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  • #21
  • Dec 27, 2015 3:50am Dec 27, 2015 3:50am
Another update!
Today I want to talk about distinguishing higher from lower probability trades.
The way that I will be approaching this is simple.
I will be using a point system and with that point system I will score certain trades. The higher the score the better the chances are for being profitable.
Each indicator will have a certain amount of points and some indicators will be required in order for me to take a trade.

For example:
I can only take a trade if the RSI is overbought or oversold.
I could have all the points in the world if the RSI is not overbought I won't take the trade.

I may eventually add something extra to it like this:
If the trade scores 4 points i can risk 0.5%, if it scores 5 points i can risk 0.6%.
Meaning that the higher probability trades will have a higher frozen margin to it but also more profit or losses.

I'm not sure if this is a good idea or not yet but once I get to making a trading plan and then in turn doing the back testing I will try it out and see how it goes.
If my back testing proves that it is more profitable I will try to implement it together with risk and money management.


Any questions?
AntiVi
  • #22
  • Dec 27, 2015 4:29am Dec 27, 2015 4:29am
Quoting AntiVi
I want to talk about distinguishing higher from lower probability trades. The way that I will be approaching this is simple. I will be using a point system and with that point system I will score certain trades. The higher the score the better the chances are for being profitable. Each indicator will have a certain amount of points and some indicators will be required in order for me to take a trade. For example: I can only take a trade if the RSI is overbought or oversold. I could have all the points in the world if the RSI is not overbought I...
Hi AntiVi,

I do not encourage this approach to system design. William Eckhardt illustrates the point more clearly in his interview from New Market Wizards.

"Schwager: Are there other practical implications of using what you term a robust approach as opposed to methods that assume a normal probability distribution?

Eckhardt: One important application concerns a situation in which you have several indicators for a certain market. The question is: How do you most effectively combine multiple indicators? Based on certain delicate statistical measures, one could assign weights to the various indicators. But this approach tends to be assumption-laden regarding the relationship among the various indicators.
In the literature on robust statistics you find that, in most circumstances, the best strategy is not some optimized weighting scheme, but rather weighting each indicator by 1 or 0. In other words, accept or reject. If the indicator is good enough to be used at all, it's good enough to be weighted equally with the other ones. If it can't meet that standard, don't bother with it.
The same principles applies to trade selection. How should you apportion your assets among different trades? Again, I would argue that the division should be equal. Either a trade is good enough to take, in which case it should be implemented at full size, or it's not worth bothering with at all."
  • #23
  • Dec 27, 2015 5:11am Dec 27, 2015 5:11am
Quoting AntiVi
Another update! Today I want to talk about distinguishing higher from lower probability trades. The way that I will be approaching this is simple. I will be using a point system and with that point system I will score certain trades. The higher the score the better the chances are for being profitable. Each indicator will have a certain amount of points and some indicators will be required in order for me to take a trade. For example: I can only take a trade if the RSI is overbought or oversold. I could have all the points in the world if the RSI...

Hi AntiVi;

Basing your Trade decision on an Indicator to tell you if the Market is Overbought or Oversold is a bad idea.

If you need Indicators only use them to confirm what you are seeing based on higher TF Support/Resistance and Market Structure.

If you are Trading H1 look at Daily and Weekly for Market Structure, HH HL LL LH etc, this will tell you which way to Trade.

Support/Resistance both long and short term will give you your entry point and TP Level.

Mark the Monthly / Weekly / Daily / highs and lows observe how the Market reacts around these Levels.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 27th Dec 15 EUR:USD D1 Chart 2 .png Size: 116 KB
Click to Enlarge Name: 27th Dec 15 EUR:USD D1 Chart.png Size: 117 KB
  • #24
  • Dec 27, 2015 7:02am Dec 27, 2015 7:02am
Hi Bud!
Wish you to be green in forex!

Cheers
Stay Hungry Stay Foolish
  • #25
  • Dec 27, 2015 12:30pm Dec 27, 2015 12:30pm
Quoting Atokys
{quote} Hi AntiVi, I do not encourage this approach to system design. William Eckhardt illustrates the point more clearly in his interview from New Market Wizards. "Schwager: Are there other practical implications of using what you term a robust approach as opposed to methods that assume a normal probability distribution? Eckhardt: One important application concerns a situation in which you have several indicators for a certain market...
The point with my scoring system post was that if it has major support then you are more likely to see a bullish move than if you only have a minor support. If it has a pattern completion on top of it it can add to that.

