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Jay's High Probability Setups

  • #181
  • Feb 26, 2016 9:13pm Feb 26, 2016 9:13pm
Quoting FX-Jay
{quote} Those AUD shorts should be doing great! I don't have any solid AUD trade, but I'd rather see it go down rather than up
AUD.USD was taking too long to move so I came out +10, just before it dropped 90 more! And I missed my pending re-entry of USD.JPY at 112.50 by a few pips too

But re-entered USD.JPY long on the break of 113, as promised, and also re-entered EUR.USD short on the break of 1.10, so all in all not a bad week.

I don't want to start cluttering your trading journal with all my trades, Jay, so I'll stop now. Thanks again
You reap what you sow.
  • #182
  • Feb 26, 2016 9:36pm Feb 26, 2016 9:36pm
Quoting NorthTrader
{quote} Hey Bill, thanks. Hope you've been well. Looks like you're trading great at the moment! Just a friendly warning about the M1 TZ trade you mentioned above. h-left=10 and h-right=1440, with k-min=1, does indeed produce a fantastic hit rate of > 98%. But please remember that most of the TZs are resolved after a very short retrace. If you wait for a retrace of 70 pips, as in your trade, then the probability of hitting the TZ is MUCH lower, actually 48% according to the stats I've just run for the previous six-month period (which assumes that...

Indeed!

That's why I mixed reasoning for the trades recently posted with some other technical event in each of my post. Fib level, S/R Bounce, MA sentiment, Channel, and currency strength of sorts. None where TZ alone.

In that trade the wait was not based on retraced pip amount, but more rather based on the rare event of a price/zone not being recurrent after a 24hr or more period. So as time stretches beyond this 24hr period so increases your hit rate probability. With this I would use the TZ as a pseudo sentiment indicator. Targeting the zone but not depending on it for exiting per say.

I'm still putting ideas together. I have primarily only used TZ on the 1min time frames and trade counter trend.

Using the static K in your stats? 1 pip k?

Thanks North
Solutions ONLY!!!
  • #183
  • Feb 26, 2016 10:07pm Feb 26, 2016 10:07pm
Quoting BillYon
Using the static K in your stats? 1 pip k? Thanks North
Yes, minimum 1 pip k. So > 1 pip included too. And yes, never trade TZs alone is good advice. Always combine with other TA.

About the rare event of the zone not being recurrent after 24h or more, the point I was making was that it's not a rare event after price has moved away 70 pips or more. It's about 50%, depending on where your stop is, which is just as good as flipping a coin
You reap what you sow.
  • #184
  • Feb 26, 2016 10:55pm Feb 26, 2016 10:55pm
Quoting NorthTrader
{quote} Yes, minimum 1 pip k. So > 1 pip included too. And yes, never trade TZs alone is good advice. Always combine with other TA. About the rare event of the zone not being recurrent after 24h or more, the point I was making was that it's not a rare event after price has moved away 70 pips or more. It's about 50%, depending on where your stop is, which is just as good as flipping a coin

yes as time goes on into infinity event becomes less rare (probability/hit rate increases).



OK let me think a bit on what you are saying. I see you have a stop in the equation so we are saying different things a bit it's 50% based on that. 50% target hit vs Stop. OK got it.

I would not use a static 140 pip stop. Stop is any close above MA in that last trade. Stop is per trade based and has it's own analysis as well.

Not targeting the TZ per say. Just trading in the direction of a rare uncleared zone and mopping up the less rare uncleared zones along the way.



Thanks North. Gives me things to ponder. I also will not flood the forum with my ideas. I'll post them in the TZ basics thread.
Solutions ONLY!!!
  • #185
  • Feb 26, 2016 11:40pm Feb 26, 2016 11:40pm
Quoting BillYon
{quote} yes as time goes on into infinity event becomes less rare (probability/hit rate increases). OK let me think a bit on what you are saying. I see you have a stop in the equation so we are saying different things a bit it's 50% based on that. 50% target hit vs Stop. OK got it. I would not use a static 140 pip stop. Stop is any close above MA in that last trade. Stop is per trade based and has it's own analysis as well. Not targeting the TZ per say. Just trading in the direction of a rare uncleared zone ...
Yes, I totally agree that stops are dynamic. It's just that you have to specify a stop level in order to obtain the probability of which one will be hit first (according to history, that is). I chose 140 pips (double the retrace) just as an example. A tighter stop would produce a lower probability of hitting the TP before the SL of course.

