Compare & Contrast with Christopher Lewis

Friday | August 19, 2022 | 6:50 AM PST

Yesterday, I asked myself the question: "What would happen if I simply entered positions in the current direction of the daily trend, without regard to entry levels?"

To get an answer, I did just that near the start of the fresh 24-hour market cycle, at 3:30 PM PST. And when I awoke this morning, I found that, this time at least, it turned out to be profitable...

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I would never do that in my live account, though. However, what I am going to consider is trading with a bias in favor of the present direction of the daily trend. I've concluded that my approach will basically be to enter positions on the "off/contrary" side of the 34-minute price range (envelope) from 0.14% to 0.24% deviation in the direction of the slope of the 90- and 120-minute baselines. So, this would mean that I'd be executing trades exclusively when the latter two moving averages matched the trajectory of the daily trend.

After cashing in this morning, I sent in my orders for fresh positions based on the above modus operandi, where entry levels were optimized, and the advantage of doing so quickly became apparent, with the spreads of the majority of theses trades being covered almost immediately...

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I planned to begin trading in my live account on Wednesday. However, I did not yet feel I had put together a plan that took advantage of subtleties and nuances implied by my most recent observations. Now I do. This means I'm ready to deposit a tiny amount of cash in my Nadex account once again and begin live trading at the start of next week, God willing. (Almost five years to the day after having come to EliteTrader.com for this very purpose.)

So then, this all stems from a single new chart/indicator I came up with after five years of experimentation and refinement⁠—the one I attached to Post #305.
 
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"Never trade against the 20-minute price flow" is no longer a hard and fast rule. If you are optimizing your entries, you will always be executing you trades in the direction of the six-minute baseline, probably when it is reversing direction to realign itself with the slopes of the 90- and 120-minute moving averages. If this corresponds to the 20-minute baseline losing momentum (i.e., assuming a neutral posture on its way to reversing direction to rejoin the trajectory of the 90- and 120-minute baselines itself), it is often a winning proposition. So, doing so with caution and careful consideration is now permissible when deemed appropriate.

(You now need to update the entry from Post #293.)
 
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When I was developing my system, I came up with an approach to buying and selling foreign currency pairs which I called "guerrilla trading." (Then I did a Google word search and discovered this style of trading already existed.) I felt this name fit because I was using tactics and techniques that I conceptualized as being similar to guerrilla warfare. I described it as a style of trading in which I relied on my mobility as a small retail trader to ambush the market with hit-and-run tactics that got me in and out quickly with what might only be minor victories here and there, yet would add up to major overall triumphs.

Having reached the stage where I am today, I feel swing and even position trading share similar aspects with guerrilla trading, but only with a longer outlook. I would not disagree with the contention that trading is an art, but I think the degree to which one can make it less so is so much the better. I believe I see this happening with NPP. If so, I sincerely hope it continues.
 
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Also, if this corresponds with candlesticks rebounding off the "far/contrary" side of the 34-minute price range (envelope) at 0.14% to 0.24% deviation, usually well before being confirmed by the 20-minute baseline, it still tends to be a winning proposition and can therefore be done with caution and careful consideration when deemed appropriate.
 
DAILY ROUTINE (THUS FAR):
  1. Check the weekly charts ("weekly price range" configuration) to see if any of rate is above or below the projected weekly price range. (This does not mean that a reversal is imminent, but it might mean that a dramatic reversal could occur if stimulated by related economic data.)
  2. View the daily charts ("wrong half of the channel" configuration) to see if any of the currency pairs is evidencing a hook (reversal) at the top or bottom of the six-day or 12-day price range. (If the reversal follows through, it could mean several days of a committed/continued trend.)
  3. Refer to the daily charts ("projected day ranges" configuration) to see if any rates have climbed above or crawled below the projected daily price range AND to form an impression as to the direction in which each asset is currently headed from a day-to-day perspective. (It makes sense to be biased toward executing trades where the 90- and 120-minute baselines are headed in the same direction as the day-to-day trend. Obviously, positions should be entered in this same direction.
  4. View a chart setup where the configuration includes the eight-hour price range envelope and the two-hour price range envelope. The two-hour measure should make it crystal clear whether a given rate is climbing, falling or neutral. Should candlesticks be positioned/located on the "contrary" side of this measure when it and the eight-hour envelope are both angled in the same direction, entering as price reverses direction to resume a course aligned with the shared trajectory will almost inevitably lead to a profitable outcome. (This is especially relevant if the slope of these two measures matches the anticipated direction of the day-to-day trend for a given pair.)
  5. If you are optimizing your entries, you will always be executing your trades in the direction of the six-minute baseline, probably when it is reversing direction to realign itself with the slopes of the 90- and 120-minute moving averages. If this corresponds to the 20-minute baseline losing momentum (i.e., assuming a neutral posture on its way to reversing direction to rejoin the trajectory of the 90- and 120-minute baselines itself), it is often a winning proposition. So, doing so with caution and careful consideration is now permissible when deemed appropriate, even though the 20-minute measure has not yet confirmed the act. Additionally, if this corresponds with candlesticks rebounding off the "far/contrary" side of the 34-minute price range (envelope) at 0.14% to 0.24% deviation, usually well before being confirmed by the 20-minute baseline, it still tends to be a winning proposition and can therefore be done with caution and careful consideration when deemed appropriate.
  6. If candlestick cross over to the "wrong" side of a sloping eight-hour price range envelope, enter positions as the 20-minute baseline reverses course to resume a trajectory aligned with the direction of the eight-hour price flow. (If this turns out to result in "false positives," use the 34-minute baseline instead. Note that there is no rush to execute such trades, given that the eight-hour price range should provide you with plenty of room to reap a profit even if you get into the trade a bit slowly.)
Typical Intraday Entry Levels:
  • The "far/retreating/contrary" side of the 34-minute price range (envelope) at 0.14% to 0.24% deviation
  • Re-evaluate: (Upper or lower band of the 10-minute price range envelope at 0.04% deviation)
  • 24-minute temporal support or resistance level
  • Two-hour temporal support or resistance level
Typical Intraday Exit Levels:
  • The "surge/advancing" side of the 34-minute price range (envelope) at 0.14% deviation
  • When the six-minute baseline begins to hook back toward the entry level
  • At the two-hour temporal support or resistance level
  • At the upper or lower band of the 34-minute price range envelope at 0.14% deviation
Ideally, you should trade in the direction of the six-minute price flow; when it is headed in the same direction as the 20- (or 23-) minute price flow; when it is headed in the same direction as the 34-minute price flow; when it is headed in the same direction as the 56-minute price flow.
 
