Disliked{quote} Speaking of maths, did you see my post about MM? Risk control is still something we need to consider, as well as some form of trade spacing when we get to that point. My preferred method is still to use ADR fraction to enter consecutive trades instead of just every candle close that gives a signal. {image} So isntead of having many trades at the same price level, as the price moves away from our Target, the consecutive trades enter at set ADR percentage, effectively at better prices. I The wouldn't relish the thought of 20+ possible trades...Ignored
(binned per thread starter’s request) MM (Money Maker) Detective
- #4,865
- Edited 6:52pm Jul 12, 2019 6:38pm | Edited 6:52pm
- Joined Dec 2017 | Status: Trader | 4,378 Posts
- #4,866
- Jul 12, 2019 7:12pm Jul 12, 2019 7:12pm
{quote} @cardm3n -- nice... A few questions... {quote} Let's use a bearish reversal as an example. So -- we get an Entry signal above the bar and open a SELL trade. Thereafter we ignore all SELL Entry signals, right? If that first SELL trade is still open and we see a price 12.7 pips higher (i.e. a bullish move going against our trade)we open another SELL trade? Is that right?
I gather you are assuming that if price goes against our initial trade it will eventually revert again. Okay -- maybe it does and maybe it doesn't. But what if there are a number of bearish Entry signals that track along above the upper band -- do you really want to ignore those? Actually, I think those are further confirmation we should open additional SELL trades. Why would I want to lose out on those waiting for the price to move further against me?
If we keep getting signals tracking above the bands, and price keeps moving further away from us, we usually get another group of signals further down. In the end, both methods have the potential to give you several trades. No ADR spacing more than with set spacing. Like I said, its about the control. In this image, we get several buy signals as price falls. Same thing? Yes and no. Depends how you look at it.
However, there is always a flip side to things. Take a look at this second image. You get buy signal. Then price goes down a bit, more signals, then up, more signals, up some more. With ADR Spacing, you would not have the benefit of all of the buy signals as the price went up, which were almost 0 DD signals. Those would have been very nice to have indeed. However, how do we know that these were not just repaints that were painted after the bands shifted upwards afterwards?
In the end, a lot of testing needs to be done to be able to see what is working, and what is working better. The way this system sits now, it works. It is not broken. I am not saying we need to fix it. But how do we know we cant tweak it to a benefit. Such as lower DD? If ADR spacing is implemented, I will be setting up 2 test accounts with ADR spacing on one, and NO spacing on the other. After sufficient trades have been placed, I will compare that the stats. That is the only way. TEST TEST TEST.
- #4,867
- Jul 12, 2019 7:24pm Jul 12, 2019 7:24pm
- Joined Dec 2017 | Status: Trader | 4,378 Posts
{quote} Yes, this is correct. {quote} In my opinion, for one reason only: Control. I would rather open one .1 trade at first signal, than ten .01 trades at within .5 pips of each other randomly. However, its not always 10 trades. Sometimes its 5, but sometimes its 20. How do you control risk in that situation? If we keep getting signals tracking above the bands, and price keeps moving further away from us, we usually get another group of signals further down. In the end, both methods have the potential to give you several trades. No ADR spacing...
How do you control risk in that situation?
EDIT:
That is the only way. TEST TEST TEST.
- #4,869
- Jul 12, 2019 7:34pm Jul 12, 2019 7:34pm
{quote} @cardm3n -- excellent explanations -- thank you. I need to re-read and think about it some more. {quote} There is a 'MaxOpenTrades' parameter -- does that count? EDIT: {quote} True. But before you can TEST, TEST, TEST I would have to CODE, CODE, CODE...
If I could code, I would help you out. But there's no way I could ever be as good as you, and you would probably end up re writing all my code anyway hehe. Your efforts are valued more than you think. Someday, after we are all rich we should all rent a floor at some fancy hotel and have a BD strategy get together haha
- #4,871
- Jul 12, 2019 9:21pm Jul 12, 2019 9:21pm
- Joined Jun 2012 | Status: Trader | 1,106 Posts
Some people say I'm lucky, but the more I practice the luckier I get
- #4,872
- Edited 11:26pm Jul 12, 2019 10:05pm | Edited 11:26pm
- Joined Dec 2017 | Status: Trader | 4,378 Posts
- #4,873
- Edited 11:40pm Jul 12, 2019 11:23pm | Edited 11:40pm
- Joined Dec 2017 | Status: Trader | 4,378 Posts
ADR / Lower Time Frames (LTF) / Level-3 Fractals
This afternoon I noticed something very interesting. I'm trying to compose my thoughts and wrestle with how best to explain this. I'll get it all out, though I may ramble a bit -- which is my style...
