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ALF/TVI - Simple, effective daytrading

  • #161
  • Edited 9:30pm Mar 28, 2010 9:28pm | Edited 9:30pm
The Basic sytem - 5Min Chart with ALF5, ALF60 and ALF240, TVI_Histogram5 TVI15 in the two sub windows.

Basic System Entry Rules from post 1,

MainTrade
- ALF 60 Crossed Below ALF240
- Main Trend is Down.
- Trend Just Changed

Rule 1 if PA is below ALF5 and TVI5 is red, Short with stoploss of highest high(my interpretation) while PA was above ALF.

Rule2 Confidence in the trade: ALF60 is LESS THAN ALF 240 and stepping DOWN.

As the trend gathers strength, the PA will indicate this with as series of mini trends and consolidations.

This presents an opportunity to crete an AddOn trade.

Same rule of the basic system apply for an AddOn trade, so long as Rule 2 shows strength. Larger Step size.

Upon AddOn, Stoploss for all trades is ALF240. If there is a spike you loose. If there is a spike and you require a close above ALF240, then a hidden stoploss comes into play.

Anyone who trades the markets has to have faith in the system. The concept that ALF60 is less than ALF240 and both are stepping down and gaining strength offers the ability to increase "calculated risk" and therefore higher return.

In a trend, the trending is usually violent, impulsive and, even with constant vigil hard to predict. ALF moves with the market and flattens out when the market is not volatile. This is where the faith in the indicators comes into play. So long as the higher TF ALFs are behaving as required, this concept of adding on trades to and existing trend yields much higher returns. The market travels 100 pips, you make 300.

Requires patience, faith in the indicators, and ability to take calculted risk.

Stick to one system.

Pat
  • #162
  • Mar 29, 2010 12:52am Mar 29, 2010 12:52am
Hi Lou,

Sounds interesting....Will feedback you with some demo testing....Great Work

Looking forward for some profitable trades and less loss trades..

Good on Ya for sharing
  • #163
  • Mar 29, 2010 1:00am Mar 29, 2010 1:00am
I am fairly new to trading full time, and quite frankly I have found people make thing way to complicated, they use way too many indicators, moving averges, and just turning the charts into unmanagable entities that cause you to get into trades that go the wrong way. When this thread started Lou made it simple. Then things went downhill from there, by the end of this thread the charts went so technical without adequate explanation. The indicators went way off base, people got off subject or tried to impose there own methodology that is not the subject of this thread in the first place. By the time i went thru this entire thread, I was in the red, but when i went back to the basics and simplicity of the orginal intention at the beginning of this thread those indicators showed me I should have never opened the trades in the first place. Most people are visual, we are looking for that system that works for us and us alone.
I have tried many many different systems, methodolgies, and indicators. i the one thing I have found is that the more simple the more less stressful and more monies I make. Dont get me wrong, there are the guys out there that are coders they write the indicators and we need them , however most of us just want to trade and make money. We want an safe entry and a safe exit.
For my self the higher time frames are no issue, it the lower M5,M15,M30 is where I get me butt handed to me with no money in the wallet. That is what i am interested in and so dar i am finding that simplicity is the key.

Lou keep keeping it simple.
  • #164
  • Mar 29, 2010 1:28am Mar 29, 2010 1:28am
Quoting jrushing
I am fairly new to trading full time, and quite frankly I have found people make thing way to complicated, they use way too many indicators, moving averges, and just turning the charts into unmanagable entities that cause you to get into trades that go the wrong way. When this thread started Lou made it simple. Then things went downhill from there, by the end of this thread the charts went so technical without adequate explanation. The indicators went way off base, people got off subject or tried to impose there own methodology that is not the subject...
wellsaid bro, didnt try this method yet but willing to give a try, as you said we all are here to make money....so why not keep it simple.....and if this thread to grow.....all of us need to share their entry charts...so newbies could learn if entry went loss or made profits....this will encourage newcomers
  • #165
  • Edited 2:47am Mar 29, 2010 1:33am | Edited 2:47am
Quoting Lou G
See post #1 for an updated AdaptiveLaguerreFilter.mq4

As I mentioned at one point along the way, the median calculation in ALF was not mathematically correct - now it is.

