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  • #101
  • Apr 25, 2016 1:09am Apr 25, 2016 1:09am
Quoting Nala66
{quote} However all three of these can only be see after the fact.
I think you missed my point, read it over and over until it sinks in.

By the way your "Quartile" is a Gann Square of nine.

I know because I posted the indicator to these boards 8 years ago

The last time I looked it had 2756 downloads.

But you didn't know that did you?

Hope that helps

Roy
Polishing my crystal ball
  • #102
  • Apr 25, 2016 1:21am Apr 25, 2016 1:21am
Quoting alphaomega
{quote} Of course nothing here is personal! I'm just trying to make a point so we can get the truth out. Let's be clear. According to the classic trend following concept like the one described and used by the turtles, Richard Dennis, Ed Seykota and all other famous trend followers..it says that the correct way to trade the trend is to buy high and sell higher, or sell low and buy lower. The problem is that this methodology no longer works! The markets have changed. What use to work in the past is now useless. You see, back in 70's and 80's the...
Can you replace the image with a chart of previous trade you took and why? Or with a live trade you will take today with reasons, that way I think we can have a little understanding of your message. But please ignore this if it will cause more argument.
  • #103
  • Apr 25, 2016 2:13am Apr 25, 2016 2:13am
Quoting Capelli
just came by to say I love this thread
Fantastic thread indeed. Learned a lot
Member
  • #104
  • Apr 25, 2016 3:52am Apr 25, 2016 3:52am
It's important that a useful discussion like this doesn't become a semantic debate. As has already been pointed out, too much confusion arises over the misappropriation of trading terms and definitions where one man's retrace becomes another man's uptrend in a lower time frame etc etc etc. If people started to think in terms of "direction" instead of "trend" and stuck to trading one timeframe only, whilst always keeping an eye on a timeframe or two above, I think they'd make a much easier job for themselves.

The word "trend" is a specious one anyway, which the books (and far too many traders) have presented in a way that encourages greed, fear, and oftentimes a kind of conceit that makes them easy prey to the market. I've found it useful to think in terms of "direction", and more specifically "direction of the move" simply because within the direction of the move lies our profit. And as a trader, profit is our ultimate goal, it's our common-denominator.

Another major issue with use of the word, "trend" is that it seems to encourage traders to fail to take profits. They get into what they perceive to be a "low cost" entry and immediately rest on their laurels that the trend will never end. How many times have we moved our stop to b/e only for the market to turn and take us out? Moreover, how many times have we re-assessed the trade and thought, if only I'd taken profit at that prior swing high to the left....?

There's infinitely more information to be found reading a price chart than there is a book but so few seem to do it. The charts don't lie and it's all there on the page to see, but first one must be willing to see it. I believe that if we commit to seeing the chart in terms of direction then eventually with enough time, effort and practice we'll begin to see the charts in terms of profit. And when we do that, we'll enter these markets with the mindset of a trader and not a pseudo-academic. Anyhow, enough of that.

The current GBPAUD chart is H1. For me, direction has already established. Suffice to say I'm currently waiting for buys. That information is already printed in this chart - it's an inarguable fact, however, that doesn't mean to say that a buy setup will, setup. Those who understand this are already well on their way to thinking like a trader.

There's obviously the other element here where traders may feel that a H1 chart takes too long for their style of trading to setup. I'd agree, H1 charts do take a long time to set up, however, check out the last hour or so of last Friday's close on GBPJPY M1. Do you see a trade based on what's been said? There's something mentioned a lot on FF but always worth repeating, it's not what we look at, it's what we see. All the best

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  • #105
  • Edited 5:32am Apr 25, 2016 4:41am | Edited 5:32am
[quote=simond2002;8891088]. Another major issue with use of the word, "trend" is that it seems to encourage traders to fail to take profits. They get into what they perceive to be a "low cost" entry and immediately rest on their laurels that the trend will never end. How many times have we moved our stop to b/e only for the market to turn and take us out? Moreover, how many times have we re-assessed the trade and thought, if only I'd taken profit at that prior swing high to the left....?

