Strat's PASR Long Term, Stress Free Trading

Hello tgs,

Cycles and frequency analysis fascinate me so I try to include it in my trading. Unfortunately, I can't find any proven software for forex so I have had to cobble my own.

That being the case, it's very experimental right now and as I said before, I'm not sure it has value or is worth the effort. There are also 2 types of cycles - price cycles and time cycles and because I can't find any time analysis software, I am only doing price cycle analysis which is no better really than the myriad of indicators already out there.

As I write this, I can hear old Dr. Joe saying "you don't need nutin' fancy" and remember that he spent over 5 years trying and therefore think I'm wasting my time but what the heck, I've got to do something during the day otherwise the trouble and strife will have me doing household chores and jobs - I need her to think I'm busy!

If you go on the web for a search, be very, very careful and wary of what is out there. Most are scammers trying to sell "junk" while others put up a fancy site with chart examples showing how powerful their indicator/software is - I can do that also - I could put up a chart showing how great my experimental cycles are BUT what they won't show you is that a couple of weeks later, as the market decides to do a 7/9th cycle followed by a 4/7th cycle, their indicator/software is about as useful as rocking horse sh*t!

Cycles are as frustrating as Elliott Wave, except to me, they look better.

The cycle analysts I have the most respect for are:

Walter Bressert and John F. Ehlers

If you find anything useful, keep me in the loop

Rock n Roll,
Strat

"Consistent losers do almost anything to avoid accepting the reality that, no matter how good a trade looks, it could lose. Without the presence of an external structure forcing the typical trader to think otherwise, he is susceptible to any number of justifications, rationalizations, and the kind of distorted logic that will allow him to get into a trade believing that it can't lose, which makes determining the risk in advance irrelevant."

... Mark Douglas, Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude

1. Richard McCall, The Way of the Warrior-Trader
2. Brett Steenbarger, Enhancing Trader Performance
3. Brett Steenbarger, The Psychology of Trading
4. Mark Douglas,Trading in the Zone
5. Richards J Heuer, Jr, Psychology of Intelligence Analysis

Brett Steenbarger, The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist

The MA's are very powerful and I use them both in isolation and in combination with all my other stuff.
They tell you the trend in two time frames, where prices are in relation to the trend, the strength of the trend, are invaluable as support and resistance AND especially when they are in confluence with support and resistance levels and can give us an idea when to expect the rubber band move to come into play.
The cross of MA's, although never used as a trading signal due to the lag, is also very informative. Their slopes provide valuable information as they do when they "trap" prices between them.
Since they are also used by banks, funds, hedge funds, trading houses and large institutions they become "self - fulfilling" much like Fib levels and retracements.
Hope this helps.
Rock n Roll,
Strat

With regard to stop loss, if that is how Trader Dante did it for his method then he must know it works for him. There are as many ways to set up your Forex ATM machine as there are traders. I cannot comment on what works for one method compared to another. The way I trade, Price Action using Support and Resistance, I would be stopped out on most trades if I did what you suggest. Since I'm trading reactions to Support and Resistance, my stops have to go either above/below Support and Resistance or at swings. For me, they have to be away from the noise of all the time frames below the Daily. This is all part of the PLAN. If you have done your analysis correctly then you will set stops according to that and let the market work it out for you. There are no emotions. You either believe in yourself and your plan or you will never make it in this business. When I place my stop loss, I EXPECT the MMs to run the stops and clean everyone out BUT I believe in my plan and let it run accordingly. I also don't put in hard stops.

I only read a post about a week ago on FF about a guy that was complaining that he set his stop and the market came back and took him out only to turn around after a further 20 pips and go in the direction of his trade. It will ALWAYS do that if you put your stop in front of resistance and support. Support and Resistance are proven areas in history where buyers have bought and sellers have sold.

One more thing, if you take a piece of method A, and a piece of method B with a squirt of method C, it won't work. A method is an all embracing strategy.

Time difference. I was going to go into a long disertation of time frames but it will not serve any point. The time is set based on the data feed from your broker. Yes different brokers wherever they are in the world have different time feeds. This means that what may appear as a hammer on my data may not be a hammer on someone with a different time data feed. It is not worth worrying about because at the end of the day we are all trading PROBABILITY and things like this, always average themselves out. You should not worry about what is happenning on a different time data feed because you cannot trade that. You can only trade the data presented to you by your broker.

