Duxon's Archive
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Monday / March 8, 2021 / 8:00 AM PST
Anecdotal Observation:
I purchased EURJPY as candlesticks began to paint above the 90- and 120-minute baselines while simultaneously breaching the 2½-hour temporal resistance level, and I took profit when the rate reached the top of the 90-minute price range at 0.20% deviation.
However, though I also purchased GBPUSD when it too began to paint above the 90- and 120-minute baselines, it breached the 2½-hour temporal resistance level only later, but was unable to follow through. Moreover, the rate keeps oscillating above and below the above-mentioned baselines. Had I set my take-profit target just below the 90-minute price range at 0.20% deviation, it would have been hit twice so far, so I have now adjusted that setting accordingly.
So then, the general rule is to enter positions as price crosses above or below the 90- and 120-minute baselines, as appropriate, and set the take-profit target just under the 0.20% deviation level of the 90-minute price range.
I should also note that in viewing the particular five-minute chart configuration I've been using this morning, a measure to which I was not giving much attention previously—the five-hour price range at 0.30% deviation—appears to be a significant level of intraday support and resistance. (If this is breached, then support/resistance at the 0.55% level is almost sure to hold the line.)
Anecdotal Observation:
I purchased EURJPY as candlesticks began to paint above the 90- and 120-minute baselines while simultaneously breaching the 2½-hour temporal resistance level, and I took profit when the rate reached the top of the 90-minute price range at 0.20% deviation.
However, though I also purchased GBPUSD when it too began to paint above the 90- and 120-minute baselines, it breached the 2½-hour temporal resistance level only later, but was unable to follow through. Moreover, the rate keeps oscillating above and below the above-mentioned baselines. Had I set my take-profit target just below the 90-minute price range at 0.20% deviation, it would have been hit twice so far, so I have now adjusted that setting accordingly.
So then, the general rule is to enter positions as price crosses above or below the 90- and 120-minute baselines, as appropriate, and set the take-profit target just under the 0.20% deviation level of the 90-minute price range.
I should also note that in viewing the particular five-minute chart configuration I've been using this morning, a measure to which I was not giving much attention previously—the five-hour price range at 0.30% deviation—appears to be a significant level of intraday support and resistance. (If this is breached, then support/resistance at the 0.55% level is almost sure to hold the line.)
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Random Thoughts...
So then, the key to successful trading is to buy low and sell high, right? But what's high and what's low? The answer to this question is found in structure. But then, there are two aspects to structure. Of course, the one is spacial. But the second aspect, which is almost never quantified, is temporal. Define these two facets of price action and you get a pretty clear picture as to when it makes sense to buy or sell a given financial asset.
So then, the key to successful trading is to buy low and sell high, right? But what's high and what's low? The answer to this question is found in structure. But then, there are two aspects to structure. Of course, the one is spacial. But the second aspect, which is almost never quantified, is temporal. Define these two facets of price action and you get a pretty clear picture as to when it makes sense to buy or sell a given financial asset.
However, for intraday trading and/or scalping, enter in the direction of the slope of the four- and eight-hour baselines as price is rejected at the 2½-hour temporal support or resistance level, as appropriate...
If this gives way, use the 12- to 14-hour temporal support or resistance levels instead. Beyond this, you're probably switching to more of a swing style of trading, as described in Post #412.
Five-minute Chart Setup for Trading NADEX Binary Options (and scalping Forex currency pairs)...
Today's trade performance using the above configuration:
As of yesterday, I switched from using the five-hour price range at 0.30% deviation to relying on the 90-minute price range at 0.20%, 0.30%, and 0.40%; with the latter two measures replacing the one I deleted. However, the five-hour price range at 0.55% deviation remains in place, with all other price ranges falling in between removed from the chart...
Today's trade performance using the above configuration:
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Wednesday, March 10, 2021
Updated NPP Explanation (addition of six paragraphs)
Copyright © 2021 Fred Duckworth
Numerical Price Prediction is an approach to trading foreign currency pairs that I came up with based on five biblical principles:
Instead, I attempted to rightly interpret the signs of the times by devising a methodology similar to that used by meteorologist to predict the weather—one based as much as possible on statistical analysis and mathematical probability.
The idea was to gather and evaluate precise, up-to-date, quantitative data and use it to calculate the odds of price reaching designated values within a given time period by patterning the system's elements after the equations, wave functions, and computer models used in weather forecasting.
