LFX Trading Proverbs

If you are a regular reader of my thread, you know I like to use my imagination to perfect my trading skills.

I had an idea about something new this week that could help you improve your trading and maybe control emotional trading issues. This idea is probably only possible for people who trade with indicators. If you trade against support/resistance lines, such as Fibonacci, trend, pivot, etc...then this might not work.

However, for those who use indicators to depict momentum and find tops and bottoms, then this could work.

Additionally, this technique is also probably best used by traders who trade intraday. If you are a position trader, then this idea is probably not that good. But, if you trade small time frame charts, you might like this.

Okay, small time frame traders who use indicators might consider this. I think we have a natural tendency to look at the candles as they are being formed. We also have a tendency to look at our profit/loss as it moves through time. I think this causes anxiety. Have you ever caught yourself talking to the chart or the market? LOL. I know I have Then I look at the indicators and tell myself everything is fine. So, this week it suddenly came into my head why not black out the candles?

As you know I used black charts to lower the glare of my computer screen at night. Even though I trade from home now, I still use the black background. It is just habit now So, I changed the properties to see how everything would look. I made the candles all black and even the bid line is black. So I have no idea what the candle looks like, or where the current market price is.

Have you ever trained to fly airplanes? There is a similar technique called IFR, Instrument Flight Rules. This is how you fly when you have no visual earth features. For example, you cannot see the ground at night, nor in fog, so you must rely on your indicators to know your altitude, direction, and speed.

Try it on your chart I suspect trading will be boring until after New Year's. So now is a good time for experimenting. That is depending on your family life and schedule. But, if you find yourself bored, try making two charts. One is your normal system, and the other is with blacked out candles. HA, even I am going to do this at some point in the next few days. I am going back to September just before the market volatility came back.

If you listened to my advice about lowering your history, then you need to go to Tools/Options and add some candles. I changed to 20,000. That puts me in at about Sept 19. Next, I bought the float software so I can easily go full screen for both charts. If you cannot, then at least do a split screen by using Windows/Tile Vertically.

Then simply compare the charts. Find your entries and exits with your full blown system, and then see if your blacked out chart looks reasonable to trade.

Why do this? I realize that trading is 20% mechanical and 80% mental. If you cannot control the mental, you will struggle to profit. If you are supposed to be using your indicators to make trading decisions, but you find yourself relying on candles or find yourself anxious, or find yourself panicking, or find yourself questioning yourself...could it be you are getting too many inputs into your head?

Consider this too:
1. What is the primary tool the market makers have to make you lose? HEAD FAKES!!!!
2. What do losing traders do? Enter or exit the market at the wrong time because it looks like momentum is changing by the creation of the next candle.
3. What is your primary anxiety? Not knowing where the real top/bottom is.

Isn't that what your indicators tell you? Have you ever exited because it "felt" right? You had no reason to exit other than a feeling. Then 10 seconds later, or less, off the market went without you. Why did you do it? Probably because of market maker trick #2. This trick is where they probe a support/resistance line and cause confusion. Price is bouncing, or pretending to break and falling back, or falling back and bouncing again. HAHAHAHAHAHA. Meanwhile your indicators are saying...this makes no sense...just hold the position. BUT, your brain has too many inputs from those candles. AND YOU, well, you have not conditioned yourself to ignore all that activity and trust your indicators. So, you quit, and the market does what you predicted it would do. Only it is doing it without you.

Use the weekend to look at your charts side-by-side. You might even see some areas that need tweaked. Since trading will likely be boring, then demo next week with the blacked out chart. See how you feel. See if there is any difference in your abilities. **Remember to change your chart history back to 2100.

If anything, it won't be boring I am going to do it myself Sounds like fun And how bad-azz are you going to be if you don't even use candles? LOL. There is only so much I can help people with since the tools are only 20% of the solution. Perhaps this idea will help with the other 80%?

Talk to you next weekend and discuss the results.

DKrock,

Just seen your post in another thread that I cannot reply to that says you may depart from FF. I have valued your contribution to FF and was hoping to gain further insights into what it takes to be successful.

I am very interested in the way you trade as I am trying to develop my own system as I have come to understand how the markets moves which is in line with how you view the market. Currently working on getting the indicators I use to reflect that.

All the best and but hope you stick around.

Regards

Neio

A lot of us still need help, but many of us have moved on to other forums, too many fucktards here with big ego's.

Blacking out the candles nice tip thanks.

If you bail, I don't blame you, but would miss the insight.

Closed for 30 pips.

Yeah, I just came up with the blacking out idea. I know for years, and even now, I find myself wanting to react to candle movement. Yet, my entire trading plan relies on indicators, not candles, LOL. So it forces a person to trust the indicator and not be anxious about the candle.

Not only that, but it seems you can find any errors quickly. I also know in the past, and from seeing other trader's systems, that an indicator or two might confuse you. You can get conflicting signals about entering, exiting, and whatever else. I think, and this is just an opinion, that it is possible to wear blinders and only be concerned with certain indicators. Or, to look for any indicator that disagrees with an exit because you want to hold onto a loser. It happens.

