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Bobnannings Range trading method

  • #21
  • Jan 11, 2009 11:26am Jan 11, 2009 11:26am
After doing some research, I found this description that I copied from another thread.

"the range is the high minus the low of a particular bar (the "size" of the bar)

the average range is the average size of each bar being evaluated.

the average true range is the just the average range plus it takes gaps into consideration. (ie if the market opens up on a gap, it adss the gap to the range, so the range would be high minus the close of last bar.) because forex doesnt open and close everyday, there are few gaps, so the average range will be pretty much the same as the average true range.

so if you are looking at hourly bars, and the ATR(14) is reading out 0.0032, that means that over the past 14 bars, the average size of each bar is 32 pips."

This gives a wavier line on the chart as shown in the pictures. The white line is the 40MA, and the red line is the ATR 13 period overlayed onto it for a 0ne hour chart, and a 5 minute chart.

They look pretty close to me. I don't really know what advantage there would be in using one over the other. Wouldn't it all work out about the same over the long haul?

Is is correct to assume that your EA makes a first entry when the pair moves 80 pips away from the ATR? Can a template be made from this so we can see where the trades would be made? I like the template nanningbob has using the 40 MA as I can play with the entries, and even move the first line closer or further away from the center line and get a visual of where each trade would be made.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: atr40ma.gif Size: 33 KB
Click to Enlarge Name: atr40ma5min.gif Size: 23 KB
  • #22
  • Jan 11, 2009 4:43pm Jan 11, 2009 4:43pm
Quoting Arnold49
I am posting some useful EA's I have found as you may find them useful also.

the only one I have used is the Swiss army knife, the other two I only found today.

the trailing stop one has the ability to trail normally or in steps

the breakeven one is self explanatory.
is trailstop ea set in pips or dollars?
  • #23
  • Jan 11, 2009 5:06pm Jan 11, 2009 5:06pm
Hello,

Try this trade manager ea http://www.forexfactory.com/showpost...99&postcount=1
I think you will like it.

Regards,
Jeff

Quoting Arnold49
I am posting some useful EA's I have found as you may find them useful also.

the only one I have used is the Swiss army knife, the other two I only found today.

the trailing stop one has the ability to trail normally or in steps

the breakeven one is self explanatory.
  • #24
  • Jan 11, 2009 6:24pm Jan 11, 2009 6:24pm
Nanningbob, I posted this on the other thread, also. If I want to have the EA make a buy or sell at a different distance from center, which numbers do I change? The H-level is now set at 90, and the L-level at 10. What is I want to have the EA make the first trade 100 PIPS away from center? Or, 120 from center? Or, any other amount. Thanks.

I followed a thread here involving using the COG line as a center, with trades made at a certain distance away from it. The recommended trades away from the center line varied for each pair with dotted lines representing a minor signal and solid lines representing a major signal. I have the distances away for each pair that I am putting together, and will post after I have them all typed up.

Your revised EA where it doesn't enter on the AUD/NZD should work very well on the other pairs as long as the proper entry for each pair is inputted.

http://www.forexfactory.com/images/misc/progress.gif

  • #25
  • Jan 11, 2009 6:43pm Jan 11, 2009 6:43pm
Ok I understand this ATR now, thanks for the info. You will find that at 13 it will move to rapidly to make trades. It may never hit a stop loss but it wont enter the market much either. The 5M in my system uses a 120 MA that is a big difference.
  • #26
  • Jan 11, 2009 6:47pm Jan 11, 2009 6:47pm
Quoting paradoxical
Nanningbob, I posted this on the other thread, also. If I want to have the EA make a buy or sell at a different distance from center, which numbers do I change? The H-level is now set at 90, and the L-level at 10. What is I want to have the EA make the first trade 100 PIPS away from center? Or, 120 from center? Or, any other amount. Thanks.

I followed a thread here involving using the COG line as a center, with trades made at a certain distance away from it. The recommended trades away from the center line varied for each pair with dotted lines...
Yes I posted my answer on the other thread and yes I am trying the same thing with other currencies. I am working on two theories:

1. Find a range that will seldom hit a stop loss on each currency. The problem I am finding is many currencies are doing several day runs and may hit 2 or 3 stop losses in a row.

