Lost in the Tunnel...

Quoting fx-trader777

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execuse me but what is fib numbers I read in article? (144, 233, 377) , hm nice 377 = 144 + 233.

Does fib means fibonacci?

thanks

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Quoting scorpion

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You'll find a modified, improved version of this in the PF when it opens.

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Quoting fx-trader777

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execuse me but what is fib numbers I read in article? (144, 233, 377) , hm nice 377 = 144 + 233.

Does fib means fibonacci?

thanks

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Quoting diallist

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Thank you Scorpion, this is correct.

I first traded the model several months ago with mixed results. The brief comment in the model document about it being vulnerable to losses during trend changes is an understatement!

Fortunately, shortly after this, I was invited to join an exclusive group of brilliant and dedicated traders whom I'll refer to as "Team Aphid" since they wish to remain anonymous. Team Aphid had developed a system from the model that they were trading with great success. I have taken their system and have made further improvements of my own, and named the system "Knife". This is the system I will be teaching in the PF and is the same system I used to win the 1770 pips in 18 days that I mentioned recently in the "100 Pips a Month" thread.

In addition, I am currently developing and testing an ancillary system to be used in conjuction with the Knife system during trend changes, to further enhance profits and reduce losses. I have submitted the initial draft of the system to Team Aphid for review. If this ancillary system tests well, I plan to include it in the PF at a future date.

I must say, that the members of Team Aphid are some of the nicest, kindest and most generous people it has been my pleasure to encounter. Would that the World was populated entirely with people such as these!!!

Diallist

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Quoting HeavyJ

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WOW!!

Thanx Charles at least you give some creditability to the merits of exploring this strategy. Warnings duly noted.

I would not have you divulge specifics about your system here. Nor do I believe you should.

I am curious if the model you tried before developing the Knife was indeed the 4Hr or 1Hr version of the tunnel

The reason I ask is because when I looked at the 1 Hr tunnel, I sort of dismissed it out of hand because of the "chop" at the tunnel. (I think this is what you were referring to) This would knock me out of tacos and beer pretty quick!

The 4hr tunnel seemed to greatly reduce this dynamic.

I appreciate and value any comment you can make to this

Thanx
HJ

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Quoting fx-trader777

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Did I understand this system well?

here is chart.
filters:
difference between 21 EMA and 5 SMA > 500 pips then the pip difference from the prior week must change by more than 10 pips, or just go lowerer to signal trend change (weekly chart)
If the 8 SMA and the 55 SMA and the market price are all within 50 pips or so of each other we go to technical to continue trade (please anyone can explain me this more clearly? perhaps I have difficulty because of my language skills. If you upload chart I will be greteful). We do this because at this juncture you are more likely to get the 8 SMA jumping up and down 2 or 3 pips every few bars, thus generating false trade signal.

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Quoting Team Aphid

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Here's what the Vegas Team says about the filter on the 4 hour chart:

“The second filter is on the 4 hour chart. If the 8 SMA and the 55 SMA and the market price are all within 50 pips or so of each other, we go to technicals [breakout] to continue the trade. We do this because, at this juncture, you are more likely to get the 8 SMA jumping up and down 2 or 3 pips every few bars, thus generating a false trade signal. It doesn’t happen very often, but when it does, using this filter can save us money, and the market isn’t really moving anywhere anyway. Therefore, a breakout of the techs makes sense to initiate a trade, if it’s in the direction you are supposed to be trading”

No idea how it works, looks impressive on the chart though. Only joking! To understand it properly you need some good Irish Whisky, triple distilled, (not bourbon), cordless keyboard because you must look at the chart with feet on table. OK, now that we’ve sorted out the difficult part lets get to the programming part of the rule.

Bit of smoke and mirrors here, lazy programmer and some reverse psychology. Instead of looking at price (will come to the why in next paragraph) and the 2 MA’s I only use the difference between the two MA’s. If the distance between the MA’s are less than 50 a WARNING will appear, if price are outside the boundaries in the warning the brain will OK the rest of the process. Less programming for same effect. To calculate the boundaries, just add 50 to the lower of the two MA’s and subtract 50 from the highest.

