Twoblink tweaks and mods

Disclaimer:

First: I don't claim to be right, nor do I actually recommend for you, what I do. If you read my thesis on why Forex knowledge can't be passed on, you'll then understand.

Second: Assuming l can kill 10 people with 10 bullets from a handgun. When that same handgun is given to someone untrained; the untrained person will probably shoot themselves in the foot. So how well I wield a gun, in no relavent to how well you can wield a gun when given to you. So please don't assume more than there is..

Third: I've read a BUNCH of books, and so there are a few hundred books swimming around in my brain; I combine the concepts that are good, and reject those that are bad. I have neither the ability nor the time to justify what I do.. It is what it is..

If you agree with me, great! If you disagree with me, great!

Let's make a deal; I won't ask you to explain yourself, so don't ask me to explain myself ok? 'thanks.

So many of you have PM'ed me (to the two of over 20 PM's a day) that I got sick and tired of typing the same thing over and over again.. So..

This is for those of you who want to learn. I've learned a great deal from others, giving back is this drone's small contribution to the collective...

I will assume you are familiar with the Mouteki method. If not, then read about it.

Attached, you will note a pennant I generated from TWO resistance trends. Previous, and present.

This is also known as a "trend angle break".

The original resistance trend, broke to a steeper one, forming a pennant.

If it rode along either of those two lines, it would have been a continuation. But note the break from that pennant to the upside.

Classic classic angular trend break.

Note, not only does it break the trend, it doubly breaks the angle of the angle break. (Read that 3 times fast, and use the force Luke, it will make sense, I swear..)

Great stuff mate, I like the way you write.
I await more.

This is probably now my bread and butter.

The parabolic is formed by the reversal of lower lows, to "slightly lower lows".

A Larry Williams defined "high quality" low reversal using mouteki sticks can be seen, and thus, the parabolic bottom is formed.

The subsequent market should move up, but at where the red arrow is, there is a break.

No, I don't usually put this many lines on my chart, but I did on this example to show the general direction of the parabolic..

I'm going to do everybody a great disservice, and post what I'm talking about. I should force you all to read, but I know most of you are way to lazy, and because of that, you will fail, and so my posting this information will be irrelevant to those who are lazy, and will help those who aren't.

High quality high reversal signal.

Contract the high quality with this low quality.

If you haven't figured out, the reason why the top is a high quality, and the bottom one is a low quality is, because on the high quality, #3 breaks PAST #1, which would have been a natural resistance point.

On the low quality, #3 does not break #1 in the first test. This means then, that the reversal will be "painful" or unclean or retested again fairly soon.

So I like the high quality signals much better (obviously) and I pay attention to them much more.

Everything is true for downside reversals, but I'm way too lazy to post them..

BTW, I put musical notes because as more bars get involved, "singing" them is the only way you can talk to someone about it without taking screenshots.

Like notes on a staff..

Note in this sample, the low quality reversal signal.. and the subsequent retest as a result. The subsequent retest is dangerous because it's a second chance to be wrong..

This is screenshot is off of MT4 with Tom Demark circles..

This is from the GBP/USD Daily shot..

Super high quality signal...

In reality, this is a super SUPER high quality signal, because the downtrend that is taking place, is parallel in angle to the previous two downtrends. (As noted by the 3 white arrows in parallel)

This was from
http://www.forexfactory.com/forexfor...0&postcount=20

This question.

I answered over there, but I'd thought I'd post it again here..

~~~~~~~~~~~~~~~~~~~~~~~~~
The reason is, note the open bar you are talking about (Red 2) is not below the original candled for analysis (Referred to as Support 1, pointed to as Red 1)

Where as the BLUE side..

Blue 2 broke the imaginary horizontal line of Blue 1.

I've drawn both lines in cyan for your reference..

The description of it is a bit difficult, but I feel the drawing explains most of it..

Stare at the drawing REALLY HARD and use the force..!

This is a modified mouteki..

This is a maximum zoomed out EUR/USD 15M.

Mouteki lines are drawn by eyeball.

Note the break at the red arrow.

If you followed mouteki's rules here, and used the height as given by "A", you will more than likely miss the Take Profit. The reason is, the pennant SHRINKS, it is not in a parallel run of tops and bottoms. So in this case, I would set the TP based on point "B's" height, much higher probability.

I just went back and measured. Taking "A's" height, you would have missed the TP by 5 pips. Taking B's height, you would have taken profit by 1 pip.

Pic should explain everything

Here, we have the same screenshot as above, but later on.

Note the red reversal signal was high quality, so it went DOWN..

Note the green reversal signal is low quality, and so it got retested.

Remember what I said above? A retest is horrible because now you have twice the chance of losing. We now have a sideways market; and all directions are open for interpretation.

Chances are, if this sucker doesn't climb really high after the retest, the bulls will run out of gas and the bears will overtake..

Oh my gosh!!

Did I call it or what??

Told you if the rest fails, the bears are going to overrun the bulls..

I called it didn't I?

And btw, I am doing this in a blind forward testing; I don't know the answers ahead of time.. Just in case you thought I was cheating..

So now, we have a lot of downtrends.. we are going to start keeping our eyes open for parabolics to occur..

twoblink, have you ever read Mark Fisher's The Logical Trader?

he is a big fan of the high quality reversal you illustrate above, but he is looking at daily bars. the logic behind this pattern is quite solid on daily bars....you have a market that is heavily long, and the next day the market ends up below the point that everyone got long. this creates a big panic for the longs, and they have to dump positions, creating even more of a slide. i guess this concept can be applied to hourly bars, ive never really considered that. great stuff man.

The lowest low is low quality, the angle of reversal is shallow..

so this is a parabolic, but of low quality...

Here is the John Madden version..

Enjoy!!

The top bowl of the parabolic (left upper corner) becomes our north star. Note the first low quality low, was broken, and retested. So we should prepare for the same thing to happen on this one as well.

The higher lows are of low quality also..

Micro profit, or fakeout, depending on your level of stupidity and dicipline.

I've never read his stuff, but yes, half the books that talk about this (which isn't a lot of them) refer to him about it.