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Lost in the Tunnel...

  • #81
  • Nov 19, 2005 10:24am Nov 19, 2005 10:24am
Quoting MuddBuddha
Here's a small article that may help you:

http://www.professionalforex.com/for...topic.php?t=12

As well as:

http://www.professionalforex.com/for...wtopic.php?t=7

Trend is not overly difficult to determine especially one you've trained you eyes to spot it. It's kinda like missing the forest for the trees.

I'm a huge believer and proponent of new traders learning the Dow Theory. It helped me tremendously as a new trader and I think it's vital to overall success.

I can now spot most trends easily without the aid of lines, channels, crystal balls, or chicken bones. Though the chicken bones do help somewhat with price action!

All of this is because of training myself to see the general direction and the patterns that fit into the theories. Of course, staring at charts for endless hours is the only way to accomplish this as well as verifying your results with someone you trust.

Once that is done, you'll wonder why you had such a hard time with it!

~MuddBuddha
Hi Mudd! How's one of my favorite geniuses doing?

Thanks for the articles. Very useful for seeing where the trend is, and conversely, where the trend isn't. I think the latter part is useful with this system because even though the Vegas method of using momentum measurements to determine trend is right on 90%+ of the time, it is when that "indicator" disagrees with the market that too many losses can occur. I appreciate your taking time to comment. Thanks!

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #82
  • Nov 19, 2005 12:11pm Nov 19, 2005 12:11pm
equilateral pendants!? do you mean a symmetric triangle!?

If you mean the triangle thing then it depends on what kind. I see s symmetric formation which are neutral in bias so they are tricky to read. Ascending triangles have an upward bias and conversely negative ones downwards. I don't have any hard statistics on breakout directions, sorry!

I've looked at the chart and, forgive me, I don't quite see the pinbar you mean. I can see the last bar you've highlighted but I'm not sure what you mean. Could you perhaps highlight the 3 bar formation?

Quoting HeavyJ
That's so cool Iso. I read somewhere that these equilateral pendants break in the direction of the previous trend @ 62% of the time. Has that been your experience? You got tons more chart and scribble time than I!

Also I'm gonna go back to James chart thread this weekend to see how or if he would play the pinbar formed yesterday on the daily. Checkout chart below

Also I'm up to my 3rd day I guess on MT4 maaaaaan what an upgrade.

I intend to disect your indicators 'cause I ain't gettin' it yet. (the programming aspect that is)

Your last improvement looks great (10^4) I'll probably fly that into my template today.

Have a good day
HJ
  • #83
  • Nov 19, 2005 12:14pm Nov 19, 2005 12:14pm
Just unzip them to the experts/indicators folder under the Interbank installation folder (normally under c:/program files for a default install). You might have to restart the terminal to pick them up. Thats should be it!

Quoting HeavyJ
Iso,

Could you help me out? How do I install/load/use these indicators?

Thanx

HJ
  • #84
  • Nov 19, 2005 12:21pm Nov 19, 2005 12:21pm
I agree with you that all newbies should learn the Dow Theory. It helps you out when you're looking at trends on different timeframes. Also many systems that screen this way borrow heavily from the theory in terms of 1st screen (macro or primary), 2nd (intermediate or secondary) and 3rd (micro or tertiary). Dr Elder built his Triple Screen system around it in fact. I first saw some resemblances of the tunnel to that system earlier on.

Nice articles Mudd, although I think I've seen them somewhere before!

Quoting MuddBuddha
Here's a small article that may help you:

http://www.professionalforex.com/for...topic.php?t=12

As well as:

http://www.professionalforex.com/for...wtopic.php?t=7

Trend is not overly difficult to determine especially one you've trained you eyes to spot it. It's kinda like missing the forest for the trees.

I'm a huge believer and proponent of new traders learning the Dow Theory. It helped me tremendously as a new trader and I think it's vital to overall success.

I can now spot most trends easily without the aid of lines, channels, crystal balls, or chicken bones. Though the chicken bones do help somewhat with price action!

All of this is because of training myself to see the general direction and the patterns that fit into the theories. Of course, staring at charts for endless hours is the only way to accomplish this as well as verifying your results with someone you trust.

