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HAC & RAC - A Simple-Minded Approach

  • #381
  • Mar 22, 2016 7:06am Mar 22, 2016 7:06am
Quoting Rammstein73
{quote} Ok, now I'm checking this hypothesis online. Let's see, but that sounds very good. And that looks like You have naked one more grail... I've found the #NIKKEY's level, where all three indies have crossings. It was formed on march, 18-th, 15:50 terminal time about. Price rised 400 points after that, now it is retracing. It looks like 1-st wave up is formed and 2-nd wave is forming. I'll post later - what came out of it.
Hey now...let's not use words like "grail" around here. I don't want to lose any credibility!
  • #382
  • Mar 22, 2016 10:35am Mar 22, 2016 10:35am
RAC as a Support & Resistance Generator

A week or two ago I mentioned that the RAC can be used to find areas of support and resistance. It can generate these far in advance and also be used spontaneously under the proper conditions.

As I've said several times, even though there are only two indicators to work with (not including the 'bonus' indy in the form of the Benford), these do quite a lot of work for us. The reason for that is because they are designed to dig out key bits of information. If you've absorbed what's been presented so far, I think this next concept will make a lot of intuitive sense.

First, remember what the RAC is for. It's to measure momentum toward one side of the market equilibrium or the other. Two major areas of interest for us have been the 80 and 20 levels. The other key level, and one that I mentioned briefly once or twice, is the 50 level.

Why are the 80 and 20 important?

These levels are important because generally speaking, when the RAC reaches beyond them, it represents a point where the market is straying too far from equilibrium relative to its current cycle. Sometimes this is sustained during a strong trend...but very strong trends aren't all that common.

In the example below, note that the RAC has crossed its own average a couple of times, yet it did not cross the HAC line until it dipped below 80. Beyond 80 or 20, the market will need time to come back to equilibrium. Everybody has seen this plenty of times by now. Maybe even a few have gotten burned for not waiting until it crossed 80 or 20.

Attached Image (click to enlarge)
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The place where 80 or 20 was originally crossed will prove to be important in the future though. At least these can be watched if one wishes. Plus it might help to focus the mind a little on a given area. This can be useful when a signal occurs because many, many times a signal will occur near one of these support & resistance areas.

The rough logic behind it is this:

1. The place where this happened, most likely, triggered some breakout systems. Generally, about 70% or more breakouts fail after a short time.
2. If scalpers were trading in the opposite direction from moving averages, they lost on those trades.

In both cases, the area where the 80 or 20 was crossed will prove to be significant for many people on a collective basis. We've all seen places where once it was support, it becomes resistance or visa versa. The reason for that is because the bias has shifted. People lost money buying in a support area, so when the market returns to it from below, they will collectively sell it and so forth.

The 50 Level:

This level is important for relatively obvious reasons. It's the halfway point, which is particularly important when using a cyclical methodology like ours.

In my next post I will demonstrate the proper way of applying it and how it might be best employed.
  • #383
  • Mar 22, 2016 11:00am Mar 22, 2016 11:00am
General Guidelines:

1. Places for support are drawn at the LOW of the bar when the 80,20 and 50 levels have been crossed from ABOVE.

2. Places for resistance are drawn at the HIGH of the bar when the 80,20 and 50 levels have been crossed from BELOW.

Like so:

Attachment

The first crossing was from below so it's drawn from the high. The next was from above back through 20 ever so slightly, so it was drawn from the low of that bar. The third one was from below so it was drawn at the high, etc...
Attached Image (click to enlarge)
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  • #384
  • Mar 22, 2016 11:15am Mar 22, 2016 11:15am
General Guideline #2:

In order to minimize the number of lines and to highlight the ones with the highest probability for being significant, I wish to make a recommendation, but first I will explain my reasons behind it.

First of all, I like to see markets as having to spring far from equilibrium (above 80 or below 20), find their balance and then spring too far the other way. In between times are when the key S&R levels are established.

So let's say that the market crosses above 20 and we draw a line. Next, it crosses 50 and we draw another line. But let's say that it crosses 50 the other way and then maybe even across it again and again and again... It might do that ten times back and forth. Why is it doing that? Because the market isn't going anywhere. Therefore, there's no need to keep drawing lines each time it makes a cross over 50.

Before another line can be drawn at the 50 level, the market ought to have first reached the 20 or 80 levels. In this way it kind of "resets" itself by moving out of equilibrium and then back toward it again.
  • #385
  • Mar 22, 2016 11:27am Mar 22, 2016 11:27am
An H4 chart of USDJPY

Here is what the chart looks like when all marked up.

