Duxon's Archive

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Monday, July 30, 2019

I lost track of Donchian channels for a couple of years, having forgotten what they were called, and coded something similar of my own, only to discover late last year that what I created was the exact same thing. Still, the way I generated them ate up a lot of memory, so I'm glad to once again have the indicator coded correctly.

On Sunday I discovered an indicator I never heard of before called the Chande Kroll Stop. It is the first indicator outside of simple moving averages, simple moving average envelopes and Donchian channels that I personally deem as being of any real value. Like several of my proprietary indicators, it seems to eat up a lot of memory, but I feel it offers me a means of timing entries and exits that is superior to simple moving average envelopes, so I'm planning to leave it on my charts anyway...

So even without trading full-time, the fully defined setup I wrote about on Saturday that uses Donchian channels in place of simple moving average envelopes (with the addition of the Chande Kroll Stop indicator added on Sunday) along with simple moving averages looks like it has the potential to easily generate better than the 1.8% daily return I will hopefully be shooting for in September.

I haven't written a protocol yet, but I should be able to come up with one over the course of this week.

 

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Monday, July 30, 2019

This is Tuesday morning—not Monday night!

 

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Tuesday, July 30, 2019 / 8:30 a.m. PST

NPP Chande-Kroll-Based Protocol:

1. There is no longer a need to check in advance for zones of support and resistance based on a statistical analysis of typical daily, weekly, etc., price ranges. Given that Numerical Price Prediction is best used as a day trading system, the (black-bounded white-cored) "universal" moving average rules the day. Assume this trend line conveys the ultimate direction in which exchange rates will eventually be headed.
2. The ideal structure for entering positions exists when rates are on the "wrong" side of the universal trend line. This condition is deemed to constitute a pullback until and unless the rate separates/distances itself (deviates) from the moving average by 0.15% or greater, so that a trade can be executed as soon as the trajectory of the actionable (green) trend lines rejoins that of the universal moving average.
3. Regardless of the location of "price" in relation to the universal trend line, positions can be entered any time the trajectory of the actionable trend lines reverses direction to rejoin that of the universal moving average.
4. Should a rate deviate from the universal trend line by 0.15% or greater, the move constitutes a reversal rather than a mere pullback. Consequently, this is the setting used to calculate where stop losses are set. (Another possible indication that a reversal is taking place is when the [burly wood] local trend line crosses to the opposite side of the universal trend line—especially if it is accompanied by the [black] intraday bias line as well, and this is particularly true if the universal trend line itself begins to hook/curve in the opposite direction. But these events cannot be fully trusted. The 0.15% measure remains the best gauge for judging when a bona fide reversal is in progress. And yet, not even this is 100% reliable.)
5. If positions cannot be actively managed, take-profit targets can be set at the same level as the most recent local high or low, as appropriate. Otherwise, the trade should not be exited until and unless the actionable (green) moving averages make contact with the local (burly wood) trend line if trading conservatively, or when the local trend line makes contact with the (black) intraday bias line for more ambitious/aggressive trading.
6. Note: Though the ultimate direction of price is conveyed by the universal trend line, its more immediate trajectory is suggested by the bias line.

 

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Rule #7:

Though the universal trend line rules the day, the more immediate trend lines rule the moment. Consequently, it is acceptable to enter trades based on reversals in the actionable (green) trend lines even before the previously mentioned 0.15% deviation is observed provided a "fanning out of moving averages" pattern similar to that described by Trade with Precision's Nick McDonald is formed by the actionable, local, and intraday bias trend lines!

 

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Wednesday, July 31, 2019 / 9:00 a.m. PST

It's been a while since all my trades came through. A big part of that is probably due to putting on more trades that shoot for profits of greater than 10 pips. The effects of once again finalizing a protocol following modifications has probably played a role as well, but another major factor has likely been the necessity of putting on trades and then walking away.

Even in this instance, I awoke to find the Aussie pairs had turned against me. I still managed to get a little bit from AUDJPY, but given just a few more seconds, AUDUSD might have succeeded in handing me a loss. Had I been awake just an hour earlier, I could have exited both positions at the first sign of trouble and perhaps tripled or even quadrupled my returns.

NZDJPY unfolded as planned, but NZDUSD missed hitting my take-profit target by like less than a pip! Had I been awake to see that, I could have exited with a profit similar to what NZDJPY offered. EURAUD is my only trade that is still active, so it might still hand be a loss today if it does not climb back above 1.6186, where I have moved my take-profit target to essentially break even.

 

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Wednesday, July 31, 2019 / 1:30 p.m. PST

What happened in the last four hours is a testament as to why, in part, I opt to day trade as opposed to swing or position trading. Though I was able to enjoy only part of the potential benefit of decisions I made last night, day trading allowed me to return to the same assets (AUDJPY, AUDUSD, NZPJPY and NZDUSD) and finish what I started.

Better yet, GBPJPY and GBPUSD also gave me a second chance to get in on what I missed while I was sleeping, and even went so far as to hit my take-profit targets "to the penny!" before reversing their direction following the release of the USD FOMC rate decision, resulting in my two largest gains over the current 24-hour market cycle.

