Duxon's Archive

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Thursday / October 31, 2019 / 4:50 p.m. EST / Halloween!

I got off to a VERY bad start today...

I would say the moral of the lesson is to never place trades I cannot monitor so as to eliminate the danger of being kicked out of positions by a stop loss as opposed to exiting after visually recognizing a reversal in the short-term trend.

However, this is not really practical (in my view) given my tiny account. Otherwise, I would simply increase my average/typical trade size to generate the returns I desire while being very selective about when I'm in the markets. But trading with such a small balance, I kind of don't want to pass up any favorable setup/conditions, even if I have to enter positions and walk away due to other obligations (because I need to rack up as many wins as possible).

 

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NOTE: Both yesterday and today the market really "woke up" at 5:30 p.m. PST.

 

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Friday / November 01, 2019 / 9:00 a.m. PST

Price can be rising (overall) in one context or time frame while falling in another and vice versa. Consequently, whether or not it is advisable to execute a given trade or enter a given position depends on how much profit a trader is seeking and how big of a drawdown s/he is willing to tolerate.

In other words, whether it makes sense to buy or sell a particular currency pair at a particular time/level will depend on how the different aspects of conditions in multiple time frames relate to one another, which of course demands their consideration.

To carry out this type of analysis in as efficient and organized a fashion as possible, it behooves me to clarify the factors involved and then establish a routine for evaluating them, which is my motivation for compiling the following list(s) for my memorization.

(Applies to the five-minute chart "amalgamation" setup)

 

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Sunday-Monday / November 4, 2019 / 7:00 a.m. PST

 

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Tuesday / November 5, 2019 / 12:30 a.m. PST

The above notes apply to the 5-Minute Slope of the Crimson chart configuration.

 

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Tuesday / November 5, 2019 / 1:20 a.m. PST

The 5-Minute Amalgamation chart setup is for the most part a jumbled mess, so I am going to delete it. But before doing so, I want to combine the useful measurements/readings from that setup with the ones above to note anywhere they overlap...

 

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Tuesday / November 5, 2019 / 7:00 a.m. PST

 

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REMEMBER!!!

When using the 15-Minute White and Black chart setup, refer to BOTH the Donchian Channel AND the Local Envelope when selecting your entries and exits.

 

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Friday / November 8, 2019 / 8:00 p.m. PST

Today I submitted my first/rough draft of the report I was asked to write on trading Forex to get the "publishers" feedback. In preparing visuals for the booklet, I came up with a black and white version of my setup that I find I prefer using to all my color versions...

 

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Sunday / November 10, 2019 / 5:30 a.m. PST

Creating a black and white chart for the book I wrote for one of my clients led me back to simplifying my own charts. On my one-hour setup, I settled on one of four different moving averages I could have used for the short-term trend and then replaced that with my own proprietary instantaneous moving average, which I felt was even better.

I also settled on one of three different moving averages I could have used for the intermediate trend and then replaced that with another of my own proprietary moving averages due to its generating a smoother line of not only the simple moving average it replaced, but also the smooth version of simple moving averages generated by the formula PREVSUM = SMMA(i - 1) * N where SMMA(i) = (PREVSUM - SMMA(i - 1) + CLOSE(i)) / N.

For the longer-term moving average, I settled on one of four different options, and for the overall trend line, I settle on one of three choices.

I then translated all of these settings to my five-minute chart setup, except that for the short-term (hourly) trend I opted to used a cluster of three simple moving averages instead of just the one.

These four (or six, depending on how you look at it) moving averages represent what the book labels as “directional bias lines” from four different time frames, all plotted on one chart. Using the language I’ve used previous, one could either say they represent the gravitational trend lines from four different time frames, or four instantaneous moving averages from four different time frames.

Continuing with the book’s ironclad rule, adapted from the rule put forth by VP (Patrick) of No Nonsense Trading, the idea is to never be short above upward sloping directional bias lines, and never be long below downward sloping directional bias lines. (Patrick does not include the slope of the lines—which he calls baselines—in his ironclad rule. Also, his system recommends using a single line rather than four.)

Between using the simplified five-minute chart setup, applying the ironclad rule, and referring to simple moving average envelopes, adaptive price range envelopes, and/or carefully selected Donchian channels as “launch pads” and “landing sites” as defined by the Cycle Theory version of my Numerical Price Prediction system, I’m hoping to have a more easily followed yet more effective protocol for continuing to trade profitably, God willing.