So if one person sees that pattern completion and goes in on the trade and another person goes in on the same trade based on support and resistance and market structure then you that are using both know that more people may take this trade which will in turn be more favorable for you.

Does that make sense?


Quoting stevepatt
{quote} Hi AntiVi; Basing your Trade decision on an Indicator to tell you if the Market is Overbought or Oversold is a bad idea. If you need Indicators only use them to confirm what you are seeing based on higher TF Support/Resistance and Market Structure. If you are Trading H1 look at Daily and Weekly for Market Structure, HH HL LL LH etc, this will tell you which way to Trade. Support/Resistance both long and short term will give you your entry point and TP Level. Mark the Monthly / Weekly / Daily / highs and lows observe how the Market reacts...
My RSI example was just an example so I agree with you that just looking at an indicator is a bad idea. However if you know how to read the chart and you know about support, resistance, trends, etc. You can use it as confirmation for what you're seeing. If you look at the picture of post 15 you will see that the market was going in a bullish direction for a long period of time. Then the RSI confirmed that it was indeed overbought as the charts indicated. If it wasn't during the holiday period I think we would have seen a bigger bearish move than the one we saw.

Basing your TP and ST on structure is going to be better than some fancy indicator.
The point with my scoring system post was that if it has major support then you are more likely to see a bullish move than if you only have a minor support. If it has a pattern completion on top of it it can add to that.

So if one person sees that pattern completion and goes in on the trade and another person goes in on the same trade based on support and resistance and market structure then you that are using both know that more people may take this trade which will in turn be more favorable for you.

I don't know if that makes sense xD
My brain exploded today with the things I read so sorry if it's a bit confusing or if I'm wrong feel free to tell me!


Quoting Nik13
Hi Bud! Wish you to be green in forex! Cheers
Thanks for the kind words!
I wish you the same!



Thanks for the replies!
If anything was wrong or confusing let me know since I was a bit out of it today!
AntiVi
  • #26
  • Dec 27, 2015 1:53pm Dec 27, 2015 1:53pm
Quoting AntiVi
{quote} The point with my scoring system post was that if it has major support then you are more likely to see a bullish move than if you only have a minor support. If it has a pattern completion on top of it it can add to that. So if one person sees that pattern completion and goes in on the trade and another person goes in on the same trade based on support and resistance and market structure then you that are using both know that more people may take this trade which will in turn be more favorable for you. Does that make sense? {quote} My RSI...
Hi AniVi;

This is how I see it on a H1 Chart, below.

See how the Market reacts from the Levels I have marked on the chart and by using Market Structure you can see if it's going up or down.

Look at D1 or W1 for significant Highs and Lows where you would expect to see Market reaction when reached.
Attached Image (click to enlarge)
Click to Enlarge Name: 27th Dec 15 AUD:USD H1 Chart.png Size: 134 KB
  • #27
  • Dec 27, 2015 2:40pm Dec 27, 2015 2:40pm
Quoting stevepatt
{quote} Hi AniVi; This is how I see it on a H1 Chart, below. See how the Market reacts from the Levels I have marked on the chart and by using Market Structure you can see if it's going up or down. Look at D1 or W1 for significant Highs and Lows where you would expect to see Market reaction when reached. {image}
After reading this I went to my chart and I went to the 4h chart and put in horizontal lines at the significant highs and lows and you're completely right.
I noticed that at the levels I marked the market was trading sideways for a little bit and then continued to follow the bullish move of course it may as well turn over.

I guess this is where my inexperience comes to show! Thanks for the valuable lesson!


AntiVi
  • #28
  • Dec 28, 2015 7:58am Dec 28, 2015 7:58am
Quoting AntiVi
The point with my scoring system post was that if it has major support then you are more likely to see a bullish move than if you only have a minor support. If it has a pattern completion on top of it it can add to that.
Ok then, just make sure you test your assumptions rigourously.
Quote
So if one person sees that pattern completion and goes in on the trade and another person goes in on the same trade based on support and resistance and market structure then you that are using both know that more people may take this trade which will in turn be more favorable for you. Does that make sense?
If I knew that the market moved because of the actions of some traders I would be glad to ignore any signal generated by such activity. I would only want to play for the sustained price trends created by changing fundamental forces.

