ATP (Advanced Trading Philosophy) - Positioning For Success

Hi Damonl, Thank you for replay.

Please let me asking something... I just try to see if I understood well the strategy, basically the Entry Point. Please let me know if I'm wrong.

 

1. After a new SHI dot is plotted and the NL closed in Yellow we must to wait for the AO confirmation (T.R.C. confirmation).
   
2. These bar , where we receive the confirmation will be the Set Up Bar (?).
   
3. We place a Buy Stop Order at High of Set Up Bar (?).

I'm a Attaching a chart of EU for better description.

Please, let me know if I'm wrong. Thank a lot again

To get ready for Sunday nights open, I thought I would start by giving you some of the entry rules.

There are 3 Early Entry Strategies that I would like to go over with you right now. I should have a few hours to give these to you as Garrison Keeler is on NPR and I love to study my charts and listen to his program.

There are a few general rules that I want to put down first regarding the Early Entry Strategy and they are these:

1. There is never a set order as to which these trades will appear. We will place an order with whichever one happens first.
2. If one order is placed with one of our Early Entry Strategies, we will not place any other orders until that order has been triggered or a reversal signal has presented itself. The reason being is that these are the trades, because they are so early that we are actually in a good position to lose.
3. After that original order has been filled we will proceed to placing the rest of our orders as they present themselves.
4. Once the 1st EES pending order triggers and we get a valid signal to place a second order, we may want to double the lot sizes for this second order because the majority of the time when the 2nd pending EES order is triggered, the trade will continue for a few more days at the very least. This is of course discretionary and I would not reccomend this if you are not familar or comfortable with the system.

Well...I guess I don't have as much time as I thought. My wife got us a movie to watch so I will have to check in later.

Hey Bull,

As I will soon share with you, your first pending order would be at the high of "your #2 on the chart". We will not place any other pending orders until this order is triggered. As "your #3" the trade had not tirggered so we would not place a second order even though the AO does give us our second entry signal at "your #3"

But for the AO confirmation trade, it would be placed at the high of "your #3" not "your #4" as in your picture.

Please stick around as the complete entry rules are coming.

I have been a little restless about the entry strategy and so I thought that I would add another entry rule, which will save us a lot of pips.

Exit Rule Addition

If you are in a short trade you would exit the market when the RSI 14 closes above 50 and.....

If you are in a long trade you would exit the market when the RSI 14 closes below 50.

Remember that this is just an additional exit rule. All others are still valid. We now have 4 different wasy to exit the market. I now feel that this part is complete. 1 of these 4 will save us a lot of pips during the exit. Whichever one hits first we will use...except that I usually don't use the Early Exit Strategy.

Cheers

Here I will introduce you to one of our Early Entrance Strategies (EES).

Basically, this strategy for entering is the same strategy that we use for exiting positions if we are using the Early Exit Strategy. The signals are the same and at the same time you would be closeing any open positions you would be opeining new ones in the other direction.

Here are the rules:

1. We need to see a ST dot signaling a reversal of direction at the close of any bar and a NL that has closed in yellow. These do not have to happen in any particular order or on the same bar, but both need to happen to give us a valid entry point.
2. Once we get both signals, we would place a long or short pending order at the high +1 pip + spread above the high of the set-up bar or a low pending order 1 pip below the low of the set-up bar depending on the direction of the trade.
3. If this is the first EES to signal, we will not place any additional orders until this order has triggered or we get one of our reversal signals.

Take a look at the chart below for an explanation.

As you can see in the AU chart above, on 2/28/08 we had a res ST dot and on 2/29/08 we saw the NL close in yellow. Then we had an interesting occurance. Sundays bar opened outside of Friday's low.

In this case we would wait until a bar closed back within the realm of Friday's close and then place the orders for this trade. This happened at the close of 3/3/08. At this time we would place our short order at 1 pip below the low of the bar that closed on 2/29/08. As you can see, this trade would still be opened.

Sorry to pick a pair that needed so much explanation.

Another thing that happened in this area is that Sunday's bar closed with the AO in red. This trade would have been ignored because by rule even if Sunday's bar closes with a signal we would use the high or low of Friday's bar as out entrance points.

Here is another chart that ended in a loss:



Although the ST dot is not there anymore (it was) we would have had a valid short signal on 3/02/08 when the NL closed in yellow. Because this occurred at the close of Sunday's bar we would have place our short order 1 pip below the low of Friday's bar.

