Strat's Long Term Stress Free Trading | Page 336 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Strat's PASR Long Term, Stress Free Trading 18,592 replies

M5 PASR Trend Trading Strat 95 replies

What you need for trading: indis, a strat & good music 27 replies

Another way to stress free, mechanic long term trading 29 replies

Short Term / Medium Term / Long Term? 3 replies

Attachments: Strat's Long Term Stress Free Trading
Exit Attachments

Strat's Long Term Stress Free Trading

  • #6,701
  • Oct 22, 2009 12:39pm Oct 22, 2009 12:39pm
I don't know what this shape or pattern is called but after it forms that U shape, it goes in the direction of the last leg significantly more than not. Often categorized by those 'small bars' mentioned by someone in an earlier post. Here's GBPJPY and GBPUSD.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: u shape.jpg Size: 110 KB
Click to Enlarge Name: gbpusd u.jpg Size: 104 KB
  • #6,702
  • Oct 22, 2009 12:59pm Oct 22, 2009 12:59pm
Quoting mstandifer
I don't know what this shape or pattern is called but after it forms that U shape, it goes in the direction of the last leg significantly more than not. Often categorized by those 'small bars' mentioned by someone in an earlier post. Here's GBPJPY and GBPUSD.
They are the W and M patterns which when present and correctly recognised, are powerful patterns.

The problem is in recognising them in "LIVE" trading - like most things, they are easily seen in hindsight, after the fact.

Caution To Everyone: Do not go blindly trading these patterns - they are only another tool - use them like all our other tools as confirmation of PASR.

Remember these are top and bottom picking patterns - the area of trading where more money is lost and accounts blown. It is far better to let the pattern AND the trend PROVE itself first. Then, as the train starts to leave the station, buy your tickets and jump on.

Make sure you KNOW which train you are on - the local, regional or fat city train.
15 YEARS OF PASR ON FOREX FACTORY!
  • #6,703
  • Oct 22, 2009 1:16pm Oct 22, 2009 1:16pm
Lou, I'm still trying to show why I prefer EURUSD over USDCHF.

If you compare the two pairs over 5 days, Monthly and 6 months, you can see that EURUSD moves more.

In trendier times it moves more but hey, those 24 pip differences all add up.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd & usdchf.gif Size: 36 KB
15 YEARS OF PASR ON FOREX FACTORY!
  • #6,704
  • Oct 22, 2009 1:45pm Oct 22, 2009 1:45pm
Here are just a few of the many failings of Ronald MacDonald (MACD)

As I have said in an earlier post, indicators are for those who do not understand PASR.

Having said that, I respect traders who make a profitable living using them and I am open to anyone who can show me how to profit consistently using the damned things!

Let’s first remember that indicators are an EXCUSE for not understanding or being able to SEE what PRICE is doing. As such they are a derivation of price and will always be a level of accuracy below PRICE depending on their formula/code complexity

They were also developed to PREDICT future price action! The prediction being entirely subjective to the views of the reader.

So let’s take a closer look at Ronald MacDonald:

To the newbie or inexperienced, I can see that it can be THEIR Holy Grail – in history and back testing it looks perfect – but any indicator will ALWAYS look perfect in history, back testing – HINDSIGHT. It has to because it is using the latest information that closed the last candle and candles depending on the number of bars it uses for calculation. However, while you are LIVE, well, good luck!

As an exercise, put Ronald on ANY chart and scroll backwards or forwards and watch this useless piece of crap jump up and down all over the place. In other words what you see TODAY is NOT what you will see when today is “x” days later. If you still don’t get it, today might show Ronald at the bottom but in 20 days time, it will be somewhere else. If you still don’t see it, take a screen shot of where it is at today and one 30 days later and see the difference.

Let’s look at how Ronald is coded:

MACD stands for ‘Moving Average Convergence Divergence’ and works by measuring the difference between a fast and a slow exponential moving average.

The three components that make up the MACD Indicator are constructed in the following way.
Signal Line = 12 Day EMA - 26 Day EMA
Reference Line = 9 Period EMA of the Signal Line
Histogram = Signal Line - Reference Line


So, we are taking the exponential moving average of PRICE 12 days ago and from that subtracting the exponential moving average of PRICE 26 days ago and calling it the Signal Line. Then we are going to take a 9 period exponential moving average of that difference and call it the Reference Line. Then we will create a histogram of the difference between the Signal line and the Reference Line.

No wonder this thing LAGS!

So, using my Mark I eyeball, I can see, without any calculations whatsoever, the difference between PRICE 12 days ago and PRICE 26 days ago. Why does anyone need an indicator to do this?

What does PRICE 12 days ago or 26 days ago have to do with where PRICE is at now? I want to trade in the NOW, not in the past.

I can see with my Mark I eyeball where PRICE is NOW compared to where it was 12 days ago, 26 days ago, 50 days ago etc. Why do I need an indicator for that?

