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Extreme TMA System

  • #12,121
  • Edited 8:42am Jul 26, 2012 8:09am | Edited 8:42am
Chart of EUR USD now, entry short marked. Was as said Alorente's system entry, slope was down, touched and crossed the upper , H1, all ranging, yadayadayyada

So, now i am close to 180 pips down. What you guys would do, keep recovery, or get out|?

thanks a lot


ps. Thanks to all the answers so far, I read them all many times. TRainman, i do know what you talk about (aka fibonacci) but I am trying to master Alorente's system first, which already proves to be a challenge. Then I will gladly add Fibbonacci, daily pivots, etc.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd.jpg Size: 295 KB
  • #12,122
  • Jul 26, 2012 8:13am Jul 26, 2012 8:13am
Quoting fedesch
Hello,

Thanks for your detailed analysis. It does help.

However, what you said about the bands aligning on the bottom for EURUSD has been happening for the last 2 weeks and it didn't always go to the opposite band.

I guess my take on this is ALWAYS expect to have alignment of PA with bottom/top of bands at least in the TF that you are trading and confirm trend with at least 2 higher TF.

Thanks
Exactly because it was alreay 2 weeks, where this push was cooking, I was extra carefull against any short.

Again: this move up should be a retracement. News caused it to be a reversal. What should be a weekly (or even 2 weeks) move, happened in 1.5 days. That is NOT normal, but it does happen. For this reason you need to always keep a healthly SL or if you trade with recovery, use small positons in order to be able to double up. Al and others explained this several times, so no point to repeat it.

Unfortunately it's not possible to backtest this system, but if you'd be checking slop (which is angle of the channel) you'd see, that all this does for you is to direct you into trading with the trend. Which trend you wanna follow is your decision. Check montlhy. You'll see that this move up last 2 days doesn't even show on it. So, is it time for retracement on monthly? No way. Is it time for retracement on h1? Way to late. H1 and H4 reached targets. There you might start searching for retracements. But D1, if price remains on this levels, might just start to be interesting for long. So, can you tell me, where the trend points to? It depends on the time frame you are trading. But good trader will position his trades with confluence between several time frames in order not to trade against the trend to heavily.

Is it complicated? Not really. In fact, it's so simple, that it's to complicated for most people to understand, how simple it is. The more you'll be searching for a system on the market, which will give you unlimited money, the more you'll loose. Free your mind and follow the chart. Price action above all. TMA is only an orientation point for me. Trading is done by trader, not by system. Point being: system cannot own trader. Trader must own system. By own I think have it and completely master it.


BR
  • #12,123
  • Jul 26, 2012 8:34am Jul 26, 2012 8:34am
Quoting thewriter30
Chart of EUR USD now, entry marked. Was as said Alorente's system entry, slope was down, touched and crossed the upper , H1, all ranging, yadayadayyada

So, now i am close to 180 pips down. What you guys would do, keep recovery, or get out|?

thanks a lot


ps. Thanks to all the answers so far, I read them all many times. TRainman, i do know what you talk about (aka fibonacci) but I am trying to master Alorente's system first, which already proves to be a challenge. Then I will gladly add Fibbonacci, daily pivots, etc.
You sold at the bottom of TMA on all TF excluding <H1. What you expected?
TMA lines is most important on this system, it show you when PA is in extremum.. try to understand that and everything will be clear

Greetings.
  • #12,124
  • Jul 26, 2012 8:38am Jul 26, 2012 8:38am
Quoting thewriter30
Chart of EUR USD now, entry marked. Was as said Alorente's system entry, slope was down, touched and crossed the upper , H1, all ranging, yadayadayyada

So, now i am close to 180 pips down. What you guys would do, keep recovery, or get out|?

thanks a lot


ps. Thanks to all the answers so far, I read them all many times. TRainman, i do know what you talk about (aka fibonacci) but I am trying to master Alorente's system first, which already proves to be a challenge. Then I will gladly add Fibbonacci, daily pivots, etc.
Hard question. The answer is really not simple. But if I try to explain:
- price reached h4 top and previous top (potential double top). So it's at big resistance. Also news for US was great, BUT EURUSD can easily go further up to about 1,2480 (61.8% of last drop)
- current slope is above 0.25. It's 0.43 so it's also above 0.40 which is the modification Al suggested the other day. This makes any short wrong at this moment
- further recovery depends for me mainly on the fact, how big is position relative to the account. If you can afford to go to level 4, you might hold it as weekly trend is down. If you can't, you shouldn't be in the position anymore anyway.

