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Similarity Trading - The ZZBB Method

  • #101
  • Sep 10, 2013 11:15am Sep 10, 2013 11:15am
Quoting vlady1974
It's real, real emotions - I'm treating this like a real account.
What you need to have is a set trade plan for each trade.... Reason to trade and 'what if' questions so ur prepare before and during ur trade... I think you will be successful and have skill just don't give up!! Look at setting strick rules and follow them....

I have said before MM is key, the reason ur feeling emotion is ur over trading and I believe you have to many trades open at once to manage!!

Try one pair and get confident with ur trade plan and them u can use that trade plan with all pairs but first you have to master it on one.

Best of luck mate
  • #102
  • Sep 10, 2013 2:44pm Sep 10, 2013 2:44pm
Today I tried trading the Yen cross currencies using ZZBB and I just couldn't get it to work and lost big time.
Thinking about it at end of day the conclusion I've come to is that I was ill prepared and then I panicked.

The main influences/reasons for introducing the cross currencies are:

  1. I've traded them before
  2. I'm reading a book called "Three Dimensional Trading"
  3. It makes sense to not isolate analysis on one currency without factoring in some others (due to reason 2)

The fact that the aftermath of all this is that I have to rebuild my position again is... well, tough luck and completely my fault.

@Josh: I'm finding it tough getting a trading plan together on this strategy. zones come and go as targets, swings repaint. It's not like Fibs or Pivots.
If I start using Fibs and Pivots - then effectively I'm diluting the method. But maybe, this is the only way to do this successfully.

A pip is only worth it if you know how much you risked to earn it
  • #103
  • Sep 10, 2013 3:22pm Sep 10, 2013 3:22pm
AAAAAAAAAAARRGGH
Just found out that the 300EMA indicator that I've been relying on was set to 1440 on a test I did on the weekend and I forgot to reset it back.
Fuck! It was key to many of my decisions and as you may know, ABOVE 300EMA is LONGS..... I've been shorting this mofo all day!
A pip is only worth it if you know how much you risked to earn it
  • #104
  • Sep 10, 2013 5:45pm Sep 10, 2013 5:45pm
EURUSD
Okay. Indicators and templates fixed and reset. Let's redo this analysis, top to bottom:

4H
Fibonacci added this time, bounce off 50% and then close above 300EMA just under the 75% 32769.
Last swing ZZT which means ZZB is next. Bollinger Band is overextended so the next ZZT location will be shallow not deep. I would guess just above 300EMA as a reasonable target. Short @ 3268 target 3238. If target reached but price travels south, look to Long at Fib 618 @ 1.31816. If wrong, then Long @ 3276.9 with target as 1.3337. Overall trend is bullish, so the short is countertrend.

1H
A massive DS Zone has been printed on the 1H but it is below 300EMA. For this to be cleared, US Dollar would have to increase in value significantly - so we will need to look out for Dollar sensitive news. This is not a guaranteed play.

Cross Currency
If EURUSD is up, then USDJPY should be down.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EURUSD-4H.jpg Size: 755 KB
Click to Enlarge Name: EURUSD-1H.jpg Size: 672 KB
A pip is only worth it if you know how much you risked to earn it
  • #105
  • Sep 10, 2013 5:56pm Sep 10, 2013 5:56pm
USDJPY
This is the 4H

