Enhance, Enhance, Enhance!

Hello all,
I wanted to start this thread by saying that this forum has brought me a lot of value over the many years I have followed it. It has not brought me many pips, but that is for no other reason than the fact that I have never truly found a way to implement FX into my schedule in a manner that doesn’t have me sacrificing responsibility in other areas of my life. I believe the primary reason for this is I cannot blindly follow another’s system/signals. I am very functionally fixed in that I have to have a drilled-down order of operations to create my biases, and the fractal nature of the markets has me losing my place as I zoom in and out of time frames.

Hence, here I am, sharing what I believe to be about 80% of a system. I say this, primarily, because I don’t think I, or anyone for that matter, can create 100% of a system that you can just run with. Rather, I believe the 80% that I can share will allow others to see the markets through my lens/biases – at which point there are many methods at hand to analyze the situation and create the right trade for each individual.

The second purpose of this post is to simply try and give back. My favorite piece of this forum is the fact that there is so much constructive back-and-forth (if you can weed out the noise), and I have never given my .02. While I am only truly beginning to employ this system, I will be greatly satisfied if I assist in someone else’s profitability – even if I never get there. We all trade FX for different reasons. Riches has not kept me interested. Rather, it’s the “10%” rule and a little bit of pride. I want only to be in the 10% to prove to myself profitability is possible.
Without further ado, Forum Rules:

 

1. Only constructive feedback to and from all participants. If someone decides to try and implement a repainting indicator, there is no need for 100+ posts back and forth proving whether or not it truly repaints – and anything similar here
2. Please keep to the premise of the strategy. It is trend following, not contrarian. It is built on the premise of analyzing and honoring 3 Time Frames. All contributions should be through these lenses
3. Being a 3TF system, I respectfully ask those wishing to test this forward stick to the same 3 time frame analysis for more consistency of data.
4. Negative speak will be blocked/deleted without hesitation

That's it! So let's Play Nice!

Lastly, before diving head first, you will see images from different platforms. I may utilize MT4 for trade explorer, but I cannot for the live of me fall in love with it. I love drawing on my graphs, and MT4 is abhorrent in this respect. For that reason, you will see a mix of Tradingview (for ease of communication) and ToS. Please forgive me for this

Enter the Strategy – Enhance, Enhance, Enhance (yes, this is a play on those crime shows)
Phase 1 – Top Time Frame – Which direction
This will be run over 3 time frames. I encourage you to choose a set of time frames that works for you and your schedule. I say this because I truly believe the fractal nature of FX can allow for indiscriminate use of various time frames – each presenting their own opportunity for success. I also encourage this for data gathering as well. have found, however, that there must be some commonalities between your time frame choices, whichever they be. That is – The subsequent time frames have to have enough units of measure to provide a DIFFERENT outlook. Put simply, there are only 4 H1 units in an H4 candle. Zooming in to H1 in this instance does not provide you hardly any different picture than H4 did.

That being said, my TF used will be W1, D1 (5.5 of these per weekly – Not ideal, but Top timeframe is only a long/short filter, and H4 (6 of these per D1 and 100+ on W1 – just enough gyration to look at the big and little picture and find aberrations and opportunities for entry).

TF1 – Long/Short Filter

For this, I am using the W1 TF. It is boringly simply:
1. 52 period CCI (1 year of data) – only line is at 0.
2. Upon zero line cross, biases flips with the trend (bearish below, bullish above).
3. At the candle close of the cross – draw a vertical line (I color with direction so when I “Enhance” I can quickly reference my bias.
4. At the close of the cross – draw a horizontal bar as well – this is our ceiling/floor from which we assess lower TF strength.
5. Addendum – I personally draw a box, but I know MT4 can be a pain here
***This can be the first entry of a very small position to keep my eyes on the pair



