Letting The Trade Run

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Relativity
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Letting The Trade Run

Postby Relativity » Wed Jul 20, 2011 3:39 pm

An experiment worthwhile trying. Inspired by the PipEasy thread in FF. After all, I am already profitable trading short term, so why not attempt long?

The only difference is that instead of using 4 mini lots like in short term, use only 1 mini lot for long term. Grab daily profit from short term and allow a small portion of it to be reinvested into long term's SL.

MT4 chart used will be DEMO AVAFX, but entry will be done on LIVE AVAFX platform. This is a possible way to guard from brokers pushing fake quotes in your live account to hunt your stops. Another method is to open up the same chart from another broker. But this could also mean getting different results when doing analysis (e.g. microlot based brokers tend to give PA that is more volatile, when compared to mini)

SL will generally be 16 to 17 pips + 3 to 4 pips spread = 20 pip total

My definition of short/long term; others may agree or disagree since the term short/long seems to be subjected to personal preferences and personality.
> Short term = 10 to 20 pip TP, usually closed within 1 hour, 7 to 10 pips tight stops.
> Long term = anything beyond 20 pips TP, set and walk away style. The idea is to enter a trade, then go to sleep or go to work, then come back for the results. Using loose stops of at least 20 pips.

This is a learning thread where my thoughts are input here. The aim here is to learn how to let the trade run correctly. But suggestions are always welcomed.
Last edited by Relativity on Thu Jul 21, 2011 10:36 am, edited 6 times in total.

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Relativity
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Postby Relativity » Wed Jul 20, 2011 3:43 pm

Instrument : AUDUSD (short)
Open : 1.0741
Stop : 1.0761
Time (Date) : 7/20/2011
Time (Time) : 11:20:36 PM
Attachments
audusd.PNG
audusd.PNG (101.13 KiB) Viewed 2060 times
Last edited by Relativity on Thu Jul 21, 2011 10:39 am, edited 1 time in total.

Belkin
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Postby Belkin » Wed Jul 20, 2011 4:08 pm

where are the candles?

Relativity
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Postby Relativity » Wed Jul 20, 2011 4:21 pm

Belkin wrote:where are the candles?


Where as in? I don't understand your question.

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PebbleTrader
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Postby PebbleTrader » Wed Jul 20, 2011 5:34 pm

I like your idea, but I'm with Belkin, It is hard to follow along with you when there are so many indicators on your chart.
Life is just a journey

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Relativity
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Postby Relativity » Wed Jul 20, 2011 9:46 pm

PebbleTrader wrote:I like your idea, but I'm with Belkin, It is hard to follow along with you when there are so many indicators on your chart.


Yup I get both of you. I will explain as time goes. I am still learning too.

The indicators worked well for me for short term trades. Maybe it might not work for long term, but lets see.

Update : I've done a lot of cleanup. It forced me to code better + improve decision making =>
Last edited by Relativity on Thu Jul 21, 2011 7:20 am, edited 3 times in total.

Relativity
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Postby Relativity » Wed Jul 20, 2011 9:55 pm

Trade #01
Instrument AUDUSD (short) - update #1 + #2
Open 1.0741
Stop 1.0761
Open Time (Date) 7/20/2011
Open Time (Time) 11:20:36 PM

Update #1
Update Time (Date) 7/21/2011
Update Time (Time) 5:53:20 AM
-Position survives after 6 hours, SL did not hit.
-Made some lines thinner so that the H1 candles can be seen more easily
-There are no high impact News for the next 5 hours, so I can worry less about my stop being hunted. The top right shows the next 6 upcoming news events which is the FF news indicator.

-At H5 timeframe level, a double top is seen forming via the last 5 zigzag waves. Price is also seen to be 'squeezing' when automatic trendlines (in yellow) are added onto the last 3 zigzag waves. This is confirmed by the GMMA (GMMA Guppy Multiple Moving Average) short term squeeze (in orange).
-The latest zigzag line retraced more than 0.618 of the previous zigzag, but failed to challenge the previous top.
-Price is now 30+ pips away from the nearest round number/psych line at 1.0700. Generally speaking, price tends to be attract to these round numbers, so this short still looks good.

-At D1 timeframe level, the latest zigzag line also retraced more than 0.618 of the previous zigzag, but failed to challenge the previous top.
-Price is still near the top of the current D1 zigzag. Good to short?


Update #2
Update Time (Date) 7/21/2011
Update Time (Time) 11:28:23 AM
-Stop got hit, then price tanked down.
-It occurred to me that I might have to look into the weekly trend. The justification is this : if I am ok catching 20 pips from short term trading, which is approximately 20% to 30% of the average daily range, then why not the same logic applied to the weekly range?
-One particular goal is to avoid poor entries that cause the trade to be whipped to death too fast. An observation is that these 10 to 20 pip whips are a common PA phenomenal, which are perfect for short term trades/scalp TP. But for long term trades, these whips can work against the trader if entry is poor.
-In reflection, this is a good entry for a short term trade (+10 pips in less than 1 hour), but a poor entry for long term. It held for 5 hours, but I am looking for a longer duration, say 12 hours. inversely and becomes SL. PTe gives me how far these whips might go, price length and time length wise.
-Got rid of GMMA. It is helpful when applied to H1 chart for short term, but I can't see it helping for long term. Also cleaned up the chart to improve the visuals; I can do without the words.
Attachments
failed audusd.PNG
failed audusd.PNG (63.68 KiB) Viewed 1983 times
audusd D1 wave.PNG
audusd D1 wave.PNG (84.53 KiB) Viewed 2009 times
audusd H5 wave.PNG
audusd H5 wave.PNG (78.01 KiB) Viewed 2010 times
Last edited by Relativity on Fri Jul 22, 2011 5:14 am, edited 1 time in total.

