Walter`s Forex "Trend Trades"

[dupaski 10]

Walter,

 

Very informative thread, thank you for sharing. I was wondering if you ever got any clarification on the use of the ADX in the original formula by Bemac?

 

BTW I'm partial to mate

 

-Derek

[walterw 10]

Excellent, walter!!!!

 

Glad to hear that Don ¡¡

 

Walter,

 

Very informative thread, thank you for sharing. I was wondering if you ever got any clarification on the use of the ADX in the original formula by Bemac?

 

BTW I'm partial to mate

 

-Derek

 

Hi Derek, glad you like this thread... about Bemac`s formula I had open this thread on TSD http://www.forex-tsd.com/indicators-metatrader-4/9423-fantail-vma-mt4.html asking for help coding into MT4 ... I hope some charitable coder can help us... so we can have it on MT4 wich is a much more friendly platform... in that thread you can see Bemac`s formula being posted... so far here Blu-Ray has been able to code it into TS... so I think he is more enlighted into how the formula really works...

cheers Walter.

[walterw 10]

So now I have to talk about _Stops ... and with that definition we basicly would had covered the entire presentation of the classic structure of a trend trade...

 

Stops for me at least is the absence of the original argument for wich you opened a trade... in simple terms, you opened a trade because you had an argument, that argument disapeared, why should I still be on the trade ?

 

Staying because of hope, tolerance, balls... bla bla bla its not really intelligent if actually your argument clean disapeared...

 

If you get disapointed maybe its time to mature and understand that you have to love them, show them your apreciation and greatfullnes to stops, as they are responsable for your survival on this bussiness without them chaos and defeat is present... stops are our friends, and friends some times can give you some headaches... still your friends...

 

So let me give you an example of a stop criteria that for me makes sense... if crossing the black line to the darkgreen was my entry... the oposite cross its telling me that things just did not work.. so get out.

 

On this example I probably would not had taken this trade since I dont like the potential "exhaustion" as I already explained on previous post.. but lets say for example I went long on our Timing entry criteria...

 

 

well the oposite cross would tell us that the argument for wich I took the trade its not any more there, there are no more reasons to stay in the trade and your friend mr Stop keeps your equity protected from a real serious drawdown in the case you become stupid enough to stay inside...

 

So that would be in this case my stop definition... cheers Walter.

[walterw 10]

And a short video on Stops... cheers Walter.

Stops.swf

[walterw 10]

At this point of the thread we had covered this definitions from a "Trend Trade " :

 

To open position :

 

_Trend Definition

 

_Pullback Definition (dips and rallys)

 

_Timing Entry Definition

 

To Close Position :

 

_Stop Definition

 

_Exit Definition

 

 

We explained the simplicity and optimization we had been able to get thanks too the VMA rainbow... wich I consider it a very powerfull indicator...

 

Now this "trend trades" have some tricks in terms of selecting the ones with the most potential success... you DONT need to trade all the setups you see... its better to be selective and trade the best ones, the ones that offer more potential of success...

 

For example let me make you reason on how you can work so little every week (being selective ) and have a very decent lifestyle trading forex... if you make (like my target) $20 per contract/week with 5000 contracts (low volume on forex) you can make 400k per month... not bad for any normal lifestyle... so why bothering trying to trade everything ? its much more smart to focus on the most classic trades... I call them the "surefoot" trades...

 

on the next post I start talking about the "surefoot" trend trades... cheers Walter.

 

 

PD: any conventional "Tokyo Gang" member should be able to make without any stress this monthly figures :hmmmm:

anyway if you manage to make 5 digits you will be accepted jejeje

[ztrader 10]

Glad to hear that Don ¡¡

Hi Derek, glad you like this thread... about Bemac`s formula I had open this thread on TSD http://www.forex-tsd.com/indicators-metatrader-4/9423-fantail-vma-mt4.html asking for help coding into MT4 ... I hope some charitable coder can help us... so we can have it on MT4 wich is a much more friendly platform... in that thread you can see Bemac`s formula being posted... so far here Blu-Ray has been able to code it into TS... so I think he is more enlighted into how the formula really works...

cheers Walter.

