Higher Lows Lower Highs

[Snow Dog 10]

I was tempted to take this one for an 85/15 trade but with US news in about 30 minutes I left it. The news took it up but you can never be sure which way it will go if you are relying on news.

[Snow Dog 10]

This higher low just above 4300 was a 100% system trade. 1hr up, 15 min positive close higher low little/no upper wick but I couldn't take it. At that stage price had already exceeded the 5 day ATR. If we had a bigger portion of the move fine then I would continue to take system trades, however we only had a fraction of move from Mrs V's trade and I was not prepared to risk that. 100 pips up I'll risk 15 on a system trade when ATR exceeded, less than 30 up then I won't. That's a rule we work to.

[Snow Dog 10]

London close trade. Set up and triggered on Eur. I am relatively new to this method taking profits early, 16 pips today, again though a winning trade with virtually no draw down. I am quite amazed as to how successfully these trades play out and the 90% winning trades claim is certainly true in my experience so far.

[Snow Dog 10]

We have had a natural progression of two things being:

 

- we have reduced trades from at one stage around 10 a day to a couple per day, and

- Mrs V has wanted us to focus on trend

 

We are making the 2nd real adjustment in 3 years (first was bringing 15 min in). The 1hr can move around a little whilst 4hr still showing trend. So we have changed definition of trend from 1hr.

 

The current set up I have then is 4hr, 15 min 5 min. Trend is described as above/below 4hr 8 lwma and 8 rsi confirming above/below its 8 sma (fozzy cross, I know an indi has appeared :doh::doh:).

 

Having our description of trend we do not intend taking ANY counter trend trades (London close set up a very specific exception).

 

So we will take hl/lhs, morning/evening stars, 2b's and the odd flag but they will be in direction of 4hr trend.

 

Can't change 1st post as far as I am aware.

[Snow Dog 10]

What that means is from the times shown per red line on 4hr NO buys of any sort would be considered on eur and gu (London close the exception). Waiting for sell set ups only.

 

The eur 5 min, from the 2b shown its just selling the right set ups. The 2b is fine as its not a reversal trade BUT a sell set up in line with 4hr down trend as described. From there on its sell your chosen set up.

 

Mrs V somewhere in there whilst I was out had a eur buy (as per prev system) and out for -9. Re-sold later to make up.

 

Anyway we realise there will be some perfectly valid trades we miss out on waiting move from 1hr to 4hr but there are losing trades as above that would be avoided.

 

We are looking for fewer, longer trades using the small stops we are accustomed to.

[Snow Dog 10]

Ralph Shell has published an article "Further weakness for the Aussie" and I have made my first contribution to his work based on this chart.

[Snow Dog 10]

Link here http://www.traderslaboratory.com/forums/forex-trading-laboratory/8164-higher-lows-lower-highs-17.html#post120757 for the Ralph Shell article.

[Snow Dog 10]

I had the chance for a winter break and grabbed with both hands.

 

1st trade for a while. Didn't trade NFP London morning session, a mistake.

 

Oh well after NFP price just didn't want to fall despite a couple of 15 min shooting stars. Got a couple of doji's (didn't have the conviction to buy the top) but after the positive close for a kind of morning star pattern (down, hesitation, up candles) bought the hl little/no upper wick. Target was original a W pivot around 90 level but when we hesitated for 2nd time at 75 psych level exited for +24, just after pic taken.

[Snow Dog 10]

I am looking at varying my description of trend.

 

D rsi 8 above 50 level is up and below down. If your shorter time frames are matching that ie 4hr and 1hr you can be fairly certain your hl/lh's in that direction have a pretty good chance of success.

[Snow Dog 10]

I am looking at varying my description of trend.

 

D rsi 8 above 50 level is up and below down. If your shorter time frames are matching that ie 4hr and 1hr you can be fairly certain your hl/lh's in that direction have a pretty good chance of success.

 

Of course that means that the concept of follow the D candle which has from my prev notes about a 70% of following through the next day has a couple of applications.

 

A pos close D candle above D rsi (8) 50 level is a very high indicator of move up. A neg candle below the same.

[Snow Dog 10]

Of course that means that the concept of follow the D candle which has from my prev notes about a 70% of following through the next day has a couple of applications.

 

A pos close D candle above D rsi (8) 50 level is a very high indicator of move up. A neg candle below the same.

 

That does mean that a pos close D candle below the D rsi (8) can mean both up and down. I'll post some charts.

[Snow Dog 10]

What that means is from the times shown per red line on 4hr NO buys of any sort would be considered on eur and gu (London close the exception). Waiting for sell set ups only.

 

 

I mis-understood Mrs V intentions here. Its not that she said no to me taking counter trend trades, she won't be, apparently.

 

A good trade from a key SR area with good candles is a good trade.

[Snow Dog 10]

Of course that means that the concept of follow the D candle which has from my prev notes about a 70% of following through the next day has a couple of applications.

 

A pos close D candle above D rsi (8) 50 level is a very high indicator of move up. A neg candle below the same.

