am
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
Yes sir. I re-read your example post 2374 several times and your last sentence "You lose money if the reward is x100 but you find that you are finding 1 win occurence in more than 100+ rounds" brought further clarity. I just need to play with some more examples (offline) around this concept with different R:R scenarios to completely (and subconsciously) blend the concept in my head. I think the use of term 'cycle' is a bit confusing to most.
Regards,
Vee
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Thank you, VEEFX.
I didnt look at it that way and apologize to other readers.
Please call me Graeme and I hope its ok for you when I address you VEEFX.
gbp/nzd 4hr - watching?
This is it VEEFX.

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Sep 20, 2010 5:27am
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crede quod habes, et habes
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Quote:
Originally Posted by tradpat
Hi Graeme
I hope you don't mind...
Which is the MT4 broker you use currently?
I use GoMarkets/FXDD/FXLite, but neither has the pairs you mentioned.
I thought to ease my learning process by having the same MT4 platform as yours.
Thanks.
Cheers
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Good evening, tradpat
I currently use FXCM.
You can download their mt4 and use it as a demo.
It looks like forexfactory was down for the past hour or so and VEEFX has logged off.
Sincerely,
Graeme
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Sep 20, 2010 5:36am
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crede quod habes, et habes
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While we wait for VEEFX.
I mentioned just before forexfactory went down to watch gbpnzd.
Please allow me to take this opportunity to show a potential tight entry that has just happened on gbpnzd.
Everyone will notice my price interpretation is always the same and applied universally to all timeframes.
If we werent interrupted I would have urged VEEFX to take a single trade in the green area on 1hr timeframe. And here is the reason why:

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Sep 20, 2010 5:44am
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crede quod habes, et habes
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My pleasure, Tradpat
Continuing on..
So what do I anticipate on gbp/nzd?
Currently, this is what I want (green arrow)
I dont know what the market will do.
But the single trade that could have been taken on the 1hr TF above in my previous post is participating into the market with the current flow. And that is the best any trader can do.
Just on a side topic to above chart.
Please allow me to show you the exact same chart above in 1ema line chart
For me the 1ema chart is much clearer but perhaps this is only my personal focal interpretation.
Last edited Sep 20, 2010 5:56am
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Sep 20, 2010 5:53am
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crede quod habes, et habes
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I do not wish to divert off the current intentions by leading into a description about my price action interpretation.
Please pm me if you wish to ask price action interpretation or if you have the time you will find the answers in the previous pages of this thread.
Everything is exactly the same as I always did.
I will slowly and eventually explain everything as they unfold. It will be clearer as VEEFX and myself work further down.
Can anyone direct me to a pair with price approaching 200ema? Preferably within 20-40 pip away.
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Sep 20, 2010 6:14am
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crede quod habes, et habes
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Quote:
Originally Posted by dongsky
Here's a Eur/Chf... possible volatile breakout?
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Good evening, dongsky
Thank you very much for the input.
Perfect example.
Please allow me to start without VEEFX for now.
This is my interpretation and my anticipation and my forecast
Current 1hr
Having said the above entry on 1hr timeframe. This opportunity is over if price closes above the mini range anywhere in the red area. Why? Cause that would mean price closed against my anticipation and became an engulf/breakout on the wrong direction. Do you understand?

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Sep 20, 2010 6:32am
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crede quod habes, et habes
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Quote:
Originally Posted by paul1
Ok have i got this,
cylcle = 1000 pips (target profit minimum.)
risk /stop loss = 10 pips per entry.
( therefore we can have 100 losers to actually lose money.)
That also gives us the 1:100 r/r. Or broken down 10:1000 r/r
So as long as we win 1000 pips more than one time in one hundred,
eg :-
Lose 99 win 1 == profit 10 pips
lose 98 win 2 = profit 20 pips
lose 97 win 3 = profit 30 pips
But I do realise aiming for 1000 pips winners could be weeks/ months away .
Have i got it ?
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Good evening, Paul1 and Skyline
Sorry to address both of you gentlemen in one post.
Skyline - thank you
Paul1.
This is very important for everyone.
You said something golden. Something large institution do everyday.
You have got the numbers correct in your calculations.
Lets focus on your last sentence.
"But I do realise aiming for 1000 pips winners could be weeks/ months away ."
What if...
What if...
There are methods (correct term is price irregularity) when backtested for last several years shows that the occurence is less than 2 months...... or definitely less than 1:100.
