The Dragon

Whatever success I may have is due to being able to access the open exchange of ideas in Forex Factory.
Thank you.

THE DRAGON HAS BEEN BORN FROM THESE FORUMS.
THE DRAGON LIVES.

The dragon is not a mindless mechanical automaton. The dragon is alive. Like any creature faithful to its master, the dragon is ready to serve. Like a seeing eye dog, or a thoroughbred horse at the Kentucky Derby, a trained falcon. The dragon takes pride and aims to please.

If treated appropriately, with respect and appreciation, the dragon will perform very nicely. The dragon amasses victory after victory when in the hands of a suitable master. One who is disciplined. Determined. Patient. And confident of ultimate success.

ARE YOU READY FOR THE DRAGON?
THE DRAGON IS READY FOR YOU!!!

We can start with a description of the anatomy:

The body of the dragon is composed of heiken ashi candles, heiken ashi smoothed, and 3ema calculated from the heiken ashi smoothed.

The landscape surrounding the dragon has a 200 ema and daily woodie pivots.

The monitoring of the internal conditions of the dragon is done by dss stoch and macd with crossing.

The idea is to anticipate the dragon's moves and be able to ride the dragon. There is much to be gained by anticipating the direction the dragon is going and staying for a ride. The dragon can take one for a great ride to riches and wealth. But if the attempting rider boards incorrectly there can be devastation.

The dragon is giving clues and hints and is very happy when the rider is successful. The dragon wants the rider to be successful. In that way a great friendship and partnership develops. Learning to listen to the dragon.....

This is what the dragon looks like.

We are working on developing an ea for the dragon.
Will keep the ea download in progress up to date on this page.
It is in very crude and beginning stages.
Please do not try to use the dragon ea for live trading it is only in developmental stages.

Here are the indicators and the template - part 1

indicators and template part 2

Heiken ashi is very significant. The ha candle clearly define the direction.

The idea is to board the dragon when he is about to change direction.

He changes direction a lot but not all of these changes of direction are good for getting on board.

When heiken ashi changes color that is an alert that a good boarding time may be coming.

It is important to note what the general direction the dragon is going in. He meanders a lot.

The best time is when he pauses, retraces a bit, and springs forward again in the original direction.

The landscape is important. The dragon may be paused near a woodie pivot or s or r area for refreshments. He tends to be very sensitive to these. And he is drawn irresistibly to the 200 ema. The affinity there is very strong.

As the dragon moves along the landscape his internal condition can be monitored. What he is contemplating.

dss stoch monitors when he has enough.
and macd with crossing confirms when he has indeed changed his mind...either temporarily or in a big way...

It takes some practice to get to know the activities of the dragon. But they are knowable. He is very beautiful. Powerful. And able to bestow immense riches. He is not attached to anything. He is indifferent. And only he knows perfectly the market place.

A good friend to have.

My relationship with the dragon is unique to me. I go for rides on the 1 min time frame.
I consult higher time frame dragons, since the dragon is a fractal being.
Let me show you some photo shots of our activities. You know the old photo album....

with comments on trades.
This was a practice session using a simulator.

#1 macd and dss favored a move down, but I did not wait for ashi candles to go green, as a result I entered too early, had to ride out a small correction, but this is the benefit of always trading with the trend, because the primary trend was down, the trade was good.

#2. same thing,
evidently what I am thinking is that I am missing a big move, and indeed there may be a big move in the making, but where the entry is makes a huge difference... always wait for the ashi candles.... they are a a first class indicator based on price action.....

#3. took a chance on a counter trend move, in real trading I most likely would not do that, bad habit, that's good way to get my head handed to me on a platter... lucky only.... silly me, I have so many bad habits that just won't seem to die, Pain of realizing a loss in bad trades may be the only way to really kill them... stubbornness that's all...

#4.little early, dss was not fully overbought, but ha candles confirmed and the bounce down from s2...

#5.http://cdn.forexfactory.com/images/s...im/chicken.gif got the entry right, but didn't ride the move. All three confirmations were very strong, plus good bounces down from 200 ema and s2, just http://cdn.forexfactory.com/images/s...im/chicken.gif

#6. counter trend, but time of day and way oversold conditions said ripe for a retrace. Still it would be better if I didn't jump for those...

