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

The Volume Detective 411 replies

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

Quoting LongBTC
{quote} I wouldn't. I like to apply filters for getting into a trade. I want to know the reasoning why price has moved to that exact point, I'm very fascinated about this behaviour. The filters I like to apply are targets, LG's or stoplosszones.
@LongBTC -- okay, that helps me to better understand where you are coming from.

I don't claim to be right and I don't have evidence -- but I've been assuming a spike breaking through a band is primary, and the explanations secondary. And that's because I can easily see many juicy spikes with no target level or LG nearby.

Another thing I've mentioned before about target levels and LGs -- it depends who and how they are drawn. If we gave 10 people the same price chart would they draw the same target levels? What if you mistakenly missed drawing a target level that would have been taken-out by a big, juicy spike? You would have passed on a great trade.

I would consider target levels and LGs more useful as a filter or confirmation -- but they are subjective (when drawn by hand) and are no more reliable at picking out reversals than a spike poking through a band.

I think the momentum filter that gets applied to candidate signals is really, really important.

Now -- your idea of a second type of signal generator that is based on target levels and LGs that uses a very tight SL as a filter, that to me makes more sense. And, with your help, I will implement that.


EDIT: Another thing about target levels I forgot to mention -- MM Detective only draws target levels for the current TF. @George was quite adamant that higher time frames were as important if not more important. Calculating MTF target levels is too CPU intensive -- and paralyzes MT4 when run from an EA. And if you were interested in trading more than one pair on different charts -- no way.
Quoting LongBTC
{quote} When I mentioned crazy mathematics I was actually referring to the numerous documents you posted and the parameters behind all the bands. While I absolutely understand that there is no doubt that you will find value in these indicators I think that we can keep things much simpler and that trading from (almost) naked price action can be profitable too.
Crazy mathematics

Crazy Typo : Gann Octave = 0.0065
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Quoting robots4me
{quote} @LongBTC -- you're preaching to the choir. I was definitely into Liquidity Gaps -- I even developed an indicator to detect them. And, yes, filling a liquidity gap often is followed by a reversal -- except in the cases when its not. That's why I like spikes. When I see a spike then I figure there must have been a target level taken out or a liquidity gap partially filled. The spike provides the timing you need to trade. Target levels and liquidity gaps are the explanation behind why a spike stretched to meet a particular price. @LongBTC --...

I think that is the root of the problem R4M - the TF your looking at may not have enough data to show you the past occurrence(s) priced reached that level.

That and the few instances where price may reach an all time high/low so there is nothing to compare against.
Quoting LongBTC
{quote} I wouldn't. I like to apply filters for getting into a trade. I want to know the reasoning why price has moved to that exact point, I'm very fascinated about this behaviour. The filters I like to apply are targets, LG's or stoplosszones.
@LongBTC -- sorry, I have to revisit your answer.

If you see a spike poking through a band without a nearby target level or LG -- couldn't that be because whoever or whatever was responsible for drawing target levels and LGs made a mistake and misses some of them? I mean, the whole basis of @George's methodology is the MM's need to revisit certain prices. And that implies every spike must have a target level or LG nearby, right?
Quoting robots4me
{quote} @LongBTC -- okay, that helps me to better understand where you are coming from. I don't claim to be right and I don't have evidence -- but I've been assuming a spike breaking through a band is primary, and the explanations secondary. And that's because I can easily see many juicy spikes with no target level or LG nearby. Another thing I've mentioned before about target levels and LGs -- it depends who and how they are drawn. If we gave 10 people the same price chart would they draw the same target levels? What if you mistakenly missed drawing...
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but I've been assuming a spike breaking through a band is primary, and the explanations secondary

I partially agree on this, for me a price breaking a TMA band is simply a visualization of the price deviating from a standard. I would like to know the purpose of this spike occurring and the reasoning behind it. I believe that if you find the reasoning behind it that it is also easier to set up a reversal trading plan.

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And that's because I can easily see many juicy spikes with no target level or LG nearby

I also noticed this, if we believe that an algo is at work then this could be the algo setting up future stop loss zones to be taken out at a later time, just an idea that I'm thinking of. I haven't done many studies on this but busy with it.

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I think the momentum filter that gets applied to candidate signals is really, really important

Which momentum indi are you referring to again?

