# P2: A batch of FX market trades



## peter2

_In the spring a young trader's fancy lightly turns to thoughts of the fx markets. _
(my apologies to Alfred Tennyson).

It's spring in Aust and the normally slumbering fx markets wake up and make a dash for the EOY. Not so this year. Pres Trump has kept the fx markets buzzing through the US summer with his statements and negotiating tactics. 

I'm going to post a batch of trades focussed on the fx markets. These are mostly currency markets but include various indicies. Providers of MT4 trading platforms are slowly increasing the number and variety of available markets. I'll be looking at ~25 fx markets and 7 indices. 

In order to do this properly we need to consider many aspects of a trading business. I'm going to be brief on these aspects and say that we're trading for growth and the trade results will be expressed as R multiples. If you're considering trading fx markets and don't understand my use of the terms "R multiple" and fixed fractional position sizing, please ask. It's vitally important to know how to position size consistently when trading leveraged markets. 

I will spend a little more time outlining the trading methodology. This is a collection of systems or guidelines that we may use to create distinct trading plans. I'm a discretionary trader but I hope you'll notice the structured process that is important to ensure consistency.


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## peter2

The trading methodology uses 4H candlestick charts and a simple interpetation of the price trend and price action of these bars. Why use this 4H period? 

(i) My trading business (and life) keeps me busy. There are only 6x4hr bars in each day. Pretty basic but I had to say it. This means that I only need to check the fx markets 4-5 times each day (depends on when I sleep). For me that 11am, 3pm, 7pm, 11pm, 03am. 

(ii) The 4H charts provide enough movement to trade both price action bars and trend. Let me show you what I mean using the last three weeks of the AUDUSD 4H chart. 

Chart indicators: 
(i) 4H trend is shown by the Blue 8EMA(Close) and Red 9EMA(Open). This trend is also shown by the top ribbon which is created by the same moving averages. 
(ii) The bottom ribbon shows this trend in the daily time frame. 
(iii) The other moving averages are 50ema, 100ema, 200ema. They indicate the trend in larger time frames and have no relevance for this threads TPs. 

The reason for this chart is to show that there is enough movement in the 4H time frame to trade the 4H trend. The MT4 platform shows the 4H charts with weekly period separators.


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## peter2

The trading methodology has two parts. I've called them System 4B and 4T. 
The "4" refers to the 4H time frame, "B" refers to bars, "T" refers to the 4H trend.

*System 4B* (based on the indicated price action of specific 4H bars):
There are a few specific type of bars that indicate that there's a high probability that price will go in a definite direction soon. We can use these bars to create a trade and await the outcome. 
(i) Outside reversal bars
(ii) Doji's and two bar doji patterns (HCD, LCD)
(iii) Pinbars
(iv) Engulfing bars
(v) Large bars (marabozu's)

I'm not going to describe them now. Look them up if you can't wait to know what they are. 

What interests me with these bar patterns is their location. I'm only interested in them if they form at prior highs/lows, at support/resistance levels or at 50-62% fib pull-back/retracement levels that are also at a high/low of a trading session. This will require lots of explanation, I expect, but you're not going to get it now. I'll explain soon after I take a trade that sets up in accordance with these ideas.

Trades based on System 4B are placed immediately you notice them. This may be near the end of a bar or at the open of the next bar.


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## peter2

*System 4T *(based on the current 4H trend):
This system trades the 4H trend and we want to get involved as soon as it starts. Most of my setups into this trend happen after a pull-back or a retracement forms. Terminology: pull-backs form in up trends, retracements(rallies) form in down trends. I prefer to trade either the 1st or 2nd pull-back/retracement because they provide the better RR. It's possible to anticipate these entries and place them in the market before they trigger. 




*Note: System 4T1*: A slight variation. Once the trend is defined it's possible to use smaller time frames charts (eg 1Hr, 15min) to find smaller sized risk setups. You can only do this if you're watching the chart at the time the market sets up. If I'm at the computer I may monitor a few markets (1hr charts) for setups into the 4H trend. That's why I've got the 4H trend ribbon on the smaller time frame charts.


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## peter2

That's the broad trading methodology. I look at each 4H bar initially for 4B setups, then check the trend for 4T opportunities to get into the trend. There's enough detail there to create many specific systems. I haven't mentioned anything about exits. I create a positive expectancy by allowing the average winner to get bigger than the average loser. I place a basic +2R target in the market. I may modify this target to account for nearby support/resistance levels, but they'll be at least +1R. 

I add to winning trades if the 1st trade stop is at BE or better and the trend looks promising. 

That's enough for now and I'll add more details using specific trade setups OR if someone asks a specific question. 

I know fx trading is only a sideline here at ASF, but I'd like to think we can foster a small group who use similar techniques and who can encourage each other with the opportunities each of us identify. 

If I end up talking to myself I'll close the thread.


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## peter2

No trades today because of the Labour Day holiday in the US. However two examples setup while I was writing the thread.  

*AUDUSD* long, using System 4B: 4H reversal pinbar. 
(Buy 0.7195, iSL 0.7172 23p risk)
Target is the trend moving averages and +1R (0.7118)  Trails stop is now at BE. 

*GBPUSD* short, based on System 4T: trend is down and there's a 1st retracement(rally) opportunity.
Sell 1.2916, iSL 1.2936, 20p risk  Target prior lows near 1.2868 (or in this case +2R target 1.2876) 




*Ka ching!* GPBUSD +2R, AUDUSD at BE still open. 

If you're keen to follow along, then think about what the GPBAUD chart would look like. Would we consider a long or short on this chart?


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## aus_trader

peter2 said:


> That's the broad trading methodology. I look at each 4H bar initially for 4B setups, then check the trend for 4T opportunities to get into the trend. There's enough detail there to create many specific systems. I haven't mentioned anything about exits. I create a positive expectancy by allowing the average winner to get bigger than the average loser. I place a basic +2R target in the market. I may modify this target to account for nearby support/resistance levels, but they'll be at least +1R.
> 
> I add to winning trades if the 1st trade stop is at BE or better and the trend looks promising.
> 
> That's enough for now and I'll add more details using specific trade setups OR if someone asks a specific question.
> 
> I know fx trading is only a sideline here at ASF, but I'd like to think we can foster a small group who use similar techniques and who can encourage each other with the opportunities each of us identify.
> 
> If I end up talking to myself I'll close the thread.



I'll get involved whenever I can Pete, so hope you don't feel alone in this Fx space. And happy to help each other in a small group since a few brains combined can see things clearer.


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## barney

Thanks for the effort here Pete …. I am a closet FX trader …. Unfortunately my personal trading habits don't suit FX so I'm still in the closet ….. Just to clarify … I am married … It's not that kind of closet

That aside, I am super keen to watch anything you have to say and do regarding FX trading so good luck with it … I'm sure there are a lot here who are in the same boat as I am and watching with interest.


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## peter2

Thanks guys. There'll be a few others that will join in once we start making some "R's". 

My morning procedure will include looking at a currency relative strength indicator to see which currencies are strong or weak. Currently this is what it looks like.


_Strongest:_ CHF, 
_Weakest:_ AUD, NZD
Others are near the middle which means their charts are probably going sideways. 
No trades in AUD until after today's RBA announcement. Nothing to do until the next update (3pm).


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## debtfree

@peter2 Naturally I'm following along to soak up what I can in this area so my thanks also Peter. 

Looks like I'll have to get MT4 from somewhere to follow along, is the currency chart above also constructed on the MT4 Platform? Maybe a silly question but what are these currencies being compare to, as a base? I know I compare the ASX Sectors to the XAO to see what's moving.


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## barney

debtfree said:


> Looks like I'll have to [B]get MT4 from somewhere[/B] to follow along,




You can download a demo from any of the Providers .... or download free demo from     https://www.metatrader4.com/en

Just have to provide an email address … bypass any of the pay options to use demo.


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## debtfree

Thanks @barney appreciate your help


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## peter2

Tues 3pm update:   AUD popped after the RBA non decision. I prefer to fade these pops, but this idea doesn't fit with either of this thread's system. 

*T01:* GBPNZD short: System 4T. 
The trend is down and the last bar went higher but ended lower. 
Sold 1.9485, iSL 1.9526, 41p risk  Target +2R, 1.9403


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## peter2

*T01:* GBPNZD short: This trade bombed but was actively managed to a loss of 0.6R.
The cross pairs are a little trickier to get right but I liked the setup. They move quickly and when we get them right +2R is easy.

AUDUSD has reversed nicely from it's pop and I profited by this quick reversal (but not this thread).


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## peter2

The systems that I've outlined will provide plenty of opportunities. Too many, probably. We won't be able to take them all and we're going to miss heaps of valid setups.

It's better to reduce the number of opportunities and ensure you trade them as well as you can. The easiest way to reduce the opportunities is to reduce the number of markets you're looking at. Keep it to a manageable number. 25 - 30 markets is far too many to trade consistently well. It's especially hard with currency markets as they tend to move together. They're significantly correlated and when you see a setup to go long AUD, chances are there'll be a corresponding long setup in EUR, GBP and NZD (CAD). Not always, but if the underlying sentiment concerns the USD this will probably be the case.

I've already mentioned that the cross pairs are tricky. These should be the first ones avoided until you've got a consistent procedure for monitoring your markets.

Another way to reduce the number of opportunities is narrow the number of setups that you'll trade. Instead of trying to trade both System 4B and 4T. Focus on one. I'll be trading System 4T much more than 4B. System 4B requires more experience with the interpretation of the bars and their significance in situ.

I should set the example and focus on System 4T and reduce the number of markets I'll monitor.

What made me write this post?
Let me show you a couple of charts that I didn't notice at the right time.


Clearly, XAG (silver) was the weaker and provided the better RR that I didn't get.


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## peter2

7pm update: I won't be available for this one. 
I do notice that many of the major markets have moved nicely in the current 4H bar. This will produce plenty of setups for System 4B. However I don't like chasing prices once they've moved significantly. I'll be waiting for pull-backs to enter the trend via the 4T system. If these swings are serious there'll be follow up movement that we can catch.


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## peter2

A good example of why I look at the 15min chart as well as the 1H for setups into an established 4H trend.



This latest swing on the USDJPY started with a classic break-out setup (4H chart). If you miss this then the next opportunity is to wait for a pull-back to join the trend. I normally use the 1H chart for this. However sometimes the candles do not present an acceptable RR setup. The 1H chart of the USDJPY last night did not present a good setup as the bars were too big and messy. 

The third chart is a 15min chart. There you can see the perfect doji setup (at the low of the US session). The bar patterns that I use for my intra-day setups are the same as the patterns I've already listed in System 4B. 

To be fair I should also point out that there was a good opportunity to start a trade slightly earlier. This is marked by the line (doji followed by a bar with a close above the doji high). This trade would have been stopped out for a -1R loss if your iSL was just below the low of the UK session. 

When we use intraday setups we're starting trades within the noise of the 4H chart. So the possibility of a quick loss is increased with intraday setups. We've got to be prepared to have a second go and this means we have to manage our money carefully in order to have these couple of chances.


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## peter2

I've probably posted too much detail and confused a few with too many options. To beginning fx traders. I'd suggest sticking to System 4T on the 4H charts and monitor a comfortable number of markets. You can increase the number of markets as you become more confident that you're applying the system properly. 

I know that many of you work and can't sneak a look at the markets during the day. Don't let this be an excuse that you can't trade. Yes, you'll miss a lot of setups. So what. There are a lot of setups in the evening (AEST) as this coincides with the heavily traded UK session. If you're passionate about trading set aside some time that coincides with the end of a 4H bar (7pm AEST) and trade all the setups that form at that time. 

If a trend started earlier and you missed it, well you know what to do. Select four markets where the trend started earlier and is established and watch the 1H (or 15min) charts for a pull-back /retacement setup into that trend. 

If you keep things simple you'll have a better chance of doing it consistently.


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## peter2

*T02*: EURUSD short: System 4T 
Sold 1.1578, iSL 1.1603, 25p risk, target +2R 1.1528

*T03*: GBPUSD short: System 4T
Sold 1.2842, iSL 1.2867, 25p risk, target +2R 1.2792



As both trades have started well, the TS are lowered to just above the top of the entry bar.


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## peter2

Always check for scheduled news reports before placing fx trades. There a few reports due in the next few hours that may impact the trades.


Trades based on 4H charts are only impacted by "red" news items. The GBP services PMI may help or hinder our GBPUSD trade.

If the trade is >+1.5R before the report I can choose to grab the profit or "let it ride".


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## peter2

A few of you might have noticed that the EURUSD setup (T02) was the third one in this move down. There is also a support level slightly lower (dashed line). These aspects make the +2R target unlikely and I've modified the target to +1.5R (1.1540) and lowered the TS to +1R (1.1553). 

*T02*: EURUSD short:  Closed at +1R after failing to get to new target by 3p.
Now that I've grabbed this profit I can let the GBP trade go with the TS at BE.


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## peter2

*T03*: GBPUSD short:  Closed at 1.2805, (+1.5R)   30min before news.

I know I should let these run, but I like grabbing quick profits when I get them.


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## kid hustlr

Enjoying this Pete,

Do you risk 1% as per your stock systems or does FX trade risk vary?

If it does vary, any reason why?


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## aus_trader

peter2 said:


> When we use intraday setups we're starting trades within the noise of the 4H chart. So the possibility of a quick loss is increased with intraday setups. We've got to be prepared to have a second go and this means we have to manage our money carefully in order to have these couple of chances.



This has been my experience as well with Forex. I think they are called _*complex pullbacks*_ when there is a set of smaller counter-trends against the main trend and I've been caught up in these so many times. It does take courage to keep trading the pull backs on say the 1H time frame since you can get stopped out a number of times before the main trend continues based on my past experience.


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## Lone Wolf

WIth the EURUSD H4 chart, the last probe down prior to the trade created a large green bar with a long tail. Did this bother you at all? Do you look for signs that the trend may be coming to an end, or do you ignore any signals against the trend and say simply that if the trend is still down then you're looking for a reason to short?


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## peter2

@kid hustlr  The value of R does vary across accounts and with trade setups. I'll use 1/2R amounts for intraday setups like those mentioned using 1H, 15min charts because I'm prepared to have two goes at getting into the 4H trend. The benefit of these intraday setups is that they can get to +2R (and better) much quicker because the initial stop size is smaller than the corresponding setup in the 4H chart.

@Lone Wolf  At the time I took the trade and posted it, no it didn't. The low of the bar was my target and I knew it wasn't +2R. It was only once I realised that the setup was the third one in the move that I knew I'd have to keep a close eye on it. Grabbed the +1R quickly as it stalled near my +1.5R level. 

Wow, I see there's been some huge moves (reversals) in the market. I'm not going to get them unless they go with the 4H trend. They do sometimes. The green bar with tail may have been an early indicator of this reversal.


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## captain black

Great thread @peter2 , following with interest.


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## peter2

We can't get them all. I was checking out the currency relative strength indicator to note the strong/weak currencies. It shows that JPY, CHF remain strong with AUD,NZD weak. This suggests that the trade possibilities are short AUDJPY, NZD JPY. 

Checking the 4H charts I notice that the best entry was overnight. I've marked the 4H bar that we needed to be watching to get in on after the big red bar established the trend down. On both charts (AUDJPY top, NZDJPY bottom) there was a clear BO or break-down setup and trigger.  Prices have drifted lower and reached their +1R levels already. 




That's what I mean about not getting them all. I do sleep and I know many of you work. I hope that by now you're seeing the process, One bar can establish the trend and we can either enter on the open of the next bar or wait for an intra-4H-bar setup. 

There's a structure and a process that can be adapted to suit your lifestyle. Don't worry about missing great trades. Trade the ones you can. It's better to trade less and do it well than over trade and make mistakes.


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## peter2

peter2 said:


> There's a structure and a process that can be adapted to suit your lifestyle.




ASF has seen many wannabe fx traders visit and IMO never do the work. They wish to be profitable traders but don't want it enough.

The next 4H bar ends at 7pm (AEST). Are you going to do the work to see if a new trend started?
Will do do the work again at 11pm? 

Note: I don't hold these trades over a week-end, seeing it's Friday, if there's any entries I'll grab the profits to avoid holding over the week-end. 

I've offered to assist and we've got this thread to discuss anything.


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## aus_trader

peter2 said:


> Note: I don't hold these trades over a week-end, seeing it's Friday, if there's any entries I'll grab the profits to avoid holding over the week-end.



Good point Peter, I also don't like holding over the weekend unless it's a really longer term trend trade that's allowed to move 100's of pips up and down. The reason is the usual gapping in price when trading re-commences the following week.


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## peter2

*T04:* EURUSD long: System 4T 
Bought 1.1635, SL 1.1635, target 1.1675 (2R)

There's a bit of EUR news over the next few hours. May help or not. There's nothing too significant.


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## Trading Athlete

peter2 said:


> *T04:* EURUSD long: System 4T
> Bought 1.1635, SL 1.1635, target 1.1675 (2R)
> 
> There's a bit of EUR news over the next few hours. May help or not. There's nothing too significant.
> View attachment 89212




Hi peter2,

Do you have a rule about how long you need to wait before entering prior to news i.e. 1hour?, 4hours?

I never could get my head around this when it comes to Forex.

That's why I am only interest in Index daytrading.

Thanks


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## peter2

FX News: I won't start a trade about an hour before major news. These are shown in red on the forexfactory calendar. Reactions to major news can increase the significance of a bar that is produced when the news is released. 


Major news tonight for the CAD and USD at 1030pm (AEST) may impact the significance of the 4H bar that started at 7pm.


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## peter2

*T04:* EURUSD long was closed for a small loss (-0.5R). 
Price went to +0.5R and I raised the exit trigger to -0.5R.


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## Trading Athlete

peter2 said:


> FX News: I won't start a trade about an hour before major news. These are shown in red on the forexfactory calendar. Reactions to major news can increase the significance of a bar that is produced when the news is released.




Hi peter2,

I only focus on the news in red on Forexfactory as well. I totally understand what you mean about how the market reacts to major news. 1 hour does seem a bit short but whatever works for you of course.

Forex trading is so tough due to having to constantly worry about the next news announcement. I was thinking about looking at it on daily bars to avoid this problem but got to much on my plate.

Thanks,
Trading Athlete


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## peter2

Be patient and wait for your setups. Markets need time to settle after a sharp move. We know this and we're happy to wait. I'm posting this as I wait. 

One of the markets I was stalking today was gold. The 4H trend is clearly down and the third 4H bar this week was a rally back to the MA's. This is where I stalk my setups. However much to my disappointment there was no clear reversal setup on the 1H chart. No trade. There was something better on the 15min chart but I wasn't watching it on that time frame. 

What about silver? You can see that the third 4H bar was a huge up bar that changed the 4H trend to up. Even though there was a doji on the 1H chart I couldn't take this short because the 4H trend had changed to up. 


We've got to wait for perfect setups. Near-enoughs aren't good enough for us. If we ignore our own setup guidelines then we'll ignore important rules that define our edge.


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## peter2

I'm also stalking reversals in a few indices (SP500, DAX). They're not system 4T compliant yet although the 4H trends have just changed. If there's further follow through in the US session and tomorrow, they could provide good opportunities.  I'll try to remember to post the trades here if the setups are perfect.


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## peter2

11pm (AEST) update: as it's getting near...

AUD:  4T down buy rally is only small, not much happening on other crosses
EUR: 4T down, outside reversal bar qualifies as a System 4B setup as it's sitting on a clear level of support. 
GBP: 4T just up and I prefer this outside reversal bar for a little trade. 

_10:55 Whoa, WTF just happened? 
I had a trade on GBPUSD open with an exit stop as close to my entry as lycra is to the body (not mine). The take profit was miles away at 1.2998, just to have one in the market. 

GBP just spiked straight through my target price. Some one must have said something as there was no news. I love fx when good things happen. 


_
Ignore the update: Things have definitely just changed! I've got to find out what it was.


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## peter2

Thank you Mr Barnier, whoever you are.


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## peter2

*T05:* EURUSD long: System 4T trend is up, outside rev bar, buy next open.
Bought 1.1605, SL 1.1580, 25p risk, Target 1.1643 (+1.5R) recent highs.


Sorry I'm a bit late with this but I thought my comments on why I selected this one might be of interest. 

1. The 1H chart shows that there was an earlier doji reversal setup with a smaller pip risk. However I don't take intraday setups during the Aussie session unless the AUD is involved. 

2. Why not the AUD (outside rev bar also) or the GBPUSD strong trend.
The trend of the AU is down, so no setup using system 4T. The outside rev bar can be used by itself as a setup as described at the start of this thread, but I preferred the EU. 

The trend of the GBPUSD is much stronger, so why not buy this one. For me it's too far from the MA's and is due for a pull-back which may provide a much better RR opportunity. Or price just bolts higher and I miss out. I'm happy with either outcome. 

As I post this I hear a ka-ching sound in the background that tells me the EU trade has already hit it's +1.5R target. This target was selected because it's the level of the recent highs. I've replaced the chart with a more recent one that shows this target level. I should also point out that I specialise in these types of quick momentum trades that last an hour or two at the most. Most of these happen in the UK session.


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## peter2

pre 7pm update:  before tennis

Indices: My anticipated BO on SP500 and DAX didn't happen. Clearly too many sellers. It's likely that a reversal may happen during this UK session, but I'll not be here to see it. 

AUD: going sideways, AJ looking stronger, while weakness against the EUR and GBP continues.
EUR: early pop that I traded has waned. EJ I missed this. EURNZD continues higher without me.
GBP: trending higher and is now the strongest currency, GJ entry was 7pm last night, missed it.
NZD: weak, like the AUD

WTI: going up, against trend, this rally may provide a short setup. 
Gold: going sideways, no momentum
Silver: going sideways, no momentum
Copper: going sideways, ready to move up? 

_Conclusion:_ If I was in the office I'd be watching the indices for a bullish reversal, oil for a bearish reversal and gnashing my teeth for overlooking the EJ and GJ setups.


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## kid hustlr

My god, if I'm following that EUR/USD trade correctly I think you sold almost the exact high?


