EUR/GBP Trendmagic System

Here is a short GU on the open of the London session. 38 pips in 10 minutes, now that's nice. Looks like it may even go lower.

And gettin back to discussing our method...

Sorry MAD but I don't agree with this statement. I don't wait for the candle to close, I'm pretty sure it wasn't in the original rules either.

Maybe Paulus can confirm how he trades it, for clarification?

I'm "out and about" today so won't be trading. Good luck all, although let's face it, with this method luck isn't quite so necessary!

Yep...I got this one also but was stopped out for BE after being knee deep in pips. I wanted to close while in profit but I'm determined to develop the discipline to trade this 'text book' style. The thread has really moved backwards over the last fews days. Not good.

But having written that my stop was 10 pips above the TM line so I should have bagged 10 pips. (I use the language of pips because it is something we all understand in relation to the chart).

Precisely ther reason why this thread should have been taken to a closed forum. Many FF traders, punters and detractors will never appreciate fine gifts.

Are we looking at a 60 pip short on GBP/USD very soon.
Broke the 50 fibo and bounced but can not make it back to the 38.2 yet.
If it breaks the 50 again, I am in short as the nearest pivot is 1.6399

I am only checking the thread occasionally now so this post is a little longer than usual.

[1] INDICATORS

I did not write TrendMagic. A decompiled mq4 was posted to this forum which was hard to read.

I merely tidied it up and made it "human readable". I did not change the logic even though it repainted.

The other indicator Paulus used was the BB MACD. I then suggested using the LRSI as an additional filter. Purely to avoid loading up the charts, I though to combine these in a single indy which put up a bar of red/yellow/blue dots.

I rewrote BB MACD only because we wanted just the "MACD" bit, we didn't need the "BB" bit.

As you all know MACD is just the difference of two EMAs. So obviously if you take the CCI from TrendMagic (set optimally to 50) and combine it with the MACD settings Paulus devised (144,233) then you will get the same result. There is nothing magic here! Just convenience.

[2] WHAT WE REALLY NEED

I would echo Paulus final plea for clarity on this thread. What we all want is to ascertain the answer to a simple question: Is this system likely to be profitable?

A number of folk have talked seriously about trading for a living. If you are relying on this to pay the mortgage and feed the familty, then I doubt you will risk everything on anecdotal evidence! We MUST HAVE a rigorous scientific test...

[3] ASIDE ON THE PHILOSOPHY OF SCIENCE

Theories cannot be proved. Only disproved. No amout of supporting evidence proves a theory, it only supports it. But a single counterexample disproves it absolutely.

For hundreds of years, every swan observed was white. Everyone thought ALL swans were white. This theory was looking good! Then one day, a black swan was seen (in Australia I think?). The theory was disproven for ever.

[4] OUR RIGOROUS TEST

So we must test our system accordingly. Our Null Hypothesis is that..

H0 = [This system has a positive profit expectancy]

If we conduct tests at some level of significance, say 95%, we will discover if we can ACCEPT or we have to REJECT the hypothesis.

If we REJECT the hypothsis, we can all just go back to whatever we were all doing 2 weeks ago. The system is dead in the water.

If we can ACCEPT the hypothesis, however, it does not PROVE it is profitable. Just very likely at the 95% level of confidence.

So.....

The indicators we are using are internally set so there is nothing to tweak. That is, there are no DEGRESS OF FREEDOM (DoF) in the indys.

The rules and their associated DoF are:

(i) Asian / Not Asian (1 DoF)

(ii) (M5 + M15 agree) OR (M5 + M30 agree) OR (M5 + M15 + M30) agree (3 DoF)

(iii) They must agree in the RIGHT ORDER (3 DoF, I think, but it may be 6)

(iv) Price above/below TM (1 DoF)

We therefore have 8 DoF for the system. Trading is a 1-tailed decision (profitable/not-profitable). If we look at a table of the Chi-Squared distribution that governs tests of this type, we see that we need approximately 33 tests (ie trades) for each DoF.

So we need around 264 trades to test the system at the 95% level of significance. This is not a huge number and should be easily achieved in a few weeks.

Please note that IT IS VITALLY IMPORTANT that folk post ALL their trades, WINNERS AND LOSERS!! Just posting winners tells us nothing!

