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Trade What You See - Almost Naked Trading

  • #8,961
  • Jan 8, 2011 1:38pm Jan 8, 2011 1:38pm
Quoting lawgirl21
Disregarding the more current PA to the far right of the chart, just by observing PA and marking that lowest low of that 40 day period, we are alerted to a potential profitable downtrend.

As we only need the vertical gold line marking the lowest low, I have removed the arrow and the highlighted area. Moving to a lower hour TF and using the H1 4C BO system for entries, here is what we have seen over the last few days...a steady march of PA downhill and right through that lowest low support line of the last 40 days.

What is the significance of...

Ahh the turtles, so this 40 day entry method is this something you have been using and will continue to use? I love the simplicity of it..
  • #8,962
  • Jan 8, 2011 2:01pm Jan 8, 2011 2:01pm
Quoting lawgirl21
Disregarding the more current PA to the far right of the chart, just by observing PA and marking that lowest low of that 40 day period, we are alerted to a potential profitable downtrend.

As we only need the vertical gold line marking the lowest low, I have removed the arrow and the highlighted area. Moving to a lower hour TF and using the H1 4C BO system for entries, here is what we have seen over the last few days...a steady march of PA downhill and right through that lowest low support line of the last 40 days.

What is the significance of...
LG, can you tell me if this is the correct way to set up the chart? I bring up the 1D chart, and draw a line on the lowest low. What if the PA doesn't drop below (or rise about the high) with in 40 days? De I just disregard the trade? Thanks.
  • #8,963
  • Jan 8, 2011 2:20pm Jan 8, 2011 2:20pm
Quoting lawgirl21
A classic entry technique in trend trading is to enter on either the highest high on the last 40 days for a long trade , or the lowest low on the last 40 days for a short trade.

If the market is going to trend up, then it must make new highs. If the market is goind to trend down, then it must make new lows.
New local lows or new historical lows?
  • #8,964
  • Jan 8, 2011 3:40pm Jan 8, 2011 3:40pm
Quoting NaughtyPip
Ahh the turtles, so this 40 day entry method is this something you have been using and will continue to use? I love the simplicity of it..
Yes, I have always used this as further longer trend confirmation.
  • #8,965
  • Jan 8, 2011 3:42pm Jan 8, 2011 3:42pm
Quoting Magnat
New local lows or new historical lows?
Forty day lows--may be new local lows (not sure what that is) or may be historical lows. I chose 40 days because the Turtles used 40 days, but it can be over any time frame one likes. I found 40 days is long enough to give general immediate trend confirmation.
  • #8,966
  • Jan 8, 2011 3:47pm Jan 8, 2011 3:47pm
Quoting Fitness09
LG, can you tell me if this is the correct way to set up the chart? I bring up the 1D chart, and draw a line on the lowest low. What if the PA doesn't drop below (or rise about the high) with in 40 days? De I just disregard the trade? Thanks.
Then, we would look for other setups and/or entries. Pull up the major pairs as an exercise and mark the lowest low/high for the last 40 days. You will know right away which pairs should go on a watch list for possible continuations maybe even some major moves.

Look at EURUSD - is PA at or near either the lowest low or the highest 40 day high? Does that red flag anything?
  • #8,967
  • Jan 8, 2011 4:11pm Jan 8, 2011 4:11pm
Quoting lawgirl21
Then, we would look for other setups and/or entries. Pull up the major pairs as an exercise and mark the lowest low/high for the last 40 days. You will know right away which pairs should go on a watch list for possible continuations maybe even some major moves.

Look at EURUSD - is PA at or near either the lowest low or the highest 40 day high? Does that red flag anything?
Friday the EURUSD broke down through the 40 day low... would you trade the break of the 40 day low itself or need candle closing conformation on some timeframe? Daily or smaller? What would you target? Previous swing low that is lower than the 40 day low? What do you do when it's broken as in this case? Continue to redraw the 40 day low (and high accordingly) everyday until price bounces up?
Today's zone = Tomorrow's opportunity!
  • #8,968
  • Jan 8, 2011 4:21pm Jan 8, 2011 4:21pm
Quoting lawgirl21
Then, we would look for other setups and/or entries. Pull up the major pairs as an exercise and mark the lowest low/high for the last 40 days. You will know right away which pairs should go on a watch list for possible continuations maybe even some major moves.

Look at EURUSD - is PA at or near either the lowest low or the highest 40 day high? Does that red flag anything?
E/U is lower than the lowest (Dec 29th), and E/G is lower than the lowest (Dec 29th). Obviously this would be a much longer time frame trade than what I normally go with. How would you set your SL and TP? I would think it would have to be pretty broad considering the flucuation.
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  • #8,969
  • Jan 8, 2011 6:32pm Jan 8, 2011 6:32pm
Quoting pres78
Friday the EURUSD broke down through the 40 day low... would you trade the break of the 40 day low itself or need candle closing conformation on some timeframe? Daily or smaller? What would you target? Previous swing low that is lower than the 40 day low? What do you do when it's broken as in this case? Continue to redraw the 40 day low (and high accordingly) everyday until price bounces up?
Good...no, I would not automatically jump into a short trade because it broke that 40 day low. The pair would, however, be on my very short list to observe for further downward movement. PA seldoms moves in a straight line, so there may be a pullback in which case I would look for a possible ZC trade.

