Manage probability while following the TREND.
- #503
- Feb 19, 2008 2:34am Feb 19, 2008 2:34am
My understandings from AMM is attached both in picture & Excel. I assumed that we could take maximum of 5% at the first price touch of a significant reference level. After that we could only risk for the maximum of 1% of our account. In the other retraces we could use the maximum risk free trades as we desire.
Dear Haniam, Could you check it. There are some differences from what you have wrote & what I achieved.
Regards,
The interpretation that you wrote is valid for normal Support/Resistance levels that will bounce first then will have a 50% probability to break on following attempts. We may call it AMM-N (For Normal)
AMM-S (For Significnt) is targeting more cases where Support/Resistance area levels have more probability to hold for a longer time with a multiple retest and a 20 pips penetration area.
It relies on the fact that these areas are almost never broken from the first attempt (first touch) and will bounce at a moment 25-35 pips (for EU pair) before another important attack. (The amount will be different for other pairs)
These areas see lot of SL or BE hits before the trade reverse. So we are trying to take the most of these retest while being more secured of an eventual 'get out of the trade' BD technique.
So goal is to build slowly incremental opened positions while securing them, to have good positions targeting hundreds of pips.
The main difference will be in catching the move if we are expecting it and having the balance grow with it. See pink cells.
This is how it works:
1- First, we sold 4-5 times the normal risk at the first touch, quickly securing them by selling 80% and not by moving the SL to BE, or we would get out. We got a 1% opened secured position and a 3% up guaranteed in the balance.
2- All following full retests (prices should go 10-20 pips and come to retest) of the lower bound (In case of resistance area as in the example) will be sold at 1 time normal risk up to the guaranteed balance, building positions and securing them when possible.
3- A further deeper penetration of the area will see another massive sell near the upper bound of the area and will be treated almost as per point 1, but with less risks since all previous positions are secured, some of the new opened positions are protected by previous guaranteed up balance and SL is 20 pips lower than the previous ones.
4- These positions will be secured by having prices going out of the resistance area (rejecting prices) before entering new positions.
5- New positions can be reentered as per point 2 on a level price bounce.
6- If prices break the upper/lower bound of the resistance/support area, we have a good probability of a retest of these level from the up/low side before prices go to hit SL. So we will immediately close all positions (No place for greed and hope here) on this retest and we will most probably suffer no loss or small losses, if not getting some positive pips, depending on situations.
7- Profit will be taken as targets are reached, and SL will be moved accordingly (Trailing stop or following Resistance/Support levels). The final guaranteed blance will depend on this.
Closing all positions at first target would have given 12% in AMM-N V/S 19% in AMM-S
I am posting a modified excel AMM-V1.1 sheet that will be taking into consideration both cases.
- #505
- Feb 19, 2008 3:37am Feb 19, 2008 3:37am
The retrace is still under run, but is approaching a good resistance on the 1.4690-1.4710 area which will be a great opportunity to reenter the previously closed mid term and short term trades with small 30 pips risk and hundreds of pips targets at 1.4550 and 1.4450. A break of 1.4550 will let us enter in the yellow trading zone.
Green dotted line illustrate this.
The yellow dotted line shows the overall downward retrace move from the all time high that may extend under 1.4000 in the coming months or even weeks.
Things will turn for a bigger retracement up if 1.4720 is broken, and we may be leaving the green region and reentering the red region for a retest of 1.48xx level.
Please note that all this move does not harm the main uptrend direction of the EU pair.
Scenario 2 is still in play
The first resistance area 1.4690-1.4710 has been broken today on speculation over the US economy and is challenging the second resistance area 1.4735-1.4755 which is being a great opportunity to reenter the previously closed mid term and short term trades with small 30 pips risk and hundreds of pips targets at per post #504. A break of 1.4550 is needed to let us enter in the yellow trading zone.
Green dotted lines illustrate this.
The yellow dotted line shows the overall downward retrace move from the all time high that may extend under 1.4000 in the coming months or even weeks.
Things will turn for a bigger retracement up if 1.4760 is broken, and we may be leaving the green region and reentering the red region for a retest of 1.48xx level.
Please note that this entire move does not harm the main uptrend direction of the EU pair.
Scenario 2 is still in play
- #506
- Edited Feb 20, 2008 12:38am Feb 19, 2008 7:26am | Edited Feb 20, 2008 12:38am
1- Sold 5 times normal risk @1.4738.
2- Secured 80% @1.4708. We are now 3% guarantee up in the balance we can use to can open 3 risk free short positions at a retest of the resistance area and we have 1 opened risk free position.
