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Lost in the Tunnel...

  • #241
  • Edited 12:20am Dec 24, 2005 12:04am | Edited 12:20am
First, thanks to HeavyJ for emailing Vegas and for sharing Vegas' reply. Cool beans HeavyJ!! Thanks!

If I'm reading everyone's posts correctly, I think there is a misunderstanding of the placement of the 24 and 28 EMAs on the charts. In the first email from Vegas, he used the word "respectively" but his sentence structure in the first email did not make it clear what was with respect to what. However, the second email did clear that up. I'll quote the relevant passage here:

Quoting Vegas
So, what we do is create daily and weekly charts [any currency pair] and then overlay on these a 24 and 28 ema, respectively. Now we plot the appropriate fib levels onto the daily and weekly charts.
The way I read this, one does not put both EMAs on the same chart. In other words, there is no tunnel as on the original one hour system. The word "respectively" in the passage above means, to me at least, that the 24 EMA goes on the daily chart, and the 28 EMA goes on a weekly chart, with this weekly chart being different from the weekly chart used to determine trend.

I agree with xspowerx that the original weekly chart (with the 21 & 5 MAs) is probably no longer used. Instead, the new daily (with 24 EMA & fibs) and weekly (with 28 EMA & fibs) is used. Once these two indicate a potentially strong move is building (and I'm not sure how to do this yet) one would then look at either the original 1 hour chart OR the original 4 hour chart for "confirmation" (Vegas' word) depending on which method was being traded.

See attached image. Does all this make any sense?

Dial
Attached Image
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  • #242
  • Dec 24, 2005 12:34am Dec 24, 2005 12:34am
Quoting volan
Hey Matsu, could you describe your chart more? Perhaps if you could label the MA's it would make it more clear. Also, what are the blue/red bars near the middle? Presumably that's the TrendManager; how does it work and where can I get the indicator?
Hi Volan,

I hope the chart is clearer now. This is just one possible way to use Vegas's new information. I have chosen the 5/13/62 EMA system here.

Yes the blue and red bars are the TrendManager. The default setting is 7, 2. I have set it at 42, 2 to get the equivalent on the daily chart. If you go to the link in buff's post http://www.forexfactory.com/forexfor...43&postcount=3 you can get a good description on its use.


Regards,
Matsu
Attached Image
  • #243
  • Dec 24, 2005 12:38am Dec 24, 2005 12:38am
Quoting diallist

First, thanks to HeavyJ for emailing Vegas and for sharing Vegas' reply. Cool beans HeavyJ!! Thanks!

If I'm reading everyone's posts correctly, I think there is a misunderstanding of the placement of the 24 and 28 EMAs on the charts.

........

Dial
Hi Dial, if you placed Vegas's indicator on the chart, you will note that both the 24 and 28 EMAs are there. So I think the tunnel is still there.



Regards,
Matsu
  • #244
  • Dec 24, 2005 1:14am Dec 24, 2005 1:14am
Quoting Matsu
Hi Dial, if you placed Vegas's indicator on the chart, you will note that both the 24 and 28 EMAs are there. So I think the tunnel is still there.



Regards,
Matsu
You have a point. What then do they mean by the use of the word "respectively"? To me, the use of that word means to pair the items in one list to the items in another list: Daily to 24 and Weekly to 28. Unless their wording is poor or they don't understand the proper use of the word. What do you think?

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #245
  • Dec 24, 2005 1:38am Dec 24, 2005 1:38am
Heavy J,
yes, I have heard of it. In fact I wrote it.
vegas
  • #246
  • Dec 24, 2005 1:38am Dec 24, 2005 1:38am
Quoting diallist
You have a point. What then do they mean by the use of the word "respectively"? To me, the use of that word means to pair the items in one list to the items in another list: Daily to 24 and Weekly to 28. Unless their wording is poor or they don't understand the proper use of the word. What do you think?

Dial
I would like to think that it is probably wrong choice of word, else the indicator would only have one EMA, and by selecting either Model #3 or #4 you would have the appropriate EMA displayed for the weekly, while Model #1 and #2 would display the EMA for daily chart.

In Vegas's reply to HeavyJ he used the words 'daily tunnel'

Quote

For example, do the yen daily. See how the market hugged the upper fib level [233 on model #1] on the daily for about 8 weeks. When it finally turned lower through the daily tunnel it was 300 points in 2 days. That's the kind of move we want to catch.

I would like to believe the tunnel is still there, instead of just one EMA.


Regards,
Matsu
  • #247
  • Dec 24, 2005 1:58am Dec 24, 2005 1:58am
Quoting diallist
Have patience, Grasshopper, and all will be revealed in the PF.
how can i join this pf please?
  • #248
  • Dec 24, 2005 7:16am Dec 24, 2005 7:16am
Hi Vegas

I've just had a quick look at the code and it looks like you're plotting fib levels of the 28 ema for all risk models.

