LFX Trading Proverbs

NSFW = Not safe for work? LOL. Only about 5% of us use indicators and only about 1/2% actually know how, so I am not too concerned. It was only meant to be temporary to emphasis my point. I think he saw it, so it's gone now. All's well that ends well.

Sorry guys, I give up ...

First you have to learn about graphs. I think this is where most traders fail. Rather than learn some simple concepts, they veer off into guessing the outcome of news releases or drawing lines to connect apexes. In this video, the inflection point represents what I call the trading equilibrium. The concave up and down are the apexes. If you want to trade like me, you have to turn your price chart into a model like you see in the video. Because of the effects of mode and median in the buy/sell struggle structure, you have to go a step further and apply filtering, or in other words, some type of smoothing, to reduce the false signals. In my model, the entry is in between the concave and the inflection point. The exit is the next entry. To increase precision, I use a lower time frame graph to see a magnified view of the concave and try to find a slightly more profitable exit. To determine if the inflection point is vertical or horizontal, I use a higher time frame graph to see a smoothed view and where the next concave is most likely to occur. So, the key to my success is to force this design onto a trading graph and then follow it from concave to concave.

In this pic, the yellow dot "3" represents the concave where the slope is "0". The red boxes are the inflection points. In this case, all three inflection points are the horizontal type. It is important to learn how to identify the horizontal inflection points. The horizontal inflection points represent what we call consolidation zones.

However, to build the strategy, you would use the vertical inflection points. By determining a moving average that most closely intersects the vertical inflection points, you can construct an oscillator that will help you determine the concave points. If you can figure out where the concave is likely to occur, then when a horizontal inflection point occurs, you will recognize it as possibly being that, and not a concave. If you can determine it is not a concave, then you know the likelihood of profit is reduced. If you concentrate on trading between the concave up and the concave down, and the range of price is sufficient to overcome your spread, then you have the possibility to make profit.

Since the market is nonlinear, meaning price does not move in a straight line, then I believe the best way to follow its graph is with lines that can bend along with it, or what we call moving averages. What is a moving average though? It is the average value of previous points on the graph. If the points are not widely dispersed, then the mode increases and the range of the median decreases, which means the slope of the average will approach "0" and display on the graph as "flat". That creates a consolidation zone. You cannot see consolidation zones by connecting the "0" slope points of the left side of the graph. You cannot see inflection points by connecting the "0" slope points of the left side of the graph. That is why support/resistance trading is worthless. All you are doing is building an art project. There is 0.00% averaging in that structure, which means you have 0.00% probability. Probability is the average of averages, which is why you need to use three time frames to find the concave points and differentiate them from horizontal inflection points.

Hope that all makes sense. I use the words equilibrium, consolidation, and apex, but it is the same thing as vertical inflection point, horizontal inflection point, and concave. Since we concentrate on Quadrant 1 in a nonlinear fashion that updates continuously, then I use some verbal liberty to distinguish a difference.

Damn, you're quick dk. Must have been an interesting pic

No. It was a visual of how to overlap moving averages from various time frames that we had discussed privately. I used his parameters to create it, so after he saw it I deleted it to prevent any confusion.

hi DK,

Thank you for creating this thread, I started reading this thread again and working on creating method according to your recommendations.
I decided to dedicate 2 hours of my time to study this thread everyday after work.

I hope you support and comment my work

which means, you are looking for, as you call "sweet spots" on H4, playing concave to concave on H1 in right direction and entering on M15 ...
My layout , at the moment looks like this ...
it will be developed further, got few ideas on my mind.
..

Nest week will spend watching "live behavior" of this stuff...

Question about oscillators... do exist types NOT showing divergence...?
can you see some significant difference between those three?

Thank you Dk for your earlier post( response to BN enquiry), It was very informative as usual. You have given us(thread followers) alot to think about. Will need to read it over time to understand.

Thanks always.

Best regards
David

Edit: Thank you Black Napkin(BN) for those questions which made this thread temporarily lively✌✌.

