walterw

And here goes a video on exits... there is also some small info about a paralel research I am doing... cheers Walter. Exits.swf

So lets first talk about _Exits ... that is from a succesfull trade... I am more of a scalper minded... so I like to lock in some good profits when they are there... Now taking an exit I am convinced its directly related to momentum conditions and here comes into play the traders discretionary reading of momentum and his experience in sensing this.. The first basic exit criteria is when the bar gets inside the rainbow crossing the black line... lets call that the "scalper exit"... its the most sensitive and fastest exit, normally leaving a lot of money on the table, but it can be usefull when we sense there is not much momentum in the market.. The second basic criteria is more of the "Traders Exit" ... in this case is the inverse action to our entry criteria as the black line crosses back the thick darkgreen line... in this case we stay inside much more, we have the expectative of having a big move... if we can sense momentum on the market, this is the best shot... So both exits have to be discretionally used... depending on momentum conditions, if small momentum is perceived "scalper exit" its the most recomended, if strong momentum conditions are perceived it would be wise to use "traders exits"... I know we can develop some intermediate alternatives... would be nice to hear what your creativity tells you on this manner... So with that sayed we have two exit criterias to be used according to momentum conditions... remember that the rainbow on the 5 min chart gives us very clear hints on momentum as previously discussed... cheers Walter.

I will start posting here on the topic "Closing Positions" ... This includes : _Stops _Exits I always consider this topic more individual, thought to really make a system we must actually include how are we going to close our trades... but why more individual ? because believe it or not closing a position is where you can see the traders personality, you can see how much tolerance he has to certain type of risks, from his $ amount on acct, his psiche and his character (patience, faith, optimism, etc)... its quiet subjective a traders profile in this arena... but anyway its good to have one good clear TECHNICALL criteria to stick too and trade by the rule... I want to make clear that at this point this thread still is on a research process, wich means I am still open to modifications... What I will present here in terms of exit methods its what has until now pleased me the most... but by no means this can be the best way of exiting... Remember that I am very biased to make $20 per contract/ week on a consitent basis... so that really has some impact on my exit systems... I think today Momentom has made some advances of how we can read an exit... its pure logic... the inverse movement has to be taken into acct here... Now remeber when we talked about expansion/contraction ? well if your trade will succeed, she actually needs expansion to happen... so contraction after that will be the sign that she is probably over... Now let me give a word on RRR (Risk Reward Ratio )... this is the backbone of trading... it is the reason you can take relaxed stops... so the ideal trade is one that actually takes good profits... Dont get me wrong when I say that I aim $20 contract/week, this doesnt mean that I will limit my profit potential... its more of a bussiness target that organizes my vision of my trading... so letting a wining trade keep running its not conditioned by my fixed target... yes it afects wich trades I take, and wich trades I simply dont take... I like more the "shurefoots" wich we will talk later... so I will take some cofee and continue on next post... cheers Walter. PD : I love cofee ¡¡ :coffee: :thumbs up:

They look pretty good ztrader ¡¡... I did test NT with forex data, some time ago quite friendly chart platform... even with tick charts, unfortunately I am not good programing on their language... how do you find the prospect potential of this horizontal VMA lines ? cutting down noise... cheers Walter.

Another Example described here... cheers Walter. Example 9-4-07.swf

maybe you want to take a look at this thread... http://www.traderslaboratory.com/forums/f24/walter-s-forex-trend-trades-2364.html I am actually looking AUD/USD and some other traders are already posting charts from USD/JPY... just a suggestion... cheers Walter.

Had you considered forex Abe ? cheers Walter.

Hi Momentom... thanks for your kind words and I am very glad you like the system... I believe it has great future... I defenitely agree on the quirurgical precision you have on the timing there is no double guess here and the cleaning of noise is just outstanding... about your posted chart :thumbs up: correct ¡¡ thats how this works... love to see this charts guys... keep them coming ¡¡ about exits I will soon post... cheers Walter.

So far as the thread is evolving we had dealed with entries... in the example from Blu-Ray the Timing entry would happen exactly on the circle he marked as the black line crosses bellow the darkgreen thick line on the 1 min chart... About exits I will be posting soon... this will deal with profitable exits as with stops.... cheers Walter.

Absolutely gorgeous one ¡¡ I would say CLEAN... You will see in coming posts that I will deal with the "iconic" setup... wich happens to be the one you just posted here... I see you are a fast learner Blu-Ray ¡¡ thanks for interacting, keep those charts coming in ¡¡ cheers Walter.

Hey Blu-Ray, this is a GREAT contribution man ¡¡ I really aprecciate this much... cheers Walter.

