Vegas Wealth Builder - Part I | Forex Factory

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Attachments: Vegas Wealth Builder - Part I
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Vegas Wealth Builder - Part I

  • #1
  • First Post: Edited Feb 6, 2006 2:41am Jan 18, 2006 8:42am | Edited Feb 6, 2006 2:41am
Many thanks and congratulations to Vegas on the release of his new "Vegas Wealth Builder". I don't believe enough praise can be given to Vegas for his willingness to share such great information freely. As Vegas says in his new document, "What goes around, comes around". Well, here's my prayer that Vegas will receive his generousity back multiplied many times.

As everyone digests the VWB document, questions are bound to arise. Let's all use this thread to discuss the VWB.

You can download the entire VWB document and the two mq4 files from here:

http://www.forexfactory.com/vegas_files.zip

The follow up document Vegas Wealth Builder II is attached below.

And, for the sake of completeness, I've also attached copies of the Vegas 1 hour and 4 hour methods as well.

Many thanks to Merlin for hosting the files on the FF server!!

Dial
Attached File(s)
File Type: doc Vegas 1 Hour Tunnel Method.doc   57 KB | 24,141 downloads | Uploaded Jan 27, 2006 7:42pm
File Type: doc Vegas 4 Hour Tunnel Method.doc   186 KB | 14,180 downloads | Uploaded Jan 27, 2006 7:42pm
File Type: zip VEGAS WEALTH BUILDER PART II.zip   693 KB | 17,808 downloads | Uploaded Feb 6, 2006 2:41am
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  • #2
  • Jan 18, 2006 9:00am Jan 18, 2006 9:00am
Vegas,

After looking at the code in the .mq4 file for currencies, I see that the fib levels are measured from the 28 EMA. I was surprised by this as I expected the fibs to be measured from the median of the 24 & 28 EMA's.

What then is the purpose of the 24 EMA?

As a secondary question of lesser importance, how did you arrive at the values of 24 & 28 for the EMA's? For example in a 5/20 crossover system the 5 & 20 are 5 trading days in a week and 20 trading days in a month. Is there such a basis or were the 24 & 28 arrived at empirically?

Thank you sir!

Dial
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  • #3
  • Jan 18, 2006 9:10am Jan 18, 2006 9:10am
Question:

I have programmed the "Daily Tunnel Method" {Indicators} as defined by Vegas into VT.

Is there anyone here using VT that would like me to post those indicators? Models 1, 2, 3 & 4.

If so, will the forum accept .vtscr extensions or should I zip them?
I'm sure the forum faq would inform me of this but just looking for the quick answer.

B
  • #4
  • Jan 18, 2006 11:05am Jan 18, 2006 11:05am
forum faq??? if you find it please tell us where it is!

ask merlin via the website feedback to include the extension (dunno if it will allow 5 chars). otherwise just zip for now.

Quoting Bemac
Question:

I have programmed the "Daily Tunnel Method" {Indicators} as defined by Vegas into VT.

Is there anyone here using VT that would like me to post those indicators? Models 1, 2, 3 & 4.

If so, will the forum accept .vtscr extensions or should I zip them?
I'm sure the forum faq would inform me of this but just looking for the quick answer.

B
  • #5
  • Jan 18, 2006 11:11am Jan 18, 2006 11:11am
I noticed this also last month and am still a bit puzzled as well.

Quoting diallist
Vegas,

After looking at the code in the .mq4 file for currencies, I see that the fib levels are measured from the 28 EMA. I was surprised by this as I expected the fibs to be measured from the median of the 24 & 28 EMA's.

What then is the purpose of the 24 EMA?

As a secondary question of lesser importance, how did you arrive at the values of 24 & 28 for the EMA's? For example in a 5/20 crossover system the 5 & 20 are 5 trading days in a week and 20 trading days in a month. Is there such a basis or were the 24 & 28 arrived at empirically?

Thank you sir!

