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Islander and Medici trade the European open

  • #1,801
  • Aug 6, 2010 6:11am Aug 6, 2010 6:11am
Quoting Sim
Good money there fellas
Indeed! I missed the 6.20 long because of computer problems (SVCHOST.EXE taking over the PC), but happy with the shorts which were the better trades after all.
  • #1,802
  • Aug 6, 2010 6:22am Aug 6, 2010 6:22am
Quoting medici
Indeed! I missed the 6.20 long because of computer problems (SVCHOST.EXE taking over the PC), but happy with the shorts which were the better trades after all.
They were, infact I just closed my long due to the expected retrace.. only got what 14p before it went into troubled waters!

:| Do nooot talk to me abou SVCHOST issues! I've always had to reformat any machine I had because nooothing seems to fix it! Takes all the CPU and ending task screws the computer up
  • #1,803
  • Aug 6, 2010 7:12am Aug 6, 2010 7:12am
Quoting Sim
They were, infact I just closed my long due to the expected retrace.. only got what 14p before it went into troubled waters!

:| Do nooot talk to me abou SVCHOST issues! I've always had to reformat any machine I had because nooothing seems to fix it! Takes all the CPU and ending task screws the computer up
I find it hard to understand how a company with such financial and research resources (Microsoft) can continue to produce crap products after more than 20 years of market leadership. If they were in pharmaceuticals most of humanity would have been poisoned to death by now.
  • #1,804
  • Aug 6, 2010 9:54am Aug 6, 2010 9:54am
Another setup of the same kind
Attached Image (click to enlarge)
Click to Enlarge Name: euro 2 6 aug.gif Size: 20 KB
  • #1,805
  • Edited 1:50am Aug 9, 2010 1:16am | Edited 1:50am
GM - a low vol fake-out down to the days open level gave a nice buy before the Frankfurt Open.

Edit: it was a 5 / 15m HL
Attached Image (click to enlarge)
Click to Enlarge Name: aug 9 cable 5m fo.gif Size: 18 KB
Trading Levels with WRBs
  • #1,806
  • Aug 9, 2010 1:47am Aug 9, 2010 1:47am
Quoting medici
I find it hard to understand how a company with such financial and research resources (Microsoft) can continue to produce crap products after more than 20 years of market leadership. If they were in pharmaceuticals most of humanity would have been poisoned to death by now.
Cosign!
  • #1,807
  • Aug 9, 2010 3:29am Aug 9, 2010 3:29am
After the buy into the Frankfurt Open, the high vol narrow ranged candle suggested that sellers were coming in and price held until ~mid Frankies Hour before confirming the Lower High and selling off. LO also headed south and now price has found support at the Daily Pivot - closing in on the 50% retrace of Fridays range at 5919
Attached Image (click to enlarge)
Click to Enlarge Name: aug 9 cable 5m lo plus 90m.gif Size: 22 KB
Trading Levels with WRBs
  • #1,808
  • Aug 9, 2010 3:46am Aug 9, 2010 3:46am
Quoting Islander
After the buy into the Frankfurt Open, the high vol narrow ranged candle suggested that sellers were coming in and price held until ~mid Frankies Hour before confirming the Lower High and selling off. LO also headed south and now price has found support at the Daily Pivot - closing in on the 50% retrace of Fridays range at 5919
Thanks for the posts Islander, nice trading, very helpful.
  • #1,809
  • Aug 9, 2010 3:57am Aug 9, 2010 3:57am
I met a French very successful trader (who only trades the Euro) some time ago, and I asked him what his secret to success was.

The answer was "price always comes back after venturing outside the Bollinger bands." Long story short, his strategy was to fade such excursions with indicator confirmation, whereas during the European open he'd use S/R confirmation only.

So I've started to filter my set-ups based on the same principles, with either S/R or Composite Index divergence as confirmation and with excellent results. See attached chart.

This, by the way, is very similar to the counter-trend trades of ryanmcd on the james16 thread. See also Jankone's M5 thread.
Attached Image (click to enlarge)
Click to Enlarge Name: cable 9 aug.gif Size: 23 KB
  • #1,810
  • Aug 9, 2010 4:43am Aug 9, 2010 4:43am
A bit choppy out there, so I thought I should share some info about the Composite Index. It was developed by Constance Brown, former trader and fund manager, now retired.

I learned about it in a Bloomberg publication called Breakthroughs in Technical Analysis - New Thinking from the World's Top Minds (some title ...).

Listen to these words of hers (about RSI): "The indicator is prone to fail to develop divergence to the price data at key market reversals. The cause of this failure is in the normalization of the indicator formula. A solution is to couple an indicator with the RSI that has not been normalised. The Composite Index is a formula I developed to identify divergence failures within the RSI."

