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  • #2,421
  • Sep 19, 2010 8:01pm Sep 19, 2010 8:01pm
VEEFX,

Our mission statement is very simple.

Im looking for, opportunities that are less than 20 pip risk that will run for 80 pips take profit but the occurences of such opportunity must be less than 1 per 4 cycle.

We will leave the above statement as it is for now but I would like to alter it as we progress. There is a reason for it and I will only reveal it later.

Now that you have your theorem, may I please request that you open any pair on 4hr chart and please place

1. 10 ema exponential close - red
2. 5 ema exponential close - blue
3. 200 ema exponential close - yellow

Please post a chart to show the above setup for the clarity of our readers.

Sincerely,

Graeme
  • #2,422
  • Sep 19, 2010 8:05pm Sep 19, 2010 8:05pm
Here is a live trade I just entered - USDJPY short. 2 FB in a row, placed order. We'll see what happens.
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpy daily 09 20 10.gif Size: 19 KB
  • #2,423
  • Sep 19, 2010 8:25pm Sep 19, 2010 8:25pm
Quoting pipEASY
VEEFX,

Our mission statement is very simple.

Im looking for, opportunities that are less than 20 pip risk that will run for 80 pips take profit but the occurences of such opportunity must be less than 1 per 4 cycle.

We will leave the above statement as it is for now but I would like to alter it as we progress. There is a reason for it and I will only reveal it later.

Now that you have your theorem, may I please request that you open any pair on 4hr chart...
Here's the chart with the above mentioned settings.
Attached Image (click to enlarge)
Click to Enlarge Name: SnapShot018 2010-09-19.jpg Size: 158 KB
Staying in my lane...
  • #2,424
  • Sep 19, 2010 8:26pm Sep 19, 2010 8:26pm
Quoting johnsund
Here is a live trade I just entered - USDJPY short. 2 FB in a row, placed order. We'll see what happens.
hi johnsund, please post your trades on this thread http://www.forexfactory.com/showthread.php?t=255481
Staying in my lane...
  • #2,425
  • Sep 19, 2010 8:32pm Sep 19, 2010 8:32pm
Quoting VEEFX
Here's the chart with the above mentioned settings.
VEEFX, you don't have PMs or email contact enabled.
  • #2,426
  • Sep 19, 2010 8:42pm Sep 19, 2010 8:42pm
Quoting VEEFX
Here's the chart with the above mentioned settings.
VEEFX,

Could you please change the chart background to white instead of black, so that those who want to print out the charts can do so?
Thanks.

Bruce
  • #2,427
  • Sep 19, 2010 8:47pm Sep 19, 2010 8:47pm
Quoting VEEFX
Here's the chart with the above mentioned settings.
Excellent work VEEFX

For all readers and VEEFX, does everyone know the purpose/functionality of moving averages.

It calculates the average price of last X amounts of periods. More or less without the indepth technicalities.

If moving average 5 shows us 100.00 that is the median price for the 5 previous periods.

Hence, if MA 200 shows us 100.00 that is the median price for the 200 previous periods.

What is the difference between 5 MA and 200 MA?

If you said time or period that is only half correct. Correct answer is the scale. They both serve the same purpose however the scale is different. Jsut like the scale difference between the lower and higher timeframe it is the same principal behind lower and higher MAs as well.

You will have price always fluctuating around the MA line. Obviously as the line itself represents the history of previous price. Many traders have a common myth/belief about MAs. They think greater the period of MA, it is slower... This is not correct. MA doesnt actually move slower or faster. It represents what it is suppose to represent on the chosen SCALE. Obviously the higher the MA then higher the scale you are choosing to analysis.

If you trade 10 EMA then you are choosing a smaller scale and hence your potential profiting grounds are 'expected' to be smaller.

If you trade 200 EMA then you are choosing a larger scale and hence your potential profiting grounds are larger than expected.

Please do not forget what I have posted many times in this thread. Your holy grail to profit making is when you skillfully adjust the R:R so your loss is always smaller and wins are always larger. This R:R doesnt have to be just entries it can be applied to all aspects of trading, even on MAs to the same positive effect.

We are basing our profits on 200 EMA profiting grounds and using price action/5,10EMA of 1/4 hr TF to skillfully enter.

What does this accomplish?

The very same thing as I always talk about. Taking trades on lower risk for potential rewards on higher and different scale.

VEEFX, it is very important you understand this completely as you will be the one showing us all.

There is little more I would like to discuss but for now, any questions?

Sincerely,

Graeme
  • #2,428
  • Sep 19, 2010 9:03pm Sep 19, 2010 9:03pm
Quoting pipEASY
Excellent work VEEFX

For all readers and VEEFX, does everyone know the purpose/functionality of moving averages.

It calculates the average price of last X amounts of periods. More or less without the indepth technicalities.

If moving average 5 shows us 100.00 that is the median price for the 5 previous periods.

Hence, if MA 200 shows us 100.00 that is the median price for the 200 previous periods.

What is the difference between 5 MA and 200 MA?