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your idea of a second type of signal generator that is based on target levels and LGs that uses a very tight SL as a filter, that to me makes more sense. And, with your help, I will implement that.

Awesome, can't wait!

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MM Detective only draws target levels for the current TF. @George was quite adamant that higher time frames were as important if not more important

I almost exclusively do testing on the 1H charts, lower timeframes is to much noise for me personally and I would like to evolve as a trader before jumping into the lowest timeframes.
Quoting robots4me
{quote} @LongBTC -- sorry, I have to revisit your answer. If you see a spike poking through a band without a nearby target level or LG -- couldn't that be because whoever or whatever was responsible for drawing target levels and LGs made a mistake and misses some of them? I mean, the whole basis of @George's methodology is the MM's need to revisit certain prices. And that implies every spike must have a target level or LG nearby, right?
From what I understood from his thread is that the market is moving in a way to psychologically mislead the masses. I've been trying to filter those herd zones with the MMdetective without much success so far but still addressing that issue a lot.
When you talk about price revisiting certain points, look at the following chart, price revisiting this area multiple times, to the exact pip, for price to reverse more than 100 pips. This is not by accident, there is clearly some psychology going on here. But why? Are there a lot of stops located at this zone?
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Quoting LongBTC
{quote} I wouldn't. I like to apply filters for getting into a trade. I want to know the reasoning why price has moved to that exact point, I'm very fascinated about this behaviour. The filters I like to apply are targets, LG's or stoplosszones.
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I want to know the reasoning why price has moved to that exact point
@LongBTC -- Why? Other than curiosity.

I mean, do we have to know why before pressing BUY / SELL. We all have opened trades based on signals and not knowing why -- why is "why" so important now?

Unless you can describe a rule that explicitly says "do this when that happens", then you start sounding like @parisboy to me. It's not good enough to simply be fascinated -- I am as well -- but if I don't place a stake in the sand then you see all we do is go 'round and 'round because there will never be a consensus. You have to have evidence that a rule works before it can be coded.

I've been collecting all this feedback -- some more useful than others -- choosing what looks both reasonable and is feasible to code, making some compromises here and there, and then moving forward. There is enough information now to create an EA.
Quoting LongBTC
When you talk about price revisiting certain points, look at the following chart, price revisiting this area multiple times, to the exact pip, for price to reverse more than 100 pips. This is not by accident, there is clearly some psychology going on here. But why? Are there a lot of stops located at this zone? {image}
@LongBTC -- The time axis was cut off and, so, I couldn't reproduce your chart.

However, below is a recent one I just took for GBPUSD/H1. In this chart, many of the spikes that poke out from the bands are NOT taken out by a target level -- I placed red rectangles around them. These would all have made very fine signals. This is why I prefer to rely on the actual spike than the "explanation" of a spike.

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EDIT: You can see other spikes that lie within the bands that I've ignored. Some are clearly spikes, yet do not take-out a target level. Also, it is not sufficient to just be "close" to a target level -- it needs to be taken out (i.e. intersect). I can't code "close". I mean, we could say within 2%. But then @Robot Trader would say what about 4%, and then @skyway would say he thinks 7.5% looks good. Then you are back to fuzzy logic. This is algebra. The rules have to be exact and threshold values honored exactly.
Quoting robots4me
{quote} {quote} @LongBTC -- Why? Other than curiosity. I mean, do we have to know why before pressing BUY / SELL. We all have opened trades based on signals and not knowing why -- why is "why" so important now? Unless you can describe a rule that explicitly says "do this when that happens", then you start sounding like @parisboy to me. It's not good enough to simply be fascinated -- I am as well -- but if I don't place a stake in the sand then you see all we do is go 'round and 'round because there will never be a consensus. You have to...
Once the EA is coded, I am sure there are a lot of Traders that can test it and give feedback, the EA will take guess work out of the repainting and whether trading every spike that passes the filter test is worthwhile, it will also show what happened to the spikes that didn't pass the filter test.