As you can see, on 3/04/08 we would have gotten a siganl to enter short based on the AO changing to red based upon where the ST dot was. but....because our first order did not trigger, we would not have placed an order here. However, based on our exit strategies, we would have place our new S/L orders at this same point.

Then on 3/05/08, a lot of things would have happened.

1. Our current long positions would have stopped out because we moved our orders yeasterday
2. Our short order that we previously placed would have triggered
3. That short order then later would have hit it's S/L as the trade would have then continued up.

What you don't see is that based on the rules all pending long orders would have still been in place until our Exit Strategy was triggered. Since our Exit Strategy triggered intraday and we do not monitor trades intraday and then continued back up we are now in a couple of very promising long trades.

You will then place these orders as specified and put them on the spreadsheet so that you will know what trades are for which postion and you wil lknow by referring back to your spreadsheet the next day how or what you need to do to manage them.

You will learn more about these other trades as we continue on our journey.

Hope this all makes sense to eveyone.

Here I will introduce you to the 2nd Early Entrance Strategy (EES).

Just becuase this is the second one introduced does not mean that it won't end up being the 1st or even the 3rd one to trigger on the chart.

In the event that it is the 2nd one to signal, I ususally do not place any orders for it unles the 1st signaled EES has triggered.

Likewise....once the 2nd EES trade triggers we are then free to place trades at will based upon all the rest of our rules.

Here are the rules:

1. We need to see an ST dot that has changed color indicating a reversal may be on the horizon
2. We need to see the AO close in the reversal color as well. If you have your charts set-up like mine then both the ST dot and the AO will be the same color.
3. These two signals will very rarely happen on the same bar and they don't have to in order to be considered valid signals. Nor do they need to happen in any particular order.
4. Once a signal is generated you would place either a long or short pending order 1 pip + spread above the high of the set-up bar or 1 pip below the low of the set-up bar depending on trend direction.

Take a look at the chart below for a visual description:

As you can see in the above GCHF chart. On 3/5/08 we would have gotten our first EES signal (the ST dot has since repositioned itself). Then on 3/6/08 this trade tirggered and then went lower. On 3/7/08 this trade hit our S/L, and we are now left with our 2nd EES signal as described above. The ST dot is green and the AO closed in green.

By rule, becuase our first EES trade triggered we would then place an order 1 pip + spread above the set-up bar on 3/7/08.

The only way we would not place this trade is if Sunday opens already higher than the high of the bar on 3/7/08. If this happens, we will wait to place our order until a bar other than Sunday's closes back within the realm of Friday's bar and our signals are still telling us to go long.

Here I will introduce you to the 3rd Early Entrance Strategy (EES)

This strategy is based off what OzFx is doing, except that I wanted an earlier entry. I also trade the original OzFx strategy which I have not put into the spreadsheet, but you are welcome to do so if you would like.

Here are a few general rules before I get into the specifics:

1. This trade will sometimes go against the trend as described throughout this thread
2. I will only take this trade is it signals at a seperate time as the other 2 EES entry signals. Rember that we don't want to be doubling up on orders this early in the trend.
3. If this trade signals and triggers first I will consider increasing my lots a little on the remaining 2 EES trades if they signal. This is discretionary and probably should not be attempted unitl you are comfortable with the ATP
4. This trade will also many times reconfigure and trigger well into the trend. At this time, the trade will be taken again if it is signaled.
5. For this trade we will be using the AC with the overlaping Stochastics
6. If the trade triggers and stops out, you can consider replacing your order at exactly the same place as long as on the same bar it got stopped out on the price stayed above/below the entry point depending on trade direction and we have not gotten a valid trend reversal siganl.

There are two entry points for this trade just in case the 1st attempt fails or doesn't trigger: The Initial Entry and the Continuation Entry

Here are the Initial Entry Rules:

1. %K Stockastic must have been either above level 91 to consider a short trade or below 7 consider a long trade.
2. Intial Short Trade Rules
   1. %K is moving in a downward direction and is touching the 91 level or has fallen below it.
   2. AC has closed in red
   3. These do not have to happen on the same bar, but both need to happen in order for it to ba valid signal.
   4. We then place a pending order 1 pip below the low of the set-up bar with our standard S/L setting.

3. Initial Long Trade Rules
   1. %K is moving in a upward direction and is touching the 7 level or has gone above it.
   2. AC has closed in green
   3. These do not have to happen on the same bar, but both need to happen in order for it to be a valid signal.
   4. We then place a pending long order 1 pip + spread above the high of the set-up bar with out standard S/L setting.

