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LFX Trading Proverbs

  • #161
  • Feb 7, 2015 1:48am Feb 7, 2015 1:48am
Quoting Neio
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. {image} {file} 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...
It looks like your arrows are often wrong. I would adjust them, or remove them. Bad data can cause you to hold onto losing trades. You don't want to be wrong, so you look for something to tell you that you are right. Meanwhile your account is disappearing. There is enough lying in the world. Don't let your system lie to you too
You cannot be extraordinary by being normal
  • #162
  • Feb 14, 2015 12:52am Feb 14, 2015 12:52am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting dkrock
{quote} It looks like your arrows are often wrong. I would adjust them, or remove them. Bad data can cause you to hold onto losing trades. You don't want to be wrong, so you look for something to tell you that you are right. Meanwhile your account is disappearing. There is enough lying in the world. Don't let your system lie to you too
Thanks DK have already stopped using it. Thought it could be an helpful filter so not really taking it as a signal in itself.

I have not traded this way for a while as I was getting inconsistent results so decided to take a break and come back to develop again with a fresh mind.
An expert is a man who has made all the mistakes which can be made
  • #163
  • Feb 21, 2015 5:32am Feb 21, 2015 5:32am
Quoting Neio
{quote} Thanks DK have already stopped using it. Thought it could be an helpful filter so not really taking it as a signal in itself. I have not traded this way for a while as I was getting inconsistent results so decided to take a break and come back to develop again with a fresh mind.
Stay positive. Take what you learned, good and bad, and apply it to your next creation. Don't force bad indicators to work It isn't worth it. Believe me. I took about 2 years trying to force stochastics to be a viable trading tool before I realized they were merely tracking the moving average of the input period. Since they bottomed out at the top and bottom, and really were no different than any other indicator, then better options existed. One day my eyes were opened to the range of individual indicators. By using an indicator that could measure the range of movement around a moving average better than a stochastic could, I was able to vastly improve my probability rate.

Thank you for keeping an open mind It is essential in discovering success. Your "master mind" cannot function unless your personal mind is open
You cannot be extraordinary by being normal
  • #164
  • Feb 23, 2015 4:07am Feb 23, 2015 4:07am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting dkrock
{quote} Stay positive. Take what you learned, good and bad, and apply it to your next creation. Don't force bad indicators to work It isn't worth it. Believe me. I took about 2 years trying to force stochastics to be a viable trading tool before I realized they were merely tracking the moving average of the input period. Since they bottomed out at the top and bottom, and really were no different than any other indicator, then better options existed. One day my eyes were opened to the range of individual indicators. By using an indicator that could...

Appreciate the advise and I am sure anyone reading this thread will also benefit too as they develop their own system.
I believe I have found an equilibrium moving average on m5. One that price crosses, pulls away from and returns to quite nicely intra-day.

I will spend some more time studying different oscillators as they act as a nice container to measure the range of movement around a specified moving average. Do you find that price has certain limitations in how far it can move away from the equilibrium MA? Do you trade based on these limitations?

I know you have shared a lot already but appreciate any more insights or crumbs you can drop.

Regards

Neio
An expert is a man who has made all the mistakes which can be made
  • #165
  • Feb 28, 2015 12:29pm Feb 28, 2015 12:29pm
Quoting Neio
{quote} Appreciate the advise and I am sure anyone reading this thread will also benefit too as they develop their own system. I believe I have found an equilibrium moving average on m5. One that price crosses, pulls away from and returns to quite nicely intra-day. I will spend some more time studying different oscillators as they act as a nice container to measure the range of movement around a specified moving average. Do you find that price has certain limitations in how far it can move away from the equilibrium MA? Do you trade based on these...
Great, glad to hear it. Demo it and if you are comfortable with it, go make some money. Spend "weekends" analyzing historical charts from other currencies. Once you are super comfortable and making profit, then work to convert it all to a 1M chart...on weekends! Making real money is more important than research, yes? So keep making the money with your 5M chart and do the research in off-market hours. If you can convert down another time frame, then demo that too before using it.