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## aus_trader

kid hustlr said:


> My god, if I'm following that EUR/USD trade correctly I think you sold almost the exact high?



Yeah, the profit taking 4H bar now looks like a pin bar followed by a reversal (bearish engulfing) bar which is still forming...



Well Done Pete, for Profit targeting to perfection


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## CanOz

Regarding the dax, yesterday wasn't too convincing, consider the volume pushing higher was relatively low. The day was balanced, an indication of acceptance of these prices. I would have preferred to have an inside day to trap shorts. Not to be and the auction today failed to stay above yesterdays value are high even. My algorithm made short work of it....literally


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## peter2

11pm update;  No time to do it as I've only just arrived in the office.
Significant moves in the last 4hrs that indicate further follow through is probable.

Gold/silver going down along with AUD.

US market just opened and I'm looking for perfect patterns to trade. They'll most likely be shorts because of today's gap down. Longs need a market bounce soon after the open. It's possible. Micron (MU) is a fav day trading stock for me.


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## peter2

Sloppy/choppy day with low volume in the US markets. They opened down and immediately bounced, patriotically. The charts that I was watching didn't form the patterns I trade. My trading day is done in 20min. This allows me to review the last 4H bar in the fx markets.

AUD: NZD: Weakened further, 
EUR: Big reversal, flattened the trend and the EJ trend.
GBP: Huge 4H doji, would frighten me away. Trend now flat.
Gold/silver produced the best opportunities. Let me show you the charts. On my MT4 charts these markets close 1hr later than all the currencies. The 4h bar closed at 8pm, an hour after I left the office.



The silver (XAG) chart shows a good outside reversal bar (ORB). Price went higher, but the sellers slammed it down and it closed below the low of the prior bar. When we see the the same pattern in both markets the probability that price will fall further is quite high. Price did fall in the next 4H bar and fulfilled the promise of a further fall. Whether you would have earned any profit depends on how you managed the trade because the markets have bounced back up.


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## peter2

4:50pm review: Halfway through a 4hr bar I know, but I've had some time to check things out. 
AUD, EUR, GBP: All going sideways. Generally this means there's movement in the cross pairs, but not now. The CAD has strengthened after last night's news and has been the only mover since then.

Indices: I've got to be bullish after the moves yesterday, but doubt they'll fire up again tonight unless there's news about the trade wars. 

I couldn't find a thread on trading cannabis stocks (other than ASX). I assume those interested know that Canada passed legislation to allow recreational cannabis use via oils and tablets. It all starts on Oct 17. I mention this because there's been a flurry of activity on the publicly listed cannabis growers on both the US and Canada markets. They've been hot, hot, hot as companies seek to get into a possible 5 - 10 billion /yr market. 

If you want to check some charts: US: CGC, CRON, TLRY, MJ(etf)


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## peter2

_T06_: AUDUSD long: System 4T
Bought BO at 0.7134, SL 0.7109, T1 0.7159, T2 0.7184
exit stop at 0.7172 (+1.5R) if it doesn't hit T2.

This trade has just bolted higher as I was writing it up. Gold has also bolted and I like that combo.
Note: for an unknown reason my internet gets a little spotty after 1am. 



 ... price now 75, 74, 75...

Edit: I'm also in the SP500 reversal and day traded SQ short for a quickie. 

AUD done at 72 for +1.5R.


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## peter2

For those following the system. There's always going to be some discretion required, at least I think so. I may try to automate this system at some stage, but I know it will take some time and a hell of a lot of thought. 

Four of the eight charts I have up on a monitor are the majors. I want to buy the strongest and short the weakest. I could see (I hope you can also) that two bars ago there was some weakness in the USDJPY (USDCHF not shown, but also going down). The AUD looked the strongest of the three as EUR and GBP were going sideways. The AUD needs a kick from commodities and got it from oil and gold tonight. 

It was an obvious choice to buy the BO on the AUD. I prefer to start two trades as I rarely pick the trade that works out to be better, but I didn't like either the EUR or GBP. I hope this helps if you're trying to follow along.


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## peter2

I realise that I'm talking to myself at the moment, but I'm happy posting educational examples until @Kryzz gets back. Kryzz is keen to contribute but won't be able to until mid-Oct.

I'll also use these examples to assist me in writing a more objective set of rules that's a requirement for an automated system. This is not a high priority item for me as I'm going along quite nicely without one.

Of course anyone can join in.

ps: I came upon this indicator that with a bit of modifying should alert me to new 4H trend changes in  markets that I'm not watching. Another item on the to be done list.


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## hallph

I'm following every trade Peter, haven't placed any trades but am getting my head around it. You've definitely expanded my outlook rather than just equity-focused I'm considering forex and formulating a plan on how to best do so.

The MA ribbon is a cool feature which I'll try to code up in Prorealtime, so both your 4hr and 1d trends are defined by the 8 period EMA(Close) and 9EMA(Open).

Nice targets on the AUDUSD trade - well done. Really enjoying following the action


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## sasch

Hi Peter, 

Thanks for doing this thread, I have been waiting on a series on forex trades from you.

I am learning a lot, from your methodical approach, and am sure a lot of others are as well. You go
into great detail, which helps a lot.

My forex trades so far, have lacked consistency, jumping through different methods, scalping, swing trading, doubling and tripling down on losers, which usually result in whacking my fist on my desk.

A question relating to your currency strength chart. Where do you access this, is this a service you subscribe to, or part of mt4. I am using cTrader at the moment.

Thanks.


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## peter2

@hallph @sasch Thanks for your comments. 
I'm glad you're both looking at the process rather than the results. 

The currency strength indicator is a freely available MT4 indicator. There are many forms of indicators to show the relative currency strength. I like this one as it shows historical values and I can see the current value relative to it's past values.


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## peter2

pre 3pm update: Not much happening now, wait until UK open (time to look at ASX scans)

AUD: Continued higher, now at support. It doesn't worry me that I missed out on more or that there were setups missed in other AUD pairs. Now need to wait for pull-back setups.
EUR: Continued higher, but not as strong as AUD. Also at support. Now need to wait for pull-back setups.
GBP: 4H trend is up, but is becoming a little spiky (volatile)
USD: Weakness continued against CAD, CHF

ASX: rolling over again
US: Going sideways
Gold/silver: initial spike up, any follow up for pull-back setups?
Oil: back at MAs, consider bracket setup as it could go either direction, (cyclone)
DAX: sideways
FTSE: sideways but looking likely to go up this evening


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## sasch

Thanks for the info on the indicator.

Peter, I notice you state that the AUD is at support. 

I can see that there are about six green 4 hour bars at the moment (last one not complete) which supports an upward trend at the moment. However, there does appear to be price rejection or selling at this level which indicates resistance, especially based on the negative sentiment recently.

This is where I get confused. Is it a higher percentage play shorting from here based on negative market sentiment or going long. I tend to try and predict bottom and tops, but struggle going with momentum. Is it better just to wait for a price signal, such as a pin bar for example?


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## peter2

@sasch  My mistake, AUD is at resistance. 
It's easy to get confused at these levels. We know there's a trading opportunity coming up but not sure what to do. That's why it's important to know what you're waiting for. 

One plan: Wait for clear signs of rejection, such as a pin bar as you mentioned. Then short it.
Another plan: Wait for shallow pull-back and buy into the up trend (ignoring possible resistance)
Another plan: Wait until price gets above resistance before buying it. 

All plans are possibilities for a prepared trader. Which strategy appeals to you? This is why it's important to know what strategy suits your personality. People generally have a preference to buy on support or sell into resistance. Once you know your preference then you can assemble appropriate tactics into a trading plan. Test it, refine it, test it some more and when it works, trade it. 

At the start of this thread I outlined two systems. 
Sys 4B would trade the 4H pin bar or ORB if one set up right here (at resistance). 
Sys 4T would wait for a shallow pull-back to the trend EMAs and trade it. 

Don't try to trade both systems. Start with one and master it.


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## peter2

@sasch  If you like pin bars (I do) then we could create a pin bar trading plan. We would have to start by defining our pin bar, then I'd add a few filters to try to select those with higher probabilities for a successful trade. eg You might like to trade pin bars with or against a short term trend, with or against a longer term trend. You might like to find pin bars that reject a defined level. You might like to trade pin bars at the extremes of a volume profile. 

Starting with a simple pin bar, the possibilities for research are huge and if you find an edge, priceless.


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## peter2

peter2 said:


> DAX: sideways
> FTSE: sideways but looking likely to go up this evening




*T07*: DAX (de30) Sytem 4T break-out setup
Buy 12020, SL 11990, risk 30, T1 12050, T2 12080

*T08*: uk100: Break-out at start of session.
Buy 7312, SL 7298, risk 14, T1 7326, T2 7340




T07: DAX: Reached T2  Result +2R.

T08: FTSE: Reversed quickly and stopped me out. Result -1R loss.

Looking at the 4H charts, the DE30 was a clear BO setup, while the UK100 chart needed a better pull-back setup. I preferred the FTSE trade and took them both. I think there's a message for me, but instead I'm going to hit a ball around a court.


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## Lone Wolf

Just to show people are playing along...

I was going to ask if the longer term trend matters to you, or if you purely look at the EMA's on the 4H. That AUD long trade seemed very much downtrend when you bought it. But you did say that it was in conjunction with the move in commodities. And it was actually showing support with a pinbar on the daily at the time. You also said at the start that you want in on the trend as early as possible.

Personally I was thrown off by the overall trend and was waiting for a reason to continue the short side. I like seeing you find opportunities in places I overlook.


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## peter2

@Lone Wolf  Thanks, I know there's a few following along without posting. I don't really mind. 
Nice pin bar. I wouldn't have taken that one either. The daily trend is strongly down. The 4H chart shows price going sideways and then breaking out. There were sixteen 4H bars in the sideways trading range before price went higher. What can I say, 4H bars rock.  

There are times when I'm not sure what the 4H bars are indicating and the best thing to do is to look at the daily chart and EMAs. 

Back in the office and I see I've missed a few more opportunities. 
EURUSD pull-back long, GBPUSD pull-back long, 
GOLD pull-back long (not missed, nailed it before leaving) 
No point looking at the cross pairs. There's always opportunities setting up somewhere. 
AJ and EJ were beautiful pull-back setups. OK I looked.


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## peter2

*T09*: AUDUSD long, System 4T, pullback setup
Bought 0.7198, SL 0.7176, risk 22p,  T1 0.7220, T2 0.7242. 
Initial target is the old high at 0.7222 which is better than T1, just.

Pic shows the 4T setup on the 4H, 1H charts and confirmation with gold.



I'm also stalking long setups on DAX and FTSE again. 
The narrow range in Oil makes for a potential bracket BO setup (both directions).

Easing down because it's Friday and I don't hold these over the week-end. It's been quite a good week for the system and myself.


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## peter2

At the end of my trading day, in the early hours of the morning I'm usually too hyped to sleep straight away. This morning I reviewed the markets I monitor and noted all the possible trades for System 4T. I usually do this during the weekend. 

I don't do this for self-flagellation but to improve my efficiency at recognising the setups in real time. Many of the setups require placing a pending stop order in the market as they trigger hours later. If I didn't place the pending order itm I need to know why. I also need this data to assist with money management guidelines. I've already limited the number of these trades to 4/day. Knowing what I'm comfortable losing each day, I can set the value of R. I've also set a max loss for the week (in R multiples). 

This review noted that there were 22 setups across the markets I monitor. 
Indices: 4, Gold/silver/Oil: 4, FX: 14. 
I subtract the ones that setup while I'm away and sleeping (~4), but I do consider if it was possible to anticipate the trade and place a stop order. 

If there's someone who wants to understand the system and process a little better I'm happy to review any market for you with detailed notes. Please ask. Most market provide only 1-2 opportunities each week. So, its important to be ready for them.


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## aus_trader

peter2 said:


> Easing down because it's Friday and I don't hold these over the week-end. It's been quite a good week for the system and myself.




Great to hear Peter, learning quite a bit from this thread. Keep it up.


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## peter2

Weekly update:  *T09:* AUDUSD long closed for a small loss -0.2R


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## Trading Athlete

peter2 said:


> If there's someone who wants to understand the system and process a little better I'm happy to review any market for you with detailed notes. Please ask. Most market provide only 1-2 opportunities each week. So, its important to be ready for them.




Hi peter2,

I've been following along and getting a lot out of it!

I would really appreciate if you could help me understand how it would apply to the Hong Kong Index over the last few days.

It went from a very strong downtrend to an immediate uptrend. How would you have recognised the change in state? How would you have traded this instrument using your system?

Appreciate any insight!


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## CanOz

An important note regarding the action on the hang seng, most of this moved occurred in the overnight session. There is a significant gap on the regular session as a result.


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## Trading Athlete

Yes that's true. 

Would you have entered in the overnight session if you happened to be at the screen?


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## andymac

hello all and hello again Peter and thank you for your ongoing contributions which i always find are of great value. i often feel like i should contribute rather than just take. on the other hand i do not want to clutter Peter's excellent thread or take it way off topic, but now it is sunday and i thought i may throw something in.
i too trade a bit of forex mostly to satisfy my urge to be involved. this urge can bugger up my longer term trading which often works quite nicely if i just leave it alone. having said that i do take it seriously, like anything i am not here to lose.
I trade using a quite different style of T/A to Peter, but funnily often end up in the same trades. I have noticed over the years that often all types of T/A lead to similar outcomes and the take away from this must be to just find the style that suits you. My style uses Elliot Wave theory and fibbonaci. And OH NO there is the can of worms opened. so lets not turn this thread into an elliot wave debate. let me just say that after many years experience i find it helps and that the most helpful part of it is that it tells you when you are WRONG and if i know when i am wrong then at least i can cut out and re-start.
I trade most days , but i only trade from roughly 3pm until US open (WA Time). this is just the times that suit me as i am awake and alert. I trade mostly AUD,Euro and Gold on 1 hour charts as a starting point but once i am stalking will often use 15m or even 5m to find an entry and a stop. I have only a couple of specific setups and most weeks will find a dozen trades.I always lose more trades than i win, around 60% losers, but my winners win at about 4:1 over my losers.  I pay very close attention to the US dollar index chart and start with this every day as it obviously gives you a lead into the others.
so i have attached a 1 hour chart of AUD. i was looking for a short trade on friday afternoon. without getting into too much detail there had been a clear 5 wave move up of the lows earlier in the week. From an EW perspective next would be 3 waves A-B-C back down. by friday we had 1 wave down(A) and one smaller wave back up to resistance at .76 (B). so i was then looking at shorter time frames for an entry into C down, which i got and went to bed leaving a target in place, which i never do unless i have already comfortably moved my stop to breakeven or better. so that was a nice trade for me, 
	

		
			
		

		
	



	

		
			
		

		
	
 but now it is sunday and there are possibly bigger fish to fry for the coming week. the main point to remember here is to not fall into the trap of letting your excellent T/A analysis (for the last trade anyway!) lead you into believing that you can PREDICT, always remember it is a guide to a possible pathway. As soon as the market varies from that possible pathway, get out and reassess.


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## andymac

ok so i posted that as i have never posted a chart before i i did not know if it would work. so it seems ok so i will carry on shortly with what i am looking at for the coming week


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## andymac

ok sunday analysis. AUD daily chart in a downtrend has been all year. US dollar index daily same but of course uptrend all year. US dollar index has recently made a high on waning momentum (macd at bottom of chart) AUD continued making new lows after USD HAD TOPPED and MACD divergence is not so pronounced which is a sign that there may be more lows to come, so caution!
looking at 4hr charts USD has made a lower high and now a lower low - downtrend - or at least a larger pullback.
AUD 4hr chart appears to have a small 5 wave move up off the lows. 1 hour chart posted above strongly agrees with this.
So from an Elliot Wave perspective the 5 wave move up(impulse wave), after it has corrected, would be followed by at least another leg up. C wave or a wave 3. so for this week i may be looking for the C wave down on the 1 hour chart to complete and then a new larger wave up.
Looking at the 1hr AUD chart again, the C wave down(not marked on chart) may be complete. it is already longer than the A wave and often A=C. It has not however yet retraced .618 of the 5 waves up which is a common retracement area. So the first thing i will be doing is nothing. Waiting until i feel the C wave down has completed. this will not be confirmed until the high of the 5 wave up is taken out at .72293. 
on the other hand this downtrend could just continue down to new lows below the sept 11 low which would then invalidate all i have proposed so far. and i would then start again.
However if the AUD makes a low monday, and starts up again breaking to new highs, then how far? i have attached a 4 hour chart( i hope) with a fibonacci extension plotted. the Fib uses the range of the first leg up then placed on the start of the new second leg. as i do not know where the new second leg is going to start yet, i have used a .618 retracement of the the first leg as this would be common. on the chart the yellow solid lines are a fibonacci retracement of the first leg up showing us the .618r i have used for the start of a possible new leg up. the aqua dotted lines are a fibonacci extension from that point.
these extensions were shown to me some years ago and are amazingly accurate for targets.  in simple elliot wave terms we have 2 possibilities if a new leg up starts. 
it can be a wave C. which is often the same length as the first wave, in which case it would stop at a 100% extension. so enter a trade at the break of .72293 and target .72842(100%). all that is left is to find a stop that gives you a reasonable risk and reward. 
the second possibility is that the first wave up was a wave 1 and that the next is wave 3. in this case , and if the move up continues on past 100%, a wave 3 often targets 1.38 or 1.618. i always assume 1.38 and set my target there.
so at face value this lot looks like a very simple trade plan. as always it is a lot harder to execute in real life. but i try not to make it harder than it has to be and the biggest problem is always waiting until it sets up as per your plan and if it does not, don't worry, go to the next one, there is always another one.
so anyway the whole point here is just to show that there are many different methods to achieve the same outcome. if the AUD breaks .72293 this week very good chance Peter will get an entry right around there on a 4 hour bar and we will be off on he same trade again.


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## andymac

the last post ha. 
 so my casual editor has accused me of not being clear enough especially for the non- elliot wavers-  . Without writing a lecture, the critical point of my analysis - that maybe  i did not make clear enough - is the possible 5 wave structure up from the AUD lows shown on the first 1 hour chart.
In elliot speak a 5 leg wave CANNOT stand on its own, it can only be part of a larger wave structure. first leg of an ABC correction or 1st leg of a large 5 wave structure upwards. so my whole analysis and my trading for last week and upcoming weeks, swings on my believing that that leg IS an impulse or 5 wave leg up. if it gets broken to the downside this week then it was not , it was only an abc correction in itself. if it is a 5 wave impulse leg up then there must be more follow through upside this week.
but as i said back at the start somewhere no predicting, just a pathway, will see which way it goes


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## CanOz

Trading Athlete said:


> Yes that's true.
> 
> Would you have entered in the overnight session if you happened to be at the screen?




I plan on trading the overnight sessions eventually with my algo, the results in backtest improve with that. 

Looking for a possible gap down Monday if Trump follows through with tariffs.


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## peter2

@Trading Athlete   My MT4 provides a cfd market on the HK index labeled HK50. 

As Canoz has mentioned there are lots of gaps in this chart because the index doesn't trade 24/hrs. It trades in sessions and there is a possibility of a gap every time it reopens. The 4hr time frame doesn't suit this market. However I can still use it to demonstrate the system. 


At the start of the week the 4hr trend is down and the only option is to short it until the huge up bar on the 12/8. I've marked the bar with an arrow. This bar was big enough the change the 4hr trend up. According to my system you have two options to consider. 

1. Buy the open of the next 4hr bar. I've marked this with a black line (26700). The initial stop loss should be placed below the low of the signal bar (red line at 26250). This makes the trade risk 450 which is similar to the daily ATR (not shown). The risk size is quite large relative to normal bars and means that the trade must last several days in order for it to become acceptably profitable. 

This setup while with the 4hr trend is against the longer term daily trend and unless you think that this reversal is a start of a much bigger trend reversal it's unlikely to get to +2R or more without a few pull-backs. 

1b: As the initial risk size is large I sometimes apply an 80% rule. I place my iSL at 80% of the range. In this example that would mean the initial risk would be 360. 

Results 1, 1b:  The MFE so far has been +640 providing a +1.4R or 1.7R result as a maximum. If your target was at +1R no problem. If you wanted +2R then the trade remains open for next week. 

2. This option allows me to use the 1hr time frame to look for a smaller sized risk setup to enter the trend. Be aware that if you wait for this sort of opportunity rather than buying the next open, you will miss out when price continues higher without pausing. 

 I've posted the 1hr chart showing an acceptable lower risk setup with the two blue lines. The risk for this setup is only 200 points and the MFE would have produced a max win of +2.8R. My usual +2R target would have been hit and in the bag. 

_Conclusion:_ The system would have provided two trades in the HK50 market, a short early in the week and a long near the end.


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## peter2

@andymac  Thanks for the contribution. I hadn't noticed the classic 5 waves up in the AUD 1hr chart. They're not as obvious in the 4hr chart. You're right in that our two ways of looking at the charts will often result in us taking the same trades at the same time. 

I'm "lucky" that the two EMAs that I've chosen, respond quickly enough to indicate opportunities.


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## sasch

peter2 said:


> @sasch  If you like pin bars (I do) then we could create a pin bar trading plan. We would have to start by defining our pin bar, then I'd add a few filters to try to select those with higher probabilities for a successful trade. eg You might like to trade pin bars with or against a short term trend, with or against a longer term trend. You might like to find pin bars that reject a defined level. You might like to trade pin bars at the extremes of a volume profile.
> 
> Starting with a simple pin bar, the possibilities for research are huge and if you find an edge, priceless.




Thanks Peter, 

Now, I can see my scope was too broad before, your given me some great ideas, and I have research to do!

I do favour pin bars against the long term trend. However, I do notice in these situations, the first pin bar often gets taken out, and you need to wait for a second for confirmation.

Do you think using 50% retracement strategy on a pin bar is a valid strategy to improve your risk and reward? 

Just one more question, as I don't want to clog up your examples.

Do you mind going into your general stop loss strategy for your system? For example: Do you move
to break even, when at 1R-1.5R?

Thanks


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## peter2

sasch said:


> Do you think using 50% retracement strategy on a pin bar is a valid strategy to improve your risk and reward?