Let’s use the Worker AUDUSD from Sept 2003 to March 2004 as an example:

First, here are some restrictions on the use of Ronald:

Gerald Appel, (Ronald MacDonald, the developer of MACD) claims that the MACD works better in trends and particularly a rising market more than a falling market.

It is also universally accepted that a buy signal is more reliable if the crossover occurs below the histogram and similarly for a sell signal that occurs above the histogram.

Most newbies and inexperienced users of squiggly wiggly lines don’t even know this. Worse still, they also use it for exits. Despite claims that it is the perfect indicator for trends, Ronald is USELESS at monitoring trends for exit signals.

This is because the reference line is an average of the signal line and it will collapse into the signal line under constant trending conditions, causing whipsaws.
This happens when the value of the signal line remains the same for any length of time, i.e. The difference between the 12 day EMA and the 26 day EMA is the same (constant).

Look at what Ronald thinks of the trend between Oct 2003 and January 2004! How does that help anyone? In fact it doesn’t help – it keeps those people trading MACD OUT of trending trades!
But wait a minute! The Ronald MacDonald experts know the answer! When any indicator doesn’t follow PRICE it is called divergence. GREAT! So for 3 months we are in limbo because our cast in concrete Gospel is shouting out “divergence”.
When do these Ronald experts know divergence is over? How do they measure divergence? Is 1 pip divergence? Is divergence expressed in terms of time? NOBODY KNOWS!
Now, if you are in the Ronald MacDonald Elite Club, you will be told about Hidden Divergence. This is when PRICE does the opposite to what the indicator does (as in the recent EURGBP example).
WHAT? PRICE does the opposite to what the indicator does? Who gives a flying shit what an indicator does – all we care about is PRICE.

PRICE is KING, QUEEN, LORD & COUNTRY

I could go on, and on ad infinitum but hopefully you get the message.
Attached Image (click to enlarge)
Click to Enlarge Name: ronald macdonald.gif Size: 31 KB
15 YEARS OF PASR ON FOREX FACTORY!
  • #6,705
  • Oct 22, 2009 3:01pm Oct 22, 2009 3:01pm
Quoting strat
Here are just a few of the many failings of Ronald MacDonald (MACD)...
You have written another gem! This is very great insight into why MACD doesn't work.
  • #6,706
  • Oct 22, 2009 3:04pm Oct 22, 2009 3:04pm
Quoting strat
Following up on my “So who took cosmo’s trades” and the poor/lack of response, I am left with the following conclusions:

1)Nobody reads the thread anyway

2)Nobody has the balls to own up that they took them

3)Those on The Path didn’t take them

Hopefully it was only the lurkers, freebie collectors, free lunchers, signal collectors, trade collectors, etc., who took the bait.

[font=Arial]Apart...
Still on The Path, and besides this pair gives me the hibbee gibbees...!!
  • #6,707
  • Oct 22, 2009 3:16pm Oct 22, 2009 3:16pm
Quoting strat
Following up on my “So who took cosmo’s trades” and the poor/lack of response, I am left with the following conclusions:...
I did not take those calls either Strat. Looking at hindsight, I knew that it's not what's taught in this thread.
Discipline is PRIMARY, Method is Secondary.....
  • #6,708
  • Edited 4:15pm Oct 22, 2009 3:42pm | Edited 4:15pm
Here's what I see on NZDUSD

Weekly: Bullish Trend. Buyers in control. Price has breach pass my SR line that I have at 0.7466

Daily: Hammer forming with 20 minutes before daily candle close. Looking to go long 10 pips above candle's high with SL below the candle's low. 1st Target around 0.7700issh

Concern: Looking at weekly chart, notice minor SR at 0.7600isshh. Am wondering should I at least wait for the price to close above 0.7600 to consider for a trade.

Thanks
Sean

Edit* I will just skip this trade since it did not close above 0.7600 . I guess a close above would be more tradable.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: nu w1.gif Size: 12 KB
Click to Enlarge Name: nu d1.gif Size: 21 KB
Discipline is PRIMARY, Method is Secondary.....
  • #6,709
  • Oct 22, 2009 3:49pm Oct 22, 2009 3:49pm
Strat mentioned that to look for how price reacts to the 1.500 area. Today's candle shows a hammer closing above it.

Question: Is the hammer significant as shown in this position?
Attached Image (click to enlarge)
Click to Enlarge Name: eu d1.gif Size: 27 KB
Discipline is PRIMARY, Method is Secondary.....
  • #6,710
  • Oct 22, 2009 4:17pm Oct 22, 2009 4:17pm
Quoting Strat
....
Apart from Patrick and Jidek who confirmed they didn’t, I would like to think ALL those on The Path had the DISCIPLINE to stay with the teachings on this thread.

