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  • #81
  • May 13, 2014 3:19am May 13, 2014 3:19am
Hi dkrock,

Thanks again for all your advice in this forum, I undersrtand you don't trade during high impact news events could I ask as you trade on the 5M chart how long a gap either side of the news you stay out of the market or is it more dependent on the particular impact the news had on the market.

Cheers...Des
  • #82
  • May 16, 2014 2:41am May 16, 2014 2:41am
Quoting des_b
Hi dkrock, Thanks again for all your advice in this forum, I undersrtand you don't trade during high impact news events could I ask as you trade on the 5M chart how long a gap either side of the news you stay out of the market or is it more dependent on the particular impact the news had on the market. Cheers...Des
There is no set time value. I can see the market going flat before the release. I try to exit before I get caught in the pending order initialization head fakes and subsequent stop hunts. After the spike I just wait for the next signal like any other trade. I have to give my indicators time to adjust after being "shocked" out of place.
You cannot be extraordinary by being normal
  • #83
  • May 16, 2014 3:32am May 16, 2014 3:32am
thanks
  • #84
  • May 20, 2014 5:29am May 20, 2014 5:29am
Nice thread! Keep it up!
fokyou forexfactory
  • #85
  • May 25, 2014 5:16pm May 25, 2014 5:16pm
Dkrock i've been reading carefully your posts but i cant seem to grasp the meaning of equilibrium . Specifically i dont understand the price should gravitate around the moving average part . If you dont mind take a look at my screenshot and comment on the three MAs(white,pink,yellow).Thank you
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  • #86
  • May 28, 2014 10:05am May 28, 2014 10:05am
I've looked at Dk's method for some time now, he has offered quite many interpretations, but I've dismissed quite many of them. Literally the last path of study is showing something, whether it is an incoming train or a light I'm approaching in the infamous tunnel, remains to be seen. I've sticked to the same equilibrium line and data/chart I posted some time ago (post #55). My equi-line is about the same as a SMA20, I can plot many lines on the chart, which represent equilibrium by definition(the last pic has equi-lines for period 30 and 10), but I think the important bit is to have reasonable movement around it, otherwise there's nothing to profit from.

On the first pic below are the raw signals from price oscillating around the equi-line with mild turning point indications. The very first signal is a headfake, as Dk would call it, not a great entry but wouldn't turn into a loss either. Other signals are good! I'm even having earlier signals than Dk in some places. Measuring acceleration might be a good addition, it would filter out the headfake, on the other hand it'd delay subsequent signals. I'll get a bigger hammer and try if I can beat better numbers out from my current acceleration meter.

The most difficult part is detecting consolidation zones, those will kill this system, no doubt about it. Using indicator smoothing like Dk, hasn't yet worked even once for me, inherited lag goes haywire very quickly. Anyone having better success?
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  • #87
  • May 31, 2014 1:21pm May 31, 2014 1:21pm
Quoting argosgate7
Dkrock i've been reading carefully your posts but i cant seem to grasp the meaning of equilibrium . Specifically i dont understand the price should gravitate around the moving average part . If you dont mind take a look at my screenshot and comment on the three MAs(white,pink,yellow).Thank you {image}

I understand. It took me awhile to grasp it too. For starters, stop trying to create equilibrium on a 1M chart. Use the 30M chart. I cannot comment on your lines because I do not know their values. Using high inputs on a 1M chart is really looking at a lower value on a higher chart. It does not help you trade the 1M chart, it only shows more specific entries and exits for a higher time frame. Instead, create the moving averages on the higher time frame and then gradually lower the time frame as your skill in defining the probability increases. This past week there were only two occasions when I used the 5M chart. It seemed the majority of trades were following the 15M chart, so I used those signals instead. You can only make profit when there is volatility. Price must move up and down. If you create equilibrium properly, you can find the chart that shows the best tracking and then trade it to make your profit. When the Average Daily Range is high, then the 1M chart might show you good trades. But, when the ADR is low, you have to take in more data to find the consistent direction that will surpass the spread and give you enough profit. The problem with creating equilibrium on a 1M chart with high values means it will not be effective on any other time frame. You have decide if some pips, taken in high probability trades, are more important than whipsawed pips on a 1M chart that may or may not even cover the spread in low volatility. I spent way too much time out of my life trying to make a 1M chart consistent, so I have no advice on how to trade a 1M chart because I do not know how to trade it myself.

