Funny Looking Rectangles & Useless Drivel

Adding OS1 to the calculation:

http://i61.tinypic.com/17zfgh.jpg

Keep in mind, this is not showing you how an entire trading system works. This showing you how one indicator works with the influence of another pulling in the exact opposite direction. What do you do when you have two indicators pulling in opposite directions? Do you give up and quit - call it a day? Or, do you get creative?

For the novice traders out there, if you are going to use multiple indicators in your trading, then you are going to have to take the time to learn how to integrate inputs from multiple sourced into your signal logic. Trade system development comes down to having good reliable indicators AND having the ability to design quality Trade Logic. It takes time, study and experience to make consistently good trade logic. Here we have two inputs pulling against each other. The reason behind going with OS1 to the upside and not B2i to the down side, is not because B2i all of a sudden became worthless. It is because OS1 was designed on purpose to have a longer event horizon. That means that price will ALWAYS return back to the level where OS1 exists and it will ALWAYS do it within a 24 hour period.

So, I could have targeted smaller pips going with B2i, but the Risk Level was too high considering the condition of the OS1 indicator (which I have not gone into any detail explaining). Basically, OS1 is a Double MA design using absurdly large Periods and a small algorithmic tweak that plots the line on the chart.

OS1 is in the Stabilizer Class of Indicators within the broader trading system. I have indicators in different Classes, similar in concept to the way an OOP coder would recognize different "Class" types in programming. All of my Indicators fit into one of four different Classes that include: Timing, Direction, Magnitude and Probability. When you start getting into Systems Theory, you will recognize the need to have indicators that take care of different aspects of Market Behavior. This helps you optimize the system and make better decisions.

This is a beautiful snapshot of how price is sitting directly between two competing Directional Vectors (OS1 and B2i). OS1 wants to pull price UP, while B2i wants to pull price DOWN. OS1 is long range, while B2i is short range. They are BOTH doing their respective job. B2i has shown its tendency to pull lower, while OS1 simply won't let go of price so easily.

This confirms that both indicators are working as expected:

http://i60.tinypic.com/ifsmqg.jpg

From here, I just sit tight, remain patient and allow OS1 to do its job - pull price higher. The lesson here is on indicator integration logic and why having different classes of indicators responsible for different aspects (long-term and short-term) of market characteristics is important to a well balanced trading system.

Hello all, these three sided rectangles are happening all over the charts.

That will take care of things until Monday morning. Have a great weekend and don't forget, funny little indicators can teach big lessons for the truly observant.

Sorry, I missed your post before signing off for the weekend. I'll give a tip. Start off with the basics first.

In theory, there are four (4) sides to every B2i. The last couple of B2i Boxes that I drew were of the slightly more advanced kind. The very first one I drew in that other thread on the randomness of markets, was the basic kind.

Essentially, use the Open Price of the first bar of any lower level chart below the Hourly Time Frame (H1 in MT4) and draw one line to the Highest High of that hour. Draw another line from the same Open Price to the Lowest Low of that hour. Then do the mirroring effect where you simply copy the O:L Line and connect the end that started with the Open Price, to the Highest High Price of that hour. Then copy the O:H and connect the end that started at the Open Price, to the Lowest Low Price of that hour. That produces the parallelogram for that hour and the Intersection Point for the Projected Fall Line of that hourly B2i Box. That's a basic H1 Conforming B2i Pattern.

When you get more familiar with basic H1 Conforming B2i Patterns, you will automatically get creative and your eyes will automatically begin seeing Non-Conforming B2i Patterns that do not use the standard Opening Price Level of the hour in lower time frames as the starting point. At that point, you will start drawing the two primary lines from the Open Price of any bar, as long as the structure of the B2i yields sufficient size and where price is far enough away from the projected Fall Line to be of any use in trading.

It takes a little practice, but eventually you can be drawing correct B2i Boxes in no time.

Also keep in mind Darryl, that for the purpose of just these online examples: An H4 B2i should produce more pips than an H1 B2i, because the ATR that makes up the bars used in constructing the B2i Box, is greater. Likewise, a D1 B2i should contain more pip potential than an H4. Also, keep in mind that the B2i Time Frame is not where I typically draw my lines. So, that I can see the detail of price action within the structure, I draw my B2i lines using a lower time frame than the time frame of the B2i itself. So, if I want the W1 B2i, I will draw it on the H1 or H4 chart, depending on how much detail I want to see. I draw almost everything on the M1 chart, because I like seeing price detail down to the minute in these examples. My actual trading system does not draw lines on a chart. It displays the same information on a Digital GUI in Excel seen here:

http://i61.tinypic.com/qxqhhy.jpg

In this thread, I am only showing people one of the many indicators that exist in my trading system and I am showing that one indicator (B2i) in manual form as best I can. All of the B2i calculations and projections are made internal to the system and not on a chart. I don't trade looking at charts. I only use the chart to confirm that my entries and exist are made, but I use the Panel you see above for actual trade decisions.

I do this so that people can clearly see that you do not have to cling to convention all the time in order to be a successful trader. Sometimes, breaking with tradition can be a good thing as long as there are good sound logical reasons for doing so as a trader. B2i is a great way to confirm that good repeatable patterns do exist in the market and then can be exploited by the astute traders who find them and harness their capabilities.