TF2 – Enhance! A Noise Filter

For this, again, I am using D1. More drawings. I utilize a 14 period RSI with the premise that it is my noise filter. Personally, I look at the 45-55 zone of the RSI as pure noise. As RSI presents us the speed of the bar changes over the last 14 periods, it is when it is out of this zone that we see the most opportunity to ride a wave. That said, we also need to realize that “Overbought” on a lower TF, in a bearish territory really means that is potentially the best price. Not picking tops or bottoms, but thinking like a bank. We always need to be trying to grab the best average price we can. TF2 Analysis below:
Bullish analysis – flip for bearish

1. 14 Period RSI. Lines at 46 and 54.
2. When price falls below 46 RSI in bullish territory, we need to watch this pair.
3. When the Daily candle closes above 46 RSI – Draw a vertical and Horizontal line at close time/price. This is our secondary floor/ceiling.
4. Enter trade, again, to keep an eye on this pair and catch the smaller waves within the larger trend.
5. **When a bullish trade falls back into the noise zone (ie. Below 54 RSI), this pair is no longer tradeable until it breaks back above or falls back into the “buy zone” (under 46). Your own disciplines can be employed here, but I will not buy again until it falls back below 50.
6. All TF 2 Trades Close as Soon as Weekly Biases Flip or TF 2 Enters the Noise.

Truly, you could stop here. I encourage everyone to look below and replicate this exercise. Simply draw boxes capturing the weekly biases, and follow that with secondary boxes capturing the RSI moves. Invariably, you will almost always see a net gain in pips. Coupling this with Money Management only adds to your own edge.



TF 3 – Enhance! – Compounding gains

This is the trickiest part of the puzzle. Invariably, all waves run out of steam and must revert to the mean and or flip the trend entirely. However, if you can master a set of analytical tools that a) allows you to capture all of the smaller impulses, and b) pairs money management to compound the moves rather than take them one at a time – you can be in a really good spot.

1. ALL TF3 Signals Are valid as long as TF2 is recovering from Contrarian move and/or is out of the “Noise” zone and with the trend!!
2. No specific indicators, although I like the RSI and Stoch here. If bullish, I am at the H4 time period looking for the pair to be oversold on Stoch (20-30 range), and to be in the Buy Zone on RSI (under 50 - On TF3, we are no longer concerned with filtering noise as we already did that in TF2). Any confluence to structure is fantastic. Enter upon confirmation of your own biases that the trend is likely to continue and you are at a good price.
3. Upon each entry, draw a base line of entry. This is the new floor (thinking bullish). All future signals must be:
{C}a. Still in line with Higher time frame rules (ie not in the noise)
{C}b. Must be above the base line of the previous trade – no averaging down.
4. Your own analysis, again, will be used to determine the steam left in the wave given current structure on TF 2 (price extremes, divergences, etc.)
5. All TF3 trades close when TF 2 enters the “Noise” zone.

Attached Image (click to enlarge)

This Image Shows all of the individual opportunities if you wish to only trade TF3 and trade one trade at a time.

Attached Image (click to enlarge)

This image shows the power of compounding gains. Couple of rules to live by here:

1. Decrease trade size with consecutive trades - as you trade up, the more likely you are ending the wave. The trade will close on a loss or TF2 entering "Noise". IF you decrease size, this loss will not hurt the net gain a bit.
2. Do not enter a second, third, etc. trade a price that is negative to the previous entry. Remember, that previous trade was your new floor/ceiling, and you can only add-on after that level!

Please be polite, as this is my first thread and contribution. I am sure the above could have been more concise, but I wanted to be sure to fully explain the lens through which I analyze the markets such that you all can replicate and perfect this system with me!

I will be continuing this by building out my biases for the week, day, and calling out what I am watching and when. I encourage you all to decide to participate/contribute, and choose the 3 TF you will be following as well! Naturally, following a D1, H4/H2, and M30 would be a great alternative for more opportunities. However, be wary of the noise you subject yourself to in those smaller TF!

Very good job tradeChaser! Thank you for sharing.

Thank you very much! I can tell you already, this is an intimidating game, as 99% of us are alone with only the pc to communicate with those that think like us about these markets. Building this thread is a huge morale boost and will go a long way toward my own accountability of following my own rules and developing this system!

