Learning From Unsuccessful Mouteki Trades - The Search for Filters...

It's still going...

It wasn't Mouteki that failed, but you, who took (if you did) a trade near very good support/resistance level. If you take every setup on any system you will get slaughtered. You need to have a bigger picture in mind before diving in….

Hmmm...with the current GBPUSD trade using Mouteki, and the most current supply line break, the horizontal line that intersects vertical and supply is at the Vegas Fib line below SMA...coincidence?


Seems smart to use Mouteki with other price action filters I think...

Any thoughts?

EggyJ

Well technically it did failed. I say you just have to know when to get out. Having the bigger picture doesn't hurt too if it helps you see that this trade is not going anywhere.

I am going to assume (yep I know) that the NFP will break one of my trend lines. so the next opening candle will initiate my trade right. But I should actually wait to see where the low is first. Also transfer to a 1 hour chart to get more detail. Is this more less right? I must then wait 40 hours (ave) to see if it hits my profit limit. Fiday is here and I recall somewhere Mouteki saying he closes out for the week end.

I like the addition of Fibo's filter to this set of filters.

1. If the candle following the breakout candle trades below/above the breakout candle, enter trade.

2. If the candle fails to trade below/above the breakout candle BUT IS ALSO REPULSED BY THE SUPPLY/DEMAND LINE, enter trade on the open of the next candle.

This slightly helps filter out volatile moves and lessen the number of your trades. Remember, each time you enter a trade, you're giving up 3-5 pips in the spread. Don't try to scalp forex, you'll lose your shirt. If you need the action, go to Vegas. The most successful traders on forex are those who swing trade and position trade.

This was the biggest obstacle I had to face cuz I'm an action man myself. But now that I'm waiting patiently, I'm seeing more success.

Nice words.

Alright gang. Here's what I've done. In an effort to see if Mouteki filtered any trades in the month of July, on the pound, according to his slideshow, I ran strategy tester, and looked for setups he had ignored, or missed, or deliberately avoided - whatever.

I came up with one trade. One trade was NOT taken. Here it is:

http://i12.photobucket.com/albums/a2...denottaken.gif

http://i12.photobucket.com/albums/a2...enottaken2.gif

http://i12.photobucket.com/albums/a2...enottaken3.gif

http://i12.photobucket.com/albums/a2...enottaken4.gif

http://i12.photobucket.com/albums/a2...enottaken5.gif

So here's the question:

Was this trade not take for any particular reason, aka filtered out, or did Mouteki leave this trade out because it was a loss? The latter seems highly unlike him, and hardly necessary since he would still have ended the month up over 850 pips. The search for a filter continues, and by the by, when I mean filter, I don't mean stochs and rsi and macds' and all that other lagging crap. I am looking for clues in PRICE to filter my trades. I will not destroy the simplicity of this system by adding anything that is BEHIND price. For me, if I can't get the message via what price is telling me, then I may as well close up shop and call it all off. Price is now, and will always be my only indicator. (This coming from someone who slept with MACD and was seeing RSI on the side). Sorry, just had to get that out there.

best to all

Nice work here Horace, and you definatelly right, if we are gona add some filters they should be based on price action. I guess we can start from what Daerus posted in his thread and see where it will lead us.

Have a nice weekend everybody

What if he just wasn't available to take that trade? I would hazard a guess that he might not even have an answer for you if you ask him.

"The search for a filter continues, and by the by, when I mean filter, I don't mean stochs and rsi and macds' and all that other lagging crap. I am looking for clues in PRICE to filter my trades. I will not destroy the simplicity of this system by adding anything that is BEHIND price. For me, if I can't get the message via what price is telling me, then I may as well close up shop and call it all off. Price is now, and will always be my only indicator. (This coming from someone who slept with MACD and was seeing RSI on the side). Sorry, just had to get that out there."

