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Joined Apr 2006
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Status: King of Fools
|153 Posts
Maybe my 2 cents to that topic.
Guppy MMA or GMMA is intentionally for equities and for long term
consideration (D1 charts).
My method is a copy/variation of Linuxtrolls method and it seems to be the
first manual system, that consistently works for me. But beware. This is
no "out-of-the-box-and-works" system. You need to gain experience!
Imagine a spiral in a antishock buffer. Draw a mental picture of only the
side of the spiral as parallel lines. Obviously there will be absolute no
way to tell where each single line is in two seconds, but there are two
semi-obvious states. The complete compression and the complete extension.
The latter is much more difficult, and I do not trade that on money
(yet?). But the complete compression is what I look for. Obviously an
extension follows the complete compression. You need to find points of
"healthy" complete compression. As linuxtroll points out, you need to
learn this method. Get screen time using a demo account.
It works like this. Make a template with all EMAs between 2 and 200. How
you group them is your taste. You can make 5er steps, or take primes or
fibs. It does not matter. The EMAs don't really have a meaning at this
method, they are an optical help. I counsel you nonetheless to not change
your templates during your learning. My template is
EMA(7),(14),(21)...(91),(98),(150),(200).
First I verify that I have at least 1 hours news free. You can trade at
the sleep time of each currency, but the active time is much better
(stronger trend, more volatility). Avoid the Dusk and Dawn times, they
tends to cause more inconsistent moves (for me).
Then I apply this template on several currencies in M15 and M5. Here I
look that the longer EMAs show a healthy steady trend. (That is
experience, sorry, cannot be more exact). Once I find one, I usually go
still one timeframe lower, so to say, from M15 to M5 or from M5 to M1, and
here I look how the past compressions work out. Were they over compressed
(going beyond the longer EMAs)? Or nice and shiny. Try to feel the rhythm
of the compression extension. Nothing is in concrete here. As soon as you
think you found a maximum compression enter your trade IN DIRECTION OF THE
TREND. I usually set the SL to the low of the previous compression. I only
set a TP if I cannot watch the trade. In this case, you need common sense.
Try to find resistance lines, use Fibs check recent highs. DONT BE GREEDY!
My usual targets are 10-15 pips. But if the trend is very strong, I will
not close the trade. See my today's trade:
Nice trade, but Im wondering why you didnt enter at the lower compression area, that seems like it would have had a smaller stop and therefore a better risk reward?
what was it about the middle of that candle that tempted you to enter?
I use the Cyrox, but just for reference. I look for the moving averages to be headed in the direction of the trade and fairly evenly spaced to demonstrate a strong long term trend. I then look for the price to come out a compression area and cross the white bollinger band (50,.7) and head for the outer band (50,2). Ideally price becomes trapped between the two, and you just stay with it as long as it is above the inner momentum band.
Nice trade, but Im wondering why you didnt enter at the lower compression area, that seems like it would have had a smaller stop and therefore a better risk reward?
what was it about the middle of that candle that tempted you to enter?
Ignored
Now that question actually has two answers:
Yes if I would have been present I would have taken that trade as well. That is the difference between theory and practice.
Nevertheless, the fact that we already had a nice compression/retraction with a following healthy expansions in the trend direction made me so much surere about the mentioned trade. That is what I meant with checking the history and see the rhythm.
