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Similarity Trading - The ZZBB Method

  • #181
  • Jul 5, 2014 3:04am Jul 5, 2014 3:04am
Also, most of my profitable trades are on London Open and if the move is in sync, NYC open magnifies it.
i also gauge the Asian period... A study I did of it on EU showed that (currently) if range is skewed, the direction of the day is set. This is since Aug last year. I do recall when it wasn't years ago.

these are things that help make it simpler for me.
A pip is only worth it if you know how much you risked to earn it
  • #182
  • Edited 3:28am Jul 7, 2014 2:18am | Edited 3:28am
Went long on EU from 1.3579 for +21 pips (x2 lots).
That was a counter trade.
I am applying ZZBB signals with something I learned from the Delicate Levels thread. At present I am eyeballing it, but the signal is a COBB on the 15M. I then enter a 5M tf and the trigger is a countertrend bar and then I look for that bar's high (in a downtrend, use the low if in an uptrend). If the next bar is a down, then you could enter a trade (riskier) or enter the trade at the prev bar's high.

The target, is basically the opposite of the above, but I look for the previous valid ZZBB COBB signal. At the moment, my eyeballing isn't refined. I had a level at 3601 and another at 3620. Looks like it's the 3601 that's being respected. I have gone short at 3598.

EDIT:
Went Long on UJ @ 101.949.
As long as it stays above 101.939, it should be safe.
A pip is only worth it if you know how much you risked to earn it
  • #183
  • Jul 11, 2014 10:09am Jul 11, 2014 10:09am
This week's been a meat grinder.

Attached is a 1H on the EU.
Based on the Close Outside of Bollinger Band (COBB) method, the current sequence of swings ended with a confirmed TOP on the 9th July just above 13640. This meant that the next sequence should be a Bottom.

There was a confirmed COBB around the 13602 mark that could have been a Bottom, BUT price subsequently went lower establishing several pin bar hour candles but no Close yet outside the Bollinger band.

Even if we agreed that those 2 swings above were not a legitimate COBB formed Top or Bottom, that means that the next sequence SHOULD STILL BE A BOTTOM.
The only way for this to be invalidated, is if price were to print a COBB TOP that is higher than the last COBB TOP, well into the 13640-13680 range. It could even challenge 13700 which would then see a COBB BOTTOM projected retrace to 13620-13640.

However, given some of the fundamental analysis provided in other threads, there seems to be more fundamental reasons why the value of the EUR would go lower. Despite the dovish tone of the FOMC notes, there is pressure for the EUR to lower its value despite some academic research to suggest that doing so wouldn't actually produce the desired effects.

The stochastics suggests that it is "overbought" but that does not really compute... look at the previous Bottom on the 3rd JULY on Draghi's speech, and compare the stoch values to present... the stoch briefly rose but price still fell sharply.

I have 2 shorts open from 13620 and will keep them open looking to move stops to cover at BE very quickly on Sunday/Monday.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-1H.JPG Size: 247 KB
A pip is only worth it if you know how much you risked to earn it
  • #184
  • Edited 9:15am Jul 14, 2014 3:55am | Edited 9:15am
Just updating the ZZBB method on the EU:

Just looking back at the previous chart in the previous post, the blue box was the area price went to taking out the previous ZZBB Top. This then means that the NEXT swing has to be a ZZBB Bottom. The move, validates the last ZZBB Bottom and also shows that the price to break is 1.3588 which is the last swing bottom.

The shape of the new BB suggests that it could be a vicious swing down after a period of small range consolidation... similar to the ZZBB Top prior to the last ZZBB Bottom. That is, the lower boundary of the BB will swing up and the BB mid will slope downward to the right. At this point, price could either create another ZZBB Bottom which will be good for Bulls, and/or if it does, the a ZZBB Top that is lower than 13640 I think would trigger a major sell-off. This analysis would have to be aligned with any scheduled news.

