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Lets build a system from the ground up..eur/usd

  • #41
  • Mar 4, 2009 1:06am Mar 4, 2009 1:06am
Quoting mf036ml
Was looking at what Mikkom sent me and was only able to look over it briefly but It looks very intersting....thanks again Mikkom...definetly going to take a really good look at it....
If you study the method properly, it's going to be an eye opener - all aspects are covered including proper MM [that is adjusted by volatility], risk between markets etc.

I might share couple of other thoughts as well.. My method of trading involves testing a lot of systems and when I found a working system, I test even more. Here are couple of things that I have found by testing, I have no idea if they are facts or not but they are what I believe at the moment:

- Almost all systems that I know that are profitable only operate on breakouts
- All the really profitable low DD systems that I know (one of them is the included turtle system) operate on daily charts.

So there are couple of things, I hope you best of luck.
  • #42
  • Mar 4, 2009 5:26am Mar 4, 2009 5:26am
Quoting mikkom
If you study the method properly, it's going to be an eye opener - all aspects are covered including proper MM [that is adjusted by volatility], risk between markets etc.

I might share couple of other thoughts as well.. My method of trading involves testing a lot of systems and when I found a working system, I test even more. Here are couple of things that I have found by testing, I have no idea if they are facts or not but they are what I believe at the moment:

- Almost all systems that I know that are profitable only operate on breakouts
- All...
That turtle system is a very simple system. I'm going to study those formulas a little closer. Do you know if anyone has written an EA in MetaTrader using those rules? Who needs people when computers never sleep and don't have opinions.

I like volatility. Volatility measurements are the closest thing you will ever get to a leading indicator. That is why I use Bollinger Bands, CCI and linear regression curves. I throw on a MA to test for pullbacks and that is it. I try to get my signals just from those.

I do draw S/R lines and watch pivot points and Fibo lines as well as round numbers just because everyone else is watching them and they become S/R points for no other reason than that.

I have also found that to find S/R from price is much easier on the lower time frames and then use them on the high frames.
  • #43
  • Mar 4, 2009 8:12am Mar 4, 2009 8:12am
Don't get me wrong here, I did not mean to criticize your system or anything.

I guess I should rephrase:
What was the reason why you use only 1 stochastic indicator instead of 2 or 3? I am trying to understand how your system works, because I have been using MTF Stochastics, your system looks simpler, I would definitely switch to simpler system if it at least giving me the same results or more...

Joan

Quoting mf036ml
Joan, if we can find a way to make it work here...then lets put it together...lets try and find the bits and pieces that have worked for us all and tweak it and share information to put together a set of rules that would product consistent results...

In all honesty I wish we could put together a mechanical system where the entries and exits are clearly defined and all emotion and speculating as am now doing is taken out of the equation....

this is just were I am now and what am looking at...

Please feel free to add, share , and even critisize...If...
  • #44
  • Mar 4, 2009 9:59am Mar 4, 2009 9:59am
Quoting JoanArc
Don't get me wrong here, I did not mean to criticize your system or anything.

I guess I should rephrase:
What was the reason why you use only 1 stochastic indicator instead of 2 or 3? I am trying to understand how your system works, because I have been using MTF Stochastics, your system looks simpler, I would definitely switch to simpler system if it at least giving me the same results or more...

Joan
Joan dont worry, I did not take it the wrong way...I actually want the critisism....too figure out and have things pointed out that I may be doing wrong....

As of now, there is no system...am just simply writing my thought process and watching how price reacts around different points of support and resistance...

My goal here is to actually find a system and build it together from the ground up piecing together the knowledge that one or a few of us may have..

so please, lay on the critisism , lets get a few people to try a few different approaches and we report back to each other with updates and hopefully we can fill in the gaps and find something that makes sense to us and is profitable...

After that i guess we can all meet in the bahamas one week out the year to celebrate want we accomplished....wishfull thinking...if you cant dream it then you cant achieve it right?
  • #45
  • Mar 4, 2009 10:13am Mar 4, 2009 10:13am
Quoting mikkom
If you study the method properly, it's going to be an eye opener - all aspects are covered including proper MM [that is adjusted by volatility], risk between markets etc.

I might share couple of other thoughts as well.. My method of trading involves testing a lot of systems and when I found a working system, I test even more. Here are couple of things that I have found by testing, I have no idea if they are facts or not but they are what I believe at the moment:

- Almost all systems that I know that are profitable only operate on breakouts
-...
Mikkom I was looking at the turtle system you sent me....Now , I know nothing I want to clear that up..and am trying to learn....for all I know this maybe be the greatest thing since sliced bread.

Am totally for the longer time frames and actually favor swing trading but am open to something that works and feel comfortable with...

However, I wonder if a variation of this may be applied to a smaller time frame...on one part it states how consistency is key and all signals should be taken regardless of outcome....

Due to the majority of the winning trades or major profits I should say will come in the form of 2 or maybe 3 winning trades in a year...