Ok I will take a little parenthesis here to post some examples... unfortunately VT doesnt have much history... so at this time it will not be that much... If we get this indi on MT4 things will be more friendly... One strategic thing to do here is trading on good volatile times of the day like the open London... look this video and compare the first example happens on a time of the day where we cant expect much moves, still was a nice trade... the second example happens right on the hot hours of europe and London trading.... cheers Walter. Example.swf

Oh yes Nick and we will create our currency and trade it with Vma`s rainbow against eur usd and everything... ¡¡ should we call it banana so the pairs would be banana/usd banana/eur jejeje cheers

Oh ok so Multicharts should then read Easylanguage without problems... that sounds good... Hi Pyenner... If we can get just the VMA coded for MT4 with Becam`s calculation the emas of VMA can be manually added on MT4.. and then we can create a Template and we are on bussiness on MT4... cheers Walter.

Super Blu-Ray ¡¡¡ I think that will be awesome to have it for TS... would this be compatible for Multicharts ? as I was thinking in giving a test to their forex version called MCFX wich has up to 5 years worth of history data and its a TS type soft with all the benefits wich that represents... thanks for that... cheers Walter.

Yes Don... this a new generation of TA...¡¡ Hi Pyenner, yes it has been happening on the most rare times of the day ¡¡ thats one of the advantages of forex jejeje... the 1 min is used in order to have more data series on the calculation of this Vma for timing purposes, but the spirit of the trade still is on 5 min... always remember that... Yes Armand at this time charts are from VT and indicator is on default settings on both timeframes... if we get to code this indi for MT4 it would be ideal as I consider MT4 more friendly in some other aspects... Glad to be of help.. there is much more in front.... stay tunned, cheers Walter.

And now a video on Pullback and Timing... The next step will be showing you a lot of diferent examples on this and after that we will aboard the closing positions issues on stops and exits... Also further in I will present the most "shurefoots" trades as the Iconic vma rainbow setup and the super strenght trend vma rainbow setup... I asume we have a long way yet to get there.... Should I add this is all research at this point, so feel free to interact... Hope so far things can be understanded, (sorry for my english) please feel free to make questions.. thanks Walter. Trend-Pullback-Timing just Power.swf

Now lets get into the specifics of reading "Pullback" and "Timing" on the 1 minute chart... You can notice that we dont have the VMA (Black line ) alone... all the contrary she is accompanied by the entire rainbow... now the rainbow literally is a series of "signals" of the VMA.... actually all emas all the way from 2 (first yellow ) too 100 (magenta line)... Now you can notice on the way of this emas "signals" we come thru a thick darkgreen one, I asume she is a 22 ema of our VMA taking Bemac`s construction description... This green Line will have some important role on our specific reading of "Pullback" and "Timing"... _Pullback Definition : We will consider ourselfs in a "Pullback" condition only when we have a Down trend present (from the 5 min chart) and the black line crosses above the darkgreen line on the 1 min VMA Rainbow... thats pretty straight forward... thats our "Pullback Definition" _Timing Entry Definition : We will consider a Timing Entry on this example when we cross back down our darkgreen line... simple... Where is the power, where is the edge in all this pullback and timing definitions ?... well as we started this thread showing the fact that horizontal lines just cannot make multiple crosses between them and in consecuence we cant have multiple whipsaws going on... So here the POWER gets unleashed ¡¡ you are in the midst of the mambo with a tool that is performing in a CLEAN fashion giving a clear "Pullback Definition" as it also is giving a clear "Timing Entry Definition"... So we have simplicity and optimization on "Pullback" and "Timing" thanks to this modern and simple tool... We had been able to encapsulate the "erratic chop pullback noise" into one simple horizontal line... make her a series of simple signal lines that will not whipsaw and create a straight forward superb timing definition of unparalel performance... This has been my Epiphany ¡¡¡ I am born again ¡¡ on next post I explain on videos... cheers Walter.

We are Trend Traders here... so first things first.... First "Trend Definition"... that task is done on the 5 min chart as explained on previous posts... Having a trend definition on line we are ready to find "pullbacks" and "timing"... this task will be done on the 1 min chart... This would be a Typical presentation of our "Trend Trades" : and typical real one... Now without our powerfull tool let me show you lots of spots where you probably would had wondered where to enter your trade : You can clearly see there where lots of smokes on the timing without VMA assistance ... This timing tool on 1 minute chart gets as powerfull as it can get... Let me get into the specifics of pullback and timing readings of the 1 min chart on the next post... cheers Walter.

