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CHOROS System

  • #4,041
  • Feb 16, 2011 6:21am Feb 16, 2011 6:21am
Quoting asos101
i am back at simulation too (and i missed all the obvious action for today) after reading again through the Dance thread.
in the simulation i follow the basic rules much easier than i can do in live trading because if there is no action i just move forward.
I know exactly what you mean!! Patience is the key and I've been forcing myself to learn that.

What I realised about the sim trading is that I only use the single timeframe and I do very well with that. So in my real trading I barely pay attention to the higher timeframes or the pivot points and really simplify things. That might not be for everyone, but my results were so good from the one timeframe, why make things more complicated? I do use the M1 and M5 to fine tune entries.
  • #4,042
  • Feb 16, 2011 6:36am Feb 16, 2011 6:36am
Quoting arha
I know exactly what you mean!! Patience is the key and I've been forcing myself to learn that.

What I realised about the sim trading is that I only use the single timeframe and I do very well with that. So in my real trading I barely pay attention to it or the pivot points and really simplify things. That might not be for everyone, but my results were so good from the one timeframe, why make things more complicated? I do use the M1 and M5 to fine tune entries.
i agree though my template may be a bit more complicated because i have all 15/35/50 of M15, H1, H4, and D1 on, just because i cant have all the windows i use in live. so i still use all TFs but mainly for SR areas.

as a side note, i do most simulation in the weekend, when spread is like 5 pips instead of 1-1.5 that it usualy is in the weekdays (EURUSD).
still with that huge spread its ok to trade in the simulator.
another thing i noticed is that while in live we are always trying to find the exact touch spot, in the simulator due to the speed it moves i usually miss that and i take the trade AFTER it has shown a reaction....
and possibly i have been saved a few times from taking bad trades that way.

that really makes me wonder if the "touch" point is the best or i should wait for a significant reaction before i enter (say 3-4 pips reaction).
though i guess its really hard to see the move you have foreseen go away without you in.
  • #4,043
  • Feb 16, 2011 6:58am Feb 16, 2011 6:58am
Quoting asos101
another thing i noticed is that while in live we are always trying to find the exact touch spot, in the simulator due to the speed it moves i usually miss that and i take the trade AFTER it has shown a reaction....
and possibly i have been saved a few times from taking bad trades that way.

that really makes me wonder if the "touch" point is the best or i should wait for a significant reaction before i enter (say 3-4 pips reaction).
I think that whatever way you trade in sim you should try and translate that to real life. If waiting until after the touch is working for you, why not try that in real trading with small lot sizes? There were certain aspects of my sim trading that I didn't do with the real trades because it wasn't "safe" and it was killing my account. When I started trading exactly like I did in the sim, I started becoming a lot more profitable.
  • #4,044
  • Feb 16, 2011 7:51am Feb 16, 2011 7:51am
Hi all

May i ask how big is your brokers spread during news?
I am in Oanda and it rises spread up to 40 pips (
Looks like i have to find another broker
  • #4,045
  • Feb 16, 2011 7:54am Feb 16, 2011 7:54am
Quoting Pucter
Hi all

May i ask how big is your brokers spread during news?
I am in Oanda and it rises spread up to 40 pips (
Looks like i have to find another broker
I'm with Oanda and I just don't open trades during the news, simple as that. If you already have a trade open it's usually no problem, and it doesn't take long for the spread to get back to normal.
  • #4,046
  • Feb 16, 2011 8:06am Feb 16, 2011 8:06am
just sometimes there were good setups, but i forgot about news and Oanda eated my 15 - 20 pts.
and second - when they returns spread to normal, move is over
  • #4,047
  • Feb 16, 2011 9:46am Feb 16, 2011 9:46am
Dear All,

I have been abroad (Cold Moscow....) for a while and having a veeeery busy time at work, so I'll have a LOT to read of the Thread.

So please forgive me if anybody already spoke about this in some previous page (I'll read them soon all): could this be a constrainment on EUR USD Daily ?
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDDAILY.png Size: 46 KB
  • #4,048
  • Feb 16, 2011 11:41am Feb 16, 2011 11:41am
Quoting micmic
I'm in AUDUSD after the two-bar bounce, with the stop loss placed just below the EMAs and the pivot. Let's see how it goes.
Well, I got a chance to get a few pips but I figured it wasn't yet time to move my stop loss and so it got hit a little after the USD rally started. I also missed the first phase of the rally, but entered a constrainment trade in GBPUSD and caught some of the second phase. More or less at the money so far today.

