Rel's Evaluation

The purpose of this thread is to evaluate the trading results and explain the experiences and discoveries since the Lab and Forge threads. Constant incremental improvement is a motto.

This thread will be much more open compared to the previous two threads, but I do expect a substantial level of thought in any given posting. Even if it is a one liner question, expand upon it in clear detail to see if the question is worth asking.


First I would like to respond to the poll;

-I would like to know more (batemap, candero, kprsa, LiquidGenius, pete7, piphunting, Rparm, Thx, wng)
What one can expect out of this thread is a clear postmortem of the trading done as shown in the results of the trade explorer 'Evaluation', hence its namesake. Again, the unconventional can be expected, but I do like a challenge to flush out inconsistencies in my current work. My previous works would be definitely given a revisit.

This is important. Forward testing like this, excluding the use of EAs, which I would comment later, puts up my work to face the music, that if it does stand up to the fire. It can look nice when one looks at the historical results via back testing or statistics, but to move forward is another story altogether IMO. Its easy to be #1 in practice, but another thing when rubber meets the road. Yes, research, statistics and practice are important, but eventually one also needs to have some kind of actual practicality; just trading it straight out. There is only so much one can do by 'shadow boxing'; eventually one needs to blood him/herself into actual trading experience.

I am sure some of you guys had been seeking for years for some form of success. Trust me on this; don't give up. Have a personal plan to stick in this game for the long run, hence my current status to be not on live trading and deciding to settle my personal life 1st. Plan for the experience, demo or live; you will need it.

-I can do much better than that (Nf414)
Yes thank you. Its great that you found something that works for you. Keep it up! Results are results. I am not perfect, but I've found something that does work for me. I do look forward to learning from others as well, so long it is within acceptable exchange between parties occur.

-I think demo account results doesn't count (pete7)
Well certainly sometimes I think it doesn't count as well, but here's something to ponder. Currently I am no longer on live full time trading due to a personal decision that demands priority. When I was on live full time in 2013 for around 6 months, I turned $100 to $1000 within 2 weeks. Something occurred to me that I am definitely doing something right and its now easy to remember how does winning (and losing) in trading really feel like.

Now I am on part time trading but on a demo, and the results are $100 to $200 within a week. Certainly there must be some common denominator between the 2 experiences I had, at 2013 vs now. Shall we find that common denominator? I suppose we should attempt to.

-I would like to contribute to improve it (Innate, Rparm)
Certainly. Thank you for taking up the offer in advanced. Take note that I will approach you 'when time is right'. I look forward to share my work in depth with a selected few. Watch out! =)

I just came accross your threads (the previous and this one), it's really interesting!! It seems like more people have found their own trading style. Keep up the great work buddy!

Timeframes : a curse or a blessing?

-What happens when we take out time?
Remember that back in the lab, I introduced the use of range bars. I got to admit, using them is great. I was all the more convinced that patterns do exist. Thats a good thing. But it came with a disadvantage that I did not consider. Using them made me lost sense of how time really flows. Granted, time can be a distraction and noise seems to be everywhere. Using range bars took out the noise, but it caused me to have a distorted feel of time, even though it is nice to be able to see clearly every since bit of price action.

So what really went wrong? Why there are people who claimed that non time based methods like P&F and Renko works for them? It then occurred to me that there are so many methods of trading (both good and bad methods), not because the methods itself, but how the method can sync up with the trader's brain. Everyone's brain is different.

Then there's this motion where 'its the trader that uses them that makes it effective'. IMO this is a very poor argument, no matter how good it sounds. This is because both the brain and the method can be changed and adjusted. There is always room for improvement. To say 'its the trader that uses them that makes it effective', is to buck responsibility for further improvement, or worse, deceiving oneself.

If we really want to improve trading overall, I say its necessary to improve every aspect one can think of. Any edge one can get is still an edge, I would take it. There are definitely methods that are statistically flawed, not effective and has no lasting significant edge. This is where I do agree where use of EAs, statistics, probabilities and research come in, to filter methods and create good tools.

Everyone is different, but its not an excuse.


-What about the trader's brain?
You see, no matter how statistically good any method is, if a trader's brain cannot sync up with the method, it is of little practical use. If you can't see it, you can't trade it. Of course there is the motion of using EAs. Here's my take on EAs to trade; its also not for everyone. There are people who are definitely not comfortable using EAs and would prefer to trade consciously.

As far as I know, there are 3 types of traders in this context;
A-Purely Mechanical, simply just EA
B-Decision Assisted, with use of some form of EA and indicator
C-Manual Trading, naked chart

And I think one can see that this seems to be somewhat assumed as common knowledge. Yet there is no clear guide on how and which 'style' one should commit to. Often, we are told that in order to find out something, we have to try it. Ok, thats true. But my question is that not everyone knows how to code! I do get a good number of PMs from well meaning traders who are in category C. How can they get their redemption, I wonder. And not everyone has the luxury of time to explore.