If you said time or period that is only half correct. Correct answer is the...
Mr. Graeme,

I am going to have a blast with this assignment. As you all probably know, I generally have a lot of questions... about everything I do or hear or read...but for this post, I am pretty sure I have a good understand of moving averages.

Very interesting to see how you would use MVAs as a 'scale' to do low risk entries on lower timeframe. I envision, we will do hindsight on H4, setup on H1 and entries on one fourth of H1 TF i.e. M15 time frame.

No Questions for now.

PS> I have changed the background on my chart.
Staying in my lane...
  • #2,429
  • Sep 19, 2010 9:05pm Sep 19, 2010 9:05pm
VEEFX,

Im aware that you have good price interpretation.

We are looking for price that is currently nearing 200 EMA on 4hr chart. Usually I place alerts so I will be notified when price is about 20-40 pips away from 200 ema.

Our point of entry is around the 200 ema line. There is no special reason apart from the fact that we are basing our profiting grounds on the scale of 200 EMA.

What you will find is 2 scenarios time over time over time.

Lets consider the area above the 200 ema line as the + territory and area below the line as - territory.

1. Price will volatile breakthrough the 200 ema and enter the opposite territory like hot knife going through butter.
2. Price will stall and re-test the 200 ema few times before moving away from ema.

We are interested in either options however there should not be more than 4-6 attempts per opportunity in a given pair of currency and 4 losses is the absolute maximum per given scenario.

Whilst price approaches the 200ema, it is time to zoom into 1 hr and use your own price interpretation for tight entries. Please remember your ammo is only 20pips (lets not include spread and there is reason behind this which will be revealed later) per shot. You only have 4 shots per opportunity.

Profiting grounds of 200 ema
Price action of lower timeframe
Tighter entries off 1hr timeframe (or lower if you can)

We have encoded excellent r:r into 'every' aspect of successful trading.

Any questions?

Sincerely,

Graeme
  • #2,430
  • Sep 19, 2010 9:15pm Sep 19, 2010 9:15pm
Quoting pipEASY
VEEFX,

Im aware that you have good price interpretation.

We are looking for price that is currently nearing 200 EMA on 4hr chart. Usually I place alerts so I will be notified when price is about 20-40 pips away from 200 ema.

Our point of entry is around the 200 ema line. There is no special reason apart from the fact that we are basing our profiting grounds on the scale of 200 EMA.

What you will find is 2 scenarios time over time over time.

Lets consider the area above the 200 ema line as the + territory and area below...
Thanks Graeme. I guess you would shed some light on how to make tight entries based on EMAs? Apart from that, I do have one question:

1. Wondering why you mentioned "...4-6 attempts per opportunity..." instead of just 4 attempts knowing that each attempt would result in either an positive or negative outcome. Based on our R:R rules, shouldn't we allow only 4 entries on H1 or lower TFs on any given pair?

Regards,

Vee
Staying in my lane...
  • #2,431
  • Sep 19, 2010 9:20pm Sep 19, 2010 9:20pm
Quoting VEEFX
Thanks Graeme. I guess you would shed some light on how to make tight entries based on EMAs? Apart from that, I do have one question:

1. Wondering why you mentioned "...4-6 attempts per opportunity..." instead of just 4 attempts knowing that each attempt would result in either an positive or negative outcome. Based on our R:R rules, shouldn't we allow only 4 entries on H1 or lower TFs on any given pair?

Regards,

Vee

Good questions, VEEFX

Entries are done by your own price interpretation. Wicks, engulf, pin, any setup you classify as low risk. Entries are not based on EMAs. EMA is just there to signal that the price is drawing closer to the favourable area.

Correct, since we are aiming at less than 1 per 4 cycle. Im assuming some of our attempt will be breakevens. They are free costs. Maximum 4 losses per opportunity on any given pair of currency.

Any other questions?

Sincerely,

Graeme
  • #2,432
  • Sep 19, 2010 9:21pm Sep 19, 2010 9:21pm
Hi Greame

You just enlightened me further with the concept SCALE vs. MA & R:R
Nobody mentioned SCALE before, in my study, until now.

Awaiting your further guidance.

Many thanks

Cheers

p.s. Will return again (working lor)
  • #2,433
  • Sep 19, 2010 9:27pm Sep 19, 2010 9:27pm
Quoting pipEASY
Good questions, VEEFX

Entries are done by your own price interpretation. Wicks, engulf, pin, any setup you classify as low risk. Entries are not based on EMAs. EMA is just there to signal that the price is drawing closer to the favourable area.

Correct, since we are aiming at less than 1 per 4 cycle. Im assuming some of our attempt will be breakevens. They are free costs. Maximum 4 losses per opportunity on any given pair of currency.

Any other questions?

Sincerely,

Graeme
No questions for now Graeme.
Staying in my lane...
  • #2,434
  • Sep 19, 2010 9:36pm Sep 19, 2010 9:36pm
Quoting VEEFX
No questions for now Graeme.
Thank you, VEEFX

Please do not worry as I will give plenty of guidance.

Now we wait.

Please scan all 4hr charts to see if any price is approaching 200 ema.