The more I think about it, my oscillators are like an advanced design of a TDI. Understand, I do not use TDI on my current template, but in the past I actually invented my own before I even knew the TDI existed. The TDI is written against arbitrary Fibonacci numbers. While my oscillator pattern is similar, it is written against moving averages that I feel separate buyers from sellers. I further enhance it with additional tools that cause it to show the cycles of price across multiple time frames. So, if you understand how a TDI works, can build your own version, with an oscillator of your choice, and use values determined by analysis, not theory, then you will have a similar trading technique.

I think this post explains why I have been having issues with TDI in trending markets on M5. It becomes very erratic. It can cross back and forth more than 8 times in an hour, while M15 signal is steady and trending nicely.

Secondly, any moving average you attached to the TDI burries itself at the top of the indicator, no matter the moving average settings.

Thank you always DK,

David

Yes this happened to me as well.
Upper TDi is made step by step as you can see... AQUA is 9SMA ... RSI aded 2SMA to smooth, then 7SMA as Sgnal ,ine and finnaly AQUA 9SMA as mine MA
Lower is TDI ... and is draws 9 SMA like this



Dk... I missed your answer to argosgate7 ... what a pity ...

Change may plan, no changed, just change schedule…
Spent whole evening reading available Dkrock stuff… definitely Dk shows us a lot of wisdom, but seems to me you need certain level of mental skill, which I am not sure I do posses in satisfactory level …
Nevertheless …

Few enlightening ideas… exploded lately in my mind …
(following Dk posts)
Without LOVE, we are nothing.
You only have to know the direction …
People who are naturally introverted (shit – it’s about me) tend to focus on the weeds and precision. Their reward is frustration and failure (ouch?)
Don’t be scared rat ... (I am)
Stop be precise ... (ouch again).

Latest , I can name it “TDI recommendation (tanks to David question)”, affecting my plans… Back to rest of the Dkrock text, dig over them once more. Hope this will bring an old introvert some new ideas..
So, gents already wish you have nice weekend… (F1 weekend at last ).
BN

PLAY

with those as your MA's firs to smmoth RSi and secound your eq ma... what do you think?



Upper RSI Lower TDI with same settings

Dkrock,

Hope you doing well, I have read some of your post and I cant think of a better person to ask your opinion about the following video

Whipsaw and small ranges are a common pattern. That is why I use multiple time frames to determine if it is even worth bothering to trade.

Two things to note about the TDI. My homemade one worked in real time. The actual TDI works on candle close, so you don't get a signal until it is too late. There is a TDI called "clone" that works in real time, if you want to use one. The second thing is that the TDI design does not change when you change the period value. Changing the period value only changes the location of the level lines.

dkrock,

first of all, thank you for taking the time to watch the video and reply. The guy in the video is a prop trader in USA. alot of the things he says is in agreement to what you say. and your reply just proves more of it.

First I think what he calls a trend trading is what you call a range trading. what he actually meant is he is not trying to pick the very top and the very bottom. And the reason is because the banks can see the pending orders as you said.

Moving to moving averages, yes, he meant the cross of two or more moving averages. And btw there is another video of him saying the way to use them is just using one as baseline (similar to what you saying)

The guy says to trades successfully you need an algorithm which consist of the following
1- ATR
2- Baseline
3- Confirmation indicator
4- volume indicator
5- 2nd Confirmation indicator
6- exit indicator


One thing I dont agree is he says that really great and AMAZING traders in the world (the best) do about 25% return annually, I mean I do think more is very possible, what do you think dkrock?

Please don't get me wrong ...
But I wonder again what is the purpose of using oscillators, smoothing them, determining their apexes, move to another part of the chart, to the new window ,mapping the behavior of the price of its apexes, reversals.
Setting the oscillator so that this mapping is possible, but by recreating the price in the second (bottom) window we get two the same mapping of price behavior, one with candles and the other without. Is it not easier to just remove the candles and use the first (upper) chart only ...
Or maybe I still haven't understood anything ...



Need translate to my mother language all proverbs and crucial posts... just new book been delivered..."Statistics For Dummies, 2nd Edition" ... let check how big dumb I am...

Four hours later ...
"To be more specific, if price is going up on your chart, and that movement warrants opening a trade, then your indicator should show the movement as being substantial enough to open the trade."