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HAC & RAC - A Simple-Minded Approach

  • #101
  • Feb 4, 2016 11:37am Feb 4, 2016 11:37am
Quoting Almuten
Some more finer points: 1. Both the HAC & RAC have a multiplier adjustment. What this does is lengthen or shorten the base cycle period length. On my charts I like to put on a 1/4 cycle period (0.25) of the HAC because it mimics the next lower time frame HAC on full cycle. I do this because 95% of the time the lower time frame will trigger first, or should trigger first. It's just easier to see at a glance this way. Recall Alien's words: "The lower leads the higher." In the chart below, the shorter length is in green and the regular is in red. {image}...
Hi,
you said that you have second HAC lines (green one). And it's multiplier on yout template is 0.382 , not 0.25 as you said. What should we actually use? Or it doesn't matter?
  • #102
  • Feb 4, 2016 1:42pm Feb 4, 2016 1:42pm
Quoting fx123321
{quote} Hi, you said that you have second HAC lines (green one). And it's multiplier on yout template is 0.382 , not 0.25 as you said. What should we actually use? Or it doesn't matter?
Ah... I'm glad you brought that up. 0.25 is what I originally said because when I first started doing this, that's what I did. Then I found that sometimes .25 shortened the cycle length too much and made the HAC behave strangely. It just got too short. However, putting it at .382 (being a fib man), accomplished what was needed. I'm going to see if I can amend or edit my original statement.

Thanks for bringing that up!
  • #103
  • Feb 4, 2016 6:34pm Feb 4, 2016 6:34pm
Alien is going to Mars
  • #104
  • Feb 5, 2016 2:02am Feb 5, 2016 2:02am
Quoting Almuten
{quote} Ah... I'm glad you brought that up. 0.25 is what I originally said because when I first started doing this, that's what I did. Then I found that sometimes .25 shortened the cycle length too much and made the HAC behave strangely. It just got too short. However, putting it at .382 (being a fib man), accomplished what was needed. I'm going to see if I can amend or edit my original statement. Thanks for bringing that up!
you're welcome)))
well, ok, now i see
  • #105
  • Feb 5, 2016 3:37am Feb 5, 2016 3:37am
First of all wanted to thank you!!
Now, since I am in a long on NU, I am seeing that it reached a 4:1 PT on the H1 and H4, retraced some and is now going back up (HAC crosses on smaller TF), maybe just touching again and then a big retrace? On the other hand, looking at the daily, it crossed where I have now my SL (up over 200p) and the 1:1 is still over 230P away. Take profit and then wait for a continuation on D1?
Attached Image (click to enlarge)
Click to Enlarge Name: HAC-NZDUSDH1.png Size: 89 KB
  • #106
  • Feb 5, 2016 6:27am Feb 5, 2016 6:27am
Quoting Go5
First of all wanted to thank you!! Now, since I am in a long on NU, I am seeing that it reached a 4:1 PT on the H1 and H4, retraced some and is now going back up (HAC crosses on smaller TF), maybe just touching again and then a big retrace? On the other hand, looking at the daily, it crossed where I have now my SL (up over 200p) and the 1:1 is still over 230P away. Take profit and then wait for a continuation on D1? {image}
Hi Go5,
First of all, congrats on the nice trade! There's no way you can lose money on it now, so relax, right? Anyway, you did a good job analyzing this. H1 did in fact hit its 4:1 and shot past it a bit. D1 is in a great position too, but look at H4. See how it hit its 2:1 and backed off? That's telling me something. It's telling me that people are taking profits there. Not everybody, but some. If you have a split position, you might consider that too. Nothing would be wrong with that.


So, what can we expect now? Would we expect an outright reversal of the whole shebang right here? Likely not. Sure, on M15-M1, there will be some short moves here and there, but the H1 and H4 are looking very strong still. The RAC on both is way above 80 and even the RSI on them is positive. However, trades can trigger to the short side on the lower TFs, which can lead to the larger ones being sucked in. The HAC on H1 is close enough to be involved, so it's something to watch for. Obviously, you don't want to lose what you have now though, so that's in your mind too. What to do?

You know, there's every reason to believe H4 will hit its 3x target. However, there's also reason to believe that on its way to do so, it can slam back into the 1x line or in that area on its way to the target Can you deal with that? This is a question I can't answer for you. It's a lot of pips, after all.

Currently, a perfect M15-M1 trade was triggered to the long side. Let's watch it and see if the M15 makes its 3x target. If it does, it will be past the 2:1 line on H4, giving us confidence that it will go higher and likely, that 2x line will become support, which will allow you to raise your SL further. If it does not make it however, and stops at the H4 2x line, then we really have to keep an eye on it closely and expect a deeper retracement.

