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The Confession & The Secret

  • #101
  • Oct 26, 2011 12:23pm Oct 26, 2011 12:23pm
Yes, I see that you are looking to stress test this week. Keep up the good work I am very interested in your approach on swapping. My only thought is that you are recreating the Market Profile in many ways but perhaps you have good reason to not use it over your custom indicator? I am curious on what you will use for exit signals? The double stochastic?
  • #102
  • Oct 26, 2011 12:24pm Oct 26, 2011 12:24pm
I'm also testing the three (3) different Swap methods this week, to help me understand if there is a significant difference between them in real terms. Today, I'm using the Swap on Close method. Tomorrow, I'll use the Swap on RPO method. Yesterday, I used the Swap on Real-Time Ask/Bid Cross method. (see post above in this journal for definitions)

From what I can see thus far, the Real-Time Ask/Bid Cross method is the absolute worse for flat/horizontal markets that refuse to move. My hunch is that the final method will be a blend of RPO and Close methods, but I don't have enough data to support one or the other right now.
Y = MX + B. The most important price level of all.
  • #103
  • Oct 26, 2011 12:33pm Oct 26, 2011 12:33pm
Ok, the last Short was just swapped for a Long. That puts me down -73.3 pips for the day, which is a reasonable recovery simulation. Current trade is now Long and +8.2 pips.

V-Trigger Swap Line is 3837.
Y = MX + B. The most important price level of all.
  • #104
  • Oct 26, 2011 12:39pm Oct 26, 2011 12:39pm
Quoting Ranger911
Yes, I see that you are looking to stress test this week. Keep up the good work I am very interested in your approach on swapping. My only thought is that you are recreating the Market Profile in many ways but perhaps you have good reason to not use it over your custom indicator? I am curious on what you will use for exit signals? The double stochastic?

I'm toying with the idea of using a V-Trigger to V-Trigger process. Close on all V-Triggers, take the profit/loss and re-enter the market on the same V-Trigger. This produces an Always-In methodology for trading. Again, I don't have enough data to support it, but that's why I am testing it.

Another exit could be my Magnitude indicator. Another could be the Fibonacci 127/144/161.8 range.

In the absolute, I will always rely upon the Daily Range and its remaining fuel on-board for whether or not the trade has enough room to be a success, and whether or not the trade has reached a point of exhaustion.

Typically, I'm looking for a minimum of 50 pips a day - bottom line. Whatever it takes to accomplish that task, is what I'll end up using. Usually, it comes down to a blend of techniques, not just one.
Y = MX + B. The most important price level of all.
  • #105
  • Oct 26, 2011 12:43pm Oct 26, 2011 12:43pm
The market profile is a study of volume at price. Google Peter Steidlmayer and Market Profile for a detailed description.
  • #106
  • Oct 26, 2011 12:45pm Oct 26, 2011 12:45pm
Regarding Swap methodology.

If you go look at chart M15 at 1700 and 1715 hrs GMT. You will note that using the Swap on Close, was inferior to using Swap on RPO. Swap on RPO would have not only taken away the last negative swap trade, but it would have actually gave an early start to the next swap trade that occurred between 1715 hrs GMT and 1730 GMT. (I think my charts might be GMT -1)

That's a swap savings of 20 pips. Not bad for a Swap method.
Y = MX + B. The most important price level of all.
  • #107
  • Oct 26, 2011 12:48pm Oct 26, 2011 12:48pm
Quoting Line In Sand
I'm toying with the idea of using a V-Trigger to V-Trigger process. Close on all V-Triggers, take the profit/loss and re-enter the market on the same V-Trigger. This produces an Always-In methodology for trading. Again, I don't have enough data to support it, but that's why I am testing it.
I see. I like that idea of trigger to trigger.
  • #108
  • Oct 26, 2011 12:48pm Oct 26, 2011 12:48pm
FYI. I've been saying GMT, but my charts are apparently GMT -1. I'm using MT4 Quant by Divisa Capital and they are one hour behind GMT. Sorry, for any confusion on chart timing.
Y = MX + B. The most important price level of all.
  • #109
  • Oct 26, 2011 12:54pm Oct 26, 2011 12:54pm
Quoting Ranger911
The market profile is a study of volume at price. Google Peter Steidlmayer and Market Profile for a detailed description.
My mistake. I asked my question poorly. You have information about the location of buyers/sellers. I am wondering if it is part of your charting package, a website, etc. thanks.
  • #110
  • Oct 26, 2011 12:57pm Oct 26, 2011 12:57pm
Typically, when I get out of the Swap Zone, I go make a cup of tea to relax for the day. But, with the news continuing to come out the U.K., I'm not so sure that the cup of tea is worth it.

I'll go ahead and make a cup anyway - keep an eye on the zone for me while I'm gone.
Y = MX + B. The most important price level of all.
  • #111
  • Oct 26, 2011 1:16pm Oct 26, 2011 1:16pm
Quoting Ranger911
Todays move was down to the VAL of monday. Next stop is 3778, then 3725 then 3689.

Or, 4040.

The only thing I can tell you about the V-Trigger, is that it often times likes to show up near the A and C points in Harmonic markets:

http://www.freeimagehosting.net/t/96849.jpg
Y = MX + B. The most important price level of all.
  • #112
  • Oct 26, 2011 1:22pm Oct 26, 2011 1:22pm
Notice the even larger Harmonic forming, after the smaller Harmonic has already formed its point D:

http://www.freeimagehosting.net/t/08aa2.jpg

If the larger Harmonic forms its point C, then at that point, it will have a good chance of once again coinciding with yet another V-Trigger on the day. That formation would then coincide with an SMA8 cross above SMA21 on the M15 time-frame.

