EUR/GBP Trendmagic System

Thats a good question, i have the same problem, ofter the trend was started before i look at the chart. Someone a good idea for this? because traders who also work can't trade the whole day.

For the stop loss is MM the most important, what will you risk, what is you cash balance.. etc.. I need to think about for good tp en sl.

excellent we now have the guidelines which will make it easy for all

Guys

Some "light" Sunday reading for you....

I have been playing with an idea for some time that has now come to fruition thanks to this thread. It will take this approach to the stratosphere (and believe me, I know where the stratosphere is....)

Although it is by no mean obvious, there is a very close analogy between "anti-persistent" markets and hydrodynamic turbulence in fluid flow at high Reynolds Numbers.

Nearly all markets (stocks, commodities, futures, etc) are "persistent" and do not work with this idea. But almost uniquely, the FOREX market is "anti-persistent". This is great for us as we can exploit the connection to turbulence in fluid flow.

When you put energy into a fluid system at the macro level, like stirring a bucket of water, the energy is transferred down the physical scale to smaller and smaller dimensions - smaller and smaller eddies and vortices - until it dissipates as heat due to viscosity. The exact physics governing this is horrendously difficult and solutions to the Navier-Stokes equations are one of the 3 "grand challenge" problem in all science.

But 40 years ago the great Kolmogorov came up with an approximate solution that works really well. It is known as the Kolmogorov Energy Cascade and describes the transfer of energy down the dimensions by a 5/3 scale-free power law.

Amazingly, it turns our to be the same law for the FX market! This was first noticed about 10 years ago and published as a paper in the world's top science journal Nature. (You have to have a subscription to Nature to read the article but I think I have a PDF somewhere that I will post if I can find it...) The paper was largely forgotten but it is worth a read - there is minimum mathematics!! I have fully developed this theory and am now ready to put it into practice.

It turns out that ENERGY in the fluid correponds to VOLATILITY in the market, and DISTANCE in the fluid corresponds to TF in the market. So the market gets INFORMATION input at the highest level like the news announcements on Friday. Then this information cascades down the timeframes to the lowest (tick) level, where it is eventually dissipated due to broker spread etc (corresponding to fluid viscosity).

Put simply... All of you have opened a chart on a pair and clicked thru the timeframes, M1, M5, M15, M30, ... and seen, noise, noise, noise, AHA!! a smoothish trend!!, noise, noise, ....

Why does this happen? What you have done is by chance found the timeframe where the volatility cascade just happens to self-cancel, producing a smooth (non-turbulent, ie laminar) flow. You can observe this in a fast-flowing river too. The eddies suddenly come together and cancel out, producing a patch of smooth flow.

THIS SMOOTH FLOW IS THE TREND OUR SYSTEM WAS BORN TO TRADE!

The problem is, it rarely occurs on one of the fixed TFs that Metatrader allows us to see. But the physics allows us to calculate the optimum timeframe for the most laminar flow. For example, recently one of our favourite pairs has an optimum TF of around 11.3 minutes. On that TF it is as smooth as a baby's bottom, and the TrendMagic + TudorGirl indy behaves flawlessly, allowing us to go from extracting ~30% of a trend to extracting around ~70% of the trend!

I have coded this into the next generation of MT4 indicators. In addition, I have put the whole lot inside a DLL which can be called from TradeStation, NinjaTrader, NeuroShell trader, etc, etc, -- even an Excel spreadsheet! (This great for backtesting as you can download years of data from Dukascopy free into Excel and run our indy's on it).

PROBLEM - But the big problem is that MT only has a very limited choice of timeframes. This is not the case with some other more powerful platforms, but most of us use MT.

So.... I have written a complete DDE interface to MT for VB, Matlab etc or any environment that has DDE. MT has an DDE export facility (just go to Tools->Options->Server) so the tick data is available instantly as MT receives it. My external system will package up the data into candles of any desired timeframe, dictated by the indicators themselves based on the ideas above. The candles are then processed by our indys and buy/sell signals generated. These can either be fed back to MT via an incredibly simple EA or fed to other trading platforms. (I am looking to use them to place a trade or two on IG Index, one of the UK spread-betting houses where the spreads are very tiny and the winnings are TAX FREE!!)

