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Peaks and Valleys (Trading Naked)

  • #421
  • Feb 27, 2008 10:58pm Feb 27, 2008 10:58pm
Quoting gyfu
hey guys... any response to this.. ??
Hey gyfu,

I think there is no response yet because could it be that folks are experimenting with the choices? I am. Going back to the drawing board so to speak.

Have been looking at just using a simple line of closing price, not candles or bars. Also have a S/R indicator. I use VT trader, but MT4 has this as well.

Oh, looking at daily right now. May look at 4 hr.
  • #422
  • Feb 28, 2008 3:25am Feb 28, 2008 3:25am
Hi Lou,
I do agree that perhaps most are still looking at it and so forth. I just wanted to know at least that someone is looking at it and the topic did not just get dropped.

It doesn't seem to be a clear answer but it looks like a double edge sword. If use the close or median instead of the peaks, you might get lucky and earn extra pips. But then again, there will be times, when it will stop you out, cos you enter earlier.

I hate to say it, but looks like to each is own. Unless someone really took the effort to measure up the entries.. and compare the numbers.

Cheers
  • #423
  • Feb 28, 2008 11:37am Feb 28, 2008 11:37am
Hello all,
My second day of part-time trading demo with this approach. Stopped out twice (USD/JPY & AUD/USD) for a total of -40 pips, and right now I am riding a nice wave on GBP/CHF, with 90 pips up and looking good. I am working on 1H charts, looking at the 4H and Daily to see the higher trend. I think that the depth/height of the valley/peak has a lot to do with the winning probability of each particular trade. Did someone thought about that? From my little observation time, it seems to me that the bigger the difference between the peak/valley and the buy/sell stop order price, the bigger the chance of getting into a winning trade.


I am using a SL on the previous peak/valley, and the SMA1-close. Hope someone is enjoying the G/C rally too. I am getting into identifying the setting prior to the breakout. Thanks again Kevin and Swingtrader65. By the way, those of you trading with many pairs, get a good reading of the Word file Swingtrader65 published here, if you didn't do it already, and his/her posts. Experience is everything, they say, so nothing better than enjoying what ST65 has plenty of.

Be well

Middleastern
  • #424
  • Mar 1, 2008 10:21am Mar 1, 2008 10:21am
For future reference, this is an ideal situation
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  • #425
  • Mar 1, 2008 10:52am Mar 1, 2008 10:52am
Quoting Middleastern
Hello all,
My second day of part-time trading demo with this approach. Stopped out twice (USD/JPY & AUD/USD) for a total of -40 pips, and right now I am riding a nice wave on GBP/CHF, with 90 pips up and looking good. I am working on 1H charts, looking at the 4H and Daily to see the higher trend. I think that the depth/height of the valley/peak has a lot to do with the winning probability of each particular trade. Did someone thought about that? From my little observation time, it seems to me that the bigger the difference between the peak/valley and the buy/sell stop order price, the bigger the chance of getting into a winning trade.


I am using a SL on the previous peak/valley, and the SMA1-close. Hope someone is enjoying the G/C rally too. I am getting into identifying the setting prior to the breakout. Thanks again Kevin and Swingtrader65. By the way, those of you trading with many pairs, get a good reading of the Word file Swingtrader65 published here, if you didn't do it already, and his/her posts. Experience is everything, they say, so nothing better than enjoying what ST65 has plenty of.

Be well

Middleastern

Thanks,

You gave me an idea... using fibs to highlight the troughs (in an upmove) to quantify them in order to see how deep is 'deep'.
  • #426
  • Mar 1, 2008 10:56am Mar 1, 2008 10:56am
Quoting kharvell
For future reference, this is an ideal situation

Hey Kevin,

Good to hear from you. Especially when you bring presents.

I noticed the long wicks. Like others still confused about the strength of these. At times I use the cursor to find a price common to most of the wicks and use that for a limit order placement.
  • #427
  • Mar 5, 2008 6:03am Mar 5, 2008 6:03am
Another thread that just dies off?
  • #428
  • Mar 5, 2008 8:13am Mar 5, 2008 8:13am
Finally .......... New Beginning
  • #429
  • Mar 5, 2008 3:15pm Mar 5, 2008 3:15pm
A question for experienced traders please: In the chart below as an example; Price has broken through the previous peak where I've put my line. I'm using the sma1 for P&V's, the candle has just formed.Would you take this trade or wait until the candle has close so that you have a definite peak? The reason I ask is it is coming up to resistance.
Thanks, Bogus.
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FF journal: Peaks and Troffs
  • #430
  • Mar 5, 2008 3:40pm Mar 5, 2008 3:40pm
If you look at the candle just before the current one you can see that before it closed it passed the sma peak but then closed below the peak. The current candle is also tentatively passing the peak but may close without passing. Waiting for a close seems best.
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
  • #431
  • Mar 5, 2008 3:42pm Mar 5, 2008 3:42pm
Quoting Middleastern
Another thread that just dies off?
Nope... People are backtesting and forwardtesting
A good trade is when I Break Even. A great trade is when I Take Profit.
  • #432
  • Mar 5, 2008 3:45pm Mar 5, 2008 3:45pm
Thanks Thexder, I'll continue forward testing, backtesting seems to give an untrue picture .I don't like the idea of setting limit orders because of spikes. Time will tell.
Quoting Thexder
If you look at the candle just before the current one you can see that before it closed it passed the sma peak but then closed below the peak. The current candle is also tentatively passing the peak but may close without passing. Waiting for a close seems best.
FF journal: Peaks and Troffs
  • #433
  • Mar 5, 2008 3:49pm Mar 5, 2008 3:49pm
This is one I'm watching. Its made a trough on the upside of the 50 ema, if it makes a peak higher on candle close it would seem like a good signal.(hopefully)
Attached Image (click to enlarge)
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FF journal: Peaks and Troffs
  • #434
  • Mar 5, 2008 4:48pm Mar 5, 2008 4:48pm
Quoting bogus
A question for experienced traders please: In the chart below as an example; Price has broken through the previous peak where I've put my line. I'm using the sma1 for P&V's, the candle has just formed.Would you take this trade or wait until the candle has close so that you have a definite peak? The reason I ask is it is coming up to resistance.
Thanks, Bogus.
Hey bogus,