Mere coincidence? We'll wait and see.
Y = MX + B. The most important price level of all.
  • #113
  • Oct 26, 2011 1:27pm Oct 26, 2011 1:27pm
Quoting Pinhead
My mistake. I asked my question poorly. You have information about the location of buyers/sellers. I am wondering if it is part of your charting package, a website, etc. thanks.
A traditional reading of a market profile and it's bell curve tells me that price was not accepted on that move up so it explored downwards. I also have stuff in addition to the MP that reads upticks/downticks in FOREX or upvol/downvol in futures when price is moving to a new level. After the move down you can see that no sellers exist below about 3820 so the market makes a distribution and price wanders back up to the bottom of this mornings bell curve or value area low as it is called.

Yesterdays accumulation back and forth over the 1.3910 level in MP terms would signal a possible topping out as price did not look to explore upwards. This morning there was more accumulation at that level then a news spike in price which had no buyers at all so down it went.

I have spent a lot of time learning the MP with a focus on trying to anticipate market direction so this thread is very interesting in that Line In Sand is disregarding direction and just staying on the right side of the trade. I'm still trying to understand what he is up to and how I might apply it.
  • #114
  • Oct 26, 2011 1:45pm Oct 26, 2011 1:45pm
Quoting Ranger911
I'm still trying to understand what he is up to and how I might apply it.
Quoting Line In Sand

...all you need is A Single Horizontal Line, Continued Directional Volatility (Momentum) and a Volatility Trigger. After that, all one needs to do is play the Swap game until the desired profit level is realized. That's the Secret.
No tricks. No magic. Nothing up the sleeve. Just three consistent keys to drawing a line in the sand and then defending that line.

The best offense is a good defense. Defend a good line and profits must come in normally volatile markets. When you run into politically driven markets, or policy driven markets, or politician driven markets, or natural disaster driven markets, then its time to switch to scalping at the Close of larger bars for safety.

I was a Directional trader for many years. I made tons of money doing systematic Directional trading. Defending a line in the market is less stressful and even more profitable in most situations. The only problem one has with this type of trading, is getting the line wrong.

A line with the wrong characteristics will wreak havoc on the account balance, sooner or later. Just take a look at my simulated loss this week. A loss of over 180 pips (simulated) because the line was wrong (of course, I padded the trade with losses and there was plenty of recovery pips available today to cure the problem).

I like Lines. Lines are defensible. What I can not defend very well, is a Direction. I cannot defend a Direction when I have no way to producing a net gain during the Draw phase of a Directional trade. The only way to defend, is to counter a loss with an eventual gain. And, the only way to do that, is to immediately move to the side of profit and look for it to continue. That's where the quality of the line becomes super critical.

Defense, is offense.
Y = MX + B. The most important price level of all.
  • #115
  • Oct 26, 2011 1:50pm Oct 26, 2011 1:50pm
"Defense, is offense."

It might sound very Conservative, but rest assured, I'm an Independent.
Y = MX + B. The most important price level of all.
  • #116
  • Oct 26, 2011 1:54pm Oct 26, 2011 1:54pm
Quoting Ranger911
A traditional reading of a market profile and it's bell curve tells me that price was not accepted on that move up so it explored downwards. I also have stuff in addition to the MP that reads upticks/downticks in FOREX or upvol/downvol in futures when price is moving to a new level. After the move down you can see that no sellers exist below about 3820 so the market makes a distribution and price wanders back up to the bottom of this mornings bell curve or value area low as it is called.

Yesterdays accumulation.......
Thanks, Ranger. One of the clearest explanations I've read about the relationship between price movement and buyer/seller interest and pressure (or lack thereof). I'll explore it further with Steidlmayer, etc. Thanks again.
  • #117
  • Oct 26, 2011 2:03pm Oct 26, 2011 2:03pm
Quoting Pinhead
Thanks, Ranger. One of the clearest explanations I've read about the relationship between price movement and buyer/seller interest and pressure (or lack thereof). I'll explore it further with Steidlmayer, etc. Thanks again.
You are quite welcome. You might look at a book called Markets in Profile by James Dalton. He does the best job in describing it clearly.
  • #118
  • Oct 26, 2011 2:06pm Oct 26, 2011 2:06pm
Current situation: Either C forms at a lower level, or B must get extended at a higher level, while remaining under X. If B exceeds X, the Harmonic converts to a simple 127% retracement of XA, which will bring 4022 into play.

http://www.freeimagehosting.net/t/57098.jpg
Y = MX + B. The most important price level of all.
  • #119
  • Oct 26, 2011 2:11pm Oct 26, 2011 2:11pm
Quoting Line In Sand
The only problem one has with this type of trading, is getting the line wrong.

A line with the wrong characteristics will wreak havoc on the account balance, sooner or later.
Yes, this is what made me think of the market profile when you stated this earlier. Wouldn't the accumulation of volume be an obvious requirement for your line? Forgive me, but I am not trying to turn this into a market profile thread.
  • #120
  • Oct 26, 2011 2:11pm Oct 26, 2011 2:11pm
Location of XA leg:

http://www.freeimagehosting.net/t/7c7f8.jpg
Y = MX + B. The most important price level of all.
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