You will have periods where 2 or 3 of them happen within a month and then months of nothing until 1 win and then few months of nothing and then 2 or 3 of them happening again. What is that? Its called law of uneven distribution
Remember tossing the coin 100 times..
It has 50% head and 50% tail chance. How do you explain streaks of 14 wins of tail and then streaks of 13 wins of heads from 50% win rate on each toss..??
That is price irregularity and as long it happens more often than your set r:r, you will create unimaginable wealth.
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Sep 20, 2010 6:43am
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crede quod habes, et habes
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Let us all wait for VEEFX and adhere to our objective.
Please feel free to pm me any questions.
Right now, it wont make much sense but I assure you the further VEEFX and I collaborate everything will be clearer.
I will guide VEEFX hands to build it together and show all at the same time how.
I sincerely hope this project will have a far more direct and concise impact to all.
If many of the traders do click at the end of my collaboration with VEEFX, I will start another 2 week project and personalise my showing to you directly.
Lets hope there is no downfall till that happens and hope I can complete it to everyones satisfaction.
Sincerely,
Graeme
P.S Dinner for myself. Good night all
EDIT: I believe it is currently very late in california. Very early morning I say. Lets allow some rest for VEEFX. I will continue with him.
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Sep 20, 2010 7:04am
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crede quod habes, et habes
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Quote:
Originally Posted by Fun Demental
Paul,
The calculations are not quite correct. If they were - the whole system here will be unprofitable.
win 1 loose 99 is a non loss (+10 pips). loosing 98 and winning 2 is a win of 1020 pips. 2030 if you win 3 and loose 97 and so on.
The concept that is tried to convey to you is of roulette tables and card games: Probability. the only difference is that the odds in forex are supposedly on your favor. The only reason they are is because of trends. that is all.
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Good observation,
I miss read paul1.
2 wins would be not +20. What paul was meant to say is 98 losses before 1 win.
Sincerely,
Graeme
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Sep 20, 2010 5:22pm
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crede quod habes, et habes
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Good morning, all
VEEFX - Good morning. It is 07:18am here in Sydney. I will be here waiting for you. There is no need to rush.
I have decided to stay home today and dedicate the whole day to this endeavour.
I will create a msn live account so we can interact 'faster' and pm you the detail. For now I will just give you the detail.
The yellow ema line on my charts are always 200ema.
Im wondering why skyline/others have a different feed.
Skyline/others if you are using FXCM UK can you please confirm your daily open line is 09:00 sydney time? Apologies I dont know what that is in other timezones. So in another words its 07:22 at the moment and in 1hr and 40min @ 09:00 I expect today's daily candle to finish forming and new daily candle open. Can anyone else using FXCM please confirm this with me?
Does FXCM mt4 shift server time based on each individual clients timezone?
Sincerely,
Graeme
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Sep 20, 2010 5:47pm
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crede quod habes, et habes
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While we wait for VEEFX I would like to take this time to briefly re-touch on tight entries. It is asked alot and I understand why.
It is very important to be able to 'save' unnecessary expenses in your business. And trading is your business. One of the best business in the world where it is not bound by unfair legislation or anti-competitive movements.
Personally I like to consider myself a surgeon making a percision cut or a sniper waiting for a single shot single kill. Whichever humourous way you consider them to be, 'tight entry' is nothing more than entering on the same criteria with smaller stop loss/risk.
When you try to enter with smaller stop loss/risk you sometimes also miss few golden movements that has no retrace. But being a versatile trader im sure you will be able to catch those golden movements as a volatile breakout? Think about this please.
Last night, I gave one live example that unfolded together that I would like to go back explain little more to the newer readers.
This was eur/chf. First chart is from last night and rest is from this morning
eur/chf 1hr
And currently (for now),
Last night, a trader not using a tight entry could have entered at the orange circle.
However, you and I need to have professional standards.
I assure all traders that I too experience long streaks of losses. It is inevitable but I do know that I will try very hard to minimize the losses as above. The market can take 10, 14, 17 pips from me as long as I know (as a hard statistical fact) sooner or later that it will give me 200, 300, 3000. Just need to wait.
P.S Thank you cameron1st and good morning to you too. Thank you Geoff, greatly appreciated.
Sincerely,
Graeme
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Sep 20, 2010 6:06pm
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
Excellent post! I have tried this to gain a statistical 'edge/advantage' in my live trading but in a different manner. I try to look for recurring 'patterns' and assess the root cause behind their recurrence. Based on the theory that 'If they happen a 1000 times in the past, it will happen atleast another 50 times in the future.