If you mean placing your iSL at 50% of the range of the pin bar. Yes, it would certainly improve your RR, but it will lower your W% slightly. Overall I think it will improve your edge if you can trade it consistently. 



sasch said:


> Do you mind going into your general stop loss strategy for your system? For example: Do you move to break even, when at 1R-1.5R?




Yes, I move my exit stop quite quickly to reduce risk. I anticipate that price will move quickly in my direction and if it doesn't I'll reduce risk quickly. My AL is -0.6R. Another reason to do it, is that there's always another opportunity coming up.


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## Trading Athlete

Hi peter2 & Canoz,

Thanks for your insights. Very useful!

I never thought about how having many opens in the Hong Kong can lead to many potential gaps.

peter2, in terms of knowing when a downtrend changes to an uptrend was it the large candle that was the big give away?

I have always tried to trade with the trend but this type of trading is very different.

I might be mistaken but from my understanding your approach is to find the spot when the trend changes. I've always struggled psychologically with that idea and am interested in what contrarians look for.

Thanks


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## sasch

peter2 said:


> If you mean placing your iSL at 50% of the range of the pin bar. Yes, it would certainly improve your RR, but it will lower your W% slightly. Overall I think it will improve your edge if you can trade it consistently.




Sorry, I should have been more specific. No, I mean entering the trade at 50% retracement of the pin bar, and initial stop loss set to usual spot behind the tail. Aiming for a 3R reward versus 2R, or looking to get out earlier for a 2R win. See below for example.






peter2 said:


> Yes, I move my exit stop quite quickly to reduce risk. I anticipate that price will move quickly in my direction and if it doesn't I'll reduce risk quickly. My AL is -0.6R. Another reason to do it, is that there's always another opportunity coming up.




Thanks, I can see why your reward ratio is so good compared to your losses. Well done on maintaining your discipline.


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## peter2

You're free to do anything you want, but test it first. 

My view is that the pin bar hasn't triggered a trade until price trades below it. Your entry is before my trigger and I can't start a trade there. 

Once triggered, I can chose to place my iSL above the pin bar high or reduce the risk size and place the iSL above the entry bar.


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## peter2

*T10:* EURUSD long. System 4T  
Bought 1.1689, iSL 1.1869, risk 20p, T1 1.1709, T2 1.1729
I was late into this trade as my entry was in the current candle not the prior one. Price almost hit T1.5 and I've closed the trade at T1 (1.1709) for a +1R result. This move happened quickly while I was going through my ASX scans. 


I've also posted two trades that I missed earlier in the day. The EUR strength should have been traded against the weaker JPY (EURJPY long). While the AUD strength should have been traded against the CAD weakness (AUDCAD long). These two setups complied with the 4T trend trading system. 

Most days moves don't happen at 11am and I often don't check the charts at this time. Today, this laziness cost me two profitable trades. These moves were reactions to the latest news of Trump's trade war.


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## aus_trader

peter2 said:


> You're free to do anything you want, but test it first.
> 
> My view is that the pin bar hasn't triggered a trade until price trades below it. Your entry is before my trigger and I can't start a trade there.
> 
> Once triggered, I can chose to place my iSL above the pin bar high or reduce the risk size and place the iSL above the entry bar.
> 
> View attachment 89365



Correct me if I am wrong, but looking at the chart this pin bar entry looks like a reversal strategy as opposed being in the direction of the trend...


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## peter2

Correct, this was in relation to a discussion about pin bars in general with sasch. Hopefully I've given sasch some suggestions to research. Pin bars by themselves don't back test well, but in certain locations they can be made profitable. 

I'll be sticking to the 4T trend trading system for my trades.


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## aus_trader

peter2 said:


> Correct, this was in relation to a discussion about pin bars in general with sasch. Hopefully I've given sasch some suggestions to research. Pin bars by themselves don't back test well, but in certain locations they can be made profitable.
> 
> I'll be sticking to the 4T trend trading system for my trades.



Yes I think most candlestick patterns are not reliable on their own. That's why I thought to ask about it. I think sasch may find this with some testing i.e. pin bars at any old location doesn't usually produce a reversal, not often enough. However these type of patterns can be a useful tool for confirming a trade e.g. a pin bar may confirm a support level by showing rejection of lower prices.


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## peter2

A pin bar and a few others are more reliable than most. You may have noticed tonight's rally in all the indices. Most charts were in a down trend (using 4T) but there were a few where the up trend was intact. JP225 was one of them. Does this pin bar make you drool?


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## Lone Wolf

The textbook trading method is to pick a stop, set your profit target to at least 2R, then sit back and wait for the result. A common theme in your trading is that you aren't afraid to take a 1R profit. Normally cutting your winners short is frowned upon, but since you also cull losers before they hit your initial stop, the end result skews the R:R in your favour.

I have no real point, except to say I like this aspect of your trading. I think if you didn't have the skill to know when to close early, the results would be quite different.


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## peter2

I do tend to take profits quickly when trading these markets. I haven't reviewed these or my own trades applying a more objective exit method. I may be disappointed at missing out on much more. I don't know. 

You're right in that my main edge is skewing the results to create a profit. I don't know if there's an edge with my entries or my exits, but I can create one overall.

I think you've also uncovered another one of my psychological biases. I'll use stats to try to outline this. My stats in this thread will be approx W% 60%, AW 1.3, AL -0.65, Exp 0.52. Those textbooks you mention have stats like this, W% 50%, AW 2.0, AL -1, Exp 0.50. There's no significant difference in the expectancy (or edge). However there's a huge psychological difference for me when trading to get the textbook stats.

I prefer to have a little more wiggle room when I start a trade even though I know I'm entering at the correct time and price. The size of my iSL is slightly larger (one bar back, an extra few pips *) than others (and the textbooks). If my trade starts well then I have room to reduce the open risk quickly. If the iSL is tight, there's no room to reduce open risk. The difference between the two iSL methods is largely psychological for me. Psychologically I am more comfortable losing 0.7R than -1R. Empirically I know the tighter iSL is the better strategy but I find it difficult to implement consistently. 

I won't elaborate on the management of winning trades other than to say that I am more comfortable having frequent wins (W%>60%).

My point is that we all have to trade in manner that's psychologically comfortable in order for us to be consistent over the long term.

* My use of the 80% SL guideline is an attempt to reduce the negative effect of my biases.


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## peter2

Whoops, I forgot that this thread is out in the open and not in the members private section. What will those in Germany and Switzerland think of my psychological issues ? @bigdog  Don't tell them please.


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## peter2

There are also practical reasons why I tend to grab quick profits in these markets. You can see the effect when one politician disagrees with another. Price reacts. 


The advantage of these markets and the methods I use, means there's plenty of opportunities.


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## sasch

Potential 4T trade coming up on EUR/USD? 

USDX is still showing weakness.

4hr chart


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## peter2

@sasch   If this is a pin bar setup then I'd agree it's worth a shot. The trigger price you selected looks OK. Would you prefer to see price trigger a pin bar immediately? If the pin bar indicates a reversal I'd like to see price reversing quickly. This one hasn't triggered so far. If it's going to trigger it'll be in the UK session. 

IMO the 4h trend is unclear, it's sideways and has been for the last few days. There's been attempts to go higher that failed, an attempt to go down that failed. Price is hovering near the 1.1700 level. There's no setup now for me and there's still 90min until this bar ends.

I'd need to see a successful break out or break-down and then trade the first pull-back. I've already started two EURUSD long trades this week for a quick win and a quicker break even. 

USD is slightly weak atm but so is EUR and that's why this pair is going sideways. 

NZD reported their GDP this morning and that's where the action was. The EURNZD chart shows a great 4H trend that could have been traded.


----------



## peter2

Let's track @sasch 's  EURUSD pin bar setup that's just triggered. 

B 1.1694, SL 1.1674, risk 20p, T1 1.1714, T2 1.1734  
T1 looks the more promising target as there's been supply every time price gets there. However if price gets above all this, the reward is bigger. 


I won't comment further as I don't want to influence sasch's trade management.


----------



## sasch

peter2 said:


> @sasch   If this is a pin bar setup then I'd agree it's worth a shot. The trigger price you selected looks OK. Would you prefer to see price trigger a pin bar immediately? If the pin bar indicates a reversal I'd like to see price reversing quickly. This one hasn't triggered so far. If it's going to trigger it'll be in the UK session.
> 
> IMO the 4h trend is unclear, it's sideways and has been for the last few days. There's been attempts to go higher that failed, an attempt to go down that failed. Price is hovering near the 1.1700 level. There's no setup now for me and there's still 90min until this bar ends.
> 
> I'd need to see a successful break out or break-down and then trade the first pull-back. I've already started two EURUSD long trades this week for a quick win and a quicker break even.
> 
> USD is slightly weak atm but so is EUR and that's why this pair is going sideways.
> 
> NZD reported their GDP this morning and that's where the action was. The EURNZD chart shows a great 4H trend that could have been traded.




Thanks for your thoughts on this one. 

I liked how the pin bar bounced off 4 hr trend line that has been in place from around the 10th of September. But I did notice the selling at the $1.17 mark which you commented on.

It sounds like your approach is to cycle through the current open market sessions looking
for a catalyst to generate short term momentum, such as a news announcement, politician comment ?


----------



## sasch

peter2 said:


> Let's track @sasch 's  EURUSD pin bar setup that's just triggered.
> 
> B 1.1694, SL 1.1674, risk 20p, T1 1.1714, T2 1.1734
> T1 looks the more promising target as there's been supply every time price gets there. However if price gets above all this, the reward is bigger.
> View attachment 89405
> 
> I won't comment further as I don't want to influence sasch's trade management.




Stopped out at 1.1688 on this trade, which equals -0.3 R, I think. Looks like I may have been too
aggressive with my trailing stop, as the price seems to pushing up again, right after it hit my stop. 

I did take another trade based on the same pin bar, instead buying on a ~50 retracement  on the same pin bar, but decided to exit on 1R. Testing each of these strategies side by side at the moment.


----------



## CanOz

With trailing stops, my experience is that I've been poor at managing them in a discretionary fashion, so I adopted a mechanical stop. I also don't mind taking profit at a structural target.


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## sasch

CanOz said:


> With trailing stops, my experience is that I've been poor at managing them in a discretionary fashion, so I adopted a mechanical stop. I also don't mind taking profit at a structural target.




CanOz, by mechanical stop, do you mean you use a bot or automated stop strategy, or do you
just leave the stop loss alone once placed? 

Which is what I should have done with this one, as it just hit 2R. I hope someone on here was more successful with this trade.


----------



## sasch

peter2 said:


> Let's track @sasch 's  EURUSD pin bar setup that's just triggered.
> 
> T1 looks the more promising target as there's been supply every time price gets there. However if price gets above all this, the reward is bigger.




Good call there Peter


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## peter2

Just back from tennis, open the MT4 (MT$) and "ka-ching" +2R in the bag for the sasch setup. I was just about celebrate with sasch but I see he's stopped out(?), but got back in (?).

This setup went to +4R. way to go, @sasch .

_Trailing stops:_ I agree with Canoz, they're tough to apply consistently well and it's much better to have a set procedure. For sasch and others following along we're trading 4hr bars, so we can only trail below 4hr bars. We never use 1min, 5min, 15min, 30min, 1hr bars to trail our exits when we're trading 4hr bars.

Looking at the 1hr chart, price never traded below the low of the prior bar until it reached +4R. Getting stopped out of this trade before 2R is poor management.



Let's leave this trade feeling good with sasch's contribution in the results speadsheet.


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## peter2

I'm willing to assist anyone like sasch is getting organised to trade in a more professional manner. I hope sasch learned heaps from this one trade he/she spotted. 

I want to thank sasch for starting a dialogue. We discussed pin bars, then sasch was enthusiastic enough about trading to post a setup and asked for my thoughts on it. The setup complied with my System 4B outline and I thought it worth a shot. 

I have to be careful in that I'm not allowed to tell or convince anyone to trade. If I think someone may take a trade mentioned here I can't tell them how to manage it. However once a trade is complete we can discuss everything as it becomes an educational topic. 

_I hope sasch_;  decides to become a pin-bar master,
 researches how other traders trade pin-bars,
 realises that he/she doesn't have a trade plan and that one is necessary,
 has started keeping detailed records and perhaps a journal
 continues to ask questions
 continues to post interesting setups

ps: I got my 2R because sasch posted his setup. Thank you.


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## CanOz

sasch said:


> CanOz, by mechanical stop, do you mean you use a bot or automated stop strategy, or do you
> just leave the stop loss alone once placed?
> 
> Which is what I should have done with this one, as it just hit 2R. I hope someone on here was more successful with this trade.




Regarding a “mechanical” stop, this can be a rules based stop (example: higher lows for a long on your chosen time frame, value area lows and highs) or an indicator (SAR, ATR Stop, SMA). The point is that you do it consistently and journal or log what you do so that a review process can allow you to see how this method is performing and what other methods could be used to improve performance.

Great thread Pete!


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## sasch

peter2 said:


> Just back from tennis, open the MT4 (MT$) and "ka-ching" +2R in the bag for the sasch setup. I was just about celebrate with sasch but I see he's stopped out(?), but got back in (?).




Lets say I learnt the hard way on this one, but the lesson is going to stick.



peter2 said:


> I'm willing to assist anyone like sasch is getting organised to trade in a more professional manner. I hope sasch learned heaps from this one trade he/she spotted.
> ...ps: I got my 2R because sasch posted his setup. Thank you.




Thank you, Peter for taking the time out of your day to teach, and post examples.
This thread is becoming a great resource!

p.s. I am a he.


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## sasch

CanOz said:


> Regarding a “mechanical” stop, this can be a rules based stop (example: higher lows for a long on your chosen time frame, value area lows and highs) or an indicator (SAR, ATR Stop, SMA). The point is that you do it consistently and journal or log what you do so that a review process can allow you to see how this method is performing and what other methods could be used to improve performance.
> 
> Great thread Pete!




Thanks, CanOz.

This has given me some ideas regarding testing stop strategies. I think I will keep it simple
at the moment and focus on setups, and let the price hit my target or stop without interference.


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## aus_trader

sasch said:


> Lets say I learnt the hard way on this one, but the lesson is going to stick.
> 
> 
> 
> Thank you, Peter for taking the time out of your day to teach, and post examples.
> This thread is becoming a great resource!
> 
> p.s. I am a he.



Market broke out hard in your direction, good predicting !
I was staying out of the Euro in this choppy section of bars (red box) since direction was not clear.


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## peter2

My latest review of 4hr charts shows me that there are plenty of strong trends at the moment. The AUD and NZD are booming along with the USD and JPY weakness pushing EUR and GBP higher. Trends in EURJPY, GBPJPY and NZDJPY are going to the moon. 

If you're not in already, well you've missed out. Our role now is to be patient and wait for our setups to form. As it's late in the week it's unlikely we'll have another trade setup. Remember I don't like holding over the weekend.

Knowing this, it's best to take some time off. Forget about trading and enjoy life. I'll take a few hours off, watch some footy and be ready for the US open later on this evening. 

If you're really keen on becoming a profitable trader there's always work to do. For example, if you're creating a trade plan based on the systems I've outlined in this thread then it would be worth reviewing the charts and noting the setups that you could have used to get into the current trends. In some charts a pull-back setup formed in others you needed a break-out setup as the pull-backs were too shallow. Make notes on these setups and add them to your list of setups in your trading plan. You can make them new "plays" in your trading "playbook". 

You'll need to define them clearly so that you'll recognise them when they form next week and in the future. Don't think you'll remember them so there's no need for a written outline. You need a written TP. 

Get prepared for next week. When a trend changes, are you going to get into it? How? If a pull-back doesn't setup will you be prepared for the break-out? 

I've only mentioned setups so far, but if you've followed the trading in this thread you should know how important trade management is. Are you going to use targets? How will you trail your exit stop? This must be written so you'll know when you've made a mistake. 

 The weekly update: only two trades, but a good week.


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## Habakkuk

peter2 said:


> IMy stats in this thread will be approx W% 60%, AW 1.3, AL -0.65, Exp 0.52. Those textbooks you mention have stats like this, W% 50%, AW 2.0, AL -1, Exp 0.50. There's no significant difference in the expectancy (or edge).





Something puzzling. In your P2 Momentum thread your average edge/expectancy was around 0.5 in a fairly inefficient market, trading mostly small-cap stocks. That's an excellent result.
Now in FX, the most liquid and efficient market of all, you're looking at a similar number.
How is this possible? I'm not doubting it as such, just asking the question. I would expect any edge to be very small.
By the way, I think the calculation in this example was incorrect. You need to normalise the risk to 1. That means AW = 2 and AL = 1 which gives an expectancy of 0.8 !?


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## peter2

Thanks for your interest. Lets look at the stats, then we can tackle the puzzle.

P2: ASX equity momentum trades:  260T, W% 45%, AW 1.47, AL -0.57, Edge 0.353/1R risked
P2: A batch of FX trades:  (hopefully) W% 60%, AW 1.3, AL -0.65, Edge 0.52/1R risked

The "hoped for" edge in this thread is anticipated to be larger than the earned edge trading ASX equities. I don't know if this is surprising or not. It's what I get. The difference may be due to having a lower number of correlated trades in these markets compared to the higher number when trading ASX equities. I don't know. Is this the puzzle? 

Or is the puzzle the different calculations for expectancy? 
I don't "normalise" the AL to -1, because I don't lose an average -1R on every losing trade. 

100 trades using my hoped for stats will result in 52R gained not the 80R if I "normalise". 

I've noticed this different calculation of expectancy when comparing my stats to others. I personally refer to your normalised version of expectancy as a theoretical expectancy. My calculation is actual or realised expectancy. I also refer to my calculated result as an edge rather than an expectancy.


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## Habakkuk

The puzzle is that you have such a large edge in the most efficient market. That is not just surprising but astonishing.
Even considering the much lower trading costs compared to ASX stock trading, I can't understand how there can be such a large exploitable edge but I want to know if I can find one too.

The other surprising thing is that you seem to have started only recently. I've never heard you mention that you ran any back tests - everything you do is discretionary. You just looked at the fx charts and started trading. Why can't I do that?

The expectancy calculation is a non-issue. Van Tharp only ever uses hypothetical examples with either bags of marbles or made-up trades. There are no fractional marbles and no trades with fractional risk. Risk is always 1.


> 100 trades using my hoped for stats will result in 52R gained not the 80R if I "normalise".



You're right. Now if you let your losses run to 1 and your wins to 2, you would make 80R …


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## andymac

Sunday update. following up last weeks AUD 4hr chart. a low was found at the .62 retracement and a new leg to higher highs followed. The form of the new leg up is a bit messy from an elliot wave point of view, and was a bit messy to trade this week. i.e. not a profitable week, at least losses were minimal  The new wave up can be counted as an unfinished 5 waves up and looks unfinished to me even though it has already surpassed the 100% extension of the first leg up. If it was going to be an A=C leg up it probably would have stopped right at the 100% ext. Looking at the waning MACD i am thinking 1 or 2 more small legs up to 1.23 or 1.38 ext before a larger pullback. The blue lines on the chart are a fib retracement of the whole move down in the AUD for this year. The blue line very close to 1.38 ext is a .238 retracement of the whole move down.
Lets have a look at the bigger picture. Second chart is the US dollar index daily which has been trending up for 6 months into august and correcting down for the last 5 weeks. It too shows a nice 5 wave move up into august and now what could be an A-B-C correction down. Again as per last week the 5 wave move up cannot stand alone from an elliot wave point of view, it can only be the first wave of a larger move up. So, i am expecting more upside. However, a 5 week correction down that has only retraced .38 of the move up is not usually enough of a retracement for a 6 month move up.
In fact it is a shallow enough retracement that another minor new high is possible, and that i have put my wave 5 label on the chart too early.
Assuming this is not going to happen, then i still expect a lot more downside in the US dollar before it starts a new larger leg up.
So, taking this analysis back to the AUD chart i am going to be looking up for at least another few weeks on this one and also the euro and gold which are all following similar paths in relation to the US dollar.
As an aside there is also a very nice inverse head and shoulder pattern pointing up on the daily Euro chart targeting hi 1.21's-1.22.


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## peter2

I post some of the trades I do but I don't show all the orders that I place trying to get into the 4hr trends. Many pending orders don't get triggered. A few orders need to be modified after price action and some orders need to be cancelled as the trend changes. 

Here's an example of two pending orders to get into the existing trends in EURUSD and USDJPY. They haven't triggered yet because JPY is in demand at the moment. They'll trigger if JPY weakens once again.


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## peter2

Both trades have triggered as the JPY resumes it's trend. What's pleasing to see is that the entry bar on both charts has formed a bullish outside reversal bar. 

*T11*: EURJPY: long System 4T pull-back setup 
Buy 132.32, SL 132.00, risk 32p, T1 132.64, T2 132.96, logical target recent high 132.86.
As this trade has started well I've raised the exit stop to reduce open risk. 
As the 4H bar formed a bullish ORB I've raised the target to T2. Price has just reached T1 as I type.

*T12*: USDJPY: Long System 4T pull-back setup.
Buy 112.65, SL 112.45, risk 20p, T1 112.85, T2 113.05.

_Note_: 11pm ECB Pres Draghi speaks, I might keep a tighter exit stop on the EJ trade or take +1.5R 
JPY monetary policy meeting tomorrow am. I'll exit both trades before then.


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## peter2

*T11*: EURJPY long, hit my target (132.86, +1.7R) once Mr Draghi started talking. 
Price was drifting lower (red bar) prior to his speech and I was ruing not taking the easy +1R earlier. 

The EURUSD has moved more than the EJ pair but I wasn't going to open another trade with the pending news. 



*T12*: Raised exit to 112.54 below the last 4h bar. This reduces the downside exposure to -0.5R.


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## peter2

Had a quick look and the only interesting charts were GBP pairs (long). 
It's best if I just get out of the office and play tennis as I'm frazzled by the ANZ->CMC debacle.
Don't trade when you're frazzled. Old rule.


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## aus_trader

peter2 said:


> Had a quick look and the only interesting charts were GBP pairs (long).
> It's best if I just get out of the office and play tennis as I'm frazzled by the ANZ->CMC debacle.
> Don't trade when you're frazzled. Old rule.