Dont get me wrong am aware what big a role phsycology plays in trading and patience is definetly not only a virtue but key as well.....But thats a little too long term for me...if we were to test this on demo we'd have to do so for a year in order to determine if this is the right method for us...

from what I've read , a bad trader or inexperienced trader well take a good proven system and tear it too shreads due to lack of discipline...Am not sure this is the right way to go ...for me atleast...


I've read that only less than 5% of traders are extremely succesful...am assuming that this 5 % of traders are doing things and trading like nothing we've ever read on these forums or on the internet for that matter....If only 5% are succesful I dont want to strive to trade like the other 95%...


What are these guys doing that few of us on here have been able to find...

perhaps simplicity is the key....am pretty sure I could construct a succesful system based on simply analyzing price figureing out what makes sense to me , and then doing the exact opposite as always seems to be the case...(thats a joke by the way)


but what would I have learned...? why am i really opening a trade and why am I exiting this trade or why am i reversing position...maybe its as easy as identifying patterns and no indicators are necessary as in my opinion ALL indicator are lagging...

In order for an indicator to not lag it would have to accuratly predict the future...If thats out there please feel free to put it up here for me...lol


So lets take a look at these charts...take mock trades on demos maybe even go in a few different directions and report back....all though the turtle breakout is not for me...I'd love to hear that its working out for mikom and here back from him from time to time...

maybe breakouts are the way to go and we can find a way to apply to shorter time frame to suite different traders risks appetite....

Good lord, i have to get back to work...the trade I opened is still open and -78 at the moment...
  • #46
  • Mar 4, 2009 11:00am Mar 4, 2009 11:00am
unfortunatly from my work computer I cant post charts up here...dont know why...would have like to have posted what the chart looks like . I had posted the one hour chart with a trend line above it...and price is breaking out of that trendline so in the real world am assuming the correct thing to have done here...

was watch the price as it was retracing to that trendline level and have placed a sell order if it continued down ....which was not the case...so in real life we would not have take this order correct?

Now i still have the order open and plan on keeping it open till i get stopped out...remember this strictly for analitacal reasons....what will the price do next....once it breaks this channel...will it move sidways and continue down to break the support level...

Or will it shoot straight up? or will it go sideways and then go up....guess will keep watching to see what happens and if we could see why it happens and start to pick up on these elusive reoccuring patterns that we YET do not have a trained eye to pick up.....
  • #47
  • Mar 4, 2009 2:08pm Mar 4, 2009 2:08pm
I really wish I could post charts on here from this computer but I cant, sorry...so here's the explanation without the charts.....

Or rather uneducated analysis.....

Ok, in my uneducated opinion...I beleive the short order I opened could not have been opened at a worse time....being that the price was so close to the strong support level as noted by our 4 hr. chart...

The price is clearly coming out of the down channel I had drawn for it on the one hour chart...perhaps no one informed the price that it was suppose to stay within this channel....will work on that..


Our stop for this hideous trade entry was 1.2687 just above 1.2682 which again in my uneducated opinion could be consisdered a weak resistance level...just above the last swing high....

For the most part all tokyo and london session price was falling..and now us sesion price is rising....

Will it be able to make it up to our weak resistance...or will it find resistance at a lower level and continue down once again during the tokyo and london sessions to retest...the strong support level at around 1.2392 if this is the case...perhaps tomorrow morning would be a good time to exit this trade (if we dont get stopped out sooner)....

and watch again and wait for another logical reason to enter the market again......I'll try to post some of the charts when I get home tonight...I think pictures are easier to follow....
  • #48
  • Mar 4, 2009 5:14pm Mar 4, 2009 5:14pm
all right heres the latest chart of whats going on...price has obviously broken out of the channel i had drawn for it...the trade is going against us...

lets say we would have taken this horrible entry in real life...lets analyze all our possible options in our given situation...

this is the beggining of an uptrend in which case if our stop is not hit price will retrace before continuing up thus if we wait for the retracement we can get out and minize our loss...if our stop is not hit....


2nd scenario, price retraced and will once again test the 1.2416 level thus giving us a chance to exit then with maybe even a small profit...once again if our stop is not hit....


3rd scenario, price will begin to range and move sideways in which case if our stop is not hit once it starts going down again will give us a chance to exit and minimize our loss....

4th scenario, our stop will get hit and will have to reevaluate what went wrong and what the heck were doing.....

so for now I guess will leave it open and see what happens...I remember reading somewhere, that some people beleive that the price does the opposite at night of that which it did in the day...now am on est. in which case the U.S session is day time for me and tokyo and london night time....

Lets start to watch this and see if this holds true and to what degree...
Attached Image (click to enlarge)
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  • #49
  • Mar 4, 2009 5:33pm Mar 4, 2009 5:33pm
just for kicks I went to action forex and looked up the eur/usd intraday out look....pretty cool, this analyst's rambling and mine seem to be in the same direction and just about the same levels for now....what do you know we may just pull out of this one......here's what it said...



