HAC & RAC - A Simple-Minded Approach

Great, thanks for the quick response Almuten. Many green pips to you.

Hi Almuten,
Thank you for sharing your idea. You give some hope to some of us for a better life than job 9-18.

For quite a long time I was looking for a system which I feel comfortable with. The most effective, simple and practical, I discovered to be yours and scalpeur's (he has a journal on ff, with bollinger bands - his BBs 100, 360 and 720 proved to be extremely powerful as dynamic support and resistance). I suggest you have a look, maybe it gives you some ideas: http://www.forexfactory.com/showthread.php?t=447470. He is a great trader.
Recently I started to test live this combined system (only trade EJ; 2 charts M1 & M5 as per your system for entry; plus 6 charts M1,M5,M15,M30,H1,H4 as per scalpeur's system to watch out for the price hitting one of the bands in any timeframe, for exit). This is what works best for me, scalping on M1&M5 and I got used with the bbs, although I really believe you a great system with the exits too.
I had great results from the trades in which I sticked to your entry rules and exited when price was hitting a band that was going in the opposite direction. Unfortunately I discovered in practice that I have a very strong lack of discipline, entering trades before entry rules were fully checked, or not exiting on time when price hits the bands and reverses the price direction. Due to this bad habit, usually my SLs are hit. I know what the issue is, and I hope to overcome it..in theory it should not be so difficult to enforce discipline, but in practice it seems.

The problem with trading only one pair, although it has its advantages, is when price does not move significantly for a long time, enters a range and mistakes are easy to make.
So I was really enthusiastic to see your post. However I was not able to make the excel work, because I don't know where to place it, it asks for mt4.exe and my platform for example uses a file labeled 'terminal.exe' (which is placed in the same folder as the DDE-Sample.xls mentioned by Go5 - at least I think that is the one).
Could you please help with this?

Best regards,
Dragos

Interesting vvFish! Apparently you're a handy programmer type, eh?

And to you my friend.

Thanks Almuten, you come up with some very original ideas, I have never heard of before. I will play with it, thanks for sharing. Really appreciate it.

Thank you, but to my regret, I am not a programmer.

[quote=dragos_;8810505]{quote} Hi Almuten, Thank you for sharing your idea. You give some hope to some of us for a better life than job 9-18.

Hi dragos,

I appreciate the optimism with regard to my methodology. I'm not a 'great trader' as yet; just a guy that's working away at developing his approach. Sharing is my way of teaching myself and focusing my mind toward perfecting it. Everyone here has been a big help in that regard and I'm very grateful for that.

I'll take a look at scalpeur's methodology. Who knows? It might spark a few ideas or pull together some incongruities...but I'm resistant to adding anything more. Trying to keep it simple is the watchword and despite my best efforts, this thing I'm doing can get complicated if I let it. Just two indys provide so much information that adding more might prove to be overwhelming.

As to getting the Excel to work, did you try to change the suffix that I mentioned? The formulas in question are on the "Input" page in columns B thru G. My broker uses "pro" as a suffix and this could be a problem for you. Also, you can probably copy and paste everything one page at a time into the sample spreadsheet you mentioned or just move/copy the whole tab into that sample.

When I did mine, I used a working spreadsheet that was done by somebody else because I didn't know how to get the data into it either

As to your 'lack of discipline,' I've learned not to fight myself too hard on this because the issue is not discipline with trading; it's discipline in the mind in general. Yet how can discipline in the mind be accomplished without a firm footing? What in life is consistent enough to build such discipline upon?

Not long ago I went to a retreat workshop that helped me discover deeply held beliefs I had about myself; beliefs that governed the way I perceived everything. I spent 5x more money on that than on funding my trading account because I knew that unless I healed myself, there was no way I could make a success of this, regardless of how good a method might be. Anyway, I discovered that beliefs are like hidden programs in the subconscious mind that run - like an EA, only these made me lose! Not being in touch with those underlying beliefs has proved to be quite self-destructive and attempts to fight them head-on made them even more powerful. They have the ability to literally scramble the mind into a state of chaos and in-coherency when I least expected it, which made it difficult to impossible to truly trust myself enough to operate in my own best interests. It's a very subtle thing, but all-pervasive.

