Compare & Contrast with Christopher Lewis

[expiated]

I have deleted the momentum indicator, bull power, and bear power indicators from my MT5 charts for reasons I don't really need to elaborate. What's left worked very well last night and will probably work even better with this morning's refinements.

I have two sets of lines or levels. The first I call the "run lines." If the William's Percent R is above or below (or in contact with) the corresponding band, especially if it is accompanied by the Stochastic Oscillator Main and/or Signal lines, it suggests to me that there is a very strong possibility that price is "running."

The second I call "surge lines." When the MACD histogram and signal line exceeds these bands, I need to be ready to take advantage of possible surges (or plummets) in price, and anticipate exiting the positions as soon as the measures fall below the run line, or at the latest, back behind that same surge line (unless the William's Percent R [and/or Stochastic Oscillator Main and/or Signal lines] indicate that price is running)...

These measures are not 100% accurate, but the ARE precise enough so that, when used in combination with the upper panel indicators plotted on the main chart (not included in the above images) they constitute very powerful tools for instructing a trader as to what actions he or she should take while day trading foreign currency pairs.

After taking a second look, I decided that William's % R acts too "weird" to be of any "real" use to me. And while the nice thing about MACD is that it can be used to define a "chop zone," because the fixed maximum and fixed minimum have to be changed when going from a "western" chart to a Japanese pair (not to mention the levels for the chop zone) I now regard it too as being impractical for my personal use.

This means the only standard or traditional indicator I regard as being of any possible use as relates to my approach to day trading is the stochastic oscillator. To do so, I established four levels and deleted the (jagged) main line, and interpret the resulting graphics as follows:

1. The top and bottom bands represent the "run threshold." Accordingly, so long as the oscillator (signal line) remains above the top band, I'm looking for the asset to maintain a bullish run. Conversely, while the oscillator remains below the bottom band, I anticipate the pair's sustaining a bearish run.
2. If the oscillator drops below the red level, I'm looking to sell and remain in the short position for the duration of its fall, whereas if the oscillator pops up above the green level, I'm looking to buy and remain in the long position so long as the oscillator's trajectory is pointed north.
3. Generally speaking, the slope of the oscillatory between the red and green levels reflects the direction of the intraday trend.

 

[expiated]

I'm finally finishing the book I began writing in September of 2017 explaining how to use Numerical Price Prediction (NPP) to trade foreign currency pairs profitably. I've gotten to the chapter on swing trading, an approach I do not recommend because I find that currency pairs fluctuate much too frequently throughout a given day or week to be able to navigate the Forex market with consistent success using a swing style of trading.

So, having gone back through all the previous chapters and reconciling what I wrote back when with what I've arrived at having finalized my system, I need to verify that the protocol I would NOW suggest for swing trading, having taken the whole of what I've concluded into consideration, finally WILL empower anyone who implements it with the ability to reap gains from its use.

My first test will be GBPUSD, which I would expect to reverse direction and turn north for a significant stretch of time if and when it drops down into the shaded region pictured below...

Oh! I didn't even notice this before. Better yet is USDCHF, which at 0.8918 is already in prime position to reverse in the other direction. I will therefore be watching for a trigger signal to sell the pair over the next week or two, and then enter a short position that I will plan to stay in for several days.

 

[expiated]

This means the only standard or traditional indicator I regard as being of any possible use as relates to my approach to day trading is the stochastic oscillator.

Oh my goodness! Shock of shocks... I actually prefer using the the stochastic oscillator on my day trading charts. After six years of finding all standard lower panel indicators of little or no value at all with respect to Numerical Price Prediction, this is quite a surprise!

However, in moving from swing trading to tightening up all my ideas of the past few years in regard to day trading, I'm afraid I will be unable to suggest to the readers of my book (which I doubt I'm going to publish anyway) how to fully optimize their intraday trading using "OEM" indicators. I would be less than honest if I didn't say I am extremely pleased with where this review process has led, but unfortunately it turns out that the measures it's recommended are almost all proprietary "sensors" I've coded myself.

I attempted to reproduce the code for the stochastic oscillator "long hand" so that I can tell an Expert Advisor (EA) how to trade off my levels, but when I attempted to calculate the moving average of the %K line, my panel went blank. (I CAN use the %K line instead of the %D, but it has to be handled just a little differently.)

 

[expiated]

Better yet is USDCHF, which at 0.8918 is already in prime position to reverse in the other direction.

The US dollar-Swiss franc looks like it's getting off on the right foot, but I entered this position aggressively, prior to getting a confirmation signal, so I will be interested in seeing whether the pair actually follows through...