3- Targets are @1.4685, 1.4665, 1.4645 and 1.4625
We got more than 7 risk free, but we will consider them 7 since we close half way.
- #507
- Feb 20, 2008 12:44am Feb 20, 2008 12:44am
1- Sold 5 times normal risk @1.4738.
2- Secured 80% @1.4708. We are now 3% guarantee up in the balance we can use to can open 3 risk free short positions at a retest of the resistance area and we have 1 opened risk free position.
3- Targets are @1.4685, 1.4665, 1.4645 and 1.4625
Target 1 approaching. We will close around 1.4690-95, move stops to BE and may sell the break of 1.4685
- #508
- Feb 20, 2008 9:10am Feb 20, 2008 9:10am
We are now 15% guaranteed up in the balance and still having 4 opened positions to be closed at targets.
Target 1 approaching. We will close around 1.4690-95, move stops to BE and may sell the break of 1.4685
Attachment
By using AMM-S, we finished the sequenced trades with 46% up in the balance, or +1400 pips up, with very limited risk.
AMM-N use would not have allowed us to keep opened positions to reach +120 pips. It could be used during the same trade to add to position at support/resistance break. An example can be found in this trade in the selling @1.4665.
The Risk Free RF trades count is not exact: it gets more complicated to count so we are rounding since the closing is not anymore at + 30 pips, but often much more.
The chart below illustrates the continuation sequence of the trades.
Hope you were ale to catch lot of pips.
This should be the end of posting AMM-S trades, since posting them is too much time consuming.
However, if you post a trade you did using this advanced AMM strategy, I would be glad to comment it with you.
Happy trading to all!
Use AMM-S to enter positions at Significant area Support/Resistance levels.
Use AMM-N to add to position at Normal Support/Resistance levels.
- #509
- Feb 22, 2008 1:34am Feb 22, 2008 1:34am
The retrace is still under run.
The first resistance area 1.4690-1.4710 has been broken today on speculation over the US economy and is challenging the second resistance area 1.4735-1.4755 which is being a great opportunity to reenter the previously closed mid term and short term trades with small 30 pips risk and hundreds of pips targets at per post #504. A break of 1.4550 is needed to let us enter in the yellow trading zone.
Green dotted lines illustrate this.
The yellow dotted line shows the overall downward retrace move from the all time high that may extend under 1.4000 in the coming months or even weeks.
Things will turn for a bigger retracement up if 1.4760 is broken, and we may be leaving the green region and reentering the red region for a retest of 1.48xx level.
Please note that this entire move does not harm the main uptrend direction of the EU pair.
Scenario 2 is still in play
Attachment
This area is now broken and turn to resistance. We are in the red area.
All remaining positions opened previously in the 1.49xx level have been momentarily closed and reversed @1.4765 break and the stops are now below 1.4745. Target are in the 1.49xx area.
Resistance are now 1.4835, 1.4885 and 1.4930
Supports @1.4785(Pivot level), 1.4755 and 1.4705
1.4930-1.4965 seems a strong resistance area we may be used to short as per previous strategy, but with bigger SL. I doubt it is yet the time for a 1.50 break and these trades should give us good pips.
Today Friday, Feb. 22, we do not have important fundamental news, and trading will continue on speculation and rumors, favored by BD who may encourage an up move, only to have the opportunity to get rid from part of their huge longing positions at an excellent price, which has already created a strong move down 3 times previously.
We may use 1.4760-1.4790 as a support area, looking to buy a possible bounce of 1.4785 PL, or 1.4760 previous resistance turned to support, targetting resistance levels with 40 pips SL, but being ready to close and reverse on a strong move down.
We expect chaotic action over 1.49xx area, and if prices do not manage to stabilize over 1.4900 level, a down strong move can be seen.
Scenario 2 is still in play until 1.4970 is broken (A daily close above)
- #515
- Feb 26, 2008 5:34am Feb 26, 2008 5:34am
Big dogs got me good on EJ today...really not happy atm. Walked smack bang into their trap and realised it too late.
Anyway, will keep trying.
A good habit would be to post a chart explaining the situation, showing the trap and suggesting some ways to avoid it next time. In this way, you train yourself to be more cautious next time.
Safe trading to all,
Hani
- #516
- Feb 26, 2008 8:26am Feb 26, 2008 8:26am
Resistance area 1.4735-1.4755 gave us around 1400 pips and a 40%+ in the balance with tarde posted live previously.
This area is now broken and turn to resistance. We are in the red area.
