Strategy Based On Chart Pattern

trading strategies and money management discussion, code, results

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fatdog1
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Postby fatdog1 » Sun Jun 25, 2006 1:24 am

TheRumpledOne wrote:"The Weinstein code would be harder because of the vertical and horizontal channels. He also uses RSI and a 40 week MA cross as triggers.
Have you ever read his book? "

I have read so much, I really don't know.

All that matters is taking profit.

I keep it simple.


For sure.
As simple as possible.
I want to paint and remodel and let the strategy handle it. :lol:

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fatdog1
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Postby fatdog1 » Sun Jun 25, 2006 1:28 am

TheRumpledOne wrote:"If you could, please try to add the code from the key reversal up candle to the DarvasBox as a condition to the ploting of the box for long trades. "

Next time I mess with the box, I'll take a look.


Thanks TRO,
Your the best

Ali Son
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Postby Ali Son » Sun Jun 25, 2006 2:24 am

Now that I have the precise particulars, I will also go ahead and enlist the support of coders on the TS forums as well.

https://www.tradestation.com/Discussion ... c_ID=53491

FatDog1, I'll let you know when I get answer to my post with a working modified Darvas code.

-OS

fatdog1
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Postby fatdog1 » Sun Jun 25, 2006 8:51 am

Ali Son wrote:Now that I have the precise particulars, I will also go ahead and enlist the support of coders on the TS forums as well.

https://www.tradestation.com/Discussion ... c_ID=53491

FatDog1, I'll let you know when I get answer to my post with a working modified Darvas code.

-OS


Ali,
Sounds good. TRO said he would look at it too.
I will look at the charts with DarvasBox on it to find examples of bull and bear flags to post pictures of for a visual clue.
I found one sort of picture where the flag pole is inside the box for a long example and one good looking bear flag.




FD1

fatdog1
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Postby fatdog1 » Sun Jun 25, 2006 9:18 am

fatdog1 wrote:
Ali Son wrote:Now that I have the precise particulars, I will also go ahead and enlist the support of coders on the TS forums as well.

https://www.tradestation.com/Discussion ... c_ID=53491

FatDog1, I'll let you know when I get answer to my post with a working modified Darvas code.

-OS


Ali,
Sounds good. TRO said he would look at it too.
I will look at the charts with DarvasBox on it to find examples of bull and bear flags to post pictures of for a visual clue.
I found one sort of picture where the flag pole is inside the box for a long example and one good looking bear flag.




FD1


Ok, I changed the time frame on the EURUSD to 30 minutes and I found a
good looking bull flag breakout.

The flagpole is outside the first box and is a big key reversal candle or up flag pole candle.

The congestion area is not one DarvasBox, but several side by side in about the same range.

You can see what happens a lot of times the way the DarvasBox is currently coded. There are lots of little long and short trades inside the DarvasBoxes which should not happen but that can be reduced by changing the stop loss and profit target settings in the inputs.

There is finally a breakout of the last DarvasBox which is the bull flag breakout trade that I am looking for.

I am hoping that if the key reversal condition was added, there would only be one DarvasBox around the congestion area and one long breakout trade.

In the next picture and next post, I will simulate the extend box top and box bottom to the right feature I am looking for by using hand drawn trend lines for the box top and box bottom.

Then I will scroll to the right on the chart to see what happens when the price trades back to the hand drawn trendlines.


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fatdog1
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Postby fatdog1 » Sun Jun 25, 2006 9:56 am

fatdog1 wrote:
fatdog1 wrote:
Ali Son wrote:Now that I have the precise particulars, I will also go ahead and enlist the support of coders on the TS forums as well.

https://www.tradestation.com/Discussion ... c_ID=53491

FatDog1, I'll let you know when I get answer to my post with a working modified Darvas code.

-OS


Ali,
Sounds good. TRO said he would look at it too.
I will look at the charts with DarvasBox on it to find examples of bull and bear flags to post pictures of for a visual clue.
I found one sort of picture where the flag pole is inside the box for a long example and one good looking bear flag.




FD1


Ok, I changed the time frame on the EURUSD to 30 minutes and I found a
good looking bull flag breakout.

The flagpole is outside the first box and is a big key reversal candle or up flag pole candle.

The congestion area is not one DarvasBox, but several side by side in about the same range.