Both shorts from FRI were stopped out on BE+1, re-entered with an order at 3638 and now currently set at BE+1

EDIT:
Switched to a scalping mode and closed shorts to book profits. Re-entered at 3626 and again I've waited to set to BE+1 for a risk free trade against Dr Drag's statement tonight.... 45min to go.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-1H.JPG Size: 232 KB
A pip is only worth it if you know how much you risked to earn it
  • #185
  • Jul 14, 2014 7:00am Jul 14, 2014 7:00am
15M update
The Bollinger Band has risen as expected to tighten into the slim price range, with a few tails being formed. I've closed one short position and will probably re-enter again upon higher price, depending on price action.

But the concept is that since ZZBB method (on this timeframe) has printed a TOP, then we must be expecting a BOTTOM as the next swing OR a Higher Top that cancels the previous TOP. Higher confidence that a Bottom is going to form is if price crosses the middle line of the Bollinger Band (BBMID), usually with a hard close for more than 3 bars.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-15M.JPG Size: 140 KB
A pip is only worth it if you know how much you risked to earn it
  • #186
  • Jul 14, 2014 8:19am Jul 14, 2014 8:19am
Quoting vlady1974
15M update The Bollinger Band has risen as expected to tighten into the slim price range, with a few tails being formed. I've closed one short position and will probably re-enter again upon higher price, depending on price action. But the concept is that since ZZBB method (on this timeframe) has printed a TOP, then we must be expecting a BOTTOM as the next swing OR a Higher Top that cancels the previous TOP. Higher confidence that a Bottom is going to form is if price crosses the middle line of the Bollinger Band (BBMID), usually with a hard close...
Hi Vlady,
There is indicator called SemaphorTrue, which does not repaint like ZZ. I thought it will compliment to your system.
  • #187
  • Jul 14, 2014 8:48am Jul 14, 2014 8:48am
Quoting pannet1
{quote} Hi Vlady, There is indicator called SemaphorTrue, which does not repaint like ZZ. I thought it will compliment to your system.
Awesome. I will try and hunt it down for my MT4 platform.
Many thanks!
A pip is only worth it if you know how much you risked to earn it
  • #188
  • Jul 14, 2014 10:17am Jul 14, 2014 10:17am
Quoting vlady1974
EDIT: Switched to a scalping mode and closed shorts to book profits. Re-entered at 3626 and again I've waited to set to BE+1 for a risk free trade against Dr Drag's statement tonight.... 45min to go. {image}
Going home, decided to close the trade and not get caught up in the news. +13 pips x 2 is still good enough for me.
A pip is only worth it if you know how much you risked to earn it
  • #189
  • Jul 14, 2014 10:42am Jul 14, 2014 10:42am
Quoting vlady1974
{quote} Awesome. I will try and hunt it down for my MT4 platform. Many thanks!
I thought I will save some time for you. Attached.
Actually, it creates many tops / bottoms, sort of like path, ZZ used to repaint. I don't know if it will be helpful for you. But it gives a more visual clue of the repaint.
Attached File(s)
File Type: mq4 SemaphorTrue2 (1).mq4   6 KB | 398 downloads
  • #190
  • Jul 14, 2014 11:23pm Jul 14, 2014 11:23pm
Quoting pannet1
{quote} I thought I will save some time for you. Attached. Actually, it creates many tops / bottoms, sort of like path, ZZ used to repaint. I don't know if it will be helpful for you. But it gives a more visual clue of the repaint. {file}
Thank you for this. I had a play with it last night and I will look at it a bit more to get the settings right.
Because it doesn't reliant, then the trail/ path provides the visual momentum. More repaints in one direction means IT IS going in that direction, conversely I was looking for how many opposite swings there were in the same area. It seemed that on EU, even in both Up and Down trends there are LESS bottom swings than TOP swings making it more difficult.