Everyone is different, but there is some hope.



-I think I am lucky
Here's a little piece of history that only my closest friends would know. I was a semi-professional gamer when I was much younger and used to run my own team. I reached top 8 in an nationwide annual competition for many years until I had to retire. Professional gaming in Singapore isn't easy, because IMO we do not have the social structure to sustain it. Its not a bad thing, as I think my country does excel in other things anyway.

I dreamed a lot and have lots of ambition, all with a pure heart, but I also learned many things from this interesting career if one can call it.
A-I don't like to run things like a boot camp, but there is still some basic kind of order to ensure the most important things are done.
B-I learned quickly that everyone is different and I cannot impart my style of play onto others without considering their current style of play and potential growth.

These 2 things I've learned, can be summed up as 'Mental Toughness'. The former is done in order to preserve and improve basic Mental Toughness through a good lifestyle and conditioning. The latter is to give them the freedom to grow and evolve in their play, not just on technical terms but mental terms! Both has to be on the same level of growth to achieve acceptable results.

To be honest, I see a lot of parallels between professional gaming and trading. Its also exactly how one of my team members became a successful RTS player and later did poker on a professional level. I am very proud of him and we keep in touch a lot.

Everyone is different, because everyone's Mental Toughness is different.



-What does Mental Toughness has to do with Timeframes?
Mental Toughness determines Attention Span Focus.

Attention Span Focus determines...
A-how long you can watch a chart for your entry
B-how long you can hold an open trade and monitor it
C-how long you can watch a chart for your exit

Hence knowing your personal Attention Span Focus is relative to what timeframe you should be using. There's also Attention Span Rhythm, which is important but we will talk about it much later. This is partly because the kind of focus required for A, B and C can vary.

I think there are many traders that expect trading can be a 'Set and Forget' or let EAs do all the work. One of my early attempts is to use a D1 based 'Set and Forget' method. To be honest, they are right; such methods exist and can work. Its a good admission that one is mentally weak and hence have a low attention span, and therefore find a style that works for them.

Same for scalpers. There are scalpers who justify a small timeframe because they know they don't have the mental strength to watch and hold beyond it.

I think this is a fair justification for both. But it can also be a sign that one is actually lazy. Good lazy vs bad lazy. It depends on how one sees it, but my experiences tell me that people don't change and also that people can change. Personally I think I've became tougher than expected over the years, given all the personal issues I had to deal with. It does help. You decide.

Everyone is different, because everyone's Attention Span Focus is different.



-Hang on, so there is such a thing as an optimal timeframe?
I say yes. However, lets make it clearer.

It has to be optimal in such a way that;
A-The instrument has to have sufficient volatility to meet your personal pip revenue targets
B-You can still make decisions without your brain zoning out and losing it. A 'just right' feeling.

For A, I use pip time efficiency to decide and selected EURJPY.
For B, I've found that I work best when using M30. I've tried M15 and H1 for a long time, but eventually I settled on M30.

Attention Span Focus wise, over my years of gaming, I found that I could focus pretty well on the screen for at least 30 mins, before needing a short 5 min break. The same goes for studying. However, not every 30 mins I am focusing on truly requires my full 100% attention and doesn't require me to 'all in' within this singular 30 mins.

This is also where Attention Span Rhythm comes in. Let's say I make one important trading decision every 30 mins. This means in a typical trading day, mathematically speaking, I would be making 1440/30 = 48 decisions in a day. To me, that feels about just right. 1440/60 = 24 seems too few. 1440/15 = 96 seems too much.

Reduce it further to a typical full time trading day without holding overnight positions, lets say 8 to 12 hours;
M15 = 32 to 48 decisions
M30 = 16 to 24 decisions <- 'just right' feeling
H1 = 8 to 12 decisions

What is also interesting is that PTe for EURJPY reveals that M30 is a very stable timeframe. And when I looked at my existing PTe studies further, using D1 as context isn't a bad idea. This is because there is a gap in between D1 and W1, and there are moments in the market when using D2/D3/D4 as context is helpful. After much consideration, I chose D1, but with some technical adjustments which I will explain later.

M30 and D1. So whats really going on here?

Everyone is different, because everyone's Attention Span Rhythm is different.



-How about Multiple timeframes?
This gets interesting. Typical MTF basically says that there is a 'Micro Timeframe' and a 'Macro Timeframe'.

The idea of a Macro Timeframe is to make 1 single simple (ok not so simple) decision, to identify the prevailing trend; Long or Short?
The idea of a Micro Timeframe is to make many decisions, to monitor price action in context of the macro timeframe and finetune entries and exits.