But, instead of monitoring wind velocity and direction, cloud formations, humidity, temperature, and barometric pressure; I evaluate the synergy (or "relationships") between such factors as typical price ranges, reoccurring chart patterns, horizontal support and resistance, trend lines and market structure (which is to say, "a multitude of counselors that proved to be valid and reliable" over several weeks and months) all in multiple time frames—with the result being a graphical depiction (computer model) of current conditions that I could then use to help me make precise, well-timed trades (or in other words, "good choices based on rightly interpreting the signs of the times").
The system incorporates the idea of cycle theory, which holds that cyclical forces, both long and short, drive price movements, and can be used to anticipate turning points. It's also compatible with Edgar Peters' fractal market hypothesis, which views financial markets as fractal in the sense that they follow cyclical and replicable patterns—ones consisting of fragmented shapes that break down into parts which then replicate the shape of the whole.
I used these cycles to generate what some call "baselines" by conducting a thorough analysis to first uncover the cyclical waves formed in the wake of price action, followed by the defining of their general frequencies and magnitudes; and then finally plotting centered moving averages that came as close as possible to approximating the zero amplitude of the corresponding waves/cycles.
So, the notion that there are no "best" moving averages to use when trading is not one to which I subscribe. Again, at the heart of my system is the use of carefully selected baselines which I calculated in the manner explained above. (By baselines, I mean painstakingly selected moving averages able to rightly discern whether price is rising, falling, or maintaining its altitude within a particular time frame.)
However, it is not enough, in my opinion, to stop at merely determining which are the best moving averages to use when trading charts of a given time frame. To trade with the clarity and precision I desired required me to carry out one final step in which I assigned a specific temporal value to each individual baseline and its corresponding or associated price-range envelope—to answer the question: What moving average best conveys in which direction and by how much price moves every five minutes? Or every thirty minutes? Or every four hours? Or even every day?
Determining the specific moving average that best represented price movement for each of the major time intervals along with their corresponding price range envelopes seemed to be the final step I needed to carry out in order to complete the development of my trading system to my full satisfaction.
And yet, even after this "final" step, their emerged still another aspect to interpreting price action that proved deserving of my consideration which I had not envisioned at all—the concept of "temporal" support and resistance.
In other words, not only do I believe there is a certain amount of distance beyond which exchange rates will typically resist separating themselves from the central tendencies of key price distributions. It seems to me I have also observed that there is generally a limit to the amount of time exchange rates will advance in one particular direction without deviation. I refer to these limitations as temporal support and resistance, and they have proven to be a welcome enhancement to my system.
As of today, when putting this system into practice, I switch back and forth between daily, 240-, 60-, 15-, 5-, and 1-minute charts to get different perspectives, even though all of these time frames are basically configured with the same relative/corresponding measures.
I rely on the 36-day baseline to gauge in which direction price is headed from month to month, with the outer limit of the corresponding price range set at 8% deviation. However, to monitor actionable price movement from a swing trading perspective, I have to drop down to the six-day baseline, which is confirmed by the less ambiguous, but slightly lagging, 12-day trend. (Most of the time the six-day price range falls within 2% deviation.)
So then, I’m generally looking to trade in the direction aligned with the slope of the 36-, 12-, 6-, 3-, and 2-day trend lines. (The 6-day trend constitutes the most accurate and valid [i.e., void of deceptive fluctuations] actionable representation of where price is ultimately headed, from a swing trading perspective.) This entails entering positions as the 4-, 8-, 16-, and 24-hour baselines reverse direction from moving AGAINST the longer-term moving averages to traversing WITH them—riding the ebb and flow of the shorter-term measures as they move in and out of sync with those having greater values. (I believe this to be more profitable than employing a buy-and-hold style of trading.)
The established routine is to enter positions as candlestick formation reverses direction such that price crosses above or below the 90- and 120-minute baselines, as appropriate, possibly taking profit just under the 0.20% deviation level of the 90-minute price range. This is especially true if the reversal takes place immediately following the rejection of price at or near the 0.55% deviation level of the five-hour price range AND/OR immediately after the rejection of price at or near the 12-hour temporal support/resistance level (or occasionally the 24-hour temporal support/resistance level). Basically, it's simply a matter of entering positions following 90-minute-baseline-pullbacks.
So then, unlike the previous routine, where the protocol was to watch for reversals at the four-hour statistical support/resistance level, or the six-hour temporal support or resistance level; it's now the five-hour statistical support/resistance level (an average of the two), or the 12-/24-hour temporal support/resistance levels where reversals are anticipated.
The most important thing here is to make sure you are trading in the direction of the eight-hour baseline (especially if it is confirmed by the 16-hour trend), given that the eight-hour trend is the measure that constitutes the most accurate and valid actionable representation of where price is ultimately headed at the intraday level.