Hope they sort it out for you Peter, sounds like a poorly organised platform migration from ANZ to CMC markets. I've seen in the media that ANZ was outsourcing it's technology side of trading platform to CMC markets. I think ANZ should have put more effort into seamless migration so that customers will not be inconvenienced.


----------



## peter2

Looking around the fx markets and the currencies are drifting ahead of tomorrow's FOMC news. NZD spiked after their trade balance news earlier this morning. 

I've placed a few orders to catch any small moves to recent highs (EU, GJ). EU looks the most promising.

That puts the focus on the indices. The trend in the DOW is down, while it's up on NDQ and Russell. If the market falls in the US session I'll short the DOW (weakest) and if it rises I'll buy the Nasdaq. 

Oil is also looking bullish and I'm stalking a buy setup. Gold is drifting aimlessly even after a surprise spike up in silver.


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## peter2

*T13*: WTI(oil) long, System 4T, trend is up with a shallow pullback. 
Buy 72.30, SL 72.07, risk 0.23, T1 72.53, T2 72.76  Targeting T2 prior days high




Oil has a nasty habit of switching direction in the early UK session as the traders try to fake out each other. I use a tight stop and am prepared to have a second go because when oil moves it moves big.


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## peter2

*T14*: EURUSD, long System 4T:  has just triggered
Buy 1.1773, SL 1.1755, risk 18p, T1 1.1791, T2 1.1809  targeting T1 recent high

Currencies may just drift around tonight waiting for FOMC news tomorrow. Value of R halved.


----------



## andymac

quick update to weekends post. after starting a possible new leg up to new highs yesterday it appears to have stalled, see peter's comments above re FOMC, am no longer confident either way and standing aside for now.
actually short gold this arvo.


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## sasch

Nice pin bar on the 4 hour AUD/NZD chart. This appears to be a support level. The tail is quite long, so I am placing my stop loss at the 50% point and entry at 1.09047. It is grinding higher ever so slowly.


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## peter2

I mentioned my intention to trade the US indices, Dow short, NDQ long. There was always going to be one that would trigger although I preferred the long. 

*T15:* Nasdaq triggered after the opening 1hr bar of the US session. 
Buy 7592. SL 7562, risk 30pt, T1 7622, T2 7652. 

DOW setup didn't trigger as all market went up. 
The Nasdaq made new highs, but didn't go on with it, prob waiting for the FOMC news. 
btw: I didn't start any currency trades even though tempted. 

As it happens I'm awake for the FOMC and can monitor the trade closely. FOMC news sent the markets higher in a rush and prices are past T1 and I'm going to take +1.5R (at 7537). Done. 




Other trade results:  
*T12*: USDJPY long *-0.5R* 
*T13*: WTI-X8 long *-**1R*
*T14*: EURUSD long *-1R*

Happy taking the +1.5 to partially offset the other losers. Small loss on the day.


----------



## peter2

I cancelled my DOW short and went to bed. This morning I'm surprised to see that the US markets sold off immediately I shut down. 


There are a lot of ugly bars in the currency charts. I'm going to wait until the 4hr trends are clearer.


----------



## sasch

Stopped out on previous pin bar setup at -1R. As Peter noted earlier, there was an initial push upwards in the currency price after the FOMC announcement, and then it deflated. 

Pete, I don't know how you have the stamina for so many late nights!

I have tried to get in once more with a buy at 50% retracement level. Entry at 1.08805, SL 1.08605, T1 1.0905, and T2 at 1.0925.


----------



## sasch

I ended up with +1R (exit at 1.09005) with the second trade (pin bar retracement entry).

Was not happy with my trade management again.
I ended up being a d--k for a tick, as the trade ended up not reaching the +2R target by about a 1 point.
This was stubbornness on my part as logically it was a good spot to exit, due to the resistance at this level. There was also a second opportunity to exit at +1.5R.


----------



## andymac

equipment query?
i am using mt4 on a mac for last 4 months or so. every 6 weeks or so it crashes, completely. have to re-download, contact broker, reset password, and then redo all my settings and charts in the new one. such an enjoyable afternoon!!!!!
anyone else have this problem?


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## peter2

@andymac  If you didn't get shaken out yesterday in your gold trade then I can tell you you're looking good now. You should be able downgrade to a PC with the profits.


----------



## andymac

ha!!! not that brave to let it sit through the fomc rubbish last night, but got a little piece yesterday and another little piece half an hour ago and now i am being a piggy and going for three in a row,,, but i think its nearly done T=1181.5, we see


----------



## peter2

I'm old enough to remember the Sesame St song; 
"One of these charts is not like the others"


Very easy to trade the system (4T) and go long Nasdaq (+2R). 
I was also short gold following the 4hr trend. Took out my price target just before I got home. 
These won't be included in results as I didn't have time to post before tennis. 

I only mention them to demonstrate (near) real time application of a TP. 
I'm never going to get them all or every move. I only need to get a few. 
I didn't get any of the FOMC moves as I was asleep. It doesn't matter. Get ready for the next move.


----------



## sasch

andymac said:


> equipment query?
> i am using mt4 on a mac for last 4 months or so. every 6 weeks or so it crashes, completely. have to re-download, contact broker, reset password, and then redo all my settings and charts in the new one. such an enjoyable afternoon!!!!!
> anyone else have this problem?




I have not had any issue on PC with MT4. 

It appears Mac does not have a native version, as it seems to work in conjunction
with Wine. But, then I notice, some brokers offer a native version? Not sure if they are
just including a Wine wrapper in the executable here.

Wine is not a very stable platform, so this could be why you are having problems. If you
don't already, you could try running Windows in an emulator on your Mac and then run Mt4 on it. Or run Mt4 natively on a PC and then use remote desktop to connect via your computer.

Not sure if you use trading bots. I find it handy having a separate PC to run trading bots, as I don't have to worry about my main computer being on all the time. 

You don't mention any other problems with other software, otherwise I would guess you 
have a flaky hard drive.


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## sasch

peter2 said:


> I'm old enough to remember the Sesame St song;
> "One of these charts is not like the others"
> View attachment 89495




USTEC entry aligns with 4hr upward trend, the others in downward trends?

Peter, Do you wait for these trades to be in break even positions, before leaving them unattended, or are you happy to leave SL at initial level? 

Have you ever done a comparison between your automated trades (set and forget, and play tennis) and your actively managed ones in terms of Risk/Reward and win %?


----------



## peter2

@sasch  They're two very good questions. 

If price moves slowly, I'm happy to leave the initial SL as it was. The market is telling me that I have to be patient. If price moves quickly then I tend to micro-manage depending on where my initial target is. 

Should I micro manage? That is the question. I haven't done the comparison you suggested, but I may not like the results if I did. I do have a tendency to take profits too quickly. I excuse this behaviour because there are plenty more opportunities. This doesn't make it right.

I'm skewing the results in my favour but I'm unaware if I'm also reducing my profits. 

My advice to a new trader would be don't micro-manage. 
Let the trade go and trail the stop using an objective rule and plan to add to the trade at set intervals. 
I've noticed than when I'm prepared to add to a trade I'm less likely to take profits quickly because I'm preparing for a larger move. Some of these 4hr swings go for quite some distance.


----------



## aus_trader

It is coming to the end of the week and only now some of the charts are starting to show some clear direction such as Euro-Dollar and Aussie-Dollar. But some of the other cross pairs are still ugly !


----------



## peter2

I've mentioned several times now that I haven't tracked the performance of different exit strategies. Could my edge be improved if I applied a different exit strategy? 

It's time I addressed this opportunity. Whether I like what the results may suggest or not. 

I've started modifying my spreadsheet to track the performance of a number of exit strategies. There are two main exit types with unlimited possibilities. I'm going to track a few that I would consider using if they produce significantly more than what I'm actually earning.

Profit targets: 1R, 1.5R, 2R, 3R   (This will provide data about my edge on entry.)
Trailing strategies: 
(i) Trail by 1R
(ii) Exit when the 4hr bar closes across the 8EMA(O)
(iii) Exit below the low/above the high of 2 bars back
(iv) Exit below the low/above the high of 1 bar back (ignoring inside bars)

If you have other suggestions then please post them.


----------



## andymac

hi Sasch and thank yu for the reply and info, yes although the broker offers a mac version i do believe it is just a bit of an aussie style bodged up version but that is also where my tech knowledge ends. i think i may take peter's advice and go get a PC just for trading which would not be a bad thing anyway.


----------



## andymac

sitting down for the arvo and first thing i notice is that aud has retraced almost 50% of last few weeks move up in a nice A-B-C, and now down move is looking tired. Gold same only nearly .62 retrace. Eur same only initial move up was stronger and looks more like 1-2,1-2 and has now retraced .62 of second leg up. USD index same as euro but in reverse of course.
 Anything could happen next, and often i find friday a bit quiet as well, but i might just be sitting watching for evidence of a reversal tonight.


----------



## andymac

Sasch - in relation to your 2 questions for Peter above, very interesting topics, especially the second one which i always battle with. 
i believe anyone can enter a trade on just about any pretence and be right about half the time, which if you think about it is as often as most really good experienced traders are right. It is all about making a better profit on your good ones than you lose on the other half. everybody i have ever read or talked to can tell you about how much they have left on the table. so i have to accept that WILL happen. 
the problem i have is when one really goes my way i keep finding supposed "good" technical reasons why it will go further and then all of a sudden you have bugger all.  
So i will be looking forward to the results of Peters latest mission.  
Interestingly i have learnt from him last few months and have been just taking a set profit target, maybe 2r but lately just a set dollar amount in relation to my acct size. when a trade hits my pre-determined profit target i just take it and be happy with that. and that seems to be working better for me.
So back to your first question - and remember i trade shorter time frames for a shorter period of the day than Peter, probably watching my trades more closely - so my initial stop doesn't really matter to me, it is wide, previous swing hi or lo, just so i don't get tipped out quickly.  I do my work at the start of my trading period and leave orders in the market, until they are triggered. THEN i almost always start aggressively chasing stops up to break even or better. i have a lot of small losses and small profits and the occasional good profit, i think it is the big losses that can kill me.


----------



## peter2

I can't wait until the end of batch to show you the results after 16 trades. 

The first four exit strategies use profit targets. They either hit the target or get stopped out for -1R. 
The second four trail the exit stop using an objective strategy. 


I'm loath to draw any conclusions yet as there's too few results. 
(I'm quietly pleased) 

There's got to be a better trail strategy than what I've started with.


----------



## andymac

Peter i don't think there is- a better trail strategy - i don't have empirical evidence, but i have been on that track for a number of years. i have discussed and read widely and tried many methods, indicators, MA's, etc, etc, they all have pluses and minuses and none can be said to outperform another. 
Having said that i do trade 2 longer term systems that both use MA crossovers for exits and i happily use them as they are part of a back tested system and by sticking to the system i know what results i can expect.
i am very interested in your project and would love to be proved wrong,(as it would make trading easier) but for a discretionary trading regime i think there is far more to be gained from trying to find better methods of setting profit targets rather than trailing stops. and i think your preliminary results(if i read them correctly)are showing that and that what you were already doing was best.


----------



## aus_trader

I also have had similar experience in the past, so these results are a good way of adding further evidence to it. In other words I've found whatever method I use, if I don't set a profit target, then other than a once in a blue moon huge winner there is too many losses if purely trailed on each trade. So I am convinced from my experience that setting a profit target is the best way to maximise gain.

Interested in Peter's forward testing experiment to see the optimal target that will result over a larger batch of trades.

Also surprised know that pure trailing strategy actually works! for a longer term strategy. But if it works that's fantastic.


----------



## andymac

apologies for jumping in and out a couple of trades triggered, 1 dead, one barely alive , so the best results i have had so far revolve around using pattern recognition to set targets rather than trailing stops. in simple terms the old double bottom/top, triangles, head and shoulders etc etc. the thing i like about patterns is that they come with defined targets. there has been quite a lot of research - mostly bulkowski- whom i am sure you have run across, around success rates using patterns and under what conditions they work better than others. again none of them are perfect, far from it, but i think results are better due to a defined target and by its nature a defined pattern that , when it fails, you know it has failed and time to leave.
The difference is you are setting a target rather than trailing a stop. and you are already proving that a set target works.
So my mission has been to find a better way to set targets. hence Elliot and Fibonacci, -modern elliot not the dribble espoused by prechter jnr -which are really just more involved market patterns and measurements. and i won't rabbit on,,,

https://www.elliottwavetrader.net/e...-Basics-of-Fibonacci-Pinball-20130129224.html
sorry don't know how to post a link
edit- it seems to have worked


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## aus_trader

andymac said:


> apologies for jumping in and out a couple of trades triggered, 1 dead, one barely alive , so the best results i have had so far revolve around using pattern recognition to set targets rather than trailing stops. in simple terms the old double bottom/top, triangles, head and shoulders etc etc. the thing i like about patterns is that they come with defined targets. there has been quite a lot of research - mostly bulkowski- whom i am sure you have run across, around success rates using patterns and under what conditions they work better than others. again none of them are perfect, far from it, but i think results are better due to a defined target and by its nature a defined pattern that , when it fails, you know it has failed and time to leave.
> The difference is you are setting a target rather than trailing a stop. and you are already proving that a set target works.
> So my mission has been to find a better way to set targets. hence Elliot and Fibonacci, -modern elliot not the dribble espoused by prechter jnr -which are really just more involved market patterns and measurements. and i won't rabbit on,,,
> 
> https://www.elliottwavetrader.net/e...-Basics-of-Fibonacci-Pinball-20130129224.html
> sorry don't know how to post a link
> edit- it seems to have worked



Yes all good, the link takes you to the Elliot Wave page.


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## andymac

hi austrader, now i know that posting a link works have a read of this if you feel like it---

http://www.easysharetradingsystems.com.au/how-to-trade/52-week-highs

this is so simple i think most people refuse to believe it can work. i have been following and doing since 2014, i do spend a little more time than him on my buying parameters, but not much, my results match his published. the E book on his site is the best $30 i have spent since i started trading.


----------



## aus_trader

andymac said:


> hi austrader, now i know that posting a link works have a read of this if you feel like it---
> 
> http://www.easysharetradingsystems.com.au/how-to-trade/52-week-highs
> 
> this is so simple i think most people refuse to believe it can work. i have been following and doing since 2014, i do spend a little more time than him on my buying parameters, but not much, my results match his published. the E book on his site is the best $30 i have spent since i started trading.



Thanks for the info, I'll have a look...


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## aus_trader

Well I had a look at both sources of information posted via links by andymac and all I can say is really good resources.

I've come across Elliot waves before but not been shown a simplistic way to apply it to trading such as in the article and also Peter Castle's 52 week highs system has really surprised me. I've seen these type of systems before with names along the lines of All-Time-High / Blue-Sky breakout trading systems but I thought like most people as mentioned:


andymac said:


> this is so simple i think most people refuse to believe it can work.



I will put some effort into testing it out going forward because there seems to be a positive outcome.


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## andymac

SUNDAY.......?????? is the way to describe my view for this sunday. so caution will be the way forward this week. 2 charts.
Firstly usd index daily showing the 5 wave move up of several months and what is now a reasonable A-B-C correction down to .38r of the move up. Just looking at the chart it looks like a topping pattern from june until now, there is a head and shoulder top but not really a very symmetrical one. Overall i am still looking for a larger pullback towards 50-62%, however a new high from this position would not be unusual , so, sit and watch until it becomes clearer.
AUD - last week i was looking for 1 more wave up to 1.23ext. i nearly got it, but not really. it was made on FOMC news and was a very quick spike but more importantly in Elliot terms it does not count as 5 waves up if you look at the internal wave on smaller timeframe charts. Although a new hi was made it is actually an "expanded flat" abc.  These  occur quite often especially on individual stocks. So we have a large ABC up and then what i have now marked as another small abc correction down to 50%. From here it could go anywhere. the first ABC up can be followed by another leg up or it can be the complete correction and the smaller abc down can morph into the start of the next big leg down, so again sit and watch. no help to anyone
As an aside i watch the USD index as the other currencies and commodities pairs are all measured against the US dollar but that does not mean they always move in opposite directions all the time. On friday evening the US dollar was up as was AUD and GOLD while Euro was mostly down. I always take note when AUD or Gold want to go up, when theoretically they might be going down.


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## sasch

peter2 said:


> My advice to a new trader would be don't micro-manage.
> Let the trade go and trail the stop using an objective rule and plan to add to the trade at set intervals.
> I've noticed than when I'm prepared to add to a trade I'm less likely to take profits quickly because I'm preparing for a larger move. Some of these 4hr swings go for quite some distance.





Thanks for providing some more information on your trade management.

I would be interested in your results, if you extended the hold time using your system. Not sure if you have a rule about holding overnight with 4T/4B? As you have noted, the 4hr swings do carry on for a long time, especially if they also coincide with the longer term trend. 

For example: Instead of trailing a stop actively, move it to break even when the trade moves to +2R, then leave it for the day, and overnight at this level. I imagine it would be too expensive to let the trade run to -1 R, as there would be many stop outs. So, ideally we would want to move to break even, and look at a minimum of 5R, even looking at 10R+ over a couple of days if there was a strong trend (Trump jumping on Twitter again).

Only moving the stop the next day to logical level based on resistance/support. 

Downsides - Use of guaranteed stops overnight to avoid nasty surprises - slightly more expensive.
- Overnight holding costs/interest charges. 
- Psychological - Forgoing short term profit.
- getting stopped out of more trades.

Positives, - catching daily trend and large return.
              - forcing us to stay in trade longer to capture bigger returns.


----------



## sasch

andymac said:


> Sasch - in relation to your 2 questions for Peter above, very interesting topics, especially the second one which i always battle with.
> i believe anyone can enter a trade on just about any pretence and be right about half the time, which if you think about it is as often as most really good experienced traders are right. It is all about making a better profit on your good ones than you lose on the other half. everybody i have ever read or talked to can tell you about how much they have left on the table. so i have to accept that WILL happen.
> the problem i have is when one really goes my way i keep finding supposed "good" technical reasons why it will go further and then all of a sudden you have bugger all.




I can identify with this, as I have tended to micro manage individual trades, rather than look at the bigger picture and considering the impact of a series of trades together. Rather than trying to make as much as possible from one trade, look at the overall portfolio return. I.e. - instead of trying to achieve +2 to 3R on one trade, be happy with a couple of +1R trades and a break even trade.  Peter is able to demonstrate this quite well in his trade samples, which really helps.



andymac said:


> So i will be looking forward to the results of Peters latest mission.
> Interestingly i have learnt from him last few months and have been just taking a set profit target, maybe 2r but lately just a set dollar amount in relation to my acct size. when a trade hits my pre-determined profit target i just take it and be happy with that. and that seems to be working better for me.
> 
> So back to your first question - and remember i trade shorter time frames for a shorter period of the day than Peter, probably watching my trades more closely - so my initial stop doesn't really matter to me, it is wide, previous swing hi or lo, just so i don't get tipped out quickly.  I do my work at the start of my trading period and leave orders in the market, until they are triggered. THEN i almost always start aggressively chasing stops up to break even or better. i have a lot of small losses and small profits and the occasional good profit, i think it is the big losses that can kill me.




Great to hear that you are making progress! Thanks for the insight here.


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## aus_trader

G'day all ASF members,

I don't have a forex thread and I know a lot of members watch Peter2's threads. So I thought to post a warning message about a Forex broker to stay well clear of. I don't normally like to make any noise if the company is reasonable in their conduct but this one is not and when I received the below email that just pushed me over the edge to warn people:




Also I was constantly called up to place trades even when I didn't want to so they could earn their commissions. So do your research and find a good broker and stay as far away as you can from ForexCT.


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## peter2

"Do you feel lucky, punk?"




A break-down from the Aussie session has produced three consecutive winners as the US markets dropped from their open.


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## peter2

Clint's setup worked out OK. This is a fav intra-day setup for me in a strong trend. 
Sold 2882, iSL 2888, risk 6pt, T1 2876, T2 2870

Bought 2873,  +9/6, Result +1.5R

Happy to get this while I was out. Hoping for an up day in the US session after three down days. 
I have to adjust my template for DST as I just realised the US open is an hour later. D'oh.


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## peter2

Similar setups and moves in DAX and FTSE. 



I'd not trade all three at the same time but two of them is OK.


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## peter2

Latest 4hr bar just closed. Let's see if there's anything interesting. 
Strong: JPY, GBP, USD
Weak: AUD, NZD
_News_: GBP GDP Wed (tomorrow) is important.

EU short setup/triggered last bar.
EG nice ORB short, tempting, but very volatile.
GBPCAD long is tempting.
USDCAD long missed it, setup/triggered last bar.
NZDUSD may be oversold after huge move down last week. 
Gold setup/triggered last bar.

Most of the action (movement) is in the indices as I've already posted. US open very soon. Bye.


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## peter2

Very choppy first hour in the US markets. No day trades for me. The market has now gone higher. I hope it doesn't reverse in their afternoon as I'd like to see some buying in the ASX.

Follow up on the four trades that setup /triggered while I was out and I'd mentioned in the prior post (in case there's someone looking at the charts).
*EU short:* trend is down, retracement has rallied ~50% of the move down (=setup)
The trigger to short is below the last bar up. Price did get to +1.5R but if you're not happy with that as a target, then you're probably stopped out at BE as price did reverse quickly.
*USDCAD long*: trend is up, pull-back is shallow, the trigger is the up bar that turns the trend back to up. Buy the open of the next 4hr bar. This trade started well but price did reverse quickly. This should have been BE result since the trade started well.
*NZDUSD short:* retracement setup at the EMAs, trigger below the lows of the dojis. Another BE result as the USD weakened quickly. I didn't like this setup too much as price has moved so much last week.
*XAUUSD short:* bread and butter pull-back setup (doji at EMAs), trigger below doji. This trade did get to +1.5R and I'd be happy with that but if you're not another BE result if you'd moved the exit to BE after the trade started well.


Note: All four trades have the USD in them so they're highly correlated. My limit is two highly correlated trades at a time.

ps: All four trades may be still open if you'd not moved your iSL to BE. Prices have not traded back to the iSLs.


