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  • #9,321
  • Dec 3, 2012 8:18am Dec 3, 2012 8:18am
I've learnt from many of the helpful posts on here just how important it is to practice practice practice. Backtesting is obviously a key part of this but it can be problematic.

I've tried using a trade simulator script on MT4 with mixed results. Whilst the concept is very good, I have noticed that the TDI Indicator doesn't always print as it should resulting in missed / poor trades.

I've also tried backtesting by scrolling the charts back in time and then using F12 to move forward one candle at a time. This works flawlessly but does have an inherent problem. Each time you move forward one bar you get to see the completed candle rather than how the candle would have looked at the start of the hour. This obviously sways judgement as you already know what happened during the hour.

Is there a way of improving the backtesting method ?
How does everyone else do their backtesting ?
Clearly the more accurate and realistic the backtesting, the better your trading skills will develop.
  • #9,322
  • Dec 3, 2012 8:19am Dec 3, 2012 8:19am
[quote=Phx62;6254458]The ScorpS,
You are exactly right.....hundreds of chart hours watching and test the way EU moves under different circumstances....even then you will miss few but overall you can succeed after learning and then building a consistent trading plan....in writing......with hard and fast rules.
Success to you.


Thanks, this is really encouraging, I have the system , if I fail , its only me, so I am following through until I see success , with experience members' helping , I think I will find the way, if takes the hardest work ever, I'm willing to and listening, I'm still loosing most of the times, but am taking notes on everything from winning to loosing, money management, psychology and etc

People are using the system and profiting, so discipline would pay off at the end.

Time to study, newbie, c u
I Have Learned to Take Some Losses to Make Profits
  • #9,323
  • Edited Dec 4, 2012 7:17am Dec 3, 2012 4:03pm | Edited Dec 4, 2012 7:17am
Quoting Defiant
Hi Phx62

Greetings to you and to all other traders that are following this thread from Croatia.

I have a question regarding your 6th trade (short after BE) on this chart.

[color=black][font=Verdana]1. What were your thoughts when you entered this trade? (Since I seen you have entered before price had broken through last few candles lows. TDI was flat but still did not cross. P.S. I personally would have entered on second...
Defiant,
If I may, let me give you a gem that I picked up a couple of years ago that has really helped my trading during the London session. Normally the EU high or low of the London session will be set within the 1st two hours of the session.....example....go back through your own charts beginning with yesterdays trades and mark out the London session for the past 20 days (on my charts the London session is outlined by the lime green boxes). Find the high and low of the session. Now, look at when the first high or first low of the London session was set. In the past 20 days, the high or low was set 17 times by the 1st 1 hour candle...2 times it was set by the 2nd candle and 1 time it was set by the 3rd candle. Once the high or low are set, you can depend on price going the opposite direction until it nears the Average Daily Range (obviously there are waves in price as it reaches the ADR) but almost always, the high and the low of the day will occur during the London session. When this does not happen it is usually because of a strong news release that moves price very quickly. With the knowledge that the high and low of the day will nomally be set during London, you can depend on price trending for several candles in one direction once the high or low is set. Then all that is left to do is determine which direction and when to enter a trade.
Now, to answer your question, once price pulled back on the 1st candle and I closed the opening trade at BE and the when the 2nd candle of the session turned red, I was confident that price would continue down, so I entered short. The ADR at the time was less than 80 pips and price was already about 20 pips below the Asian high, so I set a 40 pip target that was hit. The only thing I used the TDI for on this trade was to see if it was above or below the 50 line and which way the yellow line was pointing. All 3 lines were below the 50 and the yellow was sloping down.
I use the 200 EMA on several time frames to determine serious resistance...I also mark out S&R on the daily time frame which tends to be very strong....sometimes I also use lines from the H4 time frame. I also use some fib levels once an impulse leg and pullback complete.
Hope this helps. Many pips to you.
  • #9,324
  • Dec 3, 2012 4:17pm Dec 3, 2012 4:17pm
Quoting rorieu
Hi PHX

A crazy question I know (!) but is it possible for you to summarise what you regard as a "A+++" setup as

opposed to say, a "A++" ?

Thanks

rorieu
An A+++ trade is one which meets at least 95% of the rules of my trading plan....an A++ trade would be when 85 to 90% of the criteria is met...etc. I have 8 hard & fast entry/exit rules and 11 "if this happens then I do this" criteria that determine for me if and when to enter and exit a trade. Some of the rules apply to money management, etc. Each trader must develop his own plan. My rules work for me and my mentality but may not work for anyone else.
  • #9,325
  • Dec 3, 2012 4:25pm Dec 3, 2012 4:25pm
Quoting stephen77
I've learnt from many of the helpful posts on here just how important it is to practice practice practice. Backtesting is obviously a key part of this but it can be problematic.

