Trading Made Simple

[highlight=rgba(255, 255, 255, 0)]Thank you! I have something to read during this weekend. I very much enjoy it! [/highlight]
[highlight=rgba(255, 255, 255, 0)]Have a nice weekend, Emmanuel.[/highlight]

Friends, Emmanuel,

the whole weekend I was studying charts with the STARC bands (SMA=50, and the 2ATR(100) and 4ATR(100) bands)) and the recent pdfs shared by emmanuel and tried to analyse the information. According to my observations there are different types of entry conditions possible:

1. the price is moving for a certain time along the lowest STARC band, causing the MBL approaching the 32 level and when a bullish TDI cross happens it is above the MBL and this offers a very good risk/reward situation with possible TPs at the middle of the channel, then middle of the channel+2ATR(100) and, +4ATR(100), this could be an A++ setup

2. the price moves below the mid line of the STARC bands when the bullish TDI cross happens above MBL, with TPs at middle of the channel+2ATR(100), and 4ATR(100), this could be an A+ setup

3. the price moves between the middle line and the middle line+2ATR(100), with bullish TDI cross above MBL, TPs at middle line+2ATR(100), and 4ATR(100), could be an A setup

When the price is too close to or at the upper STARC band, then it is very likely, that the price can not break that level, so even in case of a bullish TDI above MBL it would be a risky trade, so better to stay aside.

In all the mentioned cases the PL and the MBL determines the trend, and we are condsidering a long entry only if the TDI cross below 68.

In my previous post (http://www.forexfactory.com/showthre...58#post7066058) there was an example for the short A++ trade setup according to the previous assumptions.

Someone with similar observations?

take care,
thrax

Good job thrax,

We now have another chart to add to our collection.
We need to talk about targets & take profit levels.

Thank you for all your hard work! We're getting closer.

sj

What is being discussed about Starcs, BB, etc. is new to me but just looking at the 3 charts SJ posted #1 & #3 seem to better represent a trend change than #2 (STARC bands.) Maybe I shouldn't even be posting a comment as I haven't had time to research the various links that have been posted regarding the different bands but just doing a visual of SJ's post seems pretty clear to me. Any comments gratefully appreciated. p.

EUR/USD 4H Chart = LONG SETUP

Entered in early. TDI Cross plus major support levels reached. Reversal is very near. TP is still tentative.

Tiggrrr & everyone,

Your chart look's great!

After spending the afternoon thinking about this... I came to the conclusion
that if you just focus on 2 things you will do great.

Focus on the guppy's & the tdi indicator. They are both great indicators.
They will guide you and show you the way and keep you out of trouble.
But you have to learn how to trade with them.

Tiggrrr's chart is excellent. That is all you need. Don't complicate your
life & trading. Just keep things very basic & simple. That would be my
best advice to everyone.

Keep it simple (the old kiss method)...

Thanks everyone!

sj

EUR/USD UPDATE

Typical Stop-Loss hunting or tricking investors to go short.

Nonetheless...lets see what the markets will do. Still long on my position.

Hi,

for me the EURUSD H4 would not meet my entry conditions as the TDI cros occurred below the MBL and the MBL is heading down at the moment.

I am long on AUDUSD H4, TDI cross above MBL, price bouncing from the lowest STARC band and previous support level (green rectangle).

take care,
thrax

hey.. i noticed that you have 3 different TPs... did you enter 3 different tradeS?

Yes. I tried some trade management experts (e.g. quik trail) but they did not worked properly for me, perhaps I could not set them properly.

take care
thrax

Nice PIN bar on 4 hr and on daily its under progress, any comment.

Hello pundit78!

Price hit on 50.0 fibo which is also a major support. TDI crossed on 4H charts very nicely. I suggest a TP at the 38.2 fibo level or a little bit lower only because it is below MBL.

-Tiggrrr

Let it be 3547, below BRN.

Hello,

It is holiday in Tokyo and also Monday market, so best thing for me to do is to stand aside and watch the market. Reading is my past favourite time activity.

Good trading folks.

Thanks Emmanuel for this valuable information.

Hi thrax,

You are very hardworking and doing the weekend exercise. This show the commitment which is required of a successful trader. You are heading in the right direction.

Your observations are very good and exactly what I made sometime ago and led us to TMS-II.

The use if channels or bands in trading are not new. We hear of Keltner channel, Donchian channel, and Manning Stoller created the r Starc band using market volatility using factor of the ATR. .
I use the ATR factor channel to see the market trading range. in strong trending market, price will hit 100% of the weekly ATR(100) quite easily. But in wide ranging market, price can still hit 60% of the weekly ATR(100). This is what I use to manage and ride the trends to its fullest and within realistic expectations.
When market become narrow range, this is when maximising profit taking become difficult.

One of the development objective of TMS-II is to help traders identify the market type as I wrote in the pdf notes.