Only control that which you have the ability and resources to control and ignore anything you cannot control.

Damn! I've just written that and realised why the trouble and strife is always asking why I ignore her! Need a new plan for that!

Hope this helps,

Rock n Roll,
Strat

Patience and waiting for the trade to come to us is the difference between winning and losing (read amateurs and pros). The "dead area" (trapped between support and resistance) is where most traders lose their money. We may not make many trades (and I don't want to) but the ones we make have a higher percent of success with usually a higher Gladys Knight count.

Rock n Roll,
Strat

A new thread ! Good to see we’re back Strat. And already plenty to read!

Anyone that knows me knows that I am a rebel, non-conformist and a non conventionalist (among many other derogatory words the trouble and strife calls me).

That being the case, I will probably stir up a can of worms, open pandora's box (anyone seen inside pandora's box?) etc., by saying:

I am only interested in the CLOSE of a candle. I do not care where it started, where it's been, how far it's gone or why it went there, only where it ended up.

I do not use highs and lows for any of my analysis - not even for trend lines.

Feel free to disagree with me - I don't care! If you saw my charts you would see that prices stop on, or very near, my support and resistance lines as if they had run into The Great Wall of China. That is why I don't care if the rest of the trading world disagrees with me.

My method for determining support and resistance also takes the time element out of the equation. This means that I can accurately predict the price, at some point in time, within a small percent, at which buyers will buy and sellers will sell.

For those getting ready to ask which indicator do I use to do this, it is the one between my ears.

For those who think I am full of the proverbial horse manure, and again, I don't care if you do, let me show you an example using USDJPY.

If my light had gone in 1995, I would have known that the price of 94.21 would act as support and resistance in October 2008 through February 2009.

See attached Weekly and Daily charts.

I have not shown how I identified 94.21 but all will be revealed in good time. Suffice it to say, everything you need is staring at you on that Weekly chart.

Rock n Roll,
Strat
Attached Images (click to enlarge)
https://www.forexfactory.com/attachm...1&d=1365564516

Thanks for the questions.

I may have over simplified things with my comments about the close. The close, in my opinion, is the most important level on a candle. I do not use tails or wicks for trend lines or any of my analysis. So, on a down trend line, I draw the line through the open but again, that is over simplifying it.

Trend lines are NOT an exact science and there is no right way or wrong way to draw one. The trend lines that I draw work for me because it is part of my overall analysis. If you are just drawing trend lines in isolation, they may not be giving you the information you want.

In certain cases when there is lots of volatility, I will draw an "average" trend line just by eye balling the bars and drawing the line that has the most touches to it.

Although the close is the most important, the other 3 levels also have their use in telling us what went on in that 24 hour bar.

Fibs, like trend lines are very subjective with regard to where you take the swing from and whether to use the tails and wicks or not depends on the volatility of the pair being measured.

What you have to remember is that trend lines, fibs, support and resistance are not exact. That is why you will see us say 1.3650ish. There is no rule that says price has to be "spot on" with any of these - just pretty close will do the trick.

With regard to the points from where to draw your fibs, the general rule is from swing to swing. When that swing has produced it's retrace, rally or whatever the move, then move on to the next swing. Don't worry about getting the exact points right because what you will find is that if you draw your fib and it shows the retrace at 50%, then move your points and you will see that it is now at 38.2% or 61.8% - a level where you should be taking notice anyway.

Finally, as more and more traders are using fibs, they are becoming more and more self fulfilling.

Did you really ask this question "What about setting your S/L? Do you set it above/below the CLOSE of a recent swing high/low?"

If I am long, and identify a swing low to place my SL, why would I want to place it near the close? Think about it. On that bar that produced the swing low, what did the sellers do? Where did they take price? I want to place my SL away from the noise and action of that important turning point. Also, if that swing low bounced off support, I will put my SL below and away from the noise around that support. Does that answer your question? If not, ask again.

"Does it affect how you see price action?"

This is a "how long is a piece of string" question. Everything you see on the charts affects price action - not just pieces of it in isolation, but all of it lumped together. I'm not sure that is the answer you are looking for so if it isn't, please re-phrase the question.

Hope this helps.