What you mentioned in your post above is quite intriguing to me. I have been focussed on price regularities instead of irregularities.
I guess the billion dollar question to unimaginable...
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Just one more post as we wait for VEEFX.
How? Good question.
There is a niche in retail forex that sooner or later a bright individual or group of bright individual will create a business from.
It is backtesting against 10+ years of price history across the whole board on models.
The results are of critical importance and it would save alot of time for the trader.
I have personally seen how much hard statistical fact you can extract.
It shows you so much inner workings of a method that I cannot describe them all.
VEEFX, you've selected 20 stop loss with 80 take win. And I mentioned that we will keep it like that for now but I will reveal something later.
Your r:r will not work out and I will guide you when it happens.
Please allow me to share a hard statistical fact with all readers.
From the past 10+ years of price history across the whole board: a model based on price expansion from 200ema has an average 400+ pip expansion per opportunity.
Institutions will 'saturate' their risk by entering 2 different spectrum of investment by x1 position take profit @ less than the average and x1 position take profit @ more than the average. Why would that be?
kcarvey - Thank you for the great effort. I hope readers think about your post twice as there is a related discovery within your experiment.
Last edited Sep 20, 2010 6:18pm
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Sep 20, 2010 6:11pm
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crede quod habes, et habes
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Quote:
Originally Posted by skyline
Good Morning Graeme,
yes it seems that daily candle opens is the same as your, actually my platform time is 22:52 so daily candle will open in about 1 hour and 8 minutes. I still wondering why the ema200 is different between the two platforms on GBPNZD
Edit : just a thought : it seems only final portion of your ema200 differ from our, since this is an ema200 then latest value need 200 previous candle to be calculated precisely, is it possible that you didn't had at least 200 candle loaded on your 4H chart timeframe ? Please just try...
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Good morning, skyline
My server time is the same as yours. And yes daily candle will open in 1 hour.
This is my current gbpnzd
Could it be we were talking about a different pair of currency?
starvin4pips - That is unusual. Not that is matters as everything is all relevant. Did you download from FXCM UK?
Sincerely,
Graeme
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Sep 20, 2010 6:29pm
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crede quod habes, et habes
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Quote:
Originally Posted by skyline
Now your GBPNZD H4 chart looks right ! 
In your previous post, it was different as you can see : http://www.forexfactory.com/showpost...postcount=2462
So maybe my theory is correct. When you posted that chart, your platform didn't loaded enough candles to produce correct ema values.
So problem is solved
Cheers,
Skyline
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That surprised me alot.
I have never seen that before. Yes you are correct there is a big difference. Thank you very much for pointing that out. Although it concerns me as to why and I would like to find out.
cam - Correct. Also they diversify their reward:risk on a different context.
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Sep 20, 2010 7:23pm
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
Hi all,
I am all caught up. Let's proceed.
EDIT: my FXCM/UK platform draws a new daily candle at 4pm pacific, 9am Sydney time just like Graeme. So we should have similar looking charts
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Good morning, VEEFX
Im here as well.
In regards to your previous post. You can take trades from your own interpretation. I will only guide you when I believe something has happened that is very important.
Let us scan charts and see any price near 200ema. Im also interested in price that has recently pierced 200ema as well.
Sincerely,
Graeme
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Sep 20, 2010 7:39pm
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
Sure Graeme. would you like me to post my trades/interpretation as and when I take it or only after the fact? I scanned all my pairs and only EURNZD has pierced 200 ema.
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Please feel free to trade as you normally would.
Once you take a trade please take screenshot and post into thread.
Let us start with eurnzd then.
What do you think about this pair at the moment?
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Sep 20, 2010 7:50pm
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crede quod habes, et habes
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Quote:
Originally Posted by tjfxtrader
GBPUSD near H4 200ema.
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Good morning, tjfxtrader
Excellent.
VEEFX - eurnzd and gbpusd. Lets write these 2 pairs down.
Let us all wait for VEEFX interpretation and anticipation of eurnzd. He is currently writing a post.
Sincerely,
Graeme
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Sep 20, 2010 8:06pm
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
eurnzd pair has been ranging for past 4 days within a 110 pip range. top range is 7987 and bottom range is 7877. It has closed on the bottom range on past 4 H1 candles indicating strong support. Unfortunately there is only 48 pips room to go south and touch 200 ema and break. Better to wait and enter after it closed below 1.7877 price. If it does, I plan to enter short at 50% of that breakout bear candle.
working on editing my charts now... wanted to get this out first.
