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Higher low, lower high system

  • #6,841
  • Nov 26, 2013 7:05am Nov 26, 2013 7:05am
Quoting Vantage
{quote} Sitting at +110 1.4861 and moving stop.
Hi Dave, thanks for the examples, and your continued assistance and guidance, it is appreciated.

You make trading look so easy.

Regards

Martin
  • #6,842
  • Nov 26, 2013 7:14am Nov 26, 2013 7:14am
Quoting mt2
{quote} Hi Dave, thanks for the examples, and your continued assistance and guidance, it is appreciated. You make trading look so easy. Regards Martin
Hi there mt2

Gary Player (legendary SA guy and all around wonderful person) said the harder I practice the luckier I get. There's a lesson there somewhere.

Just exited the euraud trade switching off computer due to a massive storm that's coming. Will post charts later.
  • #6,843
  • Nov 26, 2013 10:18am Nov 26, 2013 10:18am
Quoting Vantage
The uptrend on euraud is clear. Yesterday D closed a shooting star. No sign of a cross of D 8lwma lower (which would never have happened given the strength of the move last week, price moving strongly away from the lwma) or RSI cross lower. No 3-7 day reversal pattern. So whilst we could have fallen further today after the shooting star viewed this as a pause in uptrend. 1hr opened the day with a big lower wick and the lows held for 9 hours. 1hr 3 bar reversal positive close back into uptrend, bought 1.4749. Target can be anywhere from area 1.4900...

D shooting star viewed as a pause in uptrend, as mentioned this morning. A clear base above S1, engulfing 1hr 3 bar reversal. Entry 1.4749, exit +113 when a big storm hit here (one of those when the lightning unexpectedly hits close you really, really get just a bit ).
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurauddaily.png Size: 38 KB
Click to Enlarge Name: euraudh1.png Size: 34 KB
  • #6,844
  • Nov 26, 2013 10:31am Nov 26, 2013 10:31am
1hr chart without the pivots to see entry a little clearer.
Attached Image (click to enlarge)
Click to Enlarge Name: euraudh1.png Size: 30 KB
  • #6,845
  • Nov 27, 2013 4:58am Nov 27, 2013 4:58am
These are the charts for the rules as envisaged for an ea, see link in post http://www.forexfactory.com/showthre...34#post7096634 - I have left all the 3 bar reversals in. Again I have highlighted this mornings trades with the red lines in terms of the rules and I hope no errors. Euraud might have had first trade stopped out so I have shown 2nd entry today. Aud not looking great either but the other 3 are good. Of course with the jpy, aud pairs what can you expect from such big moves that have taken place already and consideration must be given to the string of successful trend trades that would have been captured.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: audusdh1.png Size: 47 KB
Click to Enlarge Name: euraudh1.png Size: 46 KB
Click to Enlarge Name: eurjpyh1.png Size: 44 KB
Click to Enlarge Name: gbpaudh1.png Size: 43 KB
Click to Enlarge Name: gbpusdh1.png Size: 45 KB
  • #6,846
  • Edited 5:20am Nov 27, 2013 5:05am | Edited 5:20am
Quoting Vantage
These are the charts for the rules as envisaged for an ea, see link in post http://www.forexfactory.com/showthre...34#post7096634 - I have left all the 3 bar reversals in. Again I have highlighted this mornings trades with the red lines in terms of the rules and I hope no errors. Euraud might have had first trade stopped out so I have shown 2nd entry today. Aud not looking great either but the other 3 are good. Of course with the jpy, aud pairs what can you expect from such big moves that have taken place already and consideration...
These are the buy rules so hopefully you'll clearly see that the 3 bar reversal trend trades are correct and not cherry picked.

A friend of mine has contacted me to say that he has a test ea from fx pro's quant system (only works on fxpro acc's) that I can start up with. We'll see in time to come if it works.