TMS is a simple method and the use of the TDI is really excellent. In John Hayden book on the RSI, he explained the characteristic of the market using the RSI. He explain those "10 lies about the RSI" in a way to help traders understand the RSI better and how to use the RSI to read market price momentum.
TMS uses the APB/HA and the 5EMA both shows us the price direction. Price action is something which we all must work on our own and improve our reading of the charts. I agree with you the 5SSMA Price Action Channel is good to use and it is a conservative method when we use the 5SMMA PAC. TMS is an aggressive entry method and this is one reason why many traders here fail to get good trades.

Moving forward, I hope you will find on your charts the synergy between the Price trend and the TDI trend and you will see the market type condition easier and pick on the high probability trade setups and be able to ride the trend and "Let Profits Run."

Good Trading.

P/s check your PM.

any one in Nzdusd it looking good now am in but still monitoring its moving towards the 38.2 fib line now
will see what is going to happen here before exit the green tdi above th 50 line and above yellow have beenn
monitoring this since last week hope it ride some SR along the way around 0.8304-.8325 will watch price behaviour on this
any one in this comment welcome

@all the coders:

My system have one backtested (2 years on different currencies in H1 and H4) rule which helped me a lot to stay in profit with my Trades and overall performance:

If the Candle after the Signal-Candle is not reaching more than 80 % of the Signal-Candle I immediately exit with the half Position and the rest @ BE.

It would be very fine if someone with coding knowledge could make an easy Indicator with just a line in the Chart where the 80 % of the Signal-candle should be.
Attached is a Screenshot.
Thanks for any info and effort.

I hope that this may help other Traders too to find the right exits.
Thanks
Greeds Zack

Week 44: Weekend Exercise

Hi Emmanuel (thanks for the mental workout :-) ) and all who will read this post,


The following post is a brief attempt at the week 44 weekend exercise (Post # 27,179).

Firstly, I will conduct a brief synopsis and comparison surrounding the literature on 1) STARC Bands & 2) Bollinger Bands – the focus here will be held on the calculation method and how the indicator is used in the conventional trading literature.

Secondly, I will provide some chart examples and highlight some observations I notice keeping all things constant (TDI as the heart of my TMS system). The Pairs used for exercise are EUR/GBP, EUR/USD, EUR/CAD all covering the same 6 day period) In order to determine my belief as to which one method is more effective to use as an indicator when you trade TMS and why based on my initial observations.


Synopsis of the conventional trading literature


STARC Bands (Developed by Manning Stoller):

1. Calculation Method:
   
2. STARC bands are calculated by adding a value of the (ATR * ATRMultiplier) to the moving average of the preceding PA
   
   1. Upper STARC: SMA + (ATR X 2*)
   2. Lower STARC: SMA – (ATR X 2*)
   3. Additional Upper STARC: SMA + (ATR X 4*)
   4. Additional Lower STARC: SMA – (ATR X 4*)​​

​​

1. Uses outlined in the conventional trading literature:
   
   1. The STARC bands are designed to interpret market volatility using a measure of the Average True Range (ATR).
   2. Similar to the Bollinger Bands, the majority of price action will be maintained within the STARC Bands. The bands can therefore be used to see how volatile the markets currently are
   3. The bands may also be used to define the existing upper and lower price points. When prices reach the top band, they are expected to turn down, and when they reach the lower band, they are expected to turn upwards. The STARC Bands can therefore be used to identify potentially higher probability trading opportunities.
      1. When price reaches the upper band, the suggested action from conventional trading literature is to go short. Since PA will be maintained within the STARC Bands for the majority of the time, when the PA approaches the top band, it can be deemed as high risk to go long at this point. The ATR and moving average would suggest that PA will fall back.
      2. When PA reaches the lower band, the suggested action from conventional trading literature is to go long. Going short when PA is hovering at the lower band can be deemed as high risk. Since the lower band is a form of support, PA could be expected to increase at this point.
      3. Always let PA lead you into a position. Because PA at one band does not guarantee a reversal. The angle of the band and behavior of PA must be taken into account before opening any position.
      4. The slope of the bands will provide trend clues. The way the bands slope will provide some clues on whether the trend is up or down.
      5. These assumptions are not to say that the PA will not go against these conventional trading assumptions.
         
      6. PA penetration of the upper or lower STARC band indicates an increased momentum in the direction of the band penetration.

Bollinger Bands (Developed by John Bollinger):

1. Calculation Method
   
   1. The Bollinger Bands indicator is two simple moving averages with 2 standard deviations applied
   2. The standard deviation of a market price varies depending on the difference between high and low prices for a given trading timeframe, which means that when an asset becomes more volatile, the Bollinger Band expands, whereas when an asset becomes less volatile, the Bollinger Band contracts.
   3. This addition of standard deviation provides that at least 95% of price is enclosed in the channel

1. Uses outlined in the conventional trading literature:
   
   1. Provides a visual representation of an asset's volatility
   2. Used to measure a market’s volatility as well as to indicate relative price levels
   3. Bollinger Bands work best for analysing sideways price action where price compresses prior to a sudden break out velocity move.
   4. During a velocity move, occurring after the compression, price can move beyond the Bollinger Bands providing a possible exit signal to traders.
   5. John Bollinger recommends that the bands are used as a guide rather than for absolute buy or sell signals when price touches a band.
   6. Conventional trading literature notes that using this indicator as an entry and exit strategy consists of the following strategies:
      1. Buy a pullback down to support when the market is in an uptrend
      2. Sell a rally up to resistance when the market is in a downtrend.
      3. The Bollinger Bands can offer resistance and support for identifying trade setups.
         1. Only in strong trending currency pairs.