I think one thing worth pointing out on your first chart is how bearish the chart looks. If I were you, I'd stick mostly to shorts, until the chart has an appearance of being flat or bullish.

The trend is your friend,

Kevin
  • #435
  • Mar 5, 2008 5:02pm Mar 5, 2008 5:02pm
OK. Fair call. Thanks Kevin.
Quoting kharvell
Hey bogus,

I think one thing worth pointing out on your first chart is how bearish the chart looks. If I were you, I'd stick mostly to shorts, until the chart has an appearance of being flat or bullish.

The trend is your friend,

Kevin
FF journal: Peaks and Troffs
  • #436
  • Mar 5, 2008 11:09pm Mar 5, 2008 11:09pm
Quoting bogus
OK. Fair call. Thanks Kevin.
One other question regarding the 50 pip initial stop loss.

Let us take an example of the long trade. If the trade goes in my favor, say 50 pips, then I have few options:

1. Close the trade and take profit

2. Bring the SL to BE

3. Leave the SL as it is until a new low is formed above the entry price and move it under new low. (which is what, I think is the description of Kevin's approach)


My question is, what if the previous low point is below 50 pips, upon entry? Shouldn't the SL be widened to make it below the previous low?

Technically if my stoploss is not below the previous low, it can hit the stop loss and turn around. right?

Is it just a matter of preference or is there a more correct way of doing this.


Thanks,
TradeStar
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #437
  • Mar 6, 2008 12:22am Mar 6, 2008 12:22am
I think you would want to put your stop loss below some type of resistance that price has shown in the past.
  • #438
  • Mar 6, 2008 7:18am Mar 6, 2008 7:18am
Guys,
I don't know how many would be interested in this.
I've been trying to find a way to compounding lots. Also I've been trying to find rules that will minimize discretion in the trades because I trade with only one lot and I know how discretion is important.
I also found that the bigger the TF the less we have Losses, so I tried the H4
I backtested about one year on EU (H4)
These are the rules:
1-Wait for a 123 formation, that will be the way we can determine the start of a trend. Never take the first breakout (the breakout of the #2)
2- Once trend confirmed, enter on peak/valley breakout of the high/low.
3- Valid picks and valleys are the one that have about 10 to 12 bars or more (about 2 days)
4- Enter with 2 positions.
5- SL = previous peak/valley
6- Never take a trade with more than 200 pips SL
7- TP for the first lot is equal to initial SL
8- Once TP is hit move SL of the second position at breakeven

Adding lots:
1- Never add lots before TP of the previous position is reached and SL of the this previous position is at BE
2-All of the above except #1 are rules for adding lots too.

123 formation:
The 123 formation is a good tools to know if a trend is about to begin: I won't explain it since Joe Ross in the Law of Charts explain it in a very good way (just google "Law of charts" and you will have it for free)
In 2 words, it's simply a reaction of taking profits between short and long term traders.
Stop Loss:
1- If multiple lots are opened, SLs of all positions should follow the last trade's SL (whether it's an initial SL or a BE SL)



Now attached is a template. Download it and put it on an EU chart H4. This way you will see how I did the backtest.
Also I should say that there might be some mistakes I made so apologize for that but I've spent the whole night looking for some system that requires the minimum of discretion. So if you see something wrong or you want to ask any question please give it a screen shot and I'll change it.

It made about 2500pips over the last 16 months which is around 150pips per month.
Results are not too encouraging but it may be interesting if we have same results on more pairs, that's why I encourage anybody who is willing to do the same backtest on other pairs otherwise I'll have to do them all by my own.
Anybody interested, please do it in a template way so we can discuss the trades.
Need your comments!!!
Attached File(s)
File Type: tpl eurusd h4.tpl   41 KB | 414 downloads
  • #439
  • Mar 6, 2008 7:32am Mar 6, 2008 7:32am
Dump backtest.......... Do forward test..... thats best for you


on other note how you guys deal with requote..... I have been trying to close one of my long from +90 and it requote to now I am left with +20 ...........
  • #440
  • Mar 6, 2008 7:51am Mar 6, 2008 7:51am
Quoting Syafi
Dump backtest.......... Do forward test..... thats best for you


on other note how you guys deal with requote..... I have been trying to close one of my long from +90 and it requote to now I am left with +20 ...........
I know backtest is useless, but I believe that to start forward testing you should have a minimum of proof that it's worthy
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