A cluster of stops all the way to 1.6218 on GBPUSD

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Paul
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a textbook surge of GBPUSD on a turn of momentum

Postby Paul » Tue Jul 14, 2009 9:04 am

kindly study this chart of GBPUSD.
GBPUSD hit an important level in a similar fashion to eurusd. There is a good reason to believe that this is a dollar game and it wasn't invented by weak forces.
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Paul
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To monolisa

Postby Paul » Tue Jul 14, 2009 9:39 am

Unfortunately I cannot, it is very difficult.
But I want to say that to understand the market moves it is essential to have both smoothed and unsmoothed data.

Smoothed indicators help identify a major (underlying) energy/direction but some very important information gets lost in the process of smoothing and this information pertains to those ripples/bumps/hollows the price action makes.

Unsmoothed indicators are extremely useful if you know how to use chaos and its complexities in trading. Of course you will never be able to effectively use them all because of the spread but should there be no spread in quoting I am sure some new trading methods would crop up immediately and work beautifully for quite some time.

One more and very important thing is that (and that is self-evident from the point of view of maths) smoothed data and smoothed indicators suggest such [B]a SL that may not be appropriate to your trade at all. [/B]
You will generally be right in direction but the market will frequently hit your stops until you are dead.

I consider the SL strategy a crucial element of trading but if you do not know how to do it or the setup you are using plays you tricks, then it is better not to place a stop and concentrate on TP. Hunting money requires a different mindset than defending your position, so it is also different from the point of view of psychology of trading.

Therefore, asking someone what his SL preference is has no sense to me whatsoever.

Another misunderstanding is that people don't tell the risk from the probability and they wrongly use them as synonymes. Quite often by taking a slightly more risk you increase the probability of a win. Your stop loss is about that risk not about the probability. If you cannot use the calculus of probability to your advantage how can you expect to be a winner in the long run?

Paul
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a next important level on GBPUSD

Postby Paul » Tue Jul 14, 2009 10:31 am

Momentum is very weak yet market makers insist on making higher prices.
1.6405 comes from very heavy selling on July 3.
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mstandifer
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S-RoC and Linear Regression Indicator

Postby mstandifer » Tue Jul 14, 2009 11:38 am

Paul,
I have been unable to locate a suitable S-RoC indicator or a linear regression channel that will allow an overlay in a secondary window.

Will you post your indicators please?

Regards,
Marc

Paul
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To mstandifer

Postby Paul » Tue Jul 14, 2009 3:17 pm

Hi mstandifer,

http://codebase.mql4.com/ru/5486 is a direct link to download S-RoC. (it's Fred G. Schutzman idea)
Linear regression should be in custom tools of your trading station. If not try
http://codebase.mql4.com/ru/1402

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How momentum works on EURUSD

Postby Paul » Tue Jul 14, 2009 6:22 pm

See how momentum works on EURUSD. The change is marked by an arrow. You risked maybe 10 pips. Just think of it!
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mstandifer
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Length of LRC and Momentum

Postby mstandifer » Tue Jul 14, 2009 9:52 pm

Paul,
Thank you for the indicator links. That's what I was looking for.

How order levels impact momentum is making sense now and I see how you are applying the linear regression channel with extensions to the S-RoC as well as the Chaos in earlier posts.

However, I am uncertain as to how you determine where to place the beginning and end of your LRC. If I misplace my channel by even one or two periods, I miss the move completely.

Could you elaborate on what determines your LRC length and placement?

Regards,
Marc

Paul
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a glimpse on EURUSD

Postby Paul » Tue Jul 14, 2009 9:56 pm

a glimpse on EURUSD:

1.4013 is an important barrier. Four attempts to break it were futile perhaps because all of them took place when momentum was really weak. But it is evident that some market players tried to squeeze prices through the area and we can only shake our heads on how relatively easy they threatened short positions built above.

The weak momentum made the eurusd slump to below 1.3920 where no wonder we expected a great number of limit entry buy orders waiting.
Longs are seen @ 1.3882
1.3905
1.3920/25.
Older strong selling @ 1.3979 was cut out.
The main buying power is seen not below 1.3920 but a little higher 1.3936 and this area is the most important short term support. If broken one should expect another dive towards recent lows. This information is important in planning your new long positions. I would not attempt them from levels which can be tested for strength. Kindly notice that some big positions are built in a battlefield front line way. There would be more than one line and one of them would be treated as a good tester. The idea behind it is to buy oneself time for an evacuation when things go the other way.

As far as new selling power is concerned, I point to the area from 1.3990 above.
Certainly Europe was waiting for a change of momentum by the US players
but the US session did not change much. Leading bourses are euro supportive. The yen is euro supportive too now.
The last signal is a sell. From my point of view it would be easier to plan if the eurusd tested last lows. Without such a corrective move a break of 1.4013 would make some participants chase the market.
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Paul
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USDCHF shows that still another test of 1.4013 is possible

Postby Paul » Tue Jul 14, 2009 10:23 pm

USDCHF shows that still another test of 1.4013 is possible. USDCHF left two levels unfilled not just one like the eurodollar. And both the levels suggest a range 1.3936-1.4013 may be in place once again.

mstandifer
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Possible direction based on method?

Postby mstandifer » Tue Jul 14, 2009 10:27 pm

Alright then. To see if I'm understanding this now. Here is a chart.

The blue triangles are my LRC points as well as S-RoC turbulence areas.

Possible move to 1.3961 and then to 1.3990?

Regards,
Marc
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Last edited by mstandifer on Tue Jul 14, 2009 10:42 pm, edited 1 time in total.

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