The idea that technical indicators have merit because other traders use them is quite a silly bit of FF logic.
  • #29
  • Edited 3:38pm Jan 4, 2016 3:23pm | Edited 3:38pm
Update!
So over the holidays I've been watching some videos that were presented to me by a kind man that shall stay anonymous. I won't be sharing the source of these videos however I can say that what I've seen so far (I am still not finished with them) has been similar to what I've been seeing in some videos that I found myself.
Now because of this I feel like I need to take a step back and rethink how I will be doing this.

I know that I need a trade plan and that I need to test that plan and then stick to that plan but how can I test that plan if I am unsure of things at the moment.
For example today. I took a trade on AUS-USD.
Now my take profit was at a resistance line and I had a 30pip stop loss under the new low that it had made. I waited for the candle to close higher and it did so I took the trade.
Now a little bit into the trade i ended it manuallly. I made 15$ profit however now the market has gone up the same amount again so that 15$ could have been 30$ or even 60$ which would have been at roughly my take profit.
Why did I end it early? Idk! Maybe I'm not confident in my analysis.

I feel like at the moment I may be unsure if a certain position for a stop loss is a good one or not and the same with the take profit or maybe I'm just ovethinking it since my predictions have been correct most of the time.

Picture:
Attached Image (click to enlarge)
Click to Enlarge Name: Trade 12.png Size: 64 KB


Now if I can't see the trades properly I can't find them and test them properly either.
Any suggestions are welcome!



Quoting Atokys
{quote} Ok then, just make sure you test your assumptions rigourously. {quote} If I knew that the market moved because of the actions of some traders I would be glad to ignore any signal generated by such activity. I would only want to play for the sustained price trends created by changing fundamental forces. The idea that technical indicators have merit because other traders use them is quite a silly bit of FF logic.
I can't really disagree with what you're saying to be honest.


Thank you
AntiVi
  • #30
  • Jan 5, 2016 2:53pm Jan 5, 2016 2:53pm
Hey guys!

So I took a trade today and I thought it was a good one.
There was a double bottom, major resistance, i think there was a pattern in there too but not too sure.
I lost money on this trade but I don't think it was a bad trade.
I think my stop loss was a bit too far in my opinion meaning my RR was bad but that is bad stop loss positioning.
Any opinions or confirmation?

Pictures:
Attached Image (click to enlarge)
Click to Enlarge Name: Trade 13.png Size: 69 KB


Attached Image (click to enlarge)
Click to Enlarge Name: Trade 14.png Size: 52 KB



Thanks for reading!
AntiVi
  • #31
  • Jan 6, 2016 2:11pm Jan 6, 2016 2:11pm
Quoting AntiVi
Hey guys! So I took a trade today and I thought it was a good one. There was a double bottom, major resistance, i think there was a pattern in there too but not too sure. I lost money on this trade but I don't think it was a bad trade. I think my stop loss was a bit too far in my opinion meaning my RR was bad but that is bad stop loss positioning. Any opinions or confirmation? Pictures: {image} {image} Thanks for reading! AntiVi

Hi AntiVi;

Do you Trade the Asian Session?

The reason I ask is because a lot of the big moves on AUD crosses occur during the Asian Session because they are in the Southern Hemisphere.

I hope the charts below will help
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 6th Jan 16 AUD:USD D1 Chart.png Size: 100 KB
Click to Enlarge Name: 6th jan 16 AUD:USD H1 Chart.png Size: 148 KB
  • #32
  • Jan 6, 2016 3:55pm Jan 6, 2016 3:55pm
Quoting stevepatt
{quote} Hi AntiVi; Do you Trade the Asian Session? The reason I ask is because a lot of the big moves on AUD crosses occur during the Asian Session because they are in the Southern Hemisphere. I hope the charts below will help {image} {image}
Hey Steve!

I got into the trade at 14:39 GMT+2 so I'm not sure about the session times at the moment and I know I should know so at the moment I don't trade any sessions specifically I am just trying to get the analysis down and there is much to learn!
The 2 green lines were profit targets so they were indeed not so significant just previous structure.
As for the the charts what does ADR stand for? Average Daily Range? Is there documentation on how it works?

Did you also catch this one? Wedge pattern breakout on the daily.
Attached Image (click to enlarge)
Click to Enlarge Name: Trade 15.png Size: 52 KB



I'll also be starting some simple exercises as soon as possible as soon as I get some historical data which shouldn't be too hard to implement.
I'm also still working on the videos!


