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Money management: Capital needed per 0.07 USD per microlot 0 replies

The Volume Detective 411 replies

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(binned per thread starter’s request) MM (Money Maker) Detective

  • #3,621
  • Jun 24, 2019 7:11am Jun 24, 2019 7:11am
Quoting LongBTC
{quote} Steve, While these entries and exits look really promising I doubt they have any value when the bands are repainting?
@LongBTC -- the Exit indicator does not repaint.

Regarding the Entries -- subtle repainting may be okay. Remember -- repainting is an artifact of charting that occurs in hindsight. When you trade you only care about the current bar, and it doesn't make any difference what the useless indicator looks like to the left of the current bar. I mean, I could remove all markings to the left of the current bar and SpikeHunter would still work fine as a trading indicator. All we care about is the computation at the current bar -- everything else can be ignored.

I don't have any evidence yet because I've been busy coding and not testing, but I think there is a good chance that @Swingman's LazyTMA (or TMA centered) can still give good computation at the current bar. Furthermore, since we are looking for spikes then small repainting issues may not be important.

Another thing -- the latest version of SpikeHunter supports 8 different envelopes. Do you see how different they are? Yet they all sort of work. This means that when the goal is to detect spikes then minor variations in curvature probably can be accommodated.

I think that settling on a good Exit condition now becomes more important. Also, I'm trying to incorporate a primitive metric that can be used to compare results when testing the different types of envelopes.
  • #3,622
  • Edited 9:03am Jun 24, 2019 7:31am | Edited 9:03am
"Reversal Trading" is ok but partial

you do not have to chase the "reversal" and the spike -

the key is to follow the Price Action flow

only with 2 "observational rules" :

- enter when Center Line or Envelope outer limit is broken by Price Action

your Chart with your Envelope using your parameters shows roughly 14 SELL opportunities (in red) and 9 BUY opportunities (in yellow) - obviously it is a post mortem

It is an application of previously posted Edge-Band Trading and Mid-Band Trading

You can observe 18 Mid-Band Trading opportunities (78 %) and 5 Edge-Band Trading opportunities (22 %)

PS If I could code I would test where to position my Stop Loss 1/2, 1/3, 1/4 , 1/8 th Envelope Amplitude above or under my Entry
Attached Image (click to enlarge)
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  • #3,623
  • Jun 24, 2019 7:46am Jun 24, 2019 7:46am
Maybe better to look at higher TF's where there is less noise.

Following dots appearing wait for Candle to close below or above band (if Candle closes too far beyond band skip the trade, so a pip range would need coding into the EA)

This should help filter out poor entries, plus the SL can be X amount of pips above the dots.
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Some people say I'm lucky, but the more I practice the luckier I get
  • #3,624
  • Jun 24, 2019 7:50am Jun 24, 2019 7:50am
Quoting robots4me
{quote} @parisboy -- Okay -- this is all good. And I'm a coder who relies on algebraic formulas. In order for me to truly make use of what you describe then it would need to be written more like a recipe. On the other hand, if this is a description for a discretionary trader then no need for a recipe. {quote} What is "normally forecasted"? How does one determine "normally forecasted"? I'm not clear whether your intent is to just write about envelopes in general or to provide some insight that I could actually use in my lazy, useless indicators....
Normally forecasted is unclear I agree on that . Most examples you will find on the net show Price Action with a flat, neutral Underlying trend where Price Action goes Sideways.

But what if the Underlying Trend goes Up (or Down)

Here you see Tops 1,2,3,4 if the Underlying would have been Flat. Price Action Cycles would have repeated theirselves

But the Underlying Trend is UP then Tops are Higher (A)r and Higher (B)

