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Trend Trading All Pairs

  • #7,801
  • Aug 25, 2010 11:37am Aug 25, 2010 11:37am
Quoting MktScape
Should have been in this move from the red box as a TT ...however missed it ....now thinking of entering on the continuation ...

EDIT: looks like market is changing is mind and forming a bullish hammer after poking into the sell stop.
yeah, but only for a short period of time. Look at all the higher time-frames, everything screams DOWN!!!!
  • #7,802
  • Aug 25, 2010 11:43am Aug 25, 2010 11:43am
Quoting Custos
yeah, but only for a short period of time. Look at all the higher time-frames, everything screams DOWN!!!!
acutally i have placed a sell stop, again at the red box (as there is a monthly level there) i am anticipating a retouch of that level .... how would you suggest re-entering into the down move?
  • #7,803
  • Aug 25, 2010 11:48am Aug 25, 2010 11:48am
Quoting MktScape
acutally i have placed a sell stop, again at the red box (as there is a monthly level there) i am anticipating a retouch of that level .... how would you suggest re-entering into the down move?
well, either at your point or right now. m15 formed an intraday level there too. Maybe you can try half at the level now and another half higher.
  • #7,804
  • Aug 25, 2010 11:56am Aug 25, 2010 11:56am
Quoting Custos
well, either at your point or right now. m15 formed an intraday level there too. Maybe you can try half at the level now and another half higher.
ok let me see.
  • #7,805
  • Aug 25, 2010 12:53pm Aug 25, 2010 12:53pm
Quoting Custos
hm, not sure where you got the number 184 from. He says in the beginning of the thread to read his first post, which is the attachment and the explanation of the strategy and from page 180 on they started using this updated strategy.
The idea of former strategy was simple - enter on a continuation (with momentum) of a 10 pip candle (cable), sometimes this strategy worked very well as strong move (10 pips when average move is 3-4 ips) may indicate a large player entering the market with substantial volume.

I am not sure why Tony abandoned his initial strategy, I didnt follow the thread for some time.

Maybe the reason is that this strategy requires being awake during London session when in USA is the middle of the night, so in fact you dont have a life.

I have read this new strategy now and it seems to me that it is at least immature: all conditions of entry are not taking into account the market direction and close support and resistance levels.

Why this is important? Frequently large traders are working on entries and before they start their main volume of odrers they want to hit and launch a clear sup/res level on the counterside o their move - i.e. they want to push the market back.

It is very popular technique among institutional traders, the largest, who can move the market.

So in this case the first move will be in the opposite direction of the main move of the session.

Hmmm, I realized now that if you hunt for a 4-10 pip gain it may be a good strategy.

Tony writes that typical TP is 140 pips - and I doubt in this number as as I believe it has no ststistical background.

I will study this thread further (real examples of trades) and post some comments here if you wish.

At this moment Ihave no idea how to improve this strategy - it might be statistically sound even as it is now.

Forgive me my level of English, it is not my native language, if something is of interest and is unclear please ask.
  • #7,806
  • Aug 25, 2010 1:27pm Aug 25, 2010 1:27pm
Meanwhile nice 3 SMA setup forms on CAD/CHF M30. Price is currently at support and inside the 30-50 zone.
  • #7,807
  • Aug 25, 2010 1:54pm Aug 25, 2010 1:54pm
Quoting MysticRiver
Meanwhile nice 3 SMA setup forms on CAD/CHF M30. Price is currently at support and inside the 30-50 zone.
Hi,
What would be your entry level?

cheers
  • #7,808
  • Aug 25, 2010 2:08pm Aug 25, 2010 2:08pm
Quoting MysticRiver
The idea of former strategy was simple - enter on a continuation (with momentum) of a 10 pip candle (cable), sometimes this strategy worked very well as strong move (10 pips when average move is 3-4 ips) may indicate a large player entering the market with substantial volume.

I am not sure why Tony abandoned his initial strategy, I didnt follow the thread for some time.

Maybe the reason is that this strategy requires being awake during London session when in USA is the middle of the night, so in fact you dont have a life.
well, I guess there is a second reason. The market tends to reverse after momentum (increased volatility). Maybe it gave him too many losses before he could move to b/e. But just a guess on my side.


Quoting MysticRiver
I have read this new strategy now and it seems to me that it is at least immature: all conditions of entry are not taking into account the market direction and close support and resistance levels.
yeah support and resistance is definitely important, gonna try to think of how to play with that strat and incorporating S/R levels.