Not an issue if you are using the default value of 5.
Hi Lou,

can you please give some more information about the corrected calculation?
/ ... clarifying decisions ... /
  • #166
  • Mar 29, 2010 2:44am Mar 29, 2010 2:44am
Quoting ravin
wellsaid bro, didnt try this method yet but willing to give a try, as you said we all are here to make money....so why not keep it simple.....and if this thread to grow.....all of us need to share their entry charts...so newbies could learn if entry went loss or made profits....this will encourage newcomers

Thanks Ravin, I try to follow the KISS Method as much as possible ,however sometimes I get caught up in the hoopla of trying new methods and styles. As you can see I entered a trade on the AUD and the indicators were correct and I even waitied for the close, where I made the mistake was I went to reading more of this thread and backtested some of my ideas and did not watch the trade, as ou can see it went north on me and when I got my head out of reading I was in the red. Luckly I use pivots, a 5 and 10 EMA and knew where it was going and I was able to cover my trade, if it does not go any higher then I will get back some pips and even get a little more in the bank. Lesson learned , ...when trying something knew, Demo or watch it closely as not to let it go to the red.
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  • #167
  • Mar 29, 2010 6:10am Mar 29, 2010 6:10am
Quoting jrushing
Thanks Ravin, I try to follow the KISS Method as much as possible ,however sometimes I get caught up in the hoopla of trying new methods and styles. As you can see I entered a trade on the AUD and the indicators were correct and I even waitied for the close, where I made the mistake was I went to reading more of this thread and backtested some of my ideas and did not watch the trade, as ou can see it went north on me and when I got my head out of reading I was in the red. Luckly I use pivots, a 5 and 10 EMA and knew where it was going and I was...
from your setup chart i see that u made the sell entry on the divergence ...can you clarify....may be i am wrong
  • #168
  • Mar 29, 2010 6:40am Mar 29, 2010 6:40am
Quoting ravin
from your setup chart i see that u made the sell entry on the divergence ...can you clarify....may be i am wrong

The Stoc was breaking 0, TVI was going into a neg. and a pivot was looking like 8953, the long term was looking at 8866. But now I dont know, I went to reading and back testing 2 different methods and the next thing I know I look up and this frakin thing has gone up 70 pips. i have a stop loss at 9166 and from the short term it may hit it. I have an opposing trade on the cad and it in the same positionlong to 1.0454 with a s/l at 1.0154
  • #169
  • Mar 29, 2010 7:11am Mar 29, 2010 7:11am
Quoting jrushing
The Stoc was breaking 0, TVI was going into a neg. and a pivot was looking like 8953, the long term was looking at 8866. But now I dont know, I went to reading and back testing 2 different methods and the next thing I know I look up and this frakin thing has gone up 70 pips. i have a stop loss at 9166 and from the short term it may hit it. I have an opposing trade on the cad and it in the same positionlong to 1.0454 with a s/l at 1.0154
Hope didnt risk too much on this trade as Lou says putting a stop loss above or below few pips the ALF is good.
  • #170
  • Mar 29, 2010 7:19am Mar 29, 2010 7:19am
Also Once the trade is going your say 10 pips+ way better to adjust the Sl to BE so to avoid losses
  • #171
  • Edited 9:48am Mar 29, 2010 8:55am | Edited 9:48am
Quoting walb99
Hi Lou,

can you please give some more information about the corrected calculation?
EasyLanguage, (the Tradestation equivalent of MQL4) offers a median function which is used in the original Ehlers code - MQL4 does not, meaning it has to be coded the old-fashioned way. When I originally translated the code I was lazy and did not provide for the Median parameter being an even number (in which case it's necessary to calculate the average of the middle two elements rather than simple selecting the middle one). This code corrects that - not a big deal either way but I do like to do stuff correctly.

EDIT:
Whoops, screwed it up again - corrected ALF uploaded to post #1
Old Benjamin was right
  • #172
  • Mar 29, 2010 9:02am Mar 29, 2010 9:02am
Quoting ravin
Hope didnt risk too much on this trade as Lou says putting a stop loss above or below few pips the ALF is good.
That stop placement is a good general rule but needs to be adjusted in some cases - I touched on this in an earlier post.

Another good general rule is, "don't set a stop for more than you expect to make on the trade". I've been using a 20 pip stop for the trades I've posted here and, in practice, I usually don't let it go that far against me.