Thanks for the reply!
AntiVi
  • #33
  • Jan 6, 2016 4:25pm Jan 6, 2016 4:25pm
Quoting AntiVi
{quote} Hey Steve! I got into the trade at 14:39 GMT+2 so I'm not sure about the session times at the moment and I know I should know so at the moment I don't trade any sessions specifically I am just trying to get the analysis down and there is much to learn! The 2 green lines were profit targets so they were indeed not so significant just previous structure. As for the the charts what does ADR stand for? Average Daily Range? Is there documentation on how it works? Did you also catch this one? Wedge pattern breakout on the daily. {image} I'll also...

Hi AntiVi;

Here's a link to Forex Trading Sessions http://www.forexmarkethours.com/GMT_hours/02/

The Trade you took was during the Asian Session which, like I said, can see big moves on the AUD crosses.

You are correct ADR = Average Daily range I've posted the two I use.

I only Trade EUR/USD now, because I am Trading from M5 charts, and find it a lot easier to focus on the one pair that I know the best and has the lowest Spread.

Remember to check Higher Tfs for Trade Bias and then Trade the Lower TF in line with the Higher TF Bias.

Look for Levels on Higher TFs that will act as Support/Resistance and then wait for the market to come to that level.

Here's a Trade I've just taken on EUR/USD (Charts Below) that illustrates how this works.

Hope it helps
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 6th Jan 16 EUR:USD D1 Chart.png Size: 123 KB
Click to Enlarge Name: 6th Jan EUR:USD M5 Trade.png Size: 107 KB
Attached File(s)
File Type: ex4 !SM_ADR Marker.ex4   12 KB | 288 downloads
File Type: ex4 xADR.ex4   6 KB | 270 downloads
  • #34
  • Jan 8, 2016 3:40am Jan 8, 2016 3:40am
Quoting stevepatt
{quote} Hi AntiVi; Here's a link to Forex Trading Sessions http://www.forexmarkethours.com/GMT_hours/02/ The Trade you took was during the Asian Session which, like I said, can see big moves on the AUD crosses. You are correct ADR = Average Daily range I've posted the two I use. I only Trade EUR/USD now, because I am Trading from M5 charts, and find it a lot easier to focus on the one pair that I know the best and has the lowest Spread. Remember to check Higher Tfs for Trade Bias and then Trade the Lower TF in line with the Higher TF...
Sorry for the late reply!

Yeah I see what you did even though it took me a little while to figure it out since I'm fairly new at this.
The way I see it is you checked the higher time frame for bullish or bearish and then checked for reversal zones in the lower time frame and traded using that.
The market seemed like it was trying to go higher but couldn't and just bounced back from the same zone over and over.

When you're trading the 5m charts do you feel more pressured or stressed than when you would trade a 60min chart? In my head trading the lower time frames gives faster results but you have to be quicker to enter trades and you have to pay attention which is probably why you're only doing one pair but the higher ones you have more time to get into a trade but the results take longer to come trough and if you have trades overnight you may not get a lot of sleep xD

Currently I'm learning patterns, how they are formed and how to trade them properly using stops and take profits.


Thanks
AntiVi
  • #35
  • Jan 8, 2016 9:25am Jan 8, 2016 9:25am
Quoting AntiVi
{quote} Sorry for the late reply! Yeah I see what you did even though it took me a little while to figure it out since I'm fairly new at this. The way I see it is you checked the higher time frame for bullish or bearish and then checked for reversal zones in the lower time frame and traded using that. The market seemed like it was trying to go higher but couldn't and just bounced back from the same zone over and over. When you're trading the 5m charts do you feel more pressured or stressed than when you would trade a 60min chart? In my head trading...
Hi AntiVi;

I enter Trades on M5 to fine tune my entry point.

You shouldn't feel any more stress, in fact, I feel less because I know I'm getting into a Trade with better chance of success.

Entering Trades, on M5, does take more focus and, personally, I find it difficult to manage more than one pair with that amount of detail. But there are Traders who manage many pairs when Trading M5 I'm just not one of them.

I hope the Charts below explains the process, clearly, if not let me know.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 8th Jan 16 EUR:USD D1 Chart.png Size: 121 KB
Click to Enlarge Name: 8th Jan 16 EUR:USD H1 Chart.png Size: 137 KB
Click to Enlarge Name: 8th Jan 16 EUR:USD M5 Chart.png Size: 122 KB
  • #36
  • Jan 8, 2016 4:05pm Jan 8, 2016 4:05pm
Quoting stevepatt
{quote} Hi AntiVi; I enter Trades on M5 to fine tune my entry point. You shouldn't feel any more stress, in fact, I feel less because I know I'm getting into a Trade with better chance of success. Entering Trades, on M5, does take more focus and, personally, I find it difficult to manage more than one pair with that amount of detail. But there are Traders who manage many pairs when Trading M5 I'm just not one of them. I hope the Charts below explains the process, clearly, if not let me know. {image} {image} {image}
Hey Steve,


I see I see! The charts make a lot of sense! Entering on the 5 min chart gives you more detail as to what is going on in the market.
Also I have a question!