Attached Image (click to enlarge)
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And here is what it looks like when it's converted to a lower TF like an M15 during a heavy area of consolidation.

Attached Image (click to enlarge)
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  • #386
  • Mar 22, 2016 11:28am Mar 22, 2016 11:28am
What about the times when price crosses the red HAC line at the same time as the RAC crosses 80 or 20? are they stronger support and resistance levels, or do we ignore the red HAC line for this?
  • #387
  • Mar 22, 2016 11:37am Mar 22, 2016 11:37am
Quoting Timo7
What about the times when price crosses the red HAC line at the same time as the RAC crosses 80 or 20? are they stronger support and resistance levels, or do we ignore the red HAC line for this?
In a way, any crossing of the 80 or 20 is going to have some support/resistance qualities to it, even during a signal. Fortunately we have the wind at our backs when this happens, which is why when a proper signal does occur, the bars tend to get larger afterwards. There's been a kind of capitulation at the place of collective equilibrium.
  • #388
  • Mar 23, 2016 2:47am Mar 23, 2016 2:47am
Quoting Rammstein73
{quote} I've found the #NIKKEY's level, where all three indies have crossings. It was formed on march, 18-th, 15:50 terminal time about. Price rose 400 points after that, now it is retracing. It looks like 1-st wave up is formed and 2-nd wave is forming. I'll post later - what came out of it.
The new #NIKKEI level was established (with "3-crossings rule") at midnight today. That means that previous bullish level, I was wrote about, is aborted. His swing was 400 points within 5 days. That's very good.
I think that new level is bearish and, so, testing of "3-crossings rule" (based on the Benford Template) still running. Let's see...
  • #389
  • Mar 24, 2016 12:39pm Mar 24, 2016 12:39pm
Quoting Rammstein73
{quote} The new #NIKKEI level was established (with "3-crossings rule") at midnight today. That means that previous bullish level, I was wrote about, is aborted. His swing was 400 points within 5 days. That's very good. I think that new level is bearish and, so, testing of "3-crossings rule" (based on the Benford Template) still running. Let's see...
Nice work Rammstein!
  • #390
  • Edited 5:07am Mar 29, 2016 3:50am | Edited 5:07am
Hello Almuten,
I have been reading and re-reading this thread for the past week with a lot of interest and, may I begin by thanking you sincerely for sharing your trading system, knowledge and experience.

I'm struggling to digest this trading method and wondered whether it was just me being a numpty. I created a crib sheet based on lots of the threads (posts 6, 80 and 313 especially) but where I am struggling is:

On MT4 should I just set my charts on e.g. the M15 time frame?
If a candle crosses the red HAC and the RAC crosses (preferably crosses the 80 or 20 lines) on the M15 time frame, should I then look at the 1 hour and 4 hour charts to see if the same thing has happened (unlikely event - I think you named it)? If it does, I should take the trade via the M15 chart?

I read and re-read the information about using the fibo tool but made no sense of which time frame and how to apply it but will keep reading over and over. is it possible to post a chart from say today which explains it for me, sorry for being a numpty.
Thank you
Scchplendid
  • #391
  • Apr 7, 2016 4:10am Apr 7, 2016 4:10am
Hi Almuten,

Is this the correct way to measure TP for this move?
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  • #392
  • Apr 7, 2016 10:46am Apr 7, 2016 10:46am
Attention All Interested Parties:

Over the past two weeks I've had some major life changes going on. I haven't had access to my computer for that time, but I will be back to answer current outstanding questions and those in the future.

My apologies for not notifying everyone. It was all rather sudden for me.

Within a few days I should be up and running again.

Almuten.
  • #393
  • Apr 10, 2016 5:58pm Apr 10, 2016 5:58pm
Quoting Scchplendid
Hello Almuten, I have been reading and re-reading this thread for the past week with a lot of interest and, may I begin by thanking you sincerely for sharing your trading system, knowledge and experience. I'm struggling to digest this trading method and wondered whether it was just me being a numpty. I created a crib sheet based on lots of the threads (posts 6, 80 and 313 especially) but where I am struggling is: On MT4 should I just set my charts on e.g. the M15 time frame? If a candle crosses the red HAC and the RAC crosses (preferably crosses...
Hi Scchplendid,

First of all, you're not a 'numpty' (that's a new one for me btw).