After a big move sometimes the correction is not very great. It lapses into a sideways consolidation even though macd and dss look like roller coaster tracks. The dragon does not actually go anywhere. Buying and selling is going on but the dragon is not moving. An end of day fade can bring a few pips but then again the risk is there for me because of my schedule that I will get caught in the trade and have to rollover. Then I have to take rest also and I really don't want to carry a trade overnight. When I log off I want to be entirely out of the mkt until the next day...http://cdn.forexfactory.com/attachme...1&d=1264237106

Here is what I would look for:
This is a minor reversal..

(of course this analysis is being performed post mortem but it can give the idea)

1. ashi candles changing color from olive to green after a significant run..
Maybe the dragon is related to the chameleon family, he changes color...
2. fresh macd cross a good distance from 0 line. Strongly suggests the dragon has changed his mind.
3.dss stoch suggests he has had enough and is ready for a change...
4.he has crossed above ashi smoothed which has also changed colors. and 3 ema calculated to ashi smooth is below ashi smoothed and facing upwards...
5.he is most likely headed for 200 ema, a favorite which also happens to coincide with r1 2 favorites in one place, hard for him to resist.

if you want to play with the dragon a bit there is a simulator.
to buy: click on buy and move the word buy up, to close the position move the word buy back down
to sell do the same by clicking on sell.
here is the indi for the simulator

Yep......I deleted my post. Got it figured out. For some reason sometimes my laptop (xp) won't download the files in the correct format.

All ok now.

thx,
todd

good..

let us know about your adventures...http://ts2.mm.bing.net/images/thumbn...dragon_012.jpg

Mr Jiva34 can u please tell us the entry and exit signal please?
thanks

The dragon is alive. You must first make friends with him. Observe his movements. Get to know his habits.
To try to get aboard him is not mechanical. He will throw you off... The signals are there. But if you have not made some friendship with him, followed him for a while, made friends so to speak you will not be able to recognize when he is telling you get on board.
He is not a machine. He is a living being.
If you do not make friends with a horse and simply try to hop up on him he may buck. Or if you try to board a horse from the wrong side he may buck.
Just watch the dragon move through his landscape and watch the monitors for his internal state for a while then we can discuss signals in more detail.

wow ! grand prose ...!

" gong! "

(saturday cheekiness .. )

(might tire those who are looking for meat among the pile once the novelty wears off )

Oh you meant those who are looking for a free lunch....
My dear sir, the real thing is not so cheap...
Please come back when you are serious.

u mean tips ... no, sir .. i didn't mean that ... i was musing about cutting the chase and saying it in simpler terms ... what matters , the technical analysis ... ..the macd crosses the ha etc ...

hope ur feathers were not ruffled ... my humble apologises ...

its ur platform , ur show ... sorry

yes what matters the technicals, of course..
However, the mastery of the technicals is not technical!!!!
Mastery (of the technicals for those who are indeed to become actually successful, which is a very few out of the many, many people who try) is sublime. Cannot be forced by brute force.
It is like fine tuning a delicate musical instrument...
The difference between playing chopsticks with 2 fingers on a piano and a concerto.
Just to give someone a golf club is not going to help them become a masters pro.
What I have is not so easily transmitted...
I am willing to transmit. But the receiver must be qualified to receive...
Chopsticks or a concerto?

practice session with notes on trades
If you can follow my notes on these trades it will help you to understand the dragon's movements.
Better yet practice trading on the demo or simulator.

A simple exercise:
Use a simplified template for this exercise. Delete the 2 lower windows, the dss and the macd. Delete the woodie pivots and the 200 ema.
Look for ashi change of color. Go long when ashi turns green after a significant move down. And go short when ashi turns olive after a significant move up. With a 1 minute dragon look for 3 to 5 pips.

This is what is called buying into weakness and selling into strength.

This in itself is not sufficient for success. But play with it as an exercise. It will help you to become more familiar with how the dragon moves.

