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The Strength of USD

  • #621
  • Sep 29, 2021 8:16pm Sep 29, 2021 8:16pm
A deep correction is not a guarantee that the next impulse wave won’t make a HH/LL …
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Learn to read the market by its swings:
1. Previous impulse swing = 91.78 —> 93.75 … (bullish impulse wave)
2. Previous corrective wave = 93.75 —> 91.80 … (a 99% correction)
3. Current impulse wave = 91.80 —> ?? … (already registered a high above 93.75)
Market is not random but unpredictable
  • #622
  • Oct 1, 2021 3:26am Oct 1, 2021 3:26am
A system is profitable if its win-rate is bigger than the percentage of “(average risk) / (average risk + average reward)” …

For example, let’s say a system has 1:3-RRR (Reward = 3xRisk). It is profitable if its win-rate > 25% [= (1 / (1+3)) x 100%]
If a system has 2:1-RRR (Reward = half the risk), it is profitable if its win-rate > 67% [= (2 / (2+1)) x 100%]

So, from the above formula of profitability, it is useless to predefine the risk (e.g., 1% on a trade) without knowing its possible reward. That’s why predefining where we will take profit (TP) is as important as defining where we will cut loss (SL) before initiating any trade …

Btw, having a profitable system to adhere to is one of the requirements to increase our chance to be successful in trading … (patience and discipline)
Market is not random but unpredictable
  • #623
  • Oct 1, 2021 6:11pm Oct 1, 2021 6:11pm
Knowing the win-rate by itself can’t tell if a system is profitable or not without knowing its average risk-to-reward ratio …

Let’s review the example below:
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Most people think that trading is a win-or-lose endeavor, so a 66.7% win-rate might look like a good number. But, upon further investigation, this system needs a win-rate greater than 84% to be profitable … [(26 / (26+5)) x 100% = 84%]
Market is not random but unpredictable
  • #624
  • Edited Oct 3, 2021 10:54am Oct 2, 2021 11:51pm | Edited Oct 3, 2021 10:54am
Here’s another example of “Don’t be fooled by high win-rate” …
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At one point, this account grew by over 42,000% and had a “high” win-rate of 79.3%, but was finally blown away because it didn’t employ a proper risk-to-reward management …
Market is not random but unpredictable
  • #625
  • Edited 10:06pm Oct 5, 2021 9:13pm | Edited 10:06pm
Patience and discipline in following your trading plan …
A trading plan based on guesswork or instant analysis is as worthless as a coin toss. A proper solid trading plan should be based on a proven profitable technical setup.
Find that first before applying patience and discipline so we know exactly what we are waiting for and what to adhere to …
Market is not random but unpredictable
  • #626
  • Oct 8, 2021 6:39pm Oct 8, 2021 6:39pm
Quoting 4for4
… Current impulse wave = 91.80 —> ?? …
This week’s harami candle made the last bullish impulse wave of USDX peaked @ 94.49, and it has made a 31% correction to 93.65 so far …
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Read the market by its swings:
1. A break of previous candle’s high creates a support,
2. A break of previous candle’s low creates a resistance,
3. An engulfing or harami candle creates a S/R …
Market is not random but unpredictable
  • #627
  • Oct 9, 2021 10:53pm Oct 9, 2021 10:53pm
Quoting 4for4
{quote} This week’s harami candle made the last bullish impulse wave of USDX peaked @ 94.49, and it has made a 31% correction to 93.65 so far … …
Do you have a source for the definition of "harami" in the way that you are suggesting here?

Assuming that you mean Bearish Harami, this is what I found -

https://www.investopedia.com/terms/b/bearishharami.asp

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It takes a lot for me to IGNORE you, but you can try.
  • #628
  • Oct 10, 2021 8:47am Oct 10, 2021 8:47am
Quoting Erebus
... the definition of "harami" in the way that you are suggesting here ...
It is my “simplified” definition of harami where the current candle’s high-and-low do not exceed previous candle’s high-and-low. And I refrain from categorizing it as bullish or bearish because, I think, the terms “bullish and bearish” are appropriate only to describe the state of a trend.

For me, out of my own experience, a harami pattern is just a stalled market condition and it is not an indicator of whether the market will continue or reverse the ongoing trend.