On the other hand, if you’re more interested in scalping, enter positions in the direction of the slope of the four- and eight-hour baselines as price is rejected at the 2½-hour temporal support or resistance level, as appropriate. (At the "granular" or "microscopic" level, you might even want to monitor 20- and 40-minute temporal support/resistance levels, given that they are good for pinpointing pullback entry levels in the intraday trend and for detecting early indications of reversals in the 90-minute and/or 2-hour bias/sentiment/price flow.
Updated NPP Explanation (addition of six paragraphs)
Copyright © 2021 Fred Duckworth
Numerical Price Prediction is an approach to trading foreign currency pairs that I came up with based on five biblical principles:
- The first being to test everything and hold fast to only those things which prove to be valid and reliable.
- The second was a belief that, as in life, when you have a system operating at peak performance, more often than not, it's at least in part due to the interactions between its various components evidencing strong, healthy relationships.
- The third is the fact that the best of plans are typically established in the presence of a multitude of counselors.
- The fourth is the necessity of being able to rightly interpret the signs of the times.
- And the fifth is that, once again, as with life itself, positive outcomes are usually the result of having made good choices.
Instead, I attempted to rightly interpret the signs of the times by devising a methodology similar to that used by meteorologist to predict the weather—one based as much as possible on statistical analysis and mathematical probability.
The idea was to gather and evaluate precise, up-to-date, quantitative data and use it to calculate the odds of price reaching designated values within a given time period by patterning the system's elements after the equations, wave functions, and computer models used in weather forecasting.
But, instead of monitoring wind velocity and direction, cloud formations, humidity, temperature, and barometric pressure; I evaluate the synergy (or "relationships") between such factors as typical price ranges, reoccurring chart patterns, horizontal support and resistance, trend lines and market structure (which is to say, "a multitude of counselors that proved to be valid and reliable" over several weeks and months) all in multiple time frames—with the result being a graphical depiction (computer model) of current conditions that I could then use to help me make precise, well-timed trades (or in other words, "good choices based on rightly interpreting the signs of the times").
The system incorporates the idea of cycle theory, which holds that cyclical forces, both long and short, drive price movements, and can be used to anticipate turning points. It's also compatible with Edgar Peters' fractal market hypothesis, which views financial markets as fractal in the sense that they follow cyclical and replicable patterns—ones consisting of fragmented shapes that break down into parts which then replicate the shape of the whole.
I used these cycles to generate what some call "baselines" by conducting a thorough analysis to first uncover the cyclical waves formed in the wake of price action, followed by the defining of their general frequencies and magnitudes; and then finally plotting centered moving averages that came as close as possible to approximating the zero amplitude of the corresponding waves/cycles.
So, the notion that there are no "best" moving averages to use when trading is not one to which I subscribe. Again, at the heart of my system is the use of carefully selected baselines which I calculated in the manner explained above. (By baselines, I mean painstakingly selected moving averages able to rightly discern whether price is rising, falling, or maintaining its altitude within a particular time frame.)
However, it is not enough, in my opinion, to stop at merely determining which are the best moving averages to use when trading charts of a given time frame. To trade with the clarity and precision I desired required me to carry out one final step in which I assigned a specific temporal value to each individual baseline and its corresponding or associated price-range envelope—to answer the question: What moving average best conveys in which direction and by how much price moves every five minutes? Or every thirty minutes? Or every four hours? Or even every day?
Determining the specific moving average that best represented price movement for each of the major time intervals along with their corresponding price range envelopes seemed to be the final step I needed to carry out in order to complete the development of my trading system to my full satisfaction.
And yet, even after this "final" step, their emerged still another aspect to interpreting price action that proved deserving of my consideration which I had not envisioned at all—the concept of "temporal" support and resistance.
In other words, not only do I believe there is a certain amount of distance beyond which exchange rates will typically resist separating themselves from the central tendencies of key price distributions. It seems to me I have also observed that there is generally a limit to the amount of time exchange rates will advance in one particular direction without deviation. I refer to these limitations as temporal support and resistance, and they have proven to be a welcome enhancement to my system.
As of today, when putting this system into practice, I switch back and forth between daily, 240-, 60-, 15-, 5-, and 1-minute charts to get different perspectives, even though all of these time frames are basically configured with the same relative/corresponding measures.
I rely on the 36-day baseline to gauge in which direction price is headed from month to month, with the outer limit of the corresponding price range set at 8% deviation. However, to monitor actionable price movement from a swing trading perspective, I have to drop down to the six-day baseline, which is confirmed by the less ambiguous, but slightly lagging, 12-day trend. (Most of the time the six-day price range falls within 2% deviation.)