I have a few ideas on this... I may try it with a CI indicator to blend it with a cycle time, eliminating the non-cycle swings.
A pip is only worth it if you know how much you risked to earn it
  • #191
  • Jul 14, 2014 11:27pm Jul 14, 2014 11:27pm
Decided to join the AU/Gold rush.
Bought gold at a not so good price of 1310. Really wanted 1307, but there you go.
Sold AU at 9375, although the Bollinger Band and previous bars showed that 9390 was the perfect place to short.
The 2 trades are complimentary, tp open. I'm trading in the direction of market sentiment; I don't usually trade these pairs.
A pip is only worth it if you know how much you risked to earn it
  • #192
  • Jul 14, 2014 11:37pm Jul 14, 2014 11:37pm
Getting frustrated with EU. Back to 13610 again.
15M shows that price is outside BB on the Lower have formed a ZZTop... So it COULD swing back even though I would prefer it to break 13605. I'm more inclined to short only if below 13600 or at 13625-40, although I'd be cautious on the upswing.... Despite a few bulls, the upswings don't have that conviction.... Too many bottom tails on the 4H and upper tails on 1H and 15M. To me that's both indecision and also, prevention of momentum as if waiting on the right trigger. Draghi didn't provide anything yesterday although maintaining the view that the EUR is preferred to go lower. Greece presenting positive economic data would be one EU country that would prefer lower currency to reduce debt. Can't see any funny reason why this currency should go to 1.4 unless $ absolutely goes haywire.

Edit:
1H shows EU making a move lower. 4H seems to support this. Could this break 13600?
Placed a short order for 13612, don't know if it will be triggered.
Attached Image (click to enlarge)
Click to Enlarge Name: image.jpg Size: 341 KB
A pip is only worth it if you know how much you risked to earn it
  • #193
  • Jul 15, 2014 12:28am Jul 15, 2014 12:28am
Quoting vlady1974
{quote} Thank you for this. I had a play with it last night and I will look at it a bit more to get the settings right. Because it doesn't reliant, then the trail/ path provides the visual momentum. More repaints in one direction means IT IS going in that direction, conversely I was looking for how many opposite swings there were in the same area. It seemed that on EU, even in both Up and Down trends there are LESS bottom swings than TOP swings making it more difficult. I have a few ideas on this... I may try it with a CI indicator to blend it with...
It works exactly the same way as ZZ if you put the same values. You could have several TOP balls before you have the reversal or price could reverse in just one ball. I dont know if the ZZ you use can get user inputs like the attached one.

Cheers.
Attached File(s)
File Type: ex4 000_3_Level_ZZ_Semafor_TRO_MODIFIED_VERSION.ex4   10 KB | 368 downloads
  • #194
  • Jul 15, 2014 2:41am Jul 15, 2014 2:41am
Quoting pannet1
{quote} It works exactly the same way as ZZ if you put the same values. You could have several TOP balls before you have the reversal or price could reverse in just one ball. I dont know if the ZZ you use can get user inputs like the attached one. Cheers. {file}
Cheers, I'll check it out tonight. I tried some of my existing settings. 34 seems to be a recurring number. But I'm not sure if the other offset number works the same way as the displacement in my existing one - it has a separate displacement value for each ZZ, whereas SemaphorTrue uses only 1.

But it has an interesting paradigm of setting a count for the number repaints vs opposite swing - that's my idea anyway. Each FX pair will have its own personality.
A pip is only worth it if you know how much you risked to earn it
  • #195
  • Jul 15, 2014 2:42am Jul 15, 2014 2:42am
Quoting vlady1974
{quote} Cheers, I'll check it out tonight. I tried some of my existing settings. 34 seems to be a recurring number. But I'm not sure if the other offset number works the same way as the displacement in my existing one - it has a separate displacement value for each ZZ, whereas SemaphorTrue uses only 1. But it has an interesting paradigm of setting a count for the number repaints vs opposite swing - that's my idea anyway. Each FX pair will have its own personality.
Hello mate, long time how have u been?
  • #196
  • Jul 15, 2014 2:45am Jul 15, 2014 2:45am
1H update on the ZZ swings:

The current price action is posting a ZZBB Bottom, but will it continue downward?. It's the elusive 1.3590ish level again.
If it does get confirmed as a bottom, then the next sequence is a Top.... but where?

