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Directional Movement

  • #261
  • Apr 21, 2009 6:07am Apr 21, 2009 6:07am
There is very little directionality in the market today, the market not sure which way to go.

So, as this strategy is called "Directional Movement" I'll probably stay out until I see a trend in at least one of the pairs.

There is a strategy somewhere here on FF about correlation with pairs and when you spot a trend with one pair, is an early sign of a trend on another pair.

Again, look out for a developing trend on any pair, even if you miss out on that one, its an early bird indication of a trend yet to come.

IMHO: I think the trend is bearish on majors GU EU EJ but the market is just having a breather before further drops come along.

It's also best to trade on the 1H with the direction of the longer term trend in progress or developing, rather than against it as this then increases your % wins.
_______________ Say Good-bye to Buy-and-Hold
  • #262
  • Edited 7:26am Apr 21, 2009 6:31am | Edited 7:26am
Hi AC

I have a question in regards to the rules of the strategy.

Say you have entered a trade as was indicated by the signal candle and you have set your SL and your TP to 1st s/r. (as shown on diagram).

But then the PA has decided to reverse on the direction that you were taking and it looks like it is to hit the SL that was set.

We can see on the chart that the Histogram is narrowing, and is showing signs of reversal. And the +DI, and -DI are also showing signs of reversal.

As you had mentioned before that when the trade is in profit and the histograms start receding then set the SL to the H/L of that candle, to lock in profits on a tighter stop. But in this case we are still at -pip and there is no room to lock in profits but we are seeing the histo start to recede.

Another situation is: we are not in profit on the trade and the PA is between entry and SL and at least one of the following has occurred.

1. Histo has reversed
2. MACD has reversed
3. DI has reversed.

A Do you then exit the trade at a smaller loss than if the PA had hit SL
OR
B Let the price continue, allowing it to maneuver between Entry and SL to then continue towards it's initial trend direction from the signal provided? and keeping the SL there to minimise any further losses.


Thanks in advance
Tareq
Attached Image (click to enlarge)
Click to Enlarge Name: audnzd.gif Size: 58 KB
_______________ Say Good-bye to Buy-and-Hold
  • #263
  • Apr 21, 2009 7:24am Apr 21, 2009 7:24am
Quoting deltaworld
Hi AC

I have a question in regards to the rules of the strategy.

Say you have entered a trade as was indicated by the signal candle and you have set your SL and your TP to 1st s/r. (as shown on diagram).

But then the PA has decided to reverse on the direction that you were taking and it looks like it is to hit the SL that was set.

We can see on the chart that the Histogram is narrowing, and is showing signs of reversal. And the +DI, and -DI are also showing signs of reversal.

As you had mentioned before that when the trade is in profit...
Hi Tareq,

Good questions.

My own style would be very similar to answer A. Take a smaller loss as the sl is now reduced.

But sometimes dependent on how small /bigthe loss would be I would keep the original stop loss.

If say the sl was moved to take a smaller loss but it was onyl say 5-10 pips away from the original I would keep the original one in place.

If the move of the SL saved me +30 pips (of potnetial loss) I would ignore the first SL and move it accordingly.

Hope that makes sense.
  • #264
  • Apr 21, 2009 7:29am Apr 21, 2009 7:29am
Quoting ACartwright
Hi Tareq,

Good questions.

My own style would be very similar to answer A. Take a smaller loss as the sl is now reduced.

But sometimes dependent on how small /bigthe loss would be I would keep the original stop loss.

If say the sl was moved to take a smaller loss but it was onyl say 5-10 pips away from the original I would keep the original one in place.

If the move of the SL saved me +30 pips (of potnetial loss) I would ignore the first SL and move it accordingly.

Hope that makes sense.
So the stop loss would be moved tighter and the position not closed when the histo/macd reversed and/or +di/-di reversed? when in negative territory.

p.s. forgot to upload chart from last post.. chart added now.
_______________ Say Good-bye to Buy-and-Hold
  • #265
  • Apr 21, 2009 7:40am Apr 21, 2009 7:40am
Quoting deltaworld
So the stop loss would be moved tighter and the position not closed when the histo/macd reversed and/or +di/-di reversed? when in negative territory.

p.s. forgot to upload chart from last post.. chart added now.
If all or one of the indcators started to go against me I would move my stop loss to the low of this candle.