4H
The 4H is above the 300EMA so is bullish outlook. Current swing is ZZT so next swing due is ZZB. The Bollinger Band is just opening up and expanding. The most recent price action to replicate this is marked by the square so we hope for a similar swing down.
Attached Image (click to enlarge)
Click to Enlarge Name: USDJPY-4H.jpg Size: 642 KB
A pip is only worth it if you know how much you risked to earn it
  • #106
  • Sep 11, 2013 2:06am Sep 11, 2013 2:06am
EU tested the 75% Fib during Asian and got rejected. Looks like on its way to 1H 300EMA. Scalping a short towards it. Not sure if it will bounce or keep going to clear the zone. Placed 2 pending longs at the lower end of zone. 10 pip SL on short. Stoch on 15M telling me the current Semafor 3 swing bottom will repaint lower.
A pip is only worth it if you know how much you risked to earn it
  • #107
  • Sep 11, 2013 2:55am Sep 11, 2013 2:55am
Quoting vlady1974
EU tested the 75% Fib during Asian and got rejected. Looks like on its way to 1H 300EMA. Scalping a short towards it. Not sure if it will bounce or keep going to clear the zone. Placed 2 pending longs at the lower end of zone. 10 pip SL on short. Stoch on 15M telling me the current Semafor 3 swing bottom will repaint lower.
Stopped out
A pip is only worth it if you know how much you risked to earn it
  • #108
  • Sep 11, 2013 2:59am Sep 11, 2013 2:59am
Quoting vlady1974
{quote} Stopped out
Re-entered. SL at 71 suggests a 20 pip SL instead of 10. We'll see.
Target is 15M 300EMA still.
A pip is only worth it if you know how much you risked to earn it
  • #109
  • Sep 11, 2013 3:28am Sep 11, 2013 3:28am
Quoting vlady1974
{quote} Re-entered. SL at 71 suggests a 20 pip SL instead of 10. We'll see. Target is 15M 300EMA still.
Stopped out again on EU. Will pause then.
UJ long has kicked in for a scalp. Pending short at 100.36
A pip is only worth it if you know how much you risked to earn it
  • #110
  • Sep 11, 2013 3:52am Sep 11, 2013 3:52am
Quoting vlady1974
{quote} Stopped out again on EU. Will pause then. UJ long has kicked in for a scalp. Pending short at 100.36
Closed UJ Long scalp.
A pip is only worth it if you know how much you risked to earn it
  • #111
  • Sep 11, 2013 7:56am Sep 11, 2013 7:56am
Short UJ triggered @ 100.359
Short EU triggered @ 1.32689 and 1.32549
Targets set for all. SL will be placed depending on London hourly close.
A pip is only worth it if you know how much you risked to earn it
  • #112
  • Sep 11, 2013 10:30am Sep 11, 2013 10:30am
Quoting vlady1974
Short UJ triggered @ 100.359 Short EU triggered @ 1.32689 and 1.32549 Targets set for all. SL will be placed depending on London hourly close.
Closed the UJ short for profit.
EU profit still eludes me. The plan today was for 75% Fib to hold but that didn't happen. I'm flat on EU but have pending shorts from 3319 to 3348 which covers 3337.
A pip is only worth it if you know how much you risked to earn it
  • #113
  • Sep 13, 2013 4:52pm Sep 13, 2013 4:52pm
Hi mate,
I didn't knew before this evening that you started a trade journal. I'll take time this week end to read it carefully and will try to follow the journal in the coming weeks and months.
Wish you all the best.
Don't be smart. Be rich.
  • #114
  • Sep 13, 2013 5:32pm Sep 13, 2013 5:32pm
Quoting maximinus
Hi mate, I didn't knew before this evening that you started a trade journal. I'll take time this week end to read it carefully and will try to follow the journal in the coming weeks and months. Wish you all the best.
It's littered with bad decisions mate!
But I've learned a valuable piece regarding the 300EMA.
However, all is not lost - I am still going to continue this journal and get a "modified" and re-defined ZZBB. I've understood that I can't really trade without Fibs and Pivots because since trading this method in Attempt 1 and Attempt 2, I've traded without an SL as I have no targets.... hence no way to define risk. If you simply take X pips off the the swing... the risk is the repaint for which I have no method or answer to. There's the flaw. Hence I now need my targets and levels to help judge the likelihood of the swings. Then... maybe then, I can stop doing crazy double up trades to win back my losses... and then lose!

Anyway... hopefully it's enjoyable reading of what NOT to do!
A pip is only worth it if you know how much you risked to earn it
  • #115
  • Edited 5:48pm Sep 13, 2013 5:35pm | Edited 5:48pm
A Tale of Two Cities

(Fibonacci - Chart 1)
Here's a 4H with Fibs. I created the levels using 25% and the standard fib level and highlighted the target.
Today's action saw the fail at 38.2 three times. I expect this to fail and go south and to the 87.5% level... if not the 100% and lower. If it holds then I suspect that it would hold as support. If not... I've not zoomed out but there are lower targets to go for.

(ZZB - Chart 2)
This shows that the last swing was a ZZT so the next due is a ZZB.... however, the swing is INSIDE the Bollinger Band and previous experience shows this to be a Black Hole price which is unresolved. Next week could open above to close it and paint a proper ZZT from which to swing down.... or it could not and just go lower. If the latter were to occur, then revisiting 1.31354 or the last ZZB coincides with the Fibonacci analysis.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EURUSD-4H-1.jpg Size: 428 KB
Click to Enlarge Name: EURUSD-4H.jpg Size: 682 KB
A pip is only worth it if you know how much you risked to earn it
  • #116
  • Sep 13, 2013 5:59pm Sep 13, 2013 5:59pm
Further Fib work showing normal extensions that everyone does.