Please see the below charts for a visual description:

As you can see from the above chart, we would have had a long signal on 2/11/08 that did not happen at the same time as any other EES signals. %K is moving up from below level 7 and crossed over it and we had a AC that closed in green.

As it turns out, this is a trade that I am still in
_____________________________________________________________________________________________



As you can see from the above chart, we would have had a short signal on 2/11/08 that did not happen at the same time as any other EES signals. %K is moving down from above level 91 and crossed below it and we had an AC that closed in red.

One thing noteworthy here is that this trade would not have triggered until 2/27/08. So this trade remained pending for 16 calander days. We would have cancelled this trade out if %K would have crossed back up above level 91 because then we would have gotten another valid entry when it crossed below it again. As is the case with this example, that did not happen and as it turns out, this is a trade I am still in short

Here are the Continuation Entry Rules:

1. This happens when the %K stoachastic crosses above or below the 0 level of the AC, but does not penetrate through either the 91 level or the 7 level of the stohcastic.
2. Continuation Short Trade
   1. %K stochastic crosses above the 0 level of the AC, but before it crosses above the 91 level of the stochastic, it reverses and croses back below the 0 level of the AC.
   2. The AC must also be red or become red at anytime after the recrossing of the %k stochastic below the 0 level of the AC.
   3. We would then place a short pending order 1 pip below the low of the set-up bar.

3. Continuation Long Trade
   1. %K stochastic crosses below the 0 level of the AC, but before it crosses below the 7 level of the stochastic, it reverses and crosses back above the 0 level of the AC.
   2. The AC must also be green or become green at anytime after the recrossing of the %Kk stockastic above the 0 level of the AC.
   3. We would then place a long pending order 1 pip + spread above the high of the set-up bar.

Please see the chart below for an example of both types of trades:

As you can see from the GU chart above on 12/14/07 we would have had an example of a Continuation Short Signal where the %k crossed above the 0 level of the AC and then crossed back below it before crossing above the 91 level of the stochastic. After the %K closed below the 0 level of the AC and the AC closed in red, we would place our order as above.

As you can also see from the GU chart above on 3/5/08 we would have had an example of a Continuation Long Signal where the %k crossed below the 0 level of the AC and then crossed back above it before crossing below the 7 level of the stochastic. After the %K closed above the 0 level of the AC and the AC closed in green, we would place our order as above.

This trading example may seem complicated, but I assure you that it will take longer for you to read this then it will for you to see the very easy set-up on your charts.

I am back out for a while to finish my chores. See you all back here soon

Hi Damonl and everybody...

I test this strategy with Forex Tester Software using GJ from 1/1/07 till 11/1/08 and according the following rules:

1. Lot size: 0.1
2. SHI Otstup: 15
3. Entry Point: Early Entrance Strategies (EES)
4. Exit: Early Exit Strategy

The result look very good...

Thanks Bull....I appreciate that as I have no idea how to do any of that. I just know what it looks like when my equity keeps increasing .

The great news is that there are many more trades to factor in and this isn't like most systems which only work with GJ. This system will work with all pairs.

I need to step away for a while, but I will be back to finish my 3rd EES strategy post.

I am here if anyone needs any help. Please upload a chart with any questions.

As soon as I get into my trades a bit I will upload a chart and tell you what I see.

Hello....are you ready to make some pips. Here is how this is going to work. I am going to pick the EU to upload everynight and go through the trades with you. It will be up to you transcribe these trades to other pairs.

If you have a question about another pair please upload your chart and ask your question.

I will normally be at my desk anywhere from 5PM CST to 9 PM CST or from 2200GMT to 0200GMT. This will be the best chance to get your questions answered.

Here is my EU chart for tonight. There is a trade on here that I haven't introduced you to yet, but it is not in jeopardy of being triggered yet so I will finish my trades and then come back and go over our Daily Trend Trade Strategy with you.

I will check back periodically to answer any questions that you have.



We have a Daily Pips Trend Trade here with EU today. I have placed an order 1 pip + spread above the high of Friday's bar with a 75 pip trailing stop.

Hi Damonl,
I am following with great interest the approach to trading which you detail here.
Am I correct in my interpretation of the USDCAD chart...under Friday's bar there is a green ST plus the NL is yellow...this would be an early sign of trend reversal... so following the guide for EES 1, we should be looking to place a BUY order at the top of the Friday candle + 1+ spread? Or am I completely amiss?