So does the divergence job better than RSI, simply put. Here are a few charts that illustrate this point:

http://www.aeroinvest.com/brownmodule.htm

mq4 code attached if you want to explore and possibly use it.
Attached File(s)
File Type: mq4 CII.mq4   3 KB | 688 downloads
  • #1,811
  • Aug 9, 2010 6:16am Aug 9, 2010 6:16am
Nice! Must influence a different style of trading? More waiting and reversal taking.. which give good potential for runners too
  • #1,812
  • Edited 3:58pm Aug 9, 2010 12:30pm | Edited 3:58pm
Quoting Sim
Nice! Must influence a different style of trading?
In my case not really. As should be clear from the beginning of the thread I like to enter at previously identified S/R levels without waiting for confirmation, so in a sense this is very similar. The challenges I've had with the more discretionary approach are

1) Price may not reach the identified level and an opportunity is missed,
2) Price may pause at an earlier level than the one identified, causing doubt, and when it then reverses an opportunity is missed,
3) Price crashes through the identified level causing a loss,
4) Being caught up in a view that proves incorrect, causing loss or missed opportunity.

A more rule-based approach, as outlined above (there's a bit more to it), would almost eliminate these issues - possibly at the expense of being stopped out every once in a while but with a higher frequency of winning trade on the whole.

Quote
More waiting and reversal taking.. which give good potential for runners too

Exactly. I have long been convinced that reversal trading is the most profitable way to trade, This because the market is mostly not trending, and then reversal trades catch most of the pip range. And most runners start with a fake-out anyway, which you also catch with a reversal approach. Of course there are the trending days but they were never a problem.

EDIT: Btw, my French mate skipped waiting for confirmation during the morning session after talking to me and reported improved results. So there's further support for this approach.
  • #1,813
  • Aug 9, 2010 4:04pm Aug 9, 2010 4:04pm
Hello back again, thanks for your inputs mates. I didn't know what happened today before FO, have forgotten about these fake moves, although they happen quite often. I'm back, trading 5:30 - 7:30 GMT, then have to go to work. Hope you keep the thread alive.

Best regards,
okrutny
  • #1,814
  • Aug 9, 2010 4:08pm Aug 9, 2010 4:08pm
Quoting okrutny
Hello back again, thanks for your inputs mates. I didn't know what happened today before FO, have forgotten about these fake moves, although they happen quite often. I'm back, trading 5:30 - 7:30 GMT, then have to go to work. Hope you keep the thread alive.

Best regards,
okrutny
Hello mate,

good to see you back How have things been?

We are trying to breathe life into the thread again after a summer break. It'll hopefully be your one-stop-shop for trading the 5:30 - 7:30 GMT period
  • #1,815
  • Aug 9, 2010 4:49pm Aug 9, 2010 4:49pm
Things went well, I graduated from the university, writing BSc Thesis on accuracy of harmonic patterns at Forex (computer science faculty). Wrote indicator searching for gartley butterfly and abcd and simple ea to that. But still a lot of work to do. Maybe we could use that somewhat. Maybe we could try to implement your way of trading mornings. CU tomorrow.

regards,
Michael
  • #1,816
  • Aug 10, 2010 12:10am Aug 10, 2010 12:10am
GM - that was a dead easy six o'clock long... target 5820.
  • #1,817
  • Aug 10, 2010 12:26am Aug 10, 2010 12:26am
Quoting okrutny
Things went well, I graduated from the university, writing BSc Thesis on accuracy of harmonic patterns at Forex (computer science faculty). Wrote indicator searching for gartley butterfly and abcd and simple ea to that. But still a lot of work to do. Maybe we could use that somewhat. Maybe we could try to implement your way of trading mornings. CU tomorrow.

regards,
Michael
Sounds interesting! So what were your findings on the harmonic patterns?
  • #1,818
  • Aug 10, 2010 12:35am Aug 10, 2010 12:35am
i agree. very interesting!
i am sure that entailed a lot of computer work/brainstorming.
  • #1,819
  • Aug 10, 2010 12:47am Aug 10, 2010 12:47am
Quoting medici
GM - that was a dead easy six o'clock long... target 5820.
20 and a few and the morning has barely begun.
  • #1,820
  • Aug 10, 2010 12:50am Aug 10, 2010 12:50am
Quoting medici
GM - that was a dead easy six o'clock long... target 5820.

GM - I was hoping to keep my alarm at 6:30, as the recent moves have been starting later. I guess that the big fall overnight has changed things.

I did grab a few pips, holding on till the 5825 level - just above S1 at 5821.

I have 5811 as the last resistance, so I'll buy again around that level....

Edit: the 1 min 30ema was at 5816, so my first buy limit was hit...
Trading Levels with WRBs
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