However, if you take the measurement from every major swing bottom up to the top up to the last swing that the current Swing Bottom doesn't cancel out... you can see how the fibs and fib extensions can project price to the downside.

Failure to take out the 75% marker of 3337, which I've mentioned before as a price marker, suggests further downside. The Fib Extension set at the first major swing low after the major bottom seems to produce the best Fib Range (38.2 / 50 / 61.8) producing 3167, 32218, 3275 as the price range to break out of. Failure at 61.8 Fib and 75% Fib could see price revisit 100% or 150% Fib levels.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EURUSD-4H.jpg Size: 371 KB
Click to Enlarge Name: EURUSD-4H-Fib.jpg Size: 454 KB
A pip is only worth it if you know how much you risked to earn it
  • #117
  • Sep 14, 2013 3:46pm Sep 14, 2013 3:46pm
Quoting vlady1974
{quote} It's littered with bad decisions mate! But I've learned a valuable piece regarding the 300EMA. However, all is not lost - I am still going to continue this journal and get a "modified" and re-defined ZZBB.I've understood that I can't really trade without Fibs and Pivots because since trading this method in Attempt 1 and Attempt 2, I've traded without an SL as I have no targets.... hence no way to define risk. If you simply take X pips off the the swing... the risk...

This is how science and knowledge progresses :nerd:so continue.

You'll may be not find the holy G, but this attempt of systematization will definitely change the way you see the indicators.

ok, but can you trade without ZZ and BB ? This question may seems evil to you but it is not and for this I owe you some explanations. Before opening a trading account, I spent years (including day and night) to make backtests with indicators. Zigzag is one of the indicators that I first used and I banished it forever and the main reason is that at least in easy language when you code this indi you ask it for count back x bars, ant that means that you ask the indicator to cheat. May be that's not the case when you code in MT (I never used and will never use Metatrade), but I don't see how one can create a ZZ indi without asking the program to look back ?
As for the BB, I've never been comfortable with this indi, so I never tried any backtest with BB. May be it's a mistake.


Quoting vlady1974
{quote}Hence I now need my targets and levels to help judge the likelihood of the swings. Then... maybe then, I can stop doing crazy double up trades to win back my losses... and then lose! .
Try to integrate Gator's mofu style. It will suits you hence you want to incorporate fibo and pivot in your system, search something on G style, you will find. At least it will help you to determine your target and stop loss.

Generally speaking, I understand our need to systematize our trade decision, because we fail especially because of our psychological weakness but the market is not purely mechanical. We need to have more confidence in our market interpretation, appreciation and may be accept to pay the price. Now that I wrote it, I just want to go back where it all started for me, backtesting indicators.

PS1 : If you had to choose an indicator other than the zigzag for the trend wich one will you choose ?

PS2 : Try to contact TauTrader and ask his opinion on your system. I think he is currently in the process of live testing his own system, He could be a best advice than me.

GL
Don't be smart. Be rich.
  • #118
  • Sep 16, 2013 12:01pm Sep 16, 2013 12:01pm
Well what a crap day to have draw downs. Broker's gap up day (although technically there are no gaps)
I'm sitting on this one. But it's no longer a true reflection of a proper trading account. More on this later.

The 4H has a bearish engulfing pattern that has confirmed the ZZT and I wouldn't be surprised if it breaks the 300EMA.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-4H.PNG Size: 78 KB
A pip is only worth it if you know how much you risked to earn it
  • #119
  • Sep 17, 2013 3:29am Sep 17, 2013 3:29am
Quoting vlady1974
Well what a crap day to have draw downs. Broker's gap up day (although technically there are no gaps) I'm sitting on this one. But it's no longer a true reflection of a proper trading account. More on this later. The 4H has a bearish engulfing pattern that has confirmed the ZZT and I wouldn't be surprised if it breaks the 300EMA. {image}
Here's how yesterday panned out. I'm starting to doubt my shorts. The ZZT was in no-man's land again so price needs it to resolve on the upside.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-1H.PNG Size: 54 KB
A pip is only worth it if you know how much you risked to earn it
  • #120
  • Sep 17, 2013 3:32am Sep 17, 2013 3:32am
Quoting vlady1974
{quote} Here's how yesterday panned out. I'm starting to doubt my shorts. The ZZT was in no-man's land again so price needs it to resolve on the upside. {image}
Zooming out a bit more... this is why I went for the shorts. That green zone at the bottom needs clearing. If price travels to this point, there will be huge demand and I can see EU going to 1.34 and higher. I could be wrong, but I think it should go lower first to 1.318X again.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-1H.PNG Size: 94 KB
A pip is only worth it if you know how much you risked to earn it
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