 

walter.

 

Your presentation here is very good, though I must admit I have not read the entire thread YET. If you do not get a responsse from "some charitable coder" to convert Bemac's forumula into mq4 format by the end of U.S. session tomorrow, I will have it done for a fee by one of the programmers I use. I will keep you posted.

 

ENJOY!

 

ztrader

[walterw 10]

So I step here into the "surefoot" trend trades...

 

Lets start by using plain logic... when do you have more probabilities of traveling more distance ? when you "start" traveling or when your journey its at half way or when its about to finish ? well sounds stupid question uhu ? the answer its simple... when you "start" traveling you have more probabilities of traveling more distance...

 

This is a plain true that some traders actually dont understand... why ? there can be lots of answers for that... maybe the most classic would be this :they dont know really on what stage of the journey they are situated... other they do know but greed its so bad they cant help it... BUT here statistics will play a great roll in favor of those that will only play from the start and not from old trends...

 

The temptation is great sometimes as the reasonig you may argue is, there is great amount of strength... this will keep going UP ¡¡ I can make more $$$$ I will be so much richer if I keep trading on this magnificent super move... Walter says there is momentum ¡¡ (he also warned about exhautions)... so this game of compulsive proportions many times finishes playing against your most valuable interests...

 

Man in his human nature does that over and over again... he plays against himself, he is expert on that... will you let that natural aspect also play on your trading ?

 

So I know we may difer on this opinion with some fellow traders.. but so far in my experience.. playing from the start of a move is more conservative than playing when she is quite possibly exhausted or already not that fresh...

 

I continue on next post... cheers Walter.

[walterw 10]

walter.

 

Your presentation here is very good, though I must admit I have not read the entire thread YET. If you do not get a responsse from "some charitable coder" to convert Bemac's forumula into mq4 format by the end of U.S. session tomorrow, I will have it done for a fee by one of the programmers I use. I will keep you posted.

 

ENJOY!

 

ztrader

 

That would be great man ¡¡... thanks for your help... cheers Walter.

[momentom 10]

Re: Exits

Great stuff Walter as I said.

 

May I offer this comment. As an ex floor trader, my big problem since leaving the floor over 15 years ago is staying in a trade long enough even though I am a scalper. Exiting on the re-entry into the rainbow of the 1 minute chart looks like exiting very early. That's OK if there is a quick re-entry but there is often not. Maybe a little more optimisation could help here.

 

I tried using ATR stops at first to help me out but looked to the rainbow for a proper solution wanting to remain faithful to your concept.

 

I then looked at each band according to its colour to try and match the ATR.

 

My solution so far is an entry into the 6th colour band of the rainbow on the 1 minute chart - CYAN in my case - as my profitable exit. I have only eyeballed this and have not done a proper backtesting - needs some decent programing in MultiCharts.

 

What do you think?

[walterw 10]

For some of you who already had been following some other of my threads... you might be already familiar with my "Icon" trade pattern... well actually its not mine... its old as TA... I only just revisited and tried to show on diferent presentations, some threads that deal with it are this http://www.traderslaboratory.com/forums/24/walter-s-first-forex-research-various-1916-2.html other from a scalper view http://www.traderslaboratory.com/forums/f24/the-mini-icon-trade-2147.html here I did use this classic pattern on diferent contexts...

 

Once again let me explain what an Icon is..

 

An Icon is the first continuation after a cross...

 

 

Very simple pattern that is present in all the fractal structure of the market... if we had to describe its formation we would say we have a 1rst intention wave, take a little brake and resume on the same direction...

 

Now that we are talking about "trend trades" the icon is a form of trend trade... but the true edge of the Icon relies on the fact that he is situated on the begining of a move... not on an old instance of a trend but on a prospect bran new move ahead...

