Similarity Trading - The ZZBB Method

Closed this shitty trade. Letting the USDCHF run but SL set at BE.

Closed USDCHF when Template 1 printed a purple dot ZZB Level 2
It's not obligatory to exit, but if you notice previous turns have been on purple and brown. Yes, they repaint... which is why it's re-evaluated constantly.
Nothing is a straightline.

+24 pips today.

Here's a little update on EURJPY.
The first chart is from a couple of days ago. Note that the 300EMA is the target for the potential reversal.
The second chart shows how this has developed. Based on the last 2 attempts, the piercing of the 300EMA hasn't been strong enough and it has traveled beneath the moving average to lower prices.

I'll be waiting for a Short Trigger signal. Good reversal points are The Level 2 and 3 Pivot Points (orange).... it's reached one of them already so a reversal is in sight.

Got an excellent question(s) from a PM that I'll share here:

1. Yes, most of the time Price turns occur on or after a piercing of the Bollinger Band. When the Stochastic equivalent happens, then that's a good sign. The danger is that this is not a clear signal for entry.... especially in a trending market.
2. The Swing Indicator I use is set up to print 3 when a valid swing occurs. Sometimes it repaints. Therefore I need another template that helps provide an entry signal.... I'm still working this out.... as Template 2 is often late because it uses lagging indicators (Moving Averages).
3. Any Add-On is good.... Pivot Points, Fibonacci, Murrey Math levels, previous Support/Resistence, analysed Demand/Support ranges... etc.... anything that will add to your reasons for entering the trade or convince you not to trade.

You can see from the 2nd template, that the lagging moving averages allow a sense check. Yes, it is still up to me to make the call but I have found that it has tempered my calls ALOT and reduced my errors. When Template 2 has a very clear BULLISH continuation but Template 1 is saying ZZT and reverse, I will ignore it.

In this case, it's not a bullish continuation (zoom out to H4, daily and Week) and you'll see a bigger picture. I think there is room to go below 1.35077

I'm about to close my 2 trades and then I'm done for the week. I don't like carrying trades over the weekend and the few times I've experimented doing that recently, has resulted in draw-downs. So I won't do that again.

I've been developing some trading targets based on my recent Attempt 2 and 3 experiences.
So far, this attempt is way ahead of the trading goals I've formulated which is an excellent sign. I will post these later once it's fully developed.... it has 4 phases spread over 3 years. Phase 1 is £250 per week goal target... I need to translate this to pips, depending on the platform I use.

Hi vlady1974,

Thanks a lot for responding to my questions. That makes it more clear.
I think I'll read and catch up on some of the things you have written in this thread. Great work!

Is the indicators and the template attached somewhere? Sorry if they are - but I'm quite new to FF.
According to your confirmation/verifying of the signals with the second template - they are lagging of course... but I want to run trade simulations with some other add-ons when I have setted up the very same platform as you. I think it could be very savvy to add some Synergy/Heiken Ashi bars, perhaps the THV-coral and maybe the THV-Trix and the THV Trend indicator. Or experimenting with other confirmation-indicators. But thats just extra stuff and you are doing very good.

What about SL and TP? Do you place the SL around an even number, swing high/low or S/R-lines? And when that is set then finding a proper TP-area with the SL and risk/reward in mind? ... I mean if things go against you - are you waiting until your SL is taken out or what do you look after?

Thanks for your respond and good weekend.

Awesome suggestions. I started looking at the Synergy/HA bars over the weekend.... has similar concepts for triggering the entry.
I'll try and post the template when I get home.

I think my style is a mixture of scalp and medium term trades. It's taken me a long time to move away from 5M-15M and I am quite happy now looking at 1H. There's something quite comforting about knowing that a move has a longer duration. Through the years, I've used many forms of breakout triggers. Most of these are the same, touches of boundaries are just another form of breakout.

"Trading In The Zone" is teaching me to accept that every decision carries the weight of being "wrong"... or risk of heading in the opposite direction. So my current attempts don't have an automatic SL. I've seen the debates over the last 7 years. My mental stop is 25 pips per trade. But that doesn't often mean I will trigger it if I am down.... it depends on the price action. Sometimes I am dead wrong and I am still trying to work out when I can measure that.... eg. Supports are support.... until they are not.... it's the last bit that I've been caught out wrong before. Often times, I've just come in too early.

I think on that front, I've moved on to a financial trigger. On a $5K account, 3% is $150. But 30% is $1500 and that equates to 10 trades or 5 trades of $300 to be wrong.... or 2 trades of $750... if you see what I mean. Now that I am on $10K (all demo by the way), the $3000 is my account trigger. Some say it's too high. That's fine. To each their own. For the TP I'm in 2 minds. Recent price action over alot of pairs has relied on news for the big moves. So taking 20-30 pips is currently the norm. I do use Fibs and D/S.... I look out for them... and usually Template 1 gets the signal right.

Anyway, I will explore Synergy a bit more.

vlady, I have been following the similarity system threads since the beginning. It has given me some new ideas about what I am looking for to trigger a trade. I see from your posts that you have experienced the same. How big a difference has it made in your trading? What I am wondering is if you ever had a doubling of your equity before as you have with 2 simulated accounts now?

Hi Kenergy,
I thought I'd answer this now as I don't have much time to do trade analysis these days.