Rock n Roll,
Strat

Only 5 months in Forex and you are already well on your way, Dan, congratulations. The one most important thing that you have done is recognise what does NOT work for you and are now trying to find that style and time frame which DOES work for you. I see so many wannabe traders plugging away losing hundreds of pips doing something in a time frame that OBVIOUSLY doesn't work for them yet they persist in throwing their money away. I did it and it took me longer than 5 months to change.

It breaks my heart when I see people losing money as fast as it can be printed. There was one guy in a chat/live trading room with a young wife and family who was not only losing hundreds of pips but posting and telling everyone about it. Everyone but him could see that it wasn't working for him yet he blindly turned up day after day to throw his money away.

I was near to tears thinking of his situation and I couldn't take it anymore so I sent him a PM PLEADING with him to STOP everything. Finally, after a couple of PMs, he saw the light and stopped, much to my relief.

If this guy is up to it, I would like him to come on here and describe his emotions, what was going through his mind, what kept him doing something that everyone knew didn't work for him, why he did this etc. This will be so important for others in, and those who will be, in this position. If he doesn't want to do it under his own handle, he can send it to me and I will post it anonymously.

Although I don't understand it, it is something I did and had to work my way through it (over $200K lost later). This is the psychology aspect of trading controlling us. It is said that trading is 10% method and 90% psychology. Controlling your psychology aspect (or the man in the mirror in my case) is critical to your success as a trader. Although I thought I had mine tamed, it came back and let me know it was still there in my "quickie" USDJPY trade.

When something is not working for us after we have given it a good try, we need to stop and ask "WHY?" How many of us have traded with something that does not work and asked "WHY ISN'T IT WORKING?" We just keep plugging away and HOPE that our "LUCK" will change. Hope and luck are not included in the recipe for trading success.

I like to use a car analogy to describe this. When you start your car in a morning it usually starts on the first crank. What do you do when the day comes and it doesn't start on the first crank? You give it another crank and it still doesn't start. Since it has always started on the first crank, you should now be thinking "something is wrong with the engine". Well we give it a third crank and it still doesn't start and now it becomes a battle and you keep cranking away until you have a dead (flat) battery. So now you have two problems - the engine AND battery. This is exactly the trading scenario. Cranking away is each losing trade and the flat battery is an empty and lost account!

Now to your trades. First, nobody knows where a pair will go. There are lots of people who THINK they know but the market will do what IT wants to do regardless of what we THINK. Even trading the Daily you have to be on your toes and keep an OPEN MIND.

I think 1.3500 is ambitious, AT THIS TIME for GBUSD (but I'm no expert). Before it gets there it has to go through major support at 1.3650 and again at 1.3550. Yesterday's bar was rejected/bounced off by the 1.3650 - what is this telling us? Are there any sellers at 1.3650? What happens at support and resistance?

"Will it bounce back to 1.5000?"
Bloody hell, Dan, that is one hell of a bounce! I hope I never get caught in one of your bounces! Before it gets to 1.5000, there are several layers of resistance holding it down.

Then I get to your last sentence and I take back everything good I said about you!

"Maybe i'll just wait and see what Nicola does, always a winner!"

Dan, you will never, EVER, get your Aston Martin thinking like this! First of all Nicola (elitejets) is NOT ALWAYS a winner - NONE OF US ARE!

Have you asked her if she can be your signal service? If you do, I hope she says NO!

If you are on here, then you should be here to learn and understand and trade for yourself. Trading on someone else's beliefs is the ROAD TO RUIN!

If you are not sufficiently confident in placing trades based on your own analysis then DO NOT TRADE! Take your time and learn what you need to become a successful trader. The market will still be here when you are good and ready.

Think again about your chat/live trading room experience. Did it work for you then taking other people's trades?

I've fallen off my soap box again!

Rock n Roll,
Strat

I struggle with getting SL to break even also. It's a toss up between hanging in for a longer move or getting out with some profit. I try to look at where the next roadblock (support/resistance) is and work back from there. It also depends where you are in the trend (or not in a trend).

From the trading psycho view, it is always best to grab some profits while you can and not let a profit turn into nothing, or worse, a loser. However if you do screw up and end up with nothing or a loser just take it on the chin and move on to the next trade. The absolute worse thing you can do is mull over it and think what might have been -forget it, let it go and move forward.