Horace Kent


Well said! I couldn't agree more and so the search moves on....
(for some reason it didn't quote in message like it was suppose to)

One thing I noticed is that on the second short not taken the breakout candle was not surpassed by the entry candle, which as you know is one of the Demark filters discussed earlier. With that said, I have seen Mouteki's trades where this is the case and he still enters.
The first one I haven't an idea.

Was there some kin d of exhaustion of the sell-off that kept him out of the first short. Something with the length of the breakout candle in relation to your potential profit. Maybe he has a risk:reward filter.

horace, one concept I have always utilized is deduction. ofcourse you have two possibilities that you can derive from mouteki.
1. he would not leave out a loosing trade just to save face to others when he wants to teach them
2. he possibly was not there to take the trade. but since he could still use xtick to calculate the possibility i find this unlikely as well.
3. he filtered it out using his method which at this time he does not want to disclose, perhaps because he want's to see who can figure it out.

so this leads us with one option. knowing he wants you to figure it out:
what does this trade present to you other than that its a loss. that all of the other trades do not.
if you find that answer i think you may have found the mouteki filter.

Good points dracozny. One thing that I plan on doing this weekend is studying the charts he has presented to us. I will be looking for constants, similarities, discrepancies, etc.. I will also compare those with some of our posted failed trades. I hope that this will shed some light on the issue. I also hope that others will do the same since we all see things differently. Like Horace stated any ideas or possibilities will only be based on price action.

QUOTE=Horace Kent]



So here's the question:



Was this trade not take for any particular reason, aka filtered out, or did Mouteki leave this trade out because it was a loss? The latter seems highly unlike him, and hardly necessary since he would still have ended the month up over 850 pips. The search for a filter continues, and by the by, when I mean filter, I don't mean stochs and rsi and macds' and all that other lagging crap. I am looking for clues in PRICE to filter my trades. I will not destroy the simplicity of this system by adding anything that is BEHIND price. For me, if I can't get the message via what price is telling me, then I may as well close up shop and call it all off. Price is now, and will always be my only indicator. (This coming from someone who slept with MACD and was seeing RSI on the side). Sorry, just had to get that out there.



best to all[/quote]



Nice finding Horace. The question can be reformulated. Until mouteki may explain, the question is: "why this setup failed" not "why mouteki did not enter on this trade". It can be thousands of personal reasons non related to candles.
Looking on Demark 4th qualifier, the open price of the candle it's not lower then the close of the previous candle. (at least on my chart)
http://picnac.com/images/2520Untitled-71.jpg

On the other hand, let's supose that I would enter that trade. But, after bar was closed i will get the 2 exit signals from Demark point of view:
One is half validated:
"If the price bar immediatly following the breakoutbar opens above the close of the breakout price bar and then closes above the breakout price level, then exit the trade".
The second is validated
"If the price bar immediately following the breakout bar fails to exceed the low of the breakout price bar downside, then exit the trade".

Please notice that from Demark point of view, the bar that gives the signal is the bar that is piercing the TL.

I think that is the same situatuation like in your first post from this thread.
http://www.forexfactory.com/forexfor...20&postcount=1

Anybody correct me if I'm wrong.

Should we be taking a step back and looking at current price action on higher time framed charts? If so one may not have taken that trade because that sell off was right through the neckline of a h & S on the daily chart, so at that point it may have been a high risk trade.
Feedback please.

http://picnac.com/images/7116gbpusd.gifHorace,


Could this not have been the first tl break instead? Even though Mouteki didn't trade it, looking at it this way, the target was hit and then the 2nd tl break would confirm and the 3rd appears to be exhaustion. However, the 1st target was only 50 some pips which hit before the 2nd tl break.

I also very much agree
now here is a thought, I remember someone posting in the original thread about seeing a 4hr breakout and then going to a 1hr with a different system for an entry.
everyone else on the thread were almost condemning him/her for that however, ONCE mouteki posted again he condoned that trading.

So is that a possible key?
to use the smaller timeframe to filter possible false breakouts

just a thought