I could not figure out how to use 1M charts for years, but when I did that black out candle chart, it suddenly appeared I always tried to convert the 1M chart into a higher level chart by using higher settings to mirror higher signals and then look inside to try to find common traits for determining peaks. I always thought it was a bit too whipsawish to use its own settings. But, I found that if you have a good 5M chart, then it will also work on the 1M. I converted one indicator, rather than the whole series, to a 5M signal. I use that signal as my direction signal. That lets me trade 1M signals in the direction of the 5M signal, so you get more accurate highs and lows for entries and exits.

Remember though...make real money first. I am sure you have spent too much time out of your life to get to where you are. So, enjoy this level of success for awhile first Go make the money, pay your bills, buy some toys, have some fun. Then work on more precision after you accomplish the "real" world agenda. You know the saying, A bird in the hand is worth two in the bush.

As far as limitations, yes, they are really easy to see if you use bollinger bands on your indicators. Depending on the period setting of your indicator, which we certainly do not want to disclose in an open forum, you would want to make the bbands either half that value, or twice that value. Try both and see which applies better to your analysis. Also, you will probably get the best result by using deviation 1.

Congratulations on your discovery. I know for a fact this method is much more profitable and easier than the support/resistance stuff Since you are on the 5M chart, be sure to include some mtf indicator, using the same technique and settings you already are using, that measures the 15M or 30M chart. Or, if you can acknowledge your understanding well enough, you can convert your equilibrium moving average to a 15M or 30M chart and track price in your head as it moves around those moving averages. You are not trading to the 15M or 30M signal. You are just using them to know market direction so you can more readily identify true reversals from head fakes. Take profit on head fakes, and enter the opposite direction on reversals. Easy Your moving average equilibrium times 3 equals the 15M chart, and times 6 equals the 30M chart. You do not need to use mtf moving averages.
You cannot be extraordinary by being normal
  • #166
  • Mar 1, 2015 12:37am Mar 1, 2015 12:37am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Everything you are saying here resonates with me. You are one of the few who are worth listening to here on FF.

I feel like I am on the verge of something and just putting the final pieces into place. So while I would like to be able to enjoy a bit of success and relax a bit. I can't yet I still have some work ahead of me

I am a bit torn at the moment as I have something else that I am developing on M1 and don't want to confuse the two even though they will probably complement each other. Not so much range trading but more to do with catching momentum.

I have quite a bit of experience with setting up my charts so that I can have MTF on one from the various systems I have experimented with on my journey. I just need to put it together now in a system that works consistently, day in day out, in any market condition.

Just a question around the equilibrium moving average if I may. For your chosen equilibrium are you entering trades when price crosses it or just after price reaches the extreme from it? I probably need to re-read your posts again but I seem to remember you mentioning both. Reason for asking is that when price is consolidating it does it around the equilibrium so I find that entering trades at this point can be inconsistent.
An expert is a man who has made all the mistakes which can be made
  • #167
  • Mar 1, 2015 2:04am Mar 1, 2015 2:04am
Quoting Neio
For your chosen equilibrium are you entering trades when price crosses it or just after price reaches the extreme from it? Reason for asking is that when price is consolidating it does it around the equilibrium so I find that entering trades at this point can be inconsistent.
The reason for the double value indicators is to avoid head fakes on the equilibrium. If the indicators agree with the cross, then so do I. Of course my next trade will depend on whether the cross is signaled as a range trade or a trend trade. As far as extremes, no, I do not care much about them. I hold for the next cross as a rule, even though some profit might be given back. It doesn't really matter, lol. You make so much it is ridiculous. But, I stick to one rule for consistency. If I do not follow the math, then I am following emotions, what I think or what I feel, and they are not high probability

Consolidation always sucks, but my equilibrium allows me to do spread trades and not suffer much loss. I can also see them coming by referring to the bband and my indicator LFX 2. I have the choice of trading through it, or avoiding it and entering late when it is over. Late because the candle would have to extend outside the consolidation before taking the trade, therefore missing the start of that move. Again, no big deal. Once you learn to trade sloppy around the equilibrium you start to make super easy pips at will without much thinking. That is my preferred way as it is much simpler and relaxing. Trying to get every pip usually results in significant whipsaw of your trades, highly charged emotions, and loss in your account. Of course you need the right equilibrium to make it all happen
You cannot be extraordinary by being normal
  • #168
  • Edited 2:01pm Mar 2, 2015 1:40pm | Edited 2:01pm
Restores my faith in online forums when I read a thread like this. Seems to be more trolls here than in other online forums in which I participate covering different subject matter areas. Thanks dkrock, you are a true educator. A rare commodity here at FF nowadays. I think most of trolls are just haters who want to be spoon fed. They usually have nothing themselves to contribute of any merit so enough said about them.