I've been wondering something that probably has been answered but couldn't find it. Is there any explanation why we use exponential moving averages for the 10 and 50 but a simple moving average for the 35 ? I know that exponential averages are more sensitive to the more recent price movements but on the other hand they may indicate more false trend changes. But is there any explanation on why the 35 is an SMA and the 50 an EMA ?
  • #4,049
  • Feb 16, 2011 12:27pm Feb 16, 2011 12:27pm
Quoting Pucter
just sometimes there were good setups, but i forgot about news and Oanda eated my 15 - 20 pts.
and second - when they returns spread to normal, move is over
The spread jumps so much because Oanda is a market maker and has to protect itself in those times. If you think you want to trade the news, you should consider looking at an ECN or an STP. I'm using MBTrading. The spreads definitely go up, but I have not yet seen spreads as big as you are reporting. Then, at the end of one of those big news runs, the reverse happens, and sometimes the spreads actually go negative for short periods of times.

The difference is that an ECN makes money off commission on trades. They pass through the best bid and ask from the different bank feeds that they use and (also from their own internal customers). Those will get crazy during news times, but what you see and pay is closer to the real thing. The risk here, of course, is that there may be slippage or re-quotes.

With a market maker like Oanda, you will likely get a quicker fill, but that's because Oanda has already protected itself from really large moves by boosting the spread. Oanda has at that time guaranteed your fill and taken a position against you. It will then try to pass on your trade either to another of it's customers or to the interbank. Thus, for the brief time that it's holding your position, its trading against you and will continue to be against you until it can balance its own risk.

Either way, entering trades during news is risky. With an ECN, you face higher spreads and the possibility of some slippage. With a market maker, you face much higher spreads, less slippage, but the possibility that the broker takes some action against your interest because they are on the opposite side of the trade from you.
  • #4,050
  • Feb 16, 2011 12:37pm Feb 16, 2011 12:37pm
Quoting micmic
Well, I got a chance to get a few pips but I figured it wasn't yet time to move my stop loss and so it got hit a little after the USD rally started. I also missed the first phase of the rally, but entered a constrainment trade in GBPUSD and caught some of the second phase. More or less at the money so far today.

I've been wondering something that probably has been answered but couldn't find it. Is there any explanation why we use exponential moving averages for the 10 and 50 but a simple moving average for the 35 ? I know that exponential averages...
I think someone asked Clay about this in the original thread. He said that someone showed him these two MAs together, and he felt like the charts were just telling him "Trade Me". That's the best explanation I've seen.

It's worth noting that EOHaters used the 35 simple and 50 exponential as well. But I haven't read enough of his thread to know if there was a reason for it.

On it's own, it seems pretty clear that the interaction of the two gives nice bulges, convergences, and divergences and these say alot about where things are likely to go. If they were both the same type of MA, I think they would probably convey less. (Conversely, I've had the 50EMA and the 62EMA on my H1 chart, and they are basically just redundant. And here, I think EOHaters actually used the 62EMA and the 50 simple on H1 charts.)
  • #4,051
  • Feb 16, 2011 3:42pm Feb 16, 2011 3:42pm
Quoting duffypratt
I think someone asked Clay about this in the original thread. He said that someone showed him these two MAs together, and he felt like the charts were just telling him "Trade Me". That's the best explanation I've seen.

It's worth noting that EOHaters used the 35 simple and 50 exponential as well. But I haven't read enough of his thread to know if there was a reason for it.

On it's own, it seems pretty clear that the interaction of the two gives nice bulges, convergences, and divergences and these say alot about where things are likely to go....

EO's manual talks about a rather complicated set of MAs:

15M chart: 5 ema, 10 ema, 21 ema, 35 sma, 50 ema, 200 sma
1H chart: 10 sma, 50 sma, 62 ema, 200 sma
4H chart: 5 sma, 10 sma, 50 ema, 150 ema
1D chart: 5 sma, 35 sma, 50 ema

Don't ask me why eg the 50 is usually an EMA but in 1H charts it's an SMA.

Best justification I've seen about the choice of some MA is that "it's what the big boys use". But actually I think it can't be proved that price respects more the 50 EMA than the 43 SMA or the 57 WMA. Probably they will all experience the same number of bounces. I think they serve mostly as a reminder that price has moved too much in one direction and the probability of a reversal increases.
  • #4,052
  • Feb 16, 2011 4:17pm Feb 16, 2011 4:17pm
Quoting micmic
EO's manual talks about a rather complicated set of MAs:

15M chart: 5 ema, 10 ema, 21 ema, 35 sma, 50 ema, 200 sma
1H chart: 10 sma, 50 sma, 62 ema, 200 sma
4H chart: 5 sma, 10 sma, 50 ema, 150 ema
1D chart: 5 sma, 35 sma, 50 ema

Don't ask me why eg the 50 is usually an EMA but in 1H charts it's an SMA.