Important point this, because unless you have managed to catch a move near the top, a pullback trade with momentum in your favour can come all the way back, wiping out your profits before it rejoins momentum. In hindsight, you wish you'd closed out, but how do you know when to close unless you have a definite level to aim for. There are ways around this quandary.

The first is to have a system of ' Following ' moving averages, or moving average. So for example, I will take today's Dax which I have been trading this morning as an example. To begin with, one must identify the likely direction first thing in the morning, and the charts I posted yesterday hopefully convey how I do that. Today has seen a strong fall, and whether you want to define this as a trend depends on the time frame. On my 30 second chart, this became a trend, in that, once it left the station just after the London open, it would have taken a fool or an inexperienced trader to attempt to buy it. I took this trade, but how did I know, from my own system, how far I would stay with it? The answer lay with my 30 second time frame ( apologies to those viewing this who use nowhere near such a small time frmae, but actually, this method can be used on any time frame, though obviously, if the smallest you use is say 5 minutes, then your style of trading is going to be very different to mine, but I shall continue ) As long as the price kept well below my 100sma, I was confident I could remain in the trade. I was lucky this morning that the price behaved itself very nicely, dropping and only gradually drawing closer to the 100sma. which it touched just before 10am London time. It dropped back a little, failed to make another low, and rose back above the 100sma at which point I had already closed the trade.

The second methos for exiting these trades, or any trades for that matter, is to have a fixed point, an S&R level you believe will be an important level to which other traders will also have been targeting, because it is not what you believe that is important, it is what you believe that others believe that is important. ( remember, we traders are just a herd, and the more you follow the herd, the better your results will be - the lone wolf never lasts long!) Today on the Dax it was the H1 200ema/sma which I have at 10,217. This is because with the 100sma having got above the price, which was bearish, the next big moving average on this time frame was the 200ema/sma ( I always use both on my charts ) Yes, it could have found support on the 45 min 200ema, but this is where my 30 second 100sma helped, by showing me that the down momentum was still strong at this level.

ps - I forgot to mention pivot points, also very important when combined with moving averages and/or fibonaccir levels. This morning's support ( so far ) came on the S3 for the day, so as this was just above the H1 200ema, this added to the likelihood that the price would target this level, and offer significant support.
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  • #106
  • Apr 25, 2016 5:48am Apr 25, 2016 5:48am
The tactic, which takes into account the important levels are very strong tactic. The price may not always grow or fall, it has a correlation levels. These stops are often arranged in a single line, which is called the important level. I always use this rule: you can not enter the market before the important level, it is necessary to leave the market to an important level. I believe that indicators of levels of resistance / support is very strong instrumaent.
  • #107
  • Apr 25, 2016 6:59am Apr 25, 2016 6:59am
This is just the M5/M1 chart of today's London session GBPJPY.

Not a single mention of the word, "trend", but "direction", however, is all over these two charts - even in such low TFs as M5/M1 (they're all noise, right????)

I trade with a supply/demand indicator but have taken it off these charts for clarity. Supply/demand isn't everyone's cup of tea, but for those who may gravitate towards it they'll find a way of using the various indicators out there that will obviously sit with their own personality.

This pair has currently rallied for 60 pips this morning. There's traders all over FF that consider 60 pips to be "wimpy" targets but what so many of them miss is:

1. Increased position sizing on lower TF charts.

2. RR, which is the most important in my view. GJ's vanilla entry on M1 has already given a 3R trade. No need to go into what consistent 3R trades will do for a trader's account over time.

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  • #108
  • Apr 25, 2016 7:57am Apr 25, 2016 7:57am
Quoting simond2002
This is just the M5/M1 chart of today's London session GBPJPY. Not a single mention of the word, "trend", but "direction", however, is all over these two charts - even in such low TFs as M5/M1 (they're all noise, right????) I trade with a supply/demand indicator but have taken it off these charts for clarity. Supply/demand isn't everyone's cup of tea, but for those who may gravitate towards it they'll find a way of using the various indicators out there that will obviously sit with their own personality. This pair has currently rallied for 60 pips...
Exactly! I, too, prefer lower TF entries. If done right, you can have your R:R way over 3:1.
Invincibility lies in the defence; the possibility of victory in the attack
  • #109
  • Apr 25, 2016 10:37am Apr 25, 2016 10:37am
I say just forget about all these indicators and trade using the candles only the Previous support and resistance (PSR), Trend lines, and Fibs with a little MACD thrown in for comfort.

