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Attachments: Additional Vegas 4h filter ideas that seem to work(+100% pips), need input please! :)
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Additional Vegas 4h filter ideas that seem to work(+100% pips), need input please! :)

  • Post #1
  • Quote
  • First Post: Jul 30, 2006 12:18pm Jul 30, 2006 12:18pm
  •  SeekingLight
  • Joined Jul 2006 | Status: Charts + PA > * | 3,251 Posts
Hi!

diallist and vegas have already pointed out that using the neutral line for entry yields more pips.
i've got some more ideas regarding exits and stops that might also help enhancing the strategy for more conservative trading.
the idea is that less (risky) trades and less losses make up a lot more pips than missed chances at more risky trade situations and missed profit.

(first bait: i got a result that was 100% more pips than the original mechanical trade result for january, will attach the trading log here)

another idea for a rule addition would be to take profit if price falls short of the second 233 fibo line by 10-30 pips and then begins to return back. at about 35% of this price difference (i.e. 35% of 88 pips = 30 pips roughly, i chose 35% as it's under the 38.2% for a 61.8% retracement flexibility to reach the outer fib after all...)...
this is of course discretionary and just an idea so far, still backtesting to see whether its more helpfull or detrimental...it's essentially the same as trailing a stop 30-40 pips away after having taken the first profit fib i guess...but i don't have trailing stops

the idea would be to prevent missing pips by waiting for a slope change to signal an exit without allowing us to take profit first(i see that happen quite a bit during the dangerous, low momentum weeks) >>> should boost
profit a bit perhaps?

another idea is moving up stops to breakeven and also after passing the first take profit level moving the stop to the first fibo line of the TIME OF OPENING THE TRADE. this locks in profit and avoids losses.
why at the time of the opening? because it seems even though price does touch the first fibo a lot of times on a retrace, it doesnt do so down to the TIME OF THE OPENING OF THE TRADE unless it is turning down all the way
in a change of momentum anyway, which would close the position for even more lost profit anyway.
at least that's what i saw, still checking whether there are too many exceptions to this or not.

these ideas are for a profit oriented conservative strategy which dreads loss. you COULD miss out on profits, maybe even a lot.
an ultra-conservative idea would be to eliminate the "free trade" and closing two thirds at the second fibo (with the lowest fibo price in the last 3 days rule) this again might boost profits....backtest and let me know, i am currently stepping through january 2006, a very undecided and difficult month, trying to check more months as time permits.

another conservative filter would be NOT to take ANY trades outside of the 233 fibo band, as the risk of it just exhausting and going against you are very high.

also we would filter out entries that are within 50 pips of the outermost fibo as they have nowhere to go and face the same exhaustion danger as the ones over the 233 band.


all of this reduces trades with a higher risk and total nr of trades taken, this should be a good thing. also do not forget vegas' idea of "Other: May not take off entire position at slight change in slope of 8 SMA on the 4 hour chart. Most likely scenario is to take partial profit, with stop based on technicals for remaining position."

this boils down to discretion in essence and if you can see the highs/lows made not exceed the current range of the last few candles, then one could place the stop at around a recent high/low with some tolerace accordingly(technicals, TDTL, fibs,s/r etc) and take partial profit on a mild slope change and not fully close like vegas suggests. it could just be a pause in the market during slow times before the actual trend resumes.

so to formulate the more mechanical rule additions and partially some a bit more discretionary:

Rule 1 : move up stop to breakeven after passing the first take profit level
OR
Rule 1(conservative ): move the stop to the first fibo line of the TIME OF OPENING THE TRADE (this could work against you!)

Rule 2(conservative, optional): if price is close to, but not at the second fibo (within ~ 30 pips) and then retreats back to the price of the (first fibo + 30 pips), then we close out either the second third or fully. (i would advise fully.)

Rule 3(conservative): never open a trade outside of the outermost (2nd / 233 distance)fibo!

Rule 4(conservative): make sure you have at LEAST 50 pips distance to the outermost fibo before even considering entering on a signal/slope change.