Rock n Roll,
Strat

Glad you're here Honest Bill - we'll get you sorted out - don't worry. Might not be this month or next, but we'll do it.

Now one very important point - As I have told all the others asking for my help, the brain is a very complex, yet simple organ, it cannot handle learning two ways of doing the same thing at the same time and just fries itself. I know I have lost $tons trying to do it. Either trade what you have already or drop everything and open your mind to new ideas and methods.

Your confusion is because you are doing a strategy that does not require you to watch price action and is reliant on squiggly lines. You are getting torn between the two methods.

It is difficult for me to know exactly what is needed because I did it the other way round. I went from Daily price action to M15 and M5 using a proven strategy to get some action (stress and pressure) and very quickly came back to the real thing.

I know you are in contact with Nicola and really, because she has been in exactly your situation, best knows how to help you so I am asking Nicola if she can help through this thread and I will give my input as needed.

With so many people wanting information and answers, I have become disorganised in laying out this thread so I'm going to tell you what you probably don't want to hear and that is go back and re-read the whole thread again. But don't flash read - after reading each post, give yourself a test - ask yourself if you understand what was written, can YOU use it, how would YOU use it. By asking yourself these questions, you will learn so much more. As you do this, write down what you don't understand and then ask the questions.

Your request to put up a chart and show examples is exactly what I will NOT do at this stage. Why? Because that is the easy way out and more important, will not help you with this method. This is not like the Pimp Strategy or indeed any other requiring you to blindly follow a squiggly line. You have to learn what each single price bar is telling you, then what a group of price bars are telling you, then what a swing is telling you, etc, etc ALL within the boundaries of support and resistance.

I know you want it all in a couple of hours but this is a lifetime learning process and don't worry, Bill, you are in at the beginning, we are only at 18 pages BUT until you get over your reliance on squiggly lines and open your mind to reading and understanding price charts, you will be forever fighting within yourself.

Like I have said in other posts, the first thing to do is learn BASIC price action from Jim and Mike (mbqb11 Resident Elmer Fudd) at James 16. No need to read current posts just the first 200 or so pages.

Whether you read Jacko or not is up to you. He trades the 50% fib retrace in the direction of the trend on the Daily but has since dropped down to H4 supposedly because of volatility but I think he has chickened out. However, he has an uncanny sense of reading EURUSD and the funny mentals and can do what we do without all our hard work.

But first you have to decide what your style and time frame is - squiggly lines with stress and pressure or emotion and indicator free trading.

Until you sort out your internal confusion Bill, no-one here can help you.

I'm sorry this is not the answer you were looking for.

Rock n Roll,
Strat

tgs, I still get caught out in the same dilemma HOPING it is going to turn into a big trend. Did I write in an earlier post that "HOPE" was not an ingredient in the traders' success recipe? If I am "hoping" for more that means GREED has raised it's ugly head again. Another session in front of the mirror for me and Mark Douglas's book.

You, as are everyone else on here, are entitled to your opinions as long as they are positive and constructive so no problem on the MAs. Before you continue with their rejection though, watch how we use them, what they tell us and the benefits they give us. I have had them on my charts since the first chart I looked at in 1982.

Yes, they lag and yes they are indicators of price history BUT we are not using them in any way shape or form to generate signals as you are probably more familiar with. I have some pretty good MA systems which are very profitable UNTIL they hit the dreaded consolidation and just like everything else in consolidation, (in my opinion), are useles. We also never use them in isolation. They are used as part of our total package in our decision making process.

Again they are almost self fulfilling because just about every bank, institution, trading house, fund uses them to generate ORDERS especially the 20. Get your charts out, put on a 20 and you can see support and resistance but not only that, the elastic band strategy coming in to play. There is a guy on a Forum somewhere that I read, that trades on nothing but how price is attracted to and rejected by the 20.

Also, you would be AMAZED at how LITTLE traders at these places know. They are basically clerks that place orders (HUGE orders) when an alarm comes on telling them an MA has been hit or crossed or whatever but they have the prestige of being called Merchant Wankers.

Spot on analysis with OZ, I agree on an upcoming trend change and was waiting to announce it in my End of Week analysis.

Rock n Roll,
Strat

As I’ve posted before, one of the benefits for me in starting this thread is that of unlocking the annals (I almost wrote “anus”) of my mind to re-call the wealth of trading experiences and knowledge I have accumulated in my quest to trade for a living.

