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A delicate secret

  • #321
  • Jun 5, 2014 11:34am Jun 5, 2014 11:34am
Quoting Old_Dog
Well, well, well.... After that sharp fall on the news, who would have thought price would return to the last piece of "unfinished business" from a fortnight ago? "Curiouser and curiouser", as Alice once said..... Old Dog . {image}
I believe I know why.....

Eurusdd alluded to it in one of his "many" threads, I also had 22nd May target, but I don't have a good indicator like yours, just statistics.

Every time I doubt this concept, it just keeps proving me wrong.
  • #322
  • Jun 5, 2014 1:18pm Jun 5, 2014 1:18pm
I entered 3 positions on the drop with the identified targets in mind. I was tempted to TP at the first target, but held out, and we managed to cover all three in the space of a few hours. The best part; I felt as comfortable as I ever have watching charts. I have never traded with such exact targets in mind as to where I am expecting price to go. It was a nice feeling.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd.PNG Size: 47 KB
  • #323
  • Jun 6, 2014 1:08am Jun 6, 2014 1:08am
Morning all!

Well, I have been right through my PM (all 40+ of them!) and they fall into two main camps:

(1) Those who want the indicator by PM,

(2) Those who want to know how I trade this, particularly how to take an entry.

My main interest on this forum is to try to impart the (very little) trading wisdom I have accumulated over 25+ years in the game.

I would rather not just hand out fish. I would rather hand out fishing-rods and some tips on where the best trout pools can be found....

So I'll hold on to the indy for the time being, but expand on my entry method.

TAKING CAREFULLY JUDGED ENTRIES

We know that price is roughly Normally distributed (it isn't actually, but it is near enough for Government work).

Hence we can calculate the Standard Deviation, and MT4 has a built-in indy for this.

We know that 68% of the time, the variable (in our case, price) will be within 1 St Dev, and that 95% of the time it will be within 2 St Dev of the mean.

We (think we) know where price will return to.

So it is just a matter of measuring the current St Dev on the timeframe of your choice (I like the M30 charts), and waiting for price to deviate from this level by say 1.8 St Dev. This is around an 80% move.

This gives us a very good chance of getting in somewhere near the maximum price excursion from the target. You can set a stop outside say 3 St Dev (99%), giving a roughly 4:1 R/R which is very good, especially considering how the win rate is looking.

Simple, yet powerful (IMHO).

Best regards,

Old Dog

.
  • #324
  • Jun 6, 2014 2:55am Jun 6, 2014 2:55am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting Old_Dog
Morning all! Well, I have been right through my PM (all 40+ of them!) and they fall into two main camps: (1) Those who want the indicator by PM, (2) Those who want to know how I trade this, particularly how to take an entry. My main interest on this forum is to try to impart the (very little) trading wisdom I have accumulated over 25+ years in the game. I would rather not just hand out fish. I would rather hand out fishing-rods and some tips on where the best trout pools can be found.... So I'll hold on to the indy for the time being, but expand...
Hi OD,

Thank you for sharing...sounds very interesting. I had never used the SD indicator before but I have used bollinger bands. What settings would you typically use on the SD indicator?

Regards

Neio
An expert is a man who has made all the mistakes which can be made
  • #325
  • Jun 6, 2014 3:41am Jun 6, 2014 3:41am
Quoting Old_Dog
Morning all! Well, I have been right through my PM (all 40+ of them!) and they fall into two main camps: (1) Those who want the indicator by PM, (2) Those who want to know how I trade this, particularly how to take an entry. My main interest on this forum is to try to impart the (very little) trading wisdom I have accumulated over 25+ years in the game. I would rather not just hand out fish. I would rather hand out fishing-rods and some tips on where the best trout pools can be found.... So I'll hold on to the indy for the time being, but expand...
Very interesting OD. Thank you so much for sharing!

I coded this up but I'm getting a lot of price levels that simply doesn't touch in years.. Like Neio said, what setting are you using?

Thank you so much!
Focus, Patience, Determination & Order in chaos
  • #326
  • Jun 6, 2014 3:44am Jun 6, 2014 3:44am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting saver0
{quote} Very interesting OD. Thank you so much for sharing! I coded this up but I'm getting a lot of price levels that simply doesn't touch in years.. Like Neio said, what setting are you using? Thank you so much!

My understanding is that OD is only using Standard Deviation to enter trades towards the already predefined exit points. These exit points have a high hit rate. He is using his custom made indicator to define the exits.
An expert is a man who has made all the mistakes which can be made
  • #327
  • Jun 6, 2014 4:02am Jun 6, 2014 4:02am
Quoting Neio
{quote} My understanding is that OD is only using Standard Deviation to enter trades towards the already predefined exit points. These exit points have a high hit rate. He is using his custom made indicator to define the exits.
Oh right, sorry Thanks for the clarification Neio.