2. Ok I will take some stop losses, but I will make them small and use only 3-5 levels. In other words can many winners overcome a certain amount of stop losses. That will take several months of testing to answer.
  • #27
  • Edited 7:25pm Jan 11, 2009 6:49pm | Edited 7:25pm
parapoxical,

I might be wrong but I don't think that is how Steve was going to use the ATR.

I think he is looking to come up with a optimized order entry for each pair used.
We'll see what he says.

I just looked at the EA code and I would say that the ATR ea will enter a short trade when price is above the 120 period ma by the amount of the current atr reading and a buy just the same but reversed of course.
Not sure that is exactly what we would want but it is a starting point.
  • #28
  • Jan 11, 2009 6:59pm Jan 11, 2009 6:59pm
Some of you guys may disagree with me but my study of indicators has led me to one conclusion. They are all variations of the same thing. In other words they are all variations of MA. They just use different math to get their lines or charts. What is my system, its kind of a bollinger bands, vegas tunnel, envelope system mixed into one. When price gets a certain distance from a median average it will move back to its median. I use MA because that is what all indicators are based on. In trading I have found only 3 major systems as far as techinicals go.

1. MA and all their variations, this includes practically every indicator you see on the market--STO, ATR, MACD, RSI,
2. Support and resistance lines with pivot points
3. Trend lines of different types including channels, high/low breakouts, candle formations, price action, etc.

If you use one of each kind in trading instead of variations of the same thing you can get clear signals for trading. If you want to manually trade you do a simple MA cross off of a support or resistance line and a clear break or continuence of the trend and you have a high probability trade.
  • #29
  • Jan 11, 2009 7:02pm Jan 11, 2009 7:02pm
Quoting nanningbob
Yes I posted my answer on the other thread and yes I am trying the same thing with other currencies. I am working on two theories:

1. Find a range that will seldom hit a stop loss on each currency. The problem I am finding is many currencies are doing several day runs and may hit 2 or 3 stop losses in a row.

2. Ok I will take some stop losses, but I will make them small and use only 3-5 levels. In other words can many winners overcome a certain amount of stop losses. That will take several months of testing to answer.
Hi Bob(?)

Ive been doing something similar on a demo account and documenting results in my journal since mid December, using only a naked candle chart, occasional price averaging, with reasonably wide stop-losses. The bones of the method is the S&R at the back of my trades. In my opinion, I should remain above water in both trending and ranging markets, which makes it pretty great in my opinion.

I think you should find a way to cut out all indicators and rely solely on price, but, thats also just an opinion.

Im a little less than 40% up on my starting account balance at this point, last week I was hit with one of the large losses that will happen(hopefully not too often), still very hopefull.

GL,

Leon
Living the adventure in my head.
  • #30
  • Jan 11, 2009 7:39pm Jan 11, 2009 7:39pm
Quoting Leonlorenzo
Hi Bob(?)

Ive been doing something similar on a demo account and documenting results in my journal since mid December, using only a naked candle chart, occasional price averaging, with reasonably wide stop-losses. The bones of the method is the S&R at the back of my trades. In my opinion, I should remain above water in both trending and ranging markets, which makes it pretty great in my opinion.

I think you should find a way to cut out all indicators and rely solely on price, but, thats also just an opinion.