the difference between 1,2,3,4 and A and 1,2,3,4 and B is the addition of the Underlying Trend to Price Action
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  • #3,625
  • Jun 24, 2019 7:54am Jun 24, 2019 7:54am
A Nigerian Humorist
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  • #3,626
  • Jun 24, 2019 10:44am Jun 24, 2019 10:44am
Quoting skyway
This is how I look at price structure for AJ today. If the trader lives in Australia he will start the day at the bottom of the retracement of Fridays quick push north. The market went straight into a strong bull phase from day low of 74.343 to day high of 74.787 a 44pips run. Then there's a pullback to a low marked by the quick spike of 74.525. This followed by another push up into NY session towards the day high. Parisboy posts explain the rest. The pics attached shows clearly the buy, sell then buy phases. https://www.forexfactory.com/showthread.php?p=12346876#post12346876...
Skyway forecast / target could give this pattern : the Mid Channel Pause
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  • #3,627
  • Jun 24, 2019 11:11am Jun 24, 2019 11:11am
Quoting robots4me
{quote} @giselle1723 -- thanks. And what do you consider a signal, i.e. Entry?
Sorry for late response.
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  • #3,628
  • Jun 24, 2019 12:12pm Jun 24, 2019 12:12pm
Quoting parisboy
"Reversal Trading" is ok but partial you do not have to chase the "reversal" and the spike - the key is to follow the Price Action flow only with 2 "observational rules" : - enter when Center Line or Envelope outer limit is broken by Price Action your Chart with your Envelope using your parameters shows roughly 14 SELL opportunities (in red) and 9 BUY opportunities (in yellow) - obviously it is a post mortem It is an application of previously posted Edge-Band Trading and Mid-Band Trading You can observe 18 Mid-Band Trading opportunities (78 %) and...
@parisboy -- excellent!! This is exactly the type of help I've been hoping for.
  • #3,629
  • Jun 24, 2019 12:24pm Jun 24, 2019 12:24pm
Quoting robots4me
{quote} @parisboy -- excellent!! This is exactly the type of help I've been hoping for.
I am the Master of Envelopes Trading !

As a Trader you just master 2 things

When and where you Enter

Where you position your Stop Loss

Target and Exit are secondary because if you not enter , you do not need to know

- where you position your Stop Loss
- when and where you exit
- to fantasy about a target

your first Target is to reach Break Even ( cost included ) to protect your capital

After that you trade into the Promise Land , every pip is a bonus !
  • #3,630
  • Jun 24, 2019 12:40pm Jun 24, 2019 12:40pm
Quoting parisboy
{quote} I am the Master of Envelopes Trading ! As a Trader you just master 2 things When and where you Enter Where you position your Stop Loss Target and Exit are secondary because if you not enter , you do not need to know - where you position your Stop Loss - when and where you exit - to fantasy about a target your first Target is to reach Break Even ( cost included ) to protect your capital After that you trade into the Promise Land , every pip is a bonus !
master parisboy, you are truly a gem in this sick world. A god sent to the masses. I truly appreciate all the work you have put into this and it has helped me tremendously. I wish that one day i can be just a 1/10th of what you are, beautiful example of humanity and a master trader unlike any other. Thank you master parisboy, I hope to meet you one day and kiss your ass and feet; though i feel i'm not worthy..
  • #3,631
  • Jun 24, 2019 12:59pm Jun 24, 2019 12:59pm
Quoting hilmy83
{quote} master parisboy, you are truly a gem in this sick world. A god sent to the masses. I truly appreciate all the work you have put into this and it has helped me tremendously. I wish that one day i can be just a 1/10th of what you are, beautiful example of humanity and a master trader unlike any other. Thank you master parisboy, I hope to meet you one day and kiss your ass and feet; though i feel i'm not worthy..
@hilmy83 -- @parisboy has a great sense of humor -- and he was partly being sarcastic. He does have this obsession for Envelopes that goes way over my head. But his posts are often a welcomed relief from what @George et al were saying about me and others posting on this thread -- and he's been very supportive. From time-to-time I'll ask @parisboy to tone down the theoretical mumbo jumbo -- and he takes that in stride. And reading between the lines from some of his "over-my-head" posts there is often good info to be had.

Early on I think I blocked @parisboy a couple of times -- but now I get it and he's forgiven me. He's old and French and has a self-deprecating sense of humor that is fun to provoke. I too hope to one day meet him -- I'll go as far as kissing his feet, but I'm not so comfortable with other parts of his anatomy.
  • #3,632
  • Jun 24, 2019 1:08pm Jun 24, 2019 1:08pm
Quoting hilmy83
{quote} master parisboy, you are truly a gem in this sick world. A god sent to the masses. I truly appreciate all the work you have put into this and it has helped me tremendously. I wish that one day i can be just a 1/10th of what you are, beautiful example of humanity and a master trader unlike any other. Thank you master parisboy, I hope to meet you one day and kiss your ass and feet; though i feel i'm not worthy..
@hilmy 83 thank you for your kind words..

you are on the right path towards Envelopes holy grail.

