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Animal Farm (Renko system)

  • #41
  • Dec 30, 2013 10:33am Dec 30, 2013 10:33am
I managed to get a small profit, getting stopped out at the first fractal while I was asleep. Then the market did a turn around.

First it broke above the small red LL LH sequence at the thin red line then it took out the last LH at the thick red line and really that confirms it is now heading up making a series of HH HL as it goes.

Each HL has provided and nice wick entry. If I can, between other activities, will try and catch the next one.

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Having to sleep now and then makes for some missed trades, but more come along all the time.
  • #42
  • Dec 30, 2013 11:18am Dec 30, 2013 11:18am
Think I'm starting to get what you're saying about the correct reading on the HH HL LL LH, etc.

Takes a bit of getting used to.
  • #43
  • Dec 30, 2013 11:28pm Dec 30, 2013 11:28pm
Hi Wab,

I appreciate your willingness to share. Is the below set up correct and would you take a short (overlooking the fact that it is a holiday season). thanks again.

regards,
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  • #44
  • Dec 31, 2013 11:16am Dec 31, 2013 11:16am
Looks good pappi. I actually took that trade as the HH HL sequence changed to LL LH. I will post the EURUSD chart and it really has some good examples.

With New Years and so forth, I have not been able to really sit down to this but that will change once things settle down.

Attached Image (click to enlarge)
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There is a load of information on this chart. I don't have time to go into it all now but will do so later.
Meantime have a look and see what makes sense and what doesn't.

Happy New Year. May 2014 be the year the pips rain down on us.
  • #45
  • Dec 31, 2013 11:31am Dec 31, 2013 11:31am
Quoting Wab
Looks good pappi. I actually took that trade as the HH HL sequence changed to LL LH. I will post the EURUSD chart and it really has some good examples. With New Years and so forth, I have not been able to really sit down to this but that will change once things settle down. {image} There is a load of information on this chart. I don't have time to go into it all now but will do so later. Meantime have a look and see what makes sense and what doesn't. Happy New Year. May 2014 be the year the pips rain down on us.

Hey Wab...thanks for the update.

I had marked up this EU chart prior to your post to see if I was getting the idea. No entries though.
I thought that last LL would be valid as price just broke the previous LL, which would seem to make that previous fractal a LH. Then that HH which I marked too soon...should wait till price breaks the new LL.

So am I missing something. Does price have to close or breech by a certain amount to be a valid new LL.
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  • #46
  • Dec 31, 2013 4:03pm Dec 31, 2013 4:03pm
Hi spyderman.

It takes a bit of head-wrapping-around to get this. (I will have to put together a graphic.)

Compare your count to mine. I do not label an LH until price breaks below the previous LL. We can only know that it is an LH after that happens.

I have added some more info to the chart showing possible WE bullish trades, that I did not take as I was busy setting rubies. I have also updated the LL LH fractals at the right.

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The next bullish reversal is confirmed when price breaks back above the last LH that we have confirmed. We may get more so just keep tracking them as they form and are confirmed by a break belwo the last LL.

(Another set of LL LH have formed while I write this, so my reversal level is now on a lower confirmed LH as price breaks its last LL.)

Once you can see this you will never again believe any of the so-called "trend indicators" which mostly get it wrong.

Now look at all of the bearish WE locations that were there for the plucking.
  • #47
  • Dec 31, 2013 4:05pm Dec 31, 2013 4:05pm
A parable about indicators.

A MafiaGodfather finds out that his bookkeeper, Enzo, has cheated him out of 10 million bucks.

His bookkeeper is deaf.
That was the reason he got the job in the first place.
It was assumed that Enzo would hear nothing that he might have to testify about in court.

When the Godfather goes to confront Enzo about his missing $10 million, he takes along his lawyer who knows sign language.

The Godfather tells the lawyer, "Ask him where the 10 million bucks is that he embezzled from me.

The lawyer, using sign language, asks Enzo where the money is.

Enzo signs back, "I don't know what you are talking about."

The lawyer tells the Godfather, "He says he doesn't know what you are talking about."

The Godfather pulls out a pistol, puts it to Enzo's temple and says, "Ask him again!"

The lawyer signs to Enzo, "He'll kill you if you don't tell him."

Enzo signs back, "OK. You win!

The money is in a brown briefcase, buried behind the shed in my Cousin Bruno's backyard!

The Godfather asks the lawyer, "What did he say?"

The lawyer replies,

" He says you don't have the balls to pull the trigger."

Indicators are like lawyers. Don’t trust them. They often lie and you have to recognize that as a fact. Learn to read the signs yourself.