Equilibrium is merely tracking the direction of buying and selling. You still need enough buying and selling in one direction long enough to profit. This means you have to follow the money by using the time frame that is showing sensible trades according to market activity. Of course, the problem with this type of trading is you have to be patient and be available to trade. If you have a job, it will be difficult. Sometimes I forget not everyone trades full time, so my advice is not easily taken by people who are not professional traders. Anyway, design your method on the 30M chart and you will be amazed how well it transfer to other time frames.
You cannot be extraordinary by being normal
  • #88
  • May 31, 2014 1:45pm May 31, 2014 1:45pm
Quoting candero
I've looked at Dk's method for some time now, he has offered quite many interpretations, but I've dismissed quite many of them.
It looks like you are progressing. I am not sure what those lines are that you are using, but they look a bit choppy. I just use Simple Moving Averages, but I am open to improvement When you dismiss my interpretations it means you are doing your own thing, so since I do not know what you are doing, I am not sure how much help I can be.

After you determine your equilibrium value, you need some kind of indicator with an appropriate range to measure your 30 and 10. This is why I use SMAs. Most indicators are written against moving average arrays, so if you are using moving averages on your chart, then your indicator will actually function and measure the standard deviations of the SMAs.

If you would build something like that, then consolidation is found when the 10 is showing buy, but the 30 is showing sell. Since I do not know what you are doing, I cannot offer any advice specific to your design. Sorry. Creating a trading system requires overlapping the available tools so they coordinate and confirm to each other. You have to take a macro viewpoint. People who are naturally introverted tend to focus on the weeds and precision. Their reward is frustration and failure. You have to keep the big picture in mind. It is not about this candle or that candle. It is about getting from a high to a low and then getting from a low to a high. If you think of driving it is about getting from one city to the next, and not about the buildings you see along the way.

I would guess that your arrows have a value to them that most closely follows your interpretation of a high and low. However, you have nothing to confirm whether the arrow is valid or a head fake. This would be your next task. Treat the arrow as an alert, not a signal. Ding Ding, look at the chart because there might be a trade. Not Ding Ding take a trade.

Also, where is the language concerning your exit? Is your exit the next entry? That is dangerous if you are caught in consolidation. Once you confirm your entry though, and use moving average indicators to track the equilibrium, then the standard deviation of the indicator will show you the exit. That is why you have to coordinate the indicators with moving averages on the chart. Otherwise, you cannot see the exhaustion points using probability, you have to use your mind instead and you won't take enough advantage of the market to make serious money.
You cannot be extraordinary by being normal
  • #89
  • May 31, 2014 1:53pm May 31, 2014 1:53pm
Remember profitable trading is about following the money. If you are using tools that no one else is using, then you are not trading with the herd. You are leaving yourself open to being wrong. Stop trying to be precise. Wait until you know what direction the money is heading, open a trade, and follow the money until it stops going that direction. You DO NOT have to be precise. YOU ONLY HAVE TO KNOW THE DIRECTION. The direction of the trade is what makes you money, not finding every high and low. The direction shows you the high and low as part of history, not as part of your entry/exit trading plan. If you trade when the money turns until it turns again, you will rarely lose a trade and will make consistent pips with low anxiety and nearly non-existent drawdown. They can't stop you when you are mixed in with them. They can only get you when you are an outlier, or a target outside the group. Cowboys don't chase cows that are moving with the herd.
You cannot be extraordinary by being normal
  • #90
  • May 31, 2014 3:34pm May 31, 2014 3:34pm
Hmm, so something along these lines like the pic below. Entry white line, exit red. It's nothing spectacular, just a raw sketch.
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  • #91
  • Edited 5:23pm May 31, 2014 3:49pm | Edited 5:23pm


