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Trend Trading All Pairs

  • #10,141
  • Jan 14, 2011 8:45pm Jan 14, 2011 8:45pm
Quoting Sesshaumaru
my audusd trade got stopped out. looks like usd is now going strong against currencies tied with natural resources such as aud, cad, nzd. But currencies from europe such as euro, gbp, chf are still strong against usd, though there's been a retracement this morning.

I suppose you were going long on Aud/Usd, right?
There was actually shorting opportunity per NM method on 4H chart with trigger on 1H.
There were a lot of signs that price was going lower. Few pin bars, price making lower lows and closes of hourly candles lower and lower.

Attached Image (click to enlarge)
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Attached Image (click to enlarge)
Click to Enlarge Name: audusd 1h.gif Size: 77 KB
  • #10,142
  • Jan 15, 2011 9:53am Jan 15, 2011 9:53am
What's also quite interesting, is that trends to the upside and trends to the downside, tend to be qualitatively different.

Obviously trends to the downside have more momentum behind them and less retracements. Maybe it would make sense to adapt a strategy to longs versus shorts to optimally exploit both.
  • #10,143
  • Jan 15, 2011 10:12am Jan 15, 2011 10:12am
Im wondering if somehow it is possible to develop an approach that works both in trending and ranging markets simultaneously.

Theres a thread somewhere (carnt remember right now) where to take action they rely only on the previous bars hi/low/close.

Has anyone thought about something like this before?

Just curious and brainstorming ideas here...
  • #10,144
  • Jan 15, 2011 10:43am Jan 15, 2011 10:43am
Quoting Pipalicious
Im wondering if somehow it is possible to develop an approach that works both in trending and ranging markets simultaneously.

Theres a thread somewhere (carnt remember right now) where to take action they rely only on the previous bars hi/low/close.

Has anyone thought about something like this before?

Just curious and brainstorming ideas here...
hm, from my current understanding of the market, I think such an approach is not possible. But, never say never!!

Also I am not sure if range trading itself has an edge. You gotta have a really strong approach to be able to profit from ranges consistently.

It might be possible, but right now I haven't found a way yet to profit from ranges consistently.
  • #10,145
  • Jan 15, 2011 10:51am Jan 15, 2011 10:51am
Quoting Custos
hm, from my current understanding of the market, I think such an approach is not possible. But, never say never!!

Also I am not sure if range trading itself has an edge. You gotta have a really strong approach to be able to profit from ranges consistently.

It might be possible, but right now I haven't found a way yet to profit from ranges consistently.
I agree with you saying that it is hard to maintain a solid edge in ranging conditions.

Some "ideas" I have are with regards to the following:

- We know that a range can also be interpreted as a trend. If a range has been formed on (for example) a 4h chart, then on lower charts such as 5m we can begin to see a trend.

In a way, this is why I "personally" trade low timeframes, because it pretty much shows trends continually. But this is also because of the volatility we are seeing, so we are seeing wide ranges as well.

What happens when volume drops and we begin to see small ADR?

- Another idea which right now for me is talking aloud could be to do with range bars. Mainly due to that they remove a lot of noise that time based bars produce.

Could be wrong, dont know, but im sure that one option, though not for everyone, is to trade low TF's.

But i STILL believe there MUST be other alternatives to this as well... hmm :nerd:
  • #10,146
  • Jan 15, 2011 12:24pm Jan 15, 2011 12:24pm
Quoting Pipalicious
I agree with you saying that it is hard to maintain a solid edge in ranging conditions.

Some "ideas" I have are with regards to the following:

- We know that a range can also be interpreted as a trend. If a range has been formed on (for example) a 4h chart, then on lower charts such as 5m we can begin to see a trend.

In a way, this is why I "personally" trade low timeframes, because it pretty much shows trends continually. But this is also because of the volatility we are seeing, so we are seeing wide ranges as well.

What happens when volume...
Well, the first idea is essentially trend-trading again, thus it doesn't have so much to do with range trading.
It don't think ADR will much affect your trading. The lower the volatility, the tighter the stop-loss, thus you can increase position size. Of course you will then also get less pip profits, but overall it will remain the same in terms of dollars.

I don't know about range bars, never used them before, so can't give an opinion.
  • #10,147
  • Jan 15, 2011 12:29pm Jan 15, 2011 12:29pm
http://www.facebook.com/photo.php?fb...74691629226392

http://www.facebook.com/photo.php?fb...74691629226392
Attached Image (click to enlarge)
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/ ... clarifying decisions ... /
  • #10,148
  • Jan 15, 2011 1:32pm Jan 15, 2011 1:32pm
Ye that does make sense. I suppose its relative just like you say... less volatility, tighter stops, smaller targets, yet it balances itself out.