BUYS
D must have closed above its 8lwma yesterday to make today a buy day only.
- The 32lwma must be above the 192lwma (these approximate the 4hr and D 8lwma's)
- The signal candle must close above the 32lwma
- Price must have completed what I will call a 3 bar reversal. The idea being to buy dips in an uptrend. The 3 candle sequence must have a negative close dip and then a positive close. It will alert with an arrow up when the signal candle has closed above the previous two candle closes (one of the two prior must be a negative close). The arrow is placed below the candle that follows the signal candle.

See the reversal 3 bar indi attached. There are too many signals generated, some filters are needed. Firstly we have our trend filter from the D and 4hr 8lwma's which must be stacked correctly and price close above the 32lwma. In addition:
- MACD with standard settings 12, 26, 9. We want the histogram to confirm.
When MACD is above the zero line the histogram value must close higher than its previous bar and
when MACD is below the zero line the histogram must close with a smaller negative value i.e. closer to the 0 line than its previous bar.
The coloured MACD attached shows the red/green changes but the principle is the same as a standard MACD.
- One open trade per calendar day. If stopped out another trade may be opened.
- Price must go 1 pip above the signal candle high (bid price or 1 pip + spread) in the 2 candles following the close of the signal candle
- EA must have a time option not to enter trades, using fxpro for example for jpy, aud nzd pairs I would not trade between 22pm and close of 1am candle. Trying to be clear the 1am candle can qualify as a signal candle and trades taken after the 2am candle has opened. For GU, EUR etc I would not trade between 22pm and 7am.
- Stops x pips below the signal candle. If candle is overly large i.e. requiring a large stop then no trade to be opened, this value will need to be changed for each pair. So no trade if stop required is greater than x pips, will vary per pair.
- Target price, the ability to set a target price and if we get to within x pips of target price then no further trades to be opened, this will vary for each pair.
  • #6,847
  • Nov 27, 2013 6:45am Nov 27, 2013 6:45am
The ea has just taken 1st trade (demo) on gbpaud. It wasn't on before, the first trade of the day should have triggered around 1.7814 or 100 pips earlier. Only time will tell if the 1 trade a day filter will work.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpaudh1.png Size: 40 KB
  • #6,848
  • Nov 27, 2013 9:09am Nov 27, 2013 9:09am
EA took its first trade on EJ and there are some stops issues that need to be sorted. Again its envisioned that the EA would take 1 trade per day and in this case it would have been in Asian session around 137.50. I just opened it up for first time a few hours ago.

We also didn't take trades on euraud and aud, so there are some issues.
Attached Image (click to enlarge)
Click to Enlarge Name: eurjpyh1.png Size: 43 KB
  • #6,849
  • Nov 28, 2013 3:54am Nov 28, 2013 3:54am
Quoting mt2
{quote} Hi Dave, thanks for the examples, and your continued assistance and guidance, it is appreciated. You make trading look so easy. Regards Martin
Hi Martin

Just wondering if you had another look at these posts would things be any clearer? Trend (taking D view above below 8lwma, RSI and 3-7 days for turns to confirm change in trend), CT from proven turn areas in market.

Quite simply above/below 8lwma on D chart after a 3-7 day candle reversal pattern has a high probability of following through. Then once trend in place looking for pullbacks and solid closes back into D trend along the lines of the charts recently posted.

I haven't done daily blog updates for a while but the principles are the same as posted.