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Good work, VEEFX
Now an interpretation and anticipation on 1hr chart please.
Graeme
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Sep 20, 2010 8:31pm
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
H1 timeframe interpretation
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Excellent.
Your price interpretation is very good.
Today if you could please adhere to your own interpretation and anticipation and take trades accordingly.
At the moment there is no movement in the market. Let us continue closer to UK session.
Just before everyone goes and they might be interested in my interpretation. Here is mine
4hr chart
But the most important price interpretation at the moment
1hr chart. It doesnt look good as the current price movement is closing over the resistance and the price is moving up (for the moment)
VEEFX is unavailable for the next 3 hours. Let us continue from 1-2 hours before the london opens as the market is currently not moving at all in this asian session.
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Sep 20, 2010 8:44pm
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crede quod habes, et habes
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Just before we all retire for few hours.
There are few things that everyone needs to know.
Price cannot stay around 200ema line for a long time (or any ema for that matter). It needs to break it or bounce from it but must move away from it. It is the nature of price contraction and expansion.
When price hovers around 200ema that is when price is balanced on even keel. Head wins and then tails and then heads again.
When price expands away from the 200ema is when you are experiencing price irregularity. 14+, 15+ streaks of wins on one side of the coin.
But, there is equal and opposite force. When there is expansion, there will be a contraction. This balances the upset. Then you will see price returning to the 200ema.
Some breakaways from 200emas last for weeks ending at gigantic few thousand pip reward. But we all know on average it is 400+ pips. This data takes every expansion/contractions on 200ema of last 10+ years across the whole board.
May I request you to think about this..?
There is an exploit here.
Last edited Sep 20, 2010 9:02pm
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Sep 21, 2010 1:15am
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crede quod habes, et habes
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So this is our first attempt.
Let the logs show this as
1. eurnzd 21/09/10
In regards to your first entry

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Sep 21, 2010 1:24am
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crede quod habes, et habes
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VEEFX, you have just spent your first ammo.
Entry was great 3.5/5
Timing was average 2.5/5
It seems you jumped into 5min chart when you saw something you liked. Unfortunately that position has much more chance of loss than win at current stage. Why?
I personally dont see any hindsight on the higher timeframe to take a sell in 5min yet.
4hr
1hr
I hope it doesnt sound like im criticizing you.
Sincerely,
Graeme
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Sep 21, 2010 1:35am
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
Thanks Graeme. Appreciate your feedback. My thought process at entry time to share with the readers. Perhaps, I placed a little more emphasis on resistance line during my entry
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Good work, VEEFX
It is your trade and your the captain of your own ship.
For myself, I always wait confirmation first. If Im looking for sell then I want to see price close below the open of previous up candle.
Most of the times I arrive late as price will not retrace up to 50% or higher for a tight entry but I save alot of money by not losing as much as most traders.
Lets all watch how this plays out.
You have 3 ammo left on this particular pair and Im looking forward to see you manage your position or enter another trade.
Graeme
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Sep 21, 2010 1:47am
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crede quod habes, et habes
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eurnzd 4hr, its up at the moment. The last 4hr candle closed above the open of the previous down candle
eurnzd 1hr
You are doing well VEEFX.
Sincerely,
Graeme
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Sep 21, 2010 2:33am
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Quote:
Originally Posted by VEEFX
Hi Graeme,
Great feedback on my trades. Please keep them coming as I (and hopefully for our readers also) am learning a great deal. I need all the criticism I could get to improvise on my entries.
Forgot to mention this... apart from strong purple resistance, I was also basing my short entry on a down trend line on H4 toughing 3 wicks. Now, that H4 candle has closed above the down trend line, it introduces an interesting scenario. If first H1 candle of the new H4 candle closes above the resistance line, that would be a very strong indication...
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Good.
eurnzd is in a range that needs to be broken out. Needs to.
Go with the flow.

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Sep 21, 2010 2:54am
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crede quod habes, et habes
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Quote:
Originally Posted by TradeStar
Hi Graeme,
A dumb question while we wait on some action on Eur Nzd.
Apologies for not using PM instead of this forum as you mentioned. I thought this might be in others mind as well.
You mentioned no more than four attempts. Is it because Vee chose 1:4 R:R OR just a coincidence.
Regards,
TradeStar
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Good afternoon, Tradestar
Good question.
It is because VEEFX has chosen 20 SL and 80 TP which is 1:4 r:r.
If you are trading for x4 profit but takes you 5 attempts for 1 win on average, you will lose money on the long run.