 

There is no guarentee that the move will develop, but you clearly know you are on the best spot if the move will actually do so... Thats what the Icon can do for you... he can select the best places for our trades, we can become more selective as we take an "iconic trend trade"...

 

So let me expand on how to read this Icon on the context of our VMA rainbow... on next post cheers Walter.

[walterw 10]

Re: Exits

Great stuff Walter as I said.

 

May I offer this comment. As an ex floor trader, my big problem since leaving the floor over 15 years ago is staying in a trade long enough even though I am a scalper. Exiting on the re-entry into the rainbow of the 1 minute chart looks like exiting very early. That's OK if there is a quick re-entry but there is often not. Maybe a little more optimisation could help here.

 

I tried using ATR stops at first to help me out but looked to the rainbow for a proper solution wanting to remain faithful to your concept.

 

I then looked at each band according to its colour to try and match the ATR.

 

My solution so far is an entry into the 6th colour band of the rainbow on the 1 minute chart - CYAN in my case - as my profitable exit. I have only eyeballed this and have not done a proper backtesting - needs some decent programing in MultiCharts.

 

What do you think?

 

I will have to agree with you momentom on the implemetation of a little more tolerance like taking a slower ema for closing positions... actually thats the idea here to make some interaction about this issues...and I would love to hear what results some manual backtesting would give you... obvioulsy my scalper exit is really that... its a quick scalp...

 

I am working on a paralel aproach that will be 100% aimed for scalpers but I think I want to finish presenting all this before getting into that, even opening a diferent thread for that scalping variation will be more organized...

 

Thanks for interacting momentom... had you seen any setup this evening ? cheers Walter.

[walterw 10]

So how to read an Icon on a VMA rainbow context...

 

Very simple, remember we are trading from a 5 minutes chart so we focus on that main time frame to find our "iconic trend trades"...

 

On the below chart you will notice some icons being formed arround the VMA Rainbow...

 

 

sometimes during the first intention move (cross) we still dont have the black line on the proper side of the magenta... but price action speeks for himself... he crosses with energy the magenta line, pullbacks to this rainbow and then he is ready to travel... he has the potential of an "entire" move...

 

You know how many icons from the vma rainbow you have per week ? by the dozens.... I want 20 bucks per week/contract... can you become enough disciplined just to take Icons ? well let me tell you they are "surefoot" trades because in the worst scenario you will get a very tight stop against a great potential on this trades... so that is the most "surefoot" trend trade on our aproach... taking the icon from the begining of a prospect move... cheers Walter.

[PYenner 10]

ztrader

If you do go to a pro, ask for just the 3 main lines, MA1=Black, MA12=Dark Green and MA49=Magenta. MT4 will only do 8 lines. I am inclined to think the rainbow serves little purpose, but more lines could be added in later if needed.

Good of you to offer.

 

Walter

I'm working my way through the Bemac version.

So far it is not as complex as it first seemed.

His use of ADX labels is misleading.

eg ADXPr is an input constant preset to 8.

The Wilders function turns this into 8*2-1=15 (periods) and returns a 15 period ema on the input price eg PlusDM and Tr are just Close prices.

Less complex than it looked.

Only half way through yet and coding would likely take me a week even if I can do it and there is no certainty of that.

Sorry I can't be more definate.

[momentom 10]

I will have to agree with you momentom on the implemetation of a little more tolerance like taking a slower ema for closing positions... actually thats the idea here to make some interaction about this issues...and I would love to hear what results some manual backtesting would give you... obvioulsy my scalper exit is really that... its a quick scalp...

 

I am working on a paralel aproach that will be 100% aimed for scalpers but I think I want to finish presenting all this before getting into that, even opening a diferent thread for that scalping variation will be more organized...

 

Thanks for interacting momentom... had you seen any setup this evening ? cheers Walter.

 

I'm afraid my traderDNA is stronger than I am and I have jumped to your parrallel approach and am scalping the DAX with this method using 1 minute and 15 second charts. I'll add in what I find once you have started the new scalping thread so as not to polute this one. Going REALLY great so far.