Once that is done, you'll wonder why you had such a hard time with it!

~MuddBuddha
  • #85
  • Nov 20, 2005 5:52am Nov 20, 2005 5:52am
Quoting Isotonic
equilateral pendants!? do you mean a symmetric triangle!?
Yup! Sorry! Last thing I read on bars, may have been candle sticks called these pendant formations. Your label is more pervasive!


Quoting Isotonic
I've looked at the chart and, forgive me, I don't quite see the pinbar you mean. I can see the last bar you've highlighted but I'm not sure what you mean. Could you perhaps highlight the 3 bar formation?
The last bar on the chart. The hammer would that not be considered a pinbar (bullish)? I guess the next bar could gap out site at open!



Thanx HJ
HeavyJ -"Posterboy for Spellchecker!" "Will work for pips!"
  • #86
  • Nov 20, 2005 11:33am Nov 20, 2005 11:33am
Quoting HeavyJ
Yup! Sorry! Last thing I read on bars, may have been candle sticks called these pendant formations. Your label is more pervasive!
Do you mean pennant?
  • #87
  • Nov 20, 2005 1:42pm Nov 20, 2005 1:42pm
Quoting Snuffleupagus
Do you mean pennant?
Yup! Somebody please just go ahead and shoot me!
HJ
HeavyJ -"Posterboy for Spellchecker!" "Will work for pips!"
  • #88
  • Nov 21, 2005 1:17pm Nov 21, 2005 1:17pm
just a quick follow up:

http://img14.imageshack.us/img14/766/audusd3mn.th.gif
  • #89
  • Nov 21, 2005 2:15pm Nov 21, 2005 2:15pm
Here's a handy slope magnifier....
Attached Image
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  • #90
  • Edited 7:35pm Nov 21, 2005 7:23pm | Edited 7:35pm
Someone asked the following via a PM to me.

They wanted to know about the Loonie (USD/CAD). They said they understood that the trend had changed from down to up, but were not sure whether they should take long positions until after the crossover of the 21 EMA and the 5 SMA.

Answer: As soon as a momentum change indicates a change in trend, you start taking positions in the direction of the new trend immediately. You do not wait until crossover occurs. Sometimes, you don't get a crossover between trend changes. And, while most trend changes are indicated by a decrease in momentum, there are some occasions where the trend change is marked by an increase in momentum. The Loonie (USD/CAD) might be about to present such a scenario in the next week or two.

Here are the two sequences that mark a trend change.

The first is when a decrease in momentum marks the trend change, and is the one you'll see most of the time.

The second sequence occurs less frequently and is characterized by an increase in momentum marking the trend change.

First Trend Change Sequence

1. Momentum continues to increase from week to week indicating the current trend is still in place.
2. Momentum decreases from one week to the next indicating a trend change has occurred.
3. Momentum continues to decrease until a crossover of the 21 EMA and 5 SMA occur.
4. Crossover Occurs
5. Momentum begins to increase following the crossover.
6. The next decrease in momentum marks another trend change.

Second Trend Change Sequence

1. Momentum continues to increase from week to week indicating the current trend is still in place.
2. Momentum decreases from one week to the next indicating a trend change has occurred.
3. Momentum continues to decrease, but then .....
4. No Crossover Occurs.
5. Instead, momentum begins to increase again marking the beginning of a new trend.
6. The next decrease in momentum marks another trend change.

Perhaps the image below will help illustrate this. If you are not clear on the two sequences, let me know.

Dial
Attached Image
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  • #91
  • Nov 21, 2005 7:28pm Nov 21, 2005 7:28pm
Jim,

This is in reference to post 102 above.

A few weeks ago, I sent you a message (PM or email, I forget which), that I no longer have a copy of and I was hoping you might still have a copy.

It was where I listed all the places in the Vegas 4h document that implied that the trend begins as soon as you get a change in momentum and it is not necessary to wait for the crossover before trading in the direction of the new trend. Do you by chance still have a copy of that message?

If so, could you email it to me so I can clean it up and post it here.

Thanks Jim
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  • #92
  • Nov 22, 2005 2:50am Nov 22, 2005 2:50am
Your posts are certainly most useful and informative.

