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The Dance

  • #301
  • Edited 11:27pm Mar 23, 2010 11:26pm | Edited 11:27pm
I'm actually still in this trade on my Mt4 platform, but looks like I moved my SL a bit too fast on the Oanda platform and got stopped out +15 or so pips. Entered on the "constrainment" on the third candle to "touch" the line afte the first two couldn't break it. Kept a very tight SL and moved down "by the rules" for an easy trade.

Reason I used Oanda, was for "fun." And yes, it is a live real money account. Not that it really matters, if you can do this in Simulator, then you can do it in Demo,, if you can do it in demo, you can do it Live with real money. The rules and signals don't change.

Here's the image. Oh, and NO, I don't recommend a trailing SL I just forgot to turn it off on the Oanda account, so I dragged it waaaaaaaay back of my normal SL.
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  • #302
  • Mar 23, 2010 11:38pm Mar 23, 2010 11:38pm
And here's another immediate entry off a 10 EMA "Touch"... going to bed soon, so see you all in the next session.
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  • #303
  • Mar 24, 2010 4:55am Mar 24, 2010 4:55am
Quoting eclayf
And here's another immediate entry off a 10 EMA "Touch"... going to bed soon, so see you all in the next session.
Hi Eclayf,

Hope all is well. I realise that you're busy right now but I just wanted to try and clarify one point that's been bugging me a little. You may have answered this already so apologies if you're repeating yourself.

When we are looking at 35 and 50 touches, we are looking for a healthy angle on the slope. If the two MA's are close together, I am very comfortable taking the touch trade of the 35 because there is secondary support in the shape of the 50 within the SL range (10/11 pips). However, if there is a gap between the MAs that's larger than 11 pips, how can we confidently take the touch trade on the 35 without knowing whether PA will continue through to the 50 and take out the stop? Should it be the case that we never have a SL in the 35/50 tunnel? Should the SL therefore be larger for these trades? Also, do you always take the immediate touch, is it not safer to see if PA bursts through the 35 or moves away by a few pips first?

I'd appreciate it if you could tidy this up for me when you have a few moments free. Again, many thanks in advance, i'm sure you're aware how much of a help it is to us but it still need to be reiterated!
  • #304
  • Edited 9:12am Mar 24, 2010 8:58am | Edited 9:12am
Hello, eclayf !

Thank you for this system. I am trying it a couple of days now, in a demo account.

Today I made one unsuccessfull trade in the EURGBP. The imagens are attached. The price touched a rounded number and the MAs.

I used the script to SELL and it put a SL of 19 pips. Following your instructions, I moved the SL to 11 pips and I was stopped in the same candle.

I think that my mistake was enter in a candle BEFORE the close, right?

Now I am stopping search for other systems and staying with this one.

I want develop the necessary discipline to follow all the rules and see good results.

Once more, thank you very much!
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  • #305
  • Mar 24, 2010 9:38am Mar 24, 2010 9:38am
Quoting Trotty
However, if there is a gap between the MAs that's larger than 11 pips, how can we confidently take the touch trade on the 35 without knowing whether PA will continue through to the 50 and take out the stop? Should it be the case that we never have a SL in the 35/50 tunnel? Should the SL therefore be larger for these trades? Also, do you always take the immediate touch, is it not safer to see if PA bursts through the 35 or moves away by a few pips first?
First, let me say that confidence is a function of experience with anything. Being confident riding a bike or playing a game is no different from being confident with a trading strategy. It takes a bit of time to gain that confidence. STILL, even with that confidence, at times we lose games, and still fall off bicycles.

An unexpected flat tire, bump in the road, or some other unexpected event can do that to you. Same in trading. These "Touch" trades are really solid and strong. BUT THERE ARE TIMES you WILL lose on them. There will be days when NOTHING will make sense to you.

I have had days when I was just "off" my game and my friend Endroute seemed like he couldn't miss a trade. It happens, just happens less and less as you grow in experience with watching the charts.

For example,,, if price literally races back to the 35 line, in one bar, I'm pretty sure of the trade,, two bars I'm still very sure of the trade, three bars (if they are "decent" sized bars) I'm usually still OK with it. Make it 4 bars, I tend to be more careful and so on for the "number" of bars issue.