Additional note in that regard: if you are not far away from the first or second fibo (i.e. not between the 55SMA and first fibo with some distance) when you enter a trade, BE AWARE THAT THIS MIGHT HAVE INCREASED RISK! place stops accordingly, use technicals and don't waste too many pips


okay, i know this is a lot to read. i have attached a step by step trading log for january for a mechanical, no stops used just slope change vegas trade of january 2006 and then one for my conservative variation.

the differences are 407 pips profit roughly with 8 trades, 3 winners and 5 loser for the mechanical trading and 893 roughly with 5 trades, 4 winners and 1 loser for my conservative version.


please help me out if you have the time and try to step through january and see if i made some mistakes, i have already found and corrected one before. also try to check for other months, too, i will post any new logs i make to this thread, too.

i have assumed all of january to be an UPTREND by looking at the weekly 5SMA which turned up in december 2005 and continued going up till february.
I used metatrader 4 from metaquotes for the time and data so you can reproduce my results.

here is the attachment, have fun and cheers!
Attached File(s)
File Type: txt vegas_knife_mod_january_2006_log.txt   9 KB | 1,104 downloads
Trust price. Know yourself.
  • Post #2
  • Quote
  • Jul 30, 2006 5:46pm Jul 30, 2006 5:46pm
  •  miketoll
  • | Joined Jun 2006 | Status: Member | 115 Posts
hey seekinglight,
i appreciate your work. I also think that this good strategy could be made better.
Im working at the absolute pips problem (detailed desciption see here see post #476 , to fit the strategy better for the respective currencies. I will post my work here.
Keep up that threat and let us improve.
I'm getting there ... slowly
 
 
  • Post #3
  • Quote
  • Aug 6, 2006 5:55am Aug 6, 2006 5:55am
  •  SeekingLight
  • Joined Jul 2006 | Status: Charts + PA > * | 3,251 Posts
Hi, just wanted to post a log for June, to show how profitable the 4h logic can be.
Again, I haven't been smart enough to trade this in reality, but by god, if I had, I would have had quite a hayday....

Total profit for June is +1030 PIPS....

As for my rule ideas:
nobody really seems interested in most of the stuff, but i guess that's ok.

So far it seems that the following rules are useful:

"Rule 2(conservative, optional): if price is close to, but not at the second fibo (within ~ 30 pips) and then retreats back to the price of the (first fibo + 30 pips), then we close out either the second third or fully. (i would advise fully.)"

Works out ok in "weak trend" situations i guess, will continue to monitor this. could potentially lead to missed profit!


"Rule 3(conservative): never open a trade outside of the outermost (2nd / 233 distance)fibo!"

Could be extended to don't trade at or past the first fibo at all.
usually doesn't prove to be a good idea unless there's a reason for a real push/acceleration towards the far outside by a news event or similiar looming.

This pretty much takes care of rule 4 anyway.

Diallist and James rightfully say one could/should just aim for A trades when starting out and i advise doing just that. anything risky will just blow out what little starting money you have and just look at the first A trade on june, it went over 1000 pips! that's well worth waiting 1-2 months for it!
keep this in mind when feeling tempted by the market once again

Please have a look at the attached log for June and don't hesitate to point out missed trades or unlogic/wrong trade signals taken.
Also any opinion on the notes would be appreciated!

Cheers
Attached File(s)
File Type: txt vegas_4h_june_2006.txt   10 KB | 663 downloads
Trust price. Know yourself.
 
 
  • Post #4
  • Quote
  • Aug 6, 2006 6:43am Aug 6, 2006 6:43am
  •  SeekingLight
  • Joined Jul 2006 | Status: Charts + PA > * | 3,251 Posts
Hi!

Here are the results for the mechanical trade version of July.

Any input is appreciated!

Also, please note that I have switched over to MigFX Demo MT4 which is in my local timezone (GMT+2) as opposed to Metaquotes MT4.

So time/candle time has changed. This also goes for the previously posted June in case you were confused by not finding the price/times.
Attached File(s)
File Type: txt july_vegas_4h.txt   4 KB | 587 downloads
Trust price. Know yourself.
 
 
  • Post #5
  • Quote
  • Aug 6, 2006 6:54am Aug 6, 2006 6:54am
  •  petercross
  • | Joined Apr 2006 | Status: Member | 79 Posts
Improving things and thinking, instead of following some system mechanically is always good!

Keep up. I'm following along the lines and will test your "conservative approach". I don't care if I leave some pips on the table, as long as I can reduce risk, somewhat at least.