You will see for example that there is hardly much movement before the next big event which is the FOMC on Wednesday.

All pairs must now trade in a low range until FOMC is passed. By looking at the candles you can trade safely up and down making easy money prior to the FOMC release.

This is where having some fundamental is helpful. Technicals will not help you if you close your eyes to all fundamentals.

We must balance everything. Fundamentals are more appropriate to daily trades but whenever there is a big wkly or mthly range move pending by the market makers they all just trade within small range.

This is how to study the market maker(the guys that draw the candles) and act like them.

So in short the holy grail I would say is try to be a ticks on the elephant or you will get trampled by them.

Happy Trading everyone
  • #110
  • Apr 25, 2016 12:58pm Apr 25, 2016 12:58pm
Quoting cat


Hello mate I admire your ambition to share your very stable and profitable approach to trading, but I am somewhat baffled that the thread is full of squatters, very few of whom seem to care about your posts From what you have shared so far, it looks very similar to my approach, even though I don't use time based charts, and am a bit more aggressive with counter-trend and reversal entries.

The kind of approach that works day in day out, every day
  • #111
  • Apr 26, 2016 1:48am Apr 26, 2016 1:48am
Quoting medici
{quote} Hello mate I admire your ambition to share your very stable and profitable approach to trading, but I am somewhat baffled that the thread is full of squatters, very few of whom seem to care about your posts From what you have shared so far, it looks very similar to my approach, even though I don't use time based charts, and am a bit more aggressive with counter-trend and reversal entries. The kind of approach that works day in day out, every day
Hi Medici, good to see you! It doesn't bother me at all...all I can do is post what I deem may be of some help to one or two people, and I don't mind where people take the thread, and if I've started a valuable discussion that runs for a bit, then that's a good thing. I personally have nothing really to add now on this thread without going over ground that I've already covered elsewhere, though if I come up with something fresh I'll post it.