I'm sorry I cannot give you any more comforting answer. I hope somebody more TMA oriented (especially if she/he masters rocovery trading) can give you a better answer than me.

BR
  • #12,125
  • Edited 9:02am Jul 26, 2012 8:39am | Edited 9:02am
Speculative day today. There is some setups in progress on EU, GU, AU...
My question is, it is time to short? or wait till tomorrow..

Greetings.

edit: -1,4% -> wait till tomorrow
  • #12,126
  • Jul 26, 2012 8:50am Jul 26, 2012 8:50am
tp0440, thanks mate. Now the fibonacci is D1 right? i get 61.8 at 12450 not 80, 30 pips diff, just to be sure i follow your analysis.

It's pretty interesting what you said. Yes i could hold lvl 4 though it'd be the second in a row

You have sort of a hybrid right? i could search for your approach in prev. threads

Ned: I see what you mean....NOW, obviously i still am learning Alorente's system...thanks
  • #12,127
  • Jul 26, 2012 9:04am Jul 26, 2012 9:04am
Quoting tp0440
Exactly because it was alreay 2 weeks, where this push was cooking, I was extra carefull against any short.

Again: this move up should be a retracement. News caused it to be a reversal. What should be a weekly (or even 2 weeks) move, happened in 1.5 days. That is NOT normal, but it does happen. For this reason you need to always keep a healthly SL or if you trade with recovery, use small positons in order to be able to double up. Al and others explained this several times, so no point to repeat it.

Unfortunately it's not possible to backtest...
Thanks!!
  • #12,128
  • Jul 26, 2012 9:38am Jul 26, 2012 9:38am
Quoting thewriter30
tp0440, thanks mate. Now the fibonacci is D1 right? i get 61.8 at 12450 not 80, 30 pips diff, just to be sure i follow your analysis.

It's pretty interesting what you said. Yes i could hold lvl 4 though it'd be the second in a row

You have sort of a hybrid right? i could search for your approach in prev. threads

Ned: I see what you mean....NOW, obviously i still am learning Alorente's system...thanks
No problem.

1,2480, give or take a few pips. And actually, based on h4. Since I'm h1 trader, I always look after h4.

I don't know what will happen. Current position is mid-swing. It can crash back down if the market will percive Draghi comments as irrelevant in the future or more probalbe, good US data can cause QE3 to be delayed. But most probably, before anything happens, price needs to consolidate. In TMA terms it means, h1 TMA must come closer to h4 TMA. If it continues to grind higher, h1 channel will change it's position (move up) and price can reach higher levels. If price will consolidate and stall, than short trades will become more probable to succeed.

I created a hybrid, yes. TMA is not good for trends, so I basically mixed MA and TMA. But let me say this: copying one system is not te way to succed. Al provided his system, but as long as I was not able to explain this sytem to me the way I see the market, I was loosing. I got into big problems not so long ago.

You've got one chance. Tommorrow is Friday and if (I say IF) it'll be profit taking day, price can collapse in NY session. But this is a "if" and to where price will go till then - no idea. Like I said: all my targets were met (h4 ATR3.5 which I use was hit at 1,2314, which is nuts; just compare how much time it took for price to reach low and how fast it went up).

All I can really do is to tell you one wisdom my friend told me (a succesful trader for 15 years). Remember very well, how you got into this problem and how much it hurt. Write it down. Next time you'll want to enter a position, read it. Read it every day until you become a succesful trader. I was down 500 pips at that time... Just to share with you, that we all make mistakes. Mine was hell of a lot bigger than your current one.


Good luck!