So, just to signal: here's somebody interested in your work. Right now, I can't just comment usefull stuff as I am testing and observing your method realtime and it takes a while to see if it works (forward testing).

Anyway, thanks for sharing.

Peter.
 
 
  • Post #6
  • Quote
  • Aug 6, 2006 7:01am Aug 6, 2006 7:01am
  •  SeekingLight
  • Joined Jul 2006 | Status: Charts + PA > * | 3,251 Posts
Please take note that just by following the mechanical rules without stops and just using slope changes as exit, the worst month out of the three so far is july with -45 pips....the next 2 trades would be in profit after this again. So i wouldn't advise live trading any rule of mine except the outer fibo retrace after barely reaching the outer limit.
Of course use stops, too. I just mean to say that purely using slope changes as entry/exit signals works fine on a theoretical backtest which assumes you are there for EVERY!!!!! 4h bar close or slope change.

Please don't put any live money on my logic before at demoing it for at least 4 weeks yourself and having made your own backtest FIRST.

I make a lot of mistakes and oversights writing up these logs and try to correct as much as I can, but I can't guarantee that they are error free at all let alone in any way profitable or better or even good and this is not in any stage to put real money on it, so please don't.

Take it as a discussion incentive to better profits and reduce missed pips and to keep discussing this very beautiful and simple method.
Trust price. Know yourself.
 
 
  • Post #7
  • Quote
  • Aug 6, 2006 9:06am Aug 6, 2006 9:06am
  •  platerina
  • | Joined Jul 2006 | Status: Member | 10 Posts
hey all, i dont understand the "part III - the 4 hour tunnel momentum method" in the Vegas 4hrtunnelmethod PDF, can someone explain to me please. Thank You. =)
 
 
  • Post #8
  • Quote
  • Aug 6, 2006 9:43am Aug 6, 2006 9:43am
  •  mjs12
  • | Joined Apr 2006 | Status: Member | 21 Posts
Hi Seekinglight,

I'm also keenly following this thread. I think there is great merit is fine tuning the Vegas method.

I don't have much to add yet, but I'm incorporating the 1hr Ovenstone method, the EJ_4hr method and the Vegas 4hr. One important thing I have found is that the 30 period TMA (triangular moving average) on the 1 hour chart used in the Ovenstone system is almost exactly the same as the 8SMA on the 4 hour chart (see attached pic). Obviously, the 8SMA is critical for the EJ_4hr and Vegas system, and the 1 hour setups from the Ovenstone system feed nicely into the Vegas signals.

I'm finding that the EJ_4hr system just provides a great context for where the price action sits relative to 55MA. This may make the system more dicretionary but that isn't necessarily a bad thing if it makes it more profitable.

Kind Regards,
Matt.
Attached Image
 
 
  • Post #9
  • Quote
  • Aug 6, 2006 10:04am Aug 6, 2006 10:04am
  •  shahfx
  • | Joined Apr 2004 | Status: Member | 86 Posts
hi,dnt forget vegas also mention in his journal the important of Data and Price Action..i cant tell u exactly on how to use the data or price action cos the idea is just come to my mind..BUt its really put an edge in my trading system..and it is also make me thinking differnetly on market behavoiur..since that day..im only trade GBP/Usd(u know why?high volatility)and my size postioning also differ than before..i only choose very high probability with the most low risk trade..and the best thing is i seldom or rarely lose since last eight months of trading..my trading odds is increase tremendously...and what i never expect is that..im able to make a decision on trading without looking at the charts..what i need is just the behaviour o of the PRICE...maybe im just lucky!!hope that im not..

rite now,my money managment is using anti martiangle..i only using .5% of my equity/worst case of 30 losing streak of 100 trades(my odds is 7 to 10) ..cos i dnt want my account lose more than 15%..if that happen..i only needed 17.6% to recover it back

and lastly,if u do read and reread Mr Vegas journal again and again..i hope and pray that u will understand what he has know that i and we dnt know..