In other words, unless you want to trade a daily chart with confirmation from weekly and monthly RSIs, I would look for our regular setups and triggers before entering. But because PA was not repelled by that 40 day support line and went right through, odds are that PA will continue in that direction.
  • #8,970
  • Jan 8, 2011 6:36pm Jan 8, 2011 6:36pm
Quoting Fitness09
E/U is lower than the lowest (Dec 29th), and E/G is lower than the lowest (Dec 29th). Obviously this would be a much longer time frame trade than what I normally go with. How would you set your SL and TP? I would think it would have to be pretty broad considering the flucuation.
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Unless you wanted to trade that TF, I would not jump into a trade just because PA pierced that 40 day support line and for just the reasons you state...the DD will be huge and the TF is longer than we generally trade here. Please read my response above for further explanation.
  • #8,971
  • Jan 8, 2011 6:48pm Jan 8, 2011 6:48pm
Quoting lawgirl21
Unless you wanted to trade that TF, I would not jump into a trade just because PA pierced that 40 day support line and for just the reasons you state...the DD will be huge and the TF is longer than we generally trade here. Please read my response above for further explanation.
Thanks for the explanation. I will probably just stick to the time frames I am used to trading with your systems.
  • #8,972
  • Jan 8, 2011 7:23pm Jan 8, 2011 7:23pm
hi alls

i read this thread for some weeks and only register yesterday, LG u r doing a very good job !

thanks and happy new year

nb: for more about turtles
https://www.bsp-capital.com/documents/turtlerules.pdf
TRUST THE PROCESS !
  • #8,973
  • Jan 8, 2011 8:30pm Jan 8, 2011 8:30pm
Quoting lawgirl21
Good...no, I would not automatically jump into a short trade because it broke that 40 day low. The pair would, however, be on my very short list to observe for further downward movement. PA seldoms moves in a straight line, so there may be a pullback in which case I would look for a possible ZC trade.

In other words, unless you want to trade a daily chart with confirmation from weekly and monthly RSIs, I would look for our regular setups and triggers before entering. But because PA was not repelled by that 40 day support line and went right through,...
Just curious as I have never heard about this turtle trading method... thanks for the reply and I use daily for determining support / resistance zones only never enter trades from there...
Today's zone = Tomorrow's opportunity!
  • #8,974
  • Jan 8, 2011 9:13pm Jan 8, 2011 9:13pm
Quoting pres78
Just curious as I have never heard about this turtle trading method... thanks for the reply and I use daily for determining support / resistance zones only never enter trades from there...
When you have time..google the Turtle traders. They are very interesting.
  • #8,975
  • Jan 9, 2011 6:27am Jan 9, 2011 6:27am
Quoting lawgirl21
When you have time..google the Turtle traders. They are very interesting.
Will do...
Today's zone = Tomorrow's opportunity!
  • #8,976
  • Jan 9, 2011 6:40am Jan 9, 2011 6:40am
i ve posted a link above about turtles trading rules

waiting for some action at this level 9850
Attached Image (click to enlarge)
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TRUST THE PROCESS !
  • #8,977
  • Jan 9, 2011 9:34am Jan 9, 2011 9:34am
Quoting cablito
hi alls

i read this thread for some weeks and only register yesterday, LG u r doing a very good job !

thanks and happy new year

nb: for more about turtles
https://www.bsp-capital.com/documents/turtlerules.pdf
Thanks for the Turtle site, cablito. There is much interesting information there.
  • #8,978
  • Jan 9, 2011 12:34pm Jan 9, 2011 12:34pm
There's a very good book about the Turtles called The Complete Turtle Trader by Michael Covel. It's well worth reading.

Very few of the Turtles had any trading success once Dennis shut down the program. The few who successfully trade don't use the Turtle system anymore. It doesn't look like either Dennis or his partner went back to trading the Turtle system.

Furthermore, the system was developed for commodity markets. I think there are important structural differences between Forex and commodities, which make the commodities markets much better suited to that kind of trading. Specifically, I think that commodities are much more prone to bubbles and crashes than currencies. Governments and businesses have a very strong interest in holding back extreme price moves in currencies, and less of the same interest when it comes to say pork bellies or orange juice.

I tested a few variations of the Turtle system on Forex about three years ago. I tried doing it with the original rules, and then with a few variations to take into account a Forex day being so much longer than a day on a commodity exchange. It didn't find anything that worked very well.

Ultimately, the turtle idea works because it takes advantage of fat tails and black swan events. (Most traders work on some variation of mean reversion. The Turtle system takes advantage of the idea that price movements are not distributed according to a bell curve, but instead that there is are more huge price swings than the random distribution would predict.) The biggest problem is that it is extraordinarily risky and requires huge capitalization to make work, even with very conservative money management.

However, the story is a great story and well worth reading. And it really illustrates the kind of personality it takes to be a great trader.
  • #8,979
  • Jan 9, 2011 2:31pm Jan 9, 2011 2:31pm
I made a thorough scanning of this forum, from first page to 599. LG, Scrutch, Guella and others have contributed well. I can say that a lot of experience is on display here. Being on this forum has been eye opener to new methods. H1 4C BOs, 3 taps 4H with the RSIs confimation, it gave me 45 pips on EUR/JPY on Friday 7th jan, 2011. kudos to you all. I am happy to be part of this success team.

Keep the pips rolling.
  • #8,980
  • Jan 9, 2011 3:05pm Jan 9, 2011 3:05pm
A quick scan before the beginning of the trading week shows the following 7 pairs at or below 40 day lows. I think they will be interesting to watch this week:

EURUSD
USDCAD
EURGBP
EURCHF
EURJPY
EURAUD
EURCAD
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