The recent posts on moving averages and bank traders have hit my “Memory Recall” button on the Merchant Banker experience I had back in 1996/97.

When I was “working” for a living, I had many overseas projects and one of them was for a large US Engineering & Construction company building the grass roots refinery for Reliance in Jamnagar, India. We were based in Mumbai (Bombay) for almost a year, living out of the Oberoi Hotel and on this occasion, our son, Ryan, was visiting with us for a couple of weeks.

Ryan is a very friendly character and makes friends real easy and one night, long after me and the trouble and strife had gone to bed, there is a telephone call, “Hey, Dad, you gotta come down to the bar quick!” I looked at the clock and it’s after 11:15pm. “What the hell for? it’s too late” was my reply. “There’s this guy that works for Hong Kong something banks that trades millions of dollars in futures”, Ryan said. Well I was out of bed and into the bar quicker than a hooker can drop her drawers!

Ryan introduced me to what’s his name (I can’t remember his name) and we shook hands. Sweaty hands and a handshake like that of a vicar or limp fish didn’t go well with me. He was English, in his early thirties, over cocky, over arrogant, over good looking and over paid and spoke very posh like they do with plums in their mouth. “Bastard”, I thought as he gave me his card. “Something something, Merchant Banker with Hong Kong something Bank”, I read on his card. In my rush to get down there, I had left everything in the room and couldn’t give him my card, so I told him I was a Project Manager working on the Reliance refinery.

Since this was about as much interest to him as the flight of the lesser spotted bumble bee, I thought this is going to be a short meeting so I just jumped in and asked him what a “Merchant Banker” does. Big mistake! He told us he traded millions of dollars at a time, made millions of dollars of profit for the bank and himself, had a penthouse suite over looking Hong Kong harbour, lived the life of the rich and famous and portrayed a “royalty” of Hong Kong image. When he eventually paused in his obvious attempt to intimidate me, I did my “How do you do it then?” routine. Well, stumbling for words took the wind out of his sails and we were back on a level playing field again.

“Martini and vodka”, he said when I got the waiter over to get our drinks. Ryan and I ordered our usual pints of beer as real men do. I told him I also traded futures and that so far, I had done nothing but lose. “You’ll never win,” he said, “we eat private traders for breakfast and spit them out in bits after”, he said in his best Prince Charles accent. Now I’m thinking “OK, smart arse, I don’t need to be told that by you” . So, in my usual blunt and tactless way, I said “OK, clever clogs, tell me how you do it?”. “Can’t do that old chap, it’s proprietary, a bank secret!”. My one word answer of “BOLLOCKS!” seemed to un – nerve him and Ryan looked at me as if to say “You won’t get anything out of him talking like that!”. He waffled around for ages about how good he was, the women he could get and the money he made, but nothing on how he ACTUALLY did it. I quickly realized that I had to work on him like the women my mate and I would chase on our “bachelor” Friday nights out – lace them with liquor before moving in for the “kill”. The waiter brought another round and Ryan realized my game plan and joined with me to triple team him.

After several rounds of drinks and us “buttering him up” telling him how good he was, he started to laugh and loosen up. “Game on”, I thought. I told him I had lost a ton of money the previous year on the Yen (another horror story to be revealed later) and he said he and his bank made millions and millions on that (yes, I thought, with my thousands as well). I told him I was using the Stochastics and MACD for my signals but so far I couldn’t make money with them. “What do you guys use?” I asked. Then he told us the REAL story!

He was one of 20 traders working for his bank and he worked in the futures section trading the deutsche mark and US$. (Only two currencies!) There were other traders who traded two currencies each of the other currencies. It was an open office with each trader having his own cubicle and computer with monitors all around the office. He had real time charts with a monitor for each currency and he spent his day reading reports on the economies of the countries for the currencies he traded. He would attend weekly internal meetings where each Head Trader would discuss the futures and commodities outlook for his section.

When it came to actually trading, he would wait for his computer to sound an alert, at which point, he would drop everything and look at what the alert was for. The bank’s software on currencies (not sure about the other futures and commodities but suspect it was the same) was programmed to trigger an alert at each cross of a 10, 20, 55 moving average. He would then see which cross was triggered, and get out his manual which told him how many $millions were allowed to be traded on that particular cross. Based on what his current exposure was (risk), he would decide how many millions to trade and THEN, take it to his Section Head or Head Trader. It was the Head Trader who made all the decisions! He would adjust the $value or just approve it as it was. The Head Trader then told the Merchant Banker to place the order for $X millions at which point, the Merchant Banker wrote up the paperwork and sent it on to their trader in the Pit. Trading over until the next alert!

