Duxon's Archive

[expiated]

AUDJPY reversed south at 75.48—there was no follow through. I have another moving average I can use to authorize this kind of a trade, so I'm going to try buying the pair again when this alternative line gives me the go ahead and see how things turn out if I operate in this manner instead.

Buying AUDJPY once the alternative line authorized the move would have been profitable indeed, but unfortunately, I was asleep at the time...

The pair has since given back a little bit of what it offered. Given that it is still overall bearish on my daily, four-hour, and one-hour charts, I wouldn't be inclined to try to get anything more out of a long position until and unless the asset goes wholesale bullish.

 

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Based on USDCHF and EURUSD, it looks like executing trades following authorization via price having "cleared the field" might indeed be a justifiable criteria to use for entering positions...

 

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I don't know what happened with EURAUD. Since I was asleep when it turned against me, I could not exit when it would have been prudent to do so, and I ended up getting stopped out. Apparently the folks at FXTurkey agree with my earlier assessment that the pair has the potential to climb much higher, so I will be interested to see if I can make up the loss.

 

[expiated]

Wednesday, July 10, 2019 / 10:30 a.m. PST

EURJPY

This pair is in the middle of nowhere in the daily and weekly price ranges, so is not of much interest to me.

 

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Wednesday, July 10, 2019 / 10:30 a.m. PST

EURGBP does not have much more room to climb. It has closed above this level a total of only about 12 months tops in the last seventeen years, since 2002, which is as far back as my charts go. I'm expecting it to start falling any day now, but especially if it climbs another 100 to 300 pips or more.

 

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My need at the moment is to practice meshing the correlated/interrelated aspects of the final chart configurations I'm using into a cohesive protocol comprising a single overarching forecast model.

Wednesday, July 10, 2019 / 3:20 p.m. PST

I'm not so sure the above can be accomplished. It might be that I will simply have to look at each facet of the different charts separately and then weigh all the various factors against one another to come to a final decision.

If the tapestry can be woven however, I think it starts with looking to enter positions whenever price "clears the field."

So starting there, I will be looking to short USDCHF. This suggests using my 60- and 240-minute charts to spot trade setups. This pair has already gotten a jump on me though, so I should probably wait for a pullback before executing the trade. This decision points to the advisability of looking to five- and/or one-minute charts to pinpoint optimal/wise entry levels. Yes, it's beginning to come together now.

So, at this point I have...

1. Use projected zones of support and resistance based on a statistical analysis of historical data (typical price ranges in multiple time frames over an extended period of time) to set predetermined levels where entering or exiting positions is likely to maximize the odds of corresponding trades ending with success.
2. Use four- and/or one-hour charts to identify potential trade setups based on price/candlesticks "clearing the field."
3. Use five- and/or one-minute charts to pinpoint precise entries and exits to optimize each trade's profitability and the chances of its meeting with success.

EURJPY is all bullish on the four-hour chart. This would suggest entering a long position as soon as the hourly trend line resumes an upward trajectory.

Given that EURUSD appears to have just initiated a wholesale reversal, it might make sense to buy the pair as soon as it evidences a "touch and go" price pattern. (NZDUSD appears to be in the same situation—not to mention AUDUSD as well.)

GBPUSD has "cleared the field," but this might simply be the first half of a touch and go price pattern, given that virtually all the graphics are still pointing south. Logic would therefore dictate selling the pair when the hourly trend line hooks south as well. But if the pair fails to follow through, a subsequent buy might be in order, provided "the field" begins to hook north.

On the other hand, this pair has been headed south for twelve to thirteen days straight, riding local support all the way down the past six days (before today) so that it is now ALSO sitting on global AND universal support. Therefore, it is in prime position structurally to head north for at least a couple of days, so I need to be prepared to execute that sort of trade if called for.

 

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EURJPY is all bullish on the four-hour chart. This would suggest entering a long position as soon as the hourly trend line resumes an upward trajectory.

EURJPY's hourly trend line never resumed an upward trajectory, and in fact, the pair is now bearish. All the readings I was observing suggested that GBPUSD, AUDUSD and NZDUSD were experiencing reversals rather than pullbacks, so that was the route I took...

Integrating the related aspects of the different chart configurations I'm using with a protocol that essentially meshed them into one cohesive forecast model didn't turn out to be the challenging task I was thinking it would be. I don't know that I will be archiving any more ideas here in that I'm no longer actively seeking any additional insights. And since the system is not only fully developed now, but also the way I want to apply it, there is no point in recording any additional trades.

The returns are only $1 to $5, but I've been trading exclusively during all the "dead" hours today. Even so, that's better then the 25¢ to $1.00 norm from before, and is likely to increase come the volatile/liquid periods during the London and New York sessions. Not to mention the fact that the returns will increase as I gradually move up from trading 0.02 Lot sizes to 1.00.

 

[expiated]

After having more-or-less fully developed my trading system, I have concluded that, for me (if no one else) the concept of trend lines is all wrong—at least when it comes to the Forex market.

Rates do not travel in a line, they travel in a channel. But since that term is already taken, perhaps I should say they travel in a stream, like a river, or a band, except that term is already spoken for as well. (Other synonyms that now come to mind include strip and belt.)

