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Igrok Method. Q's & A's. Comments, thoughts and ideas

  • #981
  • Apr 9, 2008 1:50am Apr 9, 2008 1:50am
Quoting Igrok
Here is an interesting picture on the EUR/CHF cross daily chart . As we can see, there was a clear bullish divergence between the actuall chart and the MACD histogram ponting at the high of the previous month at 1.5878 (two magenta lines indicate the divergence). This target has been finally reached on Friday. On the last Friday the market also touched and then bounced off of the green trendline suggesting taking a short position with a medium-term target being most likely located at least at 1.5574 level as an unfilled gap is still sitting down there (indicated by the red horizontal line). The stops for such a trade could either be placed above the green trendline or above the Friday's top, considering that it was an outside bar formed that day.
Hello Igrok,

I am interested in your point of view of this idea, now that the price is above the trendline/channel.
I would like to know if we can still consider the trendline to make a trade, i mean, take a short if the price goes bellow the line?
Should we consider another approach to this pair now?

Best regards
  • #982
  • Apr 9, 2008 2:00am Apr 9, 2008 2:00am
Quoting BentRod
Great stuff.

That one was text book!
Th picture was perfect but the momentum is missing. I had to speed up right after the break. Cause it didn't, I don't like it any more.
  • #983
  • Apr 9, 2008 2:02am Apr 9, 2008 2:02am
Quoting Burns
Hello Igrok,

I am interested in your point of view of this idea, now that the price is above the trendline/channel.
I would like to know if we can still consider the trendline to make a trade, i mean, take a short if the price goes bellow the line?
Should we consider another approach to this pair now?

Best regards
No. The line has already lost it's significance after the break out. The idea makes no sense any longer.
  • #984
  • Apr 9, 2008 3:33pm Apr 9, 2008 3:33pm
Quoting BentRod
Great stuff.

That one was text book!

This one on USD/CAD hourly was also perfect and unlike USD/CHF didn't fail eventually.
Attached Image (click to enlarge)
Click to Enlarge Name: 60 min. CAD A0-FX.jpg Size: 93 KB
  • #985
  • Apr 9, 2008 4:13pm Apr 9, 2008 4:13pm
I just wonder if this picture on daily AUD/JPY makes some sense to someone else besides me?
Attached Image (click to enlarge)
Click to Enlarge Name: Daily AUDJPY A0-FX.jpg Size: 112 KB
  • #986
  • Apr 9, 2008 5:58pm Apr 9, 2008 5:58pm
Whats the significance of the 96.35/40 line?
  • #987
  • Apr 9, 2008 6:42pm Apr 9, 2008 6:42pm
Quoting Blackinc
Whats the significance of the 96.35/40 line?

96.46 is the top on the left made on 01.24.07. Two lines that outline both upper borders are positioned at the same angle with the horizon and the vertical axel. One of those red lines (the left red one) comes through this top. Can't you see it's almost perfectly symmetrical.
  • #988
  • Apr 9, 2008 6:49pm Apr 9, 2008 6:49pm
Quoting Igrok
I just wonder if this picture on daily AUD/JPY makes some sense to someone else besides me?

looks like opposite end of the broadening triangle with clear boundaries, i guess would be a diamond formation? I don't see the left side of the pic completely so not sure the likely hood of the break if to the upside or downside, but clear edges of the diamond defined at right below 97.50 level.
  • #989
  • Apr 9, 2008 6:57pm Apr 9, 2008 6:57pm
Quoting Igrok
96.46 is the top on the left made on 01.24.07. Two lines that outline both upper borders are positioned at the same angle with the horizon and the vertical axel. One of those red lines (the left red one) comes through this top. Can't you see it's almost perfectly symmetrical.
I could see how the lines all helped define borders, didn't see how the angle of them factored in.

I love the bottom red horizontal. Beautiful
  • #990
  • Apr 9, 2008 9:40pm Apr 9, 2008 9:40pm
Quoting Blackinc
I could see how the lines all helped define borders, didn't see how the angle of them factored in.