When asked how they knew when to take profits he said it was usually when alerts triggered. When asked about the cross back down in a whip saw like situation he said it was no different to any other alarm. Just take the cross and the situation to the Head Trader who would review it and make a decision.

When asked about the impact of loading and unloading such high $ amounts on to the market at one time he said it wasn’t done all in one block. The Pit Trader had a system for spreading the orders such that the market (but not the other Pit Traders) could not see what they were doing.

When it finally came to profit taking, he would get his alert and take it to his Head Trader who would make the decision and instruct the Merchant Banker to close the orders. Again, he would issue the paperwork and send it to the Pit who would gradually unload it in the same manner as before.

As regards education and training in technical analysis, this Merchant Banker had an economics degree and no education in technical analysis at all other than what he had picked up by working for his bank. When asked why he didn’t have any, his cocky, arrogant, drunken response was “Why, I don’t need any, I can make millions doing what I do without it”.

When asked what qualifications a Head Trader needed he said it was “Just five years working for the bank as a Merchant Banker!”.

Having had my way with him, I couldn’t wait to get him out of my sight so the waiter brought the bill over, left it on the table, at which point Ryan and I stood up to leave. “Hey, aren’t you getting the bill?”, stumbled out of his mouth. “F**k off,” I said, “With all the thousands you stole from me, you can pay it!”

I guess this is the only time I beat a Merchant Banker!

Maybe now you will understand my dislike for Merchant Wankers!

As an epilogue, Ryan saw him the next day and said he looked “very poorly”. He should have drunk beer like real men!

And so began my not so profitable but very frustrating experience in moving average cross over systems

Rock n Roll,
Strat

Quoting Toddfx
BOSS 20 is the 20 period sma, right? I searched this thread but just want to make sure.

http://i43.tinypic.com/znv3hx.gif
We have a 20ema and a 50sma which tells us about the Daily and on the same chart we have a 100ema and a 250sma which tells us what the BOSS is doing.

The 100ema on the Daily chart is the same as a 20ema on the Weekly (20(daily) x 5 (days in a week) = 100)
The 250sma on the Daily chart is the same as a 50sma on the Weekly (50(daily) x 5 (days in a week) = 250)

In each case, the 20 is more powerful than the 50

Hope this clarifies it

Rock n Roll,
Stra

The guy who put up the re-painting HMA and Semafor crap made me think. There is only ONE WAY to read price action and that is with reading what the price bars tell you.

For those of you on here, who are pretending to read price action but have still got a squiggly line at the bottom of your charts, this is for YOU.

As long as you have an indicator underneath your price bars, you will NEVER, EVER learn price action. That squiggly line will still DOMINATE your sub-conscious and fool you into a false sense of security. I know, because I have done it and failed at it.

The only way you are ever going to learn to read price action is to strip everything off your charts except PRICES whether it be OHLC bars or candles.

Yes, it will be ONE HELL OF A SHOCK, but it will FORCE you into looking at the OHLC/candles more AND support and resistance. It won't come easy but if you are DETERMINED and PERSEVERE, you will get there.

If you take the easy way out, and refer it back to a squiggly line below the prices, then that is what you will end up doing for the trest of your trading career.

From now on, anyone who posts a chart with anything on it except maybe volume and wants an opinion on it, then they can go and whistle "Dixie".

Rock n Roll,
Strat

Quoting Toddfx
"The guy who put up the re-painting HMA and Semafor crap made me think. There is only ONE WAY to read price action and that is with reading what the price bars tell you."