 

 

Above/below D 8 rsi 50 level can easily signal trends of 2-6 weeks, for some reason my platform is playing up and cannot get a chart now. No mind you can chuck on rsi or if you like an 8 ema they'll pretty much give you the same thing.

[Snow Dog 10]

OK if I can try and sum up. Rules per 1st post pretty much apply. SR levels trumps all. But with that in mind we are focusing on trend description at its basic level being D chart above/below its 8 rsi 50 level or above/below 8 ema.

 

We like to follow prev days candle. If this confirms buys above D rsi and sells below great. If there is a contradiction then may give buys/sells on that day. Like eur on Fri a nice buy hammer below the D rsi and it carried on falling.

 

I know a prolific ea writer that pretty much always includes a D rsi filter on his short term 5/15 min ea's.

[Snow Dog 10]

Ralph Shell has written a very interesting article on US jobs numbers and currency markets see http://www.cashbackforex.com/?aid=112 and go to articles.

[Snow Dog 10]

Ha 150th post, most important, with faith all things are possible.

[mslk 10]

Ha 150th post, most important, with faith all things are possible.

 

your not done here are you? :helloooo:

 

many thanks,

-mslk

[Snow Dog 10]

your not done here are you? :helloooo:

 

many thanks,

-mslk

 

Sometimes I'm a little forgetfull:doh:. Not finished no.

[mslk 10]

Sometimes I'm a little forgetfull:doh:. Not finished no.

 

good to hear! while i have your attention, can i ask how much of your trading is automated? i'm trying to see whether or not it is worthwile trying to program rules into a platform. sorry if i'm off-topic but here is the other thread if you don't want to respond here: http://www.traderslaboratory.com/forums/technical-analysis/10442-manual-automated-trading.html

 

thanks

- mslk

[Snow Dog 10]

good to hear! while i have your attention, can i ask how much of your trading is automated? i'm trying to see whether or not it is worthwile trying to program rules into a platform. sorry if i'm off-topic but here is the other thread if you don't want to respond here: http://www.traderslaboratory.com/forums/technical-analysis/10442-manual-automated-trading.html

 

thanks

- mslk

 

I've asked a couple of guys some very bright ones to automate but its tricky. I trade 100% manual. I'm techno challenged, for example, got this email today from my rebates guys

 

Sorry you are still having the problem. It's probably related to your browser.

Try this:

1) clear your browser cache

2) clear your browser's cookies, then try to login again.

3) if all else fails, try another browser (if it lets you login, you know it's the browser).

 

and I replied that he's talking greek and heeelllllp.

 

Anyway I'm off topic.

 

Hl/Lh's are difficult to code it seems. A zig zag indi might help. Also a fozzy cross (8 sma on an 8 rsi) but then you have factor in the quiet times.

 

If I was going to try and code something you'd want to factor in something like above/below 1hr 8 lwma/8 rsi 50 level as a basic filter. This will miss some 2b trades. You might also want to code an above/below D 8lwma/8 rsi 50 level as a trend filter.

 

So then you are looking to take 2b/flag'hl, lh's with both a D trend filter and a short term 1hr filter.

 

Then of course what to do about end of run hl/lh's that go up against good strong 15 min reversal candles, perhaps no trades after 80% of 5 day ATR.

 

So in summary what might help:

D + 1hr filters for direction

5 min fozzy cross will give lots of signals filtered for trend as above.

 

Will this work on an ea, haven't a clue.

[Snow Dog 10]

Here is my 1hr chart. If 1hr filter used this am it was sell only. This pm it was buy only. There would have been no sells this am if D filter was on.

 

1swallow doesn't make a summer but it illustrates the point.

 

5 min charts coming.

[Snow Dog 10]

The rsi crosses highlighted. Direction set by 1hr. 3 would have failed, taking everything. 2 of course that failed were not strictly lh's but never mind.

 

2nd from left is a lh that failed. Last on right failed. 1 in the middle that was a rsi cross but not a lh failed.

[Snow Dog 10]

I do have an ea I paid for with rsi cross and a laguerre filter (options also a cci cross + Williams % R cross - well a stoch 14 1 1). It does not have the 1hr lwma filter.

 

I mainly use for alerts on higher TF's and then look at lower TF's for entry.

[Snow Dog 10]

The rsi crosses highlighted. Direction set by 1hr. 3 would have failed, taking everything. 2 of course that failed were not strictly lh's but never mind.

 

2nd from left is a lh that failed. Last on right failed. 1 in the middle that was a rsi cross but not a lh failed.

 

3 of 8 crosses failed, 1 wasn't a lh and one was at end of run after failure to make a new lower low. Not bad for auto system though. Has to be said that 4 of trades were in a congested sideways pa.

 

Something for you to consider though.

[Snow Dog 10]

I have since found this indi. Now if you could take this indi and have it do a bars back search for the previous time it signalled a move in same direction (but obviously at a higher price for a sell and at a lower price for a buy) then you might have a true hl/lh indi.

 

You might want to filter that with some ma's perhaps, or just trade signal manually etc for the high risk times and be aware Lo things can turn quickly but US open things can be much slower to turn.

Flexi bars swing v2.mq4