TRO FX GRIDIRON

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TheRumpledOne
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TRO FX GRIDIRON

Postby TheRumpledOne » Sat Jan 06, 2007 6:41 pm

TRO FX GRIDIRON 2




I added the PREVIOUS DAY'S OPEN and PREVIOUS DAY'S MIDPOINT lines.


TRO FX GRIDIRON



I updated the Gridiron indicator to show the previous session's high, close and low so you would know what numbers are being used for the PP calculation.

Using TRO FX GRIDIRON along with the dynamic support/resistance showme is almost like having a "crystal ball".

Yesterday, the GBPUSD had a hard time staying above the previous session close. Dynamic Support ( 1.9383 ) moved up but was broken right before NFP, that was a "clue".

When the previous Dynamic Support ( 1.9366 )was broken, the GBPUSD was in a freefall.

But the Buyer's defense stiffened near the 50 yd line ( 1.9286 ) and then again near the 20yd line ( 1.9260 )... IMAGINE THAT?!!??!

ELD attached.
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Last edited by TheRumpledOne on Sun Jan 14, 2007 7:11 am, edited 2 times in total.

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Postby nicknextmove » Sat Jan 06, 2007 8:37 pm

Can you explain the concept behind the 50 YL, Seller 20, Buyer 20, etc?

Thanks,
Nick

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Postby TheRumpledOne » Sun Jan 07, 2007 3:13 am

Hi Nick:

It's just like football.

If the sellers (red candle) have the ball, once they get near the buyer's 20 yd line, the buyers defense will start to put up a fight.

If the buyers (green candle) have the ball, once they get near the sellers 20 yd line, the sellers defense will start to put up a fight.

At/near the 50 yd line, look for the opposing team to get the ball back. In other pivot systems this is call M1, M2, M3, etc...

If the ball crosses the goal (yellow) line, many times the scoring team will score again on the drive.

If you look at the chart, you can see how the game played out.

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Postby nicknextmove » Sun Jan 07, 2007 4:37 am

TRO - Thanks much for the explanation.

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Questions about gridiron

Postby chancee90046 » Tue Jan 09, 2007 11:27 pm

I have a few questions about the gridiron for TRO or anyone else who would be kind enough to answer. Still an amateur so please bare with me.

First, I understand completely the concept of the gridiron, but I'm trying to figure out when would be the most opportune time to buy or sell. (initiate a position) Using the fifteen minute timeframe as an example, if one were looking to go long and an uptrend had been confirmed by daily/60 minute and 'the ball' was being pushed across the yellow resistance line... do you buy the current candle? Or do you wait for the next candle to confirm the uptrend, say, around the twenty yard line - then buy?

Second, and this is embarrassing I don't know this, but... what does PP stand for in the middle yellow line? Is it the middle of the day before?

Third, I'm curious exactly how you buy at 'support' and sell at 'resistance'? For example if you were looking to buy, does that mean when there is a clear and confirmed uptrend you buy the first blue dot? Or do you wait for the second blue dot? Or do you wait for the first green candle after a blue dot? Just wondering what your methodology actually is.

And lastly, this is more a question about trading in general. I know from reading your posts in tradestation that you do a lot of scalping. i think I remember you writing somewhere you scalp with around 300/500 shares.

Using tradestation where they charge a dollar for every hundred shares, if you were making only two or three cents with three hundred shares you would only have a couple dollars of profit. I know you do much better than that, so I was just wondering what part of the equation I have wrong. I only ask because I've been doing the math on my own potential profit if scalping with around three hundred shares.

That's it. Thanks in advance for any response you care to give. -C

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Postby nbarillas » Wed Jan 10, 2007 2:32 am

RumpledOne-Have you used the FX Gridiron with Stocks? if not, would you recommend it for stocks? Thanks for all you do!

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Postby stifland » Wed Jan 10, 2007 2:05 pm

Chance--don't know about all the other questions as I am new as well--but PP is the Pivot Point or the daily Floor Pivot.

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Re: Questions about gridiron

Postby TheRumpledOne » Thu Jan 11, 2007 9:38 pm

chancee90046 wrote:I have a few questions about the gridiron for TRO or anyone else who would be kind enough to answer. Still an amateur so please bare with me.

First, I understand completely the concept of the gridiron, but I'm trying to figure out when would be the most opportune time to buy or sell. (initiate a position) Using the fifteen minute timeframe as an example, if one were looking to go long and an uptrend had been confirmed by daily/60 minute and 'the ball' was being pushed across the yellow resistance line... do you buy the current candle? Or do you wait for the next candle to confirm the uptrend, say, around the twenty yard line - then buy?

Second, and this is embarrassing I don't know this, but... what does PP stand for in the middle yellow line? Is it the middle of the day before


Third, I'm curious exactly how you buy at 'support' and sell at 'resistance'? For example if you were looking to buy, does that mean when there is a clear and confirmed uptrend you buy the first blue dot? Or do you wait for the second blue dot? Or do you wait for the first green candle after a blue dot? Just wondering what your methodology actually is.