So in this "erratic pullback" scenario the trend trader is aiming to "Time" his trades.... you know what ? he normally fails... he normally gets stoped out and he gets very angry confused and frustrated.... :frustrated: He starts blaiming the market, his broker, his costs, the fed... bla bla bla... But the true fact is that the market will always be that way, and it will be independently to your emotions... Now... let me tell you GOOD NEWS... thru optimization we can solve this dilema ¡¡ Here is where VMA rainbow will show us its second power ¡¡ Now, how can VMA rainbow help us out here...? Well let me remind you the "horizontal effect" of VMA and how this can really help us here... Do you remember this graph ? well it tell us about the property of becoming horizontal during a "chop"... wow... that means that the "erratic" data could be normalized to one simple horizontal line during chop... and guess what... when the chop finishes, the VMA continues on the direction of the trend... So let me show here on a graph the comparisson of an "erratic pullback" with a "horizontal effect" of vma... This information will literally resolve our dilema just about a 100%... Now let me shift here a little bit the topic and talk to you about "trend timeframe" and smaller "very specific timing time frames"... So far I had presented "trend definition" on a 5 min time frame, and you know what, that IS our time frame, we are taking trades out of a 5 min chart... NOW timing requires more dataseries so for that purpose we will be using a 1 min chart... I need more bars to get calculated, I need ironically more noise to normalize with VMA so I can read more clearly the "horizontal pullbacks" and its aftermath continuations that will happen to be my "Timing Entry"... So for the sake of not confusing anyone let me make this clear, we will have at this point two charts, a 5 min chart and a 1 min chart : _5 min chart with VMA rainbow...... for "Trend Definition" (described on above posts ) _1 min chart with VMA rainbow...... for "Pullback" and "Timing" definitions Both charts will use VMA rainbow... BUT the uses will be diferent... on both charts the Vma rainbow parameters are the same... so actually we are looking into diferent VMA rainbows giving diferent informations... one for trend (5 min) the other for pullback/timing (1 min)... on the next post I start showing the deployment of this arsenal to our service... cheers Walter.

Ok, Let me remind you the trend trade structure how it looks (as posted before) : To open position : _Trend Definition _Pullback Definition (dips and rallys) _Timing Entry Definition To Close Position : _Stop Definition _Exit Definition and also let me remind you that our target is "simplicity" and "optimization"... now I will start with a new set of topics here as we already dealed with "trend definition", now we are ready to aboard the topic "Pullback (dips and rallys)" and "Timing Entry"... This two are directly related... Timing comes right after the pullback, wich means that a pullback is the preamble of the timing entry in the trend trade structure... Now here we have another BIG dilema (probably the bigest, the hardest) for the trend trader... and it is the "erratic morfology" of a pullback and its impact on "Timing"... lets start with this question : what would be the ideal pullback for a trend trade ? the answer is : The ideal pullback would be a V shaped pullback... now this ideal is so far from reality... actually this pullbacks have an "erratic morfology", what I mean with this is that they are not V shaped, thought some times they do contain V`s but from a morfologic stand point of view they are "erratic"... Now, having an erratic morfology on the pullbacks wouldnt bother us if we didnt need to "Time" our entries on that mambo morfology... you see, we can say we are on a pullback very easy, BUT it gets hard when we have to do the next step of "Timing" our entry and getting in to a position in an effective way... here is where the trader starts to feel the frustration of knowing the trend and knowing a pullback is in place but NOT knowing when to enter and time his trade... Now, lets analize and try to understand this "erratic" performance of a pullback... why erratic ? simple, market during a pullback is making a "pause" on his original direction (trend), and this pause will be a "chop" and not a perfect V... on this pause he has no rules, no time determination, no wave range, no intrascalp structure... no nothing... just "chop" The old TA school tried to organize it in some beautifull patterns like flags, pennants, triangles and rectangles, well let me tell you if pullbacks had such nice clean morfologies we all would be multibillionaries some years ago already.. they do some times resemble this morfologies, but we have to accept the true fact that pullbacks are erratic in nature, because the market intrinsic structure gets erratic in that particular stage... its his nature, its natural... we cant get mad on him for being like that... SO... having this reality and with the intention of playing the dips and rallys (trend trades ) we find that our "Timing" will be precisely situated exactly on the middle of a mambo of nobodies land : the "erratic pullback" :doh: let me take some coffee... I continue on next post... cheers Walter.

Thanks Don for this kind words... should you know you had made a great contribution into this system and it has been my pleasure to interact with you... and I know whats coming ahead its going to be absolutely awesome... the "Tokyo Gang" ¡¡¡ there we go ¡¡¡ cheers Walter.

I think Brown yes ¡¡ You will see as the thread progresses how the vma rainbow unleashes its power in a way I had not seen on my entire career... I could describe my trading career maybe in three great periods : 1_ the loosing period (newbie sitting on his hands)(as described by Jerry) 2_ Normal rentable period (mastered traditional methods) 3_ period under the influence of a new epiphany so yes Brown I am probably going to born again here... stay tuned and thanks for interacting... I know I had not been polite with you on some ocattions Brown and I want to publicly apologize for that... (I think I did privately) but I want you to know I feel priviledged to have you interacting on this thread as I consider you an experienced trader with great insights... and offcourse many thanks for opening the candlestick corner as I believe it was the place where you decided to open some of your great wisdom to the Public... thanks again... Walter.

I want to make a public special thanks to Jerry (jperl) as he introduced a word on his thread and videos about something happening to Newbie... he called it "Epiphany" and I really had been inspired by this fenomena lately... here is a link to the definition http://dictionary.reference.com/browse/epiphany having one of this after 12 years of trading makes me feel like newbie, its a refreshing experience...¡¡ I am gradually presenting it on this thread http://www.traderslaboratory.com/forums/f24/walter-s-forex-trend-trades-2364.html cheers Walter.

Should I add that I still did not present the other powerfull aplication of this indicator on the timing side... cheers Walter.