To be continued...
Attached Image(s) (click to enlarge)
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  • #107
  • Feb 5, 2016 6:36am Feb 5, 2016 6:36am
Quoting TwFXtrader
Alien is going to Mars
This is the first I've heard of it!
  • #108
  • Edited 8:29am Feb 5, 2016 8:07am | Edited 8:29am
GBPUSD - Short setup

Ok, now we were interested in seeing what occurred after GBPUSD hit the 3x target. After some futzing around, and after some sloppy action, this pair finally set up for a short. M15-M1 is already in progress. H1 is near to crossing right now. A conservative target is the 3x on M15, which is exactly at the 1x line on the last H4 trade, right at the last consolidation area. This is a reasonable target on a couple of fronts.

The M15 trigger was a bit sloppy though and it would have been easy to miss and I'm not sure I would've taken it anyway. That's just going to happen. Anyway, if the 3x target on H1 is hit, it will take out the prior low on D1.

The H1 trade portion of this will probably be a little sloppy on the way down. M15-M1 segment was fine, but by the time the H1 was triggered, it had been many bars between the M15 trigger and H1. So expect a reaction. If the risk is too great, etc... it will likely come and you can reenter on another M15-M1 setup.
Attached Image (click to enlarge)
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  • #109
  • Feb 5, 2016 8:28am Feb 5, 2016 8:28am
Quoting Almuten
{quote} Hi Go5, First of all, congrats on the nice trade! There's no way you can lose money on it now, so relax, right? Anyway, you did a good job analyzing this. H1 did in fact hit its 4:1 and shot past it a bit. D1 is in a great position too, but look at H4. See how it hit its 2:1 and backed off? That's telling me something. It's telling me that people are taking profits there. Not everybody, but some. If you have a split position, you might consider that too. Nothing would be wrong with that. So, what can we expect now? Would we expect an...
Thanks for your insight! Can't split my microlot....adjusted my sl to the lower side of the kumo on the H1, we 'll see. Dropped under the pitchfork during the news though
  • #110
  • Feb 5, 2016 8:37am Feb 5, 2016 8:37am
Quoting Go5
{quote} Thanks for your insight! Can't split my microlot....adjusted my sl to the lower side of the kumo on the H1, we 'll see. Dropped under the pitchfork during the news though
Yeah, see how it just bounced right off of the 2x line again? But be patient and wait for an M15-M1 setup to go long again. This is just an observation, but the 2x on the last M15 trade was right at the 2x on the H4.

Price is still holding above the 1x on H4 though. H1 is crossing below the HAC, BUT the RAC has not crossed 80 so we're still good on that front.

The RSI on H4 is still plastered against the ceiling as well.

The HAC on M5 is still a good distance from M1, so the long won't set up until they get a bit closer together. Be patient.
Attached Image (click to enlarge)
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  • #111
  • Feb 5, 2016 9:15am Feb 5, 2016 9:15am
AUDUSD Update:

Ok, after this pair hit the 3x target it set up for a short on M15 and then on H1. The 3x on H1 is marked on the H4 chart, which is very close to the lows on D1.

There were many bars between the M15 setup and the H1 however. Once again, expect some counter trend reactions on the way down. It's likely not going straight there. It might do something strange like that, but it's not likely.

Now, if you also think about what this means in the context of D1, consider what a double-bottom looks like. They're pretty ragged, right? Seldom are they smooth and easy-looking.
Attached Image (click to enlarge)
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  • #112
  • Feb 5, 2016 9:41am Feb 5, 2016 9:41am
GBPAUD Update:

Ok, a nice series of trades just triggered on this pair. Anyway, like we said yesterday, there were active long trades that had yet to be invalidated on H1 & H4 both. Then a valid H1 short set up and stopped at its 2x target (The H1 chart with pink lines).

Also, on the W1 chart, it shows the market resting against the HAC line with no RAC crossing (well above 80), indicating that it's a support and not a trade setup on that TF.

If this pair makes yet another H4 trade setup by the end of the day, then I would say we'll have a very interesting week next week.
Attached Image (click to enlarge)
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  • #113
  • Feb 5, 2016 10:48am Feb 5, 2016 10:48am
keep it simple.the more you make it complex the more you mess it.simple works
  • #114
  • Feb 5, 2016 11:12am Feb 5, 2016 11:12am
I wanted to say something more about the M15-M1 setup, especially in light of Go5's long trade in progress right now. It's been on my mind all morning. Heck, that was a week's worth of pips for some people.

Anyway, when these kinds of setups occur, it is perfectly fine to take a position in the opposite way of the main H4 trade. Generally, this setup will materialize into a sizable correction, or maybe even a total reversal of the whole H4 trade.