The folowing practice session is with the 15 min dragon. Live I trade the 1 minute but the dragon moves too fast on the 1 min setting so I use the 15min. for practice.

#1. I zoomed out (not shown) to identify the predominant trend. It was down.
The dragon was at the top of a downward channel. He had tested the 200ema 2 times and turned back down each time. Macd suggested he was turning down and dss stoch suggested he'd had enough. He did test the 200 ema a 3rd time but the ride down was good. ha candles were changing color to olive from green and ha smoothed was changing color also. It was a very dramatic move. Waiting until dss says the dragon's move is ending is a good exit sign. But I invariably jump off sooner. As I become more and more familiar with how he moves I will feel more confident about staying on for a longer period of time. For now. Thank you and take the pips...
#2 not the best entry point. ha candles had just turned green and were now olive again. dss was making a series of lower retracings showing just how strong the downward move was. hopped in then hopped out right away.
#3 hopped back in as the dragon dropped below s1 heading most likely for s2. again thank you and take the pips..
#4. waiting for ha candles to change color was not going to happen in this dramatic move dss suggested that was all there was going to be for a retrace and the dragon may be heading for s2.

Was considering entering short again that s2 was a viable destination but
macd did not confirm any further downside as there was a very big difference in the angle of macd heading up and the dragon's sort of sideways dilly dallying...
Time of day is very significant. The best moves are when there is a lot of trading action. This was getting toward NY close...

just to illustrate how significant the daily wood pivots are the dragon has been stripped down to bare bones...
there are 10 points of interest on this 30 min view where the dragon has reacted noticeably to the pivot levels.
#1 bounced off s3
#2 tested and tested and finally broke through the main pivot
#3 reached r1 and reversed
#4 fell in a dramatic straight shot from r1 to s3
#5 bounced up to test s2
#6 fell to s1 and fell thru s2 on the way to s3
(interesting to note that sometimes an s or r from the previous day still has power the dragon didn't reach s3 until the next day and formed a double bottom there)
#7 & #8 tested the main pivot
#9 dropped back to test the main pivot for the next day
#10 hovered around r1

In the landscape these pivots are very significant, regardless of what else might be going on. They are part of the dragon's world as much as off and on ramps are part of our experience of driving the freeway.

another significant part of the dragon's landscape is the 200 ema
There are 7 points of interest on this 30 min view.
(The dragon is not so stripped down as in the woodie pivot study. He's looking more dignified this way).
#1 distance from 200 ema is very great the dragon will turn back to the 200 ema
#2 the dragon tests the 200ema 3 times
#3 bounces high only to test for a 4th time and then a 5th time to finally break through
#4 distance from 200 ema is very great and the dragon turns back up to test
#5 test the 200ema and drops back down in a very dramatic move.
#6 distance from 200 ema is very great and the dragon again turns back up to test the 200 ema
#7 tests the 200 ema.

The 200ema is like the dragon's shadow. He can never really get away from it.

putting the landscape components together on the same 30 min view and leaving the points of interest for the 200 ema
it is interesting to note how the 200 ema and the woodie pivots with s/r coincide at very significant turning points for the dragon.

From and earlier post:
A simple exercise:
Use a simplified template for this exercise. Delete the 2 lower windows, the dss and the macd. Delete the woodie pivots and the 200 ema.
Look for ashi change of color. Go long when ashi turns green after a significant move down. And go short when ashi turns olive after a significant move up. With a 1 minute dragon look for 3 to 5 pips.

This is what is called buying into weakness and selling into strength.

This in itself is not sufficient for success. But play with it as an exercise. It will help you to become more familiar with how the dragon moves.

Adding woodie pivots and the 200 ema to the template the simple exercise from the earlier post can now be done with the added benefit of awareness of the landscape.

If the dragon is approaching a pivot special attention is given to how he behaves there. Is he testing and will he break through?
How far is he from the 200 ema?
All the while watching for the ha candles to change color.
The pivots can be good destinations. The dragon likes to go there.
He can never get too far from the 200 ema without returning to it at some point.

Practice, practice, practice, more practice....