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DTFD - Dot Trading for Dummies

  • #21
  • Mar 17, 2010 10:15pm Mar 17, 2010 10:15pm
Good day to you,

To be able to understand all the nuances, and how the dots are formed, the homework excercise is this:

Add the T3_clean indicator to a fresh chart - I normally use 1hr. Set the T3 period to 28. Also add, to the same chart, the Snake indicator - set the Half_Cycle to 10. These are the Primary Dots. Leave the secondary dots for now.

Now add the Taucross indicator as well.

You will now be able to observe how these dots are formed, based on the cross of the T3 and Snake. Keep the chart handy and follow the progress for a while - day or a week. You will then see when changes occur / if any - and why a dot may move back one bar, at times, or disappear - at times.

Remember - this is no grail. But it is possibly the best cross indicator system you will find. Probably the most balanced in terms of early detection versus overshoot.

It is not the intention that each dot should be traded blindly... it is a tool only.

The chart should look like this:
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  • #22
  • Mar 17, 2010 11:01pm Mar 17, 2010 11:01pm
Good day to you,

Took the signal a bit earlier. Was late, as I was still in bed. Very little drawdown. Nice.

Daily target made. Remember - it is my attempt to only bank 30 pips per day. This, in theory, will allow me the luxury of picking better entries / trades. But probably more important, to have a life too.

Will be back later today.

A want to ask / invite all of you to present / propose a directional filter to enhance the dotties. All welcome.

Wish you all success

Regards and trade well
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  • #23
  • Mar 18, 2010 12:32pm Mar 18, 2010 12:32pm
Tau!

Hey bud, I made a study chart that I will watch for a while!

Will watch tomorrow on e/j ny/uk overlap.

Keep up the bad....kidding! Keep up the good work!

Mike
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  • #24
  • Mar 18, 2010 7:04pm Mar 18, 2010 7:04pm
Quoting calderone
Tau!

Hey bud, I made a study chart that I will watch for a while!

Will watch tomorrow on e/j ny/uk overlap.

Keep up the bad....kidding! Keep up the good work!

Mike
Good day to you, Mike

I would suggest you drop the secondary dots for now. Just use the T3 (28) and Snake_Halfcycle(10) settings for now.

It does look like the crosses and MACD compliments.. I have taken the liberty to mark your chart. Once a signal is established, a break of low/high with a MACD confirmation seems like a good possible entry.

Jusf follow for a while and let me know if there is value?

With you success

Regards
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  • #25
  • Mar 18, 2010 9:04pm Mar 18, 2010 9:04pm
Good day to you,

Will attempt a long here, based on the following:

The longer term cycle direction ( although still slightly down) is flattening out at this point in time. The short term cycle shows signs of turning up.

Primary Buy dot appeared that may signal a short term change in direction.

This is not the perfect setup, but may offer some pips. If allowed, will move the SL in as soon as possible.
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  • #26
  • Mar 19, 2010 4:21am Mar 19, 2010 4:21am
Good day Tau.

I've been watching this since I set it up (just GU & EJ for now)

Now I don't use indicators so I won't be much help with finding one that would add to this one. I use mainly horizontal S/R and TL's.

So, with that, even though I haven't recived a buy signal (either in candles or this indicator), I've decided to try and "anticipate" a little based on S/R.

If you'll notice, all the green arrows point to horizontal S/R, TL'S or both where a dot confimed direction. When they appear at the intersection of a TL and horzontal the move is almost assured. When you get both a light color AND dark color dot at these points, I'd take it automaticaly me thinks.

The last RED arrow is where I'm "thinking" we may see the next buy dot.

Still learning.
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Ghost Rider - WWTBMD?
  • #27
  • Edited 6:20am Mar 19, 2010 6:04am | Edited 6:20am
Quoting albchr
Good day Tau.

I've been watching this since I set it up (just GU & EJ for now)

Now I don't use indicators so I won't be much help with finding one that would add to this one. I use mainly horizontal S/R and TL's.

So, with that, even though I haven't recived a buy signal (either in candles or this indicator), I've decided to try and "anticipate" a little based on S/R.

