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I have never been a big fan of the average directional index (ADX) indicator, including DI+ and DI-. In fact, when it comes to measuring a trend's strength and direction, I prefer something like the lower panel pictured below, which I just added (yesterday) to the charts I am presently using.
The idea is that when the oscillator is above (or maintaining a course that is more-or-less level with) the horizontal line at 1.61, chances are that the corresponding asset is trending upward with a good deal of conviction. Conversely, when the oscillator is below (or maintaining a course more-or-less level with) the horizontal line at -1.61, chances are that the corresponding asset is trending downward with conviction.
The idea is that when the oscillator is above (or maintaining a course that is more-or-less level with) the horizontal line at 1.61, chances are that the corresponding asset is trending upward with a good deal of conviction. Conversely, when the oscillator is below (or maintaining a course more-or-less level with) the horizontal line at -1.61, chances are that the corresponding asset is trending downward with conviction.
I find Deriv's "kindergarten" platform to be virtually useless for evaluating the outcomes of the positions I am entering and analyzing the manner in which they unfold. Consequently, I'm going to have to rely on my MT4 charts, annotated with symbols and text similar to what I did below, to keep track of my performance rather than any records provided by their service/system.
The contract was purchased at the start of the current 24-hour market cycle (3:00 PM Pacific Standard Time) and so far, it's development is headed in the direction anticipated.
The contract was purchased at the start of the current 24-hour market cycle (3:00 PM Pacific Standard Time) and so far, it's development is headed in the direction anticipated.
Of the various tactics I've given serious consideration, one of the most promising is to enter positions in the direction of the slopes of the 20- and 40-minute price range channels when the two measures are more-or-less pointed in the same general direction. Accordingly, I will be curious to see if the price of USDCAD is any lower an hour from now...
Unfortunately (for me), it looks like the 20-minute trend is attempting to turn north...
Unfortunately (for me), it looks like the 20-minute trend is attempting to turn north...
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Yesterday I bought five, five-hour contracts after 1:00 PM PST (given that this is the shortest expiry Deriv offers between one o'clock and six o'clock PM), and four of the five were in-the-money when the positions closed, which almost meets my expectation of a 85% to 100% daily success rate.
So then, is this a particularly good period of time to trade? Do the pairs typically start on a trajectory in the early afternoon that they maintain for the next few hours? I think this might deserve further investigation.
So then, is this a particularly good period of time to trade? Do the pairs typically start on a trajectory in the early afternoon that they maintain for the next few hours? I think this might deserve further investigation.
TRYING TO MAKE IT SIMPLE...
If foreign currency pairs tend to maintain a trend for a minimum of two or more hours at a time, then I should be able to make money by simply purchasing contracts at the start of each hour which match the direction suggested by my "instantaneous" moving averages.
Since USDJPY is decidedly bearish (@129.60), let me see what happens if I purchase a one-hour put contract.
This tactic is not advisable with Nadex, because the returns they offer on at-the-money contracts stink. However, since Derive typically returns about twice as much as Nadex, with the strike price being at the exact level that the rate was at when the position was entered, it is a much more profitable proposition with a significantly greater chance of delivering a successful outcome.
UPDATE: The above trade unfolded as anticipated, so I will definitely be trying out this hour-by-hour strategy. (I also noticed that I actually made more than just five five-hour trades.)
If foreign currency pairs tend to maintain a trend for a minimum of two or more hours at a time, then I should be able to make money by simply purchasing contracts at the start of each hour which match the direction suggested by my "instantaneous" moving averages.
Since USDJPY is decidedly bearish (@129.60), let me see what happens if I purchase a one-hour put contract.
This tactic is not advisable with Nadex, because the returns they offer on at-the-money contracts stink. However, since Derive typically returns about twice as much as Nadex, with the strike price being at the exact level that the rate was at when the position was entered, it is a much more profitable proposition with a significantly greater chance of delivering a successful outcome.
UPDATE: The above trade unfolded as anticipated, so I will definitely be trying out this hour-by-hour strategy. (I also noticed that I actually made more than just five five-hour trades.)
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Did the pairs listed below, which I expected to climb higher, actually do so?
GBPJPY - Yes
GBPUSD - Yes
Did the pairs listed below, which I expected to crawl lower, actually do so?
AUDJPY - No
AUDUSD - No
EURGBP - No
So then, am I going to purchase contracts based on the instantaneous moving averages at the daily level?
No!
GBPJPY - Yes
GBPUSD - Yes
Did the pairs listed below, which I expected to crawl lower, actually do so?
AUDJPY - No
AUDUSD - No
EURGBP - No
So then, am I going to purchase contracts based on the instantaneous moving averages at the daily level?
No!
INDIAN ALLIANCE:
According to "Aarav," he is active in the markets everyday from 9:00 AM to 9:00 PM local time. Unfortunately, at present the earliest I can be at the "office" is 6:30 AM Pacific Standard Time (PST) and the latest I can stay is 9:30 PM PST.
The resulting trading "windows" are therefore from 6:30 AM to 7:30 AM and/or 7:30 PM to 9:30 PM my local time.
If I use the one-hour candlestick tactic I described in another post, it would mean I would be having him send in orders recommended by the forecast models at 7 AM in the morning (my local time) and then again at 8 PM and 9 PM in the evening.
Accordingly, this next week I will test the strategy during these specific times and note the percentage of trades resulting in positive outcomes to determine whether the rate of success is likely to be acceptable to me (i.e., 80% or higher).
According to "Aarav," he is active in the markets everyday from 9:00 AM to 9:00 PM local time. Unfortunately, at present the earliest I can be at the "office" is 6:30 AM Pacific Standard Time (PST) and the latest I can stay is 9:30 PM PST.
The resulting trading "windows" are therefore from 6:30 AM to 7:30 AM and/or 7:30 PM to 9:30 PM my local time.
If I use the one-hour candlestick tactic I described in another post, it would mean I would be having him send in orders recommended by the forecast models at 7 AM in the morning (my local time) and then again at 8 PM and 9 PM in the evening.
Accordingly, this next week I will test the strategy during these specific times and note the percentage of trades resulting in positive outcomes to determine whether the rate of success is likely to be acceptable to me (i.e., 80% or higher).
At this point, I think the measures you have and your familiarity with them might make it possible for you to shoot for the big moves with more than a measure of success. More specifically, I want you to test whether you can use the "Weekly Trend on a Daily Chart" setup you configured this morning to spot the beginning of reversals in the daily trend. Of course, this will require you to drop down to a lower time frame.
I'm presently judging the best chart for this—for observing if and when the forecasts suggested by the weekly trend on the daily chart are beginning to unfold, is the hourly chart titled: "1-Hour on a One-hour Chart Follows the Four-and-a-Quarter-Hour Baseline," which has the four-day temporal support and resistance levels plotted on it. (For example, these two "computer models" working hand-in-hand would have told you to buy AUDUSD on Thursday.)
The moves that I interpret the daily charts as recommending I watch out for at the beginning of this week are as follows:
- AUDJPY to reverse direction and head south
- EURGBP MIGHT follow through on heading north
- EURJPY to reverse direction and head south
- GBPJPY to reverse direction and head south
- USDCHF to reverse direction and head south AFTER it climbs up to resistance, which is presently some distance away
- USDJPY to reverse direction and head south