I could go on at length, but there is enough here to get the ideas juices flowing. Please google the terms like Reynolds Number, Navier-Stokes, Kolmogorov Energy Cascade etc and you will see what I am talking about.

NOTE - I am not going to post anything more on this for now as we must not divert effort away from the TRADING STRATEGY as so beautifully outlined by Paulus, Edge and the other professionals. Having fabulous indicators is only a tiny fraction of the recipe for success. We MUST get the trading right, or the best indicators in the world will be useless in our hands.

Once we know what we are doing with what we have, then standby for fireworks.

Anne

Hi

so5 and Thiery

Entry at A is correct for the initial stop there are 2

Conservitive and aggresive

Conservitive will be placed a couple pips below the last swing low which is under the 1st red candle before the signal at A

Agrresive would be the TM horizonatl line under A

Your exit would be just before B it is the horizonatl line just before your horizontal line at B... this would be the last move up of the stop

I would not reenter without more testing and data I would wait for the 5min to go red and then renter on Blue blue

Hope that helps

Geez, what a releif you guys have not abandoned this thread.

OK this is my first post I'll admit I am a "lurker" rarely posting unless I can add value to what is developing, to this point I did not think I had anything to add to the discussion but now can see the value of contributing even if it is on minor points - less the thread will die a horrible death.

I hereby swear to try and contribute to this fantastic work even if it is trivial - and further commit to sticking to the intent of Paulus and TG in their efforts to keep this thread on track and clean of "spoilers".

I currently have the time to test live and will start on Monday London open and report my results back to the thread.

Please continue to develop your ideas guys, I know there are a lot of people like me that don't like to clutter threads for our own egos and just read and learn from those in the know.

It is a terrible shame when great thread starters and contributors are forced from their own thread by the selfish arrogance of others, and everyone suffers.

Lets get to work,

see you in the soup

Peter B

anne

excellent post, makes us use our thinking heads and not just sit quite

Your Ex-Bf's have no clue what a gem they have lost, am sure there is someone special for you waiting for you, and u will find him soon

take care and enjoy each day , may God Bless u

Hi Paulus / Anne

Can u check this chart setup and confirm if this is what we only need.

nisha

TG, very interesting read re: your last post. As to the issue with static TF bars and the 11.3 TF, have you tried your indi on constant range bars?

I won't be able to post a chart with constant range bars until the market opens, but they produce a much smoother transfer of price without the noise inherent in static TFs.

Also, not sure you're aware of it because most people don't use it, but MT4 has a period converter script that allows you to change the chart TF to something like 3M, 4M or 11M, 3H -- pretty much any combination, although I have never tried anything like 11.3.

Yes, but I think, that this is possible ONLY on the historical (offline) chart - for live trading and/or forward-testing the Metatrader HAVE NOT this. I know, it too bad, but we have not doing anything with it.

I would like to be wrong with impossibility of setup non-standart MT timframes, but I think that it impossible

EDIT: if I'm wrong, can you explain us how to set-up on online chart?

I haven't used the script in a while because I prefer the range bars, but if my memory serves, you simply allow dlls and the chart will tick over with each new price.

Ahhh!!! Thanks!! This answers the many questions we have in mind!!
Thanks!

btw, the favorite pairs at 11.3 mins timeframe - which is it, currently I have 4 as I saw your previous screen shots? Could you let us know what is it that you like to trade with? Personally, I am on GBPJPG and GBPUSD.

GBPJPY
EURUSD
EURGBP
GBPUSD

Wow, 56 people currently viewing this thread!
I've gone through the whole thread again, 3rd time now.
Realised I had skipped over the post by Paulus laying it all out, here.