I hope others hop on board along the way!

4/23/2020 - Quick breakdown of TF1 (weekly for me) biases and current opportunities!

Color codes for below:

1. Yellow - Waiting for D1 confirmation due to being in the noise. Either needs to recover to better purchasing levels or to break out of the noise
2. Orange - In good purchasing levels (buying/selling territory). Again, following my TF's, we don't have to sweat it until 5PM EST to check what has changed.
3. Green - All TF are in congruence and we are out of the noise. This is where we look to TF3, create our story, and wait for the right time to attack!

What do we know from TF1? 3 of the pairs being watched are:

1. In congruence with weekly trend
2. out of the "Noise" Filter on D1 Trend

These will be pairs that we need to watch for TF3 entries: EURCHF, EURJPY, EURUSD

Obviously these biases are indicator based. Not because they are the be-all, end-all, but because it is easy and allows you to filter quickly to the places where you need to truly apply subjectivity to your charts. HOWEVER - This is an unprecedented (in my lifetime) time for all currencies in play, so discretion and MM is of the utmost importance as the pairs regulate themselves after the pulses seen from the last 3 months.

Similarly to most currency strength indicators, we see that baskets are forming. As of now, it appears GBP and AUD to be of the weakest currencies. The EUR is not far behind but is about 50/50 to 40/60 (short) in its biases analysis. It would appear that the USD is among the strongest right now right with JPY. I am not a basket trader, but many of the GBP and AUD charts look eerily similar if you trade that way.

In looking at the 3 TF open to use, given current biases, it looks like 3 missed opportunities that presented themselves within the last 5 days for TF2 entry. That said, I feel quite strongly a lot of the pairs that we are awaiting for TF2 confirmation on (yellow pairs in previous post) will provide us entries in the next couple of trading days!

Thank you very much tradeChaser for your clean charts and very good explanations. Its very easy to follow and understand your thinking process. I hope that more people see the value of this great method.

Without asking for any prove or trading records or similar, may I kindly ask you how long you already trading this approach? Are you still struggling with getting consistent or did you reach that goal for you now to a certain degree? I´m just wondering, since your trading approach looks very organized and it has big potential.

Great questions! I am certainly not here to decieve. I have been looking at this method for the better part of 3-5 months, but never more serious than dabbling. This is for two primary reasons. The first - I want to trade smaller time frames for instant gratification, but my schedule and personality doesn't allow it. That internal struggle really just lead me to do nothing, or to check into the charts out of interest, and walk away.

The second reason is my suffering of Paralysis by Analysis. I truly get lost in my analysis if I do not have a step-by-step method. This process I have created helps me because not only does it create order, but it creates limits to analysis. You can look at the Weekly and determine you are:

1. Half way to a Fib retrace
2. Showing bearish hidden divergence
3. Over sold... yada yada yada

Problem is, you can go down a TF and due to the fractal nature of the markets, you can get lost in a completely different story! With how I am trying to employ this method, the TF1 is nothing more than long/short. It keeps me from over analyzing and getting stuck by my analysis paralysis.

So after beating around the bush, to answer directly, I do not see myself still struggling thanks to this thread. Even if nobody else chimes in, I don't want to be that guy who just let the strategy die with no follow up! Having this piece of accountability will be a massive piece in keeping me on pace and consistent.

As far as past trading records, they mean very little, but I did enter two successful trades on EURJPY and USDJPY according to TF2 entries about a week ago. It doesn't make the trade explorer, but it got me excited enough to begin the write up. Other than that, you will be right along for the journey to determine whether I reach my goal or not!

Again, this is a shot of the past, while they are still open. It is a demo. Take it for what it is worth, but its .10 lots (minimum with Think or Swim). I will likely be doing .01's and the like on the MT4 Trade Explorer.