You mentioned Russ Horn and the QQE indicator in some earlier posts. My intro to retail forex was through Russ Horn's Forex Rebellion System back in 2009. Provided me with a great base of knowledge on which to build from. He used the QQE Advanced indicator in this system which I still look at from time to time.

Measuring momentum has been an almost obsession of mine the last few years. Look forward to researching more on what you have covered in this thread. Actually a big fan of Bollinger Bands as well. Funny how people often dismiss things without actually reading the original source. I initially dismissed them as the accepted "norm" was that forex prices were not normally distributed (pun intended). Therefore measuring variation or momentum using standard deviations was flawed due to issues like Kurtosis. After actually reading Bollinger on the subject it was pretty evident he was across these issues and hence the use of a moving average that forces normality on a travelling subset of data. Sure, when you analyse a fixed dataset of forex price data it is not normally distributed but who cares?

Here is an article that provides some interesting perspectives on some of the stuff you have covered. It started me on my momentum measuring journey;

http://www.esignal.com/images/learni...zei-CI_DCI.pdf
Audentes Fortuna Juvat
  • #169
  • Edited 4:55am Mar 25, 2015 4:29am | Edited 4:55am
Quoting Nijee
Restores my faith in online forums when I read a thread like this.
Thank you for a respectable and intelligent input

I know Russ really liked the QQE and the MACD setting he decided to use. I have never used his "for sale" Rebellion product as we conversed during development and so I pretty much know what it is about. I am pretty sure I do not use the QQE the way he does. As far as I know, I took it a step further I think. I do not know if anyone else has discovered the pattern I found.

Our MACD settings are different too as I have mine adjusted to the equilibrium moving average I prefer to trade against.

Overall, Russ was always a nice guy to me, so I obviously cannot critique his system too much, especially since I am not sure what his finished product actually is I am confident it is profitable though, because he did test it thoroughly, and in my reviews it looked good enough. Unlike him though, I am not really willing to share my system, mainly because it is designed for small time frames and I simply cannot compete with thousands, or millions, of traders for the same signal.

As far as bbands and deviation, once you figure out how to use them in an unconventional way, lol, they actually show you momentum entry and exit points. You might have stumbled onto their usefulness, but not realized it? Once you figure out your moving average, then the standard deviation of the bband works in your favor, particularly in dev 1, which I noticed the author of your article briefly realized, but did not capitalize. He talked about smoothing, which is merely adding a higher moving average signal to his current one, but he left it there. He MA'd it rather than bbanding it. He talked like a line trader not entirely familiar with indicators. Rather than developing the bband measurement, he breaks into hocus-pocus divergence...oops, and gives himself away as a support/resistance trader using broken tools. Divergence of an indicator means you have a false signal, and head faking yourself is really stupid.

Here, on this thread, I take it several steps beyond and use indicators to see the vertical movement and avoid the horizontal movement. You only profit when price is moving up or down, so why trade sideways? It is quite cool to use them in this fashion as the confidence of the trade and corresponding income derived, is what makes trading fun Every window indicator I use has a bband measuring momentum of the indicator's movement in response to price action. My upper chart uses bband dev 1 so I can see my candles break out and trade with absolute confidence. To me, it makes the most sense of any technique I have seen or used. It is nearly a guaranteed profit every time. And simple

I encourage you to investigate and experiment further with this technique. It provides extremely high confidence which leads to real profits. Don't ever trade divergence signals, if you actually can?? I think they are great "historical" analysis conversations, but really suck in live trading. Divergence is not profitable when it is actually happening, so it is imperative you don't have any indicators that do it.