I've chosen Micro Timeframe = M30 and Macro Timeframe = D1. This means in any trading 8 to 12 hour session, I make a 1 single decision to go long or short, but 16 to 24 decisions to monitor price action and fine-tune entries and exits.

Knowing this will definitely affect what kind of trading method you are using and eventually the core design of your trading system. Think about it this way; my hands are small and I prefer to use a smaller knife to skin the market =) I can't grow my hands to be bigger (ekk I don't want to), but perhaps I can use a non-slip cloth to increase grip whenever I need to use a knife with a larger handle.

The worse thing to do might be to use a highly mental intense trading style in terms of Attention Span Focus and Attention Span Rhythm when one doesn't have the required Mental Toughness to use it. This is true when MTF is involved. Certainly I think this is a very common problem for new traders.

Everyone is different, because there are things you can change and things you can't change.

Thank you =) I will continue to post as time comes.

Hello rel, very nice thread. I like it, 30 tf is my preferred. Hoping to see more. Have a nice WE.

Enlightening posts as always

Traditional teachings have always said to use 3 time frames, but I think I much prefer using just 2. The D1 in your case is the directional bias, and the 30m is the entry frame. With this in mind I don't see the need for the extra information of a 3rd frame when you can get the same information with less.

I am still (slightly) confused with which time frame is best though. You said that you're comfortable with concentrating for 30m periods which is partly the reason for settling on the 30m frame. Thus using (ex) the 15m frame would be for someone with a shorter span and can only concentrate for 15m 'blocks'. Yet at the same time, a shorter frame means more opportunities or "decisions" so it also seems like the person with the shorter frame has be to able to make more decisions, and so it's seemingly even more intense? Is that simply the trade off between frames? (i'm use to playing TvT so 1hr spans isn't so difficult hehe)

Yes I had consider actually creating a custom chart that has range bars within the M30 and D1 bars. However after looking at the technical requirements, I realised it is very difficult, especially that my wave indicator is at its 6th version and could not be used with the custom chart. Unless someone else knows better.

Yes it can be confusing sometimes, that's why I broke it down into 2 parts; focus and rhythm. IMO the best test for focus is when you have an open trade without stop loss. This is often the most intense moment in trading. Relative to the method you are using;
Are you inclined to watch it?
How long can you last before you can't take it anymore?

Yes, perhaps the method states you can leave the trade alone until a signal occurs. Really? When money is on the line, can you really do that?

This tells you if you should adjust your method or adjust your brain. I highly recommend to do both. Most traders seem to look for adjustment of methods forever and get nowhere. The goal is to achieve a kind of relaxation and confidence that works for you. This is I think why actual live and demo is important to blood your 'trader's sense' but also to test if your method actually helps you. IMO this includes EA users too.

Once you are clear about focus, then rhythm comes in to create the bigger picture, since intensity differs when you are looking for entries vs looking for exits. Again, here you adjust either your brain or method or both further.Hope this is clearer.

Q and A with LiquidGenius (part 1)

LiquidGenius :
How specific is your criteria for being wrong? like does price just close at a certain spot and you say "k i'm dead" or do you wait for something to confirm it?

Like if you're short right now: if your current level is 147.00, and price closes at 147.01, is it over? Or do you wait for price to go up as it would, and retrace as normal, and then confirm the up move by going up?

Relativity :
1st of all, I would have to explain a few things;

1-Which closes are we talking about.
At least we have made ourselves clear that we are only looking at M30 and D1, which simplifies the problem. Please don't get me wrong that I do not appreciate other timeframe 'closes', that it appears that M30 and D1 closes hold some kind of significant meaning (over the other timeframes) to the market that even I can't explain fully why it just works (better than others).

Maybe someone else can attempt that challenge?

2-The current price for EURJPY short that I am looking to be proven wrong is at 147.06 on the D1 chart.
Yes therefore the criteria in this case is very specific; D1 should not close beyond this. As we can see there had been 3 attempts on the D1 to get pass and commit this price. What is more interesting is that if one looks at the M30 chart, all the candles there also failed to close beyond this line. Its like you have all the small wicks from M30 in the big wicks in D1

So if an M30 candle closes beyond 147.06, I should be quitting my positions, or at least considering it. So far, its not the case. There are obviously M1 and M5 candles that had closed beyond this line, but also H1 and H4 candles that did not closed beyond this line. From what I see, PTe has shown that M1 and M5 is just too much noise to put some significance in their closes, while H1 and H4 arrives a little too late in their 'signals'.

3-Yes so if price closes at 147.07 in M30 or more importantly, in D1, its over.
I've still managed to kept a decent amount of profit in the account, even thou no stop losses are used. It goes to show that the trader is the lack of stop loss is helpful in this situation; to consciously learn the ebb and flow of the market relative to your account. Yes there are enough studies to know this ebb and flow, but to consciously feel it on a practical level is another thing. You are your stop loss, as like how iDoubleStoch said.