We will take action when it does.

Please do not worry if we miss one or two whilst we are unavailable or sleeping.

Sincerely,

Graeme
  • #2,435
  • Sep 19, 2010 9:39pm Sep 19, 2010 9:39pm
Quoting VEEFX
No questions for now Graeme.
Sorry Graeme. Looking at some H4 charts, I just thought of asking a couple of questions to get some clarity.
(1)
- On H4, we are looking only at 200 EMA as a early alert/warning setup.
- On H1/M15, we completely ignore where 200EMA is located and just focus on PA/focal interpretation/candle patterns to trigger tight entries?

(2) Is it considered a false alert if price has pierced 200EMA several times like in the attached chart? To me, we have arrived a bit late on GBP/NZD pair.

(3) You mentioned hindsight on H4. Did you mean hindsight 'direction' on whether 200 ema is above or below the current price and then only take trades in the direction of hindsight?

sorry... my questioning has begun.. I will try to restrict and ask only those that others can also benefit for this assignment.

Regards,

Vee
Attached Image
Staying in my lane...
  • #2,436
  • Sep 19, 2010 9:39pm Sep 19, 2010 9:39pm
Quoting pipEASY
Now we wait.
Please scan all 4hr charts to see if any price is approaching 200 ema.
We will take action when it does.
Hi Greame

Can I suggest EUR/CHF or GBP/CHF?

Cheers
  • #2,437
  • Sep 19, 2010 9:51pm Sep 19, 2010 9:51pm
Good questions, VEEFX

I promise to be back in 3-4 hours from now as Im due for a meeting in my office now.

If you are unavailable please do not worry as I will leave plenty of guidance for you.

Please do not feel pressured as there is no need to.

Speak to you soon

Regards,

Graeme
  • #2,438
  • Sep 19, 2010 10:08pm Sep 19, 2010 10:08pm
Quoting VEEFX
Thanks Graeme. I guess you would shed some light on how to make tight entries based on EMAs? Apart from that, I do have one question:

1. Wondering why you mentioned "...4-6 attempts per opportunity..." instead of just 4 attempts knowing that each attempt would result in either an positive or negative outcome. Based on our R:R rules, shouldn't we allow only 4 entries on H1 or lower TFs on any given pair?

Regards,

Vee
Great exercise and I am keenly watching. Vee, please be clear that so far Graeme has not mentioned anything lower than 1 hour timeframe but you have mentioned 15m a couple times. I think this is important because you have chosen a 20 pip risk even though it was laid out that it would be 4H and 1H charts. I hope in doing the exercise you are able to refrain from timeframes below that so the exercise can go forward is Graeme has intended.

With kind regards,
MK
  • #2,439
  • Sep 19, 2010 10:12pm Sep 19, 2010 10:12pm
Quoting pipEASY
Good questions, VEEFX

I promise to be back in 3-4 hours from now as Im due for a meeting in my office now.

If you are unavailable please do not worry as I will leave plenty of guidance for you.

Please do not feel pressured as there is no need to.

Speak to you soon

Regards,

Graeme
Thanks Graeme. Perfect time for me to grab a bite as well. Want to slip in one more question...

In reference to defining the +/- territory near the 200ema, do you recommend doing some PA analysis to 'anticipate' how much wide our territory should be?

For instance, in the attached chart, having known previous support/resistance levels prior to setting the cellphone 'alert' would have helped us go short on usdsek pair at the purple line. If there is no PA analysis involved, would you suggest an arbitrary number or some multiple of ATR (like 2 times ATR(200) of M15 Timeframe).

I bet we all will truly appreciate your continued guidance and leverage this learning experience as much as possible to achieve long awaited success in our trading endeavors.

Best Regards,

- Vee
Attached Image (click to enlarge)
Click to Enlarge Name: SnapShot020 2010-09-19.jpg Size: 233 KB
Staying in my lane...
  • #2,440
  • Sep 19, 2010 10:26pm Sep 19, 2010 10:26pm
Quoting MidKnight
Great exercise and I am keenly watching. Vee, please be clear that so far Graeme has not mentioned anything lower than 1 hour timeframe but you have mentioned 15m a couple times. I think this is important because you have chosen a 20 pip risk even though it was laid out that it would be 4H and 1H charts. I hope in doing the exercise you are able to refrain from timeframes below that so the exercise can go forward is Graeme has intended.

With kind regards,
MK
Good point Midknight. In post 2429, Graeme did mention "Tighter entries off 1hr timeframe (or lower if you can)", If we restrict ourselves only to H1 entries, I am afraid I will be able to trade only 4 entries per pair per H4 setup and it reduces the opportunity further if I get BEs on any of the H1 trades. Upon BE, reentering on the same H1 candle 'based on PA' would be tricky to meet the goal of 4+ entries for each H4 candle/setup.

I think there will be more PA based entries/opportunities on M30 or M15 and that will result in more examples for us to learn from. Downside of lower TF entires is more chart editing work for me:-(

Perhaps Graeme could clarify for us. I am open whatever works best for the readers.

- Vee
Staying in my lane...
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