Chart Observations

1. Firstly it is important for me to note that I believe that TMS is a trend trading method. I also believe that there are there are 3 general market types you can define when trading TMS:

1. Trending Bullish & Bearish
   1. ​Traded by letting profits run (Plan C)

2. Wide Ranged Sideways
   1. Sideways market types can be trade when we using a channeling technique (originally this was outlined in posts 23,526, but from a preliminary observation of the STARC Bands this seems to add weight to this methodology - one to investigate further but will not be outlined in this post!) When trading within the channels, I will keep in rhythm with the market until it breakouts again into a trend (then execute plan C)

3. Narrow Ranged Sideways
   1. ​​When market is narrow ranged sideways results will not be so good (Scalp lower time-frames in this instance) and weight to execute Plan A/B/C (C = Let profits run). Position build & stalk the market is the game plan.

1. From my initial comparison of STARC and Bollinger bands I formulated the following assumptions surrounding the benefits of STARC Bands relative to Bollinger Bands:

1. Visually better than BB.
2. Removes the “messiness” of the GUPPY MA to identify the trend direction
3. Easier to Identify/Plan entry areas
   1. Upper STARC Bands in conjunction with 80/68 TDI levels (adding confluence to the TDI resistance observed between these levels (see chart areas numbered 1, we could be position building here in this narrow ranging sideways market))
      1. Increasing the probability of a positive R multiple trade entry

4. Easier to identify/Plan TP levels using STARC Bands than Bollinger Bands
   1. Lower STARC Bands in conjunction with 32/20 TDI levels (adding confluence to the TDI support observed at these levels in a downtrend (see chart areas numbered 2))
      1. Increasing the profitability of well planned TP levels at these areas of confluence
      2. This can be seen in the three STARC charts below
      3. This is not as clear in the BB band charts below
         1. However, you can observe that RSI price line (green line) is outside the BB band on the TDI indicator panel (see chart areas numbered 3) – leading me to question the actual need for the BB on your PA chart when all the information is already there for you in the TDI Indicator panel. PA is outside the BB, TDI is also outside the BB - coincidence?...Not at all!
            1. Removing BB from the PA chart will de clutter your chart and give you less noise on your chart.
            2. In order to KIS (Keep it Simple) is there any need to be doubling up the indicators that you already use in the TDI indicator panel...no need at all!

5. Easier to identify market trading ranges and plan your trades (Plan A,B,C) – you can clearly identify the ATR of the market and see if it is Wide/Narrow/Sideways ranging as well as trending based on the PA within the STARC bands a lot clearer than BB – essentially providing a moving channel to help observe PA within those ATR bands rather than showing how much variation or dispersion from the average exits in the BB method
   1. You can clearly identify different interactions and trading opportunities in each of the STARC Bands Upper/Middle/Lower providing you with additional confluence to your TMS entries

​​
In conclusion - I believe STARC Bands have more of a benefit to be used on your PA chart in conjunction with the TMS 4H methods for the reasons outlined above. I believe Bollinger Bands should be kept to the TDI Indicator Panel as we can observe the interaction with the RSI Price line there and not double up the information already being provided by this indicator by putting it on the PA chart. Also STARC Bands helps us identify trend, momentum, volatility and range - 4 of the ten(10) core skills needed to trade TMS consistently and profitably.

Keeping it Simple!

Erol

P.S. I strongly advise you all to participate in this weekend exercise for two reasons 1) You will learn something beneficial to your trading system 2) Emmanuel has once again provided people (both passive participants and active participants) in this thread with another golden nugget to challenge our trading assumptions and system and see if this method can be incorporated into your current trading system to increase your consistency and profitability.

There were multiples of people that announced there dismay when Emmanuel let the thread members know that he was scaling back the amount of time he spent on here, yet I can barely count on one hand how many people actively participated in this weekend exercise (where's your input on this exercise?). I for one would like to see Emmanuel provide us with the valuable insights he so often does but I guess this can only happen to the same extent that people participate in the opportunities he provides this thread with.

Hi all,

Please find attached a PDF I had compiled that I thought some members (passive and active) may find useful. This framework (explained and outlined by Emmanuel) is a process in BBP (Big Picture Planning). Essentially one of the ten(10) core skills Emmanuel has outlined...MTFA:




This should be an integral part of your trading system not trading strategy...don't know the difference...see below:




Why is this important?