If spikes that were filtered out turn out to be more profitable then we can look at why, maybe they occurred at known S&R levels and the filtering doesn't take this fully into account.
Some people say I'm lucky, but the more I practice the luckier I get
Quoting robots4me
{quote} {quote} @LongBTC -- Why? Other than curiosity. I mean, do we have to know why before pressing BUY / SELL. We all have opened trades based on signals and not knowing why -- why is "why" so important now? Unless you can describe a rule that explicitly says "do this when that happens", then you start sounding like @parisboy to me. It's not good enough to simply be fascinated -- I am as well -- but if I don't place a stake in the sand then you see all we do is go 'round and 'round because there will never be a consensus. You have to...

Why is important for me because I'm trying to predict their next move, which I assume is also important for you to starting coding rules around this. I want to understand why they take out this target and not the next one, it's another filtering mechanism inside my brain.

I would suggest we start very basic, something along the lines of:

If price breaches a MMdetective target on the H1 after price moved x amount of ADR for the day then open a reversal trade. SL 5 pips, TP 20% of ADR or something, just throwing ideas arround here. Later on we can apply more and more filters like only open trades during London session times, TP when LG is x bars away etc etc.
Quoting robots4me
{quote} @LongBTC -- The time axis was cut off and, so, I couldn't reproduce your chart. However, below is a recent one I just took for GBPUSD/H1. In this chart, many of the spikes that poke out from the bands are NOT taken out by a target level -- I placed red rectangles around them. These would all have made very fine signals. This is why I prefer to rely on the actual spike than the "explanation" of a spike. {image} EDIT: You can see other spikes that lie within the bands that I've ignored. Some are clearly spikes, yet do not take-out a target...
Yes sorry, this chart was from the 11th of March.

Yes, those entries do look very clean, but did these spikes occur at the time? These are the repainting bands, right? What about setting a rule for, if spike takes out H1 MMdetective target and is outside the band then open a reversal trade?
Quoting LongBTC
{quote} Why is important for me because I'm trying to predict their next move, which I assume is also important for you to starting coding rules around this. I want to understand why they take out this target and not the next one, it's another filtering mechanism inside my brain. I would suggest we start very basic, something along the lines of: If price breaches a MMdetective target on the H1 after price moved x amount of ADR for the day then open a reversal trade. SL 5 pips, TP 20% of ADR or something, just throwing ideas arround here. Later on...
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I'm trying to predict their next move
@LongBTC -- I'm not to much into predicting. I prefer to take what is given.

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I would suggest we start very basic, something along the lines of...
But what happened to envelopes and poking above / below a band? Everything to date has been about poking above / below a band. Even @George's methodology requires an extreme price entering the "TMA Pressure Zone" -- i.e. breaking through a band.
Quoting robots4me
{quote} {quote} @LongBTC -- I'm not to much into predicting. I prefer to take what is given. {quote} But what happened to envelopes and poking above / below a band? Everything to date has been about poking above / below a band. Even @George's methodology requires an extreme price entering the "TMA Pressure Zone" -- i.e. breaking through a band.
I've never looked into envelopes so can't really comment on that, I believe parisboy can help us on this mather

Sure I'm all about extreme price action, it's what I'm looking for all day long, and every price extreme pokes through a band, now I'm thinking about ways how you are able to code when price pokes through a band and at what stage we have the best chance of reversal. What first came to my mind was an MMdetective target.

Example: NZDCAD today, price spiked below the TMA 1M band taking out 2 MMdetective targets before reversing strongly. The problem here is though, which target do we enter the trade? 1th, 2nd or 3th? This happend at 4 AM, do we keep ADR into account?
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Quoting LongBTC
{quote} Yes sorry, this chart was from the 11th of March. Yes, those entries do look very clean, but did these spikes occur at the time? These are the repainting bands, right? What about setting a rule for, if spike takes out H1 MMdetective target and is outside the band then open a reversal trade?
@LongBTC -- yes, that's better. I think bands should always be included in the algorithm.

Let me get v1 completed and we'll go from there. We can always add additional signal generators. Please understand we can't add additional signal generators or refinements without a baseline app to work from.
Quoting robots4me
{quote} @LongBTC -- yes, that's better. I think bands should always be included in the algorithm. Let me get v1 completed and we'll go from there. We can always add additional signal generators. Please understand we can't add additional signal generators or refinements without a baseline app to work from.
Absolutely agree, I think it's better to start very basic and to add filters along the way.
Hi R4M,

I thought I would share these links with you, they show why the ATR is so important to ME for placing TP/SL, its all about what is happening right now in the Market at any given time.

https://www.youtube.com/watch?v=086ozcHDZPw

https://www.youtube.com/watch?v=LBQIkLkU8WY
Some people say I'm lucky, but the more I practice the luckier I get
Quoting almo
{quote} I think that is the root of the problem R4M - the TF your looking at may not have enough data to show you the past occurrence(s) priced reached that level. That and the few instances where price may reach an all time high/low so there is nothing to compare against.
@almo -- yes, that could explain it. But how far back is far enough?