[momentom 10]

ztrader

If you do go to a pro, ask for just the 3 main lines, MA1=Black, MA12=Dark Green and MA49=Magenta. MT4 will only do 8 lines. I am inclined to think the rainbow serves little purpose, but more lines could be added in later if needed.

Good of you to offer.

 

.

 

PYenner, you are right in one way about needing only 3 lines. I deleted most of the rainbow and left just those three when I first looked at this - I believed the screen was too cluttered. However, I quickly returned to the full rainbow as I found that I was able to "see" better when the fan opened and closed. But maybe that's just me.

[PYenner 10]

PYenner, you are right in one way about needing only 3 lines. I deleted most of the rainbow and left just those three when I first looked at this - I believed the screen was too cluttered. However, I quickly returned to the full rainbow as I found that I was able to "see" better when the fan opened and closed. But maybe that's just me.

 

It's not just you.

The jury is still out on that one, time will tell what serves best.

The more input the better.

[PYenner 10]

Momentum

Which lines are the least use to you, the narrower yellow side or the wider magenta side?

[momentom 10]

Momentum

Which lines are the least use to you, the narrower yellow side or the wider magenta side?

 

I find I need them ALL now. The overall "visuality" (if that's a word) really tells me all I need to know about momentum. I am less informed when I have fewer lines. Having said that, the yellower side tells me less. Walter's epiphany about the horizontal is the icing on the cake to stay out.

[ztrader 10]

This is as close as I can get to the Fantail, improvising it on NT. If this would meet Walter's Forex "Trend Trades", then this should be much easier to convert to MT4. This will actually work well on my "Z CREST" system as well [but that's another story]. Please take a look at this GBPJPY trade setup for Scalp n Trend earlier today.

 

ENJOY!

 

z

[PYenner 10]

Thanks z

Gee, 100 pip falling dagger stuff, good old GBPJPY.

Almost enough to make you believe in using stop losses...

 

Yes, that may be closer to an MT4 version.

MT4 also slows down badly when the price action heats up if you run 40+ total custom indicator lines on a platform.

Once the porting from platform to platform is sorted out, it could be backtested on MT4 but traded on other platforms, best of both worlds maybe.

 

Momentom

Yes, Yellow side is the least needed, that was my impression too.

 

Thanks

 

At least no one is telling me off for saying "8 period ADX" is actually 15 period ema, not yet anyway.

[formor 10]

Hi all,

Upper screen is on MT4, lower original fantail on VT.

Black line on MT4 is vidya3.mg4 with setup 8, 9.0. Green line is smma 20 and magenta is wma 150.

This looks much the same to the original.

[formor 10]

Another screen...

[PYenner 10]

Hi formor

 

Amazing

Get down to the basics and find out what does and doesn't matter.

Bemac seems to be using something like Green= ema 24 and Magenta= ema 100. Not much difference from other ma's it seems.

 

Bemac seems to have done a copy and paste from the "How To Write An ADX" section of the VT manual which is why his labels start with "ADX".

Better to call ema ema, then compare it to wma etc as you do.

 

Thanks formor

We may have an even happier Walter before much longer.

Someone hide the bananas before he goes hyper...

[PYenner 10]

By the way

 

Bemac blanks off only 20 periods at the start (left end) of the chart.

But when he uses a 100 period ema, he should blank off the first 100 periods.

Else what you get is either faked or garbage.

100 periods on a 5 min chart = 500 min = like 10 hours.

Garbage in = garbage out.

[PYenner 10]

Reality check time

 

MT4 usually returns zero when you ask for earlier data than the beginning of a chart. A 10 hour warm up space is not user friendly.

 

May have to look seriously at limiting the max periods to way less than 100.

Bye bye Magenta.

 

One way would be to use Green 24 ema as the longest and then offset bands out from that with variable spacing of some sort.

 

Life is a box of chocolates...