I was thinking in the scenarios you gave is there the following option that perhaps negates the weekly downtrend?

Third Trend Change Sequence (Negation and Reversal)

1. [-ve] Momentum continues to increase from week to week indicating the current trend is still in place.
2. [-ve] Momentum decreases from one week to the next indicating a trend change has occurred.
3. [-ve] Momentum continues to decrease until a crossover of the 21 EMA and 5 SMA occur.
4. Crossover Occurs
5. [-ve] Momentum continues to decrease and crosses over the centre line (0) and becomes +ve.
6. Now the [major] weekly trend is up.

4 or 5 are interchangeable in sequence?

So now we look for long opportunities on the 4h and buy on the dips instead?
  • #93
  • Nov 22, 2005 8:54am Nov 22, 2005 8:54am
Quoting Isotonic
Your posts are certainly most useful and informative.

I was thinking in the scenarios you gave is there the following option that perhaps negates the weekly downtrend?

Third Trend Change Sequence (Negation and Reversal)

1. [-ve] Momentum continues to increase from week to week indicating the current trend is still in place.
2. [-ve] Momentum decreases from one week to the next indicating a trend change has occurred.
3. [-ve] Momentum continues to decrease until a crossover of the 21 EMA and 5 SMA occur.
4. Crossover Occurs
5. [-ve] Momentum continues to decrease and crosses over the centre line (0) and becomes +ve.
6. Now the [major] weekly trend is up.

4 or 5 are interchangeable in sequence?

So now we look for long opportunities on the 4h and buy on the dips instead?
Sorry Iso, but I am totally lost. What center line? How can momentum continue to decrease after the 8/55 crossover? If I'm driving toward a street sign, it gets closer until I pass it, then it gets further away. What I'm hearing you say is that the sign gets closer even after I've passed it.

I'm lost. Picture please?

Thanks

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #94
  • Nov 22, 2005 11:53am Nov 22, 2005 11:53am
Here ya go Dial:

http://img464.imageshack.us/img464/9...dcad2qu.th.gif

Earlier on you were talking about weekly MAs (5/21) and now you mention the 4h (8/55), so I'm a bit confused as well!

Quoting diallist
Sorry Iso, but I am totally lost. What center line? How can momentum continue to decrease after the 8/55 crossover? If I'm driving toward a street sign, it gets closer until I pass it, then it gets further away. What I'm hearing you say is that the sign gets closer even after I've passed it.

I'm lost. Picture please?

Thanks

Dial
  • #95
  • Nov 22, 2005 12:12pm Nov 22, 2005 12:12pm
Quoting Isotonic
Here ya go Dial:

http://img464.imageshack.us/img464/9...dcad2qu.th.gif

Earlier on you were talking about weekly MAs (5/21) and now you mention the 4h (8/55), so I'm a bit confused as well!
Sorry Iso, I meant 5/21.

I still don't get what you mean. If the crossover has occurred, or even if the 5 just barely touched the 21 and bounced off, the momentum is going to increase, not decrease. One of us is confused and I suspect it's me!

Thanks

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #96
  • Nov 22, 2005 2:01pm Nov 22, 2005 2:01pm
I think we're both confusing each other in a negative loop somehow! :

My third point means that for instance on the USDCAD the long term weekly (and hence monthly) trend is down. That means -ve momentum rules the roost and +ve momentum is generally weak counter moves that don't often break the centre line and continue as strong moves. In other words they don't go on to negate the long term downtrend and start a new uptrend.

Your first two scenarios were I think written from the context of this down trend, hence momentum increasing when the downtrend resumes or picks up speed and conversely decreasing when the downtrend pauses (consolidates) or retraces (uptrend resumes again, if only weakly).

I differentiated the momentum in this respect into +ve or -ve so they can be freed of the weekly context. At some point even for the loony it might undergo a significant and sustained reaction to the long term down trend and thus the 3rd scenario would kick in.

Another chart might help here answer more questions:

http://img462.imageshack.us/img462/7...pusd2nb.th.gif

I find the MACD a useful indicator for what you guys are doing here. Dynamic momentum calculation and I've thrown in the weekly gradient to boot. It saves you calculating by hand the weekly values (apologies if you've automated this bit).

