LFX Trading Proverbs

Without the candles I cannot compare your chart to mine. Our chart times are different, so I have no idea where your signal is on my chart.

Yeah, I should have held longer, my ea trades kicked A today and I am at work, so I had to set tp's at 20 because I can not monitor the trade 100%.

I don't know how you do 1m trades. 5m is my lower limit lol.

Your indies only have subtle differences they look very similar to me. Frankly I dont see how oscilators of this type can show trending well.

Those candles riding the dev 1-2 zone are usually my clue.

I hope everyone is doing well.

Recently I decided to alter the look of my arrows and found this drawing with the code numbers.

Find the following line in your code and input whatever number corresponds to the symbol you want to use in the "XX" area.

SetIndexArrow(0,XX);

It will give you a fresh new look, kind of like putting new seat covers on your car You can save the chart by right clicking and "Save Target As"

I had to change brokers after the CHF crisis and got forced to place orders via metatrader. What a pain. I found this recently and it makes a big difference. Mine works, but it is up to you to figure out if it satisfies you or not. I don't need all the fancy tools and screens, lol, as I know how to trade and I am not a hedge fund.

Here is the link and attached is the pdf. It acts like an EA and requires an open 1HR chart of any pair you are trading, but it is standalone, meaning it does not attach its screen to your mt4. Pretty simple, but I like it because I don't have to open the Terminal with its big blocky trading screen nor with it squeezing my chart space. Check it out for yourself. It is free.

http://www.fx-metropolis.com/forexhelper

Newsprofiteer has not been sending any currency feeds for a few days now. It is not that big of a deal since I have a different meter I use, but the news data is important. So, I found this replacement, which is actually pretty useful. You can modify the view to include Low, Medium, and High priority news, adjust the time to where you live, and set an alarm. Don't like the screen setup, but as a tool, it is functional. It is free too.

http://www.fx-metropolis.com/nu_Info.html

This entry is confusing to me, does not seem like clear one

I understand if you are a candlestick trader, you would not enter there. The market whipsawed for the next 40 minutes, but the signal held, and the stop loss was not hit. Sometimes it might take a little while before everyone else knows what you know.

Hi dkrock,
I would first off like to thank you taking the time to help fellow traders on this forum. I've been at it here for about 7 years and been reading countless threads and strategies, but I believe yours is unlike any of the others. I took the last 2 months to read through this thread, your blog and all of the other posts you have made in other FF forums (couldn't find anything on your old strategy Ayce). I believe I have gained a lot of insight, however some things are still unclear and I would be appreciative if you could shed some light.

Firstly, I read a lot of posts where you talk about getting in just after the high which can often avoid head fakes, but also about letting price establish highs and lows and then trade this range. I'm a bit confused about this. So does this mean you are always looking for triangle wedges within the established highs and lows and then trading the breakout of these wedges to the high/low? Or are you looking at the breakout of a horizontal high/low making a new high/low until the apex? (I think I remember reading something about you saying your only look for trades after the break of the the second or third HH/LL on the M1 chart?)

I've been focusing on a single, high volatility pair for the past 2 months to test on/perfect. It seems that on most trend line breaks on the M5 it can most often go at least 15 pips, but then can often turn around back to the entry and then can go either way. So my question about this is do you move your positions to break even immediately and if so about how many pips do you consider a good level for this, or do you always have the confidence to know that it will continue in your direction and let it continue to its apex. I ask this because the way my indicators are set up is that sometimes I will have some profit and wait for the apex of the indicators, but by the time it apexs/crosses, often times it is back to break even (which is during consolidation times, during trending there can be some good moves, it's just difficult for me to figure out when is when). So I guess I'm asking if it's better to move all positions to break even immediately after X# pips or just give them room to run their course and take some small losses too?

I read about you suggesting a currency strength meter to figure out which pairs to trade, but also that you have one currency that is "your baby". Is it better to focus on one pair or to find imbalances with the currency strength meter and trade those pairs? And if multiple pairs, do you only have a specific set you look at, or does it vary depending on the currency strength meter. If you do have a specific set, do you only look for pairs that have a high ADR? If so, how much of an ADR do you suggest?

