(binned per thread starter’s request)The "Thinking is Optional" S

Hey Here2there. It seems a bit hypocritical to post in someone's thread when you have the thread starter on your ignore list.

Despite that I hold no grudge and welcome your comments as long as they are related to the topic.

Take care.

Some further thoughts on "cherry-picking"

Often an OP gets berated for showing good examples but think about it...

If you're not cherry-picking the very best for your own trade entries, you need your head read.

Why wouldn't you want the best-looking setups?

Cherry-picking should be the norm and not a way to criticize the system or method.

Have a nice weekend

I'm curious Winston, what happened to the previous way you used to trade. WRB, gaps and forks. Did you find it too time consuming or just really good in hindsight?

Hello Sossos. Good to hear from you. I still enjoy them. Yes time consuming. I haven't been a member of languageofmarkets for almost 2 years now but I watch Shane's free videos when they come out. I ventured into VSA for a bit but for the moment I've set it aside.

So now I'm in this odd system I "created". It came about as I was looking at of all things trend lines longer term. For example I would pull up a 60 min chart and zoom out all the way and identify trends that I could draw a relatively decent trend line on. It didn't have to conform exactly but the retracements had to fairly consistently either hit the TL or break it and come back through. Then I thought that a long term MA could do essentially the same thing sort of like a moving trend line. And so this system is what I've come up with.

I've only been trading it for a short time but so far it has worked well. Time will tell.

Ok, I was just curious. I'm just using parallel channels and a relative volume indicator to assist identifying swaps at D points. Be well and trade well

Looking good.

60 minute signal

Entry on 5 minute chart

I removed this post from another thread because of a couple of rude individual's comments demonstrating their utter inability to comprehend it's intent which was to point out that win rate is only one aspect of profitability.

The examples below assume trade size of 1000 units or $0.01/pip (Oanda). The cost of trade entry/exit on EURUSD is less than $0.4 total cost with this trade size. Slippage is irrelevant.


Win rate by itself will not result in a profitable method. R:R must also be factored in.
Some interesting scenarios below:

Win rate 50% with 1:1 R:R per trade. Trader risks 10 pips to gain 10 pips per trade.
Trade 1 win +10 pips
Trade 2 loss -10 pips
Net 0 after 2 trades.

Win rate 66.7% with 1:1 R:R per trade. Trader risks 10 pips to gain 10 pips per trade.
Trade 1 win +10
Trade 2 win +10
Net +20
Trade 3 loss -10
Net +10
Trade 4 win +10
Net +20
Trade 5 win +10
Net +30
Trade 6 loss -10
Net +20 after 6 trades

Win rate 50% with a 1:2 R:R per trade. Trader risks 10 pips to gain 20 pips per trade.
Trade 1 win +20pips
Trade 2 loss -10 pips
Net +10 pips
Trade 3 win +20 pips
Net +30 pips
Trade 4 loss -10 pips
Net +40 pips after 4 trades



Win rate 33.3% with a 1:3 R:R. Trader risks 10 pips to gain 30 pips per trade.
Trade 1 win +30 pips
Trade 2 loss -10 pips
Net +20 pips
Trade 3 loss -10 pips
Net +10 pips.
Trade 4 win +30 pips
Net 40 pips
Trade 5 loss -10 pips
Net +30 pips
Trade 6 loss -10 pips
Net +20 after 6 trades

Takin' my 50 pips and going home.

Buy

Buy...

Some have begun to use this system and I appreciate their posts.

By now anybody using this system or any system using moving averages knows that false signals or ranging markets can wreak havoc. Here are some observations that may help in the endeavor to limit false signals:

1. This particular system seeks to take advantage of relatively long term trends within any time frame. That is to say that trends occur on any time frame and by using a relatively slow moving average one can capture these trends no matter the price action characteristics of price under the moving average trend or above it. It should be noted that this system seeks to capture smaller short term trends with the fast MA within the overall long term trend characterized by the slow MA.

2. Fast moving averages below or above the slow moving average trend indicator then can provide signals in line with the larger trend.

3. False signals may be limited by using the nature of price to swing. That is once the fast moving average has provided a signal to potentially trade in the direction of the slow moving average trend one can use smaller swings within the new smaller trend. For example

In a down trend price will make LLs and LHs. So once the fast moving average crosses to the downside it may only indicate a pullback in the uptrend that occurred before the down trend. Therefore it may behoove the trader to observe price "taking out" a previous swing low in the old uptrend or for the new downtrend to be confirmed by a LL and LH before entering. Of course confirmation of this type has its own disadvantages.

To bring into focus the above discussion let's look at USDJPY 60 min

A larger trend is shown by the pink notations showing the larger swings of the current uptrend in terms of swings.

Look at scenario 1:

Price swung above the 200 MAs and the 200 MAs also crossed. Even if price is above the 200 MAs a buy may not be entered until the non shifted MA is above the shifted MA per system rules. After price swung above it then began a short term down trend as the 200 non shifted crossed the 200 shifted MA indicating potential buys were in play.

Notice the smaller blue LLs and LHs as this smaller downtrend occurred. Although there was a fast MA cross to the upside the LL and LH characteristic had not been violated. Once it was violated as shown then a buy could have been entered that was also in line with system rules.

Notice scenario two. It is similar so I won't give a blow-by-blow.



I hope this is helpful in filtering out some false signals. Again although thinking is not required it doesn't hurt to use your brain.

I entered the trade twice by mistake... oh well

except EU which late entry, the rest all green..
fortunate? time will tell..
as for now, enjoy while still can..
bravo Winston