The chart above is EURUSD-M5 with both the BD indicator and @SwingMan's smFractalLevels_v2 indicator. There are 3 Levels of fractals and these were discussed much earlier in the thread, and also in @SwingMan's thread. Here I am only interested in Level-3 fractals, which are denoted by squares (with circles and dots inside).
About ADR + D1:
I really like the BD strategy -- for me it's the end of the line. I think @bishopdotun's use of centered TMA + ADR + D1 is very clever and insightful. The main danger when trading away from spikes is the waterfalls. In real-time waterfalls at first look like spikes, but then they continue in the same direction. So, if you were to trade away then that would likely be a losing trade. When using D1 where the offset from the midline is 100% ADR then waterfalls rarely occur. And that's because in order for a spike to generate a signal by poking its head above / below a band, the distance from the midline is already a full ADR -- and the odds of it stretching further are very slim. That's why when using ADR + D1 we don't need additional filters (since waterfalls are so rare).
Lower Time Frames (LTF):
Turns out the BD strategy also works well at lower time frames -- e.g. M5. But at lower time frames then waterfalls become an issue, which is why there has been discussion about applying filters -- i.e. momentum-type indicators like BB% and others. Also, at LTF the offset from the midline is no longer the ADR. Instead it is 16%, or 20% or 25% or 17.8549% -- you get the idea. These are no longer related to ADR. These are just arbitrary distances that look good. They remind me of @George's 8 TMA levels when trading GBPJPY -- nothing magical about them -- he determined the offsets empirically because they looked right. My point is that when we don't use ADR as an offset then we lose that particular edge.
Also, now that we are also discussing money management then the issue has come up about spacing trades. At lower time frames there are often several Entry signals and, so, perhaps it makes sense to space them in some way. @bishopdotun and @cardm3n have suggested a %ADR distance, and others have sent PMs suggesting something similar. But to me this is sort of a hack -- what's the best %ADR percent? No one knows. This just becomes a search for another number that may or may not be dependent on pair and time frame. And if one person says 25%, then someone else will suggest 18.5%, and it becomes never ending. But I do get that too many adjacent signals may be undesirable.
Level-3 Fractals:
So -- enter fractals. In particular, Level-3 fractals which I first learned about from @SwingMan a couple of months ago when we were exploring target levels. Level-3 fractals look great when displayed by an indicator -- because the indicator has the benefit of hindsight. I appreciate the power of fractals, but haven't been a fan when it comes to trading because it takes several bars in order to compute a fractal. And when reverse trading the trading window is narrow and you don't have the luxury of waiting several bars to see if a fractal will develop.
But we may have a situation here where different pieces come together and collectively provide a nice solution. We can see that when using the BD strategy there can be multiple signals aligned above / below a band. So, maybe it's okay to expend a few bars to allow a fractal to form. Furthermore, the one Level-3 fractal now replaces the 5 - 10 Entry signals the money management guys were concerned about. Do you know what I mean?
If you look at the chart above it may occur to you to ask if we were to rely on the Level-3 fractals then why do we need the BD strategy -- good question. We wouldn't use the BD strategy for Entries, but we would use it for Exits.
Also, in the chart above I've used arrows to show BD Entries that would be ignored if we were to instead rely on Level-3 fractals when trading M5.
To summarize:
1. Lower time frame chart (e.g. M5)
2. Entry based on Level-3 fractal
3. Exit based on BD strategy
4. No need for money management scheme
5. Use profits for vacation in Hawaii (or donations to your favorite charity)
This afternoon I noticed something very interesting. I'm trying to compose my thoughts and wrestle with how best to explain this. I'll get it all out, though I may ramble a bit -- which is my style...