IF it's one bar, and it "almost gets there and then hesitates, so do I. IF it hesitates and then starts to "sputter" meaning approaches and back of,, approach and back of,,, then I wait to COB to see if it will "blow through" that line. I do much the same with the 50 line, but this issue of "sputtering" is VERY hard to describe and hard to "see" without experience. Another reason for the Simulator.

As for the SL, I "almost never" use more than the 11 pips SL,, notice "almost" there. Using more than that doesn't really gain you anything except more risk. UNLESS you're personal experience says to use a wider one at times. It really all depends on how price is moving.

SO, in short, I try to take the trade exactly at the "Touch" but some times I have to wait to "see" what's really going on with price. Remember the market is schizophrenic,,,and moves like it. It's a composite of millions of decisions being made moment to moment by millions of minds. THAT IS THE VERY DEFINITION of a schizophrenic mind. Too many "people" in control of the decision making process.

BUT that is ALSO the reason the market even exists and the reason we can take advantage of things like this strategy.

Bottom line is that we look for "high probability" setups that MOST of the time do what we expect it to do and we take our shots accordingly.

You will never bee 100 percent "sure" of any trade, otherwise you pass from trading the "now" to prognosticating the future. If you get that good,,, wanna manage some money? I'm reeeeeeeeeeal good with raising it from investors.

As for having an SL in the area between the 35 and 50 lines,, I don't see any real problem with that, unless they are really close. The closer they are, the more likely I will put my SL a few pips the other side of them both as price can "spike through" at times and hit the other line.

It all just takes some experience. Remember, trading is NEVER totally mechanical, never. IT ALWAYS requires some discretion.
  • #306
  • Mar 24, 2010 9:43am Mar 24, 2010 9:43am
Quoting eclayf
First, let me say that confidence is a function of experience with anything....
Excellent response Eclayf and you've definitely cleared one or two things up for me. I actually understand exactly what you mean by "sputtering" or "stuttering", having spent so much time staring at screens!

Thanks again and good trading!
  • #307
  • Mar 24, 2010 9:54am Mar 24, 2010 9:54am
Quoting alexmackel
....Today I made one unsuccessfull trade in the EURGBP. The imagens are attached. The price touched a rounded number and the MAs.

I used the script to SELL and it put a SL of 19 pips. Following your instructions, I moved the SL to 11 pips and I was stopped in the same candle....
Hi alexmackel, At Round Numbers, I often wait for the "touch" of the RN before I enter simply because they seem to "attract" price for a stronger psychological reason than moving averages to. Still,,, with that said, you would probably have been stopped out on this trade with an 11 pip SL. It happens.

Now,,, let me explain a concept I use a bit that is at work on these two charts. I don't really have a "name" for it yet, but it is when price is "scooped up" by the 10 EMA and appears to be reversing. THAT has happened here.

Notice that the 10 EMA in your charts is now at a "very steep" angle AGAINST a short trade here? When that happens, price has indeed reversed pretty strongly and I tend to watch those areas very carefully and NOT take the trade unless it "dead ends" INTO the line and I mean closes DEAD ON the line, not a single pip between them, not a single pip over them.

You have had two bars that "respected" the 10 EMA here which is a cautionary signal at least.

We don't' take countertrend trades in this strategy, at least NOT WITH THESE BASIC rules because of two things.

  1. It takes a lot of experience to know which trades are likely to actually be strong reverse trades
  2. It isn't necessary to take that sort of risk to make really, really good money with this strategy.

When you have been using this strategy for a while, you may at some point in the future decide to take counter trend trades, and there won't be any reason not to do that THEN, WITH EXPERIENCE behind you. But for now, no counter trend trades ever.

With enough experience, there are LOTS of additional and possibly very strong entries, but for now, we are focusing on what works MOST of the time.

Hope that helps.

  • #308
  • Edited 11:11am Mar 24, 2010 10:09am | Edited 11:11am
From time to time, I will "pick on" one of the posters to illustrate something. It's never personal, and this isn't really any different, BUT I really, really can't let this go by and it's a VERY GOOD thing!

I often "peek" at the names that appear in the list of who's "on" reading the thread. I did that when kostas1 posted yesterday, and saw something that really got me excited.