If by moving the stop loss it only moved the stop loss by 10 pips I would keep the SL in the orignal place.

If the move was greater than 10 pips I would then move the sl to the low of the canlde that showed a potential reversal.

The histogram shows a narrowing of the emas well before the DMI.

However by placing a stop above this candle it is pretty much around the same level as the original stop loss.

I would hterfroe not move the SL.
  • #266
  • Apr 21, 2009 7:52am Apr 21, 2009 7:52am
Hi Delta,

I have added my interpretation of your chart.

As attached.

There are a couple of things you can do.

However bottom line the trade got to +42 pips - you should be at least at break even after making this amount or taking part profit at the first support level.
Attached Image (click to enlarge)
Click to Enlarge Name: aud-nzd - 1h 21.04.2009.gif Size: 53 KB
  • #267
  • Apr 21, 2009 7:55am Apr 21, 2009 7:55am
AudCHF is forming nicely.. Looks like it has just come out of its retracement.
Attached Image (click to enlarge)
Click to Enlarge Name: audchf.gif Size: 38 KB
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  • #268
  • Apr 21, 2009 8:16am Apr 21, 2009 8:16am
Quoting deltaworld
AudCHF is forming nicely.. Looks like it has just come out of its retracement.
Hi Delta,

i do not have this pair on my charts.

Let me know how it goes.
  • #269
  • Apr 21, 2009 8:19am Apr 21, 2009 8:19am
Quoting ACartwright
Hi Delta,

I have added my interpretation of your chart.

As attached.

There are a couple of things you can do.

However bottom line the trade got to +42 pips - you should be at least at break even after making this amount or taking part profit at the first support level.
Thanks for the chart interpretation, thats a great help. Thanks.

I have now entered the aud/chf short at 8168.6
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  • #270
  • Apr 21, 2009 8:34am Apr 21, 2009 8:34am
Quoting deltaworld
Thanks for the chart interpretation, thats a great help. Thanks.

I have now entered the aud/chf short at 8168.6
An update of the chart with the entry, SL and TP levels

TP is at Green thumb. 8119.3
Attached Image (click to enlarge)
Click to Enlarge Name: audchf.gif Size: 45 KB
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  • #271
  • Apr 21, 2009 8:44am Apr 21, 2009 8:44am
Quoting deltaworld
An update of the chart with the entry, SL and TP levels

TP is at Green thumb. 8119.3
That was the quickest -19.9 pips i ever lost.

It suddenly reversed on me so fast and hit the stop loss, that I didnt have time to analyse whether I should have reduced the SL.

so far I am -16.9 pips for the day
Attached Image (click to enlarge)
Click to Enlarge Name: audchf.gif Size: 44 KB
_______________ Say Good-bye to Buy-and-Hold
  • #272
  • Apr 21, 2009 9:04am Apr 21, 2009 9:04am
Quoting deltaworld
An update of the chart with the entry, SL and TP levels

TP is at Green thumb. 8119.3
Hi Delta,

It looks like the DMI>20 and ADX had turned around before the MACD was correct
  • #273
  • Apr 21, 2009 9:09am Apr 21, 2009 9:09am
A lot of false signals today. These have been countertrend or in the consolidation area.
Delta, on my Alpari chart the trade on aud/chf was not validated by the macd.
Yesterday is already far...
  • #274
  • Apr 21, 2009 9:12am Apr 21, 2009 9:12am
Quoting ACartwright
Hi Delta,

It looks like the DMI>20 and ADX had turned around before the MACD was correct
What do you mean by that?
The signal i got as shown by the brown vertical bar is
-DMI>20
ADX>20
ADX rose from last bar
MACD confirming Short


I entered long Dragon 14357.4
Attached Image (click to enlarge)
Click to Enlarge Name: gbpjpy.gif Size: 43 KB
_______________ Say Good-bye to Buy-and-Hold
  • #275
  • Edited 10:44am Apr 21, 2009 9:31am | Edited 10:44am
Quoting deltaworld
What do you mean by that?
The signal i got as shown by the brown vertical bar is
-DMI>20
ADX>20
ADX rose from last bar
MACD confirming Short


I entered long Dragon 14357.4
Hi Delta,

The bar previous to the one indicated by the brown line showed the adx increasing.