BR
  • #12,129
  • Jul 26, 2012 9:42am Jul 26, 2012 9:42am
Quoting thewriter30
Chart of EUR USD now, entry short marked. Was as said Alorente's system entry, slope was down, touched and crossed the upper , H1, all ranging, yadayadayyada

So, now i am close to 180 pips down. What you guys would do, keep recovery, or get out|?

thanks a lot


ps. Thanks to all the answers so far, I read them all many times. TRainman, i do know what you talk about (aka fibonacci) but I am trying to master Alorente's system first, which already proves to be a challenge. Then I will gladly add Fibbonacci, daily pivots, etc.
Here is the EurUsd chart. You can see the Daily TMA (Blue) and the H4 TMA (Purple). As you can see, price is not even to the midpoint of the Daily TMA. Price was due to revisit the upper band of the Daily TMA since it had lingered at the bottom band for a long time. I will probably short at the 200 MA which is approximately at centerline of the D1 TMA. You must also wait for the H4 TMA to climb and start turning down again before you short.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd.gif Size: 57 KB
Observation is the path to discovery.
  • #12,130
  • Jul 26, 2012 9:54am Jul 26, 2012 9:54am
Quoting Alorente
Here is the EurUsd chart. You can see the Daily TMA (Blue) and the H4 TMA (Purple). As you can see, price is not even to the midpoint of the Daily TMA. Price was due to revisit the upper band of the Daily TMA since it had lingered at the bottom band for a long time. I will probably short at the 200 MA which is approximately at centerline of the D1 TMA. You must also wait for the H4 TMA to climb and start turning down again before you short.
Hello
Thank you for inform. Approximately is 1.2400 short am ı right?
Regards.
Bülent
  • #12,131
  • Jul 26, 2012 9:55am Jul 26, 2012 9:55am
Here is an example of a near ready Long trade. As you can see, UsdCad is below the H4 TMA lower band (Purple) and almost on the D1 lower band (Blue) All you need now is for the H1 TMA (Orange) to drop to the lower H4 band to enter long. Target will be the H4 upper band or if it is still strong, you may want to hold till the upper D1 band.
Attached Image (click to enlarge)
Click to Enlarge Name: usdcad.jpg Size: 156 KB
Observation is the path to discovery.
  • #12,132
  • Jul 26, 2012 9:58am Jul 26, 2012 9:58am
Quoting bulent
Hello
Thank you for inform. Approximately is 1.2400 short am ı right?
Regards.
Bülent
Yes. 1.24 is the 200 MA, but you have to wait for the H4 TMA to rise before you enter short. I like to wait till it just slightly begins to turn down again, together with the H1 TMA.
Observation is the path to discovery.
  • #12,133
  • Jul 26, 2012 10:32am Jul 26, 2012 10:32am
Here is a nice short almost ready. The M15 TMA (White) above the H1 TMA (Orange). The H4 TMA (Purple) above the D1 TMA (Blue). We just need the H1 TMA to climb a bit closer to the H4 top band and short at your pleasure, probably tomorrow. Target: The D1 bottom band at 0.9930.
Attached Image (click to enlarge)
Click to Enlarge Name: audusd.jpg Size: 132 KB
Observation is the path to discovery.
  • #12,134
  • Jul 26, 2012 10:58am Jul 26, 2012 10:58am
Quoting Alorente
Here is an example of a near ready Long trade. As you can see, UsdCad is below the H4 TMA lower band (Purple) and almost on the D1 lower band (Blue) All you need now is for the H1 TMA (Orange) to drop to the lower H4 band to enter long. Target will be the H4 upper band or if it is still strong, you may want to hold till the upper D1 band.
Dear Sir

USDCAD is H1 chart is right? Are we waiting same chart to lower h1 tma bant will cross lower h4 tma bant and buy is right? Sorry do we check to tma slopy ind should be > -0.40 ??
Best regards.
Bülent
  • #12,135
  • Jul 26, 2012 11:54am Jul 26, 2012 11:54am
Quoting bulent
Dear Sir

USDCAD is H1 chart is right? Are we waiting same chart to lower h1 tma bant will cross lower h4 tma bant and buy is right? Sorry do we check to tma slopy ind should be > -0.40 ??
Best regards.
Bülent
Yes. The chart is H1 TF. You can buy when price touches the H1 lower band or when RSI crosses the Red trendline. It will probably be tomorrow afternoon.