I can say, that NOW:

a) I trade on the 1H and have hardly looked at lower tfs. If anything, I would go to 4H, Daily, Monthly to see if my analysis is correct.
b) The entire experience, surreal as it may be, has actually been extraordinarily liberating, enlightening and has improved my trading and my attitude to trading.
c) The "experience" is anchored to Similarity/Dissimilarity because that's where it came from, but my transformation has also incorporated:

1. "Trading in the Zone" = this book helped to crystalise the experience in my head. To not really trying to be "correct" but trusting my indicators... even when they conflict. Accepting that I am wrong and not panicking on trades..... thus, it's not that my trading has become reckless or careless but that it doesn't matter if I am wrong. I know that I am now placing my trades in the sequence of the ZZ swings, and I am entering based on Template 2... and when I break the rule because I "sense" something, if I'm wrong... it's okay!
2. Template 2.... right now, I can't remember the source. Let's see.... Got it! "The Simple Strategy" (Amazon). This allowed me to filter out alot of incorrect trades. But on Attempt 3... I am averaging 62% win/loss ratio... .but I'm not trading everyday!! Freeedom!!!
3. I've been on this from Sep to now.... 2 mths and a bit.... $5000 to $11,0000 it's not a bad result. Attempt #1 got me to $25,000 but that was luck and FOMC. I am happy to get $200-300 in a week or $1200 a month! If I continue to Dec then the "system" as I have tailored it to now.... will let me switch to a live account seamlessly. I just won't notice the difference!
4. Anna Couling books.... especially the Volume Analysis has also been another great filter for decision making.

The end result is that, whilst it's not a "mechanical" system.... it does give me a certain "peace of mind" that the trade is ME. The skill is mine and not a computer's.... if it's wrong, I know exactly why.

That sense of knowing is extremely liberating. I can put a trade on whilst on the train and not give a shit. It's that simple. I've psychologically made this account like real money. When I got a drawdown to $3000 in the early days of Attempt #3 I was distraught! So believe me... it's REAL for me.

So as it stands, I've got some underwater trades on EA but the thread and the ZZBB method have become my allies.

It's changed my trading forever!
Hope it helps you. Remember, the original thread described a "design for a jacket" in its concepts. It's up to you to tailor it to fit YOU! That is THE secret.

Best of luck!

Thanks for the detailed reply. I am trying to write an EA to trade based on BB but I am not using ZZ. Perhaps I will have to but I dont know what data it would return to the EA so that would be more investigation to implement. Or I may start out by just running the EA when I see the conditions are right. Then trying to get the EA to read the same conditions that I see on the charts. Not always easy.

Thanks again.

An EA would basically trigger a setup signal.... But you shouldn't trade on it. You do need another filtration system to narrow down the setup.

Because the ZZ behaves like a pendulum, your next swing is triggered to be the opposite direction. The 1H seems to get the best resolution because the inherent danger in ZigZags is repainting. What I've never properly divulged is that certain patterns appear regularly to signal a Repaint. I recognise them more often now so I don't suffer from whiplash as often as Attempt 1 or 2.

The extra thing you'll see on my templates are Pivots. Perhaps a criteria you can give to a trade entry is this:

If the last ZZ Semafor is a 3 and equals a bottom then
a top is a genuine top when
- Semafor prints 3
- price is within 5 pip range of Pivot
- the last 4 mini swings were a Semafor 1 or 2
- price is above BollingerMid
- Price has exceeded BollingerTop in the last 5-10 bars
therefore, SHORT

.... As an example off the top of my head based on everything I've experienced.

Cheers

Hello !

What is and where is the Dissimilarity Indicator by Ralome of the pdf?

Thanks !!!

alazif,
see attached

Thanks Kenergy !

Owing to a serious family situation, I dropped all trading related activity in November.
I'm now resetting everything after a prolonged hiatus. Looking forward to getting back into the swing of things.

Welcome back Vlady, hope all is well with thy flock!

G'day mate! It's great to be back.

Yes, I'm happy to say that all is now well with the family - and the universe has certainly made me very aware of what is truly important... and why we are in this crazy trading game.

I have certainly missed trading and charts and FF. My 3rd attempt demo was trashed though... I think I had about 4 open trades, LOL.
But that's all gone now.

RESET!

Well... what a RESET.
A six month reset to be exact... and it feels good.

Have come back into FX towards end of June, just re-acquainting myself with all the methods etc, but not trading just watching.
Started trading my Live account this week to coincide with the end of June/start of July. It's a bonus that NFP was early due to 4th July holiday in the US.
Promising results so far: +223 pips in 3 days.

Have also been reading the "Delicate Levels" thread, another one started by Eurusdd which has a more refined approach to Price Levels that I like.
I've been testing this out on an End-of-Day basis and have posted on that thread.

Nice way to get back into the swing of things!

Welcome back again lol! 223 pips with the zzbb method?

I'm so chilled out at the moment that I think I've combined a whole bunch of methods.
I definitely have the ZZBB criteria so I was net short on Eu, long on UJ but I was playing with GU as we'll and getting back into crosses of the majors. Haven't looked at Yen too much.

The Bollinger aspect of the ZZBB is the main one. I still look for Close Outside BB (COBB) and the bounce or break of Bollinger Mid. The trigger for entry though could be anything. I've accumulated heaps of those. I like to use one called the 10ROI Method, which is essentially a retrace net entry... But it's quite powerful when combined with Eurusdd's other thread The Delicate Levels. To me it's kind of the same idea... When a Change In Trend is set (ZZBB) then the early moves from that point start creating predictable retrace net patterns... You just get in on the right wave.