He posted recently, on the 9th of this month in a thread of his own (his own post #1 (http://www.forexfactory.com/showpost.php?p=3528356&postcount=1)), that he had come very close to giving up, but wanted to try one last time and to try to find a "mentor" to help him trade better. HE ALMOST gave up!,,, ALMOST.

Then he stumbled across "The Dance." NOW, 14 days later he posts the following. And no, I am NOT "mentoring" him personally, he is taking his trades ON HIS OWN using the same EXACT information you ALL have access to on "The Dance."

Quoting kostas1
...P.S. So far I have a streak of 7 no-loss days (meaning that I finished the day positive and not that all trades were winners). These days were from 3%-9% growth per day. I don't expect this to last for ever but I enjoy it while it lasts. I like the method and I will do my best to maintain the negative days to a minimum
Folks, to be honest, I am so excited about things like this I can hardly even explain it. From almost giving up to having a streak of 7 days of gains totaling at least 21% for the period is nothing short of amazing. It is a fantastic development and I promise you he must be feeling pretty excited as well.

This system simply works. All it requires is that you follow the rules. Spend some time in the Simulator and LEARN the rules well enough to actually use them. Then the "experience" will kick in and you will start to "see" things you missed and you WILL start to have "streaks" of really good days, then weeks,,, then months,,, and before you know it, you'll be making more in a week/month than you did in a year before.

Kostas1, cudos my friend, cudos. Good work and GREAT example for others here to learn from.

NEVER GIVE UP,,,, ALWAYS TRY ONE MORE TIME!
  • #309
  • Mar 24, 2010 1:28pm Mar 24, 2010 1:28pm
Quoting eclayf
This system simply works. All it requires is that you follow the rules. Spend some time in the Simulator and LEARN the rules well enough to actually use them. Then the "experience" will kick in and you will start to "see" things you missed and you WILL start to have "streaks" of really good days, then weeks,,, then months,,, and before you know it, you'll be making more in a week/month than you did in a year before.
Kostas1, cudos my friend, cudos. Good work and GREAT example for others here to learn from.
NEVER GIVE UP,,,, ALWAYS TRY ONE...
Clay,
All so true!!!
Actually, this method exactly matched my trader personality. For example, I couldn't trade with higher TF's successfully and my best days were always of the scalping kind. Also, my daily target of 30 pips with 3% risk fits this method nicely. Before, I could often achieve it but not consistently and then I would give it back trying to stay longer in a trade. In addition, I was not good in focusing in one method whereas now I am trying to stay with the well-defined rules.
Actually, I do feel you like a mentor since your attitude in this thread is simply amazing. Needless to say that your personal story as you described it felt like you were describing my experience. Finally, having stayed in the states for 12 yrs (studies and work) I have to congratulate you for your selfless offer to the rest of us (something not characteristic of the US culture where you pay for everything....)

So the kudos go to you my friend! Wish you success and hope you stay with this thread for a long time (with the strict guidelines you use for publishing in the thread I am sure we only attract serious and focused traders).

Kostas
  • #310
  • Mar 24, 2010 2:01pm Mar 24, 2010 2:01pm
Thanks so much for sharing eclayf. I am still in the learning phase of this system and i just took a set-up on both the usd/jpy and eur/usd. the usd/jpy is for both a touch of the 92.00 line and the 10ema. the e/u is for a constrainment at the 35.Below are the chart. just want to be sure i got it. Thanks very much once again. I appreciate your selfless service. Your Story and advice has been really really helpful and encouraging to me.
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  • #311
  • Edited 4:55pm Mar 24, 2010 3:16pm | Edited 4:55pm
Ok,, so I took another short. Then moved to Be to let it run short. I hate these "slow burn" days. I'll post the exit later, unless it stops me out for +1. IF that happens, I'll just put a P.S. here for you.