However, VEEFX can try more than 4 times in one given opportunity/pair but that would be overexposure and stepping inside negative expectancy.
Sincerely,
Graeme
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Sep 21, 2010 2:54am
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crede quod habes, et habes
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Is there any price nearling 200ema at the moment apart from eurnzd?
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Sep 21, 2010 3:06am
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crede quod habes, et habes
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eur/nzd 1hr update.
Edit: Tradestar you are correct. But something is not right if if takes more than 4 attempts in one single opportunity for a win. After few hundred rounds of trades will we see from our statistics whether we had less than 4 attempts per 1 win or more than 4 attempts per 1 win. Obviously the later will reflect the minus on the capital.
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Sep 21, 2010 4:36am
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
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Good work VEEFX
Please join me and pass on our gratitude to VEEFX as he has placed alot of efforts in the last 2 days.
Please allow me to explain why it didnt work out today.
It is important to take higher timeframe hindsight. Sure there are times big trends happen first on lower timeframe however it is the higher timeframe that sets the size of the profiting ground.
Our profiting grounds needs to be large enough for us to play ball effectively.
If the higher timeframe says UP however lower timeframe says DOWN most often the DOWN movement of the lower timeframe will just be the retrace of the higher timeframe.
eurnzd 4hr

Last edited Sep 21, 2010 4:55am
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Sep 21, 2010 4:45am
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crede quod habes, et habes
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Majority of the new traders anticipate too early and then participate too early.
This is a common fallacy and everyone needs to stop doing that as that will erode your capital very quickly.
There is no rush but to wait for a confirmation which is simply price closing higher or lower.
The confirmation will swing the favour to your side all the time.
Last 1hr candle closed below the previous up candle. This would have made me lose my 1 buy position from the green zone. But even though there is strong indication from the 1hr chart that the price is now heading down that down candle was just part of a retrace on the 4hr chart.
We have talked about using price interpretation to create hindsights on higher timeframe and I can see many traders doing this but are they applying their hindsight accordingly.
For myself, I have also lost 1 position which was a buy position around the green area as mentioned few hours ago. Even though my hindsight is currently proving to be correct I too have lost a -21 pip loss.
However, I do know that VEEFX will now always take the hindsight/advice of the higher timeframe and apply it accordingly to lower timeframe.
Good work and lets do it again tomorrow, starting 2 hours before london open.
Sincerely,
Graeme
Last edited Sep 21, 2010 4:55am
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Sep 21, 2010 4:52am
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crede quod habes, et habes
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Just one more post.
I understand why VEEFX took sell positions on eurnzd today.
He mentioned something about a strong resistance. Also many other traders use resistance and support.
What is more important?
Price movement of the last x1 candle of 1hr/4hr or price resistance that was from last week or longer?
Yes, price does 'react' at these levels but I have a question for all.
There is no area that price doesnt react to.....
Draw a trendline blindfolded and you will find that when price reaches that level it will react. Is it magic? Or is everything universal and related so everything seems to work?
I too use s/r all the time however Im most interested in what price is happening right now first then s/r second.
A very important lesson to all.
Good night and thank you for coming.
Sincerely,
Graeme
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Sep 21, 2010 5:06am
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crede quod habes, et habes
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I just drew 4 trendlines with my eyes closed.
It seems to me price reacts/appreciates/respects my lines that I drew with my eyes closed. How can that be?
It makes me wonder why we do analysis when 'perhaps' the easiest way to trade is to go with the flow.
If its UP then BUY, if its DOWN then SELL.
But we look for bargains that has an antiquity value on it.
Sincerely,
Graeme
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Sep 21, 2010 5:19am
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crede quod habes, et habes
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Quote:
Originally Posted by cameron1st
Hello Graeme, excellent work you and Vee thank you very much.
If I may comment on the two statements I'd say that: price reacts to lines because there are so many market participants and each have their own focal view of what S/R lines are, that's it's almost impossible to not run into a S/R line... basically the S/R lines work because there are other participants using them.
And... I think we do analysis in order to not overtrade... to maximise the profits and reduce the risk.
Kindest Regards,
Cam
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Good answer, Cam
Excellent answer and it is definitely worth reading twice.
If I may suggest just one small correction on this sentence,
"basically the S/R lines work because there are other participants using them"
It should read: ALL S/R lines work because there are whole world of commerce that are pulling and pushing price from millions and millions of transactions that are inter-twined with its own and separate agenda.
Sincerely,
Graeme
P.S My pleasure, dongsky
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