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## sasch

Wow, 87% long positions, they are optimistic!


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## peter2

When Alice followed the white rabbit into the hole, she fell a long, long way. 

I've just entered a similar rabbit hole and I hope I don't fall as far. I've made a 12 mth commitment to develop automated trading systems. 




There's going to be a lot to learn, a lot to define, a lot of development, a lot of testing and a lot of perseverance. 

I'm going to start by trying to automate the methodology outlined in this thread for the 4hr charts. System 4B looks for certain bar patterns and System 4T defines the trend and I look for low sized risk setups to get into the trend. Both systems won't be easily defined and collated into single automated systems (or EAs). It will require a number of systems (or a portfolio of systems) to replace my discretionary style. 

Converting my discretionary trading ideas into objective rules based systems is going to be my biggest challenge. 

I'll post aspects of this work as I go. I'll continue to post occasional setups and trades.


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## fiftyeight

peter2 said:


> I've just entered a similar rabbit hole and I hope I don't fall as far. I've made a 12 mth commitment to develop automated trading systems.




What has inspired this leap in this rabbit hole?

What program are you planning on using?


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## aus_trader

peter2 said:


> Converting my discretionary trading ideas into objective rules based systems is going to be my biggest challenge.




Yes Peter, this is the tough bit and it's tough to tell a program to look for the type of visual clues that we take for granted in manual trading. Things like increased volatility in the market that you can usually identify with one look that may prompt you to stay out, clear identification of trending market as oppose to sideways grind and lack of movement during anticipation of major news announcements etc need to be clearly defined i.e. quantified in order to put if/while conditions around them.

I can see you have thought this through though, hence the longer time frame you have in mind. Try to get the core system of just the trigger for breakout or pull back automated first, that way it's still useful and if the market conditions are not good then EA auto trading can be off until conditions are just right. So initially it can be semi automated i.e. a manual/auto hybrid system. Anyway, really looking forward to your progress...


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## peter2

I knew someone would ask.   Fair enough.

I've been considering this for a few years, but I've been very reluctant to start knowing how much work is required. I'll have to reduce my trading time in order to get this established. I'm not happy with this, but once it's established it will save me time. 

You would think that looking for trades on a 4hr chart 4 times/day across 20 markets would be easy to establish and maintain. I haven't done a good job with this and I'm thinking that some automation might help. An initial step might be getting the EAs to start the trades, place a SL, PT and alert me that a trade has started which I can then manage.

I'm going to use software commercially available from TradeView Investments. The software creates MT4 coded EAs that can be run on an MT4 chart.


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## peter2

A current example of a routine System 4T trend trade that I'd like to automate soon.

*T17: XAUUSD (Gold) long*: System 4T trend UP, 
B 1195.5, iSL 1191.5, risk 4.0, T1 1199.5, T2 1203.5  
Targets not used as the market sentiment is irrational and gold can spike $20 - $50. Or it used to. 
This trade was closed as price fell back to T2. Result +2R.




I need to define the initial BO of a range, the shallow pullback and then use the BO as the trigger. 
Easy to see on the chart but difficult to define for a computer to trade.


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## Triple B

How would the trend line be defined? I suspect this is why many would use MAs to define a trend line.
ould you draw a slanted trend line manually and then have the algo recognise it?
Next target may be the daily 200ma at about $1250??


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## captain black

peter2 said:


> I've been considering this for a few years, but I've been very reluctant to start knowing how much work is required. I'll have to reduce my trading time in order to get this established. I'm not happy with this, but once it's established it will save me time.




Good move Peter. I went down the same path a couple of years ago automating my short term futures trading. I was already familiar with Amibroker and Python with most of my setups already coded so half of the work was already done.

One of the benefits is that it takes an active time consuming occupation (discretionary trading) and turns it into a mostly passive income source that only requires occasional monitoring. I use python scripts to send alerts to my home server and android phones for various events (eg. system trading outside certain parameters, unusual price activity etc.)

Getting your setups converted to code can take some out of the box thinking but I've read enough of your threads to know that's something you specialise in.


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## peter2

@captain black Thanks for posting. The "out of the box" thinking is what I'm concerned about. My initial trading education was based on classic TA and their indicators. I'm using more price structure and price action in my trading now. The indicators have only minor confirmation roles. 

Coding impulsive and corrective swings in the market will be my biggest challenge along with trade management logic. I can skew the results in my favour in real time but can I code this?


----------



## peter2

_From the rabbit hole_:
There's a lot to learn about the functionality of the software and how to assemble the coded blocks.  I thought I'd start by coding the candle patterns from System 4B. I started with the pinbar and you can see (pic) that the EA finds them and starts a trade, places a SL at the low of the previous bar and targets 200p.



I've also spent some time researching the frequency of this pinbar (as I've defined it). Interestingly the frequency in the twelve markets that I scanned is similar. Daily ~1 pinbar every 2 months,  4Hr charts ~3/mth

Across 12 markets I can expect to see 6 PBs on the daily charts and 36 PBs on the 4Hr charts. In total this one pattern will provide ~40 trades / month.

_Note:_ The definition of the pinbars is very basic and doesn't use any filters like; volume, short term, longer term trend, location (S/R, other levels), break-out, trend change etc. More research is required to see if any of these filters would improve the probability of a winning trade.

As an initial step I could let the EA run on a few markets and then manually manage the trades that are started by the EA.

ps: @CanOz  I know you'll have a chuckle at this. I did so many MT4 scans across lots of markets that my CPU ran out of storage. I'd created 120GB of files in 1 hr!


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## CanOz

Yeah intraday data is very resource intensive!


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## CanOz

Check out this for data collection...


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## andymac

Hi P2, firstly all the best with your new project and and congrats for taking it on. as always i find your posts very helpful and appreciate the time you take to do so. 
it looks to me from the work with pinbars on 4B that you have already gained some value timewise here, as well as useful stats -( 40 trades/month) . 
do you envisage continuing to trade on a discretionary basis whilst building the EA  and having it slowly take on more of the work for you as it becomes viable, or, is it one or the other?, discretionary or full EA.


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## James Austin

4B?
.


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## peter2

@James Austin  Thank you for starting a conversation. Hope your trade reaches its target.

I assume the big marabozu was your bullish System 4B bar. That definitely changed the 4hr trend to up.
Good entry and placement of your iSL. You've decided to target for +1R which is conservative. Looking left there was some supply at your target. I'd be tempted to let price hit your upper band.

CHFJPY: This is a bizarre pair to trade. Looking at my currency strength indicator CHF is neutral, while JPY is weak. This pair will only go higher on the JPY weakness alone. I prefer to couple a strong currency with a weak one.

If you look at the indicator knowing that JPY is weak, which were the strongest currencies then?
NZD GBP right.  Have a look at the charts of NZDJPY, GBPJPY.


Was there a good setup for us in either of those two 4hr charts?  I like the NZDJPY one best.


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## James Austin

4T?
.


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## peter2

@James Austin  Was that your cash register that just dinged, ka-ching. 
Nicely done and the AUD has also started well.


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## James Austin

Thanks for starting the thread Peter. I'd like to be better at FX on H4.

The downtrend followed by the convincing MA crossover (3 green arrows) caught my attention on CHFJPY; which has just now reached TP.

Yes, I usually go 1:1, I haven’t found a way to go 1:2 just yet.

As for the strength meter, I have used Hanover's meter. I found it added no value. But I may change my mind on that.

NJ is certainly strong but at +100% ADR its not for me.

I will post more set-ups as I find them.


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## peter2

James Austin said:


> Yes, I usually go 1:1, I haven’t found a way to go 1:2 just yet.




So long as you realise that your W% has to be >60% before 1:1 RR makes reasonable money.


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## James Austin

peter2 said:


> So long as you realise that your W% has to be >60% before 1:1 RR makes reasonable money.




If I hang around this thread I am sure it will exceed 80%  (wink)

At present I exit at 75% of ADR, which I like to do. 
Tighter stops and entries at the ema and I may get to 1:2, 1:1.5, whilst maintaining the same exit 75% ADR. Something to work on.....

It's way past my bed time here in Bris. I'll post more setups in real time if I think I've found one.

Bye.


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## James Austin

4B?

nice bearish bars crossing over and bouncing off MA's (green highlight)

(didn't get a chance to post live)

.


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## James Austin

is this a 4B?.....nice bullish bars (green arrows)....price going back to channel top?

I need to refine my set-ups, entries, SL and TPs for the H4
at present I favour a bounce off the ema in a trend as the preferred set-up (enter first or second retrace/pullback)

in the meantime I'll put charts/trades up for some much needed humility  (wink)






.


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## peter2

System 4B is an entry based solely on the price action of one 4hr bar. The huge outside reversal bar in the AUDCAD chart is a good example. The 4B entry is the open of the next bar. This system doesn't consider the trend or waits for a pull-back. 

System 4T considers the trend established (by your own definition) and then needs a setup and trigger to enter the trend. 

@James Austin if you like to enter on a first/second pull-back in the trend then they're all System 4T (trend) trades. 

re: the EJ chart. When there's a channel (bands going sideways) I prefer to start longs near the bottom not in the middle. Although your entry was sound (using the pin bar(doji) with the trend) it was in the middle of this channel. EJ now has to work it's way through the supply indicated by the wick of the next bar and top of the channel.


----------



## James Austin

Thanks for clarification Peter. I will post only charts that match your definitions.

According to your own definition of a trend, what is the av. number of H4 fx opportunities each month?
Do you have any stats?


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## peter2

I'm pleased you didn't think I was nitpicking. It's important to be very clear in what we're trading. 
System 4B bars are generally big bars with larger stop sizes if we use them conservatively. Bigger initial stop sizes mean we need a much larger move to get to our desired profit requirements (>1.5R). 

When I start a 4B trade I'd prefer to be going with the daily trend and I'd expect to hold the trade over many days, even a week. 

Let's discuss trend definition. I've defined it using the two EMAs, however I also consider the price structure. A new trend starts with the EMAs but I define this new trend as established (and ready to trade) if the price action goes through a sloping resistance line (supply line), or through a horizontal R line, or makes a new 123Low pattern. 

This is to avoid being caught in a sideways trading range/channel. It doesn't always work and I get caught occasionally.


----------



## peter2

The average # setups / week is 10 - 15. More than enough for me. 
Also many of these setups are in highly correlated markets and I'll limit myself to starting only two. 
eg. When the USD weakens there'll be simultaneous long setups in the AU, EU, GU, NZDU, UJ pairs. I'll only start two and try to select the best.


----------



## James Austin

Thanks for your trend definition Peter.

Yes, 10-15 trend opportunities is more than enough, *all on H4 which is relaxing.*

As for strongly correlated pairs, I tend to only take one at a time.
*AU, BE SL


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## peter2

Well shut my mouth and climb out of the rabbit hole. Seems like someone else has beaten me to it.


	

		
			
		

		
	
 60% a month and everyone can get a free copy.


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## James Austin

peanuts Peter.
at forex factory there's 100's making 60% *a week*


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## James Austin

I will need to refine my setups.
EJ, mid channel, is not the best probability, as you mentioned.
As for ACa, whichever way it goes, I have no complaints.

UJ looks like a 4T to me.


----------



## James Austin




----------



## peter2

OK let's discuss UJ in respect of Sys 4B and Sys 4T. 

*Sys 4B*. The bullish bar arrowed (yellow) is the 4B setup as this bar completes a two bar bullish HCD and changes the trend to up. The 4B entry was the next open with an iSL below the entry bar or the prior bar. This 4B entry is an early start into a possible reversal as the daily trend remains down. Our goals for this trade is to grab a quick +1R (or 1.5R) or stay in longer in anticipation of a daily trend change. If this happens we'll add to the trade and ride it for as long as we can. Two completely different trade management strategies. 

*Sys 4T*: We note the 4hr trend change (yellow arrow) but the price action hasn't established a new trend based on the price structure. This could be just a deeper correction of the existing daily down trend. This is not enough for me to consider a 4T trade here. 
Price continued climbing slowly (producing a winning 4B result) and it's only now that we see a possible 1st pull-back to the EMAs. 

Looking to the left we notice prior wicks indicating supply (lower green line). I'll buy the BO of the high targeting the higher green line or I'll wait for this bar to close provided that this bar doesn't change the 4hr trend to down. A high quality 4T setup is not present for me in this chart. 

ps: For the intraday traders there may have been a reasonable Sys 4T setup in the 4hr pinbar to the left of the white arrow. I haven't looked.


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## James Austin

Very detailed Peter, thanks.

As for the 4B, I see a version of that play out reasonably regularly; although the entry comes after a confirmation bar. I have no stats, it's just a hunch that it could be a reasonably reliable pattern....and worth investigating. (1:1)

.


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## James Austin

EURUSD from last week, is a similar setup to USDJPY this week. 
It is a buy if price comes back. TP just below weekly range high.

As for AUDCAD I can see it was too early to be a 4T. At best it was a late entry 4B, which is low probability.

*I am seeing a pattern. *

.


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## James Austin

what's the likelihood of getting filled?
either way it's like "biting the bullet"

.


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## James Austin

bitten the bullet, on both USDJPY and EURUSD

maybe these are 4T's?
.


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## James Austin

CHFJPY +1
AUDUSD BE
AUDCAD -1 (not a 4T = no trade)
EURJPY -1 (not a 4T = no trade)
USDJPY -1 (I believe D1 should have been above MA's to buy this, if so, not a 4T = no trade)
EURUSD +1

Lots of work for no reward.

*Am I clogging your thread? Please let me know.*

.


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## James Austin

I believe this is a 4B; outside bar, engulfing, depending upon your definition.

H4 trend is down
Strong daily close below MA's
Supply zone (purple)

should I be concerned about pending CNY news at 1200....


.


----------



## peter2

If you're working on your entry refinement then you're not clogging this thread. I'm happy to help. Plus, every time you post, I learn a little more about your trading personality which will help me help you. 

Many of the suggestions I write for you will no doubt help others. Are you ready? 

(i) You've written "bite the bullet" twice. This indicates a lack of confidence. You should try to identify which aspect of your TP creates this lack of confidence. Is it the setups, your trade management, your trading history, recent results etc. 

If you're attempting to trade a new system then it's important to back test so that you're totally familiar with the setups, trade mgt and the distribution of the results (W%, AW, AL max DD). If you haven't done this yourself then how can you be confident? 

This is the most important requirement for a trader. 

(ii) Consistency.  I suggest you stick to one System either 4B or 4T. You've already stated that you like trading the 1st/2nd pullback of System 4T. Stick to it. Ignore the 4B possibilities. 

eg. Your EURAUD chart. The 1st pull-back setup/entry in this current 4hr trend was 4 bars back from the outside engulfing bar. Your entry is late if your TP trades the 1st PB. 

Trade Mgt: You initially stated that you prefer targeting +1R. Stick to this until you build confidence to start managing for more. 

_Recent trades you've posted_: 
CJ: target +1R done
AU: raised exit to BE, out before trade hit +1R
ACad: loss -1R
EJ: had the opportunity to raise exit to -0.5R after bearish doji formed. 
UJ: didn't take +1R, instead took full loss
EU: target +1R done. 

Six trades: 4 x +1R, 2 losses for -1.5R. Net positive
Trade mgt has been inconsistent resulting in -1R / 6T


----------



## peter2

There seems to be some confusion regarding Sys 4T trends. The trend is defined by the two EMAs on the 4Hr chart. The daily trend is not involved unless you'd like it to be part of your TP. 

I've mentioned that I prefer to look at recent price action as confirmation for my System 4T setups.


----------



## James Austin

Thanks for the feedback Peter, and the willingness to help.

This week was my first week looking at your approach to H4; plus my first week forward testing what I've understood so far. Hence, "biting the bullet", whilst mostly tongue in check, represents a lack of data. But as you say back testing will assist, as will forward testing.

And yes you are right. I need to get better at optimising entry price, managing stops and setting targets. Set and forget 1:1 RR is relaxing but not optimal. This will come as I home in on the preferred set-ups.

As for my preferred set-ups, I don’t have enough data to decide yet. Posting charts here as set-ups occur will help me to thrash that out,.....the errors will focus the attention.

I will post more H4 charts next week.


----------



## James Austin

last chart for this week

is it wise to take 2 trades at the same time in strongly correlated pairs....

.


----------



## James Austin

.


----------



## Triple B

heh he . cmon Jimmy . dont be embarrassed about your size
seriously it doesnt matter here. Even Demo is ok. better to lose a little money while learning ,than what many do and lose thousands. (Im assuming its not covered because its massive!).
I think Peter said 2 correlated pairs is max. if you see more perhaps take the 2 with the highest potential RR ratio.or halve the risk on each one.
look for nearest supports resistance . round nos . ma's etc


----------



## peter2

Latest entries as the UK session starts.


----------



## James Austin

Triple B said:


> heh he . cmon Jimmy . dont be embarrassed about your size




I cover up so that you don't feel self-conscious about your size.


----------



## peter2

@James Austin That was a bizarre entry into AUDNZD. Hope you got out at BE.

I'm not interested in the money, only that a process is consistently applied. I would rather fade these weekends gaps but that's another TP. 

_Trade mgt_:  A new week and my aim is to earn the weekly wages (+2R).  
Looks like momentum is greater in the EU than GBP. EU at +1R, EJ at +1R and GU BE. 
It's possible for me to close all trades now for +2R and that's my wages for the week. 
I'll lock in +1R and allow the three trades to get to +3R. We all like a bonus. 
Almost there...


----------



## peter2

All closed for+2.9R .



Of course I'm not going to stop trading for the week, but trading like this early in the week takes the pressure off.


----------



## aus_trader

peter2 said:


> Latest entries as the UK session starts.
> 
> View attachment 89928



Hi Peter, just a subjective question about the entry on the gbpusd. Was the uptrend confirmed ? Looks like the red/blue ema lines haven't quite crossed when the setup occurred.

Good result, nevertheless.


----------



## sasch

Peter, have you changed direction on the EUR/USD trade after the bearish pin bar? Going for 2R the other way?


----------



## peter2

Sorry, I wrote a post and it looks like I didn't post it as it's saved in the reply space. Whoops.

GBPUSD: trend had only just changed to up (one 4hr bar) so rather than buy on the next open I bought the BO of the prev bar's high for added confirmation.

There's been a massive change in USD sentiment. USD has strengthened significantly reversing the momentum on the EU and GU pairs.




Notice the pinbar on the EU for a possible 4B short setup.
Outside reversal bar on the GU (possible Sys 4B short setup) that also turned the trend back to down (Sys 4T) with plenty of follow through in the next bar.

I was away from the office for the 8pm end of bar, missed these opps. Quick swings in sentiment show why it's important to consider grabbing some profit when you get some.

edit: @sasch: No I was away at the time, but I did think of you when I saw the pinbar.


----------



## sasch

peter2 said:


> I was away from the office for the 8pm end of bar, missed these opps. Quick swings in sentiment show why it's important to consider grabbing some profit when you get some.
> 
> edit: @sasch: No I was away at the time, but I did think of you when I saw the pinbar.




I noted that you set up an EA for pin bar detection, I am not sure whether you have enabled email notification in it? I have been using a free indicator for MT4, which can send an email for pin bars on different time frames (yes I am obsessed), which is handy when you are out. It is called, PinbarDetector.


----------



## peter2

Thanks for that suggestion I'll have a look at it. . .  Done. I like the details involved with the definition of a pin-bar. Mine is very basic in comparison.

I've been spending a lot of time learning about the capabilities of the software. I've defined my pin bar which also identifies some doji's as well. I've also defined outside reversal bars and 2 bar outside reversal bars. I've looked at frequency, next I'll optimise for some profit targets and then I'll research some filters in order to improve the distribution of results.


----------



## Triple B

Im short the GBP!! everywhere on15min charts.good luck


----------



## James Austin

peter2 said:


> @James Austin That was a bizarre entry into AUDNZD. Hope you got out at BE.




It looked ok to me initially. 
But a few errors here and there whilst I am learning a different methodology I can live with.

Regardless of the way it turns, I am up this week.

.


----------



## aus_trader

sasch said:


> I noted that you set up an EA for pin bar detection, I am not sure whether you have enabled email notification in it? I have been using a free indicator for MT4, which can send an email for pin bars on different time frames (yes I am obsessed), which is handy when you are out. It is called, PinbarDetector.



Looks like a nice indicator have to check it out. I have been using a handy little indicator to alert me on the computer with a wave sound (doesn't alert via email) when a set support or resistance level is broken. Saves me a lot of time not having to watch charts and I can be doing other things till the sound alert. The support and resistance lines can be moved to desired level visually, no need to type values etc.

Since a lot of people use support/resistance in their trading I have attached the MT4 indicator below...


----------



## sasch

peter2 said:


> I've been spending a lot of time learning about the capabilities of the software. I've defined my pin bar which also identifies some doji's as well. I've also defined outside reversal bars and 2 bar outside reversal bars. I've looked at frequency, next I'll optimise for some profit targets and then I'll research some filters in order to improve the distribution of results.




Once you have finished programming your system, it will be interesting to see if it has comparable to results to your manual trading. You have some discretionary inputs relating to trailing your stop and taking 1 R profit versus 2 R, which will hard to translate.

Do you have a rule with your system, where you allow ~ two attempts to break past 1R before you exit, other than taking into account price bar signals, or support/resistance levels?


----------



## sasch

aus_trader said:


> Looks like a nice indicator have to check it out. I have been using a handy little indicator to alert me on the computer with a wave sound (doesn't alert via email) when a set support or resistance level is broken. Saves me a lot of time not having to watch charts and I can be doing other things till the sound alert. The support and resistance lines can be moved to desired level visually, no need to type values etc.
> 
> Since a lot of people use support/resistance in their trading I have attached the MT4 indicator below...




Thanks Aus Trader, I will have a look at it. 

I often find I miss many good entry opportunities, and these types of indicators/alerts help to some degree. I should also be doing more chart analysis at the beginning and end of day. I am kicking myself for missing the great buy opportunity on XAUUSD today!


----------



## Kryzz

Thread's looking great guys. I've been overseas the past couple months, looks like I've got some reading to catch up on here. Keep it up.