Thanks again Mr vegas
shahfx
 
 
  • Post #10
  • Quote
  • Aug 6, 2006 11:00am Aug 6, 2006 11:00am
  •  capsmart
  • | Joined Aug 2005 | Status: Member | 100 Posts
Quoting platerina
Disliked
hey all, i dont understand the "part III - the 4 hour tunnel momentum method" in the Vegas 4hrtunnelmethod PDF, can someone explain to me please. Thank You. =)
Ignored
Hi
If you tell me what part you do not understand then maybe I could help you.
The idea behind the system are two moving averages. A long and a short one. But the trading is not based on the crossing of the averages but in the change of the slope of the short average. Vegas explains it in much more detail and I suggest that you read it 2-3 times while trying to implement it on your trading platform.
Regards
 
 
  • Post #11
  • Quote
  • Aug 11, 2006 1:47pm Aug 11, 2006 1:47pm
  •  rockrat
  • | Joined Nov 2004 | Status: Member | 42 Posts
hi all,

i have been trying to get my head around 4 hour tunnel trading, and have the mt4 indicator as found here on this forum ( somewhere).
but i cannot seem to find any info regarding the dotted neutral line that is put on the screen and what its use is, or how to use it.

help is appreicated
Its gonna happen, it will happen.....i know!
 
 
  • Post #12
  • Quote
  • Aug 11, 2006 4:13pm Aug 11, 2006 4:13pm
  •  SeekingLight
  • Joined Jul 2006 | Status: Charts + PA > * | 3,251 Posts
Ok, first off:
I appreciate any input, but I am afraid that a lot of the posts are drifting in the direction of "cool, and MY idea would be to xyz etc etc".
I was trying to

1. find one or two rules that help make the 4h tunnel method work even better (on those few occasions when things fall short of expected behavior e.g.)
2. to backtest it and see how it performs for this year and maybe last based on strictly mechanical trading as well as with the rules tested and developed

Now, there's a HUGE thread called "Lost in the Tunnel" which not only explains the neutral line / bar but also has a ton of other great ideas and mods for the method, so I would recommend reading the doc first until you understand that, then read the thread to add to it.

This is not meant to be an introduction thread to 4h Tunnel, it's meant to be an attempt to see if there are ideas that can help it perform a little bit better.

If anyone has some simple ideas that preferably DO NOT rely on other indicators or systems mixed into the whole mix, then I would really love to hear them. I would also really appreciated it if someone took the time to actually help verify the backtests and trades for the months I posted, since having clear maximum loss/profit numbers for a year will help figure out stakes/risk to be used accordingly with account size in mind.

Also I believe people would be interested to see in actual numbers how trades would have performed.


A last note: the neutral line / bar is for EARLY entries within the 4h candle/bar forming still and has quite a risk of catching you / making you enter, then moving back and closing so that the slope does NOT change. This will guarantee a losing trade, as there is no signal but you entered already anyway and now have a position that does not fit into the system.
This is why I am using a mechanical approach on bar CLOSES as a foundation, to compare with other methods and early entry variations.

On thing I am very much looking for is a filter that somehow takes into account the strength of a beginning move, since a lot of times there is a sideway time in which price is a bit undecided and on the "wrong" side of the tunnel, like it was lately. A few pips can change the slope up and signal a half entry, and then go a LOT of pips against you before the candle closes again, signalling an exit. Either way, whether you used a stop loss or the candle close, you would lose quite some money. The easiest and most brutal method to avoid this would be to only take trades on the other side of the tunnel (full position) and ignore all the ones on the "wrong" side. This would however eliminate a lot of signals, too and have you trade maybe once a month.....then again, maybe the missing losses would compensate for less pips won.....will have to work with the results on that as well.

BUT I NEED YOU HELP TO VERIFY THEM

Otherwise if i made some mistakes or missed signals then the whole postprocessing is for naught. So please, if you have the time, help me out

Thanks.
Trust price. Know yourself.
 
 
  • Post #13
  • Quote
  • Aug 27, 2006 11:52am Aug 27, 2006 11:52am
  •  diallist
  • Joined Sep 2004 | Status: Member | 1,464 Posts
Quoting SeekingLight
Disliked
Hi!

diallist and vegas have already pointed out that using the neutral line for entry yields more pips.
i've got some more ideas regarding exits and stops that might also help enhancing the strategy for more conservative trading.
the idea is that less (risky) trades and less losses make up a lot more pips than missed chances at more risky trade situations and missed profit.

(first bait: i got a result that was 100% more pips than the original mechanical trade result for january, will attach the trading log here)
Ignored
SeekingLight,

I just saw this thread of yours and I wanted to say congratulations on your insightful thinking for improvements to this system!