I've tried using a trade simulator script on MT4 with mixed results. Whilst the concept is very good, I have noticed that the TDI Indicator doesn't always print as it should resulting in missed / poor trades.

I've also tried backtesting by scrolling the charts back in time and then using F12 to move forward one candle at a time. This works flawlessly but does have an...
I have found that forward testing to be much more beneficial than back testing. You have pointed out some of the drawbacks of backtesting. That is fine on the weekends. During the week, demo trade on smaller time frames like the M15 or M5 and you can get a feel for the market. Even better, open a small live account and forward trade very small lots (penny lots, dime lots, etc). That gives you a real feel for the market and helps your decision making because you have some money on the line, even if it is pennies or dimes (or whatever denomination of currency you use). I suggest you check with your broker and trade the smallest amount you can trade for a while. It is good training.
Success to you.
  • #9,326
  • Dec 3, 2012 5:59pm Dec 3, 2012 5:59pm
A++++ post:
Do not just read it, but study every detail written and mark these as what you will be looking for in your charts every trading day. Internalize these.
Attached Image (click to enlarge)
Click to Enlarge Name: S3 EU post 9328.png Size: 361 KB
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #9,327
  • Dec 3, 2012 9:19pm Dec 3, 2012 9:19pm
Quoting emmanuel7788
A++++ post:
Do not just read it, but study every detail written and mark these as what you will be looking for in your charts every trading day. Internalize these.
Thanks for the kudos....we really miss your input on this thread....you give a little different perspective than some of the rest of us and that is refreshing and very helpful to newbies...Thanks again.
  • #9,328
  • Dec 3, 2012 9:50pm Dec 3, 2012 9:50pm
Quoting Phx62
Defiant,
If I may, let me give you a gem that I picked up a couple of years ago that has really helped my trading during the London session. Normally the EU high or low of the London session will be set within the 1st two hours of the session.....example....go back through your own charts beginning with yesterdays trades and mark out the London session for the past 20 days (on my charts the London session is outlined by the lime green boxes). Find the high and low of the session. Now, look at when the first high or first low was set. In the past...
Me likes this post...Thanks!
  • #9,329
  • Dec 4, 2012 3:57am Dec 4, 2012 3:57am
Quoting Phx62
Defiant,
If I may, let me give you a gem that I picked up a couple of years ago that has really helped my trading during the London session. Normally the EU high or low of the London session will be set within the 1st two hours of the session.....example....go back through your own charts beginning with yesterdays trades and mark out the London session for the past 20 days (on my charts the London session is outlined by the lime green boxes). Find the high and low of the session. Now, look at when the first high or first low was set. In the past...

Thank you PHX62

I appreciate your experience and willingness to share it.

Many pips to you too.

Cheers
  • #9,330
  • Dec 4, 2012 7:18am Dec 4, 2012 7:18am
Quoting Phx62
Thanks for the kudos....we really miss your input on this thread....you give a little different perspective than some of the rest of us and that is refreshing and very helpful to newbies...Thanks again.

....Yes, Emmanuel, please visit here, more often. Your overall view of the Forex market is unmatched.
There are some very knowledgeable and helpful contributors to this thread - you, Phx62, dee50 and of course X-Man, are at the top. (IMHO)
  • #9,331
  • Dec 4, 2012 8:26am Dec 4, 2012 8:26am
Quoting Phx62
I have found that forward testing to be much more beneficial than back testing. You have pointed out some of the drawbacks of backtesting. That is fine on the weekends. During the week, demo trade on smaller time frames like the M15 or M5 and you can get a feel for the market. Even better, open a small live account and forward trade very small lots (penny lots, dime lots, etc). That gives you a real feel for the market and helps your decision making because you have some money on the line, even if it is pennies or dimes (or whatever denomination...
I appreciate the advice Phx62. Forward testing on smaller time frames is not something I had considered before. I realise that there are likely to be many more signals on these but, as you say, it will help with my decision making process and developing a familiarity with the character of the pair.

I like the suggestion of trading live but with penny lots as well. Why didn't I think of that ? Great idea - Thank you.
  • #9,332
  • Dec 4, 2012 10:30am Dec 4, 2012 10:30am
I'm trying to make sure that I fully understand what the green TDI line is telling us. I know that as each new candle starts, the last bar of the green TDI is printed based on what's gone before. But, I can't quite see how.

In the attached image, at the very beginning of candle 2, line A is printed and is a result of what happened during candle 1
This line A slopes steeply upwards despite overall PA of candle 1 being almost unchanged. What has caused this steep angle ?

Almost the reverse happens on the next bar
At the very beginning of candle 3, line B is printed and is a result of what happened during candle 2.
As can be seen, there was significant upwards PA during candle 2 yet line B is almost flat. Why is that ?