Dial has already commented on this passage earlier:

So, what we do is create daily and weekly charts [any currency pair] and then overlay on these a 24 and 28 ema, respectively. Now we plot the appropriate fib levels onto the daily and weekly charts.

I agree with Dial that your usage of the word "respectively" implies the 24 for daily & 28 for weekly. So could the code be wrong?

Also parameters MA1 & MA2 don't seem to be used anywhere at all since the actual values are hard coded!

Thanks for taking time to answer these questions!
  • #249
  • Dec 24, 2005 10:13am Dec 24, 2005 10:13am
Hi Vegas!

First off let me personally thank you for joining us in order to answer questions. I, myself, and probably many others, really do appreciate that.

I have read your tunnel method once, twice, programmed it, read it a third time, reprogrammed with the new daily in it, read it more, printed it out, and read it about 4 more times before I went to bed to makes sure I completly understand it, LOL. I have been in it for about the last month and a half. So as you can see, I am a big fan of it.

My first question is, can you answer us in this current debat. Do we plot both the 24 and 28 EMA's on the weekly and daily or just the 24 on the weekly and just the 28 on the daily? I have been testing it with both EMA's on both charts and it seemed to produce relatively good results, acually so good I think 8 out of 10 trades were positive.

My second question is, above, I posted 3 trades, all against the JPY, on Thursday. Can you check those to see if I am on the right track with this method? Were there indeed short signals at those prices at that time? If you can't find it, here it is, I posted them Thursday.

AUDJPY spotted at 85.12.

CHFJPY Short: entered at 88.84

GBPJPY Short: entered at 202.62

Hope you and your family have a wonderful Christmas.

Thanks in advance.

-S Power
  • #250
  • Dec 24, 2005 10:54am Dec 24, 2005 10:54am
Quoting vegas
Heavy J,
yes, I have heard of it. In fact I wrote it.
Thank you Vegas for honoring our thread with a visit (hopefully a long one :-). As you can see, your methods have created a following of excited people, but people with many questions.

As you may have read, we will have a training forum opening in January. As a part of that forum, I have taken your 4 hour method as I understand and trade it and will be presenting it with much text and many images so that the greatest number of brand new traders can benefit from your system. Just so you'll understand the reference, I've called the system "Knife" to differentiate it from your 4 hour tunnel document, although the two are 97% identical. I've deviated primarily in the use of discretion. And that leads me to my question:

As you have stated, the 4 hour model is most susceptible to losses during trend changes. I see the reason for this as being that the momentum indication (diff between 21 & 5) is lagging price action. Therefore, I have been using discretion in choosing trade direction. But, I don't always get it right and sometimes I hurt rather than help myself. I've thought about using the momentum indicator purely as UP and DOWN and can see statistically that trading in those "binary" directions only should result in profit over a long series of trades.

BUT, I was trying to use discretion to cut down on some of those losses at trend change.

Okay, too much blabbing. Here's my question. When you trade the 4 hour method, do you follow th UP and DOWN trend indication mechanically, without any use of discretion? Is this profitable? Do you recommend that?

If you do, or were to apply discretion, could you give us some guidelines please? The is the one part of your method that is giving me fits.

Again, Thanks for joining us with the offer to answer a few questions. It is appreciated far more than you realize.

Hope you have a Merry Christmas.

Dial (Charles)
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #251
  • Dec 25, 2005 1:32am Dec 25, 2005 1:32am
Hi,

I'm trying to backtest and follow the original trades of the 4 hour vegas tunnel.

The document states for period 1/01/04 - 1/23/04, BUY ONLY, PL = 600
Using different parameters I can get between 583 and 959.5
The calculations are if 3 lots gain 10pips, this makes 30pips on the trade, not 10 pips on the movement.

So far so good.

The document then states for trading period 1/23/04 - 5/21/04, SELL ONLY with PL of 2,075
However, mechanically, I can't get anywhere near this, ranging from -0.5 to 979.5

Has anyone tried this and got close to 2,075 ?

If Vegas is reading, if you still have the original calculations/ spreadsheet/ trades/ scribblings, then I would love to have them to clarify my understanding of the system.

Merry Christmas
Alan
  • #252
  • Dec 25, 2005 9:15am Dec 25, 2005 9:15am
Looking for fib indicator for mq4.

Thank you!
  • #253
  • Dec 26, 2005 12:27pm Dec 26, 2005 12:27pm
Quoting ktrade
Looking for fib indicator for mq4.

Thank you!
Hey ktrade;

The fib lines in vegas' method is not really a standalone indicator. They are simply parallel lines drawn a specific number of pips away from a moving average line.

Look at post number 204 where Dialist does a great job of showing how the fib lines are put onto a chart. He's got screenshots and all.