Quoting MysticRiver
Tony writes that typical TP is 140 pips - and I doubt in this number as as I believe it has no ststistical background.
yeah, I would base the target on an opposing S/R level or close out at start of ny. Or try building a millipede by not cosing out at all and see if it would return a couple of thousand of pips.

Quoting MysticRiver
I will study this thread further (real examples of trades) and post some comments here if you wish.

At this moment Ihave no idea how to improve this strategy - it might be statistically sound even as it is now.
thanks, would be interesting if you can post some.

cheers
  • #7,809
  • Aug 25, 2010 2:11pm Aug 25, 2010 2:11pm
Quoting MysticRiver
Meanwhile nice 3 SMA setup forms on CAD/CHF M30. Price is currently at support and inside the 30-50 zone.
yeah, and the level is also historically okay. so should be worth a shot.
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  • #7,810
  • Aug 25, 2010 2:17pm Aug 25, 2010 2:17pm
Thanks folks for your answers, I am reading Tonys thread further:
Further explanation of his strategy is in a very short post below.

http://www.forexfactory.com/showpost...postcount=2835

In essence (as far as I understand it) it is entering a London Open with a 2 pip SL in the direction of first five sec candle at 8.00 sharp.

You have 20 attempts to score a 140 pip win. It is possibleand in my opinion probable.

It is a sort of gambling but:

Assume that every time you enter at 1% of INITIAL capital (means capital at the start at the start).

So you have 20 bets and you can lose 19 of them.

Lets do some math.

19 attempts at loss 2 pip = 38 pip lost. 38% of initial capital lost.

If you have 1 win then you nave 140 pips = 70% increase in account.

Because 2 pips = 1%, so 140 pip win equals 70% increase in a month.

70% increase – 38% loss equals 32% in a month despite 19 losses. Not bad.

Strategy worth further study imho.

I can see the possibility of joining this strategy with 3 SMA – the main focus should be at specific “high probability points” where market continues a move in the direction of the main trend (in the direction of 3 SMA where at least theoretically exists a high probability to score a 100+ win). If you wish I’ll enumerate (is it a proper English word???) such high probability points.

The main idea I like is - 2 pip SL, it gives a plenty of room to error. Maybe I am wrong but I would seek HP areas where I can apply 20 HP attempts even in a day or two.

Theoretically interesting imho.
  • #7,811
  • Aug 25, 2010 3:01pm Aug 25, 2010 3:01pm
Quoting MysticRiver
Thanks folks for your answers, I am reading Tonys thread further:...
I am sorry to say that, but your maths is flawed.

For example: you have a 1000 bucks, it has a drawdown of 38%, now it's down to 620.
Now you win 70%.
620 + (620 *70%) = 1054
That is an increase of only 5.4% from the original 1000 bucks. Now let's assume slippage and other stuff, then you are probably only b/e or at a loss.

If you wanna succeed in this strategy, you have to have much more winners or need to be able to move stop to b/e most of the time.

It's not as easy as it seems
  • #7,812
  • Aug 25, 2010 3:03pm Aug 25, 2010 3:03pm
Quoting MysticRiver

Assume that every time you enter at 1% of INITIAL capital (means capital at the start at the start).
okay, forget my previous post. If you take 1% of the initial capital all the time, then yes you are right with your maths. Didn't see the word initial when I read over your post before, hehe, sorry
  • #7,813
  • Edited 5:23pm Aug 25, 2010 5:04pm | Edited 5:23pm
Quoting Custos
okay, forget my previous post. If you take 1% of the initial capital all the time, then yes you are right with your maths. Didn't see the word initial when I read over your post before, hehe, sorry
Thats perfectly OK )))

Just math, it isnt even a viable strategy, far from that, but I just like the idea of precise entry with such a small SL. It seems that in Tony's case it works.

More on Tony:

How to manage the trade during first 20 pips. - #2837

Tony’s point of view on that: #2841

How Tony manages the trade: #2863

“once the price is about 2-3 pips past my entry point, my SL is already 0”


Tont’s entry is random - #2849 (I agree on that).

Why should large players launch their orders exactly at 8.00 in the first 5 seconds sharp? It has no sense to me. A tea, phone call, browsing through the markets, calls to traders from asian session to know where large orders are… First 5 sec candle is imho irrelevant.

But... sometimes it works....

Interesting comment from Tony: #2854

"In my opinion, enter on open UK&US direction is more risky than waiting for a big candle. Big candle = momentum, and open direction = random. You'll see after tries..