I managed to scalp some pips but I got stopped out on my short at 12, so net I am +4pips lol
The whipsaw just shows more indecision..... I reverted back to position trading on the my initial short at 612, and I hate going into scalping mode just because of smaller ranges, so I may just sideline myself for the time being.

I would prefer a big short at 3640-3660... but how I will play that I don't know. Do I long? Do I wait? Waiting is free.
The problem with Longs is that it's un-natural and relies on a good does of hawkish news. But how can you really have a long term bull run to 1.3680+ and 1.37 if Draghi says a higher EUR is detrimental??

Anyway... let's see.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-1H.JPG Size: 248 KB
A pip is only worth it if you know how much you risked to earn it
  • #197
  • Jul 15, 2014 2:48am Jul 15, 2014 2:48am
Quoting josh11
{quote} Hello mate, long time how have u been?
Mate I took some time off, mainly with the missus and doing other things other than FX. It was a good time to back off as I'd been running the gauntlet since Aug 2013. Sold a renovation house in Feb. just bought a flat as well, vacation in Dominican Republic... allllllll gooood!



Getting back into the swing of things. Have to say, a bit more rounded in my approach... a bit more fundy info taken into account.
Got gold happening nicely as well.
A pip is only worth it if you know how much you risked to earn it
  • #198
  • Jul 15, 2014 3:05am Jul 15, 2014 3:05am
Quoting vlady1974
{quote} Cheers, I'll check it out tonight. I tried some of my existing settings. 34 seems to be a recurring number. But I'm not sure if the other offset number works the same way as the displacement in my existing one - it has a separate displacement value for each ZZ, whereas SemaphorTrue uses only 1. But it has an interesting paradigm of setting a count for the number repaints vs opposite swing - that's my idea anyway. Each FX pair will have its own personality.
Vlady,
Semaphor calls eintDepth and ZZ calls it as period. For clarity one may use only two depths (2 and 3) or two depth (3), instead of using all the three depths. Wish you good luck.
  • #199
  • Edited 4:36pm Sep 8, 2014 4:17pm | Edited 4:36pm
Just posting my thoughts after the last major down moves.

Alot of bulls will be looking for a place to park a long trade now because they'll feel it's oversold. From 1.39 to 1.28 may seem like a lot but when you view it long term it's not unusual. The most obvious support is at 1.2764 which was previous support. But given the fundamentals behind the downward move, I don't believe it will necessarily create a reversal situation for the long term. It may pause momentarily, but I see this level failing and creating a Lower Low.

Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-1W.png Size: 135 KB


Any bounce I will view as Wave 4 and the retrace could go as high as 1.31 and I think this may occur at the Orange Lines with Green Arrows in the Yellow Box.
But I would not be surprised to see an move towards the last major low 1.20422. The time frame for this could be between Oct 2014 to Oct 2015 which could coincide with a bottoming out and a recovery of the EU

The last down moves were 3600 pips, 3200 pips, 2800 pips.... let's average this to 3200 pips.
1.3900 - 3200 = 1.0700...... is that unreasonable? If we went for the minimum of 2800 then 1.3900 - 2800 = 1.1100
If the previous lows of 1.204 and 1.18 are taken out then it's not unreasonable at all.

Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-1D.png Size: 199 KB


Here's a view on the Daily. This shows how the 300EMA on the Daily tf was breached via Wave 3 and no retest.
A new dissimilarity zone is now forming on today's move and as with previous zones, price tends to avoid a forming dissimilarity zone. Which supports my higher tf view that a new lower low will form and a Wave 4 retrace to 1.3151 would lead to a final Wave 5 push to lower lows.
A pip is only worth it if you know how much you risked to earn it
  • #200
  • Sep 8, 2014 11:44pm Sep 8, 2014 11:44pm
Hello Vlady,

Dropping by to read your thread.
Pivot Boss in the making~
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