Today I downloaded historical data trough the mt4 platform but there is a gap between the new data and the data i downloaded.
Is that a problem when it comes to back testing and trading that now?

For example this is my EUR/USD 1h chart now. The gap seems huge.
Attached Image (click to enlarge)
Click to Enlarge Name: Trade 16.png Size: 45 KB



Thanks!
AntiVi
  • #37
  • Jan 10, 2016 10:13am Jan 10, 2016 10:13am
Quoting AntiVi
{quote} Hey Steve, I see I see! The charts make a lot of sense! Entering on the 5 min chart gives you more detail as to what is going on in the market. Also I have a question! Today I downloaded historical data trough the mt4 platform but there is a gap between the new data and the data i downloaded. Is that a problem when it comes to back testing and trading that now? For example this is my EUR/USD 1h chart now. The gap seems huge. {image} Thanks! AntiVi

Hi AntiVi;

I'm not the best person to ask about this sorry.

Try the Platform Tech forum they will be able to help.
  • #38
  • Edited 1:30pm Jan 10, 2016 1:19pm | Edited 1:30pm
Quoting stevepatt
{quote} Hi AntiVi; I'm not the best person to ask about this sorry. Try the Platform Tech forum they will be able to help.
I compared the gap with a different chart and i'm basically missing a couple of hours of data now. I'm not sure how that happened to be honest.
It seems that refreshing the chart helped and i'm also not sure how that works xD
  • #39
  • Jan 13, 2016 3:56am Jan 13, 2016 3:56am
Update time!

So since last time I have placed a trade yesterday but due to the fact that i re-installed MT4 the volume changed so I didn't realize. Now I got out of the trade not so long ago as soon as the double top formed.
It made up for some stupid mistakes but it could have gone badly so it was a profitable trade but not a good one.

Attached Image (click to enlarge)
Click to Enlarge Name: Trade 18.png Size: 61 KB



Today I will be trying to get an excel spreadsheet going that calculates stuff automatically so that I will be able to back test in a more efficient manner.
I'm not good at Excel at all so it may take a while and I may not even be able to finish it today but we can hope!

What will I be back testing?
I have a simple trading plan in my head that uses triangle, pennents and wedge patterns. To me they're pretty much all the same but I may or may not post a topic in the rookie section just to make sure I'm not being stupid or anything.
I will try to set up the spreadsheet so I gather as much data as possible and I try as many stops as possible to be able to see what's best.
I want to try ATR stops, 1.5x ATR stops, 2x ATR stops. Set stops like X amount of pips below the lowest/highest point of the patterns. Etc.
I want to try to set up the spreadsheet so I can see if I were to trade them only in the current trend direction if that is more profitable or not.
So a lot of work to be done!

I chose these particular patterns because they are simple and easy to spot. They're straightforwards. I won't be trying to catch the bounces between the pattern. I will only be testing the breakout.

One more thing!
I will not be posting all of my results of my back testing but I'm sure you will be able to catch a glimpse. The reason for this is if I were to do that and it works for me people would be trying it themselves without doing the testing themselves and they won't have the confidence in the trading plan that I have and they won't have the ability to spot them as easily as I do and it may just not work for them. They may not be comfortable with my plan. They should do the back testing themselves and see what is best for them.

Any comments or questions are appreciated!


Thanks for reading!
AntiVi
  • #40
  • Jan 14, 2016 9:14am Jan 14, 2016 9:14am
Update update!

Here is my spreadsheet so far!
There are several values that are calculated to all I need to enter in is the date, time, entry, T1, T2, LL/HH, Height, Base and Set SL.
Everything else gets calculated automatically meaning that it will save me time.
The results in the sheet atm are just for testing it out they are not real market numbers.
I won't say what the stuff says behind the things I marked out so don't ask
There is also a drop down menu so i can change the stop loss used so I can compare them in the end and figure out which one to use.

If you think I missed something or if you see something I could add let me know!

Picture:
Attached Image (click to enlarge)
Click to Enlarge Name: Spreadsheet 1.png Size: 56 KB



Thank you for reading!
AntiVi
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