Hope that helps.
  • #254
  • Dec 26, 2005 2:56pm Dec 26, 2005 2:56pm
Quoting firehorse
Hi,

I'm trying to backtest and follow the original trades of the 4 hour vegas tunnel.

The document states for period 1/01/04 - 1/23/04, BUY ONLY, PL = 600
Using different parameters I can get between 583 and 959.5
The calculations are if 3 lots gain 10pips, this makes 30pips on the trade, not 10 pips on the movement.

So far so good.

The document then states for trading period 1/23/04 - 5/21/04, SELL ONLY with PL of 2,075
However, mechanically, I can't get anywhere near this, ranging from -0.5 to 979.5

Has anyone tried this and got close to 2,075 ?

If Vegas is reading, if you still have the original calculations/ spreadsheet/ trades/ scribblings, then I would love to have them to clarify my understanding of the system.

Merry Christmas
Alan
I've done a partial backtest for the second period. I got 2469 pips just through March 9th. Just eyeballing the charts I can see I would get more through the end of the sell cycle at 5/21/04. I would have done the whole period but I've got inlaws wanting feeding so I've got to go. I did this kind of quickly so be wary of any errors I might have made.

Are you taking both primary and secondary signals? If you take just the primaries, you'll miss out on a lot of pips.

FYI, I entered my "trades" 20 pips beyond the neutral line, and exited either when a fib level was hit or price moved 20 pips beyond the neutral line in the opposite direction.

Dial
Attached File(s)
File Type: zip EURUSD_Sell_Backtest.zip   2 KB | 589 downloads
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #255
  • Dec 26, 2005 5:38pm Dec 26, 2005 5:38pm
Hi Dial,

Could you clarify "neutral line" here. Is that the 50 pip zone or maybe the 8 bar BE? Just want to make sure I understand you!

Thanx
HJ

Quoting diallist
FYI, I entered my "trades" 20 pips beyond the neutral line, and exited either when a fib level was hit or price moved 20 pips beyond the neutral line in the opposite direction.

Dial
HeavyJ -"Posterboy for Spellchecker!" "Will work for pips!"
  • #256
  • Dec 26, 2005 5:52pm Dec 26, 2005 5:52pm
Quoting HeavyJ
Hi Dial,

Could you clarify "neutral line" here. Is that the 50 pip zone or maybe the 8 bar BE? Just want to make sure I understand you!

Thanx
HJ
Hi HeavyJ,

See post 26 of this thread. At the beginning of each 4 hour bar, I enter a trailing entry 20 pips beyond the neutral line with three "units". At the same time that I set the trailing entry, I also set a trailing stop 20 pips on the opposite side of the neutral line. I cancel these entries and put in fresh ones every four hours at the beginning of the next bar. If a trade is in progress, then I simply update the trailing stop to be 20 pips beyond the neutral line for the current bar. There are occasions when doing the trailing stop this way doesn't make sense. In those few cases, I'll set a technical stop based on recent price movement, as long as it does not result in my increasing the size of my stop. In that case, I just leave the stop where it is.


Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #257
  • Dec 26, 2005 6:07pm Dec 26, 2005 6:07pm
Quoting ktrade
Looking for fib indicator for mq4.

Thank you!
Hey K<

If you want the MT4 templates that Vegas sent to Claude, look at the bottom of his post # 220,

I posted an email from vegas that explains what settings he uses on the different major pairs if that is what your referring to. There are diferrent fib bands for different time frames and currencies.

HJ
HeavyJ -"Posterboy for Spellchecker!" "Will work for pips!"
  • #258
  • Dec 26, 2005 6:21pm Dec 26, 2005 6:21pm
Thanx Dial,

Quoting diallist
Hi HeavyJ,

See post 26 of this thread. At the beginning of each 4 hour bar, I enter a trailing entry 20 pips beyond the neutral line with three "units". At the same time that I set the trailing entry, I also set a trailing stop 20 pips on the opposite side of the neutral line. I cancel these entries and put in fresh ones every four hours at the beginning of the next bar. If a trade is in progress, then I simply update the trailing stop to be 20 pips beyond the neutral line for the current bar. There are occasions when doing the trailing stop this way doesn't make sense. In those few cases, I'll set a technical stop based on recent price movement, as long as it does not result in my increasing the size of my stop. In that case, I just leave the stop where it is.


Dial
HeavyJ -"Posterboy for Spellchecker!" "Will work for pips!"
  • #259
  • Dec 26, 2005 7:21pm Dec 26, 2005 7:21pm
Thanks HeavyJ and Volan on the fib info. I'll check it out!

Ktrade
  • #260
  • Dec 28, 2005 2:57pm Dec 28, 2005 2:57pm
Anybody entered long for possible retracement to second band?
I'm in @ 7140 with a tight stop.
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