I was the one who posted a chart with the 3 Level ZZ Semafor....
The 3 Level ZZ Semafor keeps repainting and repainting highs and throwing out it's stupid "3" until EVENTUALLY it is a swing high - It is an indicator painting past history using moving averages - see below for copy of first lines of program:

3_Level_ZZ_Semafor.mq4 |
//+------------------------------------------------------------------+
#property copyright "asystem2000"
#property link "[email protected]"

#property indicator_chart_window
#property indicator_buffers 6
#property indicator_color1 DimGray
#property indicator_color2 DimGray
#property indicator_color3 DimGray
#property indicator_color4 DimGray
#property indicator_color5 Lime
#property indicator_color6 Red



extern bool Sound.Alert = false ; // TRO
extern string Sound.File = "ahooga.wav" ; // TRO

//---- input parameters
extern double Period1=5;
extern double Period2=13;
extern double Period3=34;
extern string Dev_Step_1="1,3";
extern string Dev_Step_2="8,5";
extern string Dev_Step_3="13,8";

Yes, my method uses moving averages but NOT to tell ME when we are at a swing high - I can do that far better with the indicator I was born with - my eyes and brain.

If you ever read anything posted on this thread you would know that I acknowledged that Volume posted by the brokers is SAMPLING volume. You should have also noted that I said I use it to confirm PRICE ACTION. You should have also noted that I don't give a rat's ass what YOU think!

Next question?

Rock n Roll,
Strat

Quoting Baba G
Strat i was just gonna start throwing in charts with the M.As on and sort of say "well?" when a bit of price action showed up.In fact what do you think the best way is?This is what i know of M.A.s James 16 base and price actions at those levels.I gave up on "touch" entrys as i would have to change mi pants everytime i filled a ticket mostly on "instant exe" both my order and my bowls with it.So i gave up on that bit but i marveled when we got a bit of on trend price on a "first time back" (SEE USD/CAD DAILY ZOOM RIGHT OUT YOULL SEE) and...
I thought you already had a cherry on your cake!
I don't use moving averages for signals only price action at support and resistance. They are there to give us additional information on price.

Rock n Roll,
Strat

The first thing, after identifying a trade MUST ALWAYS BE - WHAT IS MY RISK? Remember my earlier posts about millionaire and professional traders? The ONLY thing they care about is how much they can LOSE. Amateurs and all other traders think just the opposite - how much can they make.

When professionals PLAN THE TRADE, the very first thing that goes down on their sheet of paper is HOW MUCH WILL I LOSE? Their whole plan is predicated around LOSING. If they are not comfortable with the amount they WILL LOSE, they will either reduce their positions (lower $ per pip) or NOT TAKE THE TRADE. They don't concern themselves with winning because they are successful traders, know it's all about probability, and will come out winners in the end (total number of trades).

When they are comfortable with HOW MUCH THEY WILL LOSE, they go ahead and place the trade. This IMMEDIATELY takes all decisions and emotions away from you on this trade leaving you with a STRESS FREE TRADE. You then TRADE THE PLAN by letting the market either (i) take you out (stop loss hit) or (ii) put you in profit. Once in profit, your plan should tell you when to take profits, go to break even etc. It may not have hard numbers but just something like take profit at 50 pips on the first contract, bring rest to break even at 100 pips or take profits at first S&R, second S&R etc.

If you feel the need to interfere with your Plan then you have not planned it correctly. Once in a trade with a plan - just let it go and do it's thing! If you plan it correctly, those demons, goblins, voices inside your head, man in the mirror no longer have a base on which to trick you on.

So back to this trade. If you had a sell stop in place below the 97.52 support line, say 97.42, did you measure your RISK? Where did your SL go on such a move? If you did it correctly, your SL should have gone ABOVE THE SWING HIGH at say 99.23. That is a 181 pip SL! That is HUGE!

Would you have been prepared to LOSE 181 pips? That is the FIRST question you should have asked yourself. If not, then either adjust your $/pip or do not take the trade.

Now for those who are going to tell me they dropped down to H4 to identify a smaller SL, then at that point, they were no longer trading the Daily. You cannot trade a time frame with a shorter time frame's S&R. There are 6 H4 price bars within one Daily price bar and if you set a SL from H4 then it would be hit within that Daily price bar.

If we managed our trade correctly, we should have taken profit when it hit support again at around 96.20, so we did make 132 pips. For those who do the Risk to Reward ratio, this was lousy.

Now that huge down bar was not the normal range for this pair and we should expect the elastic band theory to take place after it completed. If you are not familiar with the elstic band theory, take the elastic waist band in your under pants or knickers and pull it out as far as it will go. Then let it go! This is also true for the distance price is away from the 20 - the further it is away, the more likely the elastic will pull it back.

