LFX Trading Proverbs

I have used the semaphores as historical analysis and played around with settings. I am torn between using the WPR and CCI as my base indicator. ALso I am playing around with my MA (21), as well as 42, 84, 10 ad 5. To see which combos work best together. I don't feel I need the MACD to get my entry as I use Polynomial regression curves and previous S/R levels to time my entry after a reversal has taken place (A 3 on semaphore). Then I I'm directionally biased. I tend to go with trend as it's safer.

Sinc all oscillators essentailly measure price movement the same way, can you give me one or 2 additional ways in which you confirm your entries or signals ? and if you can't (lol) then can you give me an idea of where I should look or how I should think in terms of looking for supporting indicators.

Thanks again, your insight has been invaluable.

We are not trading the same, so I am not sure how to answer you. Much of what you wrote is contrary to everything I wrote on this thread.

1. The high/low of a previous trade (s/r levels) is a ridiculous strategy to me. If previous trades had any effect on future trades the market would move like a sine wave. If your broker shows you sine waves, then congratulations. It is not so easy with my broker, lol. Proverb #11.

2. I don't just make up moving average values. I create a zone that divides buying from selling and duplicate it on multiple time frames. The values would be different based on what time frames I am analyzing. If I do not have congruent signals, then it would be difficult to find the sweet spots. Proverb #5.

3. I don't have any coding for creating polynomial regression curves in meta trader, but hopefully you do and it works for you. Having not seen any coding, I would guess that it might be more accurate in determining the division between buyers and sellers. I suppose I have created a pseudo polynomial regression curve using an alternative calculation method.

4. Going with the trend is not what I do. I trade ranges. A trend is just a long range for me. I convert higher time frame ranges into lower time frame trends, then maneuver in and out with market activity. Proverb #8.

For now, we seem to have different strategies, but maybe you have found some ideas from my technique that will help your design. Good Luck.

My take.

The mega black swan panic?
Wonder if this could apply to forex too (my take is it will).
Once I start making some decent $, after so much effort,and years of study, wonder if one day, just that one trade, with "some leverage", and no broker ready to honour my stop...cause the market is flying 2000 pips in seconds...and there´s nobody on the other side....to take my stop order.....

Check this:

https://www.zerohedge.com/news/2018-...use-next-crash

Sorry for changing the subject!
There´s a thread about this somewhere, most important is a broker that won´t claim negative balance, then maybe take out money regularly, so worst case scenario, you still have the other half of your capital left to keepon going.
Wonder what u guys think about all this.

DKROCK,

We do trade differently, what I liked about your posts was the fact that a trend is in essence a very long (large) range. Also using the semaphore to line up swing highs and lows and adjusting the indicators to match them. Also the addition of the Bollingers and trendline to the indicators has really been something I never even considered.

Iknow I have asked this before ad please jusy let me know if you're unwilling to answer, but I would be very grateful if you could let me know what other (If any) indicators you use, besides the ones you create yourself from oscillator templates, to confirm entry and or exhaustion. I have used TD sequential with limited success and pivot points but can't seem to nail one down that is more consistent.

Would love to hear your thoughts.

Too vague for me, lol. Is it working? Screenshot looks like it is minimized too because of the chop on the first indicator. Circles look interesting as they look profitable. Are you monitoring 3 time frames?

If you want to make money from trading, you have to trade money.

I use FF news, spread, candle time, currency meter, moving average ribbon, Bollinger band, custom candle colors, semafors, and custom mtf coded initials. Sometimes I use trend lines with breakout projections if the market is moving flat. Sometimes I also attach a rotating photo viewer to the template if I plan to stare at charts.

Hi dkrock, would you mind explaining this plz. thanks,

dkrock,

for your proverb#5, may I have any article, link, book or litrauture so I could learn.

If you worry about black swans, that seem to happen every 3-4 years, and may or may not even happen to you, then you will miss all the profit between them.

I think it was Trigonometry class and line equations when I was first taught about bell curves, but any Statistics class should cover regression analysis. You can read the link below to have a general understanding.

https://en.wikipedia.org/wiki/Regression_analysis

Thank you for the info. I was reading some of your replies in other posts and I noticed you mentioned regression and not predicting price. I use regression channels and semafor and wait for price to go outside the 1st std dev and wait for a reversal. thius is confirmed by the semafor then take a with trend trade based on indicator confluence. This way you're trading after a change in direction, not trying to predict it.

