€/$ Fundamental-Macro Trading

I should lay the logic behind the way I trade.

Only EUR/USD.
As I am trying to integrate the models I make for the market and my own discretionary analysis, the system im using is an hybrid of discretionary/system trading style.

There are 3 types of trades I do:
- 100 to 180+ pips positioning long-term trades
- 5 to 15 day-trading trades
- 1 to 3 pip scalping trades

Model represent fair-value not price action.
- price and model should converge again
- Price should trade around it, model is neither a resistence or a support.

Trades are developed in this way:
Development of trades is organic and occurs in 3 phases, it goes from scalping to day-trading to positioning trades
All trades, even long-term positioning ones are entered as high-leveraged, scalping or day-trading positions which then can develop into long-term trades of 100 to +180 pips, if there are reasons to mantain the trade even past the initial profit taking point (news event, high directionality that is corresponding to the model, etc).
Entry uses analysis of price action, and 15 minute time-frame TA, stop-loss at 3 to 4 pips. 3 to 4 attempts are allowed.
Price action has more power over any model on deciding if the trades are kept or close.
Long-term model decides over short-term model if trades are kept or closed.
Long-term model are based on several fundamental assumptions. Trading days that threat or defy such assumptions (including price action, volatility regimes changes, Central Bank interest rate setting) can be triggers for model re-evaluation.
Intraday model is secondary and only used for day-trading if volatility is high or also as reference to entry points for long-term trades.
Updates to the model could mean early termination of the trade or extention of it depending on the new model.

Rules on how to enter/close day-trades and positioning trades:
Scalping trading is based on analysis of price-action.
Trades are open/close at extremes of deviatons from market-model.
Market-Model deviations are not ignored if they are not gradual.
Trades are only closed when price is at fair value only if the expected fair-value is to imminently move towards the trade entry level.

Market-Model deviations are ignored if they are gradual and the model eventually catches up to the price in the subsequent days/week.

Market-Model deviations are not ignored even if they are gradual but the model does not catch up to the price in the subsequent days/week.

Intraday model signals are ignored if price is moving towards long-term model (ie. buy signal from short-term model on a downtrend that is converging to long-term model)

STOP-LOSS
Inition of trade stop-Loss should be around 2 to 4 pips but are not static, can be move around to accomodate small 1 minute time-frame drifts.
Absolute Stop-Loss is around 15 pips in small volatility conditions and porportioned increased in higher volatility conditions but with downsizing of positioning.

PROFIT-TAKING
In general profit taking are open and but trailing the market, and in the direction of the model.
Profit taking does occur in designated situations described above on "Rules on how to enter/close ...".

LOSING TRADES:
Trades that for some reason escape the rules (lack of discipline, extraordinary conditions) are to be assigned a new plan of action to minimize the odds of a big loss, which usually involves manipulation of stop-loss, profit-taking and exploitation of future and current events in order to develop a new trading plan.
Trades are extensively at discretion of the trader and the trading conditions.
No losing trade should be left without a plan for an extensive ammount of time.

I leave price-action analysis principles for another post.

Next week its going to be a good week, lots of money to be made, we are entering into a very steep downtrend. If you dont like to sell to new lows, then its time enter the downtrend now.

All buy signals will be ignored, because the model does catch up to price eventually.

Hey there!
Have you tried implementing price action before to make
your trading more precise?
If your model determines the fair price value combining it with pa could be very nice...

Still ignoring all buy signals.

Hi.
I'm still working out with models and MT4 and trying to integrate this into a viable strategy to trade, but yes the model is suppose to determine fair-value, entering trades and make this profitable would be even better with someone more knowledge with price action, a proper news feed service, sell-side research and models for economic data.

I have been working with price action for years now. I am doing it full time.
I could help if you want with that and im also currently expanding my knowledge on models as well.

Ok, for now i'm saving all the data that the indicator is sending (the buy and sell signals), first we need to know what kind of nature the model is. We need to know what can constitute a sell signal, or a buy signal. Then we can work something out from this.

Meanwhile I've programmed a simple 1-minute timeframe EA and tested it on around 100 trading days, i've excluded central bank meetings.
It seems like it can enter trades and does not lose money in worst market conditions while it makes good enough money in good trading conditions.
This is from a period of 45 trading days that didnt have central meetings. I've tried other time periods and it more or less doesnt lose money or does not make money, but this period here it goes from 10€ to 125€.


Im always going to update this thread with the long-term model. For now short-term one is suspended because price is so close to fair-value.

What you got so far, what is the average divergence between your the fair value and current price that you start selling/buying? How many pips?

I havent crunched the numbers yet, still only saving the data from the indicator, that means, i've been saving the difference between fair-value and current price.
I've been saving the yellow bars you see in the chart.

Are you trading full time? On what criteria does your model determines the fair price?
How often does price returns to it? Is there a way to contact you privately?

So the way i construct the model is by using various inputs like for example the US 10 year goverment bond and then feed it into a probability distributition.
For example:
I predict where the 10y will be trading based on the FED actions and economic data.
Then I will predict reactions of the FED/ECB and Trump administration.
This will then feed all into a model that is basicly a random walk from a mixture distribution.
I run the model and it determines fair-value.

I can add german 10y to the model, balance sheet of various central banks, interest rates, etc... Anything that is can be quantifiable and is relevant to €/$ then it can be added to the model.

Im not trading full time.

I dont know yet. There is not enough data to know that.

I think you can send me private messages here, but for chatting maybe discord. I'll send you my username.