There's also another post where you suggest to people that they can use two indicators, one to determine the best time of day to trade a specific pair and another that shows how much each specific currency moves per day of the week historically. Do you personally take both of these into account when trading, knowing which hour will give the most pips, or just trade in the general time frame of the Frankfurt open to the London close?

I also saw in this thread where you were explaining one of your trades in that it was "in the buy zone". How do you determine the "Buy/Sell Zone"? In the CCI like indicator that you discuss in post#63 on page 4 of this thread, in the picture it says "yellow/blue cross...outside of range...go go go!" Does this mean that you traded because it had gone outside the range of the bollinger bands or it had broken the previous price range? Lastly, do you pay attention to the zero line cross of this indicator, or only the blue yellow cross?

I thank you for taking the time to read my post. Any questions/answers you can not divulge I can completely understand. I really appreciate all the priceless gems you have freely given.

Someone asked me recently about the concept of equilibrium and I described it as follows. Maybe this will help you if you are not seeing it too?

Consider equilibrium as the middle. Because price is not in a straight line, the middle of it will go up and down. So, equilibrium, is the value for the middle of the market flow. Once you know where the middle is, then you more easily measure the tops and bottoms, or apexes of the movement from the middle to its end, and back to the middle. Like a yo-yo. Imagine you are using the yo-yo while riding an elevator up and down. The middle is your hand. Your hand changes position in altitude as the elevator goes up and down, but it is still your hand. Your hand does not change, only the altitude of your hand changes.

That is equilibrium. Its value does not change, but it moves up and down with the market.

Hi Dk, very valuable clues you drop. May I ask if middle value=fair price for the day ?

There are three ways to trade like this to get a fair price for the day.

1. Enter at the equilibrium value and exit at the apex.
2. Enter at the apex and exit at equilibrium.
3. Enter at the apex and exit at the opposite apex.

The choice depends on market movement.

Here is an example of some recent trades. You can see some trades are equilibrium trades, while others are apex trades. I removed some data because I have to protect my system, but hopefully this explains it better. This is my new emotionless trading version I am experimenting with for my trading team, so it may look a bit strange, but you can still see how price moves around the equilibrium and apexes.

Thanks!

nalovelady,

Sorry, but I missed your post.

As far as I know, some traders still use AYCE, so I cannot really post it anywhere.

To get into a trade after a high/low, you must trade loosely. This means you stop trying to be precise. You will find a give various advice to various traders for various conditions, lol. There is more than one way to trade, so my advice to others is not always from my technique. I have studied many things and sometimes have something else to offer.

The last piece of advise concerned triangles. It was for a novice who was trying to find entries and avoid consolidation. My system is more advanced than that. In fact, I do not even use trend lines, support lines, resistance lines, or even candles. But how could I possibly explain it to someone who does? I can also see breakouts without using any of those tools too. It is part of my edge. I do not recall ever talking about second or third HH/LL on 1M charts. Sorry.

When you refer to a trade moving 15 pips and returning to the entry, that type of activity depends on which market you are viewing and what time it is. Obviously, the conditions change because if movement always occurred during the same market, at the same hour, then anyone could trade Forex. For the most part, I would guess there are 2-3 break-evens on slower days. It is just the nature of the market. Those are called range trades, and so if I recognize that as the current pattern, I could drop to a 1M chart and trade it if I wanted. But, I have moved to 5M charts so I can diversify across the market. Trading 1M time frames requires too much concentration to spread yourself out. I normally do not need to move a position to break even because I normally will get a signal in the opposite direction at the break even point when that type of volatility occurs. I do not let them bother me too much because I am not after all the pips. I have adjusted my 1M strategy to trade 5M swings, so at the end of my intraday trading, there is profit.

Many people think they can trade strength/weakness and use some type of currency meter. For me, it signals entirely too late and in the past every time I relied on its signal I got beat. So, for me, there is no signal. I look at it to see if a currency is matched, or there is a large difference. Matched usually means consolidation, and large differences usually mean trend. But again, by the time they change, you already missed it.

I have never looked at ADR in my entire history of trading, so I cannot advise you on anything concerning it. The historical hours/days indicators you reference were for someone else. I do not believe in that strategy, but some people do. There is a big difference between trading history and trading in real time.

