daedalus

As an extension of my last post I just wanted to show some examples of different providers and their systems.... Now this is one providers examples of some winning trades. Can anyone spot the patterns that turned a lot of these winners into actual winners? I don't know about you but I see a lot of LH and HL in action. And another provider... And one more... Now i'm not trying to throw these guys under the bus... but the fact is this... their methods don't work because of their fancy indicators... these entries work because of the framework behind their signals - the LH and HL's that are blatantly there making their "signals" look so sexy. The point is their signals work because of the underlying price action - not in spite of it. Cheers!

^ Completely agree Thales. The story at the end of the day is simple - if people would apply this logic to almost any system or framework they would be doing 10x's as well. I just want to thank you again for starting this thread and keeping it alive. There is so much to learn here regardless of how the end user applies that concept. Its like we mentioned before, when you dig down into most systems out there when you find their winning trades that are huge almost all of them show the HL, LH pattern in them - but the people selling the systems don't take this into account because price is so skewed by the other squiggly lines and bright colors everywhere else on the chart.

Sorry i've been absent for awhile gents but i've been fine tuning my method using this logic. I found that using the value chart was getting me a bit too many pars that should be winners. However, I wanted to address the issues that I was facing and what i've done to correct them and then show the trades from this morning using this criteria. Problems: 1. Where to trade (Personally, I find looking for prior S/R as hit or miss as any other filter, except much more complicated and messy.) 2. When is "too late" to get in? 3. When to get out? Solutions: 1a. I used a smoothed CCI (available on this forum) to show extremes in the market. Its just a oscillator but I found it was as reliable as prior S/R but without the confusion of knowing which prior S/R was really in play, etc... and it made my charts clutter free and simple. I know this is where most of you will not agree (and thats fine - S/R works obviously well as you all know) just showing what i'm doing rather than that. 1b. Furthermore, I only use it when there is divergence from swing to swing. It filters out a lot of the mess and while yea it misses some winners I feel that what is left at the end of it all are good opportunities. I have problems overtrading as well and this filter really cuts down on my trades and allows me to focus on only the best opportunities rather than shotgunning at ALL the opportunities. 2a. Then knowing when to get in - I look for a simple rotation pattern. Some of you are good enough to "see" the rotation on swings intrabar and trade off of them. Personally I don't trust myself that much and I needed something a bit more concrete. Which is why you'll see in all of my examples price makes a close lower or higher than the high/low of the previous bar, and then another higher or lower close beyond the prior bar as well to show the HL, LH pattern. You can see this in the dark red or green dots on certain candles on my charts. That way there is no subjectivity in my setups. 2b. I modified the CCI indicator to use a 0.00 midpoint line. If price hasn't triggered an entry off the HL or LH before the CCI crosses the 0 line the trade is null. I miss a few here and there but it seems to be very consistent in getting me in on those opportunities with a clean rotation from one direction to another and at a point on the chart where my stops are small and contained relative to the price action. And it stops me from jumping in on moves that have already played out and have a higher probability of reversal. Smaller stops = less risk, less movement required for pars and targets = better odds in my opinion. 3. Knowing when to hold and fold. Its what we all struggle with. Personally I rather hit singles 4 times than a home run once. Thats just my personality. So I either target a 270% extension using a fib retracement tool off the HL, LH swing or I exit on the first close at +/-100 on the CCI. What I found was this - the moves that were moving perfectly got to my targets prior to me exiting on the CCI - the moves that weren't got me some profit rather than getting me to par and taken out on a backfill. And now that my novel is over... the trades from today. EACH TRADE WAS TAKEN AND EXECUTED EXACTLY FOLLOWING THE STEPS ABOVE. The Trades fell as follows: EC: +13, +7 BP: +4 JY: +7, +3 +400/per overall. Not bad for an hour and a half of work. Now did I knock it out of the park on each trade? Nope. Did I step in a take a good chunk of the middle part of the swing out of each trade. Yup. Thats all I personally can hope to do. Hope this helps you all! Cheers!

Low of Day as far as i know.