I'm finding that the best thing to do by way of disciplining my mind is to simply love everybody all the time, regardless of what they do or not do. This takes more discipline than any other response because there's only one way to respond to any situation. The ego wants more options than that and is resistant because the ego is a collection of fictitious beliefs about myself - all hellbent on my destruction. Love and forgiveness will undo those fictions.

Anyway, I find that the quicker I forgive offenses, the quicker my sanity returns and the clearer my mind becomes. Moreover, refraining from judgment of others has also proved to be effective in eliminating unconscious guilt - which will seek out its own punishment eventually. Plus the fear goes away, which is a good thing for a trader. Living like that has made me see that I'm more than I ever thought I could be...and so is everyone else, whether they realize it or not.

Well how did you put that shading in then? I'm puzzled!

very surprised.
all that I manage is m1.

Thank you very much for your advice. I believe there is wisdom in your words, with respect to the ego..I will actually try to work on this.
Regarding the technical question, just in case other people have the same problem that I had:
I did some research on the net and found out that the DDE connection has to be enabled in order for excel to work To do this, one has to go to Tools-Options-Server tab and check "Enable DDE server". Then if one just types MT4|bid!EURUSD in an excel cell (or with -PRO, if his broker has this suffix) he will get the data. So my issue was not about the placement of the file, or about calling an mt4.exe file, but about connection excel - metatrader.
However at this time I get "N/A", and I presume it is becasue is weekend and the markets are closed. I also tried to export some data from mt4 (from Tools-History center) but the exported file was empty, probably due to the weekend as well. So I will wait for Monday.

Best regards,
Dragos

Hi Team,

I've managed to get the spreadsheet working. Just need to know which column to put the new open price in. Column 'I' and 'J' on tab 'Input' are 'Yesterdays Open' and 'Today's Open'. Do I move today's open (J) into yesterdays open (I) and then put the new open price into today's open (J).

Hope that makes sense.

Moonie.

Hey Moonie,

What I do when a new day begins is to cut the contents of column J and paste them into column I. Then I put in the new values for the day. So you did it right!

Hey dragos,

Thanks for posting that! I completely forgot about telling people to enable the DDE server in MT4.

Thanks Almuten, I think I might have an indicator which shows the daily open that I can copy and paste. Or maybe there's a web site where I could link the data from directly. I'll investigate. Very kind of you to share this, superb.

It's Coming Together... but here's how it came

I think it's important for you to understand how all this is coming together. Every time I share something, all of a sudden, I understand what it was for and how to use it. It amazes me every time! I will be posting how to use the Benford analysis to its full effect either today or tomorrow. It's blown my mind.

I've been working on this methodology for quite a long while and put in many, many joyful hours testing this and then that, etc... But the way it came to me was something of a miracle in itself. I felt like I was being guided by a higher Intelligence. Every time I would get discouraged, "It" kept encouraging me to press on; indicating that it would be worth it if only I didn't give up. One might even say it's been a path to enlightenment of sorts.

Anyway, like I said a few posts back, I've endeavored to keep my mind clear. The more I could do so, the better I "heard" that Intelligence. My first encounter with it in the trading arena was in 1998. Once in awhile something would come over me and more or less, tell me what to trade and whether to go long or short. And always...ALWAYS, it was an absolute monster of a trade - to the point of being overwhelming. I didn't have the faith to listen to it though. After hearing that 'voice' over and over (about three years worth of this) and seeing the utter reliability of it, I decided to finally act on it the next time it happened. I mean, it was so annoying how reliable it was that I couldn't ignore it anymore.

