TRO DOPC & TRO BUY ZONE

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Postby RuGO » Thu Mar 15, 2007 8:46 am

"At the start of the hour, the 1, 5, 15, 60 are all the same color." - I suppose that at th end of the day, that's all the timeframes a trader needs to make a $TRILLION ;-)

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Postby geff » Thu Mar 15, 2007 4:03 pm

London Open
GBP/USD
Last Night

1st Long = loser
1st Short = winner

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Postby geff » Thu Mar 15, 2007 4:14 pm

Here's the picutre...

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Postby geff » Thu Mar 15, 2007 4:24 pm

And if we took EVERY entry...

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Postby eudamonia » Thu Mar 15, 2007 5:19 pm

geff,

Well I see 4 winners and 1 loser. What you're calling the spread zone is where I'm making profit. Remember that Avery says that he uses limits. Personally I hit market on the way in and limit on the way out.

First trade enter short at 1.9334 max pips 4 - (that's 2 for me and 1-2 for my broker - worst case usually its only 1). Second trade enter long at 1.9340 max pips 3 this could be either a tight winner or a small loss - hard to say from this chart. Third trade short at 1.9334 max pips 7 - no problem getting a winner here. Fourth trade enter long at 1.9340 max pips 4 - another 2 pip winner (1-2 for my broker). Fifth trade enter short at 1.9334 - over 10 pips to be had here no problem getting a win.

If you're hitting 2 pips each time with a 2 pip stop you're looking at 6 pips total from all this action. Not bad. Do this on a few markets and you'll have your 10 pips per day which as Avery has stated before is all you need to make serious money.

I will say that you need to be FAST to make this happen. This is where my thousands of hours of Nintendo and PlayStation experience come in handy.

:)

Edward

BTW for those interested in "training" on this to see if the Buy/Sell Zone is for you - let's see if we can get the Buy/Sell Zone indicators into NeoTicker. That way you can use the SimServer to train yourself spot and take these setups on the simulator the exact same way as you will take the real trades. Who's up for it?

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Postby geff » Thu Mar 15, 2007 8:26 pm

Ed, how do you usually only pay 1 to the broker?

EFX charges a commission of ~ 1.936 on a round trip GBP/USD.
Add in a 1 or 2 pip spread, that's 3 or 4 to the broker.

On TS / Gain, it's a fixed 4 to the broker.

EFX's spreads range from 0 to 5 depending on the time but 1 and 2 are most common.

It seems to me that to get your hypothetical results you'd need to:

1 Enter at the optimum zone prices every time and
2 Only trade when the spread is ZERO

Yes, Nintendo is great training. Can you grab the optimum entry with real-time market orders? Wouldn't a stop limit entry be better?

Practicing with simulated playback would be great training. TS, of course, lacks this. All we'd need is for someone to program a dummy TS Server we could log into to regurgitate any session we choose - just like my Cable box's OnDemand feature. (Couldn't live without that!)

Needless to say (so why say it?) if you are going for only a pip or 2, then the commissions, spread and your precise entry/exits will all have to line up in your favor and you've got to cut your losses immediately (but then will get whipsawed to death) - even 2 pips against you and you're 4 or 5 in the hole.

And where would you have placed your stop loss? At the mid? At the opposite BUY/SELL Zone? Those losses would have been ~ 6 to 10, respectively, with those stop loss targets.

I brought up a tick chart for this time period. If you took every optimum entry and took a 1 pip profit where you could (after 3 pips in spread and commission), I count 7 winners and 7 losers with the average loser being way bigger than the average winner.

Now 14 trades in an hour may be overtrading but I'm just putting this under the microscope to scrutinize what works and what doesn't and hopefully, understand why.




Jeff

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Postby TheRumpledOne » Thu Mar 15, 2007 8:41 pm

THERE IS NO SPREAD TO PAY AT EFX!!

It costs about 2 pips to trade the GBPUSD.

Forget the spread... it is IRRELAVENT!

If you enter a one price and exit 2 pips in your favor you breakeven not matter what the spread is.

I do like the idea of having the "commission zone" on the chart. I just might have to add that in... COOL IDEA!!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Postby TheRumpledOne » Thu Mar 15, 2007 8:47 pm

In your win/lose scenario, are you considering the color of the other candles or if there are higher/lower high/lows? That would cause you to only go long or short but not both.

Where's dynamic support/resistance? Usually, I don't go long the first time it touches dynamic resistance or short the first time it touches dynamic support.
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Postby eudamonia » Thu Mar 15, 2007 11:57 pm

geff,

What TRO said for the most part answers your questions. I'll address a couple of others.

"Ed, how do you usually only pay 1 to the broker?"

EFX has variable spread and during the morning (or any active time) I typically only pay 1 pip. I limit out so no cost on that end other than comms.

"On TS / Gain, it's a fixed 4 to the broker."

That's why I don't use Gain.

"EFX's spreads range from 0 to 5 depending on the time but 1 and 2 are most common."

The beauty of discretionary trading is that I would never trade when the spread is higher than I like ie. > 2.

"It seems to me that to get your hypothetical results you'd need to:"

The results above are indeed hypothetical (because I don't trade the london open), but my results are not. They're real with real $. You can indeed scalp the forex, but as Michal would say - you must know what you're doing.

"1 Enter at the optimum zone prices every time and
2 Only trade when the spread is ZERO"

I agree that you need to enter the prices flawlessly. If I miss a setup I wait for the next one. I don't chase price.

"Yes, Nintendo is great training. Can you grab the optimum entry with real-time market orders? Wouldn't a stop limit entry be better?"

Stop limit entry is slower to enter than market order. I typically fire off an order in less than 10 seconds. It's actually far harder to get the optimal price you want on the Russell with market order but I do that too - you just have to know how to read the tape. It takes a completely reactionary reflex - you see the trade, you press the buy/sell. NeoTicker is great for training on this. I test myself by taking the orders at 5 times the real market speed - now that's tough!

"Practicing with simulated playback would be great training."

Agreed. That's why NT is critical for me.

"Needless to say (so why say it?) if you are going for only a pip or 2, then the commissions, spread and your precise entry/exits will all have to line up in your favor and you've got to cut your losses immediately (but then will get whipsawed to death) - even 2 pips against you and you're 4 or 5 in the hole."

Perhaps. The advantage of using the Buy/Sell zone with intelligent filtering is you can avoid most whipsaws. I still have losers like everyone else. With an 80% win ratio it isn't a deal killer if you have 2 pip winners and 4 pip losers. Remember this is a scalping system.

I think a key point that some folks are missing with Avery is that he is using the tape to confirm his trades (tell me I'm wrong if that isn't true Avery). When I hear him making calls on the Paltalk in the morning he often describes market conditions and how that might affect an upcoming or current trade.

Anyway, let me know if this makes sense.

Edward
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Postby geff » Fri Mar 16, 2007 12:11 am

Greetings, Ed.

"EFX has variable spread and during the morning (or any active time) I typically only pay 1 pip. I limit out so no cost on that end other than comms."

I think it's important to emphasize that the comms are just about 2 pips so you are needing that 3+ pip movement on the chart (since we're only seeing one side) before you get into profitable territory.

I agree with Avery, that you don't "pay" the spread BUT the other side of the bid/ask spread must move itself into your target zone.

The moment your order gets filled, you're 3 pips in the hole. The price has got to shift 4 in your direction to get the 1 pip net profit.

So how would you have traded this particular chart? (You may not trade the London opening, but pretend this wasn't the opening...)

Jeff

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