It seems you had good examples in your youth and that you recently read the right thread(s)

You are a true example for readers and posters of this thread !

Let's the Envelopes be with you and favorize your trading

  • #3,633
  • Jun 24, 2019 6:25pm Jun 24, 2019 6:25pm
Quoting Robot Trader
{quote} Is this what you are looking for? {image}
M15 look back 72 candle Fib,
interesting
  • #3,634
  • Jun 24, 2019 6:30pm Jun 24, 2019 6:30pm
Quoting mixedbags
{quote} M15 look back 72 candle Fib, interesting
@mixedbags -- screen shot, please...
  • #3,635
  • Jun 24, 2019 6:34pm Jun 24, 2019 6:34pm
Quoting mixedbags
{quote} M15 look back 72 candle Fib, interesting
Not sure about the reference to 72 candles, but I looked to place the Fib from the start of the Day, which is what I thought Skyway was asking for
Some people say I'm lucky, but the more I practice the luckier I get
  • #3,636
  • Jun 24, 2019 7:18pm Jun 24, 2019 7:18pm
Quoting skyway
{quote} Another gem from parisboy. Keep this post for reference. This topic is the most important in trading. Yet very little is written on it. {quote} 4 things about "reversal trading". 1. Master trend trading first, then 2. Trade "reversal trading" ONLY when the chart screams at you, 3. Trading "reversal trading" on a spike is akin to catching the falling knife, the stddev is theoretically unlimited making the risk exposure the greatest in the order of black swan, 4. As a fundamentals trader, trade "contrarian reversal trading" based on your own...
@skyway -- regarding @parisboy's post -- yes...

Regarding the other things you state -- yes and no, it all depends.

Trend following is fine. It also lends itself to manual trading because it is not crucial when you Enter or Exit. There are zillions of trend following algorithms and they all Enter / Exit at slightly different points along the price chart. A major drawback to trend following is that spikes will always bite you. Since trend following does not "wait for show hand" then you are guaranteed to have a certain percentage of losers. And for the sake of argument let me estimate that around 20% of your trades will be losers -- not because of a bad entry, but because of the unexpected spike.

Reversal trading is NOT like catching a falling knife. The knife has already fallen. Reversal trading is akin to picking the knife off the floor (or ceiling) -- with the caveat that you don't have all day to do it. @moodybot likes to use the expression "at your convenience". With reversal trading nothing is at your convenience. You must act quickly -- both Entering and Exiting. Hence, reversal trading screams out for an automated solution. I would never manually trade reversals -- I just don't want to stare at the screen for hours while waiting for setups and baby-sitting trades.

You more experienced traders talk about market structure and fundamentals -- when I read someone going down that path my eyes begin to roll back in my head. To me it's no different than @George's mumbo jumbo. I would never claim that it doesn't have value -- just that it doesn't have value for me. By nature I'm very empirical -- I solve things by observing, experimenting, trial and error. Other people solve problems by applying theories. They both have their place -- but I think empirical works better for trading.

A short example. Do you guys know what baseball is? It's a popular sport in the US. A pitcher throws a ball and a batter is supposed to hit it. If a batter can hit the ball 25% of the time he earns a few million dollars a year. One of my favorite players was Manny Ramirez. Year after year he averaged 33% -- which is amazing. I remember watching an interview where a journalist asked Manny to break-down and describe the mechanics of his hitting -- i.e. what he looks for in the pitcher's delivery, how the pitched ball rotates, how he positions himself at the plate, and so on and so forth. These days its all highly technical and sophisticated analytics and computer simulations and modeling are applied because so much is at stake. And Manny looked at the journalist, smiled and said "I see the ball, I hit the ball". And that's the perfect answer. I see the spike, I hit the spike. It doesn't have to be more complicated than that -- unless you want to make it more complicated.

I'll bet one Euro that if @parisboy were to overlay SpikeHunter on one of his sophisticated, hand-drawn charts with harmonics, sine waves, envelopes, that are verified using quantum mechanics and particle theory, that SpikeHunter's Entries would match well.

We are simply looking for an extreme price, with the assumption it will return to a fair value. As Manny says -- "See the spike, hit the spike"...
  • #3,637
  • Jun 24, 2019 7:30pm Jun 24, 2019 7:30pm
Quoting skyway
Same with AJ reversal trade yesterday for 74.125 target shows zero profit after 24hrs. {image}
@skyway -- dude, on this chart you missed your Exit. What were you waiting for?