That being the case and since we all know what to do when price hits support, it provided another magic trade PROVIDING you knew where to put your SL. If you did know where to put your SL then you are back at the beginning of this post because it is another HUGE SL

So, since no-one came even close to this, tells me you are all acting like rank amateurs.

You will NEVER make serious money at this UNTIL you turn your logic upside down, forget about profit and CONCENTRATE on HOW MUCH YOU CAN LOSE.

I promise you with 100% certainty that if you do this, you will turn your trading career around BIG TIME!

So what are you going to do with this new found information?

Rock n Roll,
Strat
Attached Image (click to enlarge)
https://www.forexfactory.com/attachm...1&d=1365565161

Everything is not always as it seems!

With the recent posts and some of the PMs I am getting, it’s time I posted the true story of my mate, Bond.

Bond was down in Tijuana, just over the US-Mexican border from San Diego and met a girl in a bar (as is his want!). He said she was a cracker, drop dead gorgeous and gave her a 9 out of 10 and that was before he had a beer. As he usually does, he got her into his room and while he was “checking out” the real estate of his catch to line her up for the “kill”, his hand came across……………………………………………………the meat and two potatoes!

Yes, it was a guy dressed up as a girl! He couldn’t believe it as everything else checked out great! He was devastated! He had never been tricked like this before. It took him ages to get over this, well the rest of the week anyway. He has never forgotten this and it has forever changed the way he approaches women.

Instead of drowning them with charm as he used to do, the first thing he asks when he meets a woman now is “ Are you really a woman – are you 100% female?”

What has this to do with trading? Absolutely everything!

As can be seen from some of the recent posts, we are learning price action specifically hammers. Notice I did not say “learned” – we are all learning and we never stop learning.

For some people, the very fact that they have “learned” certain candles can indicate price reversals, seems to make them feel as if they have found the Holy Grail and can walk on water. (This is NOT the Holy Grail, but I do know what it is). They then look at charts and see these candles everywhere! This happens every time. Worse still, they trade on them and then when they lose on it, go around bad mouthing price action!

So, as I learned this the hard way, and Baba G too and I’m sure many others, (loss of money), let’s see if we can stop it happening again.

With regard to shooting stars at the end of an uptrend and hammers at the end of a downtrend, they will jump out at you if they are the real thing. What is happening now is that you are “searching” for them and trying to make every bar look like one.

Now that you have dipped your toes in the water, go back and re- read all about them again. It is a known and proven fact that our subconscious learns from repetition so the more times you read it, the more you will learn and understand. Pay special attention to position or location. These type of candles mean different things in different positions in a chart and sometimes mean nothing at all.

While you are doing that, think about what the market is doing when it produces a “real” hammer or shooting star. Think about what it is trying to tell you. I’m not going to tell you that yet as I want you to study and work it out for yourself.

Then, when you see what looks like a hammer or shooting star, remember Bond. Ask yourself if it meets ALL the criteria, “is it really a hammer/shooting star?”.

Before anyone posts that they took trades and were successful on what appeared to be these type of bars but were not really (look a likes), then yes, it does happen. They also fail, and fail pretty bad as well. It all comes down to your risk tolerance. I want to encourage you to only trade “classic” price reversal bars as these are the safest ones with the lowest risk.

Are they perfect? No, nothing in trading is perfect. There have been classic reversal bars which have failed also but not with the same frequency as “look a likes”. Why do they fail? There are many reasons I suppose but what I always think is that after the classic reversal bar closed and gave us our set up bar, something in the market changed between the close of our set up bar and the new bar printing making price continue with the prior trend.

There are also several ways to trade the price reversal bar but I’m only going to discuss the safest and lowest risk (for me). After you see the price reversal bar and thought of Bond, this then becomes your “set up” bar. If it really is a hammer (don’t get fooled like Bond did!), enter a buy stop order about 10 pips above the high of the hammer. The amount of pips above the high will depend not only on the pair but on the current volatility of price action. (Below the low on a shooting star). If it is not a reversal, your stop order should be far enough away so that you are not filled. However, it will not stop you getting filled if the brokers and MMs go on a Stop Run.

Another thing is not to worry or beat yourself up if you miss one. There is always another one being set up somewhere.

So, think like Bond from now on and remember that everything is not always as it seems.

Rock n Roll,
Strat