Target price: Top band of H4 or Top band of D1. I am holding it till D1 Top band.
Observation is the path to discovery.
  • #12,136
  • Jul 26, 2012 3:53pm Jul 26, 2012 3:53pm
Quoting Alorente
Recovery works extremely well if you respect these two conditions:

1- Enter small positions relative to total equity (2% to 5%) so you can continue to trade while one or more positions are in recovery.

2- Always, always and that means always trade in the direction of the longer trend so the odds of your position returning to breakeven is extremely high. Determine the trend by the Weekly and Daily TMAs.

Using Recovery without complying with one or both of these conditions can be dangerous to your trading health.
Great points. Perhaps one compromise between SL vs. Recovery would be to use a SL if you enter a counter-trend trade that goes against you, and Recovery for trades with the trend.
  • #12,137
  • Jul 26, 2012 4:14pm Jul 26, 2012 4:14pm
Quoting Alorente
Top band of H4, H1 and M15 together is my signal to short when there is room for price to move to the bottom band on D1 and W1. Target price is the bottom band of H4.

Bottom band of H4, H1 and M15 together is my signal to go long when there is room for price to move to the top band on D1 and W1. Target price is the top band of H4.
Wow, what a simple eye opening post! So glad you are back Al.

I've had really good success for the past 2 months, but most of my trades went against me at first (50-100 pips) before coming around. I knew I was getting in too soon, but was struggling with figuring out better entries. I do believe this advice is what I needed. Thanks again..
  • #12,138
  • Jul 26, 2012 4:16pm Jul 26, 2012 4:16pm
Hello
Please attach a nrp rsi indicator.
Thank you very much
Michaela


Quoting Alorente
I tried this indicator but the arrows are drawn several bars back from the current bar, which in my view makes this indicator useless. The history of the chart looks good but it is not the same result in real time.
  • #12,139
  • Edited 5:20pm Jul 26, 2012 4:55pm | Edited 5:20pm
Quoting Alorente
Here is the EurUsd chart. You can see the Daily TMA (Blue) and the H4 TMA (Purple). As you can see, price is not even to the midpoint of the Daily TMA. Price was due to revisit the upper band of the Daily TMA since it had lingered at the bottom band for a long time. I will probably short at the 200 MA which is approximately at centerline of the D1 TMA. You must also wait for the H4 TMA to climb and start turning down again before you short.

Wow great simple illustration of the system. I too shorted the EU last evening because of just looking at the H1 band. I got stopped out for 30 pips but jumped the ECB news release for a 70 pip profit.

I have been trading the system with pretty good success for the past several weeks but am still learning. I am still not real clear on a couple of questions about the system still.

1. If trading time frames < 4h does the price have to make it to the 4h TMA line for a valid entry? For example, if trading on the 1h charts can the price just be in the the bottom half of band if going long & the top half if going short? Of course all of the other conditions such as slope direction & level have to be met.

2. When in a trade and looking to exit do we now exit longs when we slope drops below .4 & shorts when slope is rises above -.4?
Attached Image (click to enlarge)
Click to Enlarge Name: audjpy tma example.gif Size: 85 KB
  • #12,140
  • Jul 26, 2012 5:43pm Jul 26, 2012 5:43pm
Quoting Alorente
Here is a nice short almost ready. The M15 TMA (White) above the H1 TMA (Orange). The H4 TMA (Purple) above the D1 TMA (Blue). We just need the H1 TMA to climb a bit closer to the H4 top band and short at your pleasure, probably tomorrow. Target: The D1 bottom band at 0.9930.
Hi Al,

Thank you for the clear examples of how setups should look like for this system. Evidently I needed this reinforcement around the movement of the TMA bands and their alignment.

Saludos
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