Thank you for your post.
You cannot be extraordinary by being normal
  • #170
  • Edited 6:55am Mar 25, 2015 6:43am | Edited 6:55am
Quoting dkrock
{quote} Our MACD settings are different too as I have mine adjusted to the equilibrium moving average I prefer to trade against. Once you figure out your moving average, then the standard deviation of the bband works in your favor, particularly in dev 1, which I noticed the author of your article briefly realized, but did not capitalize.
Thumbs up, an intelligent thread and and point of view.
There is a question that I wanted to ask you since the begining.
It`s about the equilibrium moving average. Is it a constant value or do you change it day by day according to the market situation and behaviour?

Cheers
  • #171
  • Mar 26, 2015 5:00am Mar 26, 2015 5:00am
Quoting kore2
{quote} Thumbs up, an intelligent thread and and point of view. There is a question that I wanted to ask you since the begining. It`s about the equilibrium moving average. Is it a constant value or do you change it day by day according to the market situation and behaviour? Cheers
Thanks for your opinion. My equilibrium moving averages are constant values and work from currency to currency, from time frame to time frame. I have more than one moving average so I can see other time frames without needing their charts. Really it is the same value, just converted for viewing higher chart signals. When I trade small time frames, I really need to be sure I know which side of the market I am on. Having multiple charts open slows down reasoning and computer resources. Since everything trades against the same signal, it is easy to use one chart and yet view the entire market.
You cannot be extraordinary by being normal
  • #172
  • Apr 21, 2015 7:35pm Apr 21, 2015 7:35pm
This is the only thread on FF that keeps dragging me back here. Re-reading from post one.
  • #173
  • Apr 22, 2015 12:52pm Apr 22, 2015 12:52pm
Testing.

5 pips EJ
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  • #174
  • Apr 22, 2015 1:08pm Apr 22, 2015 1:08pm
Quoting dkrock
People who discover they find themselves nervous, or emotional when they trade, might not have love in their life. It is not only my hypothesis. That book I told you about, Think and Grow Rich, proves love is a key ingredient as it was a common trait for over 500 of the richest men in America in the early 1900's. Ever heard the expression > Behind every good man is a good woman? and vice versa.
There are billions of people on this planet who have lots of love yet are piss poor. How would you ascribe this state of affairs to their emotional well-being?
  • #175
  • Apr 22, 2015 1:11pm Apr 22, 2015 1:11pm
They are already rich.
  • #176
  • Apr 25, 2015 4:46pm Apr 25, 2015 4:46pm
Quoting EnoFX
{quote} There are billions of people on this planet who have lots of love yet are piss poor. How would you ascribe this state of affairs to their emotional well-being?
Hello EnoFX. The requirement for love, and how to use it to create and build wealth, is documented in the book Think and Grow Rich. If you have not read it, then you cannot understand the reference. Sorry.
You cannot be extraordinary by being normal
  • #177
  • Apr 25, 2015 5:13pm Apr 25, 2015 5:13pm
Cool Jhlewis10. I love the blacked out chart))) It forces you to trade your indicators Of course since most traders use support/resistance lines, they need those candles. But really, an indicator is the average of "X" candles, so what each individual candle does is of little importance to the whole...most of the time.

By blacking out the candles, and closing the terminal so you cannot see the account movement either, you might be surprised how well you can trade For me, they are very distracting and can easily trigger emotional responses contrary to the indicators signals. It takes a lot of experience and concentration to ignore the various informative tools that are NOT part of your trading plan...candle movement, currency meter values, account balance moving up and down. Actually, the market makers know this and are counting on traders to react to BS movement.

Anyone reading about this should demo it first though, as it is a bit odd at first Or review historical charts without the candles and tweak your settings to align with the real highs and lows you want to trade against, and not the head fakes. It is really eye-opening to see your actual system without the candles Draw the vertical lines on each of your entries and exits, and then put the candles back on the chart and review the activity between the lines. Make adjustments for obvious mistakes, and then do it again, on a different day, and keep adjusting until you have something you trust...sight unseen

Even now, I typically change my mt4 history to 30,000 - 50,000 candles on Friday afternoon when I close down for the week. Then on the weekend I scroll back beyond my memory of the market movement, black out the candles, and draw the lines for entries and exits for each day. Then put the candles back on, review the lines, make notes on good and bad trades, black out the candles, go to the next day, and do it all over again.