Im a little less than 40% up on...
I basically agree, however, because of my job, I am not around to trade when good setups come up. I come home and find out I missed my best trades for the day. So now I use an EA to trade for me. This led me to trade price ranges and this is where I am today. No matter what system you use, I find that seldom do you get a great entrance point so using a multiple entrance point fits me very well. Sooner or later I can get the right entrance and make some money. If you have been following my threads I have been heading for more exact and fewer entrances. That is what my stystems try to do. To me the best indicator is a 1 MA median crossing a 10 MA on a high time frame chart. Here is a pic of a 4H chart, distance from dotted line to dotted line is 1 week. The 1MA median is not a lagging indicator, it is now and the 10MA makes a good trend line. You trade maybe once or twice a week. Simple but effective. You basically visualize this in your head when you say follow price action. This is just a simple visual of what I think you are saying. Indicators are OK if you really understand how they work but sorry to say most people have never studied how they are put together why the do what they do. I doubt if you could find one in 10,000 traders could explain the math behind the indicator they are using. I have studied the Aud/nzd for a long time. It is a very very rare event for it to move more than 200 pips without retracing. That is the price action I play and I make my decisions based on that. When price gets within 100 pips of its highest turnaround I want to start entering my sells, when it gets 100 pips of its lowest turnaround I want to enter my buys. That is based on price action. The only unknown factor is we dont know whether it will turn around at 50, 70, 100, 120 etc from the 200 max. so I cover my bases by multiple entries. That is my system in a nutshell but it is based on the price action fact that he Aud/Nzd dollar retraces within a 200 pip range. So we do not disagree that much. The guys who understand this love my system and once they do they see the simplicity of it.

Anyway here is a 1MA crossing a 10 MA on a 4H chart. You cant get any simpler than this for a trading stystem. If follows price action and gives you a simple trendline to cross and trade.
Attached Image (click to enlarge)
Click to Enlarge Name: gbp-usd 4h.gif Size: 14 KB
  • #31
  • Jan 11, 2009 8:05pm Jan 11, 2009 8:05pm
Quoting nanningbob
Some of you guys may disagree with me but my study of indicators has led me to one conclusion. They are all variations of the same thing. In other words they are all variations of MA. They just use different math to get their lines or charts. What is my system, its kind of a bollinger bands, vegas tunnel, envelope system mixed into one. When price gets a certain distance from a median average it will move back to its median. I use MA because that is what all indicators are based on. In trading I have found only 3 major systems as far as techinicals...
I absolutely agree..... been thinking this for years...........
Same Whore .... Different Dress
  • #32
  • Jan 11, 2009 8:34pm Jan 11, 2009 8:34pm
imho, the best trades are when everyone else is buying, you're selling, and vice versa. One way to do that is to make your purchases at a certain distance away from the norm. Whether you want to use a certain moving average, the average true range, a water level, or a COG line, they will all be fairly similar. It's a guide. Something to tell you where the approximate center is. I did an overlay of Bob's 40 MA with a COG line on another thread, and also with the ATR, and they're close. Not exact, but close enough. My idea is to buy at enough distance away from this center line, so that I know I'm getting a bargain. I think everyone realizes that this is a counter trend system and a heavy trend would not be good at all. I figure if I can get in at 100 to 150 pips or more over or under the MA, I've already started with a good trade. I can make that just a single trade, or go 3-5 levels with the EA based on 60X40, 100x80, or some such other number. Each pair has a average range, and I've spent some time taking some notes on another system that uses the COG line with possible entries away from the center for the various pairs. This is attached for those interested. My plan is to test the EA using these settings on several pairs.
Quoting nanningbob
Some of you guys may disagree with me but my study of indicators has led me to one conclusion. They are all variations of the same thing. In other words they are all variations of MA. They just use different math to get their lines or charts. What is my system, its kind of a bollinger bands, vegas tunnel, envelope system mixed into one. When price gets a certain distance from a median average it will move back to its median. I use MA because that is what all indicators are based on. In trading I have found only 3 major systems as far as techinicals...
Attached File(s)
File Type: doc Potential Entries For Various Pairs From the COG or MA.doc   24 KB | 448 downloads
  • #33
  • Jan 11, 2009 8:53pm Jan 11, 2009 8:53pm
Quoting paradoxical
imho, the best trades are when everyone else is buying, you're selling, and vice versa. One way to do that is to make your purchases at a certain distance away from the norm. Whether you want to use a certain moving average, the average true range, a water level, or a COG line, they will all be fairly similar. It's a guide. Something to tell you where the approximate center is. I did an overlay of Bob's 40 MA with a COG line on another thread, and also with the ATR, and they're close. Not exact, but close enough. My idea is to buy at enough distance...
WE are thinking the same direction. Here is another help for this system to use on other pairs. I have not tested it yet because of my schedule but my grades are done and i will have this set up by tonight. You add a MA cross as your entrance point above the level entrance point. Here is a pic of what I mean. I think the pic will explain it better than any words.

