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The Holy Grail - Found

  • #381
  • Dec 20, 2007 8:34pm Dec 20, 2007 8:34pm
Quoting 4XWeezal
Not sure why you would not create an ea for this.
modified turtle could work?
Maybe a long would be

// ema + 50 > 100 and slope of 40 degrees~ maybe 20 > 50 > 100 ???


A lot would depend on how many times would be required before we guaranteed a solid resistance point on the 30?
thoughts on whether its worth seeing or do you want to add anything to it?

sounds good to me third times a charm?!
  • #382
  • Edited Dec 21, 2007 9:58am Dec 20, 2007 10:22pm | Edited Dec 21, 2007 9:58am
In the "magic bullet" scene of JFK, Kevin Costner looks at the jury and proclaims "Physicists will tell you that an elephant can hang off a cliff by just its tail, when common sense will tell you that is impossible."

Where is your common sense, people?

Can rigorous math tell me what the weather will be like in Luxemburg, Germany tommorow? Of course not. The only way for me to know in the USA is to call the Luxemburg's weather man. The same goes for currency prices. Only the central bankers know, and I'd have to have insider information to find out their plans.

Those are the unavoidable facts.

Quoting ubeee
On the other side, supposing we can demonstrate that markets are not random, would it be enough to say, in a rigorous and demonstrable way, that indeed this implies that a consistent winning trading system could surely be created? Nonlinear dynamical systems are HARD to tame, so even if you can demonstrate that markets are deterministic this would not automatically imply that there could ever be a way to "reverse engineering" the underlying process.
  • #383
  • Dec 20, 2007 10:28pm Dec 20, 2007 10:28pm
Start at the bottom first - Enjoy

http://fxclub.com/video-en/
  • #384
  • Dec 21, 2007 2:04am Dec 21, 2007 2:04am
Quoting tdion
Can rigorous math tell me what the weather will be like in Luxemburg, Germany tommorow?
Ehmmm, tommorow? Definitively yes! Even a little bit more (is it enough 30 years into the future?):
http://www.science.ie/EN/index.cfm/s...s/news_key/132

If not with math and science how can you make money with trading? Ah, yes, there are biblical numbers and astrology and gut feelings...

Sorry, I prefer something more deterministic and reliable.
From: http://en.wikipedia.org/wiki/Algorithmic_trading

"A third of all EU and US stock trades in 2006 were driven by automatic programs, or algorithms, according to Boston-based consulting firm Aite Group LLC. By 2010, that figure will reach 50 percent, according to Aite.[2]
In 2006 at the London Stock Exchange, over 40% of all orders were entered by algo traders, with 60% predicted for 2007. American markets and equity markets generally have a higher proportion of algo trades than other markets, and estimates for 2008 range as high as an 80% proportion in some markets. Foreign exchange markets also have active algo trading (about 25% of orders in 2006)."

This is all rigorous math, stats and science, and this for me is the real common sense.
.Ubeee.
  • #385
  • Dec 21, 2007 5:21pm Dec 21, 2007 5:21pm
To accept that some trend is a prevailing trend is not easy if at all possible.
The trend directions on various time frames vary.
One source suggest that uptrend/downtrend is depicted by 89 & 144 emas

This pdf suggests another angle to the same problem:
http://www.biz-analyst.com/library/s...ties_trend.pdf

To stay at right side of market requires analysis not only daily but more time frames. The rule that wasn't ever broken is that beginning of trend change starts at lower time frame. It is contrary to beliefs of many traders that think it starts at higher time frame.
The contrarian trend direction from lower time frames can be used as filter to trend direction on daily.

In JohnW method, the indication of trend direction on daily is a signal, so it doesn't matter whether that signal is right in essence of principle. He uses this signal for JohnW method only. It works, while it may be essentially wrong as signal if used for other than JohnW method.

Happy Christmas.
Here is a batch of Christmas videos:
http://www.history.com/minisite.do?c...7&mini_id=1290
screen action instead of price action
  • #386
  • Dec 21, 2007 5:39pm Dec 21, 2007 5:39pm
Quoting ubeee
But are you really sure about this? Could this be demonstrated with some sort of rigorous math?…..
With lotteries this is easy to answer because randomness is the ONLY element involved in the game, but trading is different …..
I guess it depends what is meant by random. By "a la Malkiel", I was attempting to explain the obvious consequences of a completely random walk, just like you describe re lotteries. But hopefully by saying "IF" (I did try to emphasize "IF"), I wasn't committing myself as to the extent or nature of the randomness..... the simple answer is, of course, that I don't know. Anyway, if it's possible for at least one trader to profit, on balance, indefinitely, then price movement can not be a completely random walk.

To the purely technical trader, price is ostensibly a sequence of numbers. There may well be occasional patterns ("pockets of non-randomness") in the sequence, i.e. where there is a >50% probability that there will be a bias to ensuing price direction (a widely believed example is a James16 pin-bar). For as long as this "inefficiency" recurs, it provides a setup that can potentially be exploited. That is the maximum extent to which any method can hope to remain profitable.