You can see what happens a lot of times the way the DarvasBox is currently coded. There are lots of little long and short trades inside the DarvasBoxes which should not happen but that can be reduced by changing the stop loss and profit target settings in the inputs.

There is finally a breakout of the last DarvasBox which is the bull flag breakout trade that I am looking for.

I am hoping that if the key reversal condition was added, there would only be one DarvasBox around the congestion area and one long breakout trade.

In the next picture and next post, I will simulate the extend box top and box bottom to the right feature I am looking for by using hand drawn trend lines for the box top and box bottom.

Then I will scroll to the right on the chart to see what happens when the price trades back to the hand drawn trendlines.



I have two screen shots of what happened when the price returned to the breakout line from the first bull flag breakout trade.

The breakout long trade happened on 6-3-06 at 1.2828 and the price came back to the breakout area on 6-6-06. Since the price entered the congestion area and then exited the congestion area to the upside, I would have been in another long trade again if the DarvasBox could be made to repeat the original trade conditions if market position = 0 by extending the top and bottom of the box to the right after the first breakout happens.

That way a retest of the breakout area would put you in another long trade sometime in the future.

It would work out best if it happened to be a retracement in an uptrend.

However, as you can see the EURO was begining the new current downtrend and the bounce was very small.

The bounce only went from 1.2828 to a high of 1.2843 before reversing and then hanging out in the breakout area for most of the day.

In the second screen shot you can see that if no profit was taken at 1.2843 and the trade went on, it would eventually trade down to the original stop loss just below 1.2796 for a loss on 6-7-06.


Last edited by fatdog1 on Sun Jun 25, 2006 10:09 am, edited 1 time in total.

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Postby fatdog1 » Sun Jun 25, 2006 10:02 am

Here is what it looks like without the DarvasBox around it
in a full screen shot for another view.



Here we add the Weinstein Stage 3 top area to the picture
which shows the original breakdown from stage 3 into stage 4 and a retest of the breakdown line almost immediately
leading to the beginning of the current downtrend.

The DarvasBox as it is currently coded might have put us in the trade on the first key reversal down candle above.

There was never a congestion area after the bear flag pole so my modified DarvasBox might have missed the trade.

I would have had to be at the computer and watching the EURO to manually enter the short trade if I saw the Weinstein breakdown happen or the pullback to the breakdown which did not happen that day.

The good thing is if I was in the short trade, I would take a partial profit near the bull flag breakout area and move my stop loss to even on the rest of the position in case what happened below at 1.2828 happened. Then I would trail my stop on the rest of the position from there.


fatdog1
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Postby fatdog1 » Sun Jun 25, 2006 11:25 am

Moving on we see where the DarvasBox with the bear flag modification would be expected to enter the short trade in two places.


fatdog1
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Postby fatdog1 » Sun Jun 25, 2006 1:01 pm

Ali,
I am updating the smaller time frame RIMM chart.

There are 2 possible trades working.

For a long trade there is a bull flag pole below the congestion area which would make it a stage 1 basing area if we move higher from here.
It could just be a pause in the current little up trend on the smaller time frame. A breakout of the top line is a new stage 2 uptrend on this chart.

There is also a possible stage 3 top on the 10 minute chart because of a key reversal bear flag candle inside the congestion area.

The modified DarvasBox would have a bear flag pole and a congestion area working if there is a selloff from here.

The Weinstein strategy (if it is possible to code one) would take the breakdown trade at about the same price on a break below the bottom
line of the trading range. I should add that since we don't know if this is a stage 1 basing area or a stage 3 top area, a Weinstein strategy should also be ready to enter a breakout from the top into a 212 long breakout trade. The DarvasBox is coded to do this already.

Let's see how it plays out next week.

I'll attach the workspace with the trendlines on it. Version 3159

Attachments
RIMM 10 Minute 6-22-06.tsw
(25 KiB) Downloaded 22 times
Last edited by fatdog1 on Sun Jun 25, 2006 10:59 pm, edited 2 times in total.

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TheRumpledOne
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Postby TheRumpledOne » Sun Jun 25, 2006 1:12 pm

fatdog1 wrote:How does this scalper determine support and resistance?



Sup = PivotLowVSBar(1,low, iLS, iRS, iRS+1);


Res = PivotHighVSBar(1,high, iLS, iRS, iRS+1);

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