Temper all "rules" with good common sense - if totally mechanical systems really worked, spot Forex could not exist
Old Benjamin was right
  • #173
  • Mar 29, 2010 9:07am Mar 29, 2010 9:07am
Mondays can be problematic - with little or no news the market is often a little flat.

20+ pips on this simple trade (and I'm glad to get it).
Attached Image
Old Benjamin was right
  • #174
  • Mar 29, 2010 9:12am Mar 29, 2010 9:12am
Quoting ravin
Also Once the trade is going your say 10 pips+ way better to adjust the Sl to BE so to avoid losses

I am used to longer trades and trying to learn ( the hard way) about the shorted time frames, I finaly just got out and regrouped better to take a small loss than to take a large one. Shorter stop loss and higher lots, in 10 to 30 pips trades seems the way to go, as long as the plan is is place, time to just study it and trade when it looks more defined.

I am just one of those hard headed folks that hate losing, I am from Texas, so we tend not to give up or give in too easy. Sometimes that good and sometimes thats .....not so good However, better to pip out than not to pip at all.
  • #175
  • Mar 29, 2010 9:22am Mar 29, 2010 9:22am
Quoting Lou G
Mondays can be problematic - with little or no news the market is often a little flat.

20+ pips on this simple trade (and I'm glad to get it).
welldone master
i am at work so no trades..so i wil try in few hours...i live Saudi Arabia

Also nice to see you have few indicators on your templates...so as to not to complicate though..

Always better to Plan your trade well ahead...and close it once it has reached money management is very important...
  • #176
  • Mar 29, 2010 9:27am Mar 29, 2010 9:27am
If you have not read "Trading In The Zone", I highly recommend it. The author emphasizes the fact that, to trade successfully, it's necessary to have an "edge" that you trust. This is how casinos make money.

I use the ALF/TVI because I sincerely believe that it gives me the "edge" I need. I'm not a "natural" trader - in reality I'm risk-aversive and it has taken a lot of effort for me to get to the point where I can pull the trigger and place a trade. I'm sitting at 11 wins, 2 losses with this approach and my confidence in my "edge" is steadily growing.

I trade with real money, no demo-dreaming here, and my risk per trade is at a level which will be moderately painful if I lose (but not so painful that I will not be able to pay the mortgage). This approach works for me - may not work for all but I think it's grounded in reality.
Old Benjamin was right
  • #177
  • Mar 29, 2010 9:30am Mar 29, 2010 9:30am
Quoting ravin
welldone master
i am at work so no trades..so i wil try in few hours...i live Saudi Arabia

Also nice to see you have few indicators on your templates...so as to not to complicate though..

Always better to Plan your trade well ahead...and close it once it has reached money management is very important...
As has been said by many, 10 pips a day can make you a great deal of money...
Old Benjamin was right
  • #178
  • Mar 29, 2010 9:57am Mar 29, 2010 9:57am
The ALF uploaded to post #1 is now correct (really).

Let me emphasize that if you are using the default value of 5 for the Median parameter (which I do), none of this confusion will have any impact on you...

Sorry for any confusion/inconvenience.
Old Benjamin was right
  • #179
  • Mar 29, 2010 10:02am Mar 29, 2010 10:02am
Quoting Lou G
If you have not read "Trading In The Zone", I highly recommend it. The author emphasizes the fact that, to trade successfully, it's necessary to have an "edge" that you trust. This is how casinos make money.

I use the ALF/TVI because I sincerely believe that it gives me the "edge" I need. I'm not a "natural" trader - in reality I'm risk-aversive and it has taken a lot of effort for me to get to the point where I can pull the trigger and place a trade. I'm sitting at 11 wins, 2 losses with this approach and my confidence in my "edge"...

I have seen severaal plans and they work only partially, when the market chages so does the plan, as i have said earlier trying to keeps things simple is , for me the way to go, i may have to wait for a trade, and not all trdes go for profit, but most do and like Lou when I Know i am right then I trade the amount comfortable for me, for most it would choke em out, but for now I just want to be able to learn to trade the 10 to 30 pips action, instead of the 100 to 200 pip action, that way I get a long term plan and a short term plan going. so far short term is eating my lunch, time heals all wounds and I will keep hitting the wall until it breaks and the signal light goes off in my head.
  • #180
  • Mar 29, 2010 10:55am Mar 29, 2010 10:55am
Hi All, Though this may not be the right time to put a trade , i tried my 1st entry and this is my set up
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