In the example above (post #626), if next week’s candle breaks low, it just means the correction is continuing to new low. But if next week’s candle breaks high, a new bullish impulse wave will be started and has a good chance of making HH because of the shallow correction and 93.65 will become a new support. There might be a chance of making a trade if the latter happens ... (I will make an update when there’s a development)
Market is not random but unpredictable
  • #629
  • Oct 10, 2021 5:47pm Oct 10, 2021 5:47pm
Quoting 4for4
{quote} It is my “simplified” definition of harami where the current candle’s high-and-low do not exceed previous candle’s high-and-low. And I refrain from categorizing it as bullish or bearish because, I think, the terms “bullish and bearish” are appropriate only to describe the state of a trend. For me, out of my own experience, a harami pattern is just a stalled market condition and it is not an indicator of whether the market will continue or reverse the ongoing trend. In the example above (post #626), if next week’s candle breaks low, it just...
Basically described an Inside Candle

Trade the breakout of high or low

It takes a lot for me to IGNORE you, but you can try.
  • #630
  • Oct 10, 2021 6:06pm Oct 10, 2021 6:06pm
Quoting Erebus
{quote} Basically described an Inside Candle Trade the breakout of high or low
If it’s that simple, there would be a lot of winning traders …
Market is not random but unpredictable
  • #631
  • Oct 10, 2021 11:05pm Oct 10, 2021 11:05pm
Quoting 4for4
{quote} If it’s that simple, there would be a lot of winning traders …
There would be, but Mr. Market is smarter than that

It takes a lot for me to IGNORE you, but you can try.
  • #632
  • Oct 10, 2021 11:14pm Oct 10, 2021 11:14pm
Quoting Erebus
{quote} There would be, but Mr. Market is smarter than that

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Market is not random but unpredictable
  • #633
  • Oct 12, 2021 8:39am Oct 12, 2021 8:39am
Quoting 4for4
… if next week’s candle breaks high, a new bullish impulse wave will be started and has a good chance of making HH because of the shallow correction and 93.65 will become a new support. There might be a chance of making a trade if the latter happens ...
By breaking last week’s high, a new bullish impulse wave was started, making 93.65 as the current trend-reversal level for USDX, and it has a good chance of making HH up to 94.92 or higher.

Given the waited breakout signal and its predefined playable range, we can now plan a 1:3-RRR trade as follow:
“BUY-LIMIT USDX @ 93.96 —> 93.64 / 94.92” … (-32 versus +96)

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Market is not random but unpredictable
  • #634
  • Oct 14, 2021 2:10am Oct 14, 2021 2:10am
Quoting 4for4
“BUY-LIMIT USDX @ 93.96 —> 93.64 / 94.92” …
Pending order was initiated …
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Market is not random but unpredictable
  • #635
  • Oct 15, 2021 7:13pm Oct 15, 2021 7:13pm
Will the last impulse wave make a peak @ 94.54?
It will if next week’s candle breaks this week’s low …
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Btw, the current uptrend in USDX will be reversed if 93.65 is broken …
Market is not random but unpredictable
  • #636
  • Oct 15, 2021 11:40pm Oct 15, 2021 11:40pm
looks like a profit taking, and buying up readying for an upshot post taper decision (most likely in the december meeting rather than the november, per most recent FRB minute)
  • #637
  • Oct 17, 2021 6:31pm Oct 17, 2021 6:31pm
Learn to read the market by the trends:
Seeing a swing is not enough, we also need to identify it as impulse or corrective wave of the ongoing trend …
Market is not random but unpredictable
  • #638
  • Oct 18, 2021 7:53pm Oct 18, 2021 7:53pm
To simplify the process of trend identification, forget about “phasing” the waves to identify the trend and just focus on each wave as a component of the ongoing trend ...

In the diagram below, Wave1-Wave3-Wave5-WaveB were bullish impulse waves and Wave2-Wave4-WaveA were the corrective waves. While the uptrend in the diagram peaked @ “5”, a change-of-trend took place when the last-formed support “A” was broken during the swing from “B” to “C”. Thus, making WaveC the first bearish impulse wave ...
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Notes:
1. Sequentially, in the diagram, the price made 3 higher-and-higher supports @ point 2, 4 and A during the uptrend.
2. The new downtrend will end if the last-formed resistance is broken. And the first resistance level to watch is the “B” level ... (also called the “trend-reversal level”)
3. Trend-Reversal Level (TRL) is a dynamic level that, when broken, will change the course of the ongoing trend.
During an uptrend, TRL = last-formed support. During a downtrend, TRL = last-formed resistance.
Market is not random but unpredictable
  • #639
  • Oct 19, 2021 1:02am Oct 19, 2021 1:02am
Quoting 4for4
Will the last impulse wave make a peak @ 94.54? It will if next week’s candle breaks this week’s low … {image} Btw, the current uptrend in USDX will be reversed if 93.65 is broken …
The uptrend of USDX finally came to an end, peaking @ 94.54, when the market broke 93.65 …
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Can this weak-dollar bring the price of USDX to 92.67?
Market is not random but unpredictable
  • #640
  • Edited 1:35am Oct 24, 2021 1:20am | Edited 1:35am
A system will eventually fail if it doesn’t take the “larger” market condition into consideration.
Each system will be categorized as a trend-following or trend-reversing system and it needs to be consistently operated in the “right” market condition to be profitable.
Whether a system is traded manually or automatically, it will fail if traded in a wrong market condition … Learn to read the market first before devising a trading system.
Market is not random but unpredictable
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