(Note: Any lawyers reading this are probably doing so on time that they are also billing clients for.)
  • #48
  • Dec 31, 2013 4:49pm Dec 31, 2013 4:49pm
Quoting Wab
Hi spyderman. It takes a bit of head-wrapping-around to get this. (I will have to put together a graphic.) Compare your count to mine. I do not label an LH until price breaks below the previous LL. We can only know that it is an LH after that happens. I have added some more info to the chart showing possible WE bullish trades, that I did not take as I was busy setting rubies. I have also updated the LL LH fractals at the right. {image} The next bullish reversal is confirmed when price breaks back above the last LH that we have confirmed. We may...
Thanks Wab for the update.
Yeah I think I get most of that. My question is on the fractal I have marked LL on this chart. It just broke the previous LL by a pip. Is that enough to constitute a new LL. If so then would that confirm the new LH circled?

Thanks
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  • #49
  • Dec 31, 2013 6:37pm Dec 31, 2013 6:37pm
A break is a break.

Very close LL fractals might be a double bottom, but usually it is pretty clear.

Sometimes the retrace levels are very close and can cause confusion. I will get to that eventually when I add a bit of Elliott Wave.
  • #50
  • Dec 31, 2013 7:56pm Dec 31, 2013 7:56pm
I checked the chart and after a more careful look ... sorry I missed that. ( A good student will always excel the teacher.)

Attached Image (click to enlarge)
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There were two situations where the fractals were very close, making it hard to figure out the sequence.
I would change time frames in a regular chart to sort that out. Going to a higher time frame often clears up any confusion.

I haven't experimented enough with different sized Renko blocks but the same trick would probably work. I know some people keep two or three charts with different size blocks running.

Anyone with thoughts/ experience on that please jump in.

The DMTL also helps when that second LL swings slightly lower and it adjusts and gets your attention.

Another thing I do is use the 5 34 5 MACD to figure out possible Elliott Wave counts. (We haven't got to that yet.)

I really don't want to get all EW on everybody at this point.
I will try to give ways to get around the dreaded wave four correction which always causes confusion.

Here is an EW view for those interested. All kinds of people will now jump up and down and offer their view of my count,
but as I said, I will try to avoid that and mostly keep this EW free.

Just be suspicious of fractals that are very close to each other in price.

Here is an EW view for those that might see how it applies.

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Again, I don't want to get this all EW oriented.

As the charts evolve the method will become more clear. I appreciate people like spyderman who call my attention to the things that I miss and thereby help me polish this.

Now, I am signing off for New Year's Eve in the Rocky Mountains. Where's my party hat?
  • #51
  • Dec 31, 2013 7:59pm Dec 31, 2013 7:59pm
Quoting Wab
A break is a break. Very close LL fractals might be a double bottom, but usually it is pretty clear. Sometimes the retrace levels are very close and can cause confusion. I will get to that eventually when I add a bit of Elliott Wave.

Hey, Dude...

Seen ya still online, thought I'd stop by and wish ya a Happy New Year!

All the best to you and your thread in the coming!

Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #52
  • Dec 31, 2013 11:54pm Dec 31, 2013 11:54pm
Anything with pigz in the higher hierarchy amuses me.
Next, Ill read and Ill listen carefully..
  • #53
  • Jan 1, 2014 1:39pm Jan 1, 2014 1:39pm
Welcome aboard 21vs7. At one time in his life, my father in law raised pigs. One day the government inspector came to visit and asked his wife where he was.

"He is out in the barn with the pigs,"she replied. "He is the one with the hat on."

****************************************************************************************************************************

CRL.

I want to take the opportunity to stress an important point. From now on I will try to conscientiously add a line on the charts that I will label as the current reversal level. CRL. I encourage readers to do the same. Will I always get it right? Will it always work? No. But it will work often enough and as you try to add it you will get very good at it and find it becomes part of your price action analysis.

The CRL will be the most recent confirmed LH or HL. It marks the level at which a trend of HH HL reverses or a trend of LL LH reverses.

(In Elliott Wave it is where wave three is confirmed as it breaks past wave 2 or wave C is confirmed as it breaks past wave A. Not that we need to worry about that too much. I am trying to keep this as Elliott free as I can.)


Attached Image (click to enlarge)
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If the market breaks above this CRL level a reversal in trend has occurred. If a new LH forms we should move our CRL down to the new LH fractal. The CRL is always at the most recent confirmed LH or HL.