P.S. stopped out +19,,, should have been paying attention better and waiting for it to hit the RN like I thought it would. NEXT!
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  • #312
  • Edited 3:56pm Mar 24, 2010 3:41pm | Edited 3:56pm
Heyeclayf. I have been watching your thread since u had 4 posts but still haven't posted. So to start things off i congratulate you on a good system and your hard work with the manual and
the rest of the ff comunity here that share there results/thoughts/problems and we are all able to see how it is solved and handled with.
First thing is first lets clarify that due to recent events i have been going to the office for the past month daily and don't see a end to that any time soon =-[. So that means i don't have to
much time to check the charts. So now what i have done is setup logmein so that i am able to connect when ever i have free time and place a order and just check up on things. Also setup
MT4 Mobile on my tilt with the chart setup so i can just practice on the train(New York | damn Q line =-[). So with that being said lets talk about the dance. =-]

Below is a screenshot of my home computer mt4 setup with this system.(btw: it is a 2 monitor setup for this system using 1 23'(GU/EJ) and a right side 19'(EU)) The only thing that is different
about some of the charts is that i also have pivots on the charts. (sorry eclayf but to me they have meaning =-]), ohh and also i use volume but i toke that out and have been focusing mainly
on the chart.
I have marked the trades that i have taken within the past 2 days. Yes this is a demo account but i toke 1/2 the trades also on my live account.( I now use this and another personal
stratagie on my live account, and i never trade my live account unless i am personal in front of my computer.) On a lot of these and most of my trades since i take trades and goto sleep or work or am at work, i use trailing stops a lot. So that may answer some tp's and sl's...

So yea check it out tell me what you think and any questions u have, and i will now be posting here daily.

http://img688.imageshack.us/img688/6771/dance24310.gif
.... no clue why it doesn't save in color.. ?
Time is what keeps everything from happening "right now".
  • #313
  • Mar 24, 2010 3:48pm Mar 24, 2010 3:48pm
Quoting eclayf
Ok,, so I took another short. Then moved to Be to let it run short. I hate these "slow burn" days. I'll post the exit later, unless it stops me out for +1. IF that happens, I'll just put a P.S. here for you.
Yea.... lol i missed that one and the one on EU due to me doing the other post. But good trade and i should have also taken it. I'm home now so will now be looking for entry's, but should be slow for a few hours.
Time is what keeps everything from happening "right now".
  • #314
  • Mar 24, 2010 4:21pm Mar 24, 2010 4:21pm
Quoting Dv84
First thing is first lets clarify that due to recent events i have been going to the office for the past month daily and don't see a end to that any time soon =-[. So that means i don't have to
much time to check the charts.
No worries about the time constraints, there will be tons of signals that you can take. Part of my reason for this way of trading is to be able to literally sit down, look at the screen and "know" instantly if there is a trade, or one forming. I wanted something that didn't take hours to prepare for.

Quoting Dv84
Below is a screenshot of my home computer mt4 setup with this system.(btw: it is a 2 monitor setup for this system using 1 23'(GU/EJ) and a right side 19'(EU)) The only thing that is different
about some of the charts is that i also have pivots on the charts. (sorry eclayf but to me they have meaning =-]), ohh and also i use volume but i toke that out and have been focusing mainly
on the chart.
Not saying you can't use that stuff in your own personal trading, it just adds complexity and really, really doesn't add that much to the info already in front of you on the screen. It's all about learning to master ONE strategy, or creating ONE of your own that works for YOU. Just try to stick to posting the charts that you have taken trades with the BASIC three trades of "The Dance" here.

MORE important here is for you to use one of the programs listed on page 1 for the screen captures to post. Using a third party service is NEVER as effective. When I tried to open your chart, there were NO scroll bars and I had to download it to even be able to read it properly. So, please use a different program like FastStone Capture. It's really easy and very, very simple and good to use. It also helps keep the images small enough to use here.

I have posted my comments on the chart and attached it here, but if it is too big and messes up the thread, I'll delete it.

Here are my comments.
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  • #315
  • Mar 24, 2010 8:12pm Mar 24, 2010 8:12pm
Quoting Naijapipholi
... i just took a set-up on both the usd/jpy and eur/usd. the usd/jpy is for both a touch of the 92.00 line and the 10ema. the e/u is for a constrainment at the 35.Below are the chart....
Welcome Naijapipholi and thank you for the kind words. Sorry I missed the post in my first go 'round today.

FIRST, please include the whole window so we can see quickly which currency is which chart. I am assuming the top one is Eur/Usd and the second one Usd/Jpy.

IF my assumption is correct, then the EU chart is a good setup and you are correct on the entry and why. Good start here.

The UJ seems to have worked out well but it is more of a "clear break" continuation trade than a "touch" of the line trade. For that to be the case, you need more of a move up first then a "race back" to the line in one or two bars.

Still,,, not bad trades. Close to the rules on UJ, perfect on EU.

