Range Bar Trading with Nexas

SC,

Your mom indi seems to be an amazing tool really. It even shows divs (very accurately) .
Everything altogether combines into a fine system, hope this package comes with the manual though lol!

Ok, just entered. Mom confirms, stoch doesn't...
Edit: also against div.
Edit2: +7pips

Another win +7 pips .
Mom confirmed, stoch didn't, no signs of divergence.
Easy trade, even for me, haha!

Nice strategy.
I have been extensively testing RENKO material in the past.
Came to the conclusian I could be in and out with profit before a block would even indicate there was a trade setup.

THAT is the only point I have against it.

So I scalp the M1 and happy with my results. Call it noise trading, lol.

Nice part about Renko is that is eliminates all the little whipsaw that makes SOOO many traders nervous.

Good luck and you are doing fine, Nexas.

Hi All,

Just to let you know that I am going to be doing some travelling this coming week so will find it difficult to day trade.

I will try to post updates but they will be mostly my mid term trades.

Nexas

With price being quite bearish since the London open today, I took a half size trade based on 4rg. Even though the 8rg had not yet lined up it's MA's, the momentum indie (Thanks SCJohn) was very bearish.

Price did make it to within 3 pips of target but was very much non committal for far too long. So I choose to move my stop to BE and was taken out.

Next...

Hi Diamondbbdw and Krisdetrader,

I know you're using the momentum indicator so I thought I'd use this morning's trades as an illustration to make sure we're on the same page. Decided to trade the early session from my hotel room on a Wifi connection. Boy, do I miss my 20 Mbps ethernet hard-wired connection at home! Lot's of latency and therefore slippage here but still a pretty good morning. Have a 10 am EST meeting so I'm not going to trade the U.S. session.

I'm attaching the 4 pip and 8 pip charts.



Several points on how to use momentum:

A. At point A, the 8 bar EMAs are not lined up yet, but lot's of mom reasons to take this pullback. freebee Mom on the 8 bar chart is still making lower lows and lower highs and, more importantly, proprietary mom on the 4 bar chart has just painted a 5 wave up momentum in a downtrend (See my earlier post about "reloads."). Unfortunately, I sat down a few minutes too late to get this one but did get in a few pips later on a thrust trade at point B.

C. Now the 8 bar EMAs are on board and everything else is a go. I only took a partial on this one as I was already in the earlier thrust trade which ended up making me 15 pips.

D. The pullback at point D had several problems. Freebee mom has painted a higher low and an equal high. Stochastics on the 8 bar are moving smoothly up and there is a up divergence on proprietary mom on the 4 bar. Passed.

E. The pullback at E shared D's problems and added a higher high on the 4 bar's proprietary mom. Passed.

F. Was tempted. Now had a second hit into the 50 SMA but the mom problems were still around and stoch was still moving up on the 8 bar.

G. Now we had another reload pattern on proprietary mom (5 up mom waves in a downtrend), Both stochs (%k and %d) on the 8 bar were overbought, and we had a double pump pattern on the 4 bar stochastic. These overruled 8 bar freebee mom which still was voting no. Took the short and made about 12 pips by the end.

Like Nexas, I seldom let one condition or indicator dictate. It's the overall net of the situation that rules.

Hope this helps.

Thanks SC for the Graphic analysis. I may need to go through it more than twice to glean and understand all that's in it, but already have some helpful info I believe.

I thought I had a good one at 10:20 am NY time. The 8rg chart shown had a 6 bar retracement after no significant retrace in hours. Should have been a slam dunk. However, not so this time.

After reading your review I noticed the mom indie on MT4 was showing HH & HL's. I'm thinking that is what you were referring to?

The killer aspect of this trading method is the short stops. I ate 7 pips on this loss. Barely a sneeze compared to 99% of other methods out there.

Also if you have other non proprietary momentum indies for MT4, would appreciate a post about them.
Thanks,
Darryl

Hi SC,
Many thanks for your post. It has been a good trading day. Most of the time (apart from the above) mom was in line with the entries, cannot say the same for stoch .
I am definitely trying out half-close-half-runs from tomorrow.

Yes Darryl, that's exactly what I was referring to. However you don't even have to wait for the turn down on the higher high to know that momentum was not on your side. If you look at the picture, as soon as price reaches the price pointed to in red, you know a higher high is now guaranteed (you already have a higher low). So, at this point, momentum is against you.

Like I said earlier, I don't make decisions based on a single indicator, but it takes a ton of other good stuff to make me ignore bad momentum.



Also note that my example of the freebee momentum indicator involved using it on the guide chart (8 pips) and not on the trigger chart (4 pips). I look for momentum direction confirmation on the guide chart and only momentum patterns (divergences, double convergences, 5 wave counters) on the trigger chart itself. The proprietary momentum indicator does a much better job of pattern identification. If the 8 pip is the trigger chart and all I had was the freebee momentum indicator, I would set it up on a higher level chart (~12 to 16 pips) and look for the direction confirmations there.

On your other question, I'm sorry I don't use MT4 and know nothing about it.