Dial
  • #6
  • Jan 18, 2006 11:22am Jan 18, 2006 11:22am
i've had a quick read of the new document and my initial observations are:

1. looking at the charts it looks like this daily screen will work better at spotting turns during ranges rather than trends where it seems to get a pasting. it kinda reminds me of "turtle soup" in this respect.

2. the candlestick patterns he refers to can probably be substituted with jim's bar patterns from his public or private threads to similar effect.

3. i still think you can keep the weekly but use this as an intermediate screen between macro (weekly) & micro (4h). he recommends using the daily for guidance in this respect.

4. what if the price consolidates on the daily and doesn't reverse? markets don't always swing from high to low and vice versa. this is just an extension of point #1.

like i said just early thoughts, all open for discussion...
  • #7
  • Jan 18, 2006 11:53am Jan 18, 2006 11:53am
EUR/USD - Model # 1 AND Model #2. Overlay #2 after you have setup Model #1. Just go back and do #2. This will now produce an overlap of #1 and #2 And produce 4 fib lines on both sides of the tunnel [for a total of 8]. You will now have fib numbers calculated at 89, 144, 233, and 377 from the daily tunnel.

When I pull up the daily chart on MT4 for EUR/USD with the Vegas indicator, I see on the upper left hand corner:

RISK MODEL #1 (1-4)

How do I overlay #2 so that 4 fib lines are displayed on both sides of the tunnel as stated above?
  • #8
  • Jan 18, 2006 12:03pm Jan 18, 2006 12:03pm
Quoting pabad
EUR/USD - Model # 1 AND Model #2. Overlay #2 after you have setup Model #1. Just go back and do #2. This will now produce an overlap of #1 and #2 And produce 4 fib lines on both sides of the tunnel [for a total of 8]. You will now have fib numbers calculated at 89, 144, 233, and 377 from the daily tunnel.

When I pull up the daily chart on MT4 for EUR/USD with the Vegas indicator, I see on the upper left hand corner:

RISK MODEL #1 (1-4)

How do I overlay #2 so that 4 fib lines are displayed on both sides of the tunnel as stated above?
You need to insert the indicator twice. Then right click on the chart and select "Indicators List". You then see both copies of the indicator listed. Set one of them to model #1 and set the other to model #2.

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #9
  • Jan 18, 2006 12:14pm Jan 18, 2006 12:14pm
Quoting Isotonic
forum faq??? if you find it please tell us where it is!

ask merlin via the website feedback to include the extension (dunno if it will allow 5 chars). otherwise just zip for now.
Yeah, I loked for the faq after my last post and found the acceptable extensions just where you said. {feedback} ??? does *.eld=ela {easylang}???

ok. will group all 4, zip and post.


B
Attached File(s)
File Type: zip Vegas DTM for VT.zip   5 KB | 69,648 downloads
  • #10
  • Jan 18, 2006 12:42pm Jan 18, 2006 12:42pm
Quoting diallist
You need to insert the indicator twice. Then right click on the chart and select "Indicators List". You then see both copies of the indicator listed. Set one of them to model #1 and set the other to model #2.

Dial
Thanks Dial

One other thing............in the Vegas Wealth Builder document, there are black dots drawn on the charts. The strategy is to go short when the black dots are above the tunnel and long when they are below. How are these dots figured in? Is this discretionary?

Thanks Again
  • #11
  • Jan 18, 2006 12:56pm Jan 18, 2006 12:56pm
Quoting Bemac
ok. will group all 4, zip and post.


B
Thanx for the VT Stuff I didn't get a chance to ask you for it before you posted it anyway!
Nolite dormiens pungere ursum. -- Latan Proverb.
  • #12
  • Edited 2:54pm Jan 18, 2006 2:11pm | Edited 2:54pm
This is in response to questions by Dialist.

Although I'm not the biggest fan of W.D. Gann, you can't ignore what the guy accomplished. One of his biggest tools is what he called "the square of nine". For those who are interested, you can generate your own "square of nine" wheel at the following website:

http://xmlworks.com/gann/javascript/

On this wheel the number 169 is important as well as 13. 13 squared also happens to be 169. This is the basis of the 169 ema in the 1 hour. 145 is also an important number on the wheel, and since 12 [a fib number] squared = 144 [a fib number], this is close enough for me to use. This is basis for 144 ema.