So that's what I'll be running with tomorrow. I've been trading full time for years and this is the only time I haven't been cynical about a method other than those I use. Tomorrow is going to be interesting...

And if the interface to IG Index ever appears, TG, I'll be ecstatic - I too use them to save paying 40% tax on my "winnings".

can you update the first post of this thread with the correct indicator and template files that are being used at this time?

Is IG Index similar to IG Markets?

http://www.igindex.com.au/

hmmmmm, if that's the case, I shouldn't have to pay tax on my winnings in Australia too? hmmmm, let me check.

See my post above yours mtr. It's all here.

Looks the same. In the UK the taxman considers spread betting as gambling and therefore not liable to income tax.

I'm spending some time today deciding which pairs to sample tomorrow, any suggestions welcomed.

TG, Paulus, Edge, what an education!

I am new to forex and have been trying to find a "real" educational opportunity to approach the market with and this forum is certainly providing that.

A clean concise scientific approach eliminating emotion is what I have been searching for.

Paulus, I would like to say HOOAH from a former Airborne Ranger - thanks for your service.

As I learn I look to contribute from the testing I will be doing this week as well.

Thanks for the brain power and look forward to great results.

Nick

Paulus, you're a true gentleman...

Saying that based not only on your work and kind efforts on this thread, but also the others you keep, which I suggest everybody here take a good look....

Cheers!

HT

Just wondering what the consensus is on re-entry after having been stopped out. Chart below shows short trade, stopped out but then price goes back below TM and HG indicator all red. Should you short again, or wait for a reversal and take the next long trade? Any thoughts?

TG.
Having only just joined this site when I first posted there was a lot I did not know, so I was new.
However, I have been trading for some 20 years now, so I am not new to trading.
The technology still amazes me. I think back to my first "real time" data feed", which was price updating in 2 minute snap shots on a pager which I then drew, by hand, every two minutes onto a large sheet of graph paper.(eight hours per day !)
And a "real time" order, was by phone waiting up to 3 minutes for a confirmed fill and paying £50 r/t.

I was one of the first "private clients" of Futursource back when they only supplied banks and brokerage houses. Running charts on DOS and then Win3.11 (woopie ).

I've had BT private circuit data lines installed direct to London hubs before the internet was used to trade.

So I've been through some stuff and all this from a bedsit whilst dispatch riding during my teen's, so go figure.

I only mention this to give some perspective on myself, and for anyone.
Sacrifice for most is an attitude rather than just another word.
Anything you want is possible.
Tudor Girl has given of her skills as a programmer from that which Paulus has given of his skills and others have added wize words.

I don't profess to be wize or deserving, everyone will learn what they need to learn via their own experience, knowingly or otherwise.
The dillema for us all is that we will only know what is right when we are in the right place (mentally and emotionally) to know.!

Trading/life is a realm of probability and contradiction.

TG has put those probabilities in our favour.
I can only reiterate what has already been said here by those who do know, and that is, don't fix what is not broken regards the method and learn to stay out of our own way.

Forgive my post if it does not seem appropriate.
I have continued to read the thread and was in a conundrum as to whether to post this.

I have looked into the accounts that supple MetaTrader.
I'm in a difficult position, however, as I trade with X-Trader from TT using NinjaTraders charting
I, and I'm sure many others, would obviously like to have the indicators but have no idea if they will be supplied or that I may recieve an invite, although your last post is of great encouragement with reference to the other platform interfaces.

It would be a pleasure to contribute what ever I can to this wonderful arena both in a practical application and from what ever experience I have had over these past years of trading.

I'll leave you with a favourite quote from a philosopher.

"The eye of the will is impure,
and makes for distortion.
Only when we want nothing,
only when our gaze becomes pure contemplation,
does the soul of things, the very beauty, open to us".

With Kind Regards, and thanks.

Wow, that brought back some memories. I traded with X-Trader several years ago when I was just trading futures. That was a very quick entry order platform -- nicely put together then, probably even better now.