I love the bottom red horizontal. Beautiful
Symmetrical patterns are often outlined by the lines having the same slope angles. (This is what actually makes them symmetrical.) This is how some key levels can be projected in advance in case there are some reasons to suspect that a symmetrical pattern is about to be formed. In this particular case the previous top at 100.46 could be projected in advance by just measurung the angles.
The horizontal read line at the bottom of the picture also validates that symmetry.
  • #991
  • Apr 9, 2008 9:45pm Apr 9, 2008 9:45pm
Quoting megamo
looks like opposite end of the broadening triangle with clear boundaries, i guess would be a diamond formation? I don't see the left side of the pic completely so not sure the likely hood of the break if to the upside or downside, but clear edges of the diamond defined at right below 97.50 level.
OK. Here is a bigger picture. So far looks like a huge diamond to me.
Attached Image (click to enlarge)
Click to Enlarge Name: Daily AUDJPY A0-FX.jpg Size: 97 KB
  • #992
  • Apr 9, 2008 11:09pm Apr 9, 2008 11:09pm
Quoting Igrok
OK. Here is a bigger picture. So far looks like a huge diamond to me.
In case you are waiting for the correct answer - This formation is a bust without the right side touching the bottom of the diamond before it double touched the upper border.

May I have more porridge now sir?
All I ask is a chance to prove that money can't make me happy.
  • #993
  • Apr 9, 2008 11:46pm Apr 9, 2008 11:46pm
Quoting telluv
In case you are waiting for the correct answer - This formation is a bust without the right side touching the bottom of the diamond before it double touched the upper border.

May I have more porridge now sir?
Who might want some porridge when decent read meat steaks are widely available? The meal comes with a glass of Guinness, off course.
But nonetheless this stuff still looks symmetrical enough to treat it like a diamond. The idea should also be supported a bearish MACD divergence initially pointing at the very bottom of the formation which is 86.00.
  • #994
  • Apr 9, 2008 11:51pm Apr 9, 2008 11:51pm
Quoting Igrok
OK. Here is a bigger picture. So far looks like a huge diamond to me.
Do you find that the left side is not as symmetrical as the right, or not a typical txtbook formation of a diamond? In any case, would it be fair to assume a break to the upside perhaps considering the strong lower edges formed..
  • #995
  • Edited 3:33pm Apr 10, 2008 3:20pm | Edited 3:33pm
Quoting megamo
Do you find that the left side is not as symmetrical as the right, or not a typical txtbook formation of a diamond? In any case, would it be fair to assume a break to the upside perhaps considering the strong lower edges formed..
Ideal patterns of a textbook quality are very rare. For instance, while working on my book's illustrations I could only find a single H&S formation on the charts that might be presented without any additional reservations, excuses or explanations. (Page 69, USD/DEM Weekly).
In this particular case the diamond can be validated based on three major points:
- two major diagonals are equal in size;
- both minor diagonals have bottomed out at the same level;
- both upper borders are positioned absolutely symmetrical against the vertical axel ( both angles against the horizon line are precisely equal). Based on its look I think that this pattern is more likely than not to indicate a major trend reversal with a longer-term target located at 67.00 area.
  • #996
  • Apr 11, 2008 10:13am Apr 11, 2008 10:13am
How could I miss such an educational thread ?

I have some questions and pardon if those q have been answered before:

1. Have you made any statistic or anything alike with different patterns based on your trading-experience with forex ? I have only managed to find valuable statistics with the same patterns I trade, within stocks, based upon many years of testing.

2. I see you make many diamonds patterns in your analyzes. In your experience do you have any specific pattern you value/consider more successful compared to others ?
Measure twice, cut once
  • #997
  • Apr 11, 2008 11:09am Apr 11, 2008 11:09am
Quoting aediaz1
How could I miss such an educational thread ?

I have some questions and pardon if those q have been answered before:

1. Have you made any statistic or anything alike with different patterns based on your trading-experience with forex ? I have only managed to find valuable statistics with the same patterns I trade, within stocks, based upon many years of testing.

2. I see you make many diamonds patterns in your analyzes. In your experience do you have any specific pattern you value/consider more successful compared to others ?
1. My entire trading technique is based on a number of different patterns. All 27 trading templates that I use are about patterns and statistical probabilities. However, because the market never repetes its history in the exact way, an element of discretion is always present in each and every of those templates, which makes it almost impossible to collect scientifically flawless statistics.

2. Diamond formation is not the biggest deal in my own trading. ADTR approach is more common and effective. But for some reason, when I first mentioned diamonds a few times here, some of the readers became fascinated with this particular pattern and wanted to know more about it. Besides, the diamonds normally can easily be visualized on the charts (especially when I draw the lines myself and then show them to the viewers ), which gives readers-traders some additional sense of certainty in this otherwise very uncertain business. So, it became so popular in this thread just because it looks easier than anything else that I do in the market.
  • #998
  • Apr 11, 2008 11:22am Apr 11, 2008 11:22am
Good point. So, do you think that i.e flag pattern or ascending triangle can turn less profitable/non profitable in 10 years ? Might be an blunt question but if I understand you rightly, you can't run i.e pattern-test with 10-20 years back test ? I understand that market change along with the people trading it.