[quote=scjohn;5424596]Yes Darryl, that's exactly what I was referring to. However you don't even have to wait for the turn down on the higher high to know that momentum was not on your side. If you look at the picture, as soon as price reaches the price pointed to in red, you know a higher high is now guaranteed (you already have a higher low). So, at this point, momentum is against you.

Like I said earlier, I don't make decisions based on a single indicator, but it takes a ton of other good stuff to make me ignore bad momentum.

Also note that my example of the freebee momentum indicator involved using it on the guide chart (8 pips) and not on the trigger chart (4 pips). I look for momentum direction confirmation on the guide chart and only momentum patterns (divergences, double convergences, 5 wave counters) on the trigger chart itself. The proprietary momentum indicator does a much better job of pattern identification. If the 8 pip is the trigger chart and all I had was the freebee momentum indicator, I would set it up on a higher level chart (~12 to 16 pips) and look for the direction confirmations there.
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Great input. Thanks for your help.

I'm currently sitting on the sidelines as there was a news item causing the market to spike, and since that time momentum has been lackluster.

Movement today, has been fiddle around with an occasional spasm. The few set up like situations have either been out of balance R:R or no momentum.

Will have to restudy scjohn's take on trading ranging markets. Already today, what I recall from his posts, have kept me out of trades. That's a plus.

Hi All,

Just a quick update to let you know that I am still in the Long EURJPY and USDJPY although both are doing nothing much to write home about.

There are a few other good opportunities out there, but I missed the entries so I am left holding these for the time being :-)

How are you all doing?

Nexas

Got in this 8rg bar since 8:10am UK. Just stopped out after nearly an hour.

This week has not been very productive as pa has been quite muted. It almost looks as if the euro is returning to a 100 pip per day pair. Hope not.
Darryl

Here's the same chart with the Momentum indicator. Note the lower high and lower low and the fact that momentum is below the zero line (being below the zero line is not terrible but being below with a lower high and lower low preceding is not so hot.



I've gotten a couple of interesting private messages asking me not to talk about "indicators" so much because indicators are "lagging" and that we should trade "pure" price.

So let's clear up a few things. The Nexas setup, which I have always maintained is a good one, uses from 5 to 8 indicators (8 if you use the EMAs on the 8 pip to filter trades on the 4 or 5 pip).

"Pure" price is the actual price at an instant in time with no other information related to price. Any time you consider any derivative of price, you're looking at an indicator (and remember, indicators "indicate", they do not predict).

The first indicator we use in a Nexas trade is a candestick (a derivative of price that is a function of either price and time, or price and transactions (ticks), or price and range of motion (range bars). It is a lagging indicator. Depending on the setting, the opening price can lag the closing price considerably.

The next indicator we use are trendlines which are derivatives of candlesticks which are derivatives of price and are much more lagging than either candlesticks or "pure" price.

Finally, we add 3 to 6 moving averages which are also price derivatives. The 60 and 100 EMAs lag price considerably (especially if you're using the 8 pip chart as a guide for the 4).

The difference between the indicators used in Nexas trades and ones such as momentum and stochastics is complexity of calculation (which the computer does for me instantly). But they are all simply price derivatives (in the case of trendlines, second derivatives).

One reason complex indicators were developed was to "indicate" with less time lag than moving averages. The longest lag I use in any indicator is 14 bars which is almost an order of magnitude less lag than the 100 EMA.

I'm not saying you should use complex indicators if you're not comfortable with them, but it should be noted that, as soon as you consider any information related to price that is not just price at an instant in time, you're using an "indicator" (and most likely a lagging one at that).

I've gotten a couple of interesting private messages asking me not to talk about "indicators" so much because indicators are "lagging" and that we should trade "pure" price.

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It's obvious (to me at least) that you are attempting to help, and have some sage advice, so what you are doing is OK with me, for what that's worth.

worked great on the flip of the ema's on the 8 range last 2 hours... very pleased with the results.

nexas, on ninja trader, how are you getting the best price? for me, i just look at the chart and put in the best estimated price if it were to break the trend line i draw out....

also, on the tp and sL, do you always just do it manually? cuz a preset wouldn't work since it's different everytime...

Hi Chiba San,

I am not sure I understand your question.

I execute with market orders so I watch price on the chart and what ever that happens to be on my broker I accept.

Maybe you could elaborate and I will be able to better answer your question.

Thanks

Nexas

hi nexas,

apologies, it was something very silly.

i'm used to using MT4, so the Ninjatrader platform is very new to me. I funded an interactive brokers a/c and use ninjatrader as a front. Within the Control Center, and under order type, I left it on "Limit", therefore, the price doesn't change/update or fluctuate. you have to manually put in a price. I've changed that field from "Limit" to "Market" now. Which I believe will just let me buy or sell at the current Market price.

I reckon you are not pre-entering a take profit or stop loss? Within the Positions tab of the Control Center, I just have that pre-right clicked to be ready to close the order when it hits the SL or TP.

hi nexas,

have you found that this strategy is far better in the early parts of the USA session over the UK session?