LG :
So how do you decide how to enter in a position? Since you open up so many of them.

R :
There seems to be 2 schools of thought regarding this, and I actually agree with both;

1-It doesn't matter
A trend is a trend, you will never know how strong or weak the next retracement is, so might as well hop onto the train and ride the momentum.

If you are wrong, you 'rely' on the higher timeframes that are actually in a huge price range sideways market, for price to zip back.

As we can see, its not very efficient according to PTe, but hey, I actually learned a lot about this experience. To actually learn to analyse the D1 chart since its something that I haven't committed myself to do so before. Currently as you can see the D1 chart seems to be my saving grace for positions to zip back when I am wrong.

Its still all right as far as I've tested it, because I've tried using W1 and it didn't work out as well, since the range is way too big for my personal psychology to see 150++ pip drawdown.

Around 75 pips, that's not too bad and not too far away. From a experiential point of view, 75 pips driven by D1 chart takes 1 to 2 days to return. 150 pips driven by W1... I won't bet on the return because its too much too handle.

This gets much more different when one's money is on the line but also when at higher lot sizes. I've tested myself and 2 days is the max I can go before I call it quits. This means that one has to finetune something in the method or the brain further to take this into account. But at least now we have established some kind of order to get this done;

1-Attention Span Focus
2-Attention Span Rhythm
3-Lot Size Involved

Such an order is helpful so that one knows what went wrong and can backtrack to do the necessary corrections.

2-It does matter
I think so too. I do noticed that there's only 1 thing to watch out; it goes back to understanding further why knowing your personal Attention Span Focus and Rhythm helps.

If you know it well enough, you will avoid having a guilt trip of missing out on an entry. Yes there are many other opportunities out there that are outside your Attention Span Focus and Rhythm, If you are missing them, you know you can't be exactly faulted.

But if you are actually missing those that are within your reach, you can work on it objectively, knowing the numbers. I find that this really reduces the guilt of 'I should had known H1 timeframe is doing this ...etc'. Its all right, because I've made it clear to myself that it doesn't matter so that I can stay better focused on M30 and D1. That's also when you start to consider other timeframes as noise to you.

Now you know clearly its M30 and D1, then it really does matter, otherwise, we can go in circles all day because we haven't fully committed to our choices, despite of the research done.

So to round it up; for my case, specifically, it does matter when M30 is showing some kind of a ranging market. Masterforex-V says that market moves from a flat to trend to flat. This is when I should be preparing myself for an entry, in relative to what D1 is doing of coz.

Hence this is also why I do want to correct myself; I think the most important market states are Trend and Flat. Retracement/Resume and Expand markets do exist, but they are have to be placed as secondary classifications after I've done further work on these.

So hence I've concluded that on the minimal, one should get Flat and Trend correct, regardless of whatever analysis they use.


LG :
How do I know if my flat and trend are correct? How does one know if their states are correct?

R :
I am always challenged by these two simple facts;

a-Market moves in almost specific cycles
b-Market does not moves in cycles

These 2 facts seem to be true and both are in accordance to market states;

i-Market moves in almost specific cycles
e.g. Trend 6 periods -> Flat 5 periods -> Trend 7 periods -> Flat 4 periods

ii-Market does not moves in cycles
e.g. Trend 10 periods -> Flat 5 periods -> Trend 7 periods -> Flat 20 periods

I am simply taken aback by this. There are traders from both sides profiting from both. This means the right tool that can read both markets. Unfortunately, I had yet found a single tool that can read both. I think they do exist, but its difficult to concieve it and would not be made popular.

Of course one can always pick a liquid instrument that has almost specific cycles, and monitor it carefully if the behaviour has changed, then change the indicator settings to adapt. It is possible to create such a tool, but I think this means a very indepth method to detect changes in the behaviour. I am also aware that self adjust moving averages somewhat exist.

How do I create something simple that can be used on EURJPY and EURCHF at the same time? One thing is for sure; the use of any kind of periods is out. But how do I measure something without using a metric? Isn't that a catch 22 question?

This means going back to and rethinking wave indicators.

Most wave indicators use;
Time Fixed Period
Price Fixed Period
Both Fixed Time and Price
...to determine where is the next opposite wave line direction aka the turn.

Can't I create something that isn't fixed and tells me where is its best location for this turn?

Hence, according to wave analysis as you guys may remember from the Forge thread, a turn is an accumulation of price + time, which equates essentially to a market state flat. A breakout of this accumulation leads to a trend. A trend is also an accumulation of price + time, but just more directional.