No i get that, and thats what I ended up having to do. I'm just saying this has never been an issue prior to today and its just kind of annoying to have to go through and change the symbol on 48 charts.

This may or may not affect you but I thought I would pass this along because i've been trying to hunt down a reason for this all morning. I'm trading the Forex Futures contracts via the CME (EC/6E, etc). Apparently TS in their infinite wisdom rolled over to the H contract a week early so anyone using continuous contracts on thier charts (most of us do) your data is incorrect. I wouldn't have caught it if I wasn't using another broker to clear with. But the tech support is trying to tell me that this is normal and I should trade off the H contract prices - which is dumb because everyone else is still trading the Z contract. Apparently their "data integrity group" says this is all normal and by the book but i've never had this issue before in the 3 years with them as a client using continuous contracts. I mean, the H contract has no where near the volume as the Z and yet they want to base the movement off of the H contract instead of something with 18x's the volume? WTF TS? I just thought this might affect some of you guys and I wanted you to be aware.

lol @ trader273. Beat me by seconds!

Nevermind - fixed it. Just had to modify the variable vclose to vhigh and vlow... {******************************************************************* Description : This Indicator plots Value Chart prices. Provided By : Mark W. Helweg (c) Copyright 2001 ********************************************************************} Inputs:NumBars(5), upcolour (green), downcolour(red), neutralcolour (cyan), MyExtreme(7); Variables:Vopen(0),VHigh(0),VLow(0),VClose(0),Var1(0),Var2(0); Var: VcloseLam(0),ValueSOB(" "),ValueMOB(" "),ValueMOS(" "), ValueSOS(" "), ValueFair(" "), lastdate(0); {Calcualte Value Chart} VOpen = VChart(NumBars,Open); VHigh = VChart(NumBars,High); VLow = VChart(NumBars,Low); VClose = VChart(NumBars,Close); {Plot Value Chart - Disregards the first 20 bars because Omega doesn't process them correctly} If BarNumber > Numbars then Begin Plot1(VOpen,"VOpen"); Plot2(VHigh,"VHigh"); Plot3(VLow,"VLow"); Plot4(VClose,"VClose"); If vhigh >= MyExtreme then setplotcolor (1,upcolour) else setplotcolor (1, neutralcolour); If vhigh >= MyExtreme then setplotcolor (2,upcolour) else setplotcolor (2, neutralcolour); If vhigh >= MyExtreme then setplotcolor (3,upcolour) else setplotcolor (3, neutralcolour); If vhigh >= MyExtreme then setplotcolor (4,upcolour) else setplotcolor (4, neutralcolour); If vlow <= -MyExtreme then setplotcolor (1,downcolour) else setplotcolor (8, neutralcolour); If vlow <= -MyExtreme then setplotcolor (2,downcolour) else setplotcolor (8, neutralcolour); If vlow <= -MyExtreme then setplotcolor (3,downcolour) else setplotcolor (8, neutralcolour); If vlow <= -MyExtreme then setplotcolor (4,downcolour) else setplotcolor (8, neutralcolour); End; // Value Chart Lines Inputs:Top(8),TopMid(4),BottomMid(-4),Bottom(-8); Plot5(Top); Plot8(Bottom);

thanks for the help guys! You're defiantly on the right track, however the code doesn't work as it should. It colors SOME of the bars that are greater than or less than 7 (the MyExtreme setting active in this screenshot) but not all of them. Any ideas?