Now why leave price out. Put your binary logic thinking cap on, or take another whisky. Lets call the two MA’s T (top MA) and B (bottom MA), and price P. For the within 50 pips part of the rule we can have one of the following scenarios (read top to bottom, as on chart):

T | P | T
P | T | B
B | B | P

In the first column only T and B plays a role because P is between them. Therefore, P can be dropped. The next two share the same logic: for P, T and B all to be within 50 pips means that T and B will definitely be less than 50 pips. No question about that. So as long as T and B are less than 50 pips we need to give a boundary where price must be outside. Since we calculate it as above we don’t need it in the check. That is, we don’t wait for everything to move 50 pips apart. We say beforehand where the boundaries will be and if P moves outside that consider a trade.

I know it sound confusing like hell but look at a chart.

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Quoting fx-trader777

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If I knew this system a few days ago I would not have missed this trade.

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Quoting diallist

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Here are some words of wisdom from Team Aphid's head developer regarding the 50 pip rule on the 4 hour tunnel model.



To help you visualize this, I've added the chart below. The 55 SMA & 8 SMA are within 50 pips of each other. I've drawn two horizontal lines. The green line is 50 pips above the lower SMA (the 8 SMA in this case), and the red line is 50 pips below the upper SMA (the 55 SMA in this case). If price is between these boundaries, don't take any trades. If price moves outside these boundaries, there are two ways to play it:

First, you can simply play it as a breakout and enter a trade in the direction indicated by the weekly chart trend direction.

Second, you can simply treat price being outside the boundaries as an indication that it's OK to start looking for slope change signals again.

I use either the first or second option depending on what price action on the 4 hour looks like. Sorry, this part is discretionary and I would be hard pressed to explain it in general terms. We can have discussions in the PF for particular situations.

Does this help or confuse?

Dial

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Quoting diallist

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Here are some words of wisdom from Team Aphid's head developer regarding the 50 pip rule on the 4 hour tunnel model.



To help you visualize this, I've added the chart below. The 55 SMA & 8 SMA are within 50 pips of each other. I've drawn two horizontal lines. The green line is 50 pips above the lower SMA (the 8 SMA in this case), and the red line is 50 pips below the upper SMA (the 55 SMA in this case). If price is between these boundaries, don't take any trades. If price moves outside these boundaries, there are two ways to play it:

First, you can simply play it as a breakout and enter a trade in the direction indicated by the weekly chart trend direction.

Second, you can simply treat price being outside the boundaries as an indication that it's OK to start looking for slope change signals again.

I use either the first or second option depending on what price action on the 4 hour looks like. Sorry, this part is discretionary and I would be hard pressed to explain it in general terms. We can have discussions in the PF for particular situations.

Does this help or confuse?

Dial

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Quoting diallist

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Here are some words of wisdom from Team Aphid's head developer regarding the 50 pip rule on the 4 hour tunnel model.



To help you visualize this, I've added the chart below. The 55 SMA & 8 SMA are within 50 pips of each other. I've drawn two horizontal lines. The green line is 50 pips above the lower SMA (the 8 SMA in this case), and the red line is 50 pips below the upper SMA (the 55 SMA in this case). If price is between these boundaries, don't take any trades. If price moves outside these boundaries, there are two ways to play it:

First, you can simply play it as a breakout and enter a trade in the direction indicated by the weekly chart trend direction.

Second, you can simply treat price being outside the boundaries as an indication that it's OK to start looking for slope change signals again.

I use either the first or second option depending on what price action on the 4 hour looks like. Sorry, this part is discretionary and I would be hard pressed to explain it in general terms. We can have discussions in the PF for particular situations.

Does this help or confuse?

Dial

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Quoting fx-trader777

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Also may be I am deadly wrong but you mention that weekly trend is up and to initiate long position upper boundary must be broken. I am confused was not weekly chart down?


again thanks and sorry to dusturb.

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Quoting diallist

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Hi 777! Oops! You caught me! I made a mistake. You are correct. The weekly trend is down as you said. I've corrected the graphic in my post.

Good catch 777!

Dial

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