Not rare in this context! According to historical analysis, zones which have been left behind by this much (in this case 70 pips) do not get revisited with any high degree of probability. I suppose time (h-right) plays a factor too, as you said. But your SL plays the biggest factor. I suppose you could say that the TZ 70 pips away is irrelevant. But maybe that is a matter of opinion.

Thanks, and have a good weekend
You reap what you sow.
  • #186
  • Feb 27, 2016 1:05am Feb 27, 2016 1:05am
Quoting NorthTrader
{quote} Yes, I totally agree that stops are dynamic. It's just that you have to specify a stop level in order to obtain the probability of which one will be hit first (according to history, that is). I chose 140 pips (double the retrace) just as an example. A tighter stop would produce a lower probability of hitting the TP before the SL of course. Not rare in this context! According to historical analysis, zones which have been left behind by this much (in this case 70 pips) do not get revisited with any high degree of probability. I suppose time...

I appreciate that. I understand...

You have a good weekend as well.
Solutions ONLY!!!
  • #187
  • Feb 27, 2016 5:59pm Feb 27, 2016 5:59pm
Quoting BillYon
{quote} I appreciate that. I understand... You have a good weekend as well.
Sorry, I just want to clarify the stop level because it might be misleading. The example stop I used was 140 pips from the target TZ, so actually 70 pips from the entry price. This gives a risk:reward of 1:1. And here is an extract from the stats, with added notes where necessary, which I ran on a 6E (CME EUR.USD futures) M1 chart:

Total bars = 175069 (from 31-Aug-2015 07:01 to 27-Feb-2016 06:59 JST)
Min Retrace (Entry) = 70 pips, Max Retrace (SL) = 140 pips
* both measured from target TZ
h Left = 10 bars (or more) , h Right = 1440 bars, k Min = 1 pip

Total Tip-TZs = 38526
Valid Tip-TZs = 1115 (2.9% of total)
* most were invalid due to insufficient retrace
* note that a retrace of 70 pips or more is a rare event in itself!

TP = 538 (48.3% of valid TZs)
SL = 510 (45.7% of valid TZs)
EX = 67 (6.0% of valid TZs)
* EX means that neither SL nor TP were hit within 1440 bars following the TZ
* note that position management wasn't applied so there were no BEs

Hope this helps. And sorry Jay for cluttering your journal with this. I'm not trying to be obtrusive. Have a great week everyone!
You reap what you sow.
  • #188
  • Feb 28, 2016 2:05am Feb 28, 2016 2:05am
Quoting NorthTrader
{quote} Sorry, I just want to clarify the stop level because it might be misleading. The example stop I used was 140 pips from the target TZ, so actually 70 pips from the entry price. This gives a risk:reward of 1:1. And here is an extract from the stats, with added notes where necessary, which I ran on a 6E (CME EUR.USD futures) M1 chart: Total bars = 175069 (from 31-Aug-2015 07:01 to 27-Feb-2016 06:59 JST) Min Retrace (Entry) = 70 pips, Max Retrace (SL) = 140 pips * both measured from target TZ h Left = 10 bars (or more) , h Right = 1440 bars,...
OK Great

I'll keep this in mind when considering entry. I will recheck you stats thread as well.

Very valuable info. Thanks.
Solutions ONLY!!!
  • #189
  • Feb 28, 2016 2:16am Feb 28, 2016 2:16am
Quoting NorthTrader
{quote} Sorry, I just want to clarify the stop level because it might be misleading. The example stop I used was 140 pips from the target TZ, so actually 70 pips from the entry price. This gives a risk:reward of 1:1. And here is an extract from the stats, with added notes where necessary, which I ran on a 6E (CME EUR.USD futures) M1 chart: Total bars = 175069 (from 31-Aug-2015 07:01 to 27-Feb-2016 06:59 JST) Min Retrace (Entry) = 70 pips, Max Retrace (SL) = 140 pips * both measured from target TZ h Left = 10 bars (or more) , h Right = 1440 bars,...