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Eight-hour Errant Son Setups

AUDJPY is poised to bounce north. If it fails to do so, you will be looking at the eight-hour trend reversing south.

EURJPY is poised to bounce north. If it fails to do so, you will be looking at the eight-hour trend reversing south.

EURGBP is not an errant son, but the eight-hour trend is SO bullish that you should look for this rate to bounce out of its present pullback.
 
Weekly Price Range
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The following currency pairs have either reached or surpassed the top of their projected maximum price range for the week. However, this does NOT mean they will necessarily still find themselves in this same condition at the start of next week. Also, this does not mean that a reversal is imminent. Nonetheless, it might be indicative of a reversal soon to come, and possibly a very dramatic reversal if stimulated by related economic data.
  • USDJPY
  • USDCAD
  • USDCHF
The following currency pairs have either reached or breached the bottom of the projected price range estimated for this week. However, this does NOT mean they will necessarily still find themselves in this same condition at the start of next week. Also, this does not mean that a reversal is imminent. Nonetheless, it might be indicative of a reversal soon to come, and possibly a very dramatic reversal if stimulated by related economic data.
  • AUDUSD
  • EURUSD
  • GBPUSD
AUDUSD saw its two-week simple moving average envelope join the weekly baseline in turning north last week, so the potential for the pair to climb a good distance from its present location (at 0.6972) is quite significant.

USDCAD has been neutral (in consolidation) for four weeks. If this doesn't change, it could experience a substantive drop from 1.2990 (where it is now).

USDCHF is overall bearish, so it too could experience a substantive drop from its current location (at 136.88).
 
THE SIX- AND 12-DAY PRICE RANGES:

Note that the six-day and weekly price ranges are not the same. (The six-day range is wider.) Currently, none of the currency pairs have breached either of these measures, though GBPUSD is the closest. (The bottom of the six-day price range is calculated at 1.1761, and the rate is presently about 64 pips above this level at 1.1825.)

THE TWO-HOUR-BASELINE ERRANT SON SETUP:

When (if and only if) the two- and eight-hour baselines share the same trajectory, enter positions in the matching direction as rates are rejected by the 2-hour temporal support/resistance level, as appropriate—especially if this event takes place on the "wrong" side of the two-hour price range envelope.
 
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expiated said:
Eight-hour Errant Son Setups
More...
Taking a look at this setup from the perspective of lower time frame charts, it appears the eight-hour errant son usually (if not always) involves a two-hour baseline headed in the "wrong" direction. So then, one would assume the logical signal for executing the trade would be a hook in the two-hour measure that brings it back into harmony with the eight-hour moving average.

expiated said:
Weekly Price Range
More...
Use your "Four-hour Weekly Tracer" charts for this setup. It looks like the trigger for executing the associated trades is a hook in the eight-hour baseline.

As you look into this you get the impression that a Weekly Price Flow Errant Son setup might be a very reliable trade. And since you would be operating from a weekly perspective, the payouts could be quite substantive.

Also, it appears that when the eight-hour baseline is "in front of" the daily trend line, the "back" of the eight-hour price range envelope often serves as a great launch pad for entering positions in the direction of overall price flow.
 
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expiated said:
Weekly Price Range Violations:
  • USDJPY
  • USDCAD
  • USDCHF
  • AUDUSD
  • EURUSD
  • GBPUSD
More...
The fresh weekly resistance levels for the first three above-listed pairs are:

USDJPY - 138.10
USDCAD - 1.3096
USDCHF - 1.9662

The fresh weekly support levels for the last three are:

AUDUSD - 0.6811
EURUSD - 0.9949
GBPUSD - 1.1722
 
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