About diamonds, what made me ask about it in the first place was that T. Bulkowski ranked this as low-probabilities pattern but I believed/heard (from somewhere) that this pattern was high-probability scenario due to its rare "happenings". So when I saw you draw them "a lot" too I got uncertain about its performance since I have spotted those events so rarely that I couldn't draw my own conclusion from it.
Measure twice, cut once
  • #999
  • Edited 12:46pm Apr 11, 2008 12:18pm | Edited 12:46pm
Quoting aediaz1
Good point. So, do you think that i.e flag pattern or ascending triangle can turn less profitable/non profitable in 10 years ? Might be an blunt question but if I understand you rightly, you can't run i.e pattern-test with 10-20 years back test ? I understand that market change along with the people trading it.

About diamonds, what made me ask about it in the first place was that T. Bulkowski ranked this as low-probabilities pattern but I believed/heard (from somewhere) that this pattern was high-probability scenario due to its rare "happenings". So when I saw you draw them "a lot" too I got uncertain about its performance since I have spotted those events so rarely that I couldn't draw my own conclusion from it.
First, I don't belive in "profitable" or "unprofitable" patterns. Only a trader makes them as such. For instance, the law of gravity exist regardless of the outcome for a particular human being, who can only use its forces either to his good or to his bad depending on an individual and the circumstances around him.
Second, most of the so called "failed patterns" are nothing else but the subjects of incorrect identification or wishful thinking. Unfortunately, most of the chartists don't really know how to read and interprete the charts. I have seen lots of mistakes made even in the classic TA books, when it comes to illustrating even the most common patterns. This is why most of the charts analysis I see on forums or receive from different sources make no sense to me at all.
Third, traders do not usually survive for long enough to complete their TA education. They get kicked out of business long before gaining enough experience in this
field. This is why mechanical systems based on artificial mathematical models are so popular among traders, as they try to substitute real knowledge and experience.

When it comes to a particular pattern like diamond, it is not easy to define how rare or frequent the event occures because the estimate greatly depends on an individual's ability to undentify this pattern. Moreover, the problem with the diamond is that it might exist in several different shapes and forms while still being the same formation. It also works either as a continuation or a reversal pattern depending on the information "encoded" in its shape, while in classic technical analysis diamond is being reffered to as a reversal pattern only.
  • #1,000
  • Edited 3:00pm Apr 11, 2008 2:43pm | Edited 3:00pm
Quoting Igrok
First, I don't belive in "profitable" or "unprofitable" patterns. Only a trader makes them as such. For instance, the law of gravity exist regardless of the outcome for a particular human being, who can only use its forces either to his good or to his bad depending on an individual and the circumstances around him.
Second, most of the so called "failed patterns" are nothing else but the subjects of incorrect identification or wishful thinking. Unfortunately, most of the chartists don't really know how to read and interprete the charts. I have seen lots of mistakes made even in the classic TA books, when it comes to illustrating even the most common patterns. This is why most of the charts analysis I see on forums or receive from different sources make no sense to me at all.
Third, traders do not usually survive for long enough to complete their TA education. They get kicked out of business long before gaining enough experience in this
field. This is why mechanical systems based on artificial mathematical models are so popular among traders, as they try to substitute real knowledge and experience.

When it comes to a particular pattern like diamond, it is not easy to define how rare or frequent the event occures because the estimate greatly depends on an individual's ability to undentify this pattern. Moreover, the problem with the diamond is that it might exist in several different shapes and forms while still being the same formation. It also works either as a continuation or a reversal pattern depending on the information "encoded" in its shape, while in classic technical analysis diamond is being reffered to as a reversal pattern only.
Interesting. If I understand you rightly; price patterns have lower failure-rate than "stated" its more due to the trader ?

In other words, when you draw diamonds, would you be amazed if that particular pattern where wrong ? Please don't take that question for being ignorant.

Would you allow me to post a chart with some simple drawings ?

I feel like I have entered a new "well" of relevant insight here so please say so if I ask too many q.
Measure twice, cut once
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