The next version of SpikeHunter includes an algorithm that includes Exit markers based on a Stochastic + Relative Vigor Index algorithm. The details of the algebra are not important. Once you see a picture of where the Exit algorithm places markers then you'll understand.

Also, I'm adding a metric that I hope will make it easier to compare charts and the underlying indicators.

I think what I'm about to say is obvious, but sometimes I get the feeling people think that indicators do something magical. Indicators do not alter the price chart -- the price is the price. Indicators are algebraic formulas that highlight certain features of the data. That is, they relieve your brain from having to search for certain patterns. Experienced traders can get by with fewer indicators because their brain has become accustomed to look for certain patterns. There is also the trade-off -- the human brain is better at picking-out patterns than an indicator, but an indicator has the advantage in that it can be automated. It is up to the individual trader which they value more -- accuracy or automation.
  • #3,638
  • Jun 24, 2019 7:35pm Jun 24, 2019 7:35pm
Quoting skyway
Lets watch spikehunter perform the task on NZDUSD Note - the 0.66040-0.65980 level {image} {image}
@skyway -- looks like you are using the M1 TMA envelope. I think we've already established that is not the best one to use. I'm glad you are using the indicator -- just, perhaps, don't take each trade so seriously. I mean, the result of one trade does not make or break an algorithm. Collectively one needs to make hundreds of simulated (or demo) trades to draw a conclusion. To draw a statistically meaningful conclusion, one needs a minimum sample size. I think @parisboy would back me up on that.

@skyway -- if you think the indicator does not correctly identify spikes then we can shelve the whole thing and return to target levels, liquidity gaps, Entries and Exits at one's convenience.

And in case there is any doubt -- I have zero interest in trend following. For me it's reversals or bust.

EDIT: At this point I am not interested in following open trades -- the charts waste page space. However, I am interested in post-mortem charts where a trade failed. That is most valuable because then we can figure out what went wrong and consider a remedy.
  • #3,639
  • Edited 8:02pm Jun 24, 2019 7:39pm | Edited 8:02pm
Quoting robots4me
{quote} @skyway -- looks like you are using the M1 TMA envelope. I think we've already established that is not the best one to use. I'm glad you are using the indicator -- just, perhaps, don't take each trade so seriously. I mean, the result of one trade does not make or break an algorithm. Collectively one needs to make hundreds of simulated (or demo) trades to draw a conclusion. To draw a statistically meaningful conclusion, one needs a minimum sample size. I think @parisboy would back me up on that.
"And in case there is any doubt -- I have zero interest in trend following. For me it's reversals or bust."
Ok, understood.


EDIT: At this point I am not interested in following open trades -- the charts waste page space. However, I am interested in post-mortem charts where a trade failed. That is most valuable because then we can figure out what went wrong and consider a remedy.

Ok, understood.

Robot Traders method is good for automated reversal trading. You might want to consider his idea into your spikehunter.
https://www.forexfactory.com/showthread.php?p=12346788#post12346788
  • #3,640
  • Jun 24, 2019 8:02pm Jun 24, 2019 8:02pm
Quoting robots4me
{quote} @skyway -- dude, on this chart you missed your Exit. What were you waiting for? The next version of SpikeHunter includes an algorithm that includes Exit markers based on a Stochastic + Relative Vigor Index algorithm. The details of the algebra are not important. Once you see a picture of where the Exit algorithm places markers then you'll understand. Also, I'm adding a metric that I hope will make it easier to compare charts and the underlying indicators. I think what I'm about to say is obvious, but sometimes I get the feeling people think...
Hi Bro/All, if you want to create specialized tool in this 'spike' reversal setup trading, then maybe better if you start to create tool to recognize 'spike patterns' and results first. Apply Kohonen Neural Network in your indicator code to 'search' and mapping 'spike patterns' and also the 'results'. So, when the indicator 'find' one specific 'spike pattern' then 'she' could suggest the highest potential 'result' for that 'spike pattern' base on her recorded NN learning loop. NN and Sub-Sequence Theorem combination could pin pointing better 'what next' after spike happened.. just IMHO

Maintain your sanity, avoid capitalization...
Happy Trading and keep smiling
NIH
Dog + Smile = Beautiful Day
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