And lastly, this is more a question about trading in general. I know from reading your posts in tradestation that you do a lot of scalping. i think I remember you writing somewhere you scalp with around 300/500 shares.

Using tradestation where they charge a dollar for every hundred shares, if you were making only two or three cents with three hundred shares you would only have a couple dollars of profit. I know you do much better than that, so I was just wondering what part of the equation I have wrong. I only ask because I've been doing the math on my own potential profit if scalping with around three hundred shares.

That's it. Thanks in advance for any response you care to give. -C



Let’s go over the basics of the Gridiron.

Support/Resistance are price points where the buyers and sellers put up resistance to the price moving below (support) and above (resistance). There are many formulas for calculating these lines but the basic one is:


PP = (high[1] + low[1] + close[1]) / 3;
R1 = (2*PP) - low[1];
S1 = (2*PP) - high[1];
R2 = PP + (R1 - S1);
S2 = PP - (R1 - S1);
R3 = ( 2 * PP ) + ( high[1] - ( 2 * low[1]) );
S3 = ( 2 * PP ) - ( ( 2 * high[1] ) - low[1] );
R4 = ( 3 * PP ) + ( high[1] - ( 3 * low[1]) );
S4 = ( 3 * PP ) - ( ( 3 * high[1] ) - low[1] );

PP is the Pivot Point.

S1 is the first line of support.

R1 is the first line of resistance.

High[1] is the previous day’s high price.

Low[1] is the previous day’s low price.

Close[1] is the previous day’s closing price.

The “field” is the distance between a support line and a resistance line. So a field is drawn between S1 and PP and another between PP and R1. And you draw as many fields as needed as the stock price moves throughout the day. Of course, the computer does all this for you.

So for the field between PP and R1, we will need to have the buyer’s 20 yard line, the 50 yard line and the seller’s 20 yard line drawn in using these calculations:


B20YL = (R1-PP) * .20 + LS; {buyer’s 20 yard line}
MIDFL = (R1-PP) * .50 + LS; {midfield}
S20YL = (R1-PP) * .80 + LS; {seller’s 20 yard line}

If you are a trader, the light bulb may be going off. Think of a lower indicator like RSI(10). When RSI(10) crosses below 20, it is considered to be oversold and when it crosses above 80, it is considered to be overbought. So the concept of oversold/overbought is applied to the area between support and resistance.

Who are the buyers, who are the sellers and who has the ball? We use a 15-minute candle chart to determine who has the ball. There are 15 minutes in a football quarter, which just happens to be another coincidence.

If the candle is RED, meaning the closing price is below the candle’s opening price, then the SELLERS have the ball and are on offense. If the candle is GREEN, meaning the closing price is above the candle’s opening price, the BUYERS have the ball and are on offense. The team without the ball is playing defense, just like football. The idea is to be on the team who has the ball.

When the market opens at 9:30 am E.S.T., that’s the kickoff and we wait to see who has the ball. There can be many turnovers (candle changing from RED to GREEN and GREEN to RED) during the first quarter (first 15 minutes), and we just sit back and watch to see who winds up with the ball.

At the end of the quarter, we want to get on the side that didn’t have the ball in the first quarter. This may seem backwards but it works. This is called the END AROUND play.

What usually happens is the team that had the ball runs out of steam and winds up giving the ball to the other team. When that happens, we want to enter the trade as close to the previous candle’s closing price as possible or as close to one of the lines drawn on the chart. We can usually get a first down or 10 cents out of the trade. If you are trading 1,000 shares, that’s $100 gross profit in a few seconds or minutes.

After one team carries the ball (moves the price) to one of the lines that is drawn on the chart, we want to exit the trade with a profit. And that is usually more than a ten-cent profit. This completes a successful END AROUND play. At that line, the other team will put up resistance, and get the ball back or their defense will push the offense back (move the price).

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Postby TheRumpledOne » Thu Jan 11, 2007 9:40 pm

nbarillas wrote:RumpledOne-Have you used the FX Gridiron with Stocks? if not, would you recommend it for stocks? Thanks for all you do!


Yes... LOL!

I wrote the GRIDIRON for stocks BEFORE I ever traded FOREX.

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Thanks so much!

Postby chancee90046 » Fri Jan 12, 2007 2:50 am

Thanks for replying... The whole football metaphor is ingenious. After spending several days watching stocks on the gridiron this week it finally began to sink in. And now your detailed explanation has help fill in any blanks.

For some reason, back in your tradestation days, the gridiron confused the heck out of me. Probably because when I came across your thread there you were around page seventy at the time and I was so fascinated by all your work I tried to digest everything in record time. As with the gridiron, there are several other great indicators I've recently gone back and 'uncovered' from the early days of that thread.

Oddly enough, the most basic of all, and one of the earliest of all, the SM TREND... I never realized it's true potential until you turned it into an indicator for the chart here on kreslik and I was able to see it in a different light. Now I couldn't live without it.

Thanks for sharing all your great work!

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