LFX Trading Proverbs

Dkrock... I pay so big respect to you. Even if you call me dumb or idiot, I will take it humbly .. because you know what you talking about ... i'll keep may ego closed in a wardrobe ...
Now time to digest new material, takes time I am slow learner... thank you very, very much...


BN

Hats off DK, well written, Thank you. Please can you explain this "You have not applied any market direction to the oscillator".
After studying your thread and almost all your replies, I sure I may know what you are refering to, but in another way.

About 95% trading historical charts, you are right. Thats why I made a decision and I haven't looked back since.

Stay well and safe DK

Best Regards,
David

Dkrock,
My fault, I did not express myself precisely so please excuse me. But maybe it happened well as it happened because I received a lot of valuable information and tips from you ...
My chart is not a system, it is very far from the system ... the chart only shows that I managed to bring the oscillator and averages that could be used in the construction of the system. Intentionally, BBands are turned off so as not to complicate the chart and show that the oscillator shows apex with high accuracy ... Vertical lines were not meant to come only overlapping exact intersection ....
I did not take into account various time frames, nor did I look for a opening or closing position ... this is still not the stage for me ... nevertheless, it is fantastic to get so many tips by the way ... thank you again ...

Dkrock,

Brain is boiling here ... denaturation of gray matter progresses ... what a painful process...
We need acceleration indicator on our charts. Do we...?
Sreenshot i showed is GBPUSDM30, period from 09:30 - 26/06/2020 till 15:00 - 01/07/2020.
Can you please tell me how many trades entries in this period of time your system showed? I am not asking of M30 as I dont know what TF you are placing your entries I am asking of period of time ...
That your indicator which if it doesn't give a buy / sell signal when others does, is it describing the dynamics of movement, acceleration ... is it the same indicator that keeps you away from consolidation, e.g. on lower TFs?
BN

I do not use any acceleration indicators. Consolidation is normally identified as a mismatch between buying and selling on different time frames. The lower time frame might show sell, while the higher time frame will show buy. In range trading, if you were in a buy trade, and the lower time frame showed sell, you would exit and take profit and wait for the signals to concur again. The mismatch would likely be a head fake. In trend trading, if the signals mismatch, it is likely a consolidation period. These are not always the rules for those patterns, but typically are. The main point is if the time frames do not match, you should most likely exit the trade. While that sounds obvious, from my understanding the vast majority of traders do not know how to exit for profit, and would just hold on to the trade as it goes against them and then exit for a loss. If you are not comparing time frames, then you probably do not have the data that shows you to exit. That is probably why so many people take the loss instead. Most are scared to learn how to use indicators, so they trade on lines, but then do not know what to do because they have no view of the market pattern. They merely draw fake boundaries of where price is supposedly going to stop, so they have no data on what to do in-between the lines, or if price will adhere to the lines, or if price will break through the lines. It requires analysis of the moving averages across multiple time frames; the same way you would measure any other thing on this planet.

When you go to watch a basketball game, there are statistics on the performance of every player and every team. That is similar to two different time frames. The smaller one has all the players individually, and the larger one has them grouped together as a team. Those statistics were not created by tracking only the highs/lows, but rather all the data in order to create averages. If a player is having a good game, he is playing above his average.

If it normally takes you 20 minutes to drive home, but you get there in 15 minutes, you were faster than your average. Or, would you compare it against the longest time it ever took you and the shortest time it ever took you? Which figure seems more accurate: the highest, the lowest, or the average? If there is a perceived acceleration, then it probably means something is moving beyond its average.

In the case of Forex, you picked the average, so if you think it is wrong, then pick a new average. Remember, I am a range trader. You might call it scalping, with the added feature of having an exit strategy based on the market movement and not a fixed time or fantasy take profit point. It took me MONTHS to design my technique and YEARS to adjust it. If it were easy, anyone could do it. I had to figure out how to convert human behavior and computer-driven coding to identify specific patterns. Unlike nearly every trader's trading plan though, instead of looking for profitable patterns and trying to code them into a trading system, I looked at the non-profitable patterns and learned how to avoid them. Understand the difference? You cannot win a losing hand, just like you cannot win a losing trade. By knowing if I am losing, I can save money by exiting. By knowing I am not losing, I can make money by not exiting. As long as the market is moving beyond the spread, head fakes and consolidation are the only two patterns I cannot win, and two is a much smaller number than all the patterns I can win. So it makes more sense to distinguish just two patterns, instead of all of them. The reason there is no profitable EA is because there is no single equation that makes profit on all the patterns. However, it seems possible to see those two garbage patterns. That would mean, just trade everything until one of the garbage pattern emerges. So...that is what I do. If you want to know my trades for your time period, well, it was all of the trades that occurred between the London Open and New York lunch for each day covered, except the garbage ones.

Absolute gold as always Dkrock.
I’ve been following you for many years ( lost count haha ) and very much appreciate you sharing your wisdom

Well worded DK. Almost self explanatory. Again, thank you as always.