Best justification I've seen about the choice of some MA is that "it's what the big boys use". But actually I think it can't be proved that price respects more the 50 EMA than the 43 SMA or the 57 WMA. Probably they will all experience...
My guess on the H1 is because the 50EMA is redundant of the 62EMA, and the EOHaters people were in love with the bounce trade off the 62. By making the 50 simple on that chart, you get the same sort of information between front and backweighted MAs that the 35/50 gives on the M15.

I agree that, to a certain extent, the specific periods of the MAs are arbitrary. Clay talks alot about learning how to see how price interacts with the MAs. One of the important things to remember, then, is that we are really watching price first and the MAs secondarily. The MAs are a guide to seeing what price does.
  • #4,053
  • Feb 16, 2011 4:19pm Feb 16, 2011 4:19pm
Quoting micmic
EO's manual talks about a rather complicated set of MAs:

15M chart: 5 ema, 10 ema, 21 ema, 35 sma, 50 ema, 200 sma
1H chart: 10 sma, 50 sma, 62 ema, 200 sma
4H chart: 5 sma, 10 sma, 50 ema, 150 ema
1D chart: 5 sma, 35 sma, 50 ema

Don't ask me why eg the 50 is usually an EMA but in 1H charts it's an SMA.

Best justification I've seen about the choice of some MA is that "it's what the big boys use". But actually I think it can't be proved that price respects more the 50 EMA than the 43 SMA or the 57 WMA. Probably they will all experience the...

Not just the big boys. It's just the MAs that MOST of traders use. Same is true for the round numbers, pivot points, etc. The more the traders that watch a particular price the more the chances of reaction there.
  • #4,054
  • Feb 16, 2011 5:26pm Feb 16, 2011 5:26pm
Quoting kostas1
Not just the big boys. It's just the MAs that MOST of traders use. Same is true for the round numbers, pivot points, etc. The more the traders that watch a particular price the more the chances of reaction there.

Yep, self-fulfilling prophecies. It's just that sometimes I see the price "trapped" between different MAs and I wonder whether I'm using too many of them. IIRC clay didn't use the 4H chart and its MAs at all and endroute seems to take minimalistic approaches regarding the MAs. OTOH, one could always add other very popular MAs (like the 21). Anyway, I guess there's always a degree of customization...

Another question for those of you who have been trading live for over a month: How many live trades per day on average have you been taking ?
  • #4,055
  • Feb 16, 2011 6:02pm Feb 16, 2011 6:02pm
Quoting micmic
Yep, self-fulfilling prophecies. It's just that sometimes I see the price "trapped" between different MAs and I wonder whether I'm using too many of them. IIRC clay didn't use the 4H chart and its MAs at all and endroute seems to take minimalistic approaches regarding the MAs. OTOH, one could always add other very popular MAs (like the 21). Anyway, I guess there's always a degree of customization...

Another question for those of you who have been trading live for over a month: How many live trades per day on average have you been taking ?
If my first is a looser i quit for the day, so i'm very carefull not to blue my chance for the day. If it is a winner i search for about 30 pips a day, but no more than 3 trades. After a loser i quit and go to a demo.
Better to lose opportunity, rather than capital !
  • #4,056
  • Feb 16, 2011 7:30pm Feb 16, 2011 7:30pm
Quoting metrilbg
If my first is a looser i quit for the day, so i'm very carefull not to blue my chance for the day. If it is a winner i search for about 30 pips a day, but no more than 3 trades. After a loser i quit and go to a demo.

That's commendable self-control. So on average you get 1-2 trades every day ? Do you watch several pairs ?

Below I attach a chart of yesterday's GBPUSD activity with my take on possible entries. I'd appreciate any comments.
Attached Image (click to enlarge)
Click to Enlarge Name: chart.jpg Size: 136 KB
  • #4,057
  • Feb 16, 2011 7:54pm Feb 16, 2011 7:54pm
Forgot to add that there is some constrainment between No. 4 and No. 5 and also that at No. 11 the gap between the 35/50 has started to widen so it'a not a good entry.
  • #4,058
  • Feb 16, 2011 8:57pm Feb 16, 2011 8:57pm
1) 35 Bounce. Winner. The time is too early, and the MAs aren’t really steep. I’ve been noticing that a first touch is usually OK off the 35, and that for a second touch it’s generally better to wait until it hits the 50. Except when the MAs are medium far apart, then waiting is always better. Here, I’m not sure what I would do. The best thing would probably be either to sit out the trade, or look for an entry on the 5. Good for up to 35 pips.