In hindsight, it was a terrific test of will power and I’m a little annoyed with myself that I didn’t think up such a cunning scheme for test!
....
I didnt take ANY trade so neither cosmo's trade. In fact I dont remember what cosmo was talking about, I think it was before or right after I joined this thread...

Anyway would love to see some "evil" tests from time to time.
Trading = a mirror to your human flaws. Fix them or be fixed.
  • #6,711
  • Oct 22, 2009 4:41pm Oct 22, 2009 4:41pm
Quoting Dabestone
Strat mentioned that to look for how price reacts to the 1.500 area. Today's candle shows a hammer closing above it.

Question: Is the hammer significant as shown in this position?
Thats not really a real hammer, not one I would open a position on anyway.

Although it is showing buyer strength which is important at this level for anyone with open positions
  • #6,712
  • Oct 22, 2009 4:43pm Oct 22, 2009 4:43pm
I got my very first live account funded today with $200

So now every trade I take will be with real money
  • #6,713
  • Oct 22, 2009 5:39pm Oct 22, 2009 5:39pm
Quoting mstandifer
I don't know what this shape or pattern is called but after it forms that U shape, it goes in the direction of the last leg significantly more than not. Often categorized by those 'small bars' mentioned by someone in an earlier post. Here's GBPJPY and GBPUSD.
Steve Nison calls that a "Tower bottom" there are also "Tower Tops" and I have also seen them called "Citadel" tops and bottoms. There have been a few of them lately on the indices.
Here is a good explanation from Pring:
http://books.google.ca/books?id=I3cw...age&q=&f=false
  • #6,714
  • Oct 22, 2009 5:58pm Oct 22, 2009 5:58pm
Quoting Dabestone
Here's what I see on NZDUSD

Weekly: Bullish Trend. Buyers in control. Price has breach pass my SR line that I have at 0.7466

Daily: Hammer forming with 20 minutes before daily candle close. Looking to go long 10 pips above candle's high with SL below the candle's low. 1st Target around 0.7700issh

Concern: Looking at weekly chart, notice minor SR at 0.7600isshh. Am wondering should I at least wait for the price to close above 0.7600 to consider for a trade.

Thanks
Sean

Edit* I will just skip this trade since it did not close above 0.7600 ....
But MORE IMPORTANT:

Where do you see a HAMMER on your Worker chart?
15 YEARS OF PASR ON FOREX FACTORY!
  • #6,715
  • Oct 22, 2009 5:59pm Oct 22, 2009 5:59pm
Quoting Dabestone
Strat mentioned that to look for how price reacts to the 1.500 area. Today's candle shows a hammer closing above it.

Question: Is the hammer significant as shown in this position?
Where do you see a HAMMER on YOUR Worker chart?
15 YEARS OF PASR ON FOREX FACTORY!
  • #6,716
  • Oct 22, 2009 6:03pm Oct 22, 2009 6:03pm
Quoting soso
I didnt take ANY trade so neither cosmo's trade. In fact I dont remember what cosmo was talking about, I think it was before or right after I joined this thread...

Anyway would love to see some "evil" tests from time to time.
Anyway would love to see some "evil" tests from time to time.

You're soso right! I have been too good just lately. Time to start cranking the "Evil Strat"!
15 YEARS OF PASR ON FOREX FACTORY!
  • #6,717
  • Oct 22, 2009 6:11pm Oct 22, 2009 6:11pm
Quoting Naws
I got my very first live account funded today with $200

So now every trade I take will be with real money
OK, so NOTHING CHANGES. Just trade EXACTLY as you have been doing.

Make sure you have your believed and trusted PLAN and if not doing so already, keep a very detailed LOG of all your trades.
15 YEARS OF PASR ON FOREX FACTORY!
  • #6,718
  • Oct 22, 2009 6:33pm Oct 22, 2009 6:33pm
Quoting strat
Following up on my “So who took cosmo’s trades” and the poor/lack of response, I am left with the following conclusions:...
Nope, too busy with my own scutiny of the charts. I have leaned the hard way that any 'tip' needs to be assessed by careful consideration of what I can see on my OWN chart - whatever the source of the tip.
  • #6,719
  • Oct 22, 2009 6:56pm Oct 22, 2009 6:56pm
Quoting strat
But MORE IMPORTANT:

Where do you see a HAMMER on your Worker chart?
I'd like to contribute by giving my best answer. Is it supposed to be called a potential Hanging Man, since a hammer is at the end of a selling climax and a hanging man at the end of a buying climax?
  • #6,720
  • Oct 22, 2009 7:12pm Oct 22, 2009 7:12pm
Quoting Naws
I got my very first live account funded today with $200

So now every trade I take will be with real money
Hi Naws

Great stuff, it will be a bit different now trading with your own money, it just feels right.

Congratulations and may good fortuns smile upon you.

Happy trading.
Jideck
9 traders viewing now