The chart above is EURUSD-M5 with both the BD indicator and @SwingMan's smFractalLevels_v2 indicator. There are 3 Levels of fractals and these were discussed much earlier in the thread, and also in @SwingMan's thread. Here I am only interested in Level-3 fractals, which are denoted by squares (with circles and dots inside).
About ADR + D1:
I really like the BD strategy -- for me it's the end of the line. I think @bishopdotun's use of centered TMA + ADR + D1 is very clever and insightful. The main danger when trading away from spikes is the waterfalls. In real-time waterfalls at first look like spikes, but then they continue in the same direction. So, if you were to trade away then that would likely be a losing trade. When using D1 where the offset from the midline is 100% ADR then waterfalls rarely occur. And that's because in order for a spike to generate a signal by poking its head above / below a band, the distance from the midline is already a full ADR -- and the odds of it stretching further are very slim. That's why when using ADR + D1 we don't need additional filters (since waterfalls are so rare).
Lower Time Frames (LTF):
Turns out the BD strategy also works well at lower time frames -- e.g. M5. But at lower time frames then waterfalls become an issue, which is why there has been discussion about applying filters -- i.e. momentum-type indicators like BB% and others. Also, at LTF the offset from the midline is no longer the ADR. Instead it is 16%, or 20% or 25% or 17.8549% -- you get the idea. These are no longer related to ADR. These are just arbitrary distances that look good. They remind me of @George's 8 TMA levels when trading GBPJPY -- nothing magical about them -- he determined the offsets empirically because they looked right. My point is that when we don't use ADR as an offset then we lose that particular edge.
Also, now that we are also discussing money management then the issue has come up about spacing trades. At lower time frames there are often several Entry signals and, so, perhaps it makes sense to space them in some way. @bishopdotun and @cardm3n have suggested a %ADR distance, and others have sent PMs suggesting something similar. But to me this is sort of a hack -- what's the best %ADR percent? No one knows. This just becomes a search for another number that may or may not be dependent on pair and time frame. And if one person says 25%, then someone else will suggest 18.5%, and it becomes never ending. But I do get that too many adjacent signals may be undesirable.
Level-3 Fractals:
So -- enter fractals. In particular, Level-3 fractals which I first learned about from @SwingMan a couple of months ago when we were exploring target levels. Level-3 fractals look great when displayed by an indicator -- because the indicator has the benefit of hindsight. I appreciate the power of fractals, but haven't been a fan when it comes to trading because it takes several bars in order to compute a fractal. And when reverse trading the trading window is narrow and you don't have the luxury of waiting several bars to see if a fractal will develop.
But we may have a situation here where different pieces come together and collectively provide a nice solution. We can see that when using the BD strategy there can be multiple signals aligned above / below a band. So, maybe it's okay to expend a few bars to allow a fractal to form. Furthermore, the one Level-3 fractal now replaces the 5 - 10 Entry signals the money management guys were concerned about. Do you know what I mean?
If you look at the chart above it may occur to you to ask if we were to rely on the Level-3 fractals then why do we need the BD strategy -- good question. We wouldn't use the BD strategy for Entries, but we would use it for Exits.
Also, in the chart above I've used arrows to show BD Entries that would be ignored if we were to instead rely on Level-3 fractals when trading M5.
To summarize:
1. Lower time frame chart (e.g. M5)
2. Entry based on Level-3 fractal
3. Exit based on BD strategy
4. No need for money management scheme
5. Use profits for vacation in Hawaii (or donations to your favorite charity)
- #4,874
- Jul 12, 2019 11:51pm Jul 12, 2019 11:51pm
- Joined Sep 2013 | Status: Trader | 1,209 Posts
5. Use profits for vacation in Hawaii (or donations to your favorite charity)
BD, Level-3 fractals for roulette, anyone interested ?
- #4,875
- Jul 13, 2019 12:00am Jul 13, 2019 12:00am
- Joined Jun 2012 | Status: Trader | 1,106 Posts
Some people say I'm lucky, but the more I practice the luckier I get
- #4,877
- Jul 13, 2019 12:20am Jul 13, 2019 12:20am
- Joined Sep 2013 | Status: Trader | 1,209 Posts
Here's the get rich quick scheme for small, ignorant, lazy, greedy, impatient, retail traders trade the little picture.