 

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Friday, August 2, 2019 / 1:30 p.m. PST

For a day or two I was trading with Donchian channels and regular moving averages, but in experimenting with using the new configuration to transfer the wrong-colored-candlestick methodology from daily to hourly charts, I have been led to return to my proprietary moving averages.

Though they are nothing new, the combination of lines on my chart made it clear that the "green cluster" pictured above constitutes a bevy of trend lines that do a superior job of tracking the "actionable trend" for making money by rightly distinguishing "true" price direction.

Thus, if I return to full-time trading in September, I am 99.99% sure that these are the main lines on which I will be basing my trade decisions.

 

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Saturday, August 3, 2019 / 9:00 p.m. PST

I think it could be that, in the providence of God, the completion of the final stages of the project I began forging on October 20, 2018 will coincide perfectly with the final conceptualization of my numerical price prediction forecast models, so that I resume full-time trading at the ideal moment in time, probably at the end of this month or the beginning of September.

I will have a better idea of how smoothly everything is likely to run in real life after next week, but at this point, the amount of promise it all holds looks absolutely amazing. The approach appears to have the potential to take a system that is already profitable to a whole new level.

I already wrote that I now visualize foreign currency rates as swinging back and forth between the banks of a river as they are swept along in the general direction of the overall flow.

As of today, I see myself as navigating (or traversing) waves, currents, and tides. The tide measures whether the overall price level of a rate is rising or falling. The current tracks price’s general drift or flow (directional tendency), whereas waves follow the recurring crests and troughs of price in the short term.

Though it is not necessary, the ideal trade is always a buy when the tide is rising, and always a sell when the tide is receding. It is executed on the bank of the river opposing the day-to-day bias/sentiment just after the current reverses direction to rejoin the overall direction of the tide.

Optimal entries are made right when waves begin falling after having just crested, or begin climbing after having just come out of a trough. (Again, this is only after a reversal is observed in the current.)

Exit positions when the waves (or the current) reverse direction (a second time)—after reaching the opposite river bank—depending on how aggressive, prudent, or ambitions the trader wishes to be.

 

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Wednesday, August 7, 2019 / 2:00 a.m. PST

I judged my chart configurations to have been finalized as of June 2019, so that I would still be finessing or modifying them in any way here in August is not what I would have expected, and yet, this is the reality of the situation.

Yesterday I wrote in my “Synthesizing Tharp and Alexander” journal that the aim of Numerical Price Prediction (NPP) is to apply as much logic as humanly possible by relying on mathematical data and statistical probability to identify central tendency as a means of conveying the “true” intent of the big institutions without permitting variability of data sets (dispersion) to trick one into making fallacious decisions.

As of tonight (this morning) the two measures I view as constituting the core of this approach are the ones pictured below, with the black trend line being the newest addition.

If used to navigate the Forex market continuously (which I am unable to do at this time) even losses such as the two recorded below can in all probability be avoided.

UPDATE: Since I wrote on Friday (Post #67) that I was 99.99% sure "the green cluster" would be the main lines on which I will be basing my trade decisions once (or if) I returned to full-time trading, I just checked to see if the black moving average in the above image coincides with the green cluster—and it does.

 

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I judged my chart configurations to have been finalized as of June 2019, so that I would still be finessing or modifying them in any way here in August is not what I would have expected, and yet, this is the reality of the situation.

Saturday / October 5, 2019

It would appear that the finessing of chart configurations has finally and truly come to an end, with the termination of even a trace of an inclination to make any additional modifications having taken place some time in late August or September.

The central tendency I cited in the above post as a means of conveying the “true” intent of big institutions without permitting variability of data sets (dispersion) to trick me into making fallacious decisions I would equate with what I'm now calling an asset's orbit, gravitational trend line, and/or tsunami (tidal wave) depending on which aspect price movement I'm focused.

I started using Amazon's CreateSpace to write a book on the topic, but never completed it since the system had yet to reach its final iteration. Now that I appear to have come to the end of the road, I returned to Amazon to discover that CreateSpace is now Kindle Direct Publishing. Another problem I had previously was that the pre-formatted documents Amazon provided were clunky, not to mention that at the time, it was going to be too much of a hassle to convert all my images to 300 DPI to meet their guidelines.

If I decide to do so now, I will probably charge $250 for the book—the maximum allowed—because I don't really want anyone to buy it. A part of me wants to keep my secrets to myself. Even so, I'm also not fond of the idea of the system totally disappearing when I'm no longer around in the way that no one seems to know how Ed Leeskalnin managed to build the Coral Castle (Rock Gate Park) first in Florida City, and then in Homestead, Florida apparently all on his own with nothing more than tripods, pulleys, and winches. If I manage to achieve what others claim is impossible, I would prefer that how I did it not remain a total mystery.

Besides, even if I do go on to describe in detail how I generated a fortune starting with just 100 bucks (supposing this even happens), it doesn't necessarily mean that a bevy of retail traders will suddenly spring up and start emulating my results because, the sad fact of the matter is, when provided with a road map to success, most people are too stubborn, independent, self-confident, self-assured, or obstinate to follow the blueprint exactly. Hence, the possibility of hundreds or thousands of people suddenly making thousands or millions of dollars based on secrets others let loose in the public domain after just a handful of individuals pay me a measly 250 bucks for the details of my system is probably virtually nonexistent.