"Wishful thinking dies hard." Igor T.
Mission Discovery: Think Outside The FX Box
When your two candles are picked out, the first step is to draw a line from the high of the first candle to the low of the second candle, and from the low of the first candle to the high of the second.
I don't see this occuring in your chart for post #59.
- #91
- Apr 21, 2008 12:17am Apr 21, 2008 12:17am
- Joined Dec 2007 | Status: Informed | 1,641 Posts
Thank you Scotty for setting off the trigger in my mind to trying out something new and different. I'm working on something right now.
Thanks for the questions. I haven't been on here for a couple days. Yes your examples of the method are right on. It's looks like both would have been good trades, so good work. I am glad you are thinking outside the box. I have a couple more variations of the technique I will write about and post soon, so be sure to check back soon. Also I have a new technique I've been testing using the same principles as the Japanese fan that uses two triangles and six lines to trade off of. I think I'll call that one the Japanese Butterfly. I'll have the new stuff up soon.
As you experiment with the Japanese fan it will become more and more clear to you that price is very dynamic and cohesive to itself. I used to think price action was pretty simple and that it was chaotic and random, but the Japanese fan shows that it is very much governed by previous price data. Candle sticks are full of reliable and predictive data, it's just a matter of training your self to read that data.
Hey afresh! Good to hear from you. How is trading going? Yes I agree the new concept is discretional in the sense that discretion is one of the critical ingredients of making it successful. Discretion is involved when keeping the price to time ratio low, meaning the line that we draw and it's angle. I would not say however that this technique is subjective, and I know thats not what you said but the human mind is good in the area of implication. The test of usefulness starts with observation. I noticed that when these lines are drawn on the chart (they existed before we drew them by the way) and price can close past one of our objective lines (buy/sell) it ussually goes on to hit one of the target lines. Even when price doesn't hit a target line and reverses, in the majority of cases it will still come back and hit the original target line it made an obligation to. To me this information is extremely useful, and these lines will be used by the market independent of me anyways.
When you draw a line from a low of the first candle you pick out to the high of the second candle you are in essence measuring the price's velocity.
X amount of pips per X amount of time or what a physicist would call a vector. One of the mistakes we make is thinking that price moves up and down only, but because of time it will always move at an angle. This technique takes the time and price into account. I have said before and will say again that time is the road on which price walks.
Some trivia real quick and then I'll shut up...If you start plotting out all the target lines for a given candle by pulling them off of many previous candles, you will notice interesting things happening at the point where these lines 'gather.'
Where would our stops be for the Japanese fan trade?
