Duxon's Archive

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BASELINES ARE KING!
Trading during the last 24 hours has revealed that the moving averages are MUCH more important than the envelopes when it comes to trading NPP. This prompted me to try trading Nadex binary-option contracts derived from the U.S. indices using the same baselines as those used on my Forex charts. So far, the moving averages seem to be just as valid when it comes to this second class of assets.

NOTE TO SELF: Judging by Investing.com, NASDAQ is IXIC, which is COMPQX (Nasdaq Composite Index) in TC2000. And yes, the feed on the free version of the TC2000 chart you are using has a 15-minute delay, as you thought.

 

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The moving averages are MUCH more important than the envelopes when it comes to trading NPP.

The above observation needs to be qualified: The moving averages become MUCH more important than the envelopes when it comes to trading NPP if and when an asset is trending with strong momentum.

 

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Anecdotal Observations:

Compared to other MT4 platforms, the one offered by Forex.com seems to have a slight response delay whenever I click on a menu item.

Also, if I want to alter my stop loss or take-profit target, it seems like OANDA allows me to do so much closer to the indicative price than does Forex.com or Ally Invest.

 

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Thursday, October 29, 2020

It’s now just a matter of finalizing all the numbers (integrated relationships/mathematical interactions) so that anyone (including a computer) could execute Numerical Price Prediction and achieve virtually the exact same optimized results (outcomes or performance). For example, precisely which baseline is the absolute best for signaling/triggering intraday position entries and exits? What envelope (price range) has the greatest validity and reliability in conveying the ultimate direction in which price is headed? How much slope (momentum) virtually guarantees there will be no reversal in the (intraday) trend, and which baseline should be measured for this purpose? At what angle should a trader transition from entering positions based on the trend (moving averages) to entering positions based on the envelopes (structure/price range)? Etc.

All of these measures and more can be represented graphically using a lower panel chart (or charts) where the corresponding parameters/settings are all clearly delineated via histograms and oscillators.

 

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It’s now just a matter of finalizing all the numbers and interactive relationships so that anyone could execute Numerical Price Prediction and achieve virtually the exact same optimized results.

EXAMPLE:
The 40-minute baseline is sloping upward, but price is at the top of the 75-minute price range, which is more-or-less neutral, and the asset has been losing ground from day to day. Under this set of conditions, it is recommended that you enter a short position, even though the 40-minute baseline is bullish.

 

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CORRECTION:
The 40-minute baseline is sloping upward, but price is at the top of the 75-minute price range. Price is also located at the top of the four-hour price range, which is more-or-less neutral, and the asset has been losing ground from day to day. Under this set of conditions, it is recommended that you enter a short position, even though the 40-minute baseline is bullish.

 

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EXAMPLE:
The 40-minute baseline is sloping upward, but price is at the top of the 75-minute price range. Price is also located at the top of the four-hour price range, which is more-or-less neutral, and the asset has been losing ground from day to day. Under this set of conditions, it is recommended that you enter a short position, even though the 40-minute baseline is bullish.

Continuation of example...

However, to ensure you do not make the mistake of "trying to catch a falling knife," do not actually execute the trade until candlesticks begin to paint below the ten-minute baseline after it starts to hook southward and is crossed under by the five-minute baseline (or probably something very similar to this). Or to be even more cautious, you might opt to wait for price to fall below the 40-minute baseline as well.

 

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Friday / October 30, 2020 / 8:10 AM PST

I’ve settled on three key baselines to help me interpret whether price is truly rising or falling. And in trying to determine which to rely on more heavily in any given situation, I thought, "Hey, what would happen if you averaged all three to get a ‘consensus moving average’?” I’m initially pleased with the result (see above image), and so plan to begin evaluating its actual usefulness in practical application.

GENERAL UPDATES: I have abandoned the use of the six-hour and nine-hour price ranges. The four-hour is good enough. For though I no longer think of it as the "backbone" of my system, it does still do the best job of suggesting the general overall flow of price, even if it is a bit lagging.

 

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For some reason I thought that NADEX weekly binary options were way out of my price range. But as this week was drawing to a close, I was looking to make one last trade, and out of curiosity, checked the bid and offer prices on the weekly contracts as well. To my surprise, they were roughly priced between $3.75 to $96.25 just like everything else. (I don’t remember this being the case nine years ago.)

I was curious about this because I saw at least one currency pair that was nearing the bottom of the weekly price range...

I don’t normally do such trading because I would regularly have to wait a month or more for the right setups. But depending on how easily I might realize a $50 to $90 gain on a $10 to $50 binary-option contract, I might give it a try next month (November).

Not only that, if I can enter a position in my OANDA account at the same time and let it ride for days, that would be sweet indeed. Given that day trading holds no more mysteries for me (in a manner of speaking) this will be my plan…which reminds me, the new “Consensus Moving Average” is really nice. It truly does help me better discern whether price is genuinely rising or falling at the intraday level.

 

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Note to self: Take a look at this video when you have the chance and see what Adam Harris has to say. (You have reason to believe that this guy is legitimate.)

Here is the presentation that first brought my attention to Adam Harris, but I haven't seen it from the beginning, so maybe I'll watch it over the weekend...