However, I don't know how I got that 0.8918 reading. Was I offline and working off an old chart that needed to be updated? That's the only thing I can think of that might explain it, since I was merely working on summing up everything I'd compiled over the last six years and didn't need a live feed to do so. (If it was earlier in the day, the market wasn't even open yet, so I would have had no real reason to bother with a live feed.)

 

[expiated]

I entered this position aggressively, prior to getting a confirmation signal, so I will be interested in seeing whether the pair actually follows through...

The same is now true of GBPUSD...

 

[expiated]

I found the rate of change (ROC) indicator available via MT4 to be totally useless, which is why I created my own. I use two of them (in the form of histograms) for day trading. But, since they will not be available to anyone reading my book, I needed to identify comparable substitutes, which I did for one on Monday in the form a stochastic oscillator, and for both yesterday by defining the relationship between to different pairs of measures that communicate when it makes sense to enter the market and when prudence would recommend sitting on the sidelines.

These three calculations have led to a fourth (and final) in the form of an additional stochastic oscillator (SO) set to a second set of parameters. This indicator highlights when it might be profitable to enter long positions (when the oscillator crosses above the central channel for as long as it continues to climb); and when a trader might successfully enter short positions (the opposite scenario) with respect to a higher-time-frame trend than the one highlighted by the first SO...

 

[expiated]

The same is now true of GBPUSD...

The one-month baseline has turned south and made contact with the two-month baseline, so any trader still in a long GBPUSD position should probably think long and hard about whether or not to remain so.

 

[expiated]

The US dollar-Swiss franc looks like it's getting off on the right foot, but I entered this position aggressively, prior to getting a confirmation signal, so I will be interested in seeing whether the pair actually follows through...

At 0.9023, USDCHF is down form 0.9048. However, because the five- and seven-day baselines are bullish, with the one-month price flow having turned north on September 21, 2023, I would not COUNT on price dropping any farther, even though the two-month measure IS still bearish.

The confirmation signal for SELLING the pair would be if the five- and seven-day measures ever JOINED the two-month baseline in its southbound trajectory.

So then, NONE of the pairs I follow is currently displaying a structure that I would deem ideal for swing trading. And watching GBPUSD and USDCHF last week confirmed my previously expressed view that the only thing which would justify swing trading for me personally would be laziness, given that I have measures which evidence sufficient accuracy and precision to day trade profitably (more profitably than swing trading) since they are quite adequate to the task of tracking the ebb and flow of the intraday trend, thus empowering me to capitalize on price action both coming and going.

 

[expiated]

I don't want to "beat the market." As much as possible, I want the market and I to be simpatico.

When people talk about market makers pushing rates around in order to stop retail traders out of their positions, what they're probably really referring to are institutional traders—be they at a bank, a fund, or a proprietary trading firm (or it might possibly simply be the collective actions of many speculative traders who don’t know each other)—all of whom interpret the charts in the same way and act in the same way (i.e., who end up placing such big orders that the market moves in a certain direction).

Indeed, this can be done in order to trigger stop-orders that are clustered at certain levels, such as when certain market participants see a recent price top, and think there are stop loss orders placed just above this top. In this case, there might be a desire in the market to "take out these stops," which means first buying at market with large size so that they end up with long positions while also driving price up. Then, when the market price reaches these stop loss orders, they are triggered and drive the price up even higher, and it is in this last burst of price action that the speculators start selling, exiting their long positions at a profit.

Consequently, the market participants who were previously short, those who had their stop loss orders just above the level of the initial price top, now find themselves left without their positions (having been forced to exit them) in a market that was never really going to keep climbing in the first place, and remains far more likely to eventually turn around and head back to lower levels.

Here is the point of all this…

In my experience as a retail trader, in order for me to avoid finding myself among those participants who are forced to exit their (destined to be winning) positions by this type of "mischievous" conduct just prior to the market reversing course and moving in my favor, I have to know what are the price ranges beyond which the markets almost never fluctuate, AND know which measures communicate when a given asset has genuinely executed a trend reversal with very little chance of its change in direction turning out to be a "head fake" or "false positive."

I also need to be aware of exactly which trend it is that exercises dominant control over price action in whatever context I'm operating, whether it is that of a day, swing or position trader (and it is almost never the 10-, 20-, 50-, 100- or 200-period moving average).

 

[expiated]

The one-month baseline has turned south and made contact with the two-month baseline, so any trader still in a long GBPUSD position should probably think long and hard about whether or not to remain so.

Yes, I just updated my 15-minute charts in accordance with what seemed to be recommended by what I judged to be all the best of the best measures after reviewing all my favorite forecast models, and what I see indicates that GBPUSD is indeed full-on bearish as of Friday and USDCHF is at best neutral, if not a tiny bit bullish at this point.