http://www.vantagefx.blogspot.com/2012/11/question.html
http://www.vantagefx.blogspot.com/20...ulti-time.html
http://www.vantagefx.blogspot.com/20...of-method.html
http://www.vantagefx.blogspot.com/20...ade-rules.html
  • #6,850
  • Edited 4:33am Nov 28, 2013 4:19am | Edited 4:33am
Quoting Vantage
{quote} Hi Martin Just wondering if you had another look at these posts would things be any clearer? Trend (taking D view above below 8lwma, RSI and 3-7 days for turns to confirm change in trend), CT from proven turn areas in market. Quite simply above/below 8lwma on D chart after a 3-7 day candle reversal pattern has a high probability of following through. Then once trend in place looking for pullbacks and solid closes back into D trend along the lines of the charts recently posted. I haven't done daily blog updates for a while but the principles...
Have a look at this euraud D chart. Look for the 3-7 day turns in the market that result in a move above or below the 8lwma or RSI cross. Once crossed from there the focus on 1hr or 15min is for retraces and resumption of D trend. Buying 1hr/15 min dips in uptrend, selling 1hr/15 min rallies in down trend.
Attached Image (click to enlarge)
Click to Enlarge Name: eurauddaily.png Size: 41 KB
  • #6,851
  • Nov 28, 2013 4:30am Nov 28, 2013 4:30am
Quoting Vantage
{quote} Hi Martin Just wondering if you had another look at these posts would things be any clearer? Trend (taking D view above below 8lwma, RSI and 3-7 days for turns to confirm change in trend), CT from proven turn areas in market. Quite simply above/below 8lwma on D chart after a 3-7 day candle reversal pattern has a high probability of following through. Then once trend in place looking for pullbacks and solid closes back into D trend along the lines of the charts recently posted. I haven't done daily blog updates for a while but the principles...
Then taking it one step further. The x's mark weak candles that cannot cause a cross of the 8lwma or RSI. Could they be the start of a CT move, sure. Just as likely they are a pause before continuation of trend. Also added support/resistance levels for proven turns in the market. Could you at times get a better entry than waiting for the 8lwma to cross, of course yes. Most often though the 3-7 days turn will play out before a trend forms.

Whys that? Well the big boys can't dump all their orders onto the market at once, they wouldn't get filled. It takes some time to turn a big ship around.
Attached Image (click to enlarge)
Click to Enlarge Name: eurauddaily.png Size: 43 KB
  • #6,852
  • Nov 28, 2013 4:46am Nov 28, 2013 4:46am
Quoting Vantage
{quote} Then taking it one step further. The x's mark weak candles that cannot cause a cross of the 8lwma or RSI. Could they be the start of a CT move, sure. Just as likely they are a pause before continuation of trend. Also added support/resistance levels for proven turns in the market. Could you at times get a better entry than waiting for the 8lwma to cross, of course yes. Most often though the 3-7 days turn will play out before a trend forms. Whys that? Well the big boys can't dump all their orders onto the market at once, they wouldn't get...
So if you have a view that from 21 Nov its an uptrend and buy only then the only issue is on what basis will I buy? You could use an oscillator going over sold, retrace below then above a ma, candle pattern from a pivot/RN/fib or some kind of pa like an engulfing close. That's up to each trader but its a lot easier to have a view of trend and trade in that direction than trying (but inevitably failing) to capture each move in the market.

Bottom line have some definition of higher TF trend. Have an entry signal from lower TF. Then research that they work, the majority of the time.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: euraudh1.png Size: 45 KB
Click to Enlarge Name: euraudh1 a.png Size: 35 KB
  • #6,853
  • Nov 28, 2013 5:12am Nov 28, 2013 5:12am
[ Hi Martin Just wondering if you had another look at these posts would things be any clearer? Trend (taking D view above below 8lwma, RSI and 3-7 days for turns to confirm change in trend), CT from proven turn areas in market.

Hi Dave,

Thanks for charts and links, I have not been able to access computer today till now. I will have a look, and if Ihave queries, I will let you know.

Your rules are very clear, I think one of my problems is watching to many currencies, instead of identifying one or two, and focussing on them.

Not sure if youve answered this question previously, how do you identify the best currencies to trade?