I treat Forex as my business and sometimes it can be unpredictable. My goal is to make as many predictable trades as possible, and it requires study and dedication to continuous process improvement. I could work for a living, being paid what someone else wants to pay me, forced to hear and obey...or I can do this. For me, it is not a hard decision to validate my talent and make improvements when necessary. It is so much better than working for someone else
You cannot be extraordinary by being normal
  • #178
  • Apr 25, 2015 5:36pm Apr 25, 2015 5:36pm
I was thinking about something else I do to improve my analysis and speed. When you are reviewing trades, keep track of which indicator you are relying on most and prioritize them. Arrange your indicators to match your trust. At the top of my list is my range indicator. Below it is my trend indicator. Below it is an alternate trend indicator that never lies flat on itself, so if the market is sideways and the indicator lines are all glued together, the third indicator clearly shows what is happening. The next indicator signals halfway between my time frame and the next one. The final indicator shows me the next time frame. Besides the indicators, my price chart has similar information on it, so it is just a matter of lining up signals to make entries and exits.

Consider which direction you read charts. Do you start at the bottom and go up, or the top and go down. I start at the top, so my indicators are aligned for the fastest to trigger at the top, and the smoothest at the bottom. As ALWAYS, eliminate any indicator that is not consistent, or is always diverging, or never agrees with the rest of your system. If you cannot tame it, it will destroy you, so just delete it.

These are just ideas to consider.
You cannot be extraordinary by being normal
  • #179
  • Edited 12:05pm Apr 28, 2015 11:34am | Edited 12:05pm
If you are not familiar with the book Think and Grow Rich, you can go to this link:

http://www.seektoclarify.com/free-th...thors-preface/

I cannot attach the book because the file is too big for transfer to FF. On the site you can view free videos, listen to free audio, and if you sign up for a free membership you can get the book for free.

Think and Grow Rich is the foundation of nearly every self-help book about motivation, goals, and wealth. It is like a Christmas song that keeps being recorded by different artists. Most people obviously never finish it, never apply it, or just never understand it, but you should at least try.

If you have read the Bible you will also see many recreations of its teaching in Think and Grow Rich, namely love, faith, honesty, and others. If you understand Mark Chapter 4, then you should have no problem with Think and Grow Rich. It is the same thing really, but rather than directing thought energy to our Creator, it directs it to the quantum universe. Same thing, just missing the religious aspect.

You will hear the first half of the secret to success in the Author's Preface. That half is what caused me to develop the trading method I use. The second half of the secret, well, it will apply to whatever missing character ingredients you have. I sum up the total by stating to myself that a definiteness of purpose that is pursued with a positive mental attitude achieves its goal. I have successfully applied the secret many times. Trading Forex is probably the most visual, but there are reasons to use the formula in many other areas of life. I am where I am as a direct result of having an idea to draw charts as a moving picture that required no mechanical input from me, and I did not accept failure in my route to accomplish it.
I hope you will understand the concepts as they are vital to success. If you don't get it the first time, then read it or listen to it again. Now you have the link, so you can study however you wish. If for nothing else, the stories are interesting Remember the book is based on interviews of over 500 of the richest men in the world at that time, and a synopsis of their common traits. It took 20 years to compile the data and was initially written as the 17 Laws of Success. While working with President Roosevelt to end the depression, the laws were condensed into the book Think and Grow Rich. I strongly encourage you to read and understand Think and Grow Rich.
You cannot be extraordinary by being normal
  • #180
  • Apr 28, 2015 11:49am Apr 28, 2015 11:49am
Just a two trades manual trading for today. EA busy doing its thing. 20 pip tp hit on each. Verticals are the entrys.

I only have one indicator, I don't have one for consolidation, or other tf's. Would not know how to put one together.
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