This is my proposal to traders reading this thread. Innate and Rparm, I hope you guys are reading this.

Try to create an indicator that uses the following concept. Post it here and lets see how we can improve upon it.

Here are some screenshots on what I have now;
http://i57.tinypic.com/5yfdk3.png
http://i59.tinypic.com/2uhmizd.png
http://i61.tinypic.com/35nbvxg.png

For a start, since trend can be seen as an accumulation of price on the up or downside, here's the basic 'formula' I have right now to determine the wave turn; (accumulative trend High + accumulative Low + rolling Close) / 3

So to fully answer the question if one is correct on flat or trend market state determination; I think to allow price and time accumulation to be as organic as possible. Its not easy because the conditions to measure and mark these, at least according to current research, lies outside of use of time and/or price periods itself.

I've never fully considered use of some kind of modified pivot formula, when applied to a price/time range on a wave would actually work. So perhaps this is something that the classics got right; to trade long if price is above the pivot + reversal happens if a type of close commits below it. I've tried to use pivots on fixed D1 timeframes thou; it doesn't work all the time and I don't like the motion of 'resetting' when a new day starts [ (fixed previous high + fixed previous low + fixed previous close) / 3 ] . So why not use the reset from a bottom/top of an existing trend that a wave indicator can plot?


LG :
So answer is it depends?

R :
It depends but I don't want to count on it; as we've talked about earlier, we don't want too many timeframes into the picture.

The indicator, when applied to D1 chart, should tell us when D2/D3/D4 time/price accumulation is in play, without us making customized timeframes and adding further to the confusion.
http://i58.tinypic.com/70e2qx.png
http://i60.tinypic.com/e04qqr.jpg
http://i61.tinypic.com/25zgodl.png

Hence the idea of letting time/price self accumulate and to create such an indicator that actually I think is close to how a manual trader looking at a D1 chart would see the same thing, is not easy. Plus why fixed periods methods would not be suitable for such a task, since it already implies the earlier problem I've stated. There are instances when D2 pivot would be much more useful and correct than a D1 pivot level, because of the prior price/time accumulation.

Its tricky on the brain, I am afraid. How do you get a period without using a period haha...


LG :
So fixed or not fixed both have their value and primary objective should be to identify flats vs trends?

R :
Primary Objective is identify flats vs trends yes, but at this point, I've given up on anything that is fixed or non-fixed.

Perhaps I should be clearer. I think the requirement to determine states should not be time/price period (both fixed and non-fixed) driven, but the market equilibrium driven plus provide a projection where this equilibrium is going to happen in advanced. For a wave trader, its almost always touted to be the projected 50% retracement, but again, we know that its not always the case.

IMO there are very few tools that are created with market equilibrium in mind; Market Profile, JChart and Pivots what I am aware of. I do noticed that they all have their weaknesses; of how they reset. classical MP resets every 30 mins. JChart is too CPU intensive. Pivots are much easier to implement IMO, so I decided to give it a shot and it worked.


LG :
Assuming you're using just 2 TFs, how do you know if your TFs are in sync/work well with each other?

R:
To be frank, there are always relationships between 2 timeframes. These relationships can be found and its really up to the trader to find them. Fortunately I think classical MTF concepts provides some idea what to look for and how. These concepts are the relationships that will determine how 2 timeframes sync and gel together.

a-Potential change of trend in higher timeframes can be determined by various accumulation patterns and deep retracements found in the lower timeframes. The idea is that lower timeframes slowly drive the change of trend. To find the small weaknesses and cracks occurring in big existing trends.

b-Higher timeframe trends tend to persist longer than expected, with the lower timeframes slowing little or no retracement. The idea is that higher frameframes drive the trend. To find the big existing trends being solid and intact.

Therefore the key according to MTF concept is quality. Of course at this point we are assuming we are looking sufficiently low enough (M30) and high enough (D1). In this case, its not quite an assumption anymore; if we know that we are comfortable looking at M30 and D1 according to Attention Span and Rhythm, then I say its much easier to see how these MTF concepts work.

You can only trade what you can see. Thats something that TRO has thought me well, and I do give him credit for that.

In Barros's book, he uses D1 x 5 weekly trend, D1 x 20 monthly trend...etc. I was never comfortable with those timeframe sizes, even thou I understood where he is coming from and going. I could understand the concept but I couldn't see fully working out for myself, hence it was necessary for me to find a way to adjust, either myself or the method or both.


LG :
The d1x5 and d1x20 seem to make so much sense especially if you using as a rolling number that it seems hard to find a better substitute.