All remaining positions opened previously in the 1.49xx level have been momentarily closed and reversed @1.4765 break and the stops are now below 1.4745. Target are in the 1.49xx area.
Resistance are now 1.4835, 1.4885 and 1.4930
Supports @1.4785(Pivot level), 1.4755 and 1.4705
1.4930-1.4965 seems a strong resistance area we may be used to short as per previous strategy, but with bigger SL. I doubt it is yet the time for a 1.50 break and these trades should give us good pips.
Today Friday, Feb. 22, we do not have important fundamental news, and trading will continue on speculation and rumors, favored by BD who may encourage an up move, only to have the opportunity to get rid from part of their huge longing positions at an excellent price, which has already created a strong move down 3 times previously.
We may use 1.4760-1.4790 as a support area, looking to buy a possible bounce of 1.4785 PL, or 1.4760 previous resistance turned to support, targetting resistance levels with 40 pips SL, but being ready to close and reverse on a strong move down.
We expect chaotic action over 1.49xx area, and if prices do not manage to stabilize over 1.4900 level, a down strong move can be seen.
Scenario 2 is still in play until 1.4970 is broken (A daily close above)
Attachment
We had excellent US data, but prices are not falling, yet.
There's a BD play in preparation!
Closing all EU long opened position @1.4885 for tons of pips.
Preparing to short the market. Seems 1.4885 resistance is bouncing, and a reverse is under way. Will see last news release in 30 minutes...
- #517
- Feb 26, 2008 8:45am Feb 26, 2008 8:45am
We had excellent US data, but prices are not falling, yet.
There's a BD play in preparation!
Closing all EU long opened position @1.4885 for tons of pips.
Preparing to short the market. Seems 1.4885 resistance is bouncing, and a reverse is under way. Will see last news release in 30 minutes...
Attachment
Adding to short on 1.4855 break
- #518
- Edited Feb 27, 2008 12:30am Feb 26, 2008 3:15pm | Edited Feb 27, 2008 12:30am
The stop loss only hit 1 position as per AMM-N rules so we gave back 25 pips
for a net of 110-25 = 85 pips.
We are testing the all time highs, with some attempts to break up that have not yet succeeded.
The following days will be decisive for the direction of the EU, with some important move, a break of 1.50xx putting us in a no men lands.
Trade very carefully, and don't forget to use a good MM and to put a SL.
- #519
- Feb 27, 2008 1:25am Feb 27, 2008 1:25am
Resistance area 1.4735-1.4755 gave us around 1400 pips and a 40%+ in the balance with tarde posted live previously.
This area is now broken and turn to resistance. We are in the red area.
All remaining positions opened previously in the 1.49xx level have been momentarily closed and reversed @1.4765 break and the stops are now below 1.4745. Target are in the 1.49xx area.
Resistance are now 1.4835, 1.4885 and 1.4930
Supports @1.4785(Pivot level), 1.4755 and 1.4705
1.4930-1.4965 seems a strong resistance area we may be used to short as per previous strategy, but with bigger SL. I doubt it is yet the time for a 1.50 break and these trades should give us good pips.
Today Friday, Feb. 22, we do not have important fundamental news, and trading will continue on speculation and rumors, favored by BD who may encourage an up move, only to have the opportunity to get rid from part of their huge longing positions at an excellent price, which has already created a strong move down 3 times previously.
We may use 1.4760-1.4790 as a support area, looking to buy a possible bounce of 1.4785 PL, or 1.4760 previous resistance turned to support, targetting resistance levels with 40 pips SL, but being ready to close and reverse on a strong move down.
We expect chaotic action over 1.49xx area, and if prices do not manage to stabilize over 1.4900 level, a down strong move can be seen.
Scenario 2 is still in play until 1.4970 is broken (A daily close above)
Attachment
Prices broke overnight the all time highs, setting a new record and closing above 1.4970, which gives the bulls a big advantage.
Scenario 2 is now not any more under our attention.
We have now a range breakout, that would be confirmed by a close today over 1.5xx level. Then we can expect a 500 pips target.
A new factor is in play for the EU pair: The interest rate that has turned from negative to positive when longing it. It is becoming more and more interesting to buy and hold for investors, and this interest will increase in March with a new rate cut, putting more and more pressure on the USD.
Oil breaking 100 level is supporting bulls. The coming weeks will be critcial for the USD to determine a possible bigger recession in the US economy. Watch Bernanke speech today.
For our Level 3 position trades, we are looking to buy a retrace to 1.4890-1.4930 targeting 1.5060, 1.5230, 1.54xx with a SL under 1.4680