Sell zone crossing 50% downward of RSI, buy zone crossing above 50% of RSI yes?

which TF? In general if you are bearish Long term, then sell zone is ABOVE 50 on TF3 and above 54 on TF 2 (flip for bullish).

this doesn’t mean buy or sell immediately, but it does mean you are prepped to engage when the conditions are meant.

if it’s not in your “zone”, you don’t even look at it yet. Decreases the amount of time spent analyzing is the main thing.

If you are talking TF1 (highest time frame) sentiment flips to bearish upon break below 0 line in 52 period CCI. Opposite for bullish flip.

Touching base on Thursday evening's notes:

EURCHF: No longer on our radar, but that is okay. While the TF2 is moving into the noise zone and allowing us to wait until it shows it's intentions, it is moving past and toward notable levels of predictability. These levels will provide the best RR and allow TF 2 to recover back into the selling zone (assuming pair stays bearish).



EURJPY: Still on radar for TF3. Slight Chop. Signals on RSI and Stoch are getting nice. Still not to major levels however. Must wait for everything to line up!



EURUSD: This one is hot. Signals on TF3 are valid. So Why not enter? Well, idk where I would put my stop given structure. It seems someone awkward and I believe that to mean that PA just isn't showing itself yet. I believe we will be in this trade within the next 12 to 36 hours.



USDJPY: TF2 just made a break out of Noise on Friday. Didn't enter on TF2 for two reasons... Can't on Friday Close! Duh! But also because there was no solid recovery into selling territory on TF2. However, we ARE now keyed in to the TF3 and are awaiting our first signal on usdjpy! As was noted on this pair, there is a lot of sideways action, so unfortunately our indicators are losing their appeal. Still, we have to wait and see how this develops. If biases remain consistent, I believe that our primary opportunity will fall very close to the top of that channel. Currently, although we will see, that is the best possible combination of RR, as well as the indicator signals that would be needed for a 4H entry.



Current Open Positions since before the thread: USDJPY and EURJPY. Have honestly not tracked like I should, but will be sure to close as soon as the conditions are met.



Man, I hate that this is going so slowly right now, but it is nice to a) not have too many signals, and b) maintain my patience. Gives me a lot of time to check out the other threads. Really enjoying watch LauraT's Roadmap thread!

Will have update at D1 Close unless any of our TF3 pairs provide us a safe, strategic entry.

Trade Entry made on EURUSD. Details Below. While the price didn't get all the way to the 1.0900 handle of previous structure, we see a really nice pin bar from which we can make a fairly good stop. What is more, the current 4 hour bar is the telling signal that we were looking for. Again, while it did not make it fully up to structure, this is a TF3 entry. This means we do not fully expect a multi week run in this trade. If we make our target the recent swing low, we are posititioning a 1:2 Risk:Reward. I opened two .01 positions. Never used explorer before but I am hoping it makes it to it. For whatever reason, I am trying to place SL, but am getting an "Off Quote" Error. If not for that, SL would be 5 pts above swing high, or 1.08665.

Note: Should we wait for 4Hr to end. I say not. Reason 1 - I am working and the crux of this strategy to to work around my schedule. Reason two. The signals are evident, and even small retracement in last hour of candle are not likely to unwind the Stoch and rsi levels.





Finally got something going!

Update on EURCHF.

We were clear of noise yesterday, and looking into TF3. However, we expected this bullish impulse, and also as suspected, it pushed technical into noise. looking at current Daily bar, there is a lot of strength present. While we have a tasty 4H pin bar and technicals, there is reason to think this push is not out of steam:

1. Close to 1.0600 even number
2. This level would push TF2 out of noise and into selling territory
3. TF3, if followed by second, smaller push into said level, would likely show signs of divergence, depending on the force with which it approaches said levels.

All of this noted, while we could enter, it seems that there will be a safer, more strategic entry later this week - assuming the larger trend and biases of Weekly bearish sentiment hold true.

Looks so nice... But let's look up a time frame!


Patience is key. We can always "miss out", and this could be a once hit wonder bullish candle. However, you lose 0% of the trades you don't take!

