Duxon's Archive

[expiated]

The protocol for guerrilla style trading suggested by the (5-minute) chart configured for my book is very different from the directions pasted down below (from last Saturday)...

• Actually, Step 2 from the previous directions and Step 5 from the new directions are essentially saying the same thing.

• Also, Step 3 from the previous directions and Step 1 from the new directions are also more-or-less the same.

And change the red (and blue) baselines to dotted moving average(s) like you had it in the first setup.

.Adjusted Configuration...

 

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Changes Between Now (Sunday) and Two Days Ago:

Now...

(P.S. Include the 4-day baseline in Step 1.)

Then...

 

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Monday / May 31, 2021 / 7:45 AM PST

Finished! (I think)

Thanks to the process of self-publishing a book explaining my approach to Forex trading, I think I finished validating all my settings last week