So then, I’m generally looking to trade in the direction aligned with the slope of the 36-, 12-, 6-, 3-, and 2-day trend lines. (The 6-day trend constitutes the most accurate and valid [i.e., void of deceptive fluctuations] actionable representation of where price is ultimately headed, from a swing trading perspective.) This entails entering positions as the 4-, 8-, 16-, and 24-hour baselines reverse direction from moving AGAINST the longer-term moving averages to traversing WITH them—riding the ebb and flow of the shorter-term measures as they move in and out of sync with those having greater values. (I believe this to be more profitable than employing a buy-and-hold style of trading.)
The established routine is to enter positions as candlestick formation reverses direction such that price crosses above or below the 90- and 120-minute baselines, as appropriate, possibly taking profit just under the 0.20% deviation level of the 90-minute price range. This is especially true if the reversal takes place immediately following the rejection of price at or near the 0.55% deviation level of the five-hour price range AND/OR immediately after the rejection of price at or near the 12-hour temporal support/resistance level (or occasionally the 24-hour temporal support/resistance level). Basically, it's simply a matter of entering positions following 90-minute-baseline-pullbacks.
So then, unlike the previous routine, where the protocol was to watch for reversals at the four-hour statistical support/resistance level, or the six-hour temporal support or resistance level; it's now the five-hour statistical support/resistance level (an average of the two), or the 12-/24-hour temporal support/resistance levels where reversals are anticipated.
The most important thing here is to make sure you are trading in the direction of the eight-hour baseline (especially if it is confirmed by the 16-hour trend), given that the eight-hour trend is the measure that constitutes the most accurate and valid actionable representation of where price is ultimately headed at the intraday level.
On the other hand, if you’re more interested in scalping, enter positions in the direction of the slope of the four- and eight-hour baselines as price is rejected at the 2½-hour temporal support or resistance level, as appropriate. (At the "granular" or "microscopic" level, you might even want to monitor 20- and 40-minute temporal support/resistance levels, given that they are good for pinpointing pullback entry levels in the intraday trend and for detecting early indications of reversals in the 90-minute and/or 2-hour bias/sentiment/price flow.
CORRECTION:
At the granular level, you might even want to monitor 20- and 40-minute temporal support/resistance levels, given that they are good for pinpointing pullback entry levels in the intraday trend and for detecting early indications of reversals—not in the 90-minute and/or 2-hour bias/sentiment/price flow—but rather, in the 40-minute baseline...deemed to convey the lowest "actionable" trend at any level (typically used for scalping).
Tuesday / March 16, 2021 / 7:00 AM PST
USDJPY is a prime buy candidate at the moment for reasons related to the information below.
I won't bother with the details since they were mentioned recently in two or three of my other threads. Given that the above probably represents optimum trade conditions and will most likely be driving my actions going forward, further comment would simply be redundant and boring.
As a result, my guess is that trade related entries going forward will be limited primarily to short video clips and occasional posts in the 1.8% Profit per Day Compounded over 220 Days thread.
Not much else is of interest to me now, other than simply trading the system.
USDJPY is a prime buy candidate at the moment for reasons related to the information below.
I won't bother with the details since they were mentioned recently in two or three of my other threads. Given that the above probably represents optimum trade conditions and will most likely be driving my actions going forward, further comment would simply be redundant and boring.
As a result, my guess is that trade related entries going forward will be limited primarily to short video clips and occasional posts in the 1.8% Profit per Day Compounded over 220 Days thread.
Not much else is of interest to me now, other than simply trading the system.
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But wait...I have a question!
You made money from the likes of EURJPY, GBPUSD, and USDJPY as price was rejected at statistical support in the form of the four-hour price range; but the corresponding price action pulled the eight-hour baseline down so that it has now assumed a negative slope.
Given that the eight-hour trend rules that day, would buying these pairs as candlesticks initially begin painting above the eight-hour baseline be a logical and justifiable decision to make, or should you ONLY buy following pullbacks down to statistical support, even if the eight-hour baseline is in the process of transitioning from a bearish to bullish attitude.
My guess is that if the one- and two-day baselines are still bullish (as is the case with EURJPY and USDJPY) then go ahead and buy the pair whenever the slopes and alignment of the 40-, 60-, 90-, and 120-minute moving averages begin to suggest that price is ready to resume climbing higher, even if the rate already bounced off statistical support.
But if the one- and two-day baselines are bearish (as is the case with USDCHF) don't enter a long position until and unless the eight-hour baseline resumes a bullish trajectory, at which point, price action will once again probably not involve any kind of bounce off statistical support.
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