Duxon's Archive
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Thursday / August 27, 2020
Having now "locked down" precisely which moving averages I believe best represent the five-minute, 15-minute, 30-minute, 60-minute, 90-minute, four-hour and daily trends, my main chart configuration (as opposed to the lower-panel setup) is no longer changing at all, and I suspect having assigned specific time values to these various moving averages will facilitate teaching how to apply their use to others learning the NPP system in the future, if this sort of thing were to ever take place.
Friday / August 28, 2020 / 7:45 AM PST
For the immediate direction, evaluate the relationship between the five- and 15-minute baselines. To facilitate this task, plot a moving average halfway between the two of them. So then, let’s call this the 10-minute baseline.
The 10-minute baseline is what rules now in place of the TUBE (the 30-minute price range envelope). So then, the TUBE's new role is to differentiate between pullbacks in the 10-minute trend that are relatively significant from those that are less so. (Set the 10-minute price range envelope at 0.15% and 0.20% deviation.)
For the ultimate direction, note the slope of the 90-minute price range envelope.
Currently, it appears the most profitable setup is when candlesticks are coming out of a pullback in which the 10-minute baseline was on a temporary trajectory headed in the direction opposite the 90-minute baseline.
(The previous observations made regarding converges between the upper or lower bands of the 240-, 90- and 30-minute price range envelopes will need to be reevaluated in that the above factors are now being given prominence.)
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Application of Culminating Chart Setups:
You can ignore this. You typed it when the 30-minute price range envelope was no longer on the charts, but it's back now, so there is no longer a need for a reevaluation. Also, there was some question earlier as to whether the 90-minute price range envelope replaced the 60-minute price range envelope. It does, so there is no need to wonder about this anymore either.
No, on further analysis, the TUBE still rules. Yes, the 10-minute baseline does convey the immediate direction, but this can be relatively short-lived. Hence, the slope of the TUBE is more indicative of where price is going to end up eventually, and because of this, the TUBE can be used to differentiate between pullbacks in the 10-minute trend that are relatively significant from those that are less so (with the 90-minute baseline suggesting where price will end up ultimately).
The one exception to this is a reversal in the 90-minute price range envelope, which is when you can probably set your most ambitious take-profit targets.
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The application of NPP as of this date...
Friday / August 28, 2020 / 10:30 PM PST
Friday / August 28, 2020 / 10:30 PM PST
- Conceptualize the four-hour price range as the intraday foundation on which foreign currency pair price action is built—the backbone of the Forex market, on which the rest of the “body” is constructed.
- But, use the 90-minute baseline to determine the ultimate direction in which price is headed at the intraday level, which of course implies it should also be used to detect full-fledged intraday reversals.
- Use the five-, ten-, and 15-minute baselines to establish the direction of the short-term trend along with the “flat worm” envelope, which replaced the “bubble worm.” Let’s call this “the short-term cluster.”
- Since the bubble worm was replaced by the flat worm, you will have to rely on the relative position of candlesticks within the short-term price range envelopes rather than the bubble worm for determining entry levels.
- Though the 90-minute baseline determines the ultimate direction of price, the 30-minute price range envelope—otherwise referred to as “the TUBE”—rules when it comes to projecting where price will eventually head in the immediate future.
- Accordingly, other than when there is a full-fledged reversal in the 90-minute trend, the most profitable setup is when candlesticks are coming out of a pullback in which the short-term cluster was on a temporary trajectory headed in the direction opposite the slope of the 30-minute price range envelope, especially if it (the angle of the TUBE) is also aligned with the slope of the 90-minute baseline.
- Pay particular attention (be watching for reversals) when there is a convergence between the upper or lower bands of the 10-minute price range envelope, the TUBE, the 90-minute price range envelope, and/or the four-hour price range envelope.
- The histogram is the slope of the ten-minute baseline.
- The sea green oscillator is the relative position of price within the immediate (shortest-term) price range.
- The black oscillator is the relative position of price within the five-minute price range.
- The bluish oscillator is the relative position of price within the ten-minute price range.
- The light blue histogram is the slope of the 90-minute baseline.
- The black oscillator is the slope of the flat worm.
- The light tan oscillator is the slope of the five-minute baseline.
- The bluish oscillator is the slope of the ten-minute baseline.
- The brown oscillator is the slope of the 15-minute baseline.
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Anecdotal Observations:
Current/Initial Lower Panel Color Codes:
So then essentially, all of the measures are reading the direction of the short-term cluster with the exception of the light blue histogram. Consequently, you will have to be monitoring the slope of the TUBE (the 30-minute moving average envelope) and noting when the short-term cluster is going out of and coming into alignment with it, visually (by comparing the lower-panel indicators with the slope of the TUBE as observed on the main chart).
In evaluating the one-minute charts, it appears that you might want to avoid or pass on entering positions until and unless candlesticks are forming to the outside of the flatworm envelope on the far side away from the trend, or at least until the appropriate/corresponding band(s) of the short-term envelope(s) have made contact with it ("it" being the "outside" band of the flatworm envelope).
You might also find it advantages to refrain from doing so until and unless the flatworm envelope is angled in the same direction as the slope of the TUBE.
UPDATE: This seems to be confirmed by a brief analysis of five-minute charts. Note that the flatworm envelope adapts quite readily to expansions in the price range. Note also the the probability of trades ending in success appears to be increased even more so if positions are entered to the outside of the TUBE, especially if near the projected limit(s) of the 90- and/or 240-minute price range.