Just trying to modify the value chart so that if the High or Low of that bar is >= 7 (or whatever number you want) it paints that bar a different color. So you could tell visually if those bars are at the extremes rather than having to check them. But i can't seem to make it work. Here's what i've got. I think my if then else's are the problem. Anyone got any ideas? {******************************************************************* Description : This Indicator plots Value Chart prices. Provided By : Mark W. Helweg (c) Copyright 2001 ********************************************************************} Inputs:NumBars(5); Variables:VOpen(0),VHigh(0),VLow(0),VClose(0),Var1(0),Var2(0),Value_Color(0),Bull_Color(0),Bear_Color(0),Mix_Color(0),Default_Color(0); {Calcualte Value Chart} VOpen = VChart(NumBars,Open); VHigh = VChart(NumBars,High); VLow = VChart(NumBars,Low); VClose = VChart(NumBars,Close); Bull_Color = Green; Bear_Color = Red; Default_Color = DarkGray; Mix_Color = LightGray; {Plot Value Chart - Disregards the first 20 bars because Omega doesn't process them correctly} If BarNumber > Numbars then Begin //This is where i started editing code If VHigh >= 7.00 Then Value_Color = Bear_Color else Value_Color = Mix_Color; If VLow <= 7.00 Then Value_Color = Bull_Color else Value_Color = Mix_Color; Value_Color = Default_Color; Plot1(VOpen,"VOpen"); Plot2(VHigh,"VHigh", Value_Color); Plot3(VLow,"VLow", Value_Color); Plot4(VClose,"VClose"); End; // Value Chart Lines Inputs:TopMid(7),BottomMid(-7); Plot6(TopMid); Plot7(BottomMid); //Plot ADX Value in Subplot Plot9("VC High: "+ numtoStr(VHigh,2),"High"); Plot10("VC Low: "+ numtoStr(VLow,2),"Low");

been out of town for 10 days but i'm back trading today. Don't know about you guys but I got tossed around today. No fills on exits (that turned into pars), pars that got slipped into losses, pars that turned into losses due to an internet connection dropping out, and some outright bad trades. If you wanted some examples of bad trades don, here are a few. Nothing went my way today. Overall I feel that this trade in particular was horrible. I ignored my primary rule when looking for a potential setup and that is A STRONG CLEAN IMPULSE MOVE! This messy decline was nowhere near that relhm of reality and yet I found myself in it getting chopped around. Time to slap my own hand. The rest of the trades I felt were ok - but it should've ended up being a win, loss, and par and instead it ended up being a par, and two losses due to fate intervening in a couple instances. Thats trading I suppose. I shut down the charts about 1:30 minutes into the morning and went into self preservation mode after hitting 4 back to back losers/pars/crap. I lost a decent amount but nothing I can't make up on a solid day. Sometimes its just not there and you have to be able to cut your losses and walk. That was today for myself. Not how I intended to get back into things after vacation but it was! Remember folks - NO ONE DAY SHOULD MAKE OR BREAK YOU OR YOUR ACCOUNT. If you start drawing down hit the panic button and walk. Its only ONE day in your CAREER!

Just another comment on timeframes. Its been mentioned before, but the chart in your example ziebarf looks pretty "thin" to me. What I mean by that is you have lots of bars on that chart that have little or no movement (and to me little or no importance). The chart does not look smooth and flowing to me. And I suspect its because it is a small timeframe time chart. These patterns occur fractally - (if that's a word?) meaning in all timeframes but if you are going to trade the faster charts in my opinion you need to use a different type of chart (tick or volume or comparable) to interpret the price bars in a better fashion. For example: This is a 1 minute chart of the British Pound: And here is the same time period (more or less) on a comparable tick chart: Which one looks more smooth? I would say the tick chart does and that's because (at least I feel) it breaks up the price movement in a much better format than simple time charts. And because of that, any potential signals have more relevance to me than comparable time chart signals because the bars were formed due to price interaction and not due to X amount of minutes passing and that to me, shows a better picture to make a trade decision off of. Longer timeframes aren't a problem usually as they "filter" out the bad signals inherently because they take longer for a bar to close so they naturally filter prices wiggles and squiggles. But if you are going to be trading under say a 15M timeframe you may want to consider using a tick chart or something comparable. I guess what i'm saying is that you've got the concept down, but you need to apply it to a chart thats giving you a relevant picture and when you dial down on time charts too far often you aren't getting that relevant picture.

