Snake-Eye Trading Method

What pairs are you trading this with? What kind of stops are you using to get 3 -5 pips?

PostEdit: I cleaned up the template file and image...

Palmer and i were talking today and i shared some of what i'll post here as it is in context. The below screen shot shows a slice of a five minute chart and the various indicators in the template file. Feel free to download and test it out. I'm testing this in demo on five minute charts looking at the 15m for confirmation. Also, i think there might be a use for this setup on longer term charts but that is another thread and another day.

To answer your question directly i have been trading the four majors with a "catastrophic s/l"...

http://www.accrete.com/fx-atm/indica...icatorList.gif
The link to download the indicators are here:

Grab the indicators listed in the screen shot from this directory:
http://www.accrete.com/fx-atm/indicators/

Also grab the atm_snake_eyes.tpl as you scroll down the folder.

I hesitate in posting this as i am no expert in the method though I will share i have had about 80% success rate over the past three months and i am positive in my trading of this method. I trade during the London Open using this set up and have recently incorporated SRDC II rules in the different quadrants (i was using APF for channels, but now use LRCs) using this template as an entry filter of sorts. One additional "filter" is the purple MA that represents the 24MA on an hourly chart. I mainly use what one would call "catastrophic" stop losses. I.E. i put in 100 pip S/L for math's sake and will exit a trade well before that if i feel my homework and decision for entry are no longer valid. My profit targets vary from 15 pips up to 50/60 or more depending on nearby S/R. I don't look at this as only an intraday model but rather a testing ground for greater things to come and higher timeframe testing.

Cheers,
Thom

Since this method was adapted/generalised from stocks/indices, is this the reason there is a bias in the MAs?

I remember reading a discussion somewhere on FF a while ago where there was a comparison between the price movements of stocks/indices and currencies. The general theme was that stock/indices prices tended to fall faster than they rose. Currencies do not suffer (benefit?) from this [presumably psychologically based] effect - at least to any significant degree.

I am currently playing around with this method (only Cable so far) and am thinking that, because of this lack of bias in currencies, that both SMAs should be either 8 or 10. Anyones thoughts/opinions would be most appreciated on this.


Thanks for sharing this method Akuma99,

Magnus

Yuppie -

I agree, there probably isn't a benefit at all to the period bias in the MAs when applying this technique to currencies. In that case of equities, I can see the reason for a 20% difference in the MA period as stocks tend to peel off much faster and more violently than they appreciate.

That being said, on a 5 min and 15 min chart (which will both exhibit a tremendous amount of noise anyway) the effect of a period difference of only two bars may not be of much significance in the long run. I'm just shooting from the hip here, but my gut tells me that a 10sma and 25sma would alter the results much moreso than trading the 8sma/10sma.

Thanks for your insight Dave. You are right about the noise and particularly about the 20% difference - not much in it on the 5/15min.


Placing SMA[8] set at Low, SMA[8] set at High, SMA[10] set at Low, and SMA[10] set at High all on one chart shows there really is not much of a gap between the 8s and 10s.

The method is fairly discretionary and, as stated in the information provided by Acuma99, a degree of training is required to be able to accurately and consistently identify set-ups.

It was really the concept of it that peaked my interest; watching price for the inability to take out the previous bar(s) - detecting strength/weakness.

The 8/10 thing bugged me a bit and wanted to make sure that this bias was not something critical I was missing. Your confirmation of stocks falling more rapidly than they appreciate and mention of only a 20% difference in SMAs has certainly cleared that up for me. Will look into this in more detail now...


Thanks again,

Magnus