If you'll notice, all the green arrows point to horizontal S/R, TL'S or both where a dot confimed direction. When they appear at the intersection of a TL and horzontal the...
OK, with a bullish looking 1H close above the 5 SMA, let's see if we get a dot if it breaks 122.90.

I should note the EUR index broke support and the YEN has just barely as well. So both are getting a little weaker ATM. Expect some dodgy PA maybe?

EDIT: Added a 15M chart. (I know you said 30M and up) but an interesting buy dot no? LOL
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Ghost Rider - WWTBMD?
  • #28
  • Mar 19, 2010 6:33am Mar 19, 2010 6:33am
Dark blue buy on the 15M. This is interesting......
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Ghost Rider - WWTBMD?
  • #29
  • Mar 20, 2010 1:13am Mar 20, 2010 1:13am
Please provide more information on the other indicators in your charts. It looks like one can make some rules around the 2nd penetration of the shorter period bands combined with a dot for entry. Then as far as managing the trade exit 80% of the position at half the risk and let the rest ride for reversal signal. This makes it a free trade even should the stop be taken out after the first target was hit. Followed it for one day on shorter time frame and found that the DOTS don't always update till you change the time frame.

Does have potential.

4xtrend
  • #30
  • Mar 21, 2010 9:47am Mar 21, 2010 9:47am
Quoting TauTrader
Good day to you,

Will attempt a long here, based on the following:

The longer term cycle direction ( although still slightly down) is flattening out at this point in time. The short term cycle shows signs of turning up.

Primary Buy dot appeared that may signal a short term change in direction.

This is not the perfect setup, but may offer some pips. If allowed, will move the SL in as soon as possible.
First things first - I took a 42 pip licking on the trade entered.

Regards
  • #31
  • Mar 21, 2010 9:55am Mar 21, 2010 9:55am
Quoting albchr
OK, with a bullish looking 1H close above the 5 SMA, let's see if we get a dot if it breaks 122.90.

I should note the EUR index broke support and the YEN has just barely as well. So both are getting a little weaker ATM. Expect some dodgy PA maybe?

EDIT: Added a 15M chart. (I know you said 30M and up) but an interesting buy dot no? LOL
Good day to you,

I want to thank you for the time taken to post your detailed charts as well as the commentary.

I studied these. To be honest, the dots do not seem to really enhance your current strategy. The way you trade, you have these possible points identified already, and the dots MAY confuse you rather than assist you, - this in the current format, applied to your charts.

Please correct me if you think I am wrong. You MAY benefit from identifying longer term cycles to give you a general trading direction to which to apply your current system.

More about this in a few days time.

Thank you again for your time - feedback on your view about my comments will be greatly appreciated.

Regards
  • #32
  • Mar 21, 2010 10:06am Mar 21, 2010 10:06am
Quoting 4xtrend
Please provide more information on the other indicators in your charts. It looks like one can make some rules around the 2nd penetration of the shorter period bands combined with a dot for entry. Then as far as managing the trade exit 80% of the position at half the risk and let the rest ride for reversal signal. This makes it a free trade even should the stop be taken out after the first target was hit. Followed it for one day on shorter time frame and found that the DOTS don't always update till you change the time frame.

Does have potential....
Thank you for your time.

You are correct. The dots do not always update. I have the habit of changing timeframe and back to my original timeframe traded, on each bar close - just to make sure. It however is not an issue for me, since I trade 30 min and up.

The cycle bands on the main chart is proprietary and can not be shared. I am however in the process of incorporating the basic information these give (TMA), into a different indicator that will enhance the trading of the dots. Just want to make sure these work properly before putting it out there.

Hope you understand

Regards
  • #33
  • Mar 21, 2010 10:20am Mar 21, 2010 10:20am
Just a note.

Do NOT trade these dots as a stand alone indicator. It is imperative that you find a good directional filter / or that you are able to identify possible cycles in terms of direction, before you attempt to use the dots as entry and exit indicators. Just follow their behaviour - if this interests you at this stage.

I am currently working on it to see if I can make it easier to determine longer term cycles and general longer term direction. This will take emotion out of the picture and I will then be able to trade the dots like a dummy.