Just wanted to give you a quick update boys. I apologize this isn't exactly topical (well i'll include my trade from this morning to make my educational quota) but i wanted to share my first weeks results. I actually nailed the exit on this at 40 and actually got filled. I was pretty stoked to say the least. I decided to trade only the first two hours based on BF's recommendations (and my own observations) and Fridays till the first winning trade i.e. its 9:32 right now!. Frankly, its got more than enough opportunity for myself, it doesn't get me burnt out, and frees up time for me to do other things. There is more to life than trading - I just haven't realized that until recently. I didn't knock it out of the park this week. That's due to 1)letting the bigger risk trades (that alone were worth +600.00/per this week) go and 2) being a weakling earlier in the week. I'm ok with letting the big ones go as i'm keeping my risk in strict supervision. As the account grows, i'll begin to add them and the account growth will grow exponentially. 18 Trades, 8 wins, 8 pars, 2 losses, 5 ticks in negative slippage, an 88.89% win rate, and 12.26% account growth. :rofl: I can't thank you guys enough for sparking this in me. I'm back to my roots now and it feels good! Hope you guys all had similar experiences!

Did poorly again this morning and easily missed out on 3 winners for at least +300/per. I've been on sim for so long getting back onto the live account has been difficult for me to pull the trigger at times. Its getting easier. After my early morning blunders I did catch two winners. They were admittedly small winners but as of right now i'm filtering trades based off potential risk and that means smaller risk - smaller reward. That being said - my account is up 9.5% this week thus far even with my bad trading. I quit trading at 11AM after my last position closed out. I was upset about my performance and just happy to be walking out with some money in the account. 3 pars, 2 winners. Should've been 3 pars, 5 winners. Oh well. There is always tomorrow. Hope everyone is having a good trading day! Also - thales i'll tone down my language a bit. I didn't realize we had young eyes amongst us. My apologies!

I'm done for the day... I just wasn't trading well. Basically there was a nice winner this morning I didn't take for no other reason than fear. Yup. Newbie bullsh!t. After that I did catch a nice trade in the EC, took a healthy loss in the BP. I had long signals in the EC and JY when i was short in the position but I didn't get reversal signals in the BP so I just held on. Kind of knew it was coming, but my rules are my rules, and they don't include exiting because another market is bullish or bearish so I took the loss like a man. Then is where the real fun started. Got a nice signal in the JY, put in my order - internet dies. Crap. I call up my broker tell them to cancel the order, except that they tell me i'm already filled. Crap. Exit at a loss over the phone. I got super lucky and only took a 1 tick loss at the time. Got the connection back, re-entered at the same price, and got 4 ticks out of it. Should've been 5 but I screwed up the exit order. Just sloppy. At this point i'm just pissed, frazzled, cursing, and i'm calling it quits for the day. Should've been a solid winning day but I screwed it up. Walked out with 6.25/per BEFORE commissions so basically a scratch day. Sometimes its just not falling your way and its best to quit while your ahead (albeit not by much). I guess the lesson here is that I traded poorly early, had some outside circumstances work against me but I didn't find myself blowing out my account and I consider that progress over what could've happened to me a couple years ago. Hope you all had a better day!

forrestang - yes I use them for entries and exits.

I'm paying 5.45/rt on a small Infinity account trading small size. CME Forex Futures are a higher commission rate than the e-mini's. Nah... not that many, but yea, on an 89t there can be a lot of signals depending on the time of day. But as far as criteria... i think i summed it up pretty well in this post: http://www.traderslaboratory.com/forums/208/reading-charts-real-time-6151-112.html#post80668 Keep in mind though, that if I get the same signal on an 89t and a 233t, i defer to the smaller timeframe and only take the trade once (and manage it off the smallest timeframe). So a lot of entries may be valid elsewhere, but if I have the same picture on the 89t, i take it there. The only other discretionary filtering is if there is a massive run up prior to a signal i'll probably skip it (as was the case today with my example) and avoiding trades that are very close to prior S/R.