Any more tips on figuring out the exists.. hehe
Focus, Patience, Determination & Order in chaos
  • #328
  • Edited 4:25am Jun 6, 2014 4:14am | Edited 4:25am
This week so far!

I've added this concept to my existing scalping method, which almost seems to be a dead cert now that we know where price should be headed.
Attached Image (click to enlarge)
Click to Enlarge Name: Capture.PNG Size: 33 KB
  • #329
  • Jun 6, 2014 5:05am Jun 6, 2014 5:05am
Quoting Neio
{quote} Hi OD, Thank you for sharing...sounds very interesting. I had never used the SD indicator before but I have used bollinger bands. What settings would you typically use on the SD indicator? Regards Neio
I think BB and StDev are the same
Don’t ever let someone tell you that you can’t do something.
  • #330
  • Jun 6, 2014 5:08am Jun 6, 2014 5:08am
Interesting thread and concept... but where are you guys getting the orange arrows from? Did i miss something there?

All else, i think i understood!
Cheers!!
  • #331
  • Jun 6, 2014 5:13am Jun 6, 2014 5:13am
On an extra note:

When using Std. Dev. to enter a trade on the assumption that price will reverse to the predefined level because price hit 2 or 3 times sigma, price can simply correct some and continue for a prolonged time in the initial direction .. ergo trading under the assumption that SL isn't needed is extremely dangerous
Don’t ever let someone tell you that you can’t do something.
  • #332
  • Jun 6, 2014 5:20am Jun 6, 2014 5:20am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting Armacom
On an extra note: When using Std. Dev. to enter a trade on the assumption that price will reverse to the predefined level because price hit 2 or 3 times sigma, price can simply correct some and continue for a prolonged time in the initial direction .. ergo trading under the assumption that SL isn't needed is extremely dangerous
Thanks Armacom,

Yes I agree the problem with only knowing the exit is that you don't know how far away it is going to go away before it comes back! Would the account survive any drawdown.
An expert is a man who has made all the mistakes which can be made
  • #333
  • Jun 6, 2014 5:23am Jun 6, 2014 5:23am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting PipsMaster23
Interesting thread and concept... but where are you guys getting the orange arrows from? Did i miss something there? All else, i think i understood!
A few people have worked out how to find the targets where price will return but they are quite rightly respecting Eurusdd's request not to share an indicator or divulge what they found.

Regards

Neio
An expert is a man who has made all the mistakes which can be made
  • #334
  • Jun 6, 2014 5:35am Jun 6, 2014 5:35am
You can give 10 people the "holy grail", 8 of them will lose money using it.

Carl
  • #335
  • Jun 6, 2014 7:09am Jun 6, 2014 7:09am
There seems to be a contradiction @ 1.36195 EURUSD, price will break that level sooner or later, maybe on Monday.
  • #336
  • Jun 6, 2014 7:27am Jun 6, 2014 7:27am
Quoting Madmoney
There seems to be a contradiction @ 1.36195 EURUSD, price will break that level sooner or later, maybe on Monday.
I have that as well.

Carl

PS. 1.3659 is still unfinished (1-min chart).
  • #337
  • Edited 7:44am Jun 6, 2014 7:31am | Edited 7:44am
Quoting crodzilla
{quote} I have that as well. Carl
Nice one!

We're on the same page, lets see how it plays out.
  • #338
  • Jun 6, 2014 7:42am Jun 6, 2014 7:42am
Quoting Madmoney
{quote} Nice one! We're on the same page, lets see how it plays out.
I'm looking through all timeframes down to the 1-min...

Quite impressive, even through this news cycle.



Carl
  • #339
  • Jun 6, 2014 7:51am Jun 6, 2014 7:51am
Quoting crodzilla
{quote} I'm looking through all timeframes down to the 1-min... Quite impressive, even through this news cycle. Carl
Regardless of the news on USD my target was hit on my GBPUSD short earlier.

I'm sure I'm doing it differently from other people as my screen is messy (5 different types of indies), but it has the same concept.

Hopefully from this I can create a standalone indicator like Old Dog.
  • #340
  • Jun 6, 2014 7:52am Jun 6, 2014 7:52am
Quoting crodzilla
{quote} I'm looking through all timeframes down to the 1-min... Quite impressive, even through this news cycle. Carl
Great job Carl, would be possible to attach a couple screenshots ?
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