Some folk are concentrating on the M5. Some are focussing on the H1. This is great! We can hopefully accommodate both the scalpers AND the swing traders.

Paulus and I will coordinate the results but please make our work easier! This is a difficult task but worth it. At the end of this trial, we will be able to say with confidence that our system either works or not.

BTW, I did a large statistical analysis for a Hedge Fund who were surveying trading systems. They tested 325 systems. In only 2 cases were they unable to reject the Null Hypothesis.

IF our system "passes" the test, it will be a very significant result indeed!

Anne

I think this post belongs on the cable update thread?

Hey,

let's get this thread back on focusing on the SIMPLE SYSTEM provided by Paulus and TudorGirl. Please don't make it more complicated than it is with all kinds of useless indicators.

Here is my trades for today, 4 wins, 1 loss, total 55 pips. My daily goal of 50 in the bank. KISS.

I use 5 and 30 min. confirmation.

Have a nice weekend all.

PC

What has this got to do with the TM method? I'm sure many of us can do our own TA & Fibo analysis but we are not on this thread for that reason. There are many other threads that cater for this type of analysis.

* I had to double check that I was on the correct thread before posting *

Rastaman,
Why are you posting charts with fibs and other indicators on it? This has nothing to do with this system , please read various posts on on this thread about sticking with original system, if you must post with other indicators kindly start your own thread
Geoff

I think we shall see 8750 by next week

With other people posting charts with Fibos on them as in the post above this one, I did not realize that it was important.

Are you just going to ask me to stop posting charts with fibos or are you going to apply this to others, if you don't then obviously you are simply having a go!!!


PS: I see you did....LoL

The problem is, the thread is so long, hardly anyone is going to read the whole thing and find out the criteria.

Don't worry notch, we'll get it back on track

morning all. im watching the eur/gbp this morn. Looking to go short if price drops below tm and goes red and 15 or 30 goes red followed by 5 min going red. seems to be some resistance at 0.85299 so hopefull of this scenario. we will see.

read jacko's thread when it was already at 400 over pages. went back 2 read the thread from the start. till 200 over pages, tried the method n decided that it wasn't 4 me.

read this thread when it was already at 20 over pages. read it from the start again. n u have 2 know that there were some really long posts by edgetrader.

we're just guests in this thread, gotta respect the thread starter's wishes. don't know y every1 just want 2 prove that they r right or just get into a argument. it's also happening on cobra's thread. is it because we're all behind a pc monitor??

just go n start your own thread 2 talk about the things u want. simple as that. let me tell u. 1 of the most exasperating thing on this forum 2 happen. is when some self appointed fx guru or expert come n tell u with a scarcastic tone that u will fail. your method will not work blah blah blah.

this is not directed at any1. just my observations on what's happening on ff nowadays. y must every good thread degenerate into a farce in the end???

trade well all.

Just start another thread and make SURE everyone knows emphatically that no indicators are to be added or changed and that the thread is for the sole purpose of trading this system as it is.

It is not nice to jump down someones throat when they honestly did not know what the criteria is after reading the first few pages.

People will use fibos and MA's and some other things on their charts to help them gauge where the market is going. Keep in mind fibos and MA's are tools not indicators in the strict sense, like MCAD and Stochs. With that said, I do believe we need to keep the core indicators the same on all of our charts and take the trade signals from those indicators so we can evaluate our results.

any1 looking at the e/u on the 1m?? just thinking that a reversal might be happening. as a stock double-bottom had formed.

Folks:

Please listen to Paulus and TudorGirl. Stop wandering around in the wilderness. Do you see the same scene repeated over and over again?

First, Very rarely a brilliant method is presented

Second, a few professional traders post its value breathing credibility to the brilliant method

Third, traders having nothing brilliant(certainly not new or unique) to offer...post common ideas you see on every thread diluting the brilliant method.

Fourth, the professional traders leave

Fifth, the brilliant method presenter distances themselves from the traders having nothing brilliant to offer

Sixth, the thread slowly dies having become dominated by well intended traders having nothing brilliant to offer.

well, let's see what happens next.........TudorGirl and Paulus will need to show miraculous patience and leadership to press onward at this point.

I really need to use a great method to trade full time. This could be it. My prayer is this thread continues to be helpful to full time traders. The brilliant method already is.

Steve