Hope this helps!

Quoting diallist
Sorry Iso, I meant 5/21.

I still don't get what you mean. If the crossover has occurred, or even if the 5 just barely touched the 21 and bounced off, the momentum is going to increase, not decrease. One of us is confused and I suspect it's me!

Thanks

Dial
  • #97
  • Edited 9:28am Nov 23, 2005 8:28am | Edited 9:28am
Thanks for the clarification Iso. I think we are talking about the same thing, but using different terminology to describe it.

For me, there are still only two possible scenarios:

(1) Two consecutive momentum changes with an intervening crossover.
(2) Two consecutive momentum changes without an intervening crossover.

I think for the purposes of this system, the direction of the momentum, is irrelavent. Only the magnitude is important. But I could be wrong.

If you still believe there is a third scenario that I'm missing, feel free to try again. But for now, I'm happy with just my two.

Thanks Iso

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #98
  • Nov 23, 2005 11:54am Nov 23, 2005 11:54am
I think with our circular arguments we'll meet up somewhere eventually.

I've looked at your first post on this (#102) and it seems to me that you're talking about relative momentum, whereas I'm taking about absolute momentum. So your example talks about increasing and decreasing momentum with respect to the weekly downtrend. You highlighted the turning point in the weekly trend from down to up and labelled that as decreasing momentum, and when the up trend was over then momentum increased again.

With relative models the terminology breaks when the model breaks or is flipped over. So for example say the up trend carries a long way so that it doesn't become feasible to talk about decreasing moment wrt to a down trend since the trend itself has changed long term from down to up.

For example right now with the USDCAD the major or primary trend is down with corrective or secondary trends up. But there may come a point where there may come about an equilibrium and then reversal from down to up long term. Hence scenario 3.

With absolute momentum you split the relative terminlogy into -ve + ve terms instead to deal with this and traditionally this is what the MACD histogram does [to deal with this limitation]. But you still need to make judgement calls on weak reversals that just hover around the centre line.

I think my definitions and terms are probably just confusing the issue and/or topics being discussed here and I might still be wrong in my assumptions of your posts so I will respectfully defer to your terms instead!

Much easier all round I think - after all you've investigated this sytem far longer than me so you're probably correct after all!

Quoting diallist
Thanks for the clarification Iso. I think we are talking about the same thing, but using different terminology to describe it.

For me, there are still only two possible scenarios:

(1) Two consecutive momentum changes with an intervening crossover.
(2) Two consecutive momentum changes without an intervening crossover.

I think for the purposes of this system, the direction of the momentum, is irrelavent. Only the magnitude is important. But I could be wrong.

If you still believe there is a third scenario that I'm missing, feel free to try again. But for now, I'm happy with just my two.

Thanks Iso

Dial
  • #99
  • Nov 23, 2005 1:16pm Nov 23, 2005 1:16pm
Quoting Isotonic
I think my definitions and terms are probably just confusing the issue and/or topics being discussed here and I might still be wrong in my assumptions of your posts so I will respectfully defer to your terms instead!

Much easier all round I think - after all you've investigated this sytem far longer than me so you're probably correct after all!
You are far too kind and give me more credit than I deserve, but thank you!

Quote
With relative models the terminology breaks when the model breaks or is flipped over. So for example say the up trend carries a long way so that it doesn't become feasible to talk about decreasing moment wrt to a down trend since the trend itself has changed long term from down to up.
Hmmm....I have a sneaky suspicion than what you said here may apply to the 500 pip (not 50) rule on the weekly chart.

Anyhoo, I'm brain-burnt now. Iso, I hope you have a wonderful holiday weekend! (Assuming your in USA).

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #100
  • Nov 24, 2005 4:44am Nov 24, 2005 4:44am
Happy thanksgivings my american chums! Go easy on the turkey now!

Quoting diallist
You are far too kind and give me more credit than I deserve, but thank you!

Hmmm....I have a sneaky suspicion than what you said here may apply to the 500 pip (not 50) rule on the weekly chart.

Anyhoo, I'm brain-burnt now. Iso, I hope you have a wonderful holiday weekend! (Assuming your in USA).

Dial
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