Ok! Everybody have a great weekend.

I understand, don't want to interfere with your thread. Just wanted to point out some really simple rectangles just sitting on the charts waiting to be traded. Have a nice weekend every one, from Houston, TX.

OK, I'm curious

It is quite alright. This thread is just as much yours as it is mine. I was just trying to get you in the slot for the fundamentals of B2i setups before going advanced, so that you are aided and supported by the knowledge of what makes them unique and so that you can see when using them is not advised, such as when the market is trending hard.

B2i frameworks are only valid during horizontal market phases - but there is a horizontal market phase in existence all the time. You just have to find the right time frame in which to plot your B2i Box - that is where having other indicators that can assist you in knowing the correct Market Phase (there are Five Market Phases) becomes invaluable. When designed properly inside a trading system, those market phase finding indicators would be used to algorithmically modify or shut-off the input from horizontal indicators such as B2i.

It is good to bring a strategic approach to system design, such that each indicator has the correct amount of authority and control over final signal output.

Ok, that's it for this week!

when you are so sure you can predict where price will go, seems strange that there are never any orders open on your charts?

Can you explain why you never entered a buy when you knew in advance it was going long?

Does that not seem strange to you?

iDoubleStoch,

I like your charts a lot. I like that they are very neat with a black background, they look kind of similar to my charts.

I also like your username a lot. I said many times before, stochastics is my favorite indicator, by far.

Keep up the good work while I continue to catch up on your thread.

Very good try but after a bit more investigation you will find that for every one of your pattern that plays out, there are dozens that do not - they fail and you would lose money
You make the usual mistake of fitting the pattern to the obervation and discarding anything that does not fit..
When you can fit the price to the pattern I will buy your book .... )
Hint: that pesky wiggly price "pattern" that unfolds on the chart will always be like a Rorschach test.

Your post on the box looks very similar to action reaction style trading. Research Tim Morge action reaction style trading as well as Action Reaction Course.

The 7/25/14 20:00 hr H1 B2i (an indicator) came with significant OS1_M1x60 (an indicator) overhead and the OS1 came out the clear winner as predicted on last Friday just before the close. This pic shows the results:

http://i60.tinypic.com/mcx9bl.jpg

It took a strong Weekend Gap Down move on the pair but the original B2i did reach its target. However, as the synergy of both indicators warranted, I favored the Long trade to the upside back into the OS1 Cloud and that is precisely what price ultimately did, striking the OS1 target level at 09:26 during today's session.

When people tell you that the market has no repeatability, no predictive value and there is no way that you can know with a high degree of certainty what the market will do "next," tell those people that they are flat out wrong and they need to better Homework and far better Research into the real data that makes up the market they trade. This trade turned out nearly perfectly - though I was expecting the original B2i pattern to fail because of the massive upward pressure placed on the profile by OS1.

This is one of those cases where taking the Long OS1 position would have required patience through the original B2i target area before making a solid move to the upside. Trading is about patience as much as it is about having the right tools to trade with. Price is now dancing all over the original OS1 target and presents a very comfortable exit plan.

Note: I do not trade through weekends typically. I only did this to continue to examples started last week.

That depends. Of course, if you are shooting Non-Precision Approach, you can fly down and maintain the MDA until the MAP. At that point, if you have no visual, then you must call a missed approach. Typically, it will be between the MDA and the DH where the decision gets made. If you have no open trade by the DH (which I would define as that distance between current price and the B2i target level that is less than your minimum profit per trade requirement), then I would call a missed approach, fly the procedure and wait for another Box to land on. I like maximizing opportunity while minimizing risk as much as possible. (about 7,500 TT here)

Why would it seem strange that I'm using my development rig to demonstrate that patterns do exist in the market, contrary to those who have not done enough homework to know otherwise? I don't trade retail forex anymore and have not for a few years now. What you see in this thread are pics of an MT4 platform. I still use MT4 and a retail broker account for Development purposes only and I do it out of a small cash account. That means that ALL of my test traded are done with Cash.

Why? Because, I do not merely test trade for the sake of test trading. I test trade only ideas and concepts that have been built-up through a very detailed 14-Step Development Process that involves a lot of testing and research. None of that will ever be revealed on this forum. So, all you are going to get here, are one-off examples of what I can show you, purely out of my benevolence and not because I feel like I own you something.

I don't this ONCE per year. That's it. I provide Novice Traders something special to think about ONCE per year. That's my commitment to the retain forex trading community, even when some in that "community" have been so nasty to my contributions to it over the years. I do it for the Genuine Nube who is sincere, without ego and desiring to become a better trader than their so-called peers.

I could trade anyone in this forum under a table, but that's not why I am here. I have been doing that for many years. Mine is to help that ONE person grab on to something inside them that causes them to STOP thinking like the rest of the HERD and start thinking like a successful trader. If the B2i does that, then so be it. If the B2i does not do that, then so be it.

ONCE a year - that's it. You either get it, or you don't. I do not hold hands anymore. Those days are long gone.

At least we won't need a singles vs. twins debate here...LOL...
Do you have an opinion on trading gold with this basic idea? Gold has been really flat lately, do you just keep holding and hoping you don't hit bingo until you see a pattern forming? Do we need a good crosswind leg to start a pattern?