Once again, this method looks for the UNLIKELY. When an unlikely event happens, it means that people are getting surprised. In this case, we weren't completely surprised because we had an H4 2x level to watch. It proved itself earlier as a profit-taking level for some of the traders. Then, to see the M15-M1 setup to occur, well, it says something doesn't it?

Will the M15 hits its PT level? I don't know. However, what I DO know (as well as I am able as a human being), is that it won't reverse back to the long side UNTIL at least the M5 & M1 align enough to produce a resumption of the trend upward. Until that gets even close, there's no point of thinking of going long again. There just isn't.

A major clue lies in the RSI of the RAC on those TFs. If you put the cursor on M15, you'll see that all 3 triggered within that bar. First the M1, then M5 and then M15. The 3x PT level of M15 was around 110 pips away at the time of the valid cross, which makes it pretty worthy of consideration, right?
Attached Image (click to enlarge)
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  • #115
  • Feb 5, 2016 11:28am Feb 5, 2016 11:28am
Quoting vasily
keep it simple.the more you make it complex the more you mess it.simple works
Amen brother! I'm trying, and believe me, it is tempting to add other things

You let me know if I go off the rails, will ya?
  • #116
  • Feb 5, 2016 11:46am Feb 5, 2016 11:46am
Quoting Almuten
GBPAUD Update: Ok, a nice series of trades just triggered on this pair. Anyway, like we said yesterday, there were active long trades that had yet to be invalidated on H1 & H4 both. Then a valid H1 short set up and stopped at its 2x target (The H1 chart with pink lines). Also, on the W1 chart, it shows the market resting against the HAC line with no RAC crossing (well above 80), indicating that it's a support and not a trade setup on that TF. If this pair makes yet another H4 trade setup by the end of the day, then I would say we'll have a very...
GBPAUD - Potential trade invalidation

Wanted to point out something on this pair right now. Yesterday we were watching an H1 short trade and I pointed out that it hit its 2x level (pink lines) and began to go upward. Watch what occurs if that trade becomes invalidated. It will be at the 2.0564 level. If that happens, a lot of losses will be taken and stops triggered. Remember, there were multiple TFs involved on this level, an "unlikely event." With that level out of the way, there's no stopping this market. There are no current, active short trades other than that one going on right now.

Moreover, it also appears that H4 will be making yet another active long trade within an acceptable number of periods. Looks like it will be clean as well.
Attached Image (click to enlarge)
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  • #117
  • Feb 5, 2016 11:53am Feb 5, 2016 11:53am
Quoting Almuten
{quote} Amen brother! I'm trying, and believe me, it is tempting to add other things You let me know if I go off the rails, will ya?
eveey new indi added today to filter the bad ones,when market changed will filter the good ones.if it doesnt work dont push it.you need 25% annual max
  • #118
  • Feb 5, 2016 12:24pm Feb 5, 2016 12:24pm
Quoting Creator3000
{quote} Hey Almuten, first of all I want to thank you for sharing this system. Before I get deeper in a system I would like to understand more about the indicators which are used. May I ask you to provide me a link or even a pdf-file with John Ehler's formula and his explanations? I already tried to google it but unfortunately I couldn't find any information. Best regards !!!
Sorry I'm just now getting back to you. Anyway, to answer your question, the code for the cycle period is taken from this book:

"Cybernetics Analysis for Stock and Futures"
  • #119
  • Feb 5, 2016 12:39pm Feb 5, 2016 12:39pm
Quoting vasily
{quote} eveey new indi added today to filter the bad ones,when market changed will filter the good ones.if it doesnt work dont push it.you need 25% annual max
Well I'm not too worried about adding indys to validate other ones or to filter them in any way. The method is pretty straightforward in that it does its own confirming (if done properly). There's a lot more "simplified sophistication" going on in those indicators than any 10 things MT4 ships with.

Some of the PT analysis can get complex and one might get lost in it, and that part does take getting used to. I'll admit that. But here's how I see it. If a person has to wait around for a trade to set up (and he will), then he might as well see what other trades are happening in those markets and give himself some overall context - meaningful context - in light of the overall method.

Now don't have a cow but I AM going to add a couple of things to help get a person into a running market, etc... But I don't want to confuse anybody or throw new things into it yet. When people start finding things on their own and posting them, asking good questions and so on, then I'll know I can do that.
  • #120
  • Feb 5, 2016 1:10pm Feb 5, 2016 1:10pm
Quoting Almuten
{quote} Well I'm not too worried about adding indys to validate other ones or to filter them in any way. The method is pretty straightforward in that it does its own confirming (if done properly). There's a lot more "simplified sophistication" going on in those indicators than any 10 things MT4 ships with. Some of the PT analysis can get complex and one might get lost in it, and that part does take getting used to. I'll admit that. But here's how I see it. If a person has to wait around for a trade to set up (and he will), then he might as well...
you have no clue what ıam saying about.green pips
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