On April 19, 2001 the Nasdaq futures were going down hard all day long - just a steady stream of selling pressure. I wasn't in a position (so common back then because I was scared out of my wits most times). Then I noticed unusual volume and tick patterns - my eye just picked up on them after staring at charts for years - and had this extremely strong intuition to go long. I looked at my trading partner and said, and I kid you not, "I think God is telling me to go long right now." There was absolutely no technical basis for it at all - NONE.

Of course he thought I was nuts, but I went long close to the bottom tick. Within 5 minutes Alan Greenspan's face appeared on CNBC and announced a surprise 50 basis point reduction in interest rates. This was in early 2001. Remember what the Nasdaq was like back then? That thing would move so fast that the fills would be 50 points from my intended entry ($5000 per contract).

Within 15 seconds, that market moved 450 points up. (Too bad I didn't trade my full margin!)

It was a very, very good day indeed

Imagine the impression that made upon me at the time though. Here I was, doing all sorts of technical analysis, etc... and that "Voice" knew stuff I could never know on my own. Problem was, I was partly afraid of it and so couldn't trust it, even though it had always been benevolent and never once steered me into a wall. I wanted to trust it. I really did. I just couldn't do it. Plus, I didn't know how that would actually work in practice. I mean, what do I do? Just sit around all day and wait for God or whatever to tell me what to do? That would never work.

I was in a quandary for sure.

Well, thanks Almuten, very interesting, please keep on sharing!

Unrelated but Congruent

As this progresses on, I'm beginning to see how there's actually three methodologies at work. Each of them addresses different things. The thread began with the HAC & RAC and by itself, it does pretty well. But there's room for doubt and the lines can get a bit hard to watch, especially when in a listless market or consolidation pattern. Plus it's hard to know which market to focus on at any given time. So there's really two remaining problems:

1. Finding objectivity midst the "noise"
2. Locating the most probable high-movers

I'm in the process of perfecting the Excel portion of this in that I've added a few things that require further development before I post a new version. I think it's going to turn out to be a 'whale hunter' in the end. I calculated that if I can find the highest probability of a market moving 100+ pips and trade only half my available margin on those markets, the returns are beyond belief.

But for now, I want to turn to the Benford. So far, nobody's really commented on it and it might be because people don't understand why I developed this. I made it for a reason. I paid a fair amount of money for the indys and spent close to 3,000 hours testing it because I could see there was efficacy there. I just couldn't figure out how best to harness it into something useful for trading until now.

In the story I told in my prior post, I related an incident where I saw unusual tick & volume patterns in the Nasdaq futures. Those patterns were caused by people who knew, well ahead of time, what was about to occur. This is likely true of all news events in one way or another. Either there are people on the 'inside' or a firm does so much of its own research that it already knows what's about to be announced.

When I first heard of Benford, my mind immediately hearkened back to April 19, 2001. I felt an inner joy I can't describe. That's where I was feeling guided so I started a pretty lengthy research project in that direction. For a long time I felt like I was beating my head against a wall because while it was obvious the markets responded to those levels, there was no way to know for sure how to trade from them. The information didn't seem any better than any other information from other indicators.

Now it all makes sense

You do so much more You're wellcome!

Benford Lesson #1

First let me begin by asking you to believe one particular aspect. This is something you can do your own research on in order to prove the efficacy of it, but if you don't want to go to that trouble, you can simply take my word for it. I used to run experiments of this kind on the expenses my last employer had and it worked to the tee.

The basic premise here is that the leading digit in a naturally-occurring set of numbers will have the following distribution:



When I decided to pursue working with this phenomenon in the currency markets, it was obvious that using the first digit of each closing price was not going to work because it seldom changes. Something else, naturally-occurring, had to be measured. That's why I opted to use the range of each bar instead. I did this for about a year and then realized, through other research on Benford, that the range ought to be multiplied by the volume as well.
I know this seems like some freaky shit, but after seeing it over and over for years, I know there's something to it. It works on all markets, which is another reason why the efficacy is there. By the time I'm finished explaining this, I believe you'll see it as plainly as I do.