You've done some outstanding work here SL, and I hope it serves to show new traders that mechanically (blindly) following any system is not the best way to go, but that directed intelligent analysis is the way to go.

Good job SL!!

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
 
 
  • Post #14
  • Quote
  • Sep 10, 2006 1:06am Sep 10, 2006 1:06am
  •  Pipkingdom
  • | Joined Aug 2006 | Status: Member | 49 Posts
Hey Seeking Light...

Thanks for all your work on these improvements. I was going over the results of the trades for Jan and even if you remove the last trade I end up with a
gain of +250 pips. Is there a trade left out?
 
 
  • Post #15
  • Quote
  • Sep 10, 2006 6:19am Sep 10, 2006 6:19am
  •  howard
  • | Joined Sep 2006 | Status: howard | 1,681 Posts
Quoting SeekingLight
Disliked
Hi!

Here are the results for the mechanical trade version of July.

Any input is appreciated!

Also, please note that I have switched over to MigFX Demo MT4 which is in my local timezone (GMT+2) as opposed to Metaquotes MT4.

So time/candle time has changed. This also goes for the previously posted June in case you were confused by not finding the price/times.
Ignored
Hi SK

I have quite recently gone through all the threads and documents of the Vegas models, 1 h, 4h and VWB , still it seems as if I am missing some of the documents as I see a number of posts which looks unfamiliar to me.

Could you be kind enough to post here all the links for the final version of the documents and download files for MT4. From your charts I note that you should have all of these. I am located in GMT+1 zone.

Thanks a lot

Howard
Regards
 
 
  • Post #16
  • Quote
  • Sep 10, 2006 6:20am Sep 10, 2006 6:20am
  •  howard
  • | Joined Sep 2006 | Status: howard | 1,681 Posts
Quoting SeekingLight
Disliked
Hi!

Here are the results for the mechanical trade version of July.

Any input is appreciated!

Also, please note that I have switched over to MigFX Demo MT4 which is in my local timezone (GMT+2) as opposed to Metaquotes MT4.

So time/candle time has changed. This also goes for the previously posted June in case you were confused by not finding the price/times.
Ignored
Sorry for misspelling your name, I meant SL
Regards
 
 
  • Post #17
  • Quote
  • Last Post: Sep 27, 2006 2:49pm Sep 27, 2006 2:49pm
  •  SeekingLight
  • Joined Jul 2006 | Status: Charts + PA > * | 3,251 Posts
Quoting howard
Disliked
Hi SK

I have quite recently gone through all the threads and documents of the Vegas models, 1 h, 4h and VWB , still it seems as if I am missing some of the documents as I see a number of posts which looks unfamiliar to me.

Could you be kind enough to post here all the links for the final version of the documents and download files for MT4. From your charts I note that you should have all of these. I am located in GMT+1 zone.

Thanks a lot

Howard
Ignored
Hi Howard.
Sorry for being a bit late with a reply to this, but I was chasing around other threads, trying to help people and working on my trading and had a lot of things in "real life" to contend with, so my efforts on backtesting took a bit of a back seat. I will however try to at least complete it for 2006 at some point.

As for you post, I do not believe that you are missing anything, the documents you can find in the sticky threads in this niche forum are the final versions, there was only 1 Version of each release. Only VWB is a series of 1-3 if I remember correctly and they all have different topics and are not relevant to the 4 hour tunnel method. Only the 4h tunnel method doc is. I'll be looking into these things again soon, as I find that the 4h method would have worked out splendidly on this last ascent of cable to 1.9000+ levels from 1.8600ish. Over 250 pips in one smooth trade.

So I hope I'll get around to this again eventually at some point.

Thanks for the compliments and input.

@PipKingDom

Hey Seeking Light...

Quote
Disliked
Thanks for all your work on these improvements. I was going over the results of the trades for Jan and even if you remove the last trade I end up with a
gain of +250 pips. Is there a trade left out?

I will look into this when I find the time, if you backtested yourself you should be able to match up the signals though if you are in the same timezone as the demo I used back then. If not, then it's possible we get different results for that month. Thanks for the post.

Best wishes,


SeekingLight
Trust price. Know yourself.
 
 
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