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CHOROS System

  • #3,821
  • Feb 8, 2011 11:50am Feb 8, 2011 11:50am
Quoting kostas1
Last post for today but keep your eyes on a possible short signal:
Confluence of:
1. H4 35
2. RN
3. Daily R2
4. H1 200

Wait for a good M5 reversal signal around the 1.3700 area.
I'm not worthy! I'm not worthy!

Attached Image (click to enlarge)
Click to Enlarge Name: Not worthy.jpg Size: 79 KB


I didn't trade it as I finished for the night!
  • #3,822
  • Feb 8, 2011 1:26pm Feb 8, 2011 1:26pm
Hi kostas1,

I am newbie in this thread please post recent indicators and template
  • #3,823
  • Feb 8, 2011 1:46pm Feb 8, 2011 1:46pm
Quoting bigtent
I'm not worthy! I'm not worthy!

Attachment

I didn't trade it as I finished for the night!


P.S. I got +22p traded with reduced lot size since I was done for the day and also I am not usually trading that late.
  • #3,824
  • Feb 8, 2011 1:47pm Feb 8, 2011 1:47pm
Quoting smartvin
Hi kostas1,

I am newbie in this thread please post recent indicators and template
Hi

Welcome

All you need to start is in first post. No fancy changes here like other threads. Just go through first post carefully and start trading. Then slowly you can go though entire thread. The thread contains valuable info but you don't need all info to begin.
Making money is easy- Just dont take losing trades
  • #3,825
  • Feb 8, 2011 1:53pm Feb 8, 2011 1:53pm
Quoting kostas1


P.S. I got +22p traded with reduced lot size since I was done for the day and also I am not usually trading that late.
You are GOD.
Keep it up. Am sure some day i will start taking these trades.
Making money is easy- Just dont take losing trades
  • #3,826
  • Feb 8, 2011 1:55pm Feb 8, 2011 1:55pm
Quoting bigtent
Actually, Steve Nison talks about that in his Japanese Candlesticks stuff. They call the gaps "windows" and the market will return, "closing the window".
i think he refers to daily charts not for forex, and definitely not 5 mins timeframe
  • #3,827
  • Feb 8, 2011 1:58pm Feb 8, 2011 1:58pm
Quoting bigtent
I'm not worthy! I'm not worthy!
you could see that from a mile coming, it was there since this morning in H1, the only question was if it was ever gonna reach it today.
i got that to compensate for some mindless trade i did earlier.
it was great that Kostas shared this with us here, cheers m80
  • #3,828
  • Feb 8, 2011 2:05pm Feb 8, 2011 2:05pm
Quoting kostas1


P.S. I got +22p traded with reduced lot size since I was done for the day and also I am not usually trading that late.
I was actually uploading that file for you, and had forgotten all about it. Then I looked at the chart....
  • #3,829
  • Feb 8, 2011 2:25pm Feb 8, 2011 2:25pm
Quoting asos101
i think he refers to daily charts not for forex, and definitely not 5 mins timeframe
Not quite. I have read his first two books as well as "Steve Nison's Profiting in Forex" and an accompanying video series (which is many hours long and I have never finished watching).

He makes some modifications to account for the 24 hour continuous trading and very high liquidity of 4x, but other than that, all the principles hold across all time frames, noting that patterns get less reliable as the time frame shortens.
  • #3,830
  • Feb 8, 2011 6:01pm Feb 8, 2011 6:01pm
Quoting kostas1
OK. This is not a CHOROS rule but I use it very often as an added confirmation in a trade.
Somebody may ask why I got in long with that strong short action (even-though the confluence was strong for long)?
Answer: I noticed these gaps in the bodies of the M5 bars. In my experience these are getting filled very soon when they form. Even one gap will make me confident about taking a trade in the "filling direction". Here I noticed three in a row! I am not sure why this happens but I tend to believe that these are traps to get most of us in the...
Thanks for sharing, I wish a new that in the morning before taking the trade short, I will look for it, is this normaly happens in the 5 min tf?
  • #3,831
  • Feb 8, 2011 6:55pm Feb 8, 2011 6:55pm
Quoting Survivor
Just a quick clarification here duffy. When i say diverging i mean diverging. Actual distance between them might be very small but what i look for is weather this distance is increasing- then i pass it. If they are converging/ parallel / on top then i dont worry about distance much.

Of course we are dealing with moving things here and MA always looks better for winners and worse for losers. A winning first touch of 10 EMA will automatically make 10EMA look steep and a losing one will make it look flat. But divergence is not influenced by trade...
Thanks for the clarification. I need to go back to the original manual and see what Clay says about this sort of thing. And also look at his examples to see if there's anything there.