R :
Yes I think so too. I think over time, I've actually adjusted both method and myself. I've learned how to handle a higher timeframe around between D1 to W1, to the point where the big movements don't scare me any more, while improving the method technically overall to objectively determine market states with clearer MTF viewing. Its all in the works and always looking for improvements, but I like the progress as it does show up in the green on the account =)


LG :
So the idea behind 2 TFs is the standard simple micro/macro structure. Would that would mean in theory every macro has it's "buddy" micro frame (or range of frames) that is/are being supported by it and it's mostly a trader preference to decide which "set" to use? (like 30m/d1 or maybe 1hr/d3, 4hr/w1, etc)

R :
Yes I think its somewhat a trader's preference, but it has to be in line with PTe studies, trader's brain and eventually lot size. You don't want to be too low or too high relative to these factors.

Its like asking why and how to trade a 0.01 lot when one is looking at a yearly timeframe? I've asked myself the question : is it necessary to look this far for such a small lot? Am I over taxing myself in terms of the amount of decisions I have to make?

Or using the M1/D1 timeframe set. IMO the distance between the timeframes are too extreme for both to support each other technically. Besides, I think its not easy on the trader's eyes. However, M5/D1 or M15/D1 seems to work pretty well, at least looking at TRO's methods. PTe seems to agree too.

So perhaps, my set is M30 to H1 / D1 to D4, give and take.


LG :
Ok, and basically it's one of those "when you know, you know" sort of situations for determining which macro and micro go together? It seems like If i'm working on h1 and I'm searching for the macro structure, I know I have the correct macro frame (or at least one correct macro frame) when the analysis supports them working together?

And on that note, do you think it matters to look for macro first and then micro, or the other way around, or developed at the same time or does it not really matter as long as you have them both?

R :
I think it doesn't matter which way you look around, so long you have them both. Although in general as you can see, I started from micro to macro, but that's also because that's part of my nature as a person. I am detail oriented, yet that's also my weakness as I fail to see the bigger picture. Knowing this, it took be a longer while to get the macro side of things right. At least knowing it objectively is useful.

Yes I think when you know, you will know it and can actually describe it sufficiently. The research I've demonstrated sufficiently in the Forge thread. The eventual best test is to trade it, since it tests your resolve on being able to see it.

To clarify this proposal is open for anyone who is interested, although Innate and Rparm had their chance to make their interest to me due to an earlier poll. Therefore, just give me a PM. Don't worry I wont' bite

This means...
a-the pivot level is always refreshing every 30 mins.
b-to be more precise, for the M30 current candle, at every tick, seeking for the current close and comparing it with the overall current pivot level, looking for a 'pre-commitment'
c-if the pivot level is broken via the current M30 candle fully committing its close below it, time accumulation of the current trend ceases, and new time + price accumulation for the reversal direction begins.
d-if the pivot level is not broken via the current M30 candle committing its close below it, time accumulation of the trend continues.
e-if a new high is printed, price accumulation of the trend continues.

http://i58.tinypic.com/w0t0tw.png

To me, this is more realistic than using a fixed stop even a trailing stop via predetermined levels e.g. 30 to 50% retracement. I do somewhat likened to this Parabolic SAR, but again, I have no idea how its actual formula works. I do think that tool seems to be a lagging indicator, and when compared to pivots used in this manner, there doesn't seem to be any lag. In fact I do feel that its pretty much close to somewhat a leading indicator, to constantly updating you by the tick where your best location for an entry and a stop should be.

http://i62.tinypic.com/2eyi4jb.png

PM convo with an trader in FF, name would be kept Anonymous

Anonymous :
At some points it gets lost on my chart, the pivot buggers off, y'know. Not a bug on my end I think, trademark of an early development I wonder... Or just strong trending?


Relativity :
Yes its not a bug but I think its intended to prove a point.

Traditionally, TA is always about 'look to the left to find out what might happen on the right'. There are 2 problems with this motion IMO;
1-You can look to the left all you want, but sometimes, what does data from 1999 really have to do with today? If you are using a yearly timeframe, perhaps its helpful. But if you are using M30 and D1, does it?

2-What if you have a new instrument in play and there's nothing on the left? Then what? I would treat it as a flat and an initial launching point for a new trend.

Therefore my concern is what is the size of the sub-datasets I should be using? Where should I start the calculation of the pivots?

The number of bars / sub-datasets to be loaded is an additional requirement, but this is something that I am still figuring a way out to get it done better, perhaps statistically on a live basis.

The current idea;
Micro Timeframe / M30 = rolling 240 bars (weekly context)
Macro Timeframe / D1 = rolling 20 bars (monthly context)

Contexts are again, based off historical PTe, plus to also give and take, that the market has cycles, despite of the indicator being non-cyclic. It appears balance is the key and I am trying to find it.

Based off the thread;
The launch point for the indicator had a very strong outier high volume M30 candle, which affected the rest of the calculations ;
http://i61.tinypic.com/35nbvxg.png

Updated;
It self corrected itself later after the bar passed ;
http://i59.tinypic.com/28bfkp1.png

This isn't too much of a big deal I think, but I would take note of it and try to correct it later.