Regards the daily, there are 6 four hour time periods in a day, thus 28*6= 168. Since it is not possible to do daily charts in decimal days, therefore 28 ema. 24 days * 6 [the number of 4 hour periods in a day] = 144. Therefore the other ema on the daily is 24. It is a tie-in to the 1 hour and the 4 hour.

As to why I chose one boundary level to calculate fib lines and not the median, it is simply to write easier code. In the long-run it won't make that much difference if you use either boundary or the average or the median. The difference will only be a couple of pips.

So, why put the 24 on the chart with the 28? To get a better visual of the whole picture since I don't know what the trading God's have in mind when it comes to calculating the fibs [the top boundary, the bottom boundary, the median, the average, .618% of the average, .312 of the median, etc., etc.] Both ema lines give you a better visual when it comes time to ring the register on a trade. Remember 50% comes off when the currency pair gets back to the tunnel AREA.

Try this URL again.

http://xmlworks.com/gann/javascript/
vegas
  • #13
  • Jan 18, 2006 2:12pm Jan 18, 2006 2:12pm
From my understanding of the new Vegas strategy, it is, in its most basic meaning, trading price action off support and resistance. It is much akin to drawing trend channels, and then trading bounces off the channel lines, using price action to confirm the bounces. But instead of using trend channel lines to denote support and resistance, it uses fib-based EMAs. The part I like about it the most is the method of taking 50% profit at the tunnel and then letting the rest run. I'm currently using James16 price action concepts to trade daily chart bounces off trendlines, channels, and horizontal S/R. I think this new Vegas strategy would be a complement to what I am doing now.
  • #14
  • Jan 18, 2006 2:20pm Jan 18, 2006 2:20pm
Quoting pabad
Thanks Dial

One other thing............in the Vegas Wealth Builder document, there are black dots drawn on the charts. The strategy is to go short when the black dots are above the tunnel and long when they are below. How are these dots figured in? Is this discretionary?

Thanks Again
I drew the black dots on the charts to identify the reversal patterns at the important fib levels for each currency pair. At each black dot there is a reversal of some kind that indicates the market is potentially exhausted. The more perfect the reversal, the better an indicator for a reverse in trend.

I put these on the charts so that you wouldn't have to go hunting for them on your own. When you look at the charts, you can see that at almost all turning points you get these patterns at the important fib levels.

Now, the key is, not every one is the top or bottom in a move. Taking small losses on these losers is essential. Discipline here is key. When it is correct, the winners are huge. Bat .500 and you make a lot of money.
vegas
  • #15
  • Jan 18, 2006 2:25pm Jan 18, 2006 2:25pm
Vegas,

Can you shed any light on what is a good SL strategy for using the daily chart and your new strategy? I know you said in your document that you set the SL at previous highs/lows, but on the daily chart this can make the SLs huge. How exactly can we take small losses when we're working with such volatility? Thanks for your help!

Quoting vegas
I drew the black dots on the charts to identify the reversal patterns at the important fib levels for each currency pair. At each black dot there is a reversal of some kind that indicates the market is potentially exhausted. The more perfect the reversal, the better an indicator for a reverse in trend.

I put these on the charts so that you wouldn't have to go hunting for them on your own. When you look at the charts, you can see that at almost all turning points you get these patterns at the important fib levels.

Now, the key is, not every one is the top or bottom in a move. Taking small losses on these losers is essential. Discipline here is key. When it is correct, the winners are huge. Bat .500 and you make a lot of money.
  • #16
  • Jan 18, 2006 2:28pm Jan 18, 2006 2:28pm
Quoting dnbae
From my understanding of the new Vegas strategy, it is, in its most basic meaning, trading price action off support and resistance. It is much akin to drawing trend channels, and then trading bounces off the channel lines, using price action to confirm the bounces. But instead of using trend channel lines to denote support and resistance, it uses fib-based EMAs. The part I like about it the most is the method of taking 50% profit at the tunnel and then letting the rest run. I'm currently using James16 price action concepts to trade daily chart bounces off trendlines, channels, and horizontal S/R. I think this new Vegas strategy would be a complement to what I am doing now.
Yes, this is the whole idea.