Please upload your chart attictrader, I am not seeing the same thing that you are.

Hi Damonl,
On the atttached chart the NL has now turned blue as the Sunday bar forms.....

The actual EES trade would have been placed on 2/29/08. You are acutally using the 2nd NL yellow close which would not be a EES signal.

However, according to the indicators the trend is still long and you would have a Daily Pips Trend Trade (which I will go over shortly) and you would have a short signal for the EES 3 signal (D-OzFx) which can be found in a previous thread.

I will get you the daily pips trend trade as soon as I am able.

thanks Damonl,
I am keen to learn and continue to observe with interest.

Looking at the chart for 2/29/08, I cannot see a green ST, only the yellow NL....so, why would the EES trade have been placed at this time?

Here is my chart. Did you set your ST settings as per our post a few days ago?

Damonl,
Sorry, I was using the incorrect ST signal indicator....have now changed to the above indicator, with the Otstup adjusted as you recommended. I now have the same chart as you displayed and can understand the rational of your approach to this trade on the 02/29/08.
thanks again.

I would now like to introduce you to my Daily Pips Trend Trade.

Here are the basic rules:

1. This trade is usually a 1 to 3 day trade.
2. We will exit our position the first day that this trade closes in profit.
3. This trade is placed daily and only in the direction of the trend.
4. If the trade does not trigger on the day it was set, then the trade is cancelled.
5. Before we can consider that this strategy has given us a valid signal, first one of our three EES trades must have signaled and triggered.
6. I open up one of these trades everyday in the direction of the trend even if yesterdays triggered, but did not end in profit.
7. Please use the Trade Management Spreadsheet to locate your T/S for each pair. Very rarely is the T/S hit, but it is important in case of a major support/resistence level beeing hit. Please remember to place this T/S on every Daily Pips Trend Trade you place

Here is how you place this trade:

1. Placing a Long Daily Pips Trade
   1. After you have had a valid EES signal and trigger you would then place a long pending order 1 pip + spread above the high of the bar that just closed on the following day.
   2. Our standard S/L setting is used
   3. Once the trade closes in profit, we will liquidate the postion.
   4. You would continue to place these trades daily until the trend changes

2. Placing a Short Daily Pips Trade
   1. After you have had a valid EES signal and trigger you would then place a short pending order 1 pip below the low of the bar that just closed on the following day.
   2. Our standard S/L setting is used
   3. Once the trade closes in profit, we will liquidate the postion.
   4. You would continue to place these trades daily until the trend changes.

Please see the chart below for a visual description:

As you can see from the chart above. The Yellow arrow gave us our 1st EES signal. The green arrow was the bar that triggered our first signal. We are now ready to start our Daily Pips Trend Trades.

As you can see by the Thumbs-Up arrows, so far we would have had 18 daily pips trades to date for this EU pair since the trend began. I will go through them with you one at a time. For each Thumbs-Up arrow, our orders would have been placed 1 pip + spread above the high of the previous bar. If these would have been short trades the order woul dhave been 1 pip below the low of the previous day.

#1 - this order did not trigger so at the close of the day we set the order we would have cancelled it.
#2 - this order would have triggered and gave us about 40 pips
#3 - this order would have triggered and gave us about 30 pips
#4 - this order did not trigger so at the close of the day we set the order we would have cancelled it
#5 - this order triggered and gave us about 40 pips
#6 - this order would not have triggered and so that order woul dhave been cancelled.
#7 - this trade would have given us about 80 pips
#8 - this trade closed with -pips so we would have let it ride
#9 - this trade would not have triggered. Trade #8 is still open
#10 - I don't remeber, this trade may have hit our S/L. If it didn't we would have made some nice pips, but we would have made a profit of about 150 pips from trade #8
#11 - we would have made over 50 pips
#12 - profit of about 45 pips
#13 - closed -pips so we would let it ride
#14 - closed -pips so we would let this one ride as well...we know have 2 open trades
#15 - this trade did not trigger
#16 - this trade stopped out trade #14, but gave us about 45 pips from trade # 13 and about 25 pips from this trade
#17 - earned us about 75 pips
#18 - this is the trade that I just opened for today.

I think that you get the picture so I will not load a chart and go through short trades with you as the concept is the same except in the other direction. I will be around if you have any questions, please ask.