----------



## aus_trader

Not a trade but just a macro view of the Aussie-Dollar. As of today our currency is down to 70c, levels not seen in 3 years. Might make imported goods (pretty much everything we buy since Aussie manufacturing sadly passed away) expensive especially coming towards the festive buying season...


----------



## Kryzz

Entered a short here on the AUS200, awkward time of year for trading, but the setup looked appealing on the 1HR chart. Tight stop on a reversal bar/doji pulling back in to the downtrending MA's.


----------



## Kryzz

Kryzz said:


> Entered a short here on the AUS200, awkward time of year for trading, but the setup looked appealing on the 1HR chart. Tight stop on a reversal bar/doji pulling back in to the downtrending MA's.
> 
> View attachment 91088




Covered quite quick after the entry here for +44. May have been a little too early, market sunk another 30 odd points. Still also holding a long in gold since Friday - bought after a breakout at 1280 approx.


----------



## sasch

Kryzz said:


> Covered quite quick after the entry here for +44. May have been a little too early, market sunk another 30 odd points.
> 
> View attachment 91098




Nice call Kryzz.

Boom - It has dropped like a bomb. 

Check out the AUD/JPY.


----------



## sasch

I hope no one was on the wrong side of AUD/JPY this morning.


----------



## Kryzz

sasch said:


> I hope no one was on the wrong side of AUD/JPY this morning.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> View attachment 91113




I was on the right side of an AUDUSD short, couldn't see any news out, not surprising there was a big flush out at 0.70 but almost 300 pips in a few mins! Should have had my TP lower. Looks like more paind for the aussie dollar.


----------



## peter2

Thanks for your posts @Kryzz. Glad you went with the larger time frame trend. 
I've had to download two weeks of data and it'll take me a few days to review all the charts. This morning's flash crash hit many markets and I'm a little too late to trade the reversal.


----------



## sasch

Kryzz said:


> I was on the right side of an AUDUSD short, couldn't see any news out, not surprising there was a big flush out at 0.70 but almost 300 pips in a few mins! Should have had my TP lower. Looks like more paind for the aussie dollar.
> 
> View attachment 91114




A nice start for your new year trading.

It is hard to know when to leave a trailing stop and let it run or a take profit sometimes. 
Such negative sentiment in the market at the moment.

Do you have additional market filters that you use before you place a trade, or do you go purely on 
chart action?


----------



## sasch

peter2 said:


> Thanks for your posts @Kryzz. Glad you went with the larger time frame trend.
> I've had to download two weeks of data and it'll take me a few days to review all the charts. This morning's flash crash hit many markets and I'm a little too late to trade the reversal.




Maybe you can send a bill for missed income to Telstra .


----------



## Kryzz

sasch said:


> A nice start for your new year trading.
> 
> It is hard to know when to leave a trailing stop and let it run or a take profit sometimes.
> Such negative sentiment in the market at the moment.
> 
> Do you have additional market filters that you use before you place a trade, or do you go purely on
> chart action?



All chart action for me.


----------



## Triple B

sasch said:


> I hope no one was on the wrong side of AUD/JPY this morning.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> View attachment 91113




No I was on the right side !  Lots of New year movement in fx and commodities atm


----------



## Kryzz

Watching the EURUSD and XAGUSD (silver) currently - euro short triggered, entry based off the chart rolling over on the 1hr chart. Pending BO on silver. Manufacturing data out at 12:30 tonight.


----------



## peter2

That silver chart with the ascending triangle does look tempting. I'm in.


----------



## Triple B

Me too . Just entered the BO


----------



## peter2

Silver bounces around a lot more than gold so don't raise your exit stops too early. Raise them when you've got above average profits to protect. Price can spike up with gold so it's OK to use a target that would provide an above average result if it gets hit.


----------



## Triple B

Thanks for that Peter . First trade ever on silver . Have never watched it before so handy info. Was looking too good to pass up and took the trade as I had no Risk out and was looking strong .
Ive been trading the longer TFs (dailys using hourly entries) for the past couple weeks and am getting much less stop outs than I was with the 15min trading. More consistent results with much less screen time!


----------



## Kryzz

Kryzz said:


> Watching the EURUSD and XAGUSD (silver) currently - euro short triggered, entry based off the chart rolling over on the 1hr chart. Pending BO on silver. Manufacturing data out at 12:30 tonight.
> 
> View attachment 91130
> View attachment 91131




Stopped out of the euro trade pretty quick smart, still in an ugly choppy range on the daily. Out for -24pips. 



peter2 said:


> Silver bounces around a lot more than gold so don't raise your exit stops too early. Raise them when you've got above average profits to protect. Price can spike up with gold so it's OK to use a target that would provide an above average result if it gets hit.



 Silver long still going ok currently, sitting at +1.2r. 

Went short on the AUS200 from the open this morning:


----------



## aus_trader

Kryzz said:


> Stopped out of the euro trade pretty quick smart, still in an ugly choppy range on the daily. Out for -24pips.
> 
> Silver long still going ok currently, sitting at +1.2r.
> 
> Went short on the AUS200 from the open this morning:
> 
> View attachment 91139



Looking to go long on Gold & Silver charts. Couldn't get in on the break out so awaiting pull back...


----------



## peter2

Silver: I've grabbed the quick +2R profit. Thank you @Kryzz for posting your silver chart.


----------



## Kryzz

Fewer trades for me now that I'm back at work, a couple of my recent ones though. 

Short on USDCAD, wasn't a favoured setup after such an extensive run down (as Pete mentioned, the first couple are the best opportunities - I did manage do get one of them early on after the big push down). Stopped out for a small loss. 



Currently short on the EURJPY, looking for a continuation of the downtrend in play:


----------



## peter2

I've just breezed through this thread again looking for any record of my old currency strength indicator (as I lost it in the C: crash). Unfortunately I didn't record the indicator name. Looking through the MT4 indicator lists I notice that they've been reformatted to facilitate monetisation. I haven't found it yet.

The trading activity was pretty intense here for a short while. It's interesting how circumstances change. I'm unable to trade the UK sessions like I used to but the end of DST allows me to day-trade the US markets much easier. I've been focusing my attention/efforts on this activity. 

I still look at the 4H currency charts and lament that I'm not in all those great swings. Of course, we only see the untaken winning opportunities, never the losing ones. [_Nice little swing down on oil today._] 
I should restart it, as a little extra pocket money is always handy.


----------



## peter2

_Comment:_ For threads like this to continue there needs to be continuous contributions from several people. One person runs out of energy or motivation doing it alone, even if there's many people reading and enjoying it (lots of likes). 

This thread was my attempt to establish a small group of active FX, index, commodity traders. There was occasional interest, some discussion but only one trader. I realise that ASF is primarily a stock forum, but there's enough interest in these markets to establish a little support group. 

I'm also guilty of not contributing in various threads. I trade gold occasionally and I've rarely posted any of my gold/silver setups in the Gold Daytraders thread that @Joules MM1 enthusiastically continues. Joules' posts reminds me that there still is a silver market. I tend to not look at it. 

_Whoa. US GDP number just spooked the gold market. Hope Joules wasn't "washed and rinsed" (cleaned out). _

People think their contributions are of little value, when they're not. They keep the energy up. For example, I've looked at the 4H gold chart and I see that gold is turning up. It's coming off the bottom and I see there's a lot of room for it to move (possibly another $30/oz). If I post this in the gold thread then others will look at their charts and hopefully post their thoughts.  If Joules' _abcde_ pattern is complete then there might be $60/oz movement. 

If gold starts going up, then we should be looking for the gold stocks to turn around. One little post can get us going.


----------



## Joules MM1

peter2 said:


> _Comment:_ For threads like this to continue there needs to be continuous contributions from several people. One person runs out of energy or motivation doing it alone, even if there's many people reading and enjoying it (lots of likes).
> 
> This thread was my attempt to establish a small group of active FX, index, commodity traders. There was occasional interest, some discussion but only one trader. I realise that ASF is primarily a stock forum, but there's enough interest in these markets to establish a little support group.
> 
> I'm also guilty of not contributing in various threads. I trade gold occasionally and I've rarely posted any of my gold/silver setups in the Gold Daytraders thread that @Joules MM1 enthusiastically continues. Joules' posts reminds me that there still is a silver market. I tend to not look at it.
> 
> _Whoa. US GDP number just spooked the gold market. Hope Joules wasn't "washed and rinsed" (cleaned out). _
> 
> People think their contributions are of little value, when they're not. They keep the energy up. For example, I've looked at the 4H gold chart and I see that gold is turning up. It's coming off the bottom and I see there's a lot of room for it to move (possibly another $30/oz). If I post this in the gold thread then others will look at their charts and hopefully post their thoughts.  If Joules' _abcde_ pattern is complete then there might be $60/oz movement.
> 
> If gold starts going up, then we should be looking for the gold stocks to turn around. One little post can get us going.




ah, the title of the thread got me...not an  fx fiddler 

xauusd looking smooth trendy so far post gdp hit



and then.....so far...


----------



## Joules MM1

now looking for construction


----------



## Joules MM1

the inverted ratio is my 
"i got no better place to close out and bank some coin so why not use this random inverted ratio "

price has choked at the ratio but it's very constructive so far....more of the same is the hint


----------



## Joules MM1

looking bully.....applying technical ideas to the auction


----------



## Joules MM1

i closed those two higher BTO's at the 161.8 inverted ratio, price clearly stalled .....but not rotation....hint of more of the same

on a break i can take new BTO's ....waiting.......waiting.....waiting..the risk still the nearest ratio at 1:1 (yellow line) ...liquidity appears to have dried up...players are done, no aggressive sells/bids




mins later....the inv ratio holds, beings to rotate, yellow line needs to be respected to keep BTO's


----------



## Joules MM1

in the original set, the BTO's are based on an already esteblished series of ratio trades that suggested a swing low was established and a new upside target needed

a news spit allowed weak longs to be flushed and shorters invited into the excitement, the real gig is upside, so the pattern needs to signal intent to drive price out of congestion into trend construction that'll attract more bid side liquidity

game on

as price climbs there is only one clear level (to me) that says this is the failure of that idea and all the construction behind that idea

now we have a clear set of levels to go by

the art part is where i accept a widening risk with each BTO because now we have demarcation further away while the lowest level remains key to the larger swing picture......we're building construct on the run....

the inverted 161.8% is doing a good job of holding price
persistant eating of offers suggested price assistance......not a decent "open drive" trend ..but enough


----------



## Joules MM1

bumping this post 
https://www.aussiestockforums.com/threads/p2-a-batch-of-fx-market-trades.34221/page-12#post-1023999

thanks @peter2 

jeez, tellyawot, hard yakka banging this stuff out in the process of but when using uber small size it's ok as the real game movers cannot be commented on and require cokebottle eyes
-----------------------------------------------------------------------------------------

quick follow-up




have a great weekend


----------



## peter2

Thanks Joules, I sensed that you were looking for a reason to go long and the GDP blip gave you that chance. Should have known you were all over it (like a rash). I was trading the oil fall via a day trade short on MRO. 



We're off the FX topic, but it shows the variety of trading opportunities that are at our disposal when we're prepared.


----------



## Kryzz

peter2 said:


> _Comment:_ For threads like this to continue there needs to be continuous contributions from several people. One person runs out of energy or motivation doing it alone, even if there's many people reading and enjoying it (lots of likes).
> 
> This thread was my attempt to establish a small group of active FX, index, commodity traders. There was occasional interest, some discussion but only one trader. I realise that ASF is primarily a stock forum, but there's enough interest in these markets to establish a little support group..




I know I've definitely been lazy posting anything whatsoever! Will make more of an effort.

Methods from this thread have lead to some of my largest wins to date with some oil trades, entered into early March and stopped out last night...very ugly reversal bar on the weekly. I'll be looking to short any pullbacks if weakness continues. 

On the currency front, I'm watching the EURJPY for it to continue to rollover but weary it's extended currently.


----------



## peter2

Kryzz said:


> Methods from this thread have lead to some of my largest wins to date with some oil trades, entered into early March and stopped out last night...very ugly reversal bar on the weekly.




I like that. Kudos to you for staying in the trend and earning those large wins.


----------



## Kryzz

Short entered with oil recently, trading on the daily time frame. Let's see if this uptrend starts to rollover now.


----------



## cogs

Thought I might add a snippet to your post.
Thoughts on AUD/USD after rate announcement Tuesday. I don't think they will drop just yet, but may jawbone down a smidge. There has been some talking about AUD climbing again, but being an Australian observing what is actually going on I can't see much of a climb taking place.
So the following are my thoughts of only three options if I am to trade.
M30 (still honoring the 30 min channel)



H1



H4 (bouncing off 4hr oversold)


----------



## cogs

I realised a little too late, I should have added the above post in AUDUSD, I sorta bombed your thread


----------



## Kryzz

Kryzz said:


> Short entered with oil recently, trading on the daily time frame. Let's see if this uptrend starts to rollover now.
> View attachment 94270



Added further shorts recently, hoping I can catch a significant trend down as much as I did up.


----------



## Kryzz

Short trade initiated in silver a couple of days ago also. Last major low is $14


----------



## Kryzz

Kryzz said:


> Added further shorts recently, hoping I can catch a significant trend down as much as I did up.
> 
> View attachment 94503



Still holding the oil short with a wide stop, prone to spikes. A strong close around the $64.00 region is my line in the sand. Waiting to see if this little ledge/consolidation breaks down further.


----------



## Kryzz

Kryzz said:


> Short trade initiated in silver a couple of days ago also. Last major low is $14
> 
> View attachment 94590




Whilst the oil short is stalling the silver position has tanked nicely over night. Second short added a couple of days ago, taking partial profits tonight with the remainder targeting $14 still.


----------



## sasch

peter2 said:


> I've just breezed through this thread again looking for any record of my old currency strength indicator (as I lost it in the C: crash). Unfortunately I didn't record the indicator name. Looking through the MT4 indicator lists I notice that they've been reformatted to facilitate monetisation. I haven't found it yet.




Hi Peter,

I have just checked up on this thread after a while. Did you end up finding the currency strength indicator? 

This may be the one you are referring to. This is actually a binary file, so you need to change the extension to '.ex4'.

Plus, I have included an absolute strength indicator, (not currency related) which could be of interest.


----------



## sasch

Coming back to your pinbar coding and analysis from last year lol. Have you implemented an additional check/filter for double top with pinbars? Such as that displayed on your previous screenshot below, and another example.


----------



## Kryzz

Kryzz said:


> Still holding the oil short with a wide stop, prone to spikes. A strong close around the $64.00 region is my line in the sand. Waiting to see if this little ledge/consolidation breaks down further.
> 
> View attachment 94659




Oil rolling over again, disappointed with my second entry here. Didn't wait  to enter once a pivot high with a series of weak closes took shape. All stops now at $64.30. Positive swap with this pair too, so easier to hold short for longer.

Entry 1: $63.29
Entry 2: $61.29


----------



## Kryzz

Kryzz said:


> Oil rolling over again, disappointed with my second entry here. Didn't wait  to enter once a pivot high with a series of weak closes took shape. All stops now at $64.30. Positive swap with this pair too, so easier to hold short for longer.
> 
> Entry 1: $63.29
> Entry 2: $61.29
> 
> View attachment 94883




Entry 1: $63.29 
Entry 2: $61.29 
Entry 3 triggered:  $58.51


----------



## Kryzz

Kryzz said:


> Whilst the oil short is stalling the silver position has tanked nicely over night. Second short added a couple of days ago, taking partial profits tonight with the remainder targeting $14 still.
> 
> View attachment 94738




Stop moved to $14.72. Missed the chance to add to the short here with a series of weak closes on a pullback to the MA's.

Entry: $14.83


----------



## Kryzz

Kryzz said:


> Entry 1: $63.29
> Entry 2: $61.29
> Entry 3 triggered:  $58.51
> 
> View attachment 95040




Entry 1: $63.29  - closed this portion of the trade at $55.40. Still getting my feet with scaling in and out of positions, closed the first trade I opened. Letting the latter pyramid trades run further.


----------



## peter2

I keep an eye on the 4H FX charts occasionally (should be all the time P.). I did notice these pinbars on the EURUSD chart. The short ended at break-even, but the following long provided +1.5R.


----------



## captain black

peter2 said:


> The short ended at break-even, but the following long provided +1.5R.




Nice flip trade Pete


----------



## captain black

peter2 said:


> I've made a 12 mth commitment to develop automated trading systems.
> 
> There's going to be a lot to learn, a lot to define, a lot of development, a lot of testing and a lot of perseverance.
> 
> I'm going to start by trying to automate the methodology outlined in this thread for the 4hr charts. System 4B looks for certain bar patterns and System 4T defines the trend and I look for low sized risk setups to get into the trend. Both systems won't be easily defined and collated into single automated systems (or EAs). It will require a number of systems (or a portfolio of systems) to replace my discretionary style.
> 
> Converting my discretionary trading ideas into objective rules based systems is going to be my biggest challenge.




Apologies for bringing up one of your old posts Pete (Oct 2018) but I was curious how you're going with this project?


----------



## peter2

It's quite all right to ask me anything.  I spent a lot of time creating EAs (MT4 expert analyzers) and testing them. I was quite disappointed with the results. An EA that worked well in one year lost in another year. Almost all EAs experienced too many losers during times when the market conditions were unfavourable. I created EAs for trending markets, mean reversion strategies, normal break-outs, range break-outs and some price action EAs (pinbars, outside reversal bars etc). 

All of them showed periods where they were profitable, but all of them had too many losers when market conditions were unfavourable. I couldn't filter out enough losers to satisfy myself. 

I am concerned that I was hoping for something that was too good. I was looking for +20%pa with a 5% maxDD. I created plenty that earned 5%/5%, but I don't consider this good enough. Am I expecting too much? 

I realise that the best approach uses a portfolio of systems. I insist that each system be profitable on it's own. Is this realistic if a portfolio of systems makes money? (ie 5%/5%).

I was very disappointed after all this work and have not done anymore for many months. I love the idea of having a portfolio of EAs working away in the background, buy only if they're consistently profitable. So far I've been unable to work something out.


----------



## captain black

Thanks for the detailed reply Pete.

I've been down a similar path over the last few years but with different software (Amibroker and Python). I've been fortunate enough to be mentoring someone in trading over the last couple of years who has a background in server management and is highly proficient in several coding languages. With my trading experience and his coding experience we've managed to get all my systems automated.



peter2 said:


> An EA that worked well in one year lost in another year. Almost all EAs experienced too many losers during times when the market conditions were unfavourable. I created EAs for trending markets, mean reversion strategies, normal break-outs, range break-outs and some price action EAs (pinbars, outside reversal bars etc).




I don't trade FX Markets so not sure if it's of any assistance but all of my futures systems are designed to "adapt" to changing market conditions. Part of this is based on the work Howard Bandy has done regarding testing if your system is out of sync with the market. Howard focuses mainly on testing for when a system is broken. We've taken it one step further and test for when the current risk management component of the system is out of sync with the current phase of the market.

I posted in my thread last night about how messy the Bund was and how this was offset by strongly trending index futures. The code for each of these markets is the same, but it adapts to the current conditions of the market. The Bund was behaving like a mean reversion type of market for the first few hours and the system switched to a mean reversion type risk style. (It still lost money but no system is perfect). The same system on the index futures adapted to a trend following type of market and adjusted it's risk management style accordingly.

I'm sure you've read through Trembling Hand's futures threads from a few years ago and one thing he said that stuck in my head was that he adjusted his style of trading depending on the market conditions. Taking that idea and turning it into code has taken some out-of-the-box thinking and re-reading some of Howard's books several times. Such a shame both TH and Howard no longer post here


----------



## peter2

Thanks. I do the same thing. Manually/discretionally. If a market has not broken out of a range I avoid it and find a market that has and trade it using a pull-back or BO-NH setups to join the trend. 

You're suggesting that I start the algo by classifying the current market conditions first then select the most suitable trading strategy for those conditions. If the conditions remain the same the algo trades profitably until the market changes, the algo has a few losses, recognizes the changed conditions then  switches to a more suitable strategy. 

In your case rather than switch strategies, the algo adjusts the risk management of the strategies when the market conditions change (decreasing risk for the unsuitable strategy and increasing the risk for the suitable strategy). ie All your strategies are running continuously and the algo monitoring the current market conditions modifies the trade risk, increasing the risk for the most suitable strategies and decreasing the risk for the unsuitable strategies.

Classify current market condition (range bound, trending up, trending down)
IF range bound . . .  THEN use mean reversion strategy
IF trending UP . . .  THEN use PB, BO-NH buy strategies
IF trending DOWN . . . THEN use retracement, BO-NL sell strategies

The difficulty of classifying the current market conditions is that the market conditions may be different in different time frames. Although if the algo does this consistently well, the algo is run on different time frames simultaneously. 

An interesting line of thought. Thanks


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## peter2

Create a portfolio of strategies with each strategy suited to a particular market condition (range bound, trend up, trending down). Create a market classification algo that defines the current market conditions and adjusts the amounts risked on each strategy (decreasing risk on unsuitable strategies, increasing risk on suitable strategies). Run portfolios on each time frame.

OR 

Create a portfolio of strategies with each strategy suited to a particular market condition. Create an algo that monitors the recent results of each strategy and adjusts the amount risked (reducing the amounts risked in strategies that are currently losing, while increasing the amounts risked to those strategies that are winning). Run portfolios on each time frame.


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## captain black

peter2 said:


> the algo is run on different time frames simultaneously.




This is the key.

I've mentioned this article once before on ASF in @Modest 's futures thread. I'll post it again here because it planted the seed for the eventual path I went down. It's old code, there's better ways of doing it now, but the concept is the same.

http://www.amibroker.com/docs/MTFIndicators.html

It's an Amibroker document but we've coded it into our systems with Python. I haven't used EA's so not sure if it can be tested and applied in one.



peter2 said:


> An interesting line of thought. Thanks




Happy to help, you've posted so much interesting stuff over the years. Hopefully I can sow the seeds of an idea that can improve your returns.