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Postby Relativity » Thu Jul 21, 2011 5:49 am

Trade #02
Instrument : EURCHF (short)
Open : 1.1720
Stop : 1.1740
Time (Date) : 7/21/2011
Time (Time) : 1:15:23 PM

Close : 1.1664
Close Time (Date) : 7/21/2011
Close Time (Time) : 5:23:21 PM
Lot P/L : 56

Hope these charts are now much clearer to show intent.

How Internal Fibs are constructed
Look at screenshot of Constance Brown's book (or get the book if you want; its a good read). Basically this is how the internal fibs are constructed. On any timeframe on your choice, select a good sized swing + drawn a fib retracement grid onto its high and low extremes. The swing that I select (automatically by code + also automatically plot the grids) is the latest SB zigzag wave.

Then sub divide the top/bottom area where you want to look for points of price exhaustion / contraction. I only use 3 levels of sub divided fibs, rather than 4 as shown. If price is not going to exhaust / contract yet, it will disrespect the lines; so wait till it does, at least for the 3rd level of sub divided fibs.

This set of fibs measures the internal retracement of the current swing, to spot for 3 things in regards of how price can behave:

1-if price is starting its reverse from its current extreme after reaching exhaustion by respecting the minor fib grid
OR
2-if price is going to end its retracement and resuming the trend by respecting the major fib grid
OR
3-if price is not going to end its retracement but to become a full fledged reversal by disrespecting the major fib grids

I will do my best to post analysis of such trades when they show up.

Here's another example I found : Internal Fibs. I don't think its clear enough thou, but at least its nice to see someone else is aware of this technique.

Later : how external fibs are constructed
Attachments
FIBONACCI_ANALYSIS P15 P16 Copyright - Constance_Brown.PNG
FIBONACCI_ANALYSIS P15 P16 Copyright - Constance_Brown.PNG (112.66 KiB) Viewed 1944 times
eurchf_h5_d1.png
eurchf_h5_d1.png (78.44 KiB) Viewed 1958 times
eurchf_d1_w1.png
eurchf_d1_w1.png (81.88 KiB) Viewed 1963 times
Last edited by Relativity on Thu Jul 21, 2011 10:30 am, edited 7 times in total.

Relativity
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Postby Relativity » Thu Jul 21, 2011 8:59 am

Trade #03
Instrument : GBPUSD (short)
Open : 1.6183
Stop : 1.6203
Time (Date) : 7/21/2011
Time (Time) : 4:31:52 PM

Close : 1.6181
Close Time (Date) : 7/21/2011
Close Time (Time) : 8:07:21 PM
Lot P/L : 0 (Breakeven)

How are these waves constructed?
These are not the regular zigzag lines. They may line up almost the same when laid out together thou. The formula comes from the basic SignalBender : previous low - current high VS previous high - current low. This formula can be applied to any timeframe to find out its basic movement. I took it 1 step further : since it plots the signature of basic price movement, it also means it can be also used to plot the price extremes.

Its actually very simple (but hard to code!). Look at Basic SB. For every SB cross made, it signals a reversal of price. At this point, the latest high point (when reversing to go down) or latest low point (when reversing to go up) is marked. Repeat that for all points (moving forward in time, not backwards!), then join all points with lines. The SB zigzag is formed.
Attachments
BE gbpusd.PNG
BE gbpusd.PNG (74.07 KiB) Viewed 1910 times
gbpusd d1 w1.PNG
gbpusd d1 w1.PNG (87.98 KiB) Viewed 1946 times
gbpusd h5 d1.PNG
gbpusd h5 d1.PNG (73.75 KiB) Viewed 1946 times

Relativity
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Postby Relativity » Thu Jul 21, 2011 1:40 pm

Trade #04
Instrument : EURJPY (short)
Open : 111.97
Stop : 112.17
Time (Date) : 7/21/2011
Time (Time) : 8:13:24 PM

Close : 112.56
Close Time (Date) : 7/21/2011
Close Time (Time) : 8:55:26 PM
Lot P/L : 59
Attachments
success eurjpy.PNG
success eurjpy.PNG (74.99 KiB) Viewed 1902 times
eurjpy h5 d1.PNG
eurjpy h5 d1.PNG (76.19 KiB) Viewed 1904 times
eurjpy d1 w1.PNG
eurjpy d1 w1.PNG (79.04 KiB) Viewed 1904 times

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