Duxon's Archive

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Wednesday / May 6, 2020 / 12:30 PM PST
CHANGE IN STRATEGY?

What I've been doing has been working, which has been to execute trades coming out of pullbacks. However, in analyzing the newly imagined lower-panel oscillators, it appears that doing the opposite would be even more profitable—even though this seems counter intuitive to me.

Rather than wait for rates to initiate an exit as price reverses direction to rejoin the trend, it looks like the better tactic would be to enter positions smack dab in the middle of pullbacks using the newly imagined oscillators to select the extreme maximum degree of retreat. The statistical probability of rates reversing immediately or shortly thereafter—with a whole lot more room to run—looks to be extremely high!

New color scheme...

 

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Wednesday / May 13, 2020 / 7:55 AM PST

Theoretically, it seems to me that it might at some point be possible to have folks come in and sit down at a computer station and duplicate the kind of results recorded below simply by following a clear set of guidelines based on a chart similar to the one that follows...

Using nothing more than the dark red trend line, the light sea green adaptive price range envelope, and the two lower-panel oscillators, it should be possible for trainees to take advantage of the Numerical Price Prediction system to execute successful trades without a clue as to how these indicators are generated so as to protect my intellectual property.

Even with years of experience using the system, I suspect the chances of anyone figuring out how to go home and duplicate the corresponding indicators is pretty much zero given that how I came up with them is in no way connected to just about anything anyone else created, be they Lane, Appel, Williams, Chaikin, Keltner, Hull, Chande, Kroll, Wilder, DeMarker or whoever.

 

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I created the this graphic as I began to think about how I might train others to use Numerical Price Prediction successfully.

From the perspective of an hourly chart, I see two reasons for entering positions. The black line with the arrow at the end takes the place of the universal baseline moving average, which is not plotted on this chart, whose job it is to convey the day-to-day trajectory of a given asset (i.e., the overall trend). The blue arrows draw attention to situations during which I personally would be looking for the perfect time to execute a trade due to price’s having crossed over to the “wrong” side of the trend.

The green circles highlight locations where I would begin watching for signs of an intraday trend reversal due to price having reached a height or depth the system calculates to be either a normal or an extreme statistical support or resistance level.

The second from the last green circle on the right approximates where I bought GBPUSD last night and the last blue arrow on the right is where wisdom would dictate pocketing one’s gains in that the odds of price continuing higher after forming a hook to the south were surely close to nonexistent at that point.

 

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Thursday / May 14, 2020

Surprisingly enough, I'm finding that even at this stage, I'm not yet through with my analysis. A time-frame I was not working with a lot before turns out to be particularly well suited for depicting intervals that are, by and large, representative of intraday tops and bottoms...

So this morning I began working on extrapolating these numbers down to the lower time-frames so as to begin making relatively quick trades sometimes for as much as 61¢ or 89¢ as opposed to 22¢ or 47¢. Once I get my position size up to one Lot, this should translate to about $60 to $90 per trade.

 

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Saturday, May 16, 2020

Using nothing more than the dark red trend line, the light sea green adaptive price range envelope, and the two lower-panel oscillators, it should be possible for trainees to take advantage of the Numerical Price Prediction system to execute successful trades without a clue as to how these indicators are generated so as to protect my intellectual property.

I wouldn’t be surprised to find May 17-22 turning out to be a rather interesting week for me. My lower panel indicator is likely to remain very much, if not exactly, as it appears below. With this tool a trainee would theoretically be able to execute successful trades without even having to look at the main chart. The process of entering and exiting positions requires little to no thought whatsoever, given that it is a generally objective matter of buying or selling when the green and goldish-brown oscillators are clearly on one side of the channel, and the grayish-blue oscillator is on the other/opposite—preferably when the first two oscillators are making forward progress or are at their peaks, as opposed to when they are in retreat. (All the thought went into designing the system and its corresponding protocol.)