However, the real problem is something like this, like how you said, it tapers off;
http://i59.tinypic.com/1dylwi.png

...and hence the PA I've circled should be delegated and correctly captured by a higher timeframe.

The 3rd screenshot where the indicator tapers off is using 2400 bars on M30 chart, which is 10 days worth of data. In that context, 10 days worth of data might be better off analysed from a daily or weekly POV. Hence what I meant by 'PA I've circled should be delegated and correctly captured by a higher timeframe'

Update For Trade Explorer

I would stop trading the demo account, while I await the responses for the indicator development from other traders (see above).

Q and A with LiquidGenius (part 2)

LG :
So what do you think of my latest blog post?

R :
Ok, to be fair; I really like point #3

Its not easy to design something because the market is naturally IMO multidimensional.

I do agree that edges can be found on single dimensions; it would be as simple as an EA on an H1 chart. To be fair, if it works, it works. My only question is that I would not want to be caught in a singular view of the market. The irony is that the human mind can only handle so much; perhaps we all know that we can only remember on the average 4 things at once with short term memory.

So that's where technology assists us to see better as some kind of a leverage, but again, my problem now is that not everyone is a programmer/coder. I do not wish to give the impression that everyone else who does not is somewhat doomed not to succeed in trading, even for myself.

Once I had a 50 year old gentleman who came to me for advice. I tried to explain to him what I see in the markets, especially MTF view of the market. We talked for hours and he ended up asking a frank question; 'Is there something else that is simpler?'

I was kinda taken aback, but at the same time, I know this person is actually lazy in character. However, I also have to give the benefit of doubt that him being of age, perhaps coding/programming or the ability to see a multidimensional view of the market is something that he would never be able to achieve, or take a much longer time to grasp.


LG :
Would you say that my knowledge (or intermediate level) of excel is good enough on the technology aspect? Or is some outside coding still needed

R :
I would not make any judgment on that, because in the end, technology is still a tool and an edge itself that potentially generates more edges. I would dare say that only those who walked down a similar path can better comment, plus when in doubt, I think the key question would be; has it helped you make more money in the end of the day?

That's the eventual bottom line. Its not an easy question to answer, because when you are developing something, you have no full idea if it is actually going to 'make you more money'.

However, I think when one is still in the mist of development, at some stage, I would say that its always good to stop for a while and try the idea on demo or a small live account. The results should tell you if you need to buck up on the technology knowledge, trading logic, or both. Its a long path, so be prepared.

Personally I've came to a point its all about improving trading logic. Not that I am not open for more technology knowledge; I am indeed, but perhaps not now. Unfortunately, one can also see this as a chicken and egg question. But if you want me to pick and chose on personal terms, I would definitely put trading logic slightly ahead of technology knowledge. The trading logic would tell you what kind of technology knowledge you need to acquire.

The tricky part of this is that the logic might had came from someone else or based off general observations of your own. So how much do you trust that information is up to you.

If you come from the technology knowledge side of things, then you can potentially use it to find good trading logic. Its kinda like brute force as you can see, but its worth it if you know how, what and where to look.



LG :
So mostly on the idea that "if it works, it works"?

R :
Yes. You will know when you find it yourself. That's why I did not discuss about methods until later.

IMO the best methods in the world can be in front of you and you can't use it because its just not suitable for your current psychological makeup. That's the part where a lot of people might not understand, probably because they assume mechanical trading is the way to go.

I am not saying mechanical trading does not exist. I am saying that one should somewhat understand that paying the dues in this business is much more important than the methods itself.

The experience, as far as I know, always eventually pays off. I say this because one of my fall backs in this business is to assume I lose all my indicators. Can I still survive, pick myself up and rebuild from scratch when all my tools are gone?

I think if you can get to this stage, then truly, you know 'what really works'. That you really caught an essence of the market and it is already ingrained into your being. Hence that should answer your question of 'if it works, it works'.


LG :
Is that the same as asking why you've been taking long positions?

R :
That I started to take long positions on the 29 Dec?

LG :
Yeah. It seems like the longs started to be rejected completely and then you stopped shorting

R :
And I decided to stop trading totally since my account is already in profit anyway, then the huge short breakout I was talking about days ago came?

LG :
Yup yup

R :
I was scalping the longs as you can see, but I also realized something was wrong. Not that I couldn't wait for the huge 170 pip move that came. I had a personal family related issue that had been dragging way too long. I was already feeling pretty uneasy on 22 Dec (which was also before our 1st interview).