I also read what you wrote about s/r lines. Your arguments are sound and I really liked the video on stop hunting. I have to admit I am still using s/r lines (4 hr chart) but only major ones. Am I correct in interpreting that you trade with the trend, based on waves that take price to a st5atistically higher area of probability of a reversal (based on regression channels) then wait for a refvesal (confirmed by semafor and other indicators) then go with the trend ? How do you determihne your exits ?

Thanks again for your insighful info (and ignore the haters lol).

I didn't know this term when I created this thread, but I think what I have done is designed a pseudo regression curve. Unlike a regression channel, which I assume is a straight line, my analysis bends with the market.

I think your idea can work, but be sure to apply stops because semafors are not reliable. As well, candle head fakes are common, so if your analysis does not include a higher time frame view, you might get some whipsaw signals.

If you want to use s/r lines, that is up to you. They might work for you. There was a point, I think 2011, where I looked at using s/r, mainly pivots, at apexes to determine valid exits. I don't remember exactly, but I think most of the time it just identified a consolidation area, not a trading signal. Multiple head fakes are another proverb NO-NO for me. If it don't work, I don't use it. So, I stopped using them. For me, now, it feels more like trying to predict, rather than trying to follow. If I have an exit in my mind, then it is based on a feeling, not math. Trading on feelings is not very profitable for me. Been there, done that.

I am at home on the range, per one of my earlier proverbs. I trade multiple time frames overlaid on top of each other. If I can create a trend based on a higher time frame range, then I will because they are easier to profit on. If my higher time frame trends, then I just trade the higher time frame. This means a reversal is going to depend on the higher time frame, whether it is a range, or a trend. Of course, those are my swing trade rules. If I am in the mood to trade sweet spots, it doesn't matter if there is a trend or not. I am trading any significant reverse, or exiting and waiting for the continuation trade. I don't trade like that often. It depends on the whipsaw. Lately, trades are moving up and down, not sideways, so I have no reason to exit. Sweet spots trading is good for consolidation and stair steps, but I prefer to trade swings on better patterns.

So my exits on weak reversals are determined by my lower time frame and on strong reversals by my higher time frame. I noticed that often people who use MTF analysis, me included in the early days, where actually trading the higher time frame because they were waiting for its signal to make a decision. I flipped that on its head. In essence, there are two different levels of probability risk, based on two different signals that help determine weak vs strong signals. If my weak signal does not convert to a strong one, it means to exit. If the strong one shows a weak reverse, or head fake, I can either exit until the manipulation ends, or ride it out.

Rather than using regression channels, I have created an equilibrium field. If price is outside the field, it is smooth sailing. When it begins to enter the field, I have to determine if it means anything or not. If it is stuck in the field, I have to determine if the range is enough to cover the spread or if I should wait for it to break out of the field, or if it is the end-of-day, it is my signal to exit and quit trading.

There is a lot of thought in my design, lol. It comes from over 40,000 hours of trading Forex, as well as my time from the stock market. I keep forgetting to say, but I think it was mostly the stock market that turned me against fundamentals. Every little piece of news caused knee-jerk reactions that were nearly impossible to keep up with. Forex is better in that most fundamentals are scheduled, but the stop hunting is too dangerous to me.

This is the video I referenced. It is a graphical representation of something I said in an earlier post.

On the previous video, you get to see a line trader explaining to line traders why they might lose a trade.

This next video shows you how 90% of the market is traded. I do not see any lines. Do you?

If we merge these two videos together, then how did that pattern occur? It happened because according to this video, there was a clustering of "sell to close" and "sell to open" trades in near proximity to each other. The bank wanted to buy, so they acquired those pending sell orders. The result created the chaos on the first video. This is why line trading is pushed so hard to novices. They make it look like trading and convince you it is the proper way to do it, then get you to risk money, as groups, so they can create the clusters and move their money off the back of your money. That is why the 95% of people trading lines are considered to be the 95% of losing traders. They are bait.

I am a bit confused about this scenario though, because aren't brokers the counter-party to your trade, not the bank? So, it leads to a little insight of that whole process. Apparently the counter-party trades are left on the other side of the column until all the buying is finished. Then those counter-party buys are activated, which causes price to move out of the consolidation zone and into the buy zone and create profit for the bank's orders. It is confusing, but if that is even close to reality, then it is the counter-party trades that are actually making the market move, because the banks intercepted them and did not activate the broker buy orders until all the bank sell orders were finished. Then they used the broker buy orders to put the bank into profit. So, basically, a delay in the brokers' transactions. The line traders and the brokers were all used to profit the bank, one by liquidity, and the other by momentum caused by sudden one-sided buy volume, simply by managing the activation of the pending orders through their market maker. Just a theory of how it works, since I have no idea, but seems probable. Is it still your plan to defeat this activity by trading lines connected to previous battle zones?