As for range bars ive never tried them but from what i understand each bar opens and closes by a set amount of pips that you predefine.

So if you set it at 5 pips then the bar will close ONCE price moves either up or down for a total of 5 pips.

So with ranging conditions you will get less bars and hence it gives it a smoother visual so to speak.

Ive never tried them in fact im looking for an mt4 range bar script or something to see them.



Quoting Custos
Well, the first idea is essentially trend-trading again, thus it doesn't have so much to do with range trading.
It don't think ADR will much affect your trading. The lower the volatility, the tighter the stop-loss, thus you can increase position size. Of course you will then also get less pip profits, but overall it will remain the same in terms of dollars.

I don't know about range bars, never used them before, so can't give an opinion.
  • #10,149
  • Jan 15, 2011 1:35pm Jan 15, 2011 1:35pm
Quoting Custos
What's also quite interesting, is that trends to the upside and trends to the downside, tend to be qualitatively different.

Obviously trends to the downside have more momentum behind them and less retracements. Maybe it would make sense to adapt a strategy to longs versus shorts to optimally exploit both.
Custos, it is what I have been recently thinking actually. I remember reading about it somewhere.
We can see it on 2008 market fall and 2010 may 6 event. However, we do not see similar events to upside.
  • #10,150
  • Jan 15, 2011 1:39pm Jan 15, 2011 1:39pm
Quoting Custos
hm, from my current understanding of the market, I think such an approach is not possible. But, never say never!!

Also I am not sure if range trading itself has an edge. You gotta have a really strong approach to be able to profit from ranges consistently.

It might be possible, but right now I haven't found a way yet to profit from ranges consistently.

ok, here is what I think. even ranging markets develop trends. however those trends are not on 4H- daily charts., They are on 1H chart. I took long E/U trade on Friday. technically the pair is in ranging conditions but on 1H chart it is in uptrend and there was huge momentum.
I also have to admit that my James16 attempts have not been so successful as to continue. I have tried for 3 months and only December was good. Account got stuck in range. Stats say that NM method has considerably higher hit rate than James16 at least for me. I will stick with NM method since now on.
  • #10,151
  • Jan 15, 2011 1:40pm Jan 15, 2011 1:40pm
Quoting shiko
Custos, it is what I have been recently thinking actually. I remember reading about it somewhere.
We can see it on 2008 market fall and 2010 may 6 event. However, we do not see similar events to upside.
yeah, it's much easier to destroy than to build. Same is true for the markets.

Those downtrends are more or less black swan events, if it has been going up for a while.
  • #10,152
  • Jan 15, 2011 1:43pm Jan 15, 2011 1:43pm
Quoting shiko
ok, here is what I think. even ranging markets develop trends. however those trends are not on 4H- daily charts., They are on 1H chart. I took long E/U trade on Friday. technically the pair is in ranging conditions but on 1H chart it is in uptrend and there was huge momentum.
I also have to admit that my James16 attempts have not been so successful as to continue. I have tried for 3 months and only December was good. Account got stuck in range. Stats say that NM method has considerably higher hit rate than James16 at least for me. I will stick...
If you read one post further, I actually wrote, that this kind of approach will then be trend trading again and thus you can't say that this is range trading.

Yeah, hector's method is definitely good.
  • #10,153
  • Jan 15, 2011 3:41pm Jan 15, 2011 3:41pm
Quoting Custos
If you read one post further, I actually wrote, that this kind of approach will then be trend trading again and thus you can't say that this is range trading.

Yeah, hector's method is definitely good.

LOL, you are right I have heard some trade 5-15 min trends there is always trend. It just depends upon time frame.
But ifmarket ranging and range is big enough 1H trend might be pretty solid to trade. It's just that we have to keep an eye on prevailing higher time frame trend if there is one.
  • #10,154
  • Jan 16, 2011 4:12am Jan 16, 2011 4:12am
Quoting shiko
LOL, you are right I have heard some trade 5-15 min trends there is always trend. It just depends upon time frame.
But ifmarket ranging and range is big enough 1H trend might be pretty solid to trade. It's just that we have to keep an eye on prevailing higher time frame trend if there is one.
Just remember that price action and "time" are 2 very differrent things.

Time is what frames price into segments. There is no time in price action.

Price is price no matter the timeframe you look at.

Not to confuse you mate.
  • #10,155
  • Jan 16, 2011 7:19am Jan 16, 2011 7:19am
Quoting Pipalicious
Just remember that price action and "time" are 2 very differrent things.

Time is what frames price into segments. There is no time in price action.

Price is price no matter the timeframe you look at.

Not to confuse you mate.