I'm also considering your suggestion of testing it for myself, but that could take some time. The real problem with testing it, is getting a large enough sample size. There are lots of trades with diverging MAs, but most of them have other faults as well -- flat MAs, too many bars on the retrace, too many touches, and so on. Getting the data for all those things, and then making sense of it, might take quite some time.
  • #3,832
  • Feb 8, 2011 6:56pm Feb 8, 2011 6:56pm
Quoting asos101
i think GU is rather hard to trade the last couple of weeks at least, and after (3) in your graph is un-tradeable as its an MA soup.
i lost most of the day for live so when i returned late at night i run the EU and GU in the simulator.
EU had at least 2 solid entries with the first just before the big dip, if followed by Clay's rules it would result in at least 50 pips and the second also good for 20-40 depending on how brave you are.
both of these were quite clear to take on the simulator.

now GU was another story, apart from the (1) ad (2)...
Thanks for the encouragement. I may take up your suggestion about EU. I've actually traded it more than GU in the last two weeks, so it might not be a bad idea to try to learn it, too.
  • #3,833
  • Feb 8, 2011 7:06pm Feb 8, 2011 7:06pm
Quoting kostas1
Interesting. I will look it up. Do you have any links?
http://www.scribd.com/doc/6367231/St...ing-Techniques
  • #3,834
  • Feb 8, 2011 7:09pm Feb 8, 2011 7:09pm
Quoting bigtent
I appreciate that, but the news said that it was what drove the Aussie down.

Cable reacted far worse, breaking its 2 day low, whereas the the Aussie bounced off today's low and...
I saw a lead on one of the business channels last week: "Dow climbs because of growing uncertainty in Egypt."

When writing these things, they simply take important event A and market move X and say A caused X. Pay no attention to that man behind the curtain...
  • #3,835
  • Feb 8, 2011 7:16pm Feb 8, 2011 7:16pm
Daily is uptrend. H4 is confused, basically between the 35 and 50. H1 is flat/ranging. Not a good market.

1) 10 Touch. MA is not that steep. Trade is right at Frankfort Open. There’s a RN and an S/R line just above the trade. I would be very cautious about this trade, and probably pass. Goes for 15 pips only. So either 15+ pips or Break Even.

2) 35/50 Bounce. Break Even. First touch. MAs are steep, close, but slightly diverging. Price blew through both MAs, and then took its bounce off the 100 (which is not Dance). Comes back up enough to move to Break Even, and then drops quickly. I don’t see how I would get anything but Break Even out of this. Based on other advice, this is either a no trade, or one where you would wait for a nice rejection set-up on the M5.

3) 35/50 Bounce. Winner. This is almost certainly a no trade. MAs are flat and diverging. It goes against the Daily trend, and there is no other trend to rely on. It takes 5 bars to get here. I can’t see this as a by the rules trade, but its good for 20-25 pips with 11 pip drawdown.

4) 35/50 Bounce. Winner. Two bars later, this is the same trade as 3, only worse. MAs diverging, one going up the other down. Second touch. The chart is starting to grow quills. A definite no trade. Good for 20-30 pips.

5) 50 Bounce. Winner. The MAs have started to converge and they both are at least slightly angled in the right direction. Here, the trick would be knowing when to enter. If you waited for the 35, you miss the trade. If you waited for a good rejection on the M5, the rejection itself would eat up enough pips to turn a winner into a break even (at least on the first bar). So you would have to take the first touch of the 50, since there is no room for error. Taking it, however, would simply be a guess. Then, on the very next bar, the same trade happens a second time. This time, it turns out to be the trade of the day, but in real time its just a second touch with a chart that now looks like a porcupine. Depending on the entry, this is Break Even, good for 15 pips, or for up to 40.

6) 10 Touch. Winner. This is a perfect 10 Touch trade, except the touch never happens. There’s even a nice Round Number confluence. I would almost certainly miss this trade. Good for 35+ pips.

7) 10 Touch. Loser. This is the first actual touch of the 10, and it comes after a fairly long move. The 10 is still very steep. It’s a one bar retrace to the 10 (some people insist on 2 bars). It’s possible to think that price had stalled at the S/R line or the Daily S2. I can’t see any flaw in this trade except that it loses.

8) 35/50 Bounce. Winner. 35 are steep and converging. They are on top of each other at the point of the trade. Confluence with RN, and with H1 10. Good for 15 pips.

9) 35/50 Bounce. Winner. This is the second touch of the MAs. Now the MAs are diverging. There is still confluence with the RN, which is almost constraining price at this point. I think this one is a no trade. Good for up to 30 pips.