If you noticed. I also look a long on 22 Dec. That long was a very small mistake, and I closed it quickly when I noticed it. I was supposed to click SELL and I clicked BUY
http://i61.tinypic.com/25g4br9.png

LG :
So what about the longs after that (the most recent closed trades)?

R :
Those longs are pure lucky. I knew I was already trading against the impending trend, but my mind was no longer in the right state.

When one has some aspect of trading that is manual, it means personal Attention Span Focus and Rhythm is in play. A bad mental state drags your top form in terms of Attention Span Focus and Rhythm down. And if you have a huge sized lot, it gets worse. It could be as simple as having a bad time in your day job and returning home tired while trying to trade.

This means we can add one more layer/factor, I hope this makes sense to you;
1-Attention Span Focus
2-Attention Span Rhythm
3-Lot Size Involved
4-Current Mental State

#4 is the hardest to discuss, because often, it appears on the surface that the issues found have nothing to do with trading

Here's my counter to this assumption. The average person who has a day job would definitely be more or less affected emotionally and mentally if someone close to him/her passed on (no lol that didn't happened to me, but I am stating an example).

If trading is your day job, what would you do?



LG :
i guess a pre-req for trading being a day job in the first place is to already have a "tested" mental state that is prepared for what could happen

Obviously there are a lot of day traders that struggle with mental state (hence all the books written on the topic) but I think it's one of the things that should already be taken into account before you trade as a full time job?

Kind of like being a pro starcraft player and not having nerves.. pro players still have issues playing in the big tournaments sometimes but they wouldn't already be there in the first place if they didn't have some control over it to begin with.

R :
Yes. Pretty much.

I state this because I still see a lot of misconception of how trading is actually like. I think I would qualify somewhat, since I went full time in 2013 for 6 months, succeeded reasonably and decided to stop (since I found important issues I should deal with 1st).

It is really a job as far as I see it. IMO other than purely mechanical systems that perhaps make up a small % of all the methods out there, there would be some form of manual aspect of trading involved. I think there are still too many traders out there who think that they can beat the odds in the long run. I don't think they could, not because they cannot, but perhaps because they are seeing it unrealistically.

We are really talking about the average trader here;
-Most know some/little or no coding, therefore would most likely be manual trading.
-For those who are very good coders, there is only a very small percentage who are able to brute force their way to find good trading logic and make EAs. Otherwise most get almost nowhere.
-Top that when most people have average Attention Span Focus and Rhythm.
-And everyone has their own set of personal problems that might spill over to affect overall trading performance.

And I still think I am somewhat the average trader myself, although I do not intend to offend anyone. I still think theres a lot to work on.


LG :
Do you think maybe your definition of average is slightly high? Surely someone who can support themselves full time (especially in a place like Singapore) is on the high end of the spectrum of traders? (although I do agree that everyone has a lot to work on)

R :
I think the definition is realistic in terms of what is required to be full time trader.

No, I would not put myself into the high end of the spectrum, although I do have other successful full time traders telling me that I am already on the right track and all I need is time to sort things out.


LG :
Going back on methodology; How accurate does the D1 analysis need to be?

R :
Its relative to my personal Attention Span and Rhythm. It needs to be very accurate. My personal psychological make up makes it happen. If there's a (directed) will, there's a way.

Meaning, if you find that its important for you to do so, you WILL do it, outside technical reasons e.g. PTe

If you look at the trade list, the durations of the trades are telling; a lot of it are within 24 hours. Half of them are within 30 mins. It means that I am riding on the D1 as macro timeframe, trading M30 as micro timeframe movements within the D1.

This means most of the time I cannot stand a trade being held longer than 24 hours, so this leads up to me analyzing the D1 chart (and also the M30 x 48 view) sufficiently so that I can pick its movements within it.

Outside the personal Attention Span and Rhythm parameters, technically for MTF, there are 2 kinds of analysis for the D1 macro timeframe;
1-What are the boundaries of today's D1; technically it means where are the likely high and low of today. This must be done 1st to reduce risk. This is where I use the D1 chart.
2-Knowing #1, then ask about what are the micro movements within today's projected high and low? This answers entries and exits better. This is where I use the M30 x 48 chart.

Update : Had some 'fun' with Evaluation v2 after I returned from a successful operation. I would be taking a year off from anything related to trading to take care of my health and sort personal issues out. See you next year! =)

All the best Rel,

Here's to a total recuperation and come back 200% better in '16.

Update : I realized that I am bored since I am no longer trading live, not coding or even watching the market. I do just 'look', but its nothing serious.

I've decided the best use of my time, perhaps just for another short while here is to start a very interesting thread. It will be one of the most important threads I had ever started and once it is completed, it is good to 'sit on it' for a long time (looking at 15++ months). Doing so is actually helping myself a favor; I can 'download' my trading head onto writing in full and hence I can mentally relax and recover much better.

Stay tuned!