The trader can then pocket his or her (or the firm's) gains when the third (grayish-blue) oscillator makes it way to the same side of the channel as the first two oscillators (i.e., green and goldish-brown). As already stated, it is a mostly objective approach based strictly on the math, as represented graphically. It's all about the numbers, and when interpreted using valid/reliable techniques for analyzing data, numbers tend not to lie.

 

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Seeing as how the above tactic depends on identifying unmistakable trends, I was curious to see how the technique would compare to the ADX indicator created by J. Welles Wilder to analyze commodity price charts (I preferred a setting of 28 rather than 25).

Initially, I thought I might have to change my mind about rejecting all standard and commercially available indicators with the exception of moving averages and moving average envelopes due to the fact that the ADX appeared to be signaling trends right after they were being initiated, giving me the impression that, at this point, the indicator might be of great value to me.

However, once I began marking the signals (vertical green lines for buy and vertical red lines for sell), I found that in reality, this happened only four times (see the bold vertical lines). At other times, the ADX actually registered signals at the end of (the leg of) a trend, or preceded price’s initially taking off in the “wrong” direction before turning around and heading in the expected direction. (I marked the ADX signals with a square box at the top.) Also, noting when reversals in trends were being signaled by a switching of positions between the +DMI and -DMI is not exactly what I would necessarily call clearly or easily discernible.

So, besides my entry levels (marked with circles at the top) always starting off on the right foot and having crystal clear take-profit targets, I like that they are always leading indicators in a certain sense (which is kind or related to the first point) and found it both interesting and surprising (since they are both based on trend) that my oscillators have practically nothing at all in common with the ADX.

(Oops! I just noticed I missed marking a good strong ADX sell signal about four-tenths of the way across the chart, and another one about three-fourths of the way. Oh, and I also missed a buy signal just before the first sell signal. However, there was also an unmarked buy signal on my own panel in just about the same area.)

 

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Sunday / May 17, 2020 / 6:30 PM PST
I've made two trades so far based on the new technique, both less than ideal, but nonetheless successful. It appears to me that another possibly profitable tactic is to enter positions the moment that both the goldish-brown and grayish-blue oscillators have crossed over to the opposite side of the lower panel channel...

But, it is probably not a good idea to do so when the lines have begun to cluster together, as they have done to the far right, as this indicates the asset might have entered consolidation and is evidencing a neutral bias/sentiment, meaning traders should pass on the last buy signal seen here.

 

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Monday, May 18, 2020

With this tool a trainee would theoretically be able to execute successful trades...it should be possible for trainees to take advantage of the Numerical Price Prediction system to execute trades successfully...

As I continue to reconcile my old 15-minute chart setup with my newer configurations, and my one-minute charts with my 15-minute charts, I’m beginning to form the opinion that training might not be that much of a necessity with new recruits—that a set of clear-cut directions is all that a participant interning to learn the system would need to trade successfully provided they were able to absorb the rules well enough to follow written instructions.

Though I generally agree with Patrick’s (i.e., VP of No Nonsense Forex) contention that moving average crossovers are too lagging to be used in the decision-making process, I don't think this is necessarily the case while operating within the lowest timeframes. Also, when it comes to the financial markets, there is often debate as to exactly when conditions have gone from bullish to bearish and vice versa, but examine the numbers closely enough, and I think it can become pretty clear when an asset is making money, when it is losing money, and when it is simply treading water.

So, this morning I began the process of compiling a step-by-step guide specifying which benchmarks to use for dictating exactly when to enter positions, when to exit/pocket gains, and when to reverse direction, continuing the process of making it unnecessary for a trader to have to think about anything, with trading becoming an automatic/mechanical process of simply following the rules.

 

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Down the final stretch with respect to writing directions for the "new-lower-panel" based system...

 

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Sunday / May 24, 2020 / 11:00 PM PST

Down the final stretch with respect to writing directions for the "new-lower-panel" based system. My focus is now back on detailing a mathematically-based trading routine/protocol that should all but eliminate unsuccessful outcomes.

The above process is now fully completed. As of this hour, Numerical Price Prediction has been totally quantified, and all I'm doing at this point is trading the system as designed.