As to the long-term effectiveness of systems, I posed a couple of questions here, and got some very interesting responses from (supposedly) highly experienced traders:
http://www.forexfactory.com/showthre...6&postcount=19
The earlier posts by FXAnalytics are a great read, IMHO; I expect you've already seen them.

Quoting ubeee
Also the definition of randomness itself can be misleading and phenomenons that in the past were believed to be totally ruled by randomness are today approached in different ways (with chaos theory, for example). So even if those same phenomenons still today (from a probability distribution point of view) maintains the same characteristics of the past (of course), we now are starting to believe that they are deterministic.
I'm not well versed in Chaos Theory, but if non-linear systems "captured" the peculiarities in price movement significantly better than linear ones, then I would expect that methods like Bill Williams' Profitunity, and Ken Herbert's Fractal's Edge, would outperform those offered by "traditional" TA by a conspicuous margin.

Quoting ubeee
In the end this talking about the randomness or not of the markets, when applied to trading, seems to me not very much helpful in the advancement of trading techniques themselves…..
I agree that this topic isn't very constructive, and also that I've done it to death elsewhere. I was just attempting to answer a point made in a previous post, and then I'm afraid I digressed a little….
(and to avoid hijacking this thread any further, this is my last post on this topic).

Thanks Ubeee, I enjoy reading your well-thought-out posts.

David
  • #387
  • Dec 21, 2007 6:40pm Dec 21, 2007 6:40pm
ICED - Did you play that breakout? I see you mentioned it on the 18th. It broke out for 60+ pips last I looked. Perfect no stress break, at no time was the price remotely close to the stop.
Although the trend wasn't right on the daily chart, it was perfect on the 4 hr chart. I actually prefer the 4hr charts for setups. You can get multiple hits on a 4hr chart that will produce exactly the same pattern breakout, and the ma's will be correct, no need to lose a setup. They're hard enough to come by.
Everyone talks about the dollar going to hell in a handbasket, yet it keeps going straight up.
The BigBoys probably purchased a ton of contracts at 90 cents (usd/cad), they'll distribute them at much higher prices just as they are right now. That tells me they can control the price perfectly over time.

Greensperm said usa is 50% likely to enter a recession in 08. He ought to know, with his 17 interest rate hikes in a row (good job greenie, you idiot) and they gave him an award lol.
Stockmarket up another 200 today lol Dow Market Makers can't manipulate the market...can they? Say it isn't so.

Ok my rant is over....or is it
  • #388
  • Dec 21, 2007 7:24pm Dec 21, 2007 7:24pm
Quoting FXNorm
ICED - Did you play that breakout? I see you mentioned it on the 18th. It broke out for 60+ pips last I looked. Perfect no stress break, at no time was the price remotely close to the stop.
No, today I had to take care of things with my business so no time to put in on trading.

I'll continue using vHands over the weekend/holiday to practice trading this method. It still looks good!
  • #389
  • Dec 21, 2007 7:28pm Dec 21, 2007 7:28pm
well , maybe I don't know what I am looking at@.
1.) ema of 50 greater than 100. (assume for a long)
2.) On the 30 mn chart will want multiple hits on a high at least 16 bars apart. (30 mn x 2)
3.) Place the buy stop off this resistance level? within 5 pips? Is this the right factor? ie or is this bought off a fib retracement and are we looking for multiple bars ?

I assume based on reading below its a long off the top? is that right?


All trades are taken off the 30M chart. I look for S/R levels. S/R levels are determined from trend lines and swing points (stop and reverse levels). The more times an S/R level is hit and price reverses from it, the stronger it is. So, if the daily trend is up, I look for a strong resistance level with more than one hit (preferably separated by 8 hours) and reverse over the course of 2-3 days. I place a buy order above that level regardless of where the 30M EMA's or PSAR are, what the MACD says, or whether there is any divergence or not. If these other indicators confirm, then I feel a slightly more confident in the trade. If not, I don't worry. I also look for S/R from stop & reverse levels that are close to S/R from trend lines. If price breaks both in a move, I will not place a TP, but instead close the trade near the end of London. I use a 30-pip SL, and I target 20 pips for all trades except the AUD/USD and USD/CAD. For these I use 10 pips. I typically place orders after 00:00GMT (5:00PM EST) so that I can catch moves during the London session. My stop orders are spread +2 pips from the S/R level. Only enter the market using stop orders. My logic is this: if there is a resistance point in a long term uptrend, who is going to break that resistance? Stronger traders, that's who. Where do all the self-proclaimed gurus tell you to place stop loss orders? Beyond S/R levels. Think that large traders will run those stops? Yes, they will. More often than not (>90%) you will get the 20 pips.
  • #390
  • Dec 21, 2007 7:45pm Dec 21, 2007 7:45pm
fx norm? can you explain the exact "rules" -- I am missing something. (assuming an up)
RULE 1 50 > 100 EMA ON DAILY
RULE 2 Mulitple resistance on 30 mn at least 8 hours apart.?
RULE 3 play buy stop order above it by 2 pips?