2) 10 Touch. The MA is a bit flat to take this trade, and it violates the 2 bar rule. So no trade.

3) 50 Bounce. Winner. Here the MAs are diverging and still a bit flat. But there is a RN and an S/R line in confluence. I probably would have taken this trade if I had been staying up late. (Instead I woke up early and got an OK trade on the EURUSD). With no good target here, I think this is probably worth 15 pips, or its a Break Even).

4) 10 Touch almost. This is the trade that Arha took for +90. I’m pretty sure I would have missed this trade. The RN, the 10, and the 50 are all in the same area, but the 10 is 5.5 pips away from the others, so I would not have seen it as a confluence. The retrace back to the 50 is only 9 pips. Clay calls for a pullback of 15 pips or more, and I would not have seen this as enough to act, and would have been waiting for the 10 Touch instead. (Last week, I tried to do one of these trades that pulls back to the 50 after a clean break. It was less than 10 pips on the pullback, and blew back completely through both MAs again. After that, this pullback would have scared me off.) As it turns out, this trade was probably the trade of the week. Kudos to Arha for seeing it.


5) 10 Touch. Very steep MAs. Nice two bar pullback to the 10. The question here is figuring out the entry point, since the 10 is so steep. This is a picture perfect 10 Touch trade. The only way it could be better is with some confluence. (Note to self, I should probably run this one on the simulator to see what the MA actually looked like in real time. The extremely long bar probably distorts the real time picture.)

6) 10 Touch. Loser. MA is still plenty steep. And this one comes after a very big move. But, it’s the fourth bar of a pullback (though technically only two bars in a row to the touch). And it’s the second 10 touch after (5). With the S/R line just above this touch, I would have been very tempted to take it.

7) 50 Bounce. Winner. This is probably by the rules, but there’s much going against this trade. The 50 is flattening and the MAs are diverging. There’s a Weekly Pivot and An SR line acting as immediate support following the bounce (and in this case the S/R line acts as a pretty good support area). And its now after London close. Ultimately I think this is no trade.

(Apologies for the charts being out of order)
Attached Image (click to enlarge)
Click to Enlarge Name: 11508143_ MBT MetaTrader 4 - GBPUSD,M15-2.jpg Size: 74 KB
Attached Image
  • #4,059
  • Feb 16, 2011 9:12pm Feb 16, 2011 9:12pm
Quoting micmic
That's commendable self-control. So on average you get 1-2 trades every day ? Do you watch several pairs ?

Below I attach a chart of yesterday's GBPUSD activity with my take on possible entries. I'd appreciate any comments.
I wrote my chart up before I saw this. Here are my comments on what you have here.

1-3 are before London opening, and thus not strictly dance.

On 3, the rule that the pullback to the 35 or 50 must be two bars is new. It's not in the original dance rules, or in the original thread, and lots of people do not observe it. I've read the rules in the latest manual a few times, and I'm not entirely certain that Clay means it. I think this is an OK, but not a great trade.

6 and 7 are bounces off the M5. Clay includes the M5 as one of the MAs in the first manual, but I don't think he actually recommended using it. (I could be wrong on this.) I think some others here don't even put it on their charts. Recently, there seems to be more interest in using it to get in on really quick, big moves. I'm interested in the idea, but I haven't really started looking for these touches yet.

8-11 These would all be counter-trend entries. You raise an interesting question here. Dance says go with the trend of the moment, which is defined by price in relation to the 35/50. But is it possible that there is a steep enough move, even with price on the other side, so that you would go against the Dance defined trend? I'm not sure about this. If there is, I would think it has to qualify as an "advanced" technique.

What you have generally looks good to me. And you have an economy with words that I regrettably lack. If you put up a chart like this in the future, I'll chime in with comments, and do my own analysis on another pair. That's fine with me. In my opinion, the more charts, the better.
  • #4,060
  • Feb 16, 2011 9:57pm Feb 16, 2011 9:57pm
duffypratt thanks, i was just writing exactly the same post. I totally agree with you! It is good when all of us see one and the same right

micmic i'm trying to stick with some sort of this, on a demo there are some more trades, i even try some sort of martingale system when the trend goes, but only on the demo. On real i trade only AAA+ dance signals, it is so less stressful for me and for my account
Better to lose opportunity, rather than capital !
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