All done for the day folks. Took this in the morning for some solid profit: Not a whole lot of action as I stepped out for lunch and missed a lot of profit. Got back and skipped this trade: Textbook entry for myself... however... In the context of this move, I said, i'm best not to get in the way so I passed on it. Caught this little scalp in the afternoon. Not a huge P/L day for me but solid, consistent profit. I'll take it. What times of the day do you guys trade? I've been doing 9AMCST-11AM, and 12PM-2PM CST to avoid morning news events and take an hour lunch. But i'm thinking of moving to a 9AM-1PM CST trading day and walking away after that as we all know typically the further into the afternoon we go the less tradeable action we see. Thoughts? Cheers!

Just curious why you guys like the spot forex so much? Personally I love being able to specify EXACT prices for entry and exit and know I have the exact same spread no matter what time of day on the CME contracts. Obviously if you have a very small account or need to trade 20 pairs, but I think there is more action than I can ever trade on 3 pairs, let alone 8 or so they offer. And you can trade 1 lot on a 2k account with places like AMP Global or Infinity.

To answer your first question. I think its fine to understand how a basic indicator functions - the caveat being that you don't use them. Which segways into your next question... I think more often than not an indicator does NOT help you see something - it prevents you from seeing EVERYTHING. Again, its the looking at the trees and not the forest. I don't know about you but when I have an indicator on my charts my eye is naturally drawn to it and I focus on what the indicator is saying rather than what the picture above it (price) is saying. I think thats why a lot of new traders are setup to fail. The indicators train them to look at the wrong thing (the indicators). And consequently they fall down the rabbit hole of failure for weeks, months, and years before they realize what they should've been focused on was on their charts too all along. They just couldn't see it through the indicators. Thats why I do feel slightly guilty about using any indicator on my charts (value chart). But I use it completely secondary to price and am very conscious of that. If price is telling me something and the indicator isn't, I respect price first and foremost. I am ONLY using it as a confirmation to take profits and get to par. Cheers!

Its shocking how so many of us go down the same path and ultimately end up in pretty much the same place... I couldn't agree more with your analysis of MTP - even if the software's signals were questionable at time, the overall packages enforcement on importance of risk, position sizing, and potential reward was a huge step forward in my trading some years ago.

:rofl: That has to be one of the funniest "trader jokes" i've heard in awhile. :haha:

I just thought I would comment on the indicator discussion because I really do agree that more is not more. The most efficient and powerful design will always be the one in which nothing else can be subtracted from it without an adverse effect in outcome. I was browsing through another trading forum where people were all trading the same holy grail method using a bunch of indicators, and some of their trades were awesome, but like usual a lot of them were bad entries and getting people chopped around. Below are a couple of screen shots of their trade examples. Note the patterns that is printed up on a LOT of the good winning entries... is EXACTLY what thales has been instructing in this thread. I think far too often we find ourselves looking at the trees (indicators) and we just can't see the forest (price). If these guys want to use their indicators for confirmation - fine but they should realize (and they don't) that the power of their winning setups is not because of or due to the indicators but rather the underlying price behavior or L, H, HL and H, L, LH. Indicators can be helpful in my opinion but ONLY when we respect them for what they are and use them in a useful way (ie not as entry triggers). In my opinion a useful way to use an indicator is limited to identifying areas for a trade (MA's used for S/R, Bolinger/Keltners for S/R, and Oscillator for Trend Exhaustion, or Using them to give us pointers on holding or folding trades). But we MUST respect the underlying truth that the indicator works because of price and tells us what price has already told us, and thus we must respect price first and foremost as the ultimate truth teller. Please excuse my hack job notations done in MS Paint! :rofl:

I will not allow myself to succumb to the evil ways of the Elliot Wave! Thanks for posting it Thales.

Two trades this morning - 1 par and 1 winner. Price was just coiling sideways for a while after entry but I had no reason to get out of either. Had to take a bit of heat but sticking to the rules took care of me rather than bailing out of fear, reigning in stops too tight, bailing at par when they started to work, etc. JY was the par based off rotation in the VC. BP was +21 out at 270% target like usual. As you can see there was no VC rotation prior to it so I just hold the trades for my targets. (The 200% is my par level if the VC has not already rotated as was the case on this trade). Off for an early start to the weekend! See you guys monday!