It might have been the one before but I can not see that from the chart.

If the MACD does not confirm at the same time as the ADX turns (over 20 or 3 off bottom) with DMI>20 then you should leave the trade alone completely.

It looks like the trade was confirme dby MACD a candle after the original signal from the DMI/ADX.
  • #276
  • Apr 21, 2009 9:33am Apr 21, 2009 9:33am
Quoting ACartwright
Hi Delta,

The bar previous to the one indicated by the brown line showed the adx increasing.

It might have been the one before but I can not see that from the chart.

Yes you are right but the one preceding the brown line was not a valid signal as the MACD was not confirming the trade.
_______________ Say Good-bye to Buy-and-Hold
  • #277
  • Apr 21, 2009 9:38am Apr 21, 2009 9:38am
Quoting oblo
A lot of false signals today. These have been countertrend or in the consolidation area.
Delta, on my Alpari chart the trade on aud/chf was not validated by the macd.
Yesterday is already far...
Yes there have been a few false signals.

MACD has worked well however in stopping the false signals from DMI.
  • #278
  • Apr 21, 2009 10:48am Apr 21, 2009 10:48am
Quoting deltaworld
Yes you are right but the one preceding the brown line was not a valid signal as the MACD was not confirming the trade.
Hi delta,

Hope I was clear in my description.

Just going forward.

1. A trade can be taken late (with caution) if the signal candle had all indicators confirming at the same time.
2. A trade is not to be taken when the correctly positioned DMI/ADX is waiting for the MACD to confirm. If the MACD does not confirm at the same time wait for the next signal given by DMI/ADX.

gbp/jpy is a great one to be on currently.
  • #279
  • Apr 21, 2009 11:28am Apr 21, 2009 11:28am
Quoting ACartwright
Hi delta,

Hope I was clear in my description.

Just going forward.

1. A trade can be taken late (with caution) if the signal candle had all indicators confirming at the same time.
2. A trade is not to be taken when the correctly positioned DMI/ADX is waiting for the MACD to confirm. If the MACD does not confirm at the same time wait for the next signal given by DMI/ADX.

gbp/jpy is a great one to be on currently.
Hi AC

Thanks for the rules clarification, I have a better understanding of that, and in hinesight, that would have kept me out of that previously losing trade.

I went into gbp/jpy and exited with 41.7 profit, as one of you money management techniques discussed previously on this thread that if you are down for the day you may bank at 40 pip, which I did so. I have left the demo account for the pair running.

You will see that the market suddenly moved and alot of the pairs have trended with large moves. The JPY currency has weakened. So when exited the trade I wanted to get back in on the jpy rally so, I researched trying to find the strongest currency that I can pitch against the JPY. The best pair I could see a further move is the AUDJPY which I have since entered at 7003
_______________ Say Good-bye to Buy-and-Hold
  • #280
  • Apr 21, 2009 11:31am Apr 21, 2009 11:31am
Quoting deltaworld
Hi AC

I went into gbp/jpy and exited with 41.7 profit, as one of you money management techniques discussed previously on this thread that if you are down for the day you may bank at 40 pip, which I did so. I have left the demo account for the pair running.

You will see that the market suddenly moved and alot of the pairs have trended with large moves. The JPY currency has weakened. So when exited the trade I wanted to get back in on the jpy rally so, I researched trying to find the strongest currency that I can pitch against the JPY. The best...
Good move on exiting gbp/jpy - it had moved a good distance.

all ways a smart idea to get to break even for the day.

Try the exit method we discussed yesterday on the demo account.
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