Second, with regard to what TF to set the charts on, you can trade just one TF, but I think the strength of the method really lies in seeing how well multiple TFs align in rapid succession. What this means is that the lower TFs will trigger prior to the higher. Therefore, if you see the signal on H1, the M15 will have already been underway.

But here's what you can do. If you see a signal on M15 with the red HAC being crossed, etc..., look then at the H1 and see whether or not the green HAC was crossed at the same time the red HAC on M15 was crossed. If so, this is good alignment.

If it happens that H1 has its red HAC crossed, then look at H4 to see if the green HAC on that TF was crossed at the same time. If so, it will indicate that those two TFs are aligned.

Work your way up as high as you can. When you find the highest TF that has alignment, move to the next lower one to find your profit targets.

If you're having trouble with the fib tool, see post # 182. If that still doesn't help, let me know specifically what's going on and we'll look at it together.
  • #394
  • Apr 10, 2016 5:59pm Apr 10, 2016 5:59pm
Quoting Azlanfx
Hi Almuten, Is this the correct way to measure TP for this move? {image}
Yes. Absolutely perfect!
  • #395
  • May 3, 2016 11:52pm May 3, 2016 11:52pm
Buy a small lot at 155.548 2hr ago with TP 156.519. SL 154.850.
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  • #396
  • May 4, 2016 3:57am May 4, 2016 3:57am
Manually close my long earlier, going to short after london open.
conformation from 15m and h1.
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  • #397
  • May 4, 2016 9:35am May 4, 2016 9:35am
Quoting Azlanfx
Manually close my long earlier, going to short after london open. conformation from 15m and h1. {image}
close this one after NY open, did't reach my TP, must learn how to measure TP correctly.
  • #398
  • May 23, 2016 1:37pm May 23, 2016 1:37pm
Quoting Almuten
Attention All Interested Parties: Over the past two weeks I've had some major life changes going on. I haven't had access to my computer for that time, but I will be back to answer current outstanding questions and those in the future. My apologies for not notifying everyone. It was all rather sudden for me. Within a few days I should be up and running again. Almuten.
Hi Almuten ,
please back in this interesting thread .
Thank you .
  • #399
  • May 24, 2016 10:15am May 24, 2016 10:15am
Quoting redoktober
{quote} Hi Almuten , please back in this interesting thread . Thank you .
Ok, just checking in here. I know it's been awhile since I've been on here but my life has been in a complete upheaval over the past six weeks or so.

My wife asked me to leave (well, screamed it repeatedly actually, for months) so I did. I have no job and what money I have is nearly gone for the moment. I don't have enough capital to hope to make a living from trading - just a very small account to at least begin the arduous process of getting it into my bones and I'm not sure I'm ready to even do that right now.

As luck would have it, I have a friend who is old and somewhat feeble. He needed a roommate to help him get his life together. So that's where I am - getting both my and his life together. We're both in financial straights at the present time but little miracles happen now and then to get us by. His house was in shambles - dog poop and pee everywhere and it hadn't been cleaned in years ever since his wife died. Anyway, I've been cleaning, painting every room in his house, plus the outside in exchange for living here. That's been my life for the last six weeks.

Amidst all the changes and financial constraints, it's been very difficult to put my mind on trading. The healing is coming quickly though. If I can get through this without losing my mind in the process, trading should be a piece of cake

Meanwhile, if anyone has any charts they'd like to post, please do so. I check for questions on a regular basis too.

Almuten
  • #400
  • May 24, 2016 2:20pm May 24, 2016 2:20pm
Quoting Almuten
{quote} Ok, just checking in here. I know it's been awhile since I've been on here but my life has been in a complete upheaval over the past six weeks or so. My wife asked me to leave (well, screamed it repeatedly actually, for months) so I did. I have no job and what money I have is nearly gone for the moment. I don't have enough capital to hope to make a living from trading - just a very small account to at least begin the arduous process of getting it into my bones and I'm not sure I'm ready to even do that right now. As luck would have it, I...
Hello,
I'm sorry for your troubles, life is not easy for anyone, but everytime a door gets closed you can find an either bigger one opening just for you.
If I may give you a suggest, keep your savings, for little they might be, apart for the day you will be ready to trade real and train yourself on demo only.
Your system is very simple to use but behind it there are smart thoughts and you can make good pips with it: however it is essential to your success to educate your mind to trading environment because trading is first of all a state of mind.
Your mindset is your true Holy Grail, so take care of it and train it the best as you can.
I wish you all the best!
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