Also I would think a currency strength filter (depending on it's basis) would increase probability if using such a wide SL.

Throw in some trend and technical event (MA cross, S/R, FIB or so) and entry is more optimal as well no?
Solutions ONLY!!!
  • #190
  • Feb 28, 2016 5:30am Feb 28, 2016 5:30am
Quoting BillYon
{quote} Also I would think a currency strength filter (depending on it's basis) would increase probability if using such a wide SL. Throw in some trend and technical event (MA cross, S/R, FIB or so) and entry is more optimal as well no?
Couldn't agree more

Got a bit of wine inside me now so can't resist one last comment. This time I'm playing devil's advocate because I've been a bit too hard on that little lonely TZ sitting 70 pips away from where you entered, Bill.

Imagine that you were a brand new trader who knew nothing about trading, absolute zilch. So you decided to take trades based on M1 TZs after reading these posts, and you decided to enter at exactly 70 pips from every unresolved TZ, no matter what. And put your stop at exactly 70 pips in the opposite direction, no matter what. And put your TP at the tip of the TZ, no matter what. And hold on until either the SL or TP were hit, NO MATTER WHAT. Isn't that the dumbest way of trading you've ever heard of? Isn't that guaranteed to blow your account in a matter of months, if not weeks?

And yet, if that's all you'd done in the last six months then you would have won over 48% of those trades. Even after trading costs your account would be nowhere near blown, assuming you were sensible with the leverage. You may not have profited overall, but you'd probably be doing a lot better than most newbies who'd taken 1000 trades in six months!

Isn't that mind-blowing? Isn't that encouraging to all of us that trading can be so simple if we want it to be? Add a bit of experience to the mix, some position management, and take sensible precautions such as trading in the direction of macro fundamentals and current sentiment, and you'll soon be making money effortlessly

With that in mind, it's not difficult to see why Jay is so successful at trading TZs. And please forgive us Jay for hijacking your thread. I should have taken it to the stats thread long ago
You reap what you sow.
  • #191
  • Feb 29, 2016 11:39pm Feb 29, 2016 11:39pm
Quoting FX-Jay
Positions that have been mentioned here that I'll be holding over the weekend: 1- USDJPY shorts for sub 111 levels 2- AUDJPY shorts for sub 79 levels 3- EURGBP longs for a new high Bonus: Loaded new GBPCHF shorts for the 1.3750 target
Solutions ONLY!!!
  • #192
  • Mar 1, 2016 2:03am Mar 1, 2016 2:03am
curious if jay is still holding his AUS/JPY shorts. Pretty huge gains today in Asia, looks to be rising all the way back to the highs of last week.
  • #193
  • Mar 2, 2016 7:29am Mar 2, 2016 7:29am
Hi FX-Jay,

Thanks for sharing your journal and results.

You have a very bright mind, especially for your age!

I am still not sure about how you are tradting TZ, even after reading all your posts.

It seems that Vlad is trading bouncebacks near valid and potential TZ in the direction of the bounce.

And that, on the contrary you are trading valid TZ breakouts.

What is the part of these elements in your trading with TZ in term of percentage and that you attribute to your success ?

- TZ breakout,
- TZ probabilities,
- TZ expiry,
- correlation,
- currency strength,
- COT analysis.

The similarities according to what I understood is correlation with a same pattern.

You said that you were doing EW, COT, BPR analysis. What are EW and BPR ?