I want all of you to understand the power of a model versus the weakness of a system.

A system is "everybody wear black". A method is "use black and look your best".

That's why I say in the VWB that after you take this initial profit at the tunnel you now have the "holy grail" of trading. A position that is a winner that you can do with as your abilities allow. If you are an experienced trader, you may want to take the remaining position and move to the 1 hour or 4 hour for timing your exit. If you are a newbie, you can just trail with a stop where you feel comfortable. There are an infinite number of exit strategies suitable to your abilities.

But one thing everybody has in common: it's a winning trade.
vegas
  • #17
  • Jan 18, 2006 2:40pm Jan 18, 2006 2:40pm
Quoting dnbae
Vegas,

Can you shed any light on what is a good SL strategy for using the daily chart and your new strategy? I know you said in your document that you set the SL at previous highs/lows, but on the daily chart this can make the SLs huge. How exactly can we take small losses when we're working with such volatility? Thanks for your help!
Yes, sometimes stops can be more than 20 - 50 pips away. In GBP/USD, on a good reversal day, they may be 100 - 150 pips away.

The way I handle these is as follows:
1) When the market gets to the outer fib lines where I am interested, I pay very close attention to market action during the day. If the market starts coming back more than 50% of the range for the day, I begin to think about where I want to get in.
2) If it keeps going in this reversal direction, I may start to nibble with a small position. If it keeps going I will add to the position. By the end of the day, if I'm right, I have my psoition at a better price than the close.
3) If I'm wrong, chances are the first small position I took, is the only thing I have gotten myself into that is wrong. I treat it as a daytrade and exit with small loss or breakeven, ormaybe even small gain. It doesn't really matter. I was looking for something to happen and it didn't, so I got out.

Realize, that this is just my way. Others will come up with other strategies that are just as valid or profitable.

For you newbies, try and be alert before the day in question, so that you can anticipate a reversal in this fib area. You don't have to wait until the close.
vegas
  • #18
  • Jan 18, 2006 2:51pm Jan 18, 2006 2:51pm
From the other thread:

Quoting Bemac
I just wonder if you have an intuition or method that, after 'x' Time from Entry, if the Trade has not confirmed that it is a good one, that it probably may not be.

OR
Do you always Stick to your Stops?

B __________________
Bemac
Scots Wha Ha'e
Quoting vegas
It doesn't really matter. I was looking for something to happen and it didn't, so I got out.

Realize, that this is just my way. Others will come up with other strategies that are just as valid or profitable.

For you newbies, try and be alert before the day in question, so that you can anticipate a reversal in this fib area. You don't have to wait until the close.
Hi Vegas,
I think I can take this as an answer to my previous post. Yes?

B
  • #19
  • Jan 18, 2006 2:59pm Jan 18, 2006 2:59pm
Quoting Bemac
From the other thread:





Hi Vegas,
I think I can take this as an answer to my previous post. Yes?

B
This is just my way for entry.

I think what you're talking about is after entry, after the reversal day is in place and the position is on. I know from experience that if I can leave it on , without the stop being taken out, for more than a couple of days, that I probably have a good trade. I'm more concerned after it goes back to the tunnel. I will under no circumstances let a winner become a loser.
vegas
  • #20
  • Jan 18, 2006 3:23pm Jan 18, 2006 3:23pm
Quoting vegas
This is just my way for entry.

I think what you're talking about is after entry, after the reversal day is in place and the position is on. I know from experience that if I can leave it on , without the stop being taken out, for more than a couple of days, that I probably have a good trade. I'm more concerned after it goes back to the tunnel. I will under no circumstances let a winner become a loser.

"I will under no circumstances let a winner become a loser."

this should sound familiar and allowing this to happem is what kills most new traders. jim
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