That move in the yellow box, basically it defines that day, but given my current setup (and understanding) I will never catch it. Every solution to get that compromises the first part of the day, it shouldn't be that kind of a trade-off, should it?
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  • #92
  • Jun 1, 2014 10:19am Jun 1, 2014 10:19am
Quoting candero
Hmm, so something along these lines like the pic below. Entry white line, exit red. It's nothing spectacular, just a raw sketch.
What is the indicator? Awesome? It does not support your white and red lines, so why are you using it?
You cannot be extraordinary by being normal
  • #93
  • Jun 1, 2014 10:51am Jun 1, 2014 10:51am
Quoting candero
That move in the yellow box, basically it defines that day, but given my current setup (and understanding) I will never catch it. Every solution to get that compromises the first part of the day, it shouldn't be that kind of a trade-off, should it?
I do not know enough about your strategy to agree or disagree with your analysis. The first pic is my trade during the time on your screenshot.

The remaining portion of the trade began to wobble up and down, which is normally good, but the overall market was only sell. So, only sell trades should have been taken. Since the range from high to low significantly lowered the best way to capture any further pips was to upgrade to a 15M chart where the whipsaw was not so evident. When you get caught in whipsaw, but the market has a direction, then simply wait for a signal in the proper direction of your preferred time frame and then use a smoother time frame for the exit. The cleaner the picture, the easier to trade it

If the market is flat though, but cycling, then you would lower your time frame to improve your entry and exit position.

I don't recommend using multiple charts. I still use the 5M chart as my primary. But in conditions where the market is flat and cycling I can improve my trades by also using the 1M chart as long as the range between entry and exit supports trading. And in conditions were there is an obvious trend, but the market is head faking and you know it...then I also use the 15M chart to smooth out the garbage.
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You cannot be extraordinary by being normal
  • #94
  • Jun 1, 2014 2:00pm Jun 1, 2014 2:00pm
Quoting dkrock
{quote} What is the indicator? Awesome? It does not support your white and red lines, so why are you using it?
Does not support? Those lines are based on that indi, direction change signals the apex or its whereabouts, hence the entry, exit comes from reaching the deviation line on the other side as you suggested.

No, it is not Awesome oscillator, I did look at it, but to me it looked useless in this concept. If you want to know, I named it "1 DK", the dev lines track the histogram deviation, yellow line is smoothed MA of histogram (seems useless at the moment as well).

Quoting dkrock
I do not know enough about your strategy to agree or disagree with your analysis.
It's funny you say this, I'm merely replicating your teaching. Got an equi-line, tracked the price, entered at the apex, exited at the standard deviation. I'm yet to put "my spin" on it.

Quoting dkrock
...only sell trades should have been taken. Since the range from high to low significantly lowered the best way to capture any further pips was to upgrade to a 15M chart where the whipsaw was not so evident.
In hindsight I agree, but trading in that moment I'm not so sure it would have been so clear.
  • #95
  • Jun 1, 2014 10:29pm Jun 1, 2014 10:29pm
Quoting candero
{quote} Does not support? Those lines are based on that indi, direction change signals the apex or its whereabouts, hence the entry, exit comes from reaching the deviation line on the other side as you suggested. No, it is not Awesome oscillator, I did look at it, but to me it looked useless in this concept. If you want to know, I named it "1 DK", the dev lines track the histogram deviation, yellow line is smoothed MA of histogram (seems useless at the moment as well). {quote} It's funny you say this, I'm merely replicating your teaching....
The pic in Post 90 shows white and red lines that you said were entries and exits. I do not see those lines lining up with indicator color changes, indicator line crosses, or the indicator crossing the median line. For that reason, I do not know how the indicator supports your signal.

Your moving averages appear choppy, so they do not look like moving averages to me. If they are not moving averages, you will have a bit of a struggle finding an indicator to confirm them since almost every indicator is a reflection of moving average inputs.

That is all I am saying. It just doesn't look right, but if it is working for you, then use it.

I have no idea how to use an Awesome indicator either, lol, as it seems worthless to me too.