Tony's response:

"That's why we use 0SL... and I am aware I won't win on every open, but my account isn't going down and the US open has taken it away dozens of times to 140 pips straight.. since the beginning of the year.. .you can go verify"

And in the next post:

"Paulus, they are already moving it... I don't know how many times I have been taken away 140 pips to a TP straight from an opening.... only with a 1 pips SL... "

==============

It would be great to have market snapshots - 5 sec candles from the last 100 days.

As far as I know NinjaTrader also has 5 sec candles but I don't personally know anyone who uses NT.

Maybe we should start to gather screenshots. Frankfurt, London and then NY.
  • #7,814
  • Aug 25, 2010 8:13pm Aug 25, 2010 8:13pm
I completely agree with both of your assessment of tony strategy. Every last word.

The only way i can i see it applied successfully is when combined with LOB trades. That will screen out a lot of junk entry. Of course, using the ADR as the PT. The SL could be stretched to pips. Entry could be at breakout or BPC completion
  • #7,815
  • Aug 25, 2010 8:26pm Aug 25, 2010 8:26pm
custos the reason I said there is no edge is because the first 5-sec candle has absolutely no directional edge; in trading things must be proven otherwise. His basis of a system is solely on money management, which is pretty faulty.
Now...5-10-sec entries can be used around s/r spots if very good at volume or price is moving slow. I do this occasionally for very tight stops and giant r:r, but it is based on volume, time, s/r, etc. That is the edge, not the r:r.

Back to vacation
  • #7,816
  • Aug 26, 2010 4:32am Aug 26, 2010 4:32am
Quoting Mortician.
I completely agree with both of your assessment of tony strategy. Every last word.

The only way i can i see it applied successfully is when combined with LOB trades. That will screen out a lot of junk entry. Of course, using the ADR as the PT. The SL could be stretched to pips. Entry could be at breakout or BPC completion
1. Yes, entries could be at breakouts - at least at certain types (I suspect the best ones will come from certain types of broken counter - trendlines.

Because if we want to win a large amount of pips (100+) with a 2 pip stop we need a situation whete market quickly turns and never retraces to the point (level).

In my (immature at this moment) opnion the best candidates will be broken countertrendlines (H1 or higher) when price retraces to them back and then reverses its move (and the market is overextended).

It would be interesting to investigate the dynamisc of market in such areas.

2. Entry at BPC - in my opinion not: as market frequently retraces back - the better candidate will be a S/R level touched second or third time on low volume (and a substantial candle from there in the direction of 3 SMA it would be the best entry at least as I understand he strategy now - without extensive research and testing).

3. Please explain - I am not familiar with the LOB, PT and ADR acronymys.
  • #7,817
  • Aug 26, 2010 4:43am Aug 26, 2010 4:43am
Quoting randomperson
custos the reason I said there is no edge is because the first 5-sec candle has absolutely no directional edge; in trading things must be proven otherwise. His basis of a system is solely on money management, which is pretty faulty.
This is something like a shotgun strategy (shotgun is loaded with many small bullets and you just point it more or less at your aim and fire) - many small entries in expectation that something hits the goal.

At this moment (I have read only ~~360 posts of the new thread so far) I dont consider this method a full system. It doesnt have any stastistical or conceptual (rooted in market psychology or structure of orders) edge.

With alll due respect to Tony at this moment his new approach is incomplete it is not even a system, rather a general strategy with undefined effects - it may give profits in the short run or in certain market conditions, we dont know.

Quoting randomperson
Now...5-10-sec entries can be used around s/r spots if very good at volume or price is moving slow. I do this occasionally for very tight stops and giant r:r, but it is based on volume, time, s/r, etc. That is the edge, not the r:r.

Back to vacation
As I understand you use former Tonys strategy "10 pips candle"?

Could you elaborate on your rules?

Ups, I realized that we are hijacking this thread devoted to 3 SMA, maybe we start another thread? I dont want to discuss these topics in the "Central Banks" thread as there is a high volume of posts.

In next post I willl show my market updates on 3 SMA.
  • #7,818
  • Edited 5:40am Aug 26, 2010 5:02am | Edited 5:40am
H4 market update - view in H1 timeframe where the trendlines are present.

1. NZD/JPY - trendline is broken but move down doesnt look as it is finished.

2. EUR/CHF - it looks that we have finisher down move after a trendline break, good reward to risk if levels of entry and SL dont change, TP (for the half of order) slightly before the down point of move.

3. EUS/USD - price is in a channel, it takes some time to clarify - but even if we hawe good breakout - we will not have proper risk to reward ratio - first TP is at lowest swing point.