And again, if in the end all I need is an extreme price poking above / below a band (@George's TMA Pressure Zone) then why do I care whether or not its cousin target level is in the vicinity?
  • Post #3,819
  • Quote
  • Edited Jun 27, 2019 1:52am Jun 26, 2019 8:18pm | Edited Jun 27, 2019 1:52am
Quoting LongBTC
{quote}The problem here is though, which target do we enter the trade? 1th, 2nd or 3th? This happend at 4 AM, do we keep ADR into account? {image}
LongBTC, the core issue in this discussion is prioritising targets over spikes or spikes over targets.

There is no right or wrong in either approach. What each trader choses goes down to his trading psychological need that seperate their individual decision.

Trader1 choses target over spike because he wants to know the reason behind the spike, ie. targets. Where there is spike without target he can't consider this a purpose filled MM manipulation because it does not fulfil this narrative. This is usually more appealing to levels trader, the traditional support and resistance or supply and demand which is important to him.

Whereas the spike trader2 psychology does not have this requirement of targets rendering them less important in his decision making. Such traders are visual by nature that they recognise spikes as a standout pattern on their charts. Notice that such traders rely on momentum to navigate spikes rather than rely on absolute targets.

There is always the key parameter that our psyche trust, targets or levels or momentum or whatever each trader feels comfortable with.

The lesson to learn from this is there are two large pool of traders with different psychological mindset, we learn that from our experiences with the market. The bad experiences are the ones that cause this ingrained psychological setting. In short, FEAR has taught us how and why we should approach this market. And individually, we respond differently to the pain of hard lessons the market throw at us. The result is the hard stance that each trader believe he is right and the other is wrong.

What is good tradable set up for one trader is risky to another trader, vv. From a practical standpoint what is simple to one trader is tedious to another, vv.

When in fact both factions are not exactly correct or wrong when you consider that the market has no appreciation for our psychological setting, it does it's usual thing with no care for what the traders psychology prefers.

Look at your cadchf chart again. The end result is the market kept rising to the real intended target. The key word is rising market. Yes it touches "targets" along the way. Yes there are "spikes" along the way.

Have the trader considered to look beyond historical "target" and visual "spikes", try analyse or rationalise the market outside of what the psychological lessons that fear has taught us ?

That explains for why in one of my earlier post I wrote I do not trade targets, spikes, or bands, they are secondary consideration - risking another controversy hopefully nobody jump at me. To me they form part of the journey of the market. Imho
For practical application AJ lower target for the past 2 days is 74.52(74.58) and 74.34(74.42). Anything below is outside the scope of the move from hindsight. Look at the chart, is it a dropping market or rising market to you ? How do you "see" the market in real time ? How different is the actual market to what you "see" in real time ?

If it is a dropping market with bottom targets below you will be looking for top target spikes to short. If it is a rising market with top targets on top you will be looking for bottom target spikes to go long. How your psychology is set up by fear dictates the way the trader "sees" the market, that will be right to him.

That's why there will always be contending groups, each one very steadfastly adamant they are right and all others wrong. Whereas there is only one universal market that we trade, that is the only right.

To get ourselves to rewire our psychology to focus on the real market is very difficult, impossible to us.

We have to look at how we psychologically "see" the market. Identify the wrong. Focus on the wrong. Understand and appreciate how we are psychologically set up. That's what each of us need to "see" as a starting point.

This is the hardest part in our trading journey. Our huge ego gets in the way and our psychological set up taught by fear prevents us from seeing our wrong. Combine both and throw in "we are the best trader on the planet" in few cases, we are totally convinced we are right, no chance for us to be wrong. Because we individually have checked and rechecked that we are right. Those other guys has to be wrong. And the debate goes on and on....

Lastly, don't throw rotten tomatoes, stones and rocks. Just sharing my thoughts that is "wrong" to be on the safe side.
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