How does making a square, rectangular, or triangular picture frame around candles prepare you for trading? What other statistics in every day life, things that move and are not stationary, do you measure by drawing boundaries lines around it? I cannot think of anything. Normally things that change often are averaged. You can determine peaks, but for consistency in discussing projections, the whole world uses averages. But in trading, where your most tangible possession is used, money, you forget all about that and draw art projects around previous trades to make decisions about current trades. Brainwashed. The only way I have found to make money is to trade live. I have not yet figured out how to go back in time and place historical orders. They are done. Finished.

As an equilibrium trader, I am tracking the difference between the buyers and sellers. The drawing of the first video would most like occur as consolidation to me. I would have sold into it, waited for it to end, then bought on the way out. I would have measured when either buying or selling was more popular and just followed it, rather than watching some imaginary line pretend to mean anything. Each turn of the market, according to this video, occurs after filling a cluster order and then momentum drives it away, one direction or the other. In my mind then, if you are not measuring the tug-of-war, then what are you measuring? Nothing. Lines draw boundaries and measure nothing. That is the difference between what I do and what the other 95% of traders do.

This style of trading is how businesses track their expenses against their profits. Consider expenses as sellers and profits as buyers. In business, you attempt to be on the positive side of the mean. In Forex, since both sides represent a currency, there is no positive side. It is positive for whichever currency is on the the side of the mean that price is moving away from. Hope that explains it. Good Luck.

After a lot of thought (and reading and backtesting) I have decided to completely eliminate lines. You are an equilibrium trader (Buyers versus sellers) I am more of a probbability trader (Regression channel, lower and higher TF on 1 Chart) When they line up (Did I just use the word "line" lol ?) or more precisely, when their respective more extreme deviations converge and create an area where both lower and higher TF areas of probability of the trade going my way, coupled with my entry signals based on my indicators it tends to work fairly well. I have decided to delete all s/r indicators because I have ( in the past) hesitated in taking a trade because there was an s/r level close to where my entire system signaled me to take a trade.

I believe it will work out in my favor as these s/r lines are just minor (for the most part) areas of congestion where bulls and bears fight it out, but ultimately because I took the trade with trend on both TF's in an area where, statistically speaking I have a much higher probability of the trade (and trend) to continue (pullbacks into higher prob zones).

That's really it in a nutshell.

I would be interested in hearing about your equilibrium field. I know you won't give away the "secret sauce" but if you could explain how you put it together. Thought process, analysis, implementation, etc) I would be very interested.

Thanks again.

I do not know your specifics, but I like your concept. I think you are seeing some value in my suggestions, after making them your own. Your system must be you, not me, and you must be your system. I used the trading weeks to validate and look for improvements. I used the weekends to make changes and rewrite indicator code to match my specifications. If you need to use lines while you are progressing, don't let me pressure you to stop. I still use those zigzag dots, lol, even though they are useless in live training, lol. Just habit. Just remember the point I made early in the thread that if you have something that is contrary to the rest of your signals, it is very likely your attention will be focused on it and it will hurt you. Anything that does not contribute to your vision should be removed for your own safety.

Let me know how it works out. As for the field, it is just a moving average field of the equilibrium of two time frames encompassed by a third time frame. It lets me see market activity without changing screens and allows me to see overlapping signals and their congruency on the same graph. When price is outside it, I know to leave the trade alone. When price starts to enter it, I have to become more alert. When price is inside it, I have to monitor closely until it breaks outside the field. I do not know how your channels work, if they create a boundary around price, or if price is allowed to break outside of them. If price can break outside, then it is similar to my design. Hopefully, you will start seeing head fakes and consolidation too, as you become more familiar with how your design draws different patterns. Also be aware of your natural tendency to want to improve your precision. Keep reminding yourself that by compounding the easy pips you can actually make more money because you will likely lose less trades. Consistency is more profitable than precision. Making 30 points a game scores more points than making one full court shot, lol. Good Luck.

Hi drock
You can share which average movings you use.
Thank you
July Bento

It will depend on your time frame and how much precision you want on changes in direction. It has to match your trading goals.