This week will be a refining week. but I will post possible potential trades and some live ones as I go. You are at any stage more than welcome to add your bit, give comment if you so feel, and offer suggestions.

Regards
  • #34
  • Mar 21, 2010 10:56am Mar 21, 2010 10:56am
Quoting albchr
Dark blue buy on the 15M. This is interesting......
Yep very interesting - how far did it drop after that - 200 pips??

Hope you don't trade this cr*p Chris - Don't you think this might be another scam just like EO - the last system you tried. LOL.
  • #35
  • Mar 21, 2010 10:58am Mar 21, 2010 10:58am
Let me explain where we want to end up...

PA moves in cycles. This we can all agree on. The first compressed daily chart shows the general current trend direction. Within this general trend we find secondary cycles. The second chart is a 4hr - this clearly shows the cyclical movement of price within the larger trend.

The last chart shows the minor cycles within the secondary cycles within the longer time trend. Also known as the 1hr trend, or short term trend. Identifying these , will be where we want to end up.

ZigZag indicators have always been used, or wave count, but they are both extremely subjective.

The dots are created by MA type cross - this, in theory - should be more reliable. Moving averages will thus form the core and the dot trading system will be build on this.

Common sense tells me that, should one be able to identify secondary cycles / longer term cycles, one could trade the minor cycles in the direction of the larger cycle, with high probability.

I have thus opted on a journal whilst I develop this for myself. This is not a manual trading system thread - so there should be no expectation. I will however share my findings and attempts as I go.

I would however like to invite everyone to give input and share ideas.

Regards
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  • #36
  • Mar 21, 2010 11:11am Mar 21, 2010 11:11am
Master cycle, mini cycle, baby cycle, it all makes sense if you look at it sideways,, sort of. I'll be following.
  • #37
  • Mar 21, 2010 7:03pm Mar 21, 2010 7:03pm
Spent the weekend going through different scenarios in terms of cycle determination with the use of Moving averages. I have completed the basic framework.

I will basically end up with 2 different entry propositions. The prime entry conditions will be the ones to look for. The more risky entries will be dealt with later.The entry will consist of 3 parts, then the exit. All done with signals ( dots) received from various MA combinations.

I am posting below 2 charts. The very first warning signal of a possible trade ( Step 1) will be in the form of a cross of the T3 moving average, with Snake - through the Taucross indi. ( all 3 indicators posted already) - the settings / template / other indicators to be posted after my testing is complete.

I will thus now keep an eye on the charts, and will wait for the 2nd indication as part of the 3 step process for entry. Will update once / if these are received.

Continuation of PA to the downside will obviously void these initial signals and they will disappear. I however do like the fact that they are based on Moving Averages, as opposed a ZigZag type calculations. More later.

Regards
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  • #38
  • Mar 21, 2010 7:12pm Mar 21, 2010 7:12pm
Also on EU, I have an initial indication of a possible trade coming. No trade is taken at this stage, on any of the 3 pairs I trade. Will have to apply patience and wait for a possible 2nd signal to confirm the turn.

Regards
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  • #39
  • Mar 21, 2010 9:15pm Mar 21, 2010 9:15pm
Liked the reaction of the cross to what has just happened... Kept me out of temptation to long off the Friday low @ 1.4987 or off the low of last week @ 1.4977.

The cross remains in place... different to a ZigZag type indicator. Did not get any signals yet to look for shorts either...

Bear trap?
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  • #40
  • Mar 22, 2010 1:26am Mar 22, 2010 1:26am
Things are looking good with the testing - so far. Notice on the GU chart, that the Major Blue Dot ( MA type cross) has now moved lower, from the previous possible turn position. Most importantly - no Major Red Dot was generated.

What happened here, is that the T3 and Snake " uncrossed" during that downward thrust, and has now re-crossed lower.Creating a new possible turning point. I like this - no whipsaw blue / red / blue / red stuff. Kept me out so far.

On the EU and EJ, the initial Major Blue Dots are still remaining in place since the previous charts were posted. None of the charts, however, has given me the second confirmation signal yet. So I am sitting out at this time. This is gonna teach me patience...

Will update again later.

Regards
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