What bars do I look @ in this resistance?
  • #391
  • Edited 9:25pm Dec 21, 2007 8:03pm | Edited 9:25pm
Hi 4XWeezal,

Place a line connecting the "hits" as best you can, thats your exact resistance or support point, give or take a few pips. The hits won't be exact, but close enough to get the idea. Alot of times the "hits' are right to the pip even tho the price is several hours older. 4 or 5 hits have to be averaged by connecting the most hits. I probably didn't get your question correct.
  • #392
  • Dec 21, 2007 8:12pm Dec 21, 2007 8:12pm
Hmm. How do you determine when the market is ready for a
correction. Obviously, stochastics is one way but is there another.
that would be my wholly grail. Anyway, the most "hits" has some merit. But, turns are never easy or we would all be rich.
  • #393
  • Edited Dec 22, 2007 9:16am Dec 21, 2007 8:28pm | Edited Dec 22, 2007 9:16am
I just continue to play the breakouts, that way I don't have to guess if price is entering a corrective phase.
If the price breaks against the trend, its my warning signal that a ranging market may be about to start.
Never try to guess price direction, you'll lose your butt, just keep playing the breakouts till they stop breaking out. Then move to another pair until
an new trend is underway as indicated by the 50 and 100 ma in either the 4hr chart or daily chart. Both ma's need to be "pointing" ((tips of ema's) either up in an uptrend or down in a downtrend and be reasonably parallel. This wll be profitable while you hunt for your Holy Grail.
  • #394
  • Dec 21, 2007 9:03pm Dec 21, 2007 9:03pm
Fri 12-21-07

Take a look at GBP/USD on the 1 hour chart, there's a perfect setup of a downside breakout with 4 "hits" at support and 3 hits at overhead resistance ( both ma' pointing nicely down). Price has been moving sideways
and the 50 ma and 100 ma's are approaching...price is coming under pressure from the ema's. Rarly does the price break thru the 50 ema, most times it is repelled. So, just wait until the price breaks support by 15 or so pips, then wait for a retest of the support, then go long as it moves past the tip of the breakout bar or candle (entry point). Called, breakout, pullback, continuation.
There's an excellent chance that price will break support on sunday, as people see their investment having gotten hammered and may want to take profits before the end of the year. Its a no brainer play.

If price breaks thru the 50 ma to the upside,its no trade for me, as it would be AGAINST the trend.
  • #395
  • Edited Dec 22, 2007 1:40am Dec 21, 2007 10:15pm | Edited Dec 22, 2007 1:40am
Quoting blueruby
(Darkstar and his protege Steve).
Hey now my name is Mike! steve isn't a bad name though(steviet ). Darkstar is a brilliant man


I enjoyed this thread, some good thinking and information, but the usual bad information being passed as fact(from good sources none the less, which goes to show you can still make money with your own beliefs). I commend those that have an open mind, and then look to verify information for themselves.

Hanover your posts are always so detailed and enjoyable to read even if you "quit".

Happy Holidays all

Mike

edit* I do hate the title of these threads and some of the claims, i think that goes without saying at this point lol
  • #396
  • Dec 22, 2007 12:55am Dec 22, 2007 12:55am
find the best pair and system with the best risk/reward ratio by YOURSELF and you have found the holy grail
  • #397
  • Dec 22, 2007 2:05am Dec 22, 2007 2:05am
Quoting mbqb11
Hey now my name is Mike! steve isn't a bad name though(steviet ). Darkstar is a brilliant man


Have a great Christmas Mike - if you look in my profile you'll see why I may be laying low on the 25th hehe.

Kind Regards
Steve
  • #398
  • Dec 22, 2007 5:54am Dec 22, 2007 5:54am
Quoting hanover
I'm not well versed in Chaos Theory, but if non-linear systems "captured" the peculiarities in price movement significantly better than linear ones, then I would expect that methods like Bill Williams' Profitunity, and Ken Herbert's Fractal's Edge, would outperform those offered by "traditional" TA by a conspicuous margin.
I also don't want to hijack this thread any further. I hope to be able to find some time in the future to open a specific thread about these topics.
.Ubeee.
  • #399
  • Dec 22, 2007 7:04am Dec 22, 2007 7:04am
Quoting steviet


Have a great Christmas Mike - if you look in my profile you'll see why I may be laying low on the 25th hehe.

Kind Regards
Steve
Happy BDay Steve on Christmas day...
  • #400
  • Dec 22, 2007 7:21am Dec 22, 2007 7:21am
Quoting smjones
Happy BDay Steve on Christmas day...
Cheers Scott - apparently my life begins at 40

Oops - better not hijack this thread lol. Happy Christmas to you & yours Scott
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