The image below is flawed in that I didn’t notice until after I started creating it that I was building it off of an old setup that was missing one of the upper envelope bands. Consequently, the outer white zone is missing on the “upper bank” of the “river,” but the image still conveys the general idea, nonetheless.

Viewing a given rate as swinging back and forth between the banks of a river as it is swept along in the general direction of the overall flow reveals an almost unlimited number of opportunities to compile profits. Though enormous trades are rare, so are substantial losses…

And the little payoffs can add up to significant returns over time.

Numerical Price Prediction Protocol:

1. Use projected zones of support and resistance based on a statistical analysis of typical price ranges in multiple time frames over an extended period of time (primarily using daily charts) to set predetermined levels where entering or exiting positions is likely to maximize the odds of the corresponding trades ending with success (i.e., maximize expectancy).
2. Once these levels are established, use the four- and/or one-hour chart configurations to recognize when potential trade setups are taking shape at or near these levels based on price evidencing structures/formations indicative of wholesale trend reversals (i.e., candlesticks crossing over all your key/designated moving averages).
3. As soon as a potential wholesale trend reversal has been confirmed/verified, use the five- and/or one-minute chart configurations to get a fix on the precise entry or exit points that will optimize each trade's profitability and the chances of its ultimately meeting with success.
4. Rather than exit the trade at predetermined take-profit targets, stay in the position (remain in the trade) until and unless the associated forecast model readings indicate that a given run has come to an end.
5. Rather than exit trades at a predetermined stop loss, do so as soon as the associated forecast model readings convey a reversal in the profit generating trajectory of price action. (Note: The last two steps can only be carried out if you are actively monitoring/managing your positions. Otherwise, you will have to rely on take-profit targets and stop losses, greatly reducing the effectiveness of your system.)

I pasted the information that appears directly above primarily as a matter of record. Actual execution of the system has altered my thinking so I am now of the opinion that following the above routine is unnecessary.

On the forecast models I'm using, the river banks are plainly marked and the path taken by exchange rates as they swing back and forth across the general flow of the current are precisely and clearly defined (not pictured) so that all I need to do is enter and exit positions as rates bounce back and forth between opposite sides of the "stream."

 

[expiated]

Friday, July 19, 2019 / 5:30 p.m. PST

The (black) hourly (or instantaneous) trend lines on your 60-minute charts are set, as is the day-to-day moving average cluster. However, on this simplified chart, an intermediate indicator was clearly needed. After plotting it and comparing it with the MA formerly used to confirm the hourly trend, it turns out they were pretty much analogous, though the proprietary one (or actually, it’s a pair) plotted today is better.

BRAND NEW “MINDLESS” NPP FOOLPROOF PROTOCOL:

1. Enter long positions when candlesticks are forming above the day-to-day moving average cluster, provided that the intermediate and instantaneous moving averages are BOTH rising—especially right after the instantaneous moving average reverses north. Enter short positions when candlesticks are forming below the day-to-day moving average cluster, provided that the intermediate and instantaneous moving averages are BOTH falling—especially right after the instantaneous moving average reverses south!
2. The black instantaneous moving average on the 60-minute chart coincides with the purple cluster on the five-minute chart. Use this chart (five-minute) for entries and exits. You should abide by the above stipulations, even after switching to this lower time frame, if you wish to absolutely maximize the probability of achieving ultimate success (but it is not really necessary in that the following routine will probably lead to a daily success rate north of 90% anyway).
3. So then, disregarding everything just stated about the 60-minute charts, the specific rule for using the five-minute template is to enter long positions as candlesticks cross above (simultaneous with) the chart’s purple cluster and exit long positions as the gray thread of the instantaneous moving average fan comes down to hit the orange thread. As long as the fan remains above the purple cluster, keep reentering long positions every time rates cross back above the bold base thread of the instantaneous moving average fan, and keep exiting per the previous instructions—as the gray thread of the instantaneous moving average fan comes down to hit the orange thread.
4. Conversely, enter short positions on the five-minute chart as candlesticks cross below (simultaneous with) the chart’s purple cluster and exit short positions as the gray thread of the instantaneous moving average fan comes up to hit the orange thread. As long as the fan remains below the purple cluster, keep reentering short positions every time rates cross back below the bold base thread of the instantaneous moving average fan, and keep exiting per the previous instructions—as the gray thread of the instantaneous moving average fan comes up to hit the orange thread.

If you wish to see everything in greater detail, you can enter and exit positions using the one-minute chart setup that is color coordinated to match the five-minute configuration.

In the language of the previous post, this routine is tantamount to entering positions as rates join or rejoin the general direction (or flow) of the stream's current, and exiting each time they reach the opposing river bank.

 

[expiated]

MILESTONE:

Saturday, July 27, 2019

This morning I fully defined, in specific detail, how to interpret price action in accordance with the Numerical Price Prediction (NPP) forecast model at the intraday level on one-minute charts using standard moving averages in conjunction with Donchian channels rather than my proprietary indicators.

It will probably be next to impossible for me to refine the system any further than this.

I should hopefully be finished with my other projects by the end of August, which ought to allow me to begin taking full advantage of the system's full development by returning to full-time trading at the beginning of September. The idea is that NPP is a foolproof approach to trading foreign currency pairs because it uses 100% objective measures for obtaining valid reads on when rates are rising and when they are falling.

Supposedly, the system cannot fail as long as up remains up and down remains down.