By blacking out candles, you can quickly see where your problem areas are. I can tell you from experience that once you delete substandard indicators from your system, and only use what works, your profits will soar!! Oh, if I could only have back all those months I tried to make stochastics work, LOL. Like I wrote before though, everything changed when I realized everything was measuring the same moving averages, just with different ranges. So I knew I didn't need stochastics for anything, lol, as it is more or less ineffective since it cannot range properly for the moving averages I wanted to track.

Now, if my indicators start telling me different things, it is actually a signal It means the market is consolidating and I should take profit and sit out Turn lemons into lemonade

Anyway, it is just an exercise to reprogram your brain and your chart vision. Once your brain adjusts you probably should put the color back on the candles

It makes a lot of sense. There is a lot of noise on PA.

I like the way you use indicators to normalise the Price action and put it within a container that enables you to take signals without 2nd guessing.

I know all your indicators will have a purpose others they would not be there.... but do you only have one indicator for entry/exit signals and the others act as filters for that signal so that you can avoid bad trades?

I plan to leave the site for a bit. I have some goals for 2015 that include moving to another country, reorganizing my corporation, buying new properties/toys, and possibly getting married. So I am going to be quite busy

I wish everyone Good Luck for 2015. I will check in from time to time and see if there is any further assistance I can be.

I have a series of entry and exit signals. It is because I designed it to trade both ranges and trends. I can see higher time frames, and lower time frames, on the same chart. I do not like extensive analysis. It leads to guessing. It also causes paralysis. You just sit there and woulda, coulda, shoulda. Or you "guess" and are wrong. So, I made one chart that tells me the answers to the questions I asked myself.

The primary question then becomes consolidation. I spent years determining how to identify consolidation. Anything can show you an entry or exit, particularly in a trend trade. Your real decision-making comes in consolidation. Do you stay? Do you close? Will it continue the same direction? Will it reverse? Once you figure that out, everything else is simple The added benefit is that you will also see reverses that do not matter, and reverses that come at tops and bottoms.

I guess my filter then is my tool for seeing consolidation. It shows me market direction consistently, whether it is up, down, or sideways. It has made all the difference

Hey, are you using my AYCE stars? Do we know each other from SFT?

Many thanks Dkrock....wish you all the best in reaching your goals for 2015.

No, I wish then I may have more insight to your methods.

That is Kiads Skull and Stars indy Sub Sequences.

Good luck with all of the 2015 changes! A tax friendly country I am guessing?

Hi dkrock

Your thread really inspire me a lot on my trading strategy..
I really like the concept of crossing equilibrium.. I am developing my trading strategy based on it on M15..
Also, thanks for the lesson such as making TDI style of WPR, overlay MA over MACD, correcting fisher parameter etc etc..
Hope you will come back once a time to continue guide us..

Good luck and all the best~

Regards
tankhang

Thanks again....starting to see the wisdom in those words.

Been working on testing some indicators this week to see how I can get them to show consolidation. Looking good so far....



My advice for anyone interested in developing your own indicator to show consolidation should search and study all of Dkrock's posts and start testing with different oscillators to see how consolidation can best be shown.

The next thing I need to know is how to identify head fakes. Especially when coming out of consolidation.

I think this indicator could be a good filter. Will try it out next week.





I believe it identifies possible head fakes as follows:

1. Two consecutive ups, with the second high-close distance greater than the first one.
2. Vice versa for two consecutive downs.

The arrows can probably be ignored during trends especially if you are riding it. I would use them to filter out entering reversals or coming out of consolidation.
Anyway will see how it goes.

Regards

Neio

I was a bit shocked by all the brokers who lost money on the CHF move last week. I am pretty sure it was a technical issue involving stops and margin cutoffs.

My system signaled an exit 10 minutes for the giant move. So rest assured, if you are wondering, I am still very much in business I have to change my currency pairs now because my broker is being stupid, but I did not lose anything. Once they turned the market back on, I traded the cycles just like always. No big deal

I would say sorry to everyone who lost money, especially if you are among the trash talkers against me and my method. But, I won't. That lesson is far greater than anything I could say.

Hi dkrock, i have sent you a PM...

Hi tankhang. I want to warn you that "some" of the topics I discuss are valid, but I do not use them. I found better methods for some indicators. The intent is to show you alternative methods of measuring momentum. You can use these techniques on other indicators that might offer a better range of signal from start to finish. If you find yourself frustrated about how an indicator signals, then most likely it is not useful for you. Move on to the next indicator and use the techniques on it.

Hi drock

I am very grateful for the teaching and the way you do it.
As the Chinese proverb "If you see a poor thou givest him a fish, teach him how to fish.
Since I have followed you, my way of trade has improved immensely.
I ask the favor of you continue with this precious help.

Yours sincerely
Júlio Bento