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## peter2

Thanks for the article. I'll re-read a few times to stir my thoughts. The article proposes a MTF indicator that can be used in a single time frame chart and that the indicator is more responsive and provides earlier indications than the single time frame. I'll think about this some more and see if I can code an MTF indicator and whether I can code this into an EA to test in the FX markets. 

I'd thought that your preferences @captain black were with intraday VSA based indicators, unless the charts you show are only a part of your overall trading activities.


----------



## captain black

peter2 said:


> I'd thought that your preferences @captain black were with intraday VSA based indicators




Wyckoff/VSA forms part of the entry and exit setup criteria. The MTF composites are used primarily to determine what type of market phase and therefore what risk management parameters to use.

The entry setup on the FESX chart last night has a higher probability of leading to a trending outcome rather than a swing trade so rather than looking to exit on the next distribution setup the system takes a more conservative "trend following" exit strategy.

That particular entry setup took several bars to form after the initial high volume reversal bar. There was a second high volume bar. The subsequent bars in that accumulation zone were in the medium-high spread range. Along with a few other inputs, these all gave a higher probability score to a trending trade than a swing or MR trade.

I'll just add that it's not about prediction, it's about probabilities.

As the trade developed, the probability we were in a strongly trending market increased so the trend following exit parameters were adjusted to allow more room to move and the position was added to in shallow pullbacks.

Each type of setup is tested individually, similar to how Thomas Bulkowski grades the pattern setups on his pattern site. As the probability of one particular outcome increases, the parameters are adjusted.

Individual setups (eg Wyckoff/VSA) contribute to this probability calculation as well as the MTF composites. So rather than setting the probability at the beginning of the trade, it's a dynamic process taking into account not only the initial risk but also the underlying market phase determined by the MTF composite.


----------



## captain black

peter2 said:


> Thanks for the article. I'll re-read a few times to stir my thoughts.




I've sent the article to a few people in the past and as far as I know no-one has found it particularly useful so you may find the same 

I'm sure most people would read my "probability" post above as well and find it a load of waffle.

I mentioned @Boggo 's signature "Differently Think" in my futures thread earlier today. I know from past experience that it's the times I've been forced to "differently think" that I've had a few "a-ha" moments.

(If you read this @Boggo it's a great signature. The play on the common "think differently" phrase is ingenious)


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## peter2

@captain black Thank you for providing the additional context. Trading with probabilities is certainly not waffle as you know. It's the goal of all traders that want to be profitable. I'd rather buy a BO with a prob >0.8 than a BO with a prob of 0.5. You may or may not have noticed that all six intraday trades (US) that I posted  last night were with the market or sector. I'll never trade a pattern on an intraday time frame without agreement with the sector and market. The probabilities of a successful trade are so much greater when everything is in alignment. Patterns on their own are 50:50, patterns with the sector are 70:30 and with the market 80:20. (*)

The context you added with the MTFs makes so much sense. I totally accept that trading the intraday VSA setups with the trend of the MTFs improves the probabilities greatly. I'm very grateful for this extra information. Your additional info has given me plenty to think about. My task now is to assimilate that info into a carefully thought out plan for research. 

(*) AMD (semiconductor stock) was selected because it was the strongest semiconductor stock. The semiconductor index was chosen because it was the strongest sector and it's one of the largest components of the SPY.  The AMD trade was started when the SPY was going up early in the morning. Strongest stock in the strongest sector when the market is going up, what is the probability of a successful trade? It's >95%. If anyone wants to trade equities intraday, understanding this is vital.


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## captain black

Thanks for your detailed reply again Pete.



peter2 said:


> I'll never trade a pattern on an intraday time frame without agreement with the sector and market. The probabilities of a successful trade are so much greater when everything is in alignment. Patterns on their own are 50:50, patterns with the sector are 70:30 and with the market 80:20.




A lot of discretionary traders talk about "overall context" when they take a trade which is pretty much what you describe above. What is happening in higher and lower timeframes, where is support and resistance, which sectors are outperforming etc. etc.

What we've tried to do over the last few years is to turn "overall context" from a discretionary decision into computer language that can be used to make decisions in an automated system.

Statistical analysis gets you so far and we're slowly integrating machine learning now to take us the next step.


----------



## captain black

peter2 said:


> AMD (semiconductor stock) was selected because it was the strongest semiconductor stock. The semiconductor index was chosen because it was the strongest sector and it's one of the largest components of the SPY.  The AMD trade was started when the SPY was going up early in the morning. Strongest stock in the strongest sector when the market is going up, what is the probability of a successful trade? It's >95%. If anyone wants to trade equities intraday, understanding this is vital.




Another pearl of wisdom 

While were on the subject of sector analysis and trading the strongest stocks in the strongest sectors I'll throw in this link from one of Joe Marwood's articles:

https://jbmarwood.com/simple-breakout-system-sector-filter/


----------



## Gringotts Bank

captain black said:


> Wyckoff/VSA forms part of the entry and exit setup criteria. The MTF composites are used primarily to determine what type of market phase and therefore what risk management parameters to use.
> 
> The entry setup on the FESX chart last night has a higher probability of leading to a trending outcome rather than a swing trade so rather than looking to exit on the next distribution setup the system takes a more conservative "trend following" exit strategy.
> 
> That particular entry setup took several bars to form after the initial high volume reversal bar. There was a second high volume bar. The subsequent bars in that accumulation zone were in the medium-high spread range. Along with a few other inputs, these all gave a higher probability score to a trending trade than a swing or MR trade.
> 
> I'll just add that it's not about prediction, it's about probabilities.
> 
> As the trade developed, the probability we were in a strongly trending market increased so the trend following exit parameters were adjusted to allow more room to move and the position was added to in shallow pullbacks.
> 
> Each type of setup is tested individually, similar to how Thomas Bulkowski grades the pattern setups on his pattern site. As the probability of one particular outcome increases, the parameters are adjusted.
> 
> Individual setups (eg Wyckoff/VSA) contribute to this probability calculation as well as the MTF composites. So rather than setting the probability at the beginning of the trade, it's a dynamic process taking into account not only the initial risk but also the underlying market phase determined by the MTF composite.




edit: when I read it over again it's actually quite do-able.  Identify the type of market (one of three, based on a higher TF) and alter your size and exits accordingly.  I have never attempted to define the type of market conditions in a system.  Probably should try that, thanks.


----------



## captain black

Gringotts Bank said:


> Identify the type of market (one of three, based on a higher TF) and alter your size and exits accordingly.




We identify 4 types of markets in the system.

1/ Sideways (stand aside) (my mate has labelled it as "shitty" in the code. Who says coders don't have a sense of humour )
2/ MR
3/ Swing (or momentum)
4/ Trending

Within each of those market types we assign a ranking from 1 - 10 so in effect were adjusting the system for 40 different market phases. Dealing with non-stationary data means the rankings are constantly changing.

(I guess standing aside for major news events is another market phase too.)



Gringotts Bank said:


> based on a higher TF




Hint:
Higher AND lower. We trade futures primarily on 1 and 2 - minute timeframes and look not only at the composite calculations in higher timeframes but also at what tick bar and range bar composites calculations tell us too.



Gringotts Bank said:


> alter your size and exits accordingly.




The idea of an "adaptive" type of system came to me when I was staring at the books in my bookshelf and one of the titles there is Radge's "Adaptive Analysis". The book is more based on traditional technical analysis but the word "adaptive" triggered one of those "a-ha" moments.


----------



## IFocus

captain black said:


> I'm sure most people would read my "probability" post above as well and find it a load of waffle.




I hope not 

Great conversation BTW impressive what you have achieved Captain (automation) and Peters record speaks for itself.


----------



## Gringotts Bank

captain black said:


> We identify 4 types of markets in the system.
> 
> 1/ Sideways (stand aside) (my mate has labelled it as "shitty" in the code. Who says coders don't have a sense of humour )
> 2/ MR
> 3/ Swing (or momentum)
> 4/ Trending
> 
> Within each of those market types we assign a ranking from 1 - 10 so in effect were adjusting the system for 40 different market phases. Dealing with non-stationary data means the rankings are constantly changing.
> 
> (I guess standing aside for major news events is another market phase too.)
> 
> 
> 
> Hint:
> Higher AND lower. We trade futures primarily on 1 and 2 - minute timeframes and look not only at the composite calculations in higher timeframes but also at what tick bar and range bar composites calculations tell us too.
> 
> 
> 
> The idea of an "adaptive" type of system came to me when I was staring at the books in my bookshelf and one of the titles there is Radge's "Adaptive Analysis". The book is more based on traditional technical analysis but the word "adaptive" triggered one of those "a-ha" moments.




40 market phases....yowsers.  I can't imagine how you'd rank them without sampling a lot of historical trades, but maybe that's what you're doing.  Most coders are serious AF, so you found a good one!


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## captain black

Gringotts Bank said:


> 40 market phases....yowsers.  I can't imagine how you'd rank them without sampling a lot of historical trades, but maybe that's what you're doing.




This is where our machine learning code is being tested at the moment. Calculating the timeframe composites and "learning" as new data comes in.


----------



## Gringotts Bank

captain black said:


> This is where our machine learning code is being tested at the moment. Calculating the timeframe composites and "learning" as new data comes in.




I imagine something like the following:  Be ready to trade in the direction of the higher TF (aka 'context'), but trade the equity curve of the 1 min TF, and assign the 10 layers of rank according to the 1 min equity curve.


----------



## captain black

Gringotts Bank said:


> I imagine something like the following:  Be ready to trade in the direction of the higher TF (aka 'context')




One of the elements is the composite calculation of the higher timeframes but it's only a small part of a number of variables.



Gringotts Bank said:


> trade the equity curve of the 1 min TF




We don't reference the equity curve in any of the code apart from the "kill switch" if things turn to poo.


----------



## sasch

peter2 said:


> Thanks. I do the same thing. Manually/discretionally. If a market has not broken out of a range I avoid it and find a market that has and trade it using a pull-back or BO-NH setups to join the trend.
> 
> You're suggesting that I start the algo by classifying the current market conditions first then select the most suitable trading strategy for those conditions. If the conditions remain the same the algo trades profitably until the market changes, the algo has a few losses, recognizes the changed conditions then  switches to a more suitable strategy.
> 
> In your case rather than switch strategies, the algo adjusts the risk management of the strategies when the market conditions change (decreasing risk for the unsuitable strategy and increasing the risk for the suitable strategy). ie All your strategies are running continuously and the algo monitoring the current market conditions modifies the trade risk, increasing the risk for the most suitable strategies and decreasing the risk for the unsuitable strategies.
> 
> Classify current market condition (range bound, trending up, trending down)
> IF range bound . . .  THEN use mean reversion strategy
> IF trending UP . . .  THEN use PB, BO-NH buy strategies
> IF trending DOWN . . . THEN use retracement, BO-NL sell strategies
> 
> The difficulty of classifying the current market conditions is that the market conditions may be different in different time frames. Although if the algo does this consistently well, the algo is run on different time frames simultaneously.
> 
> An interesting line of thought. Thanks




Peter,

Personally, I have found using an ADX filter for trending systems is quite a simple and effective component. I.e. Trending if above >=25 or ranging if below. Then decide if you want to pause trading or switch to another system.

You can use one bot, which switches between the two modes, which can be easier for backtesting and testing drawdown. 

Obviously, you can use two or more bots for different conditions.

Interestingly, standard risk reward ratios, such as 1:1, 1:2, are not always the way to go. I have had and continue to have good results with reversed ratios as well.


----------



## sasch

captain black said:


> Wyckoff/VSA forms part of the entry and exit setup criteria. The MTF composites are used primarily to determine what type of market phase and therefore what risk management parameters to use.
> 
> The entry setup on the FESX chart last night has a higher probability of leading to a trending outcome rather than a swing trade so rather than looking to exit on the next distribution setup the system takes a more conservative "trend following" exit strategy.
> 
> That particular entry setup took several bars to form after the initial high volume reversal bar. There was a second high volume bar. The subsequent bars in that accumulation zone were in the medium-high spread range. Along with a few other inputs, these all gave a higher probability score to a trending trade than a swing or MR trade.
> 
> I'll just add that it's not about prediction, it's about probabilities.
> 
> As the trade developed, the probability we were in a strongly trending market increased so the trend following exit parameters were adjusted to allow more room to move and the position was added to in shallow pullbacks.
> 
> Each type of setup is tested individually, similar to how Thomas Bulkowski grades the pattern setups on his pattern site. As the probability of one particular outcome increases, the parameters are adjusted.
> 
> Individual setups (eg Wyckoff/VSA) contribute to this probability calculation as well as the MTF composites. So rather than setting the probability at the beginning of the trade, it's a dynamic process taking into account not only the initial risk but also the underlying market phase determined by the MTF composite.




I Like your approach here Captain Black,

You have given me some interesting ideas, thanks.

I have started focusing more on probability on my systems, and definitely do not think it is waffle. 

Increasing trade volume on low risk setups, decreasing on high risk. Looking for repeatable patterns that occur during different trading session (Tokyo, London, US, etc)


----------



## captain black

sasch said:


> I Like your approach here Captain Black,
> 
> You have given me some interesting ideas, thanks.




My pleasure, and thank you for taking the time to comment. It's heartening to know that a few of my ideas have resonated with other traders.



sasch said:


> Increasing trade volume on low risk setups, decreasing on high risk.




Position sizing is another component that we're constantly working on. Often with discretionary trading we get a feel for a position and market action and know instinctively when to increase or decrease our position size. It's another part of reading the overall context of the market.

One of the factors we're still tweaking is position sizing during the transition from (for example) the MR phase to the swing/momentum phase. If there is a high probability setup early in the phase changeover do we take a large position or wait until "x" number of bars confirm the changeover. Currently we use a 1 - 10 scale to measure the strength of the new phase compared to the previous phase and switch to full position sizing once the new phase strength is greater than the old but I think there's better ways of doing it.

I'm off to the Grampians for a week of walking in a couple of days, think I might need to sit on top of a mountain and contemplate for a while


----------



## willoneau

Great thread Peter2 
I use ATR and pip value with risk to calculate position size


----------



## sasch

Re-read this thread last night, lots of great trading advice here.

Peter, what do you think of this AUD/USD buy on the 4hr chart. Price is sitting on daily 200 moving average at the moment. So could see a push above soon. There is supply at 1 R, but I think it is worth the risk.


----------



## peter2

sasch said:


> I think it is worth the risk.




That's all you need for a trade. 

I'd be careful if you're only going for 1R with most of your trades. An occasional quick one is OK if you think the RR acceptable or the probability very high.


----------



## sasch

peter2 said:


> That's all you need for a trade.
> 
> I'd be careful if you're only going for 1R with most of your trades. An occasional quick one is OK if you think the RR acceptable or the probability very high.




Thanks Peter,

Going Sideways at the moment. Looks like traders are waiting for the Nondefense Capital Goods report later tonight.

I knew this one was going to be a grind, so in hindsight I should have waited for a better entry, with improved risk reward ratio.


----------



## sasch

sasch said:


> Thanks Peter,
> 
> Going Sideways at the moment. Looks like traders are waiting for the Nondefense Capital Goods report later tonight.
> 
> I knew this one was going to be a grind, so in hindsight I should have waited for a better entry, with improved risk reward ratio.




This position finally hit 1R target. Now it has finally decided to take off, it was a bit like watching paint dry there for a while.


----------



## willoneau

Peter2 thankyou for this thread, I have re-read it a few times and have adopted the strategies that you have outlayed within to get my FX trading back on track.


----------



## willoneau

I am long,
USDCHF, USDJPY and XAGUSD
although placing the orders before the open on Monday I noticed the USDJPY order was filled too soon because of the large spread.
USDCHF entry = 0.89254, isl = 0.89045, risk = 24.3p.
USDJPY entry = 105.044, isl = 104.892, risk = 15.2p.
XAGUSD entry = 27.455, isl = 27.126, risk = 32.9p
1% risk per trade and only 2 max trades in USD.


----------



## willoneau

Peter2 , you drop down to the 1hr for tighter entries in the 4hr, do you also tighten your stops in the 1hr if 4hr bar closes against you?


----------



## peter2

I do tighten exit stops but I've found that this is the wrong thing to do in the FX markets. As long as your trading with the higher timeframe trend then leave your trades alone. Much easier said then done. It's one of my biggest weaknesses when trading FX.


----------



## willoneau

I use c-trader for my FX trading and am currently trialing a bot that sets position size in relation to my risk profile.


----------



## willoneau

peter2 said:


> I do tighten exit stops but I've found that this is the wrong thing to do in the FX markets. As long as your trading with the higher timeframe trend then leave your trades alone. Much easier said then done. It's one of my biggest weaknesses when trading FX.



I am trading in direction of 4hr but daily can go either way . Ref to USDCHF
I moved my isl up slightly below 1hr to reduce my R to 0.53


----------



## willoneau

Closed USDCHF at 0.89087 for -0.69R


----------



## peter2

The USDJPY is looking good. Nicely done.


----------



## peter2

willoneau said:


> Peter2 , you drop down to the 1hr for tighter entries in the 4hr,



Sorry, I didn't reply to this part of your question. Yes, I do drop down to the 1hr chart to look for tighter entries. My higher time frame trend is the daily more so than the 4hrly. I prefer the trend that is clearer. As you know it can sometimes get tricky, like the USDCHF this morning. Is the trend up or down? The daily trend is down but there's been a rally off the low to switch the 4hr trend to up. Which direction do we trade or do we pass and find another easier to read chart?

Earlier this morning the AUDUSD and AUDJPY were showing clear up trends in both the daily and 4hr charts. The AUDUSD didn't get very far but the AUDJPY rallied strongly.


----------



## willoneau

Hi Peter2 , I closed USDJPY  on the hrly for 2.14R


----------



## willoneau

peter2 said:


> Sorry, I didn't reply to this part of your question. Yes, I do drop down to the 1hr chart to look for tighter entries. My higher time frame trend is the daily more so than the 4hrly. I prefer the trend that is clearer. As you know it can sometimes get tricky, like the USDCHF this morning. Is the trend up or down? The daily trend is down but there's been a rally off the low to switch the 4hr trend to up. Which direction do we trade or do we pass and find another easier to read chart?
> 
> Earlier this morning the AUDUSD and AUDJPY were showing clear up trends in both the daily and 4hr charts. The AUDUSD didn't get very far but the AUDJPY rallied strongly.



I did look at AUDUSD this morning but disregarded it as I thought it was too far away from the EMA"s
following on from what you wrote earlier in thread


----------



## willoneau

I like your systematic approach here which makes it much easier to track more markets at a glance.

Just entered AUDNZD LONG 1.07536

looking at it's 4 hrly I have noticed it is the third PB so will watch closely and may expect blow off top or increased volatility to the up side.


----------



## willoneau

peter2 said:


> I do tighten exit stops but I've found that this is the wrong thing to do in the FX markets. As long as your trading with the higher timeframe trend then leave your trades alone. Much easier said then done. It's one of my biggest weaknesses when trading FX.



would you consider going to hrly TF once 2R is reached? or just close at 2R


----------



## willoneau

peter2 said:


> Sorry, I didn't reply to this part of your question. Yes, I do drop down to the 1hr chart to look for tighter entries. My higher time frame trend is the daily more so than the 4hrly. I prefer the trend that is clearer. As you know it can sometimes get tricky, like the USDCHF this morning. Is the trend up or down? The daily trend is down but there's been a rally off the low to switch the 4hr trend to up. Which direction do we trade or do we pass and find another easier to read chart?
> 
> Earlier this morning the AUDUSD and AUDJPY were showing clear up trends in both the daily and 4hr charts. The AUDUSD didn't get very far but the AUDJPY rallied strongly.



I thought you traded the 4 hrly trend in the same direction as the daily TF?


----------



## willoneau

Looking for an entry in GER30 on the 1hrly with target up at resent high for 2.5R


----------



## willoneau

Hi Peter2, do you scale out of your position at all and what is your take on scaling out?


----------



## peter2

There's two opinions about scaling out. Do it and don't do it. The reasons for doing it are for emotional and psychological reasons. Scaling out makes people feel better as they grab some profit on the way. Having taken some profit they're more able to let the rest go to it's final result. I think scaling out is a good thing to do if you lack confidence and discipline. Most new traders should scale out until they realise how much profit they're wasting by scaling out. 

The reason for not doing it is money. Not scaling out makes more money. If your system has a good edge let it run without handicapping it by scaling out. Of course, this is harder to do.


----------



## willoneau

Thanx for the reply Peter2 ,
I can understand emotional reasons for doing it but if hinders making money then I will continue to chase the minimum 1.5R.
Following your system and money management keeps my emotions in check.


----------



## peter2

_A comment:_ You made a reasonable observation on the AUDUSD chart yesterday. You mentioned that price was too far from the moving averages and dismissed the chart. I agree with your observation, but I take this observation as a potential opportunity and place this chart on watch throughout the UK/US sessions. What I'm waiting for is a pullback so that I can buy it and trade it back to the prior high and above. Unfortunately AUDUSD and AUDJPY didn't pullback enough and form an acceptable RR for a trade. 

I wanted to mention this for your consideration as we want to be trading with the stronger trends and we want to trade them on our terms.


----------



## willoneau

peter2 said:


> _A comment:_ You made a reasonable observation on the AUDUSD chart yesterday. You mentioned that price was too far from the moving averages and dismissed the chart. I agree with your observation, but I take this observation as a potential opportunity and place this chart on watch throughout the UK/US sessions. What I'm waiting for is a pullback so that I can buy it and trade it back to the prior high and above. Unfortunately AUDUSD and AUDJPY didn't pullback enough and form an acceptable RR for a trade.
> 
> I wanted to mention this for your consideration as we want to be trading with the stronger trends and we want to trade them on our terms.
> 
> View attachment 120175



How do you determine acceptable RR , is it looking at potential support or resistance near which can stop the move?
I noticed the depth of the pullback but on the hourly chart.
So looking at the depth of the pullback within the daily TF determines if RR is acceptable?


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## peter2

For a pull-back I look at the prior high. What is my RR if price goes back to the old high. If it's > 1.5R that's acceptable because there's the possibility that price may go a little higher. 

In the AUDUSD chart, the deeper PB got to +1.5R near the old high and went a little higher the next morning in the Aussie session giving us +2R. 