Good continuation!
  • #194
  • Mar 2, 2016 7:44am Mar 2, 2016 7:44am
Quoting tsf
What are EW and BPR ?
EW=Elliot Wave
BPR=Breakout, Pullback, Reversal
"Mrrraggglhlhghghlgh"
  • #195
  • Mar 2, 2016 7:46am Mar 2, 2016 7:46am
Quoting LiquidGenius
{quote} EW=Elliot Wave BPR=Breakout, Pullback, Reversal
Thanks, I really appreciate!
  • #196
  • Mar 6, 2016 11:13am Mar 6, 2016 11:13am
Quoting FX-Jay
Positions that have been mentioned here that I'll be holding over the weekend: 1- USDJPY shorts for sub 111 levels 2- AUDJPY shorts for sub 79 levels 3- EURGBP longs for a new high Bonus: Loaded new GBPCHF shorts for the 1.3750 target
Clearly not a profitable week, and I believe there will be more DD going into next week.
I'm still holding onto my positions & adding more until the signals become invalid. So far they are still as valid as the day they were mentioned.

Whenever you are trend trading higher TFs you should always be ready for retraces that look huge using small TFs, but are nothing but retraces on larger TFs.
The current inverse move could be extended even further, and that's where the big money would be made for the people with good MM & TM.

I feel bad for not taking some of the profits off the EURGBP top & the AUDJPY down move before the surge upwards.
For the EURGBP it was purely my decision because I still believe that we're going to be heading higher.
Concerning the AUDJPY I didn't even have the opportunity sine the move happened during the Asian session while I was asleep, but even if it happened during the EU session I doubt that I would have closed some of the positions to retake them at higher prices.

To sum up, I'll still be holding AUDJPY, USDJPY, and GBPCHF shorts + EURGBP longs.
Targets are the same ones mentioned last week.

Best,
Jay
  • #197
  • Mar 6, 2016 11:14am Mar 6, 2016 11:14am
Quoting NorthTrader
{quote} AUD.USD was taking too long to move so I came out +10, just before it dropped 90 more! And I missed my pending re-entry of USD.JPY at 112.50 by a few pips too But re-entered USD.JPY long on the break of 113, as promised, and also re-entered EUR.USD short on the break of 1.10, so all in all not a bad week. I don't want to start cluttering your trading journal with all my trades, Jay, so I'll stop now. Thanks again
He mate,

Please feel free to share your trades & insights here at any time.

GL for next week.

Best,
Jay
  • #198
  • Mar 6, 2016 11:24am Mar 6, 2016 11:24am
Quoting tsf
Hi FX-Jay, Thanks for sharing your journal and results. You have a very bright mind, especially for your age! I am still not sure about how you are tradting TZ, even after reading all your posts. It seems that Vlad is trading bouncebacks near valid and potential TZ in the direction of the bounce. And that, on the contrary you are trading valid TZ breakouts. What is the part of these elements in your trading with TZ in term of percentage and that you attribute to your success ? - TZ breakout, - TZ probabilities, - TZ expiry, - correlation, - currency...
Hey mate,

Thanks for the nice words.

If I want to allocate a percentage of the below in my trading decision for my current non-active (medium term) trading, It would be roughly the following:

- TZ breakout & TZ Probability (30%)
- currency strength (25%)
- Sentiment Analysis (Including COT) (25%)
- Fundamental + Technical Analysis (15%)
- correlation (5%)

When all of the above are aligned with the trend that I see, then I take the decision to enter the position

Best,
Jay
  • #199
  • Mar 6, 2016 12:38pm Mar 6, 2016 12:38pm
Hi Jay,
Ref the AUD/JPY looking at the 4hr chart we should not have been surprised by the deep correction. From the 20th Jan to the 29th jan the pair made a correction. The correction we have just experienced is almost the same distance as the Jan retracement. I´m figuring that this move is almost complete and i would agree with you that a down move will happen quite soon. By my reckoning it could drop to the 76.00 level, it will a while though. Lets wait and see.
  • #200
  • Mar 6, 2016 3:54pm Mar 6, 2016 3:54pm
Quoting FX-Jay
{quote} Hey mate, Thanks for the nice words. If I want to allocate a percentage of the below in my trading decision for my current non-active (medium term) trading, It would be roughly the following: - TZ breakout & TZ Probability (30%) - currency strength (25%) - Sentiment Analysis (Including COT) (25%) - Fundamental + Technical Analysis (15%) - correlation (5%) When all of the above are aligned with the trend that I see, then I take the decision to enter the position Best, Jay
Hi FX-Jay,

Okay thanks!
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