Can anyone clarify this ?

Thanks
Attached Image (click to enlarge)
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  • #9,333
  • Dec 4, 2012 3:19pm Dec 4, 2012 3:19pm
Hi PHX

Thanks for the answer to my A+++ post.
And... #9328: an invaluable observation many thanks

R


Quoting Phx62
Defiant,
If I may, let me give you a gem that I picked up a couple of years ago
Hope this helps. Many pips to you.
  • #9,334
  • Dec 5, 2012 2:22am Dec 5, 2012 2:22am
I do not know if anybody noticed what just happen to EUR/USD pair (as PHX has pointed out that low/high of the day will be usually formed during first or second candle of London session), which started to tumble down from 1.3123 after bearish divergence that could be seen from stochastic (I do not have TDI at work). I think it will continue down past 1.3080. If anybody has info on ADR please share so we can estimate - as I said I have a limited view at work.

Feel free to comment

Cheers

Defiant
  • #9,335
  • Dec 5, 2012 2:31am Dec 5, 2012 2:31am
Quoting Defiant
I do not know if anybody noticed what just happen to EUR/USD pair (as PHX has pointed out that low/high of the day will be usually formed during first or second candle of London session), which started to tumble down from 1.3123 after bearish divergence that could be seen from stochastic (I do not have TDI at work). I think it will continue down past 1.3080. If anybody has info on ADR please share so we can estimate - as I said I have a limited view at work.

Feel free to comment

Cheers

Defiant...
Do not have TDI at work. Try this from TP040.

"So, what my manually made TDI is all about:
- RSI 17 (a bit longer than RSI in TDI, but with a reason as it seems RSI in TDI is really closer to about 21 or even more, so it's smoothed somehow; bottom line, I tested the settings and this seems ok)
- Exponential 7, close on first indicator data (so, RSI) = trade signal line
- Exponential 34, close on first indicator data (so again, on RSI) = market sentiment
- Bollinger band, also close on first indicator data, but with deviation 1 (this is a big difference compared to TDI). Cross of that is more powerful than market sentiment in TDI

Result: it gives entry approximately 1 candle faster. This means, TDI as indicator is as stated somehow smoothed, although it shouldn't be. ??"

This is the link to that post. Also couple of posts further down from it with example charts.

http://www.forexfactory.com/showthre...71#post6206671
Cut your Losers short and let your Winners run.
  • #9,336
  • Dec 5, 2012 2:33am Dec 5, 2012 2:33am
Quoting stephen77
I'm trying to make sure that I fully understand what the green TDI line is telling us. I know that as each new candle starts, the last bar of the green TDI is printed based on what's gone before. But, I can't quite see how.

In the attached image, at the very beginning of candle 2, line A is printed and is a result of what happened during candle 1
This line A slopes steeply upwards despite overall PA of candle 1 being almost unchanged. What has caused this steep angle ?

Almost the reverse happens on the next bar
At the very beginning of candle...
Your answer is here

http://en.wikipedia.org/wiki/Stochastic_oscillator
Cut your Losers short and let your Winners run.
  • #9,337
  • Dec 5, 2012 2:37am Dec 5, 2012 2:37am
Quoting Defiant
I do not know if anybody noticed what just happen to EUR/USD pair (as PHX has pointed out that low/high of the day will be usually formed during first or second candle of London session), which started to tumble down from 1.3123 after bearish divergence that could be seen from stochastic (I do not have TDI at work). I think it will continue down past 1.3080. If anybody has info on ADR please share so we can estimate - as I said I have a limited view at work.

Feel free to comment

Cheers

Defiant...
Try this for ADR. If you can not use it at work then use standard ATR to give you an idea of daily range

http://www.forexfactory.com/attachme...%202012%209:22
Cut your Losers short and let your Winners run.
  • #9,338
  • Dec 5, 2012 2:45am Dec 5, 2012 2:45am
Quoting dee50
Try this for ADR. If you can not use it at work then use standard ATR to give you an idea of daily range

http://www.forexfactory.com/attachme...%202012%209:22

Thx dee50, will try!
  • #9,339
  • Dec 5, 2012 2:49am Dec 5, 2012 2:49am
Quoting dee50
Your answer is here

http://en.wikipedia.org/wiki/Stochastic_oscillator
Many thanks Dee50.
  • #9,340
  • Dec 5, 2012 3:15am Dec 5, 2012 3:15am
With the market as it is, I will settle for + 30, for this morning. Afternoons I have gone back to trading the E-Mini S&P bit more volatility.

Reasons for the trade should be obvious on the chart. Reason for exiting should be obvious on the chart.
Attached Image (click to enlarge)
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Cut your Losers short and let your Winners run.
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