Yesterday's shallow PB did go higher the next morning but reversed during the Aussie session. This trade would have been a break-even result depending on when we got in. Our assessment that price was too far from the MA proved correct in this case. Notice that the price reversed near the even number 0.7800.


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## willoneau

I made the mistake this morning of going long after the 4hrly broke yesterdays high getting hit for-R1 instead of waiting for the pullback.


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## peter2

No problems if we stay solvent and learn. 
Looking at the 4hr AUDUSD chart I want to show you three shallow pullbacks from last week that were good setups. We knew the daily trend was UP and these 4hr bars were very small making excellent RR opportunities. This week or next week it'll be another currency pair that provides these types of setups. Keep an eye on them. I'd be very careful doing this with indices as the small bars are formed when the exchanges are closed. Openings can be a bit volatile.


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## willoneau

Thanx for the heads up on the indices as i am following 
AUS200
GER30
UK100
EUSTX50


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## willoneau

peter2 said:


> No problems if we stay solvent and learn.
> Looking at the 4hr AUDUSD chart I want to show you three shallow pullbacks from last week that were good setups. We knew the daily trend was UP and these 4hr bars were very small making excellent RR opportunities. This week or next week it'll be another currency pair that provides these types of setups. Keep an eye on them. I'd be very careful doing this with indices as the small bars are formed when the exchanges are closed. Openings can be a bit volatile.
> 
> View attachment 120177



The ema's on the second two are down, do you disregard them on 4hrly when daily is still up?


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## peter2

Yes, I try to apply some commonsense.  The daily trend is UP and the 4hr trend is up if you judge the trend by higher lows and higher highs. In this case the pullback did reverse the EMAs but the low was slightly higher than the prior swing low. If it had gone lower then I'd need a stronger reversal signal to go long with the daily trend. I might find it on the 1hr chart or wait for a reversal bar the 4hr. This is a subtle modification and I hope I've explained that clearly. 

I hope you're collating these notes and recording them in your trading plans. 

I hope you've noticed that gold is going down with the daily trend still being down. There was a nice 123H reversal setup on the 1hr chart. It formed while I was playing tennis so no trade for me. 

Did you notice the quick pullback in the USDJPY chart? Daily trend is up, 4hr trend is up, a quick pullback then BOOM past the old high. 

These setups are our bread and butter that lead us to caviar and champagne if we're ready for them. We don't need anything complex, just simple trend following strategies work well if we apply them consistently. 

I've got to prepare for the US open, it looks likely to be volatile tonight.


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## willoneau

I noticed daily , 4hrly and 1hrly up on USDJPY and currently long with my trailing stop at 1.5R looking to trail on 15 min bars until stopped out . I will re read this thread and update my trading plan giving it much thought about your points.
USDJPY closed for 1.5R


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## willoneau

I was in the gold move, took 2R . I wasn't watching it so unable to trail stop .


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## willoneau

I have started to put a lot more effort into my record keeping and added comments to my trades.
I try to keep my daily trades to around 4 unless I go to BE and I have completed 28 trades in 5 days  a little high but I went to BE ten times which allowed me to take another trade.
I have noticed that I might be moving to BE a little early which is reducing my edge and highlighting my over trading (over trading = FOMO)
currently my win rate is 54% and my edge is 0.19R


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## willoneau

One question, with the different markets and pip sizes should the edge be calculated on pips at risk or cash?


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## peter2

Your trading edge is calculated from a batch of results. Each result can be expressed in dollars or R multiples. An R multiple is the initial downside exposure that you're willing to risk in the trade. When trading across many market types (equities, fx, commodities) with different pip/point values, the trader should position size each trade to be the same or similar dollars at risk. 

If I trade an index with a 20 point initial risk and a currency pair eg. AUDJPY with a 35 pip iSL I'll position size each trade so that I'm risking a similar dollar amount in each trade. The initial risk in each trade is one R multiple. 

In intraday trader who starts many trades during a session may employ a fixed size position model (eg 1000 shares, 1 FX contract, 2 futures contract). This is done to make entries quicker and not have to worry about position sizing. This trader will look at the whole session result rather than each trade. It's unlikely that this trader would trade across many market types. They'll tend to specialise in equities, fx or futures.


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## willoneau

Thanx Peter , I risk same dollar value just not sure if I should use dollar value or pip valve to give me R multiple as I would rather look at pips not dollars at risk especially at dollar risk value increases and may play on emotions.


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## peter2

Good point and I should have mentioned it. If you only consider your results in R multiples then each trade has the same initial risk and the same potential reward. As your account grows the next trade risks only 1R, the same as your first trade.


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## willoneau

So I guess what I am asking is does the different pip values of the different FX markets affect the edge calculation when using pips ?
or because I relate it to dollar value at risk it doesn't?.


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## peter2

I went long the TQQQ a few days ago and it's started well but I need to let the trade go. So what's that got to do with this thread that's all about FX?  I needed a diversion to prevent me from meddling with the trade, so I've reread this thread.

I posted a lot of detail and plenty of examples at the start of this thread. I'm pleased to note that my FX trading hasn't changed much from what I've posted 2.5 years ago. My charts look the same.

My trip down the rabbit hole of system coding didn't end with an automated system. I researched many that looked promising for a while (even up to one year) but when examined over longer periods failed. That project was interrupted (things happen) and I haven't resumed that work.

It was good the reread the contributions of Captain Black and I even reread his references again (Marwood's work).

I see the TQQQ had a nasty dip but is being dragged higher by the BO-NH of the SP500.  Yeah the DOW30 is charging higher as well.

While our ASX is trading sideways I've been thinking about restarting this thread. However I want something to push me a little. A goal or target so that the readers can follow along as I attempt to get to a destination. It'll have to be something that grabs my imagination. Money won't do it. An extra 50K or 250K won't change my lifestyle. Turning a little into a lot doesn't do it for me as it's just pushing the risk side of trading and I don't think that should be emphasised in a public forum. A 50R or 100R challenge is interesting. A real money trading competition is interesting. The joy for me is posting the journey and the events that happen along the way. If you have any suggestions PM me.

edit: Trading for charity or a worthwhile cause?  hmm..


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## peter2

@ducati916 has me thinking about trading FX across different timeframes and I'm thinking I can do that by myself. 
[My subconscious mind is laughing its head off, thinking I bet you can't. ] 

Can I trade the 4hr setups using two timeframes for the exits. The 4hr setups trade with the daily trend. Trade one set normally and the other using an exit determined from the daily chart. If the daily trend goes for a few weeks then the results should be much better. The disadvantage of using the larger timeframe means that when the trend does change a lot of open profits will disappear. 

Brief research project on back of an envelope. The AUDUSD went for a rally a few weeks ago (0.765 - 0.800) why not use this to test the idea to see if there's any merit in it. 

The AUDUSD chart shows five 4hr setups (rectangles) trading with the daily trend (ribbon in bottom pane). These 5Ts would have earned 8.9R over the period which I'm pretty pleased with. 




The daily trend ended at the black line top right. This is used as the exit for the four 4hr setups. One of the 4hr setups is redundant and not included. These 4Ts would have earned 17.5R.  Can you believe it, that's almost double. This makes me think about the folly of taking small profits. 

I know, very small sample and probably a best case example. A few months ago the AUD went from 0.70 to 0.78, a much bigger rally. However this small example does highlight the potential that must be researched further. Back testing discretionary setups is always flawed so this might be a better project for a live test. Could this be the spark to get me posting here again? 

Note: More open positions means more margin required and the new ASIC limits on leverage will cramp my style. I'm applying for non-retail status to keep the leverage level higher. There will be a delay until this is sorted and account properly funded.


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## peter2

peter2 said:


> I've spent the past few hours paper trading my 4hr FX method with the new lower leverage limits. Shite, they make a huge difference on the number of open trades. I'm going to need margin of 300 - 500 for every $50 of trade risk. If I start a trade with a tighter iSL I'll need >$1000 for every $50 risk.
> 
> This is going to curtail the FX and crypto trading by a huge amount. I see the new limit for the cryptos is only 2:1.
> 
> Edit: There's no use keeping accounts with small amounts in them. I'm consolidating them into just one.




Further comments on the effect of the new ASIC limits on leverage for FX and CFD clients. 

I think the lower limits will reduce the trading volume significantly. Small account holders won't be able to trade with a risk amount that will make it worth their while. Normally, we can increase our position size when we use a smaller initial stop loss size or when trading smaller time frame charts. The lower leverage limits won't make this possible. 

These changes will significantly reduce the trading activity. How will the providers react to this? I think they may increase their commission costs and widen their spreads. Some of the old "bucket shop" dirty tricks may return. The new non-retail trading group won't be able to complain as they've signed away some of their previous retail protections. 

I can see myself going back to the futures markets as the leverage, volume and protection will be greater in many markets. 

It's definitely going to be a users beware environment. 

Regarding this thread. I was considering operating two accounts. One for the shorter term trades and another for the exits managed by the daily charts. The idea being to place the exits for the daily trades and close it up and forget them. Having them all in the one account will test my discipline and I know I'll fail. "_A man's got to know his limitations_".


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## sasch

Hi Peter,

Thanks for resurrecting this thread. Looking forward to your next FX Project.

I have taken a short on the AUD/USD 1hr chart today, based on the price retracement. Have only
set target at 1.5 R as I am a bit wary of the buy support zone. The rise up only had
small tick volume.





Currency strength chart (4hr) also shows USD strength.


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## peter2

Slowly getting things organised to revitalise this thread. The ASIC enforced changes have had me apply for "pro" status which has been granted by one broker and they've granted me 300:1 leverage.  I haven't used one account with another broker for so long that it wasn't worth applying. I've noticed that the withdrawal process seems to take longer than the deposit one  .

The currency and commodity markets have been pumping for the past few months. @ducati916  has been providing all the current news.

I've been looking at these markets more, since the ASX has been going sideways. There's been many good opportunities and I hope it continues. I think it will for all the reasons that Ducati mentions.

As with all trading activities it's important to establish a consistent process. Auto system traders just flick a switch to turn their system on. A discretionary trader like myself has to schedule the time to do the things that are important. As I'm going to be trading the 4hr charts I'll have to review the charts every 4hrs for my trading opportunities. I'll be asleep for two of them but that leaves four. The idea is to review all the charts once per day and then monitor a few promising ones during the day.

Of course it's never this simple. The gold/silver charts are displaced 1hr later than the currency markets. No doubt I'll want to find a better entry on a market than the 4hr one. This will require real time monitoring during their active sessions.

I'll be forward testing for the next few months until the EOFY.  During this time I will try to distill several systems from my methodology.  Not sure if I can do this though. I'll need to start writing a journal of what I'm looking at and what I'm looking for each day (flow charts) if I'm ever going to create systems that I'm comfortable with. 

That's the plan until the EOFY. Plus it'll give me the time to decide the goals for the next FX project. I'll post a few opportunities when I see them.


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## qldfrog

peter2 said:


> Slowly getting things organised to revitalise this thread. The ASIC enforced changes have had me apply for "pro" status which has been granted by one broker and they've granted me 300:1 leverage.  I haven't used one account with another broker for so long that it wasn't worth applying. I've noticed that the withdrawal process seems to take longer than the deposit one  .
> 
> The currency and commodity markets have been pumping for the past few months. @ducati916  has been providing all the current news.
> 
> I've been looking at these markets more, since the ASX has been going sideways. There's been many good opportunities and I hope it continues. I think it will for all the reasons that Ducati mentions.
> 
> As with all trading activities it's important to establish a consistent process. Auto system traders just flick a switch to turn their system on. A discretionary trader like myself has to schedule the time to do the things that are important. As I'm going to be trading the 4hr charts I'll have to review the charts every 4hrs for my trading opportunities. I'll be asleep for two of them but that leaves four. The idea is to review all the charts once per day and then monitor a few promising ones during the day.
> 
> Of course it's never this simple. The gold/silver charts are displaced 1hr later than the currency markets. No doubt I'll want to find a better entry on a market than the 4hr one. This will require real time monitoring during their active sessions.
> 
> I'll be forward testing for the next few months until the EOFY.  During this time I will try to distill several systems from my methodology.  Not sure if I can do this though. I'll need to start writing a journal of what I'm looking at and what I'm looking for each day (flow charts) if I'm ever going to create systems that I'm comfortable with.
> 
> That's the plan until the EOFY. Plus it'll give me the time to decide the goals for the next FX project. I'll post a few opportunities when I see them.



That's a very ambitious plan.
I am a bit worried by the load you are going to put yourself under.
FX has no week end break so 24/7 every 4h actually 3h with PM plus more.
this is a super high stress load.
Will you be able to think clearly?
Monstrous load for a team of 1.
I know nothing on the tech fin details, just looking at the human side.
Hope it helps


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## ducati916

qldfrog said:


> That's a very ambitious plan.
> I am a bit worried by the load you are going to put yourself under.
> FX has no week end break so 24/7 every 4h actually 3h with PM plus more.
> this is a super high stress load.
> Will you be able to think clearly?
> Monstrous load for a team of 1.
> I know nothing on the tech fin details, just looking at the human side.
> Hope it helps





This actually is quite a significant issue. Particularly if you want to swing trade or trend trade currencies, which I would like to do. I cannot monitor the FX markets with sufficient frequency to actually trade them.

The alternative is to trade currency ETFs.

Some pros/cons:

(i) less leverage;
(ii) stop trading when the market closes, which means some big opening moves when they re-open;
(iii) entries/exits limited to market open hours, which means a trade that was available on market close may have gone by the open and if something turns to custard in out of hours, you are stuck until open, SL are probably pointless;


However, I am going to post some 'paper trades' in this thread and see how it all pans out. A bit of a work-in-progress.

jog on
duc


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## qldfrog

ducati916 said:


> This actually is quite a significant issue. Particularly if you want to swing trade or trend trade currencies, which I would like to do. I cannot monitor the FX markets with sufficient frequency to actually trade them.
> 
> The alternative is to trade currency ETFs.
> 
> Some pros/cons:
> 
> (i) less leverage;
> (ii) stop trading when the market closes, which means some big opening moves when they re-open;
> (iii) entries/exits limited to market open hours, which means a trade that was available on market close may have gone by the open and if something turns to custard in out of hours, you are stuck until open, SL are probably pointless;
> 
> 
> However, I am going to post some 'paper trades' in this thread and see how it all pans out. A bit of a work-in-progress.
> 
> jog on
> duc



The reason i never touched FX even with the number of various ads for get rich recipe.
Using etf would only capture long term move imho:
You have an open window of 30h or so trading time per week out of 168h of continuous activity, and i do not include holidays, even day trading is stretched imho, so weekly trading, not less?


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## qldfrog

qldfrog said:


> The reason i never touched FX even with the number of various ads for get rich recipe.
> Using etf would only capture long term move imho:
> You have an open window of 30h or so trading time per week out of 168h of continuous activity, and i do not include holidays, even day trading is stretched imho, so weekly trading, not less?



I know, harsh figures but this is what it is


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## ducati916

qldfrog said:


> The reason i never touched FX even with the number of various ads for get rich recipe.
> Using etf would only capture long term move imho:
> You have an open window of 30h or so trading time per week out of 168h of continuous activity, and i do not include holidays, even day trading is stretched imho, so weekly trading, not less?




This is true. However, the FX markets do provide some alternatives to stocks in a diversified portfolio. As such, it is at least worthwhile to see if it works. The reason that it may work is that currencies have long trends. Therefore, even though there are issues, I still think it can work, which is why I originally offered the short/medium/long term trading idea.

I follow DXY on an ongoing basis. Currently DXY is approaching at an inflection point. The trade would be short UUP long FXE.

Now, due to Easter etc. you could only enter this trade via ETFs when the market re-opens Monday. I'll follow this one as a paper trade.

jog on
duc


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## qldfrog

ducati916 said:


> This is true. However, the FX markets do provide some alternatives to stocks in a diversified portfolio. As such, it is at least worthwhile to see if it works. The reason that it may work is that currencies have long trends. Therefore, even though there are issues, I still think it can work, which is why I originally offered the short/medium/long term trading idea.
> 
> I follow DXY on an ongoing basis. Currently DXY is approaching at an inflection point. The trade would be short UUP long FXE.
> 
> Now, due to Easter etc. you could only enter this trade via ETFs when the market re-opens Monday. I'll follow this one as a paper trade.
> 
> jog on
> duc



Interesting indeed, and in many way, weekly trading is a breeze vs daily or worse: time to think twice, no rush etc.
Please keep up posted.maybe here if @peter2 does not mind?


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## ducati916

qldfrog said:


> Interesting indeed, and in many way, weekly trading is a breeze vs daily or worse: time to think twice, no rush etc.




And why is that?

Psychologists answer that question with the term 'ego depletion' the (mental cost) of exerting self-control in undertaking stressful/unpleasant tasks. That is to say, monitoring a trade that requires _fast action _to limit losses (activate SL). In a weekly system, as you say, there is more time to think and prepare to execute stops etc.

This 'depletion' is I would say, the primary reason that many day traders blow themselves up at some point. They exhaust their ability to close out the trade to plan, they let it run and it requires greater and greater amounts of mental energy, that they don't have, to finally close it and take the far larger loss.

I have no data to prove this, but my gut instinct is that FX, although it trends for significant periods, carries a very high noise-to-signal ratio, which, in the short term, (day trades) creates a very difficult environment to trade.

jog on
duc


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## ducati916

Currency markets open:

Long EUR
Short $US

*Long at 1.17641

jog on
duc


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## ducati916

ducati916 said:


> Currency markets open:
> 
> Long EUR
> Short $US
> 
> *Long at 1.17641
> 
> jog on
> duc





Nicely in profit.

jog on
duc


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## ducati916

So I have now closed the above trade with a nice profit.

The reason I closed it is because it reached my profit target. However, I still think the trend has a way to go to play out. Which goes to my initial idea around running 2 trades: (a) the first trade to capture big moves in the currency markets and (b) short term trades to catch swings within those larger trends. So you will need either separate accounts or a broker that can segregate trades so that multiple positions can be held without closing trades out.

So first up:

I still have my short DXY trade on. What I closed for the profit was the long FXE component.




For a pair that is pretty much all about short term trades:

Given that both are currencies around commodities, the greater chop is understandable. This pair should offer many short term trades. The trend however, would be really violent.





jog on
duc


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## ducati916

So another 'short term' trade:

Long GBP @ 1.023.21
Short EUR @ 1.004.20

jog on 
duc


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## ducati916

ducati916 said:


> So another 'short term' trade:
> 
> Long GBP @ 1.023.21
> Short EUR @ 1.004.20
> 
> jog on
> duc




Closed this out for a loss.

jog on
duc


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## ducati916

Long British Pound @ 1077.55.

So trialling another 'system'! We'll see how this one works out. I definitely want to get exposure to currencies. With stock markets so extended, it simply provides some alternate asset classes.

jog on
duc


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## willoneau

Hi I am trading the EUR/USD pair 
I have total risk per trade of max 3% at this stage as my Capital is 20K.
My trade is broken up into three possible entries with a wide stop loss of 40 pips.
I trade daily , looking to enter any time after frankfut opens but more interested to see how London opens. 
I look to close position before US closes as the spread can and does exceed 30 to 40 pips after it's close.
I use Pivot points to help with determining bias both shorter and longer time frames.


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## willoneau

I opened a long position after Frankfurt opened at 1.17895 looking to take profit at a pull back to the daily pivot before possible short continuation . If price continues above pivot then might signal change of direction bias.
Profit target of 1.18075 or 18 pips.


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## willoneau

Moved my stop up after London open to below daily low reducing my risk to 18 pips


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## willoneau

Second position triggered when London opening high taken out , stop and target in same location as first position.


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## willoneau

Moved stops up to 1.17800 when price reached my first position entry for a total risk of 23.7 pips out of an original risk of 80 pips.
Which is 0.5% of my Capital.


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## willoneau

Placed short position order just below stop for continuation , will leave stop at 40 pips with a target of 36 pips while I go to work on my last night shift.


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## willoneau

Long positions stopped out for a loss of 24.5 pips (slippage included) , which is a loss of $98.24
One short position now open that will run while at work .
If Peter is happy for me to continue in this thread I will resume tomorrow with my thoughts and trades.


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## willoneau

Second short position taken at 1.17434 with stop and target in same location as first position giving me a risk of just below 2%.


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## peter2

I'm happy to see someone continuing the thread but I think it should be done with the same intent. I've always tried to be educational and interesting. A chart always makes a trade that is based on chart indicators (like pivot levels) more interesting. It also helps others to follow along if they're really interested. 

It would be of interest if you'd post a brief description of your setup. This doesn't mean outlining your whole TP in detail. Just a note that you're trading movements between two pivot levels with a directional bias is enough for most readers to understand what's happening. 

At the end of the week  (or month) post a brief summary with some stats eg. 5T, +1.8 units of risk. This would show that you're running a business and have some accountability. I'm not concerned by the P&L in dollars. The R values are enough. This allows you to focus on the trade and not the dollars. 

Why R values rather than pips?  R values allow for the size of the initial risk as they may vary each time. A win of 200 pips is nothing if the trader risked 300 pips initially. If the 200 pips was a +5R profit then we'd all know that it was a good result for the week. 

These are my suggestions only. Of course you're free to post whatever you like.


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## willoneau

Thanx Peter I will try to organize it better and was going to add a chart of the trade tomorrow.
I was trying to show live trading and what I was thinking at the time and my decisions.


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## willoneau

Position size and Stop loss position determines Risk on Capital
Number One Rule , once entry stop placed it will not be removed and can only be reduced. NO EXCEPTIONS.


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## willoneau

Price has just reached the first part of my forecast and I would have placed the third short position on had I not been at work. The stop would be placed at the same location as the first two to keep risk below the 3% . Currently in losing position and will see if second part of forecast is fulfilled or price continues up and takes my stops out.
Now I could have placed a stop entry short position at the pivot but did not want an order sitting in the market if price had moved down to my target while I am at work.
Looks like I have been stopped out.


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## willoneau

Two losing trades for a loss of  2.48%
A= 0.30R
B= 0.93R


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