Good trade entries.
  • #316
  • Mar 25, 2010 2:22am Mar 25, 2010 2:22am
hi DANCERS!

london has just opened. wishing all green pips today. gona be quite a tough day i presume, peppered with high impact news from UK n US n VIPs releasing statements.

a little constrainment is forming at london open for E/J(35/50/10 with RN) and G/U(35/50) today(am i right clay?) lets see how this plays out
  • #317
  • Mar 25, 2010 3:37am Mar 25, 2010 3:37am
hi clay i finally understood why u are having problems with 5EMA bounces. it repaints horribly and looks perfect in hindsight. definitely not something we can trust. was eyeing the trade, luckily i didnt enter due to gut instinct on PA and saw how the 5ema repainted in real time and by the time the bar closes(5ema stops repainting) its already way past a good entry point.
  • #318
  • Edited 4:57am Mar 25, 2010 3:58am | Edited 4:57am
Quoting yunielescaz
hi clay i finally understood why u are having problems with 5EMA bounces. it repaints horribly and looks perfect in hindsight. definitely not something we can trust. was eyeing the trade, luckily i didnt enter due to gut instinct on PA and saw how the 5ema repainted in real time and by the time the bar closes(5ema stops repainting) its already way past a good entry point.
I've noticed the same thing but I don't think that he's advocating 5ema bounces particularly.

Even the 10 ma bounces are difficult to see in real time but look great when viewing the past. If they fly back in quick time, it's quite hard to call sometimes.

When eclayf comes on, I'd love to hear his views on how to get the most out of these trades. Take cable this morning as a great example. There were 3 clear touch trades this morning for the 5/10 emas or the tunnel, if you want to call it that. You could have got in on all these, with the trend (safe trading, with the trend! This is what we're doing here) and each one would have yielded over 20 pips with 4% on a 2% risk available on each one as a minimum. That would be 12% minimum on your account on just a few hours work!!! (one of these will have been near news though).

The angle of the ma's seems vital in these. They need to be steep, really steep to keep the trade secure. Would extending the ma trajectories with a hand-drawn line give us a more sure trade (just following the current angle and drawing up or down the chart in that direction? They're hard to take but I'm sure even with the odd loser you will have, most of these trades will net you 2%-6% on a 2% risk and they happen all the time, every day. They should be no brainers but we're not talking about them much.

Eclayf, we need help mate ;-)
  • #319
  • Mar 25, 2010 8:19am Mar 25, 2010 8:19am
Quoting Trotty
Even the 10 ma bounces are difficult to see in real time but look great when viewing the past. If they fly back in quick time, it's quite hard to call sometimes.

The angle of the ma's seems vital in these. They need to be steep, really steep to keep the trade secure.
Many times when the touch of the 10 ma happens, the steep angle of the 10 MA is completely gone. This is less of a problem with the 35 and 50 MAs for obvious reasons.

You could consider changing the 10 EMA to use Open price or add shift=1. Doing this creates a static MA for the current bar. Then it may be easier to judge the touches. It also makes backtesting (visually and otherwise) much easier and more accurate.

Also, may want to consider using the velocity of the MAs instead of the angle tool to judge the "steepness".

You just have to make sure tweaking the 10 EMA is not detrimental to the success of the strategy. Obviously eclayf is having nice success with the strategy as is.
  • #320
  • Mar 25, 2010 9:02am Mar 25, 2010 9:02am
Quoting zznbrm
Many times when the touch of the 10 ma happens, the steep angle of the 10 MA is completely gone. This is less of a problem with the 35 and 50 MAs for obvious reasons.

You could consider changing the 10 EMA to use Open price or add shift=1. Doing this creates a static MA for the current bar. Then it may be easier to judge the touches. It also makes backtesting (visually and otherwise) much easier and more accurate.

Also, may want to consider using the velocity of the MAs instead of the angle tool to judge the "steepness".

You just have to...
this is very true. when we see a steep move up with a steep 10ema, the bar is usually far from the 10ema, for it to retrace back to the 10 to touch it will be a big move which will cause the 10 to form a u turned shape. but when it bounces off that u turn back up, it straightens up again so u will neva see that u turn in hindsight. but then again trading the 10ema is always with the trend, and in strong trends its unlikely the retrace will go much against u or the 10ema.
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