EUR/USD recovers mildly after dipping to as low as 1.2456. But still, intraday bias remains on the downside as long as 1.2676 minor resistance holds. Fall from 1.4719 is expected to extend further to test 1.2329 low next. On the upside, above 1.2676 will turn intraday outlook neutral first. But short term outlook will remain bearish as long as 1.2991 resistance holds. Above 1.2991 is needed to signal that a short term bottom is finally formed.
  • #50
  • Mar 4, 2009 6:08pm Mar 4, 2009 6:08pm
Ok, so if a short trade was what we were looking for so close too a strong support level ....the price has retraced significantly , am assuming this is when we should have opened our trade if we absolutly had to go short....

Since were not risking any real money and in order to learn one must fail repeadidly what do you say we add to our position and open up an other order and see what happens....

So another order open at 1.2625 with the same stop loss...now even if this goes against us this order makes much more sense to me atleast...

for this order were only risking 61 pips..where as the other order were risking about 191 pips....pretty much same exact order same exact target more less...just above our strong resistant level....

but look at the difference at what were risking ....a lot less risk and alot more profit potential.....ok, so far this is whats making sense to me and the time to have taken this order would have been now.....so will continue to wait and see what happens...
  • #51
  • Mar 4, 2009 6:15pm Mar 4, 2009 6:15pm
did u using only trendline to trade ?
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  • #52
  • Mar 4, 2009 6:32pm Mar 4, 2009 6:32pm
Quoting fxtrendline
did u using only trendline to trade ?

well , yea pretty much...just the trendline...I know the price is out of the trend channel at the moment .....but i beleive it will either go down to retest the support level or even if it starts moving sideways we might be able to pick up a few pips on the way down now....

That is assuming it is going down now....now if it doesnt retest this level...

when do we close our orders...what are we look for to get out once it goes our way?
  • #53
  • Mar 4, 2009 6:37pm Mar 4, 2009 6:37pm
Quoting mf036ml
well , yea pretty much...just the trendline...I know the price is out of the trend channel at the moment .....but i beleive it will either go down to retest the support level or even if it starts moving sideways we might be able to pick up a few pips on the way down now....

That is assuming it is going down now....now if it doesnt retest this level...

when do we close our orders...what are we look for to get out once it goes our way?

Ok , to answer my own question...what if we set a target at 1.2487 just above the last point of support....technically it should reach this whether it goes down or sideways...now if its retracing to go up we'd be s.o.l.


but am going to go ahead and do this to play it safe (somewhat) which if hit would give us a profit of about 8 pips on that first horrible entry I made...

and about 139 pips on the 2nd more reasonably thought out entry (atleast in my opinion)...
  • #54
  • Mar 4, 2009 6:42pm Mar 4, 2009 6:42pm
Here's what my one hour chart looks like

my trend channel...

small red line on top is where my stop is

long yellow line on bottom my tp

long green line on bottom what i beleive to be strong support level observed on the 4hour chart....
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd1.gif Size: 34 KB
  • #55
  • Mar 4, 2009 6:45pm Mar 4, 2009 6:45pm
and here's what my 4hour chart looks like....used strictly to find main trend...and then look for entry's in that direction only on the 1hour...
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd4.gif Size: 35 KB
  • #56
  • Mar 4, 2009 6:46pm Mar 4, 2009 6:46pm
Quoting mf036ml
all right heres the latest chart of whats going on...price has obviously broken out of the channel i had drawn for it...the trade is going against us...

lets say we would have taken this horrible entry in real life...lets analyze all our possible options in our given situation...

this is the beggining of an uptrend in which case if our stop is not hit price will retrace before continuing up thus if we wait for the retracement we can get out and minize our loss...if our stop is not hit....


2nd scenario, price retraced and will once again...
Depends on your perspective.
I see Green Red & whatever TF that is.. Let's call it Aqua,.
Attached Image (click to enlarge)
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  • #57
  • Mar 4, 2009 6:48pm Mar 4, 2009 6:48pm
good lord , why are my charts coming out that funky color....am i the only one they look weird too?
  • #58
  • Mar 4, 2009 6:52pm Mar 4, 2009 6:52pm
Quoting Bemac
Depends on your perspective.
I see Green Red & whatever TF that is.. Let's call it Aqua,.

Bmac are you simply mocking my colors or are you saying the bottom green line on your chart would be your take profit?
  • #59
  • Edited 7:16pm Mar 4, 2009 7:11pm | Edited 7:16pm
Quoting mf036ml
Bmac are you simply mocking my colors or are you saying the bottom green line on your chart would be your take profit?
No! I am simply trying to give you another aspect of protecting your funds.

AND
Yes.
I expect 1.25## to be revisited. {before the additional Drop.}
  • #60
  • Mar 4, 2009 7:12pm Mar 4, 2009 7:12pm
although I didnt fully understand Bmacs post...it's had me thinking....is my target to out there? specially round such a close strong support level?


Supposedly, what was once resistance once price breaks it should technically then become support....hmmm....lets take a look at that one hour chart and reasses..
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