On an ideal day, I trade from Frankfurt to NY lunch. However, if nothing has happened during that time, I know I have to stick around because there will be a late swing trade. It almost always happens, you just never know when. That is why the hour/day indicators don't mean much to me. If it were that easy, everyone would win. Granted, some patterns repeat because money movement is predetermined for certain days, but who is to say what hour?

Each of my indicators have a unique function. There is no point to having a bunch of indicators telling you the exact same thing. In time you will downsize your screen Not only are the indicators different, but what they measure is different too. Yes, they all mesh together, but only when they agree is there a trade.

Understand I was trading 1M charts when I started this post, and now I have converted what I learned to effectively trade other time frames. Some things have changed, others have been eliminated, and some are new. It is simply fine tuning to fix any signal errors over time. Now it seems right again, but that doesn't mean it still cannot be improved.

I do not know if my method is that unique, but it is different from most traders do. It is just a matter of developing consistency to build trust.

Dkrock,
Thank you for reply. I really appreciate you taking the time to answer my questions. You have given me a lot of good points to think about and practical expectations for trading outcomes. If I may, I would like your help in better understanding equilibrium. From my reading of previous posts, should I still be look to find my equilibrium based on the 30 minute timeframe? If this is the case, use this moving average and multiply it relative to the lower timeframe you are using?
On a sililar note, what sample size and what method for gathering and evaluating this sample size do you suggest (example: visual backtester or using values from the history center)?
I think this question has already been asked, but does each pair have its own equilibrium or do you tend to find that all of forex behaves in a similar fashion?
From my observations, it seems the new system that you are developing doesn't put much importance on highs or lows (as there are no candlesticks) in your trading decision, rather it focuses on trading moves back to or away from equilibrium. So is simply finding and trading deviations to and from equilibrium sufficient in being successful?
Lastly, could you elaborate on how you use or what the Bollinger bands in the price window tell you? Do they help in determining limits/turning areas/consolidation/trending?
I apologize for my long post. I would appreciate any light you could shine on any of the above questions. Thanks again!

From my reading of previous posts, should I still be look to find my equilibrium based on the 30 minute timeframe? If this is the case, use this moving average and multiply it relative to the lower timeframe you are using? On a sililar note, what sample size and what method for gathering and evaluating this sample size do you suggest (example: visual backtester or using values from the history center)? By its definition, equilibrium is equilibrium. My more precise definition is "market", which is to say, the value that is most often the mean between buying and selling. This is the first half of successful trading, in my opinion. The second half to success is realizing a time frame is a time frame. They all work the same. The two major differences are the sample size between your entry and exit, and the volatility of the price range between the entry and exit. A 1M time frame will provide many trades, but perhaps not enough range. A higher time frame may provide less trades, but also lack range, but most likely can cover the spread. You have to determine the time frame that best suits your personality and business plan. The 30M chart covers the number of periods that will effectively measure the most different trading plans and styles. That is why I suggest system design novices to start with it. A high frequency trading strategy is too fast for that time frame, but nearly every other strategy can be seen and measured with it. I cover the math behind that opinion on my blog.

I think this question has already been asked, but does each pair have its own equilibrium or do you tend to find that all of forex behaves in a similar fashion? Again, equilibrium is equilibrium. It does not matter what time frame, what pair, or for that matter, what market -- Forex, Stock, Indices. Not sure about commodities because so far no one has tried it. That market is too driven on fundamentals for my tastes, so I stay away from it.

From my observations, it seems the new system that you are developing doesn't put much importance on highs or lows (as there are no candlesticks) in your trading decision, rather it focuses on trading moves back to or away from equilibrium. So is simply finding and trading deviations to and from equilibrium sufficient in being successful? Correct, and Yes. In my previous system I concentrated on trading ranges, but it is rather time consuming and restricted me from diversifying to multiple pairs. So, I converted my equilibrium to trade intraday swings. This means it is not very effective for ranges anymore, causing it to break even, or gain/lose a few pips. However, on the swing trades, there are not numerous range trades. I stay in trend direction until a moderate reverse is formed. While I could easily find the high/low, on my range system often that value would occur multiple times causing too much confusion. In addition, that is a lot of eye power to effectively trade multiple pairs. I prefer to just ride it out until all the head fakes are done and it is ready to go the other way. Most of the time, I find that point. You should also be aware that while candlesticks are not required to trade my technique, I also do not show my whole technique on my screenshots.