I have an 80 ma levels every 100 pips first level is at 200 -200. This is a gbp jpy one of the hardest to use with my system because it moves so much. But if we ever make one work................ ahhhhhh you dont want to know how much you can make.

Not only do you have levels but you also use a MA cross above the levels. Instead of a fixed range we let price action determine our range to play. Notice at the crosses:

A is near the 300 line
B is above the 400 line
C is at the 300 line
D is at the 300 line

This gives us larger range and a better chance of not getting knocked out on big moves. If the gbp/jpy decides to do one of its famous 500 pip moves we dont enter until it is done. The only thing I dont have is what would work best. This is just my first wild guess as to what to use. The MA is a 3MA shift1 open against a 3MA shift 1 close. A shadow trade. Our entrances now become flexible and you have an EA with a 3-500 range on top of that I think you have a very safe trade. What do you think??? Anyway I will try to code this later tonight.
Attached Image (click to enlarge)
Click to Enlarge Name: gbp jpy 1h 80 ma.gif Size: 20 KB
  • #34
  • Jan 11, 2009 11:16pm Jan 11, 2009 11:16pm
Bob, I'm nowhere near you when it comes to this, and learning from you. What you've done so far I think is fantastic. It fits perfectly with another system using certain distances away from the COG. Not only can I get entries at good prices, I can use it for as many levels after that as I want...or I can use it for just a single trade. What you're working on now should be even better.
  • #35
  • Jan 12, 2009 9:56am Jan 12, 2009 9:56am
Arnold, are you still around?
  • #36
  • Jan 12, 2009 10:39am Jan 12, 2009 10:39am
Quoting paradoxical
Arnold, are you still around?
yeah, still around, was busy the weekend and will be tonight, I'll catch up
soon as I can, though most questions seem to have been answered, Is there anything specific you want to know?

Steve.
  • #37
  • Jan 12, 2009 10:48am Jan 12, 2009 10:48am
I did some more testing of the 60x40 & as Bob said , although it misses death trades, it doesn't really make enough trades to be worth doing.

I am trying to alter the EA to open buystops as it goes down & sellstops as it goes up, as someone suggested, unfortunately it seems beyond me, I will keep at it though, I'm learning this programming lark as I go along.

Steve.
  • #38
  • Jan 12, 2009 10:51am Jan 12, 2009 10:51am
Quoting Arnold49
I did some more testing of the 60x40 & as Bob said , although it misses death trades, it doesn't really make enough trades to be worth doing.

I am trying to alter the EA to open buystops as it goes down & sellstops as it goes up, as someone suggested, unfortunately it seems beyond me, I will keep at it though, I'm learning this programming lark as I go along.

Steve.
I have never tried programming that way. Would be interesting concept though. Good luck,
  • #39
  • Jan 12, 2009 10:52am Jan 12, 2009 10:52am
Quoting Toothman
Steve,
My setting must not be right yet. I ran them through the strategy tester for the GBP/usd 5M for this week and only get 4 trades for a profit of $2.79. Please check my settings.My broker is not a 5 digit broker. LOTS .01, tp 60, mult. 1.8, ATR periods .6, max.trades 5, pips 40, sl 400. Also, to get this not to trade from 12 midnight-8:00 am EST would you set New York hours- true start 14,stop 5 GMT? Thanks
The time needs to be GMT not EST, that may be what is causing you lack of trades?

Steve.
  • #40
  • Jan 12, 2009 10:56am Jan 12, 2009 10:56am
Quoting tommyd
parapoxical,

I might be wrong but I don't think that is how Steve was going to use the ATR.

I think he is looking to come up with a optimized order entry for each pair used.
We'll see what he says.

I just looked at the EA code and I would say that the ATR ea will enter a short trade when price is above the 120 period ma by the amount of the current atr reading and a buy just the same but reversed of course.
Not sure that is exactly what we would want but it is a starting point.

that's exactly right, but I'm using 40 MA not 120

Steve.
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