Dkrock,
I perfectly understand your approach to the matter and I respect it. I do not intend to extract from you any information that you consider sensitive to you ... I do not even have such causative power. It is your knowledge and your will to what extent you share this hard-acquired knowledge. It is your intellectual property and only you decide on the limits of sharing it. I can only accept it.
I am grateful for everything you have presented so far. Will it help me with something, I do not know, I will see ... but I am a bit skeptical knowing how long it took you and the resource of Your knowledge and Your skill cannot even be compared to my little knowledge and my skill or rather its lack ...
Anyway, there is going through again and again and again and again from scratch what you wrote hoping that something will finally shine in my head ... Again, thank you for everything I could read, it was a fascinating journey.
Have a nice weekend

You should not speak negatively about yourself to yourself. If you think you can, or think you cannot, you are correct.

Overall, Forex trading is just a matter of interpreting a graph. If you do not know much about graphing, start there. Each price tick is displayed as on ordered pair, however, Forex uses timed charts, which simply means the value of X remains the same for the length of time of the chosen chart. If you are trading a 15M chart, then X will remain the same for 15 minutes, while Y, the price, will change with each new transaction.

On a normal graph, the value of X and Y both change with each new data input. X and Y together are called an ordered pair. Each ordered pair can be illustrated as a dot on a graph. In the case of trading Forex, all X and Y values are positive numbers, meaning all inputs, or dots, will occur in Quadrant I.

Since the value of X remains constant for however many minutes your chart is programmed for, then perhaps it is simpler to use that entire bar, or candle, as one value, rather than (X,Y), (X,Y1), (X,Y2), (X,Y3), etc. So each candle is X, X1, X2, X3, etc, and the Y values are the high/low and everything in-between. If you did not use a constant value for X, for the predetermined minutes, then the chart would have to plot each individual transaction as it occurred, which might be visible as a tick chart. So, if you want to see what the real graph looks like, you would look at a tick chart.

To complicate the ability to use the chart as a means of profiting, the gambling aspect of trading introduced a spread. The spread is not based on ticks, but rather on the movement of Y. Time, X, is not a consideration for the spread. So, to increase probability, you increase the sample size of (X,Y). Since time is a constant, you can add more Y, price, to it, and thus create a larger sample size than a tick. By using many ticks together, you can make assumptions on Y based on the average of Y within the allotted time parameter. To add even more probability, you can group several of the timed X values together and then average the Y among them. That is what a moving average on a timed chart does. If you are looking at a 15M minute chart, using a 20 period moving average, then it is calculating the average Y for the last 5 hours. Contrary to novice's opinions, the moving average updates on every tick. If it "lags", like so many claim, it is the exact same lag as a tick being updated on a chart candle. No difference. Moving average code is not written to delay the market transactions, but rather add them, immediately, to the overall number of ticks within the parameters of the moving average value. So, if you are looking at 5 hours of tick data vs 1 transaction of tick data, which one provides more confidence as to the average Y value and whether or not the market is moving up or down? Which amount of data would you prefer to use when you risk $20,000 a pip?

Here is how trading with a graph works. The transactions are grouped together to create pips. Pips becomes the unit of measurement for the distance Y travels, not transactions. The number of transactions that occur has nothing to do with the distance Y, price, moves. The moving average is limited to the average number of Y values of the ticks within the number of X periods of the moving average. That average is not going to show you highs/lows, unless those highs/lows are the overwhelming average value. So, if you want to see highs/lows, you need more than a moving average. You will need to use an oscillator that aligns to the moving average and shows the track of the Y values as compared to the moving average value. As Y moves up and down from the average, the oscillator shows that movement as a line. That line is the distance Y, price, moves. When you can see the distance Y moves, then you can find the points on the graph where the Y value is moving up, moving down, or moving flat, as compared to the moving average. If the moving average is correct, then the oscillator will be correct, and the Y values above it would mean the market is buying, and the Y values below it would mean the market is selling. If that moving average is graphed on an oscillator, as a line, and you learn how to follow it, you have a reasonable opportunity to profit on the movement of Y, price.

Yep, I now know why we have to use oscillators, thank you. Excellent illustrating how oscillators work. I did various types of tests on one-tick charts, so I understand that perfectly. best regards
BN ...

Dkrock,
I found your blog LFX, I read what was there, but you mentioned once that you were a member of another forex forum. I would like to read very much, but I haven't found Dkrock anywhere. Would you be willing to provide information about this forum ... I checked several places but did not come across a trace of Dkrock ... What do you say?
BN

I am not sure, but I think that was about 11 years ago. Many things have been improved since then.

https://www.forexfactory.com/showthr...18#post7430018

This one I know... been through number of times and I'm still digging...

I try this template...
Tomorrow will try to prepare rules for setup I be looking for... just one basic setup... based on two TF;s ...need to see if this it will work...

"You had time to go to school and learn business analysis. Hopefully, that is what you did. Most people lose because they do not know anything about analysis.
But, you also have to have a temperament to gamble. If you are afraid of gambling, it can affect your reaction to trades.
Once you have a background in analysis, and have determined your probabilities, it relaxes your emotional state and you become more rational. Good Luck ...
...get the message...

New Project ...

frustration is slowly growing ...
all this stuff doing the same... Mine oscillator is a William Blau stuff...


I must attack the problem from the other side ...

my invention for today and a little bit excited lol, i don't know how long it will last as i dismissed so many of them previously. its gbpjpy M5 and just the oscillator

Lucky shot ...