Patience is a virtue! Closed out the EURUSD for a very small, nominal loss. To recap, we were out f the noise on TF2 (Daily rsi below 46). On TF3, we had RSI in the selling zone, and we had stoch at over bought extremes. The signs were there, but the nuance to the entry was that PA had not quite made it to a nearby level.

We cannot predict the future. Our entry could very well have been the "lower high" that provided us a great time to ride a trend. Instead, we saw price return to the key level I noted in post 12 and post 13.

Again, very small loss. All we can do is take notes of the previous entry, what we could have done differently, and move on!


Level predicted to be best turning point on 4.26


Level hit overnight on 4.28

Back into EURUSD. Hoping that we are not succombing to the chop, but all we can do is do our DD given what we see and enter with faith! In short - We did hit the level called for last week, and the technicals are still strong. We can't tell the future, but we can control our risk and look to enter at the best possible moment, given what we see!

Quick Update. Going forward, I am going to limit the overall analysis going into this thread, as I think the first few posts explain this simple system fairly fully.

That being said, we did make numerous entries on Thursday of last week. They are all in profit. It is tempting to take them off the table, but they are all looking fairly good for now. Because these were TF2 entries, there is really only criteria that will cause these trades to close:

1. Daily RSI closes in noise area (some of these were aggressive entries with trades taken in "buying" or "selling" territory. Being aggressive on entry, we will allow the SL to be our primary decision maker here). If the pair exits the noise area during trade and then closes back in, we will close our trade. Some pairs will succumb to chop, albeit profit should still be secured. Others will take us for a ride!
2. SL is taken out.

Another thing to note - As these trades have been open over weekend and for a couple of days, I snugged on SL to close structure. Overall, we took about 150 pips+ in total risk off the table. If we watch daily closes and RSI levels, there should be zero reason other than global-impacting news that a SL gets hit before the RSI dictates the exit. We may still lose some trades, but these losses will be very, very nominal compared to initial R:R set by SL.

Pictures of trade entries below. I will add lines in future images, but do note that the below images are Daily time frames, and trades were placed on Thursday. So entry was taken about 3-4 candles ago:

Final Note: I Closed the EURJPY trade that I took on TOS for a profit and closed due to RSI. The USDJPY is still open. Daily RSI looks great for staying in this trade and is currently +80 pips in profit!

Quick Trade Update:

While we closed EURJPY last week in Think Or Swim, TF2 criteria offered itself to another trade opportunity. Having reset to the 50 level in RSI since our trade close, the pair has since dropped and broken out of the Noise Zone (confirmed by close of Daily candle yesterday). This triggered our entry yesterday evening (USA Time) into EURJPY. Trend seems to be continuing to the downside which is nice as it reinforces our larger biases on this currency pair. I will be starting to add the lines that I mentioned in the first post - as long as MT4 continues to behave and not move or lose the drawings!

Again, this whole system is subjective, utilizing our own best judgement when analyzing the entire picture in front of us. Looking at the chart, we can see a Doji followed by an impressive engulfing candle that brought us to our entry. I am trying my best to stay strict to the RSI rules to best gauge their validity. However, if you wished to have more confluence in your entries, the current PA gives even further reinforcement to the entry triggered by simply RSI movement!

Trade Adjustment Update - EURCHF.

TF2 Entry was made on Friday when RSI broke out of the Noise Zone. However, the Pair recently closed back inside the noise zone. Under strict rules, this would be a clear exit.

HOWEVER - I personally do not want to leave this trade. The last trading day provided a loose piece of structure that I was able to move the SL to. In short, I secure pips while at the same time allowing my trade idea to truly flesh out in the instance I was correct. If I close out, the pair still is in play for the next time we break out of noise!

Possible Opportunity at close of week:

I have avoided any action in CHFJPY primarily due to the fact of the Weekly TF has just hovered at 0 CCI, showing no momentum in any direction with only the slight pre-existing bias long.

It is only Tuesday, but there is a strong case that this will be a true bias flip and TF1 entry. This will be the first pair that we can truly begin the full cascade of compounded trades assuming the bearish bias holds through the end of the week.