10) 35 Bounce. Winner. This is another no trade, mostly because of the time of day, over 2 hours after London close. Its a perfect confluence of the 35 with the Weekly Pivot, and the 35 is still steep, though diverging with the 50. The diverging MAs also make it a no trade. Good for 15-20 pips.

This day is a bit frustrating for me. The best trades, I think, are 2, 7, and 8. A break even, a loser, and a modest winner.

The other trades are all worse in terms of dance rules, but as a group they do far better than the good trades. The problem with this is that this kind of observation leads to breaking the rules. And at the same time, I think that the charts will likely start dancing in perfect time just at the point where I decide to put a hitch in my step.
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  • #3,836
  • Edited 9:30pm Feb 8, 2011 9:00pm | Edited 9:30pm
Quoting duffypratt
I saw a lead on one of the business channels last week: "Dow climbs because of growing uncertainty in Egypt."

When writing these things, they simply take important event A and market move X and say A caused X. Pay no attention to that man behind the curtain...

Haha, love it!

Another example... with the recent floods out here, that flooded some of our biggest coal mines and wiped out a season of crops, they said on the news that the Aussie was going to tumble in a big way, and there was no way it would get back to parity.

Then on top of that, we had the biggest cyclone ever in Yasi, wiping out the bulk of the country's sugar cane and banana crops.

I forget the figures, but represents a huge dent in our exports and GDP.

So what did the Aussie do? Climbed up above parity and is still there, holding fast above US$1.01 for the last week.

This makes no sense whatsoever from a funnymental viewpoint.

Fact is, the news does NOT drive the markets, trading does, and you can never predict how traders will react to the news, because traders are people and people are not rational nor logical (like to think they are, though). In fact, people are very strange cattle, indeed, and traders, doubly so!

This is what attracted me to The Dance (after I saw Kostas equity curve on post 1, of course). The Dance has no "magic or mystery", no "holy grail" system, indicator, etc.

As Clay said many times, it relies on the self fulfilling phenomena that traders use moving averages, round numbers, etc, and will react to them, so we want to catch those reactions. In essence, we are trying to judge where and when traders are likely to react and jump on board when they do. The strategy works very well at that.

To do this, he found a simple set of Moving Averages that seemed to give the best results. When you realize that nearly all indicators, even oscillators, are a form of moving average, it makes a whole lot of sense in so many ways that the total effect can be summed up in simple set that will expose the likely moves in the market when they agree. Then you "dance around it", reacting rather than predicting.

I really admire the genius of that!
  • #3,837
  • Feb 8, 2011 9:19pm Feb 8, 2011 9:19pm
Quoting bigtent
Haha, love it!

Another example... with the recent floods out here, that flooded some of our biggest coal mines and wiped out a season of crops, they said on the news that the Aussie was going to tumble in a big way, and there was no way it would get back to parity.

Then on top of that, we had the biggest cyclone ever in Yasi, wiping out the bulk of the country's sugar cane and banana crops.

I forget the figures, but represents a huge dent in our exports and GDP.

So what did the Aussie do? Climbed up above parity and is still there, holding...
Indeed the market movements of AUDUSD have been erratic and some would even describe them as irrational. The RBA's long term vision explains these to a degree. However, given that the PBOC has just raised their rate and it has even been sugggested that more is on the horizon, one has to ponder how long this strength can be sustained. Of course, if the USD continues to remain weak, nothing can be assured.
  • #3,838
  • Feb 8, 2011 9:33pm Feb 8, 2011 9:33pm
Quoting mags01
Indeed the market movements of AUDUSD have been erratic and some would even describe them as irrational. The RBA's long term vision explains these to a degree. However, given that the PBOC has just raised their rate and it has even been sugggested that more is on the horizon, one has to ponder how long this strength can be sustained. Of course, if the USD continues to remain weak, nothing can be assured.
I think the phrase "trade what you see, not what you think" is a classic bit of wisdom in relation to this.
  • #3,839
  • Feb 8, 2011 10:32pm Feb 8, 2011 10:32pm
Anyone awake and watching GU 1h? Looks familiar? Only trouble is in D1. I would take it anyway.

And the good part is if it breaks up and rushes higher to RN we have a exceptionally beautiful confluence there - RN 35, 50 and 62 All siting together.
Making money is easy- Just dont take losing trades
  • #3,840
  • Edited 11:27pm Feb 8, 2011 11:03pm | Edited 11:27pm
Quoting Survivor
Anyone awake and watching GU 1h? Looks familiar? Only trouble is in D1. I would take it anyway.

And the good part is if it breaks up and rushes higher to RN we have a exceptionally beautiful confluence there - RN 35, 50 and 62 All siting together.
Bit late, but if it comes back up, I might jump at it.

On second thoughts, looks like the D1 10 is support just below it.
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