As far as knowing when to switch to the 15M chart, you are only looking at one indicator in my screenshot. When I look at my full trading system there is no doubt in my mind that not only is it selling, but also consolidating. That tells me that whipsaw or head fakes are imminent. However the sell signal was extreme. So, rather than try to keep making sell trades, for this situation it is easier to use the chart that is tracking price smoother. I do not know what the currency meter reading was, or what the news was, but it is apparent something triggered a big sell and either the big banks were cashing in from trades placed prior to the news, or people with poor trading systems were thinking the sell had reached the bottom. Anyway, using the rest of my system, it was obviously not going to buy anytime soon, yet was in a range collapse compared to the trade you displayed. You could have walked away after the big move, or tried to trade 4-5-6 mini sells, or just sell by using a higher time frame when price started selling again. It really was/is not hard to see.

If you are having success with your template in the pic, then you should stick with it. Don't let me dissuade you from making profit in whatever fashion is logical and comfortable for you. While I have not disclosed my actual method, it is great that you have explored your own method based on my recommendations. I have offered templates to people in the past and believe it or not, they change them or can't figure out how to use them so just forget about them. LOL. So, it is probably 1000 times better that you figure it out on your own, in my opinion. I can share the strategy, but you need to find the method that works best for you. It seems you are building it.
You cannot be extraordinary by being normal
  • #96
  • Jun 1, 2014 11:21pm Jun 1, 2014 11:21pm
Quoting argosgate7
Dkrock i've been reading carefully your posts but i cant seem to grasp the meaning of equilibrium
I have been thinking about this more and perhaps I can help a little. When it comes to equilibrium you are looking for the 1/x crossing of the moving average. For instance candero mentioned using a 20 something for something. So if you decide 20 is the moving average you want to use, then you are saying that the 1/20 crossover is the line between buying and selling that you want to use.

Then you find an indicator that can measure the movement of price over 20 periods and show you its apex. It is your choice which one to use. Nearly all of them will signal at the same time, but some will look clearer than others, and some will use 0 as their 20 period crossover while others will use 50. This just means that when price crosses the 20 moving average, then the line on the indicator will cross 0 or 50.

How far will price move from the 20 moving average before stopping, turning around, and returning to the 20 period moving average? The 20 moving average on the chart cannot show you that. It only shows you when price crosses it, and that's it. So basically, it is your high probability entry point. The indicator, however, is aligned to measure how far price has moved from the 20 moving average. By applying standard deviation and maybe a moving average to the indicator you can further predict when price will stop, turn, and return.

The key to your success is determining the moving average you are comfortable to use as your entry point. This is your definition of equilibrium. Once you decide, then you use the indicator to show you the exit. From there you can add additional confirmation and/or alternate views.
You cannot be extraordinary by being normal
  • #97
  • Jun 2, 2014 5:06am Jun 2, 2014 5:06am
Quoting dkrock
{quote} The pic in Post 90 shows white and red lines that you said were entries and exits. I do not see those lines lining up with indicator color changes, indicator line crosses, or the indicator crossing the median line... While I have not disclosed my actual method, it is great that you have explored your own method based on my recommendations. I have offered templates to people in the past and believe it or not, they change them or can't figure out how to use them so just forget about them. LOL. So, it is probably 1000 times better that you...
Maybe I should have explained it a bit better - signals are raised at bar opening considering the value change in the last two bars. I do not know the exact value before bar close. So, white line means position gets opened at bar #1 if there was a direction change between bar #2 and bar #3, plus the change needs to be on the right side of the zero line. In addition I look for signs of reversal, too.

Regarding the template or strategy share I was about to bring this up. You say you're scared to say this or that because the very next morning you have thousands of signals competing to yours. I don't really agree to you because one thing is sharing and other is putting it into practice! Replicating a strategy is not so easy, it depends largely on how mechanical it is and its overall complexity. It comes down to people's skill and experience, and lets not forget - his/her needs and preferences. It is much harder than it looks I say it's your system, you say you don't understand - this captures the essence I believe!
  • #98
  • Jun 12, 2014 11:33am Jun 12, 2014 11:33am
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  • #99
  • Jun 17, 2014 12:33pm Jun 17, 2014 12:33pm
Good read, only been trading for 9 months or so. I do not follow this in its entirety, but here is my go at it. Closed it at 10 pips cause I thought it was going to consolidate.
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  • #100
  • Jun 17, 2014 1:07pm Jun 17, 2014 1:07pm
Ucad for 11 pips
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