When you say you are a bit more aggressive with your counter-trend and reversal entries, do you mean that you just take them earlier?
  • #112
  • Apr 26, 2016 4:18am Apr 26, 2016 4:18am
Quoting cat
{quote} When you say you are a bit more aggressive with your counter-trend and reversal entries, do you mean that you just take them earlier?
Compared to your last chart, the circled lows would be counter-trend opportunities for me, and the timing of first one (9am) indicating the move may be over. So the second circle would be a potential low, even though I would just go for return to the MA. Then the horisontal line would be reversal setup.
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  • #113
  • Apr 26, 2016 4:40am Apr 26, 2016 4:40am
Quoting medici
{quote} Compared to your last chart, the circled lows would be counter-trend opportunities for me, and the timing of first one (9am) indicating the move may be over. So the second circle would be a potential low, even though I would just go for return to the MA. Then the horisontal line would be reversal setup. {image}
I see, fair enough, and I wouldn't criticize a 35 pip counter trend if your system is set up to take them, and you can always sell again on the rollover, so I would sauy very nice and congratulate you. Do you exit your short I wonder, or just keep it running through the counter trade, and then add to it on the roll over? Now that would be very flash!
  • #114
  • Apr 26, 2016 4:46am Apr 26, 2016 4:46am
Quoting cat
{quote} Do you exit your short I wonder, or just keep it running through the counter trade, and then add to it on the roll over? Now that would be very flash!
Not that flash... Exit short on first yellow circle, and then avoid further shorts as risk/reward is worsening and whipsaw risk increasing.
  • #115
  • Apr 26, 2016 4:58am Apr 26, 2016 4:58am
Quoting medici
{quote} Not that flash... Exit short on first yellow circle, and then avoid further shorts as risk/reward is worsening and whipsaw risk increasing.
Okay, but as your lower dashed MA and the red one seem to have the price pretty nicely contained, on this particular move at least, the R/R on a short from the first rollover above the yellow circle would appear to be at least, if not better that your counter trend, and of course, iy would be with momentum rather than against it. It's just interesting to me, as you would take the counter trend but not the momentum trade, the exact opposite of what I would normally do, and that would have been worth 50 pips if closed out upon contact with your lower moving average!?
  • #116
  • Apr 26, 2016 5:23am Apr 26, 2016 5:23am
Quoting cat
{quote} Okay, but as your lower dashed MA and the red one seem to have the price pretty nicely contained, on this particular move at least, the R/R on a short from the first rollover above the yellow circle would appear to be at least, if not better that your counter trend, and of course, iy would be with momentum rather than against it. It's just interesting to me, as you would take the counter trend but not the momentum trade, the exact opposite of what I would normally do, and that would have been worth 50 pips if closed out upon contact with...
Agreed, but it's a psychological thing. That strong bounce at 9am from 10250 makes me stop looking for short, even though I know it'sgood for another move down.
  • #117
  • Apr 26, 2016 5:58am Apr 26, 2016 5:58am
Quoting medici
{quote} Agreed, but it's a psychological thing. That strong bounce at 9am from 10250 makes me stop looking for short, even though I know it'sgood for another move down.
I know exactly what you mean, and you're not alone. Personally I've worked hard on this aspect of my trading, especially with Dax which loves to put in these aggressive counter moves before it turns and goes the other way. It caught me out this morning - I went long, expecting it to get to R1, and although I got out with a half decent total, the powerful move up to the H1 100sma prevented my from shorting exactly where I should have done had I not been influenced by the strength of the move, ( and been a bit more on the ball after a late night at the theatre!) I don't think we ever completely learn to master the psychological demons do we?
  • #118
  • Apr 26, 2016 6:59am Apr 26, 2016 6:59am
Quoting cat
{quote}I don't think we ever completely learn to master the psychological demons do we?
No, we don't. Or at least I haven't. Rather it's a matter of taming them somewhat, and learning to live with them. One of my demons is the counter-trade demon, which i need to feed with trades as indicated above, or he might start doing stupid things.
  • #119
  • Apr 26, 2016 7:37am Apr 26, 2016 7:37am
Quoting medici
{quote} No, we don't. Or at least I haven't. Rather it's a matter of taming them somewhat, and learning to live with them. One of my demons is the counter-trade demon, which i need to feed with trades as indicated above, or he might start doing stupid things.
It's in us all...must be some primeval instinct we acquired somewhere along our evolutionary path...the impulse to take the least logical approach, which could be something to do with feeling the need to assert ourselves as individuals instead of just one of the crowd, a benign characteristic outside of trading, but a malignant one within it.
  • #120
  • Apr 26, 2016 7:42am Apr 26, 2016 7:42am
One of the main problems with trend trading is how and when to take profits. Another problem to note is trend entropy.

How and when to take profits is a question that probably has no real answer so the best we can do is have some sort of plan where we also realise it will be imperfect.

A concept I use is to study the 'character' of the trend and then look to take profits when a move happens in your direction that's out a character. Assume the trend is classic, chart book type trend - nice and rolling, moves to new highs then retraces a bit then up to new highs etc. That's the charter of the trend in force. But then if you get a sudden move higher which is out of character, that's a big clue to take profits. This concept works well on any chart, 1m to monthly. If you wait for a trend to end then with modern markets you may well have given back 200-500 ticks worth of profit. So it's best to take profits as the trend is still in force, you can always try to get back in.

Trend Entropy

Often you'll fine a trend starts out nice and smooth and continues nice and smooth for some time but then as the trend ages (not necessarily over) it starts to get wilder with the moves less classic and far more volatility, that's trend entropy and you need to trade (or manage) a position differently than if positioned towards the start of the trend.
Road To Wisdom? To err and err and err again, but less and less and less...
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