To avoid getting stopped out, the trigger signal for entering positions when you have the structure/situation described above is when the candlesticks crossover or begin forming to the "inside" of the five-minute baseline on a one-minute chart, or when you get a reversal in the instantaneous moving average envelope on a five-minute chart. (If you want to be extra safe, you can wait for the candlesticks on the five-minute chart to cross over the ten-minute baseline and/or for the ten-minute baseline to reverse direction to realign itself with the slope of the TUBE.)
Current/Initial Lower Panel Color Codes:
So then essentially, all of the measures are reading the direction of the short-term cluster with the exception of the light blue histogram. Consequently, you will have to be monitoring the slope of the TUBE (the 30-minute moving average envelope) and noting when the short-term cluster is going out of and coming into alignment with it, visually (by comparing the lower-panel indicators with the slope of the TUBE as observed on the main chart).
In evaluating the one-minute charts, it appears that you might want to avoid or pass on entering positions until and unless candlesticks are forming to the outside of the flatworm envelope on the far side away from the trend, or at least until the appropriate/corresponding band(s) of the short-term envelope(s) have made contact with it ("it" being the "outside" band of the flatworm envelope).
You might also find it advantages to refrain from doing so until and unless the flatworm envelope is angled in the same direction as the slope of the TUBE.
UPDATE: This seems to be confirmed by a brief analysis of five-minute charts. Note that the flatworm envelope adapts quite readily to expansions in the price range. Note also the the probability of trades ending in success appears to be increased even more so if positions are entered to the outside of the TUBE, especially if near the projected limit(s) of the 90- and/or 240-minute price range.
To avoid getting stopped out, the trigger signal for entering positions when you have the structure/situation described above is when the candlesticks crossover or begin forming to the "inside" of the five-minute baseline on a one-minute chart, or when you get a reversal in the instantaneous moving average envelope on a five-minute chart. (If you want to be extra safe, you can wait for the candlesticks on the five-minute chart to cross over the ten-minute baseline and/or for the ten-minute baseline to reverse direction to realign itself with the slope of the TUBE.)
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TAKE-PROFIT TARGETS
Everything noted thus far suggests that the opposite side of the flatworm envelope is a reasonable and conservative level at which to lock in gains, with the opposite side of the TUBE being a more aggressive/ambitious goal.
FIVE-MINUTE RELATIVE POSITION OSCILLATOR
It looks like about the only time this indicator really comes into play is when you have a breakout (as suggested by the five-minute baseline) where it looks like an asset is starting to trend with momentum (i.e., has initiated a run) and you want to identify one of the optimum levels from which to attempt getting in on the journey. (Possible take-profit targets are the ten-minute price range at 0.15% deviation, or the closest of the three 90-minute price range levels, or the four-hour price range, or the intraday price range. [This is because the candlesticks will already be forming to the outside of the flatworm envelope and the TUBE.])
Everything noted thus far suggests that the opposite side of the flatworm envelope is a reasonable and conservative level at which to lock in gains, with the opposite side of the TUBE being a more aggressive/ambitious goal.
FIVE-MINUTE RELATIVE POSITION OSCILLATOR
It looks like about the only time this indicator really comes into play is when you have a breakout (as suggested by the five-minute baseline) where it looks like an asset is starting to trend with momentum (i.e., has initiated a run) and you want to identify one of the optimum levels from which to attempt getting in on the journey. (Possible take-profit targets are the ten-minute price range at 0.15% deviation, or the closest of the three 90-minute price range levels, or the four-hour price range, or the intraday price range. [This is because the candlesticks will already be forming to the outside of the flatworm envelope and the TUBE.])
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Though I replaced the bubble worm with the flatworm (or smooth worm) envelope in the main chart, it occurred to me that this wasn’t necessarily reason for removing the lower-panel bubble worm oscillator as well. Moreover, the oscillators generated using the relative position of candlesticks within the short-term price range envelopes are very different from the one generated using the bubble worm. So, I reintroduced the bubble worm oscillator on the lower panel to see if I wanted it back, and indeed, it filled a role unlike any purpose served by those that were already there. (And it was far superior when it came to identifying all of the pullbacks representing golden opportunities.)
Lower panel with no bubble worm oscillator:
Lower panel with bubble worm oscillator and corresponding alert levels included...
The bubble worm oscillator is not an automatic signal to execute a trade, however. Rather, it serves as an early warning alerting the trader of the fact that the right conditions for entering a position might be just around the corner. The next step is not to make a trade, but to instead ask (and answer) six questions:
Lower panel with no bubble worm oscillator:
Lower panel with bubble worm oscillator and corresponding alert levels included...
The bubble worm oscillator is not an automatic signal to execute a trade, however. Rather, it serves as an early warning alerting the trader of the fact that the right conditions for entering a position might be just around the corner. The next step is not to make a trade, but to instead ask (and answer) six questions:
- Are the candlesticks painting beyond the interior of the flatworm envelope?
- Are the candlesticks painting beyond the interior of the TUBE?
- If so, are the candlesticks located on the exterior side of the flatworm envelope that is opposite the envelope’s trajectory and/or that of the TUBE?
- And/or are the candlesticks located on the exterior side of the TUBE that is opposite the direction of its trajectory?
- Are the candlestick painting beyond or near the projected top or bottom of the price range corresponding to the 90- or 240-minute baseline, or that of the intraday or daily price range?
- Has the instantaneous price range envelope begun to reverse direction?