Thanks man, what I actually mean is that sometimes we have very good opportunities on lower time frames like 1H despite 4H being not in NM set up but 1H showing set up with pbc while there is no pbc on 4H. I already realise it is a matter of momentum. when such momentum exists and it does almost every month especially when pair is in range we do not have to wait for 4H to catch up. In this case set up is on 1H with trigger on 15 min. BTW, E/U is testing upper range limit. it will be interesting to see how it goes. I will be watching.
  • #10,156
  • Jan 16, 2011 8:06am Jan 16, 2011 8:06am
Quoting shiko
Thanks man, what I actually mean is that sometimes we have very good opportunities on lower time frames like 1H despite 4H being not in NM set up but 1H showing set up with pbc while there is no pbc on 4H. I already realise it is a matter of momentum. when such momentum exists and it does almost every month especially when pair is in range we do not have to wait for 4H to catch up. In this case set up is on 1H with trigger on 15 min. BTW, E/U is testing upper range limit. it will be interesting to see how it goes. I will be watching.
Sure buddy.

You're right Also remember that momentum exceeds everything, especially trading trends.

Momentum is what takes us from A to B. No momentum, no trade.

In fact on a side note, for my own trading im considering implementing some kind of time stop.

Most of my *profitable* trades take off within the entry bar or the next.
Most of my losses are trades that tend to wiggle wobble around before moving.

If you have any suggestions or others here as well it would be interesting to find out more about this subject.

Ive considered a 3-4 bar time stop, irrelevant of timeframe.

Ive got to the point that making money is easy. It is keeping it that is hard.

So now i dont worry about making money, im concerned with how little I lose.

So im very aggresive when moving to break even, pretty solid at managing trades, but i need something else to help on sloppy trades per say lol.
  • #10,157
  • Jan 16, 2011 9:57am Jan 16, 2011 9:57am
Quoting Pipalicious
Sure buddy.

You're right Also remember that momentum exceeds everything, especially trading trends.

Momentum is what takes us from A to B. No momentum, no trade.

In fact on a side note, for my own trading im considering implementing some kind of time stop.

Most of my *profitable* trades take off within the entry bar or the next.
Most of my losses are trades that tend to wiggle wobble around before moving.

If you have any suggestions or others here as well it would be interesting to find out more about this subject.

Ive considered a 3-4...
Yeah, time-stops are not too bad. I am myself using time "targets". Meaning I don't have a profit target in place, but as long as the trade is working out, I will sell my whole position after a certain amount of time, which is individual for each pair.
But I believe, time stops, for getting out of crappy trades, should work equally well. Best is to get some stats on it. Then you can find the optimal time a trade should be open and cut losers short.
  • #10,158
  • Jan 16, 2011 10:08am Jan 16, 2011 10:08am
Quoting Pipalicious
Sure buddy.

You're right Also remember that momentum exceeds everything, especially trading trends.

Momentum is what takes us from A to B. No momentum, no trade.

In fact on a side note, for my own trading im considering implementing some kind of time stop.

Most of my *profitable* trades take off within the entry bar or the next.
Most of my losses are trades that tend to wiggle wobble around before moving.

If you have any suggestions or others here as well it would be interesting to find out more about this subject.

Ive considered...
With respect to time stops, trading time frame must also be taken into account as well i.e. waiting for 4 bars (4 hours) could be an acceptable time stop on H1 but would not work on H4. Because on H4 waiting for 4 bars would mean 16 Hrs and if one tries to exit the position on H4 after 4 hours then it would be too early.
  • #10,159
  • Jan 16, 2011 10:27am Jan 16, 2011 10:27am
Quoting MktScape
With respect to time stops, trading time frame must also be taken into account as well i.e. waiting for 4 bars (4 hours) could be an acceptable time stop on H1 but would not work on H4. Because on H4 waiting for 4 bars would mean 16 Hrs and if one tries to exit the position on H4 after 4 hours then it would be too early.
not quite sure what you mean.
4 bars on every time frame are just 4 bars.
On daily it's 4 days, on a second chart it's 4 seconds.

Not sure where you are coming from...
  • #10,160
  • Jan 16, 2011 10:43am Jan 16, 2011 10:43am
Quoting Custos
Yeah, time-stops are not too bad. I am myself using time "targets". Meaning I don't have a profit target in place, but as long as the trade is working out, I will sell my whole position after a certain amount of time, which is individual for each pair.
But I believe, time stops, for getting out of crappy trades, should work equally well. Best is to get some stats on it. Then you can find the optimal time a trade should be open and cut losers short.
Time exits...interesting concept never thought of it.

i dont use targets either but never thought about time exits.

I think my best option is what you say, get some data on time stops.

Most days I just trade eur/usd because of low TF's and plenty ops and ive noticed that most sloppy trades *usually* take around 3-4 bars max, before a)they take off or b)they stop me out.

id rather not gamble it so even if it takes off who cares...

Yeah im gonna test it.
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