Lastly, could you elaborate on how you use or what the Bollinger bands in the price window tell you? Do they help in determining limits/turning areas/consolidation/trending? Bolllinger band on my chart are simply for predicting market position. Bollinger bands on my indicators are for predicting momentum during the trade. Neither are signals. They just give me advance notice to possible changes in my trade status.

Think of yourself as a referee when you trade. As the referee you are not playing the game, but observing from a short distance away. You look for irregularities and make corrections to the game when they occur. As the teams advance from one end to the other, you follow, closely monitoring the action, but not directly influencing it. If you have ever watched a referee's movement, you might notice they often stop short of going all the way to the end of the court, or field. They do not need to travel the whole distance to monitor it. That is how I trade. I follow the price until it stops moving, turns, and goes the other way. I am never the reason for the turn, so since I do not control it, then I do not try to trade it.

I recently read an article by Reynaldo Soriano Jr.. the founder and Peak Performance Trader Coach for Enlightened Super Trader Education. This is not an endorsement for him, but merely a footnote to acknowledge the material. It is my own paraphrase and expansion of the topic.

I was astonished on how accurate it was as it pertained to me, so I thought I would share this insight with you. He describes the process of becoming a successful trader in 5 levels of competence.

1. Unconscious Incompetence - When a trader wants to learn how to trade, but he doesn't know that he knows nothing about trading.

2. Conscious Incompetence - When the trader realizes that he is incompetent, and begins to research trading from books, videos. seminars, forums, etc. He is not aware that he's learning bad habits along the way because he has no guidance and he is learning the wrong way. The result is inconsistent profitability.
- This is the level I think the majority of FF members are at.

3. Awakening Moment - After a few years of trading and losing consistently, he realizes there's something else wrong. At first he can't figure out what's wrong. He learned different systems and none of them worked out. He traded different asset classes from stocks, futures, Forex, and options. He is about to give up and he realizes that perhaps it's not about the trading system. He realizes that the main problem is him and that he learned how to trade the wrong way.
- I still remember that day. I was seriously ready to quit trading forever on that day. I think I discussed it in one of my posts, but basically I had spent several
months studying moving average crossovers and concluded there are not any that are consistently reliable for profit. A few more months went by trying and
tweaking various indicators. Then the realization hit me when my conscious mind finally saw the code I usually ignored. It was the code concerning how the data
for the indicator was collected. It was done by moving averages. No wonder nothing worked!!

4. Conscious Competence - After his awakening moment, he researches self-improvement techniques and attends self-development workshops to know more about himself. He learns more about his beliefs and values that have limited successful trading. He becomes aware of his emotions and searches for methods and coaches that will guide him every step of the way to correct his bad habits.
- Religion had taught me that being rich was bad. I had to learn the real Truth and disregard the religion parts.
- Education had taught me that I was smarter than most people and subsequently rewarded for natural-born talents. I had to alter my ego.
- Work had taught me that being an over-achieving paid off with more recognition, authority, and income. I had to develop a method that matched my personality
and not my socialital expectations. By altering the desire to get all the pips with ridiculous whipsaw into a less-than-perfect method that worked with extremely
high consistency, I ultimately achieved my goal of high probability winning rather than the expectation of large daily growth. By altering the precision of the
trades, and converting profit focus from daily to weekly, I was able to finally devise a method to win nearly every trade. I don't make all the pips, but I rarely
give back any of them.

5. Unconscious Competence - With proper training, practice, planning, and preparation (technically, physically, and mentally) through trading the markets for years, he developes mastery and is able to trade intuitively without thinking. He has absolute confidence in his trading system. He knows when to buy and when to sell. He knows the behavior of the asset class that he's trading. The result is consistent profitability.

What level are you on in the process? If you are at level 1, 2, 3, or 4, you might have difficulty applying a level 5 technique. Use this illustration to develop your goals and milestones.

I feel that since money is at stake, nobody should consider trading at full size until they feel they are at Stage 4.

I also feel that upon reaching Stage 3, many will truly understand the game of trading and leave.