Regards

Martin
  • #6,854
  • Nov 28, 2013 5:25am Nov 28, 2013 5:25am
The last few posts in summary http://vantagefx.blogspot.com/2013/11/trading-101.html
  • #6,855
  • Nov 28, 2013 5:43am Nov 28, 2013 5:43am
Quoting mt2
Hi Dave, Thanks for charts and links, I have not been able to access computer today till now. I will have a look, and if Ihave queries, I will let you know. Your rules are very clear, I think one of my problems is watching to many currencies, instead of identifying one or two, and focussing on them. Not sure if youve answered this question previously, how do you identify the best currencies to trade? Regards Martin
You could scan many pairs D charts at the start of each day to find something that meets your trend definition. Once trend is there most will last for several days or weeks. The issue then becomes do you want to add other pairs when one is trending and likely to carry on or look to re-enter and build positions on your existing pair.

I used to focus on gu, eur, ej but after getting alerted to euraud and gbpaud and how well they trend the focus is on them and aud (still look at ej and gu). I came across 2 threads from 100 pips a day I think it was (using a MACD cross and then 20/50 ema's on D chart as trend definitions and entries from 1hr) and he listed his fave trending pairs. I don't think he even considered eur and gu. That was a big eye opener.

I cannot remember the last time Mrs V took a trade on ej or gu. Her obsession is euraud and then aud. We have taken 4 trades I think this month and sitting around 13%. Not too shabby and Mrs V said this morning if I am aware she hasn't had a losing trade in 2 months.

The reason for the infrequent trading is work getting in my way and some of the old health issues on Mrs V's side. That is why I am looking so intently at an ea that will capture trend trades in particular the pairs gbpaud, euraud and aud that have great moves in Asian session (when trend rules met).

If I had to choose a few pairs to watch at the moment they would be euraud, aud and gbpaud.
  • #6,856
  • Nov 28, 2013 6:13am Nov 28, 2013 6:13am
Got a message from someone commenting on the CT moves on the 1hr chart in post 6852, yes there are 1 or 2 that work but they are a minority and most fail.

I'd totally agree and normally a losing CT trade will = a failure to get back into the trend move, compounding the agony.
  • #6,857
  • Edited 7:22am Nov 28, 2013 7:10am | Edited 7:22am
Bought euraud 1.4888 with a bit of a base forming, Asian session low has held for the last 11 hrs or so. 1hr inside candle with an upper wick. There is a problem at 1.4930 where we fell from this morning.

Will post charts as usual if trade pushes up in resumption of trend, not giving this one much room as we are in the resistance area (its a large one 1.4900-1.5030).
  • #6,858
  • Nov 28, 2013 7:24am Nov 28, 2013 7:24am
Quoting Vantage
Bought euraud 1.4888 with a bit of a base forming, Asian session low has held for the last 11 hrs or so. 1hr inside candle with an upper wick. There is a problem at 1.4930 where we fell from this morning. Will post charts as usual if trade pushes up in resumption of trend, not giving this one much room as we are in the resistance area (its a large one 1.4900-1.5030).
OK we are challenging the highs/D pivot at 1.4934 ish and time should quickly tell if we can push higher or if move is a fake out.
  • #6,859
  • Nov 28, 2013 7:34am Nov 28, 2013 7:34am
Quoting Vantage
{quote} OK we are challenging the highs/D pivot at 1.4934 ish and time should quickly tell if we can push higher or if move is a fake out.
Mmmh if we do break out higher above 1.5030 the next resistance level I see (you'll need a monthly chart) is 1.55. The key word as always is if.

Might not be the volumes today with US hol's.
  • #6,860
  • Nov 28, 2013 8:23am Nov 28, 2013 8:23am
Quoting Vantage
Bought euraud 1.4888 with a bit of a base forming, Asian session low has held for the last 11 hrs or so. 1hr inside candle with an upper wick. There is a problem at 1.4930 where we fell from this morning. Will post charts as usual if trade pushes up in resumption of trend, not giving this one much room as we are in the resistance area (its a large one 1.4900-1.5030).
Hi Dave, did you take entry off 15 min chart. Entry on 1Hr per rules would be above 1.4944?
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