Note: There is one place where we will not necessarily have a turn that occurs on a fractal. I mention it now because I don't want you thinking I am making it up a as I go along. I will be sure to point it out when it occurs and will refer back to this note if questions arrive.
  • #54
  • Edited 2:50pm Jan 1, 2014 1:43pm | Edited 2:50pm
Summary: I have tried to lay the groundwork of using fractals to count the HH HL LL LH sequence.
I have discussed the importance of wicks on median Renko bars where a color change occurs.
I have touched on the significance of where wicks occur in a fractal and how they predict fractal formations.
I have pointed out that not all De Mark Trend Line points are fractals but all fractals have the necessary three point patterns that DMTL uses.
I have discussed the fractal where a trend reversal can occur.

Abbreviations:

HH ... Higher High.
HL ... Higher Low.
LL ... Lower Low.
LH ... Lower High.
WE ... Wick Entry.
FC ... Fractal Confirmation.
CRL .. Current Reversal Level.

I think I have established the basis for a system and I am ready to take it in some different directions.
First of all, I think I will try to catch some trades (as time permits) and field any questions.

Time to go play some New Year's Hockey and relax for a bit.
  • #55
  • Jan 1, 2014 6:48pm Jan 1, 2014 6:48pm
The LH (CRL in the last chart) was broken as price moved up. It is now dropping and this is what I referred to as a point where a fractal may not form when the price turns back up.

(This came up quickly, as I thought it might , so I am glad that I mentioned it in post 53.)

I am looking for a fractal or at least DMTL point, a change in the location of the green DMTL and a WE to go long form.

Let's see how it goes.
  • #56
  • Jan 2, 2014 4:16am Jan 2, 2014 4:16am
Wab, why do you over complicating so simple things. Just follow the order flow and that is it. What is the point of Fractal ? Wave counting ? We have been trading this way for years already, it is sonic R system, it is works with candles, bars, renko, you can take any chart, order flow every where is gonna be the same. I don't like renko 4, I prefer renko 10, because it doesn't have so much noise. But here is the entry, from today, every thing simple. Brake of the base, HL, low swing poin, any way, wait for retrace to dragon and two renko candle same colour in the direction of the move, and sell.
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Even though I walk through the darkest valley, I will fear no evil
  • #57
  • Jan 2, 2014 4:22am Jan 2, 2014 4:22am
Quoting Wab
Welcome aboard 21vs7. At one time in his life, my father in law raised pigs. One day the government inspector came to visit and asked his wife where he was. "He is out in the barn with the pigs,"she replied. "He is the one with the hat on." **************************************************************************************************************************** CRL. I want to take the opportunity to stress an important point. From now on I will try to conscientiously add a line on the charts that I will label as the current reversal level. CRL....
WAB, this doesn't work with trading, there is no such a thing like here this way and there is another way. You should have hard rules, entry, SL, BE, TP. Only in this way you can make profit.
You gonna have to make a plan, place everything together, make testing, or at least back testing.
And after show it to public.
Right now you have a mess with all information that you gave, showing how much pips you could make with a history, and trading live it is a big difference !
Even though I walk through the darkest valley, I will fear no evil
  • #58
  • Jan 2, 2014 6:23am Jan 2, 2014 6:23am
Quoting monocor
Wab, why do you over complicating so simple things. Just follow the order flow and that is it. What is the point of Fractal ? Wave counting ? We have been trading this way for years already, it is sonic R system, it is works with candles, bars, renko, you can take any chart, order flow every where is gonna be the same. I don't like renko 4, I prefer renko 10, because it doesn't have so much noise. But here is the entry, from today, every thing simple. Brake of the base, HL, low swing poin, any way, wait for retrace to dragon and two renko candle...
Monocor...

Why in the world are you trashing Wad's trading system when he hasn't even finished explaining it. He's delivering it at his own pace which is his prerogative as the thread OP. If you don't like what you see and have a better way, start your own thread. Or go over to sonic R and post there.

I just can't understand peoples need to come on these threads and tear everything down.

Wad...looking forward to hearing more. It may not end up being right for me, but I'll never know if I don't listen.
  • #59
  • Jan 2, 2014 6:26am Jan 2, 2014 6:26am
I am most interested in learning these concepts, price action is so important and Wab is stressing it.
  • #60
  • Jan 2, 2014 8:03am Jan 2, 2014 8:03am
Quoting spyderman
{quote} Monocor... Why in the world are you trashing Wad's trading system when he hasn't even finished explaining it. He's delivering it at his own pace which is his prerogative as the thread OP. If you don't like what you see and have a better way, start your own thread. Or go over to sonic R and post there. I just can't understand peoples need to come on these threads and tear everything down. Wad...looking forward to hearing more. It may not end up being right for me, but I'll never know if I don't listen.
I am one with spyderman, Wad, we are all interested in your Renko trading research, don't care about the "strangers". I have been "playing" with Renkos for about two years now. And thanks monocor for introducing Sonic R!
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