4. GBP/JPY - this one looks slightly better but - RR will be at best at 1:1, maybe too risky.

5. EUR/JPY (small picture at bottom right of picture)- situation similar or better as at point 4.

Generally the trendline should have more sharp angle - 45 - 60 degrees is best I suppose.

Edit: I studied other timeframes and at this moment there are no interesting setups.
Attached Image (click to enlarge)
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  • #7,819
  • Aug 26, 2010 6:42am Aug 26, 2010 6:42am
MysticRiver;3978271]1. Yes, entries could be at breakouts - at least at certain types (I suspect the best ones will come from certain types of broken counter - trendlines.

Because if we want to win a large amount of pips (100+) with a 2 pip stop we need a situation whete market quickly turns and never retraces to the point (level).

Absolutely, that is why i will recommend LOB = London Open Breakouts. They are furious and fast. Generally, you are suppose to wait for a bpc to trade LOB, but sometimes, the breakouts are soo strong it doesnt even give you a BPC. This is why i think it fits well with tony's approach. If you look through the archives of this thread, you will find some summary on LOB. Just search "LOB" on this thread. Or, you can start here:

http://www.forexfactory.com/showpost...postcount=2997


n my (immature at this moment) opnion the best candidates will be broken countertrendlines (H1 or higher) when price retraces to them back and then reverses its move (and the market is overextended).

I believe they call that on this thread : TLC. short for TREND LINE COLLAPSE.
http://www.forexfactory.com/showpost...postcount=5185

http://www.forexfactory.com/showpost...postcount=2421

Again, thread search for "TLC" on this thread to find more about it.
http://www.forexfactory.com/showpost...postcount=4881



It would be interesting to investigate the dynamisc of market in such areas.

2. Entry at BPC - in my opinion not: as market frequently retraces back - the better candidate will be a S/R level touched second or third time on low volume (and a substantial candle from there in the direction of 3 SMA it would be the best entry at least as I understand he strategy now - without extensive research and testing).

I dont disagree, that is why i prefer LOB. You can enter at the breakouts and use the 10 pips + spread as SL or after the BPC completes use the 10 PIPS + spread as SL. And i dont think it has to be limited to the EUR/USD.



3. Please explain - I am not familiar with the LOB, PT and ADR acronymys.[/quote]

LOB = London Open Breakouts

PT or TP = Price Target. Where you expect to get out.

ADR = Average daily range. That is, the statistical/average length of moves for each pair within 24 hours. Thread search for ADR to learn more.
  • #7,820
  • Aug 26, 2010 7:02am Aug 26, 2010 7:02am
3 SMA doesnt give a clear signal at this moment so I have read and analyzed CB thread.

I looked at todays EUR/USD chart searching for the best candidates (best, high probability zones) for CB entries.

Look at charts below.

1. In the left part we have M1 chart - clear trend up, first swing high, retracement and then BPC.

Right hand of this picture I enlarged first swing and retracement.

Also I added some additional moves not present at this chart - in order to show best zones for CB small entries.

In the second picture I extracted only the main points of predecessor - in order to illustrate my concepts.

2. Look at the second chart - without candles.

Market breaks retracement trendline, we have a first swing high (number 1).

The market retraces to the point 2 and rejected upward forms swing high 3.

Retraces again to the swing low 4 and again pushed up breaks level of swing high 3. and forms new high - 5.

Then retraces again to the point 6 (former swing high becomes resistance and breaks up to the point 7, retraces again to 8 and pushad up runs to new highs.

Eventually it can form a new high, retrace and move up again from the level of high number 1.

I see several high probability zones here:

Zone Z1. This would be a B – class move. I’ll explain n below.

Zone Z2. This would be a B+ class move.

Zone Z3. This would be a A – class move.

Zone Z4. This would be an A class move.

Why so?

Zones Z1 and Z2. After Swing high number 1 market didn’t form a new swing high so trend is in fact down – retraces and we don’t know where it stops.

Experience gives a hint that second (and next) pushes up from a downward countertrendline are more probable than the first. But essentially the move is downward.

Zone Z3.

A minus class move – market broken last swing high (3.), formed new high (5.), retraced to level of support S2 and currently is moving up – we have several bullish signals. (new high, retracement and moving up reflected by support).

Zone Z4.

This is BPC we know all – breakout of last important swing high, retracement, and move up from here.

This would be a highest probability zones of all.

Also there exists a new – second reflection of support level marked as S3 (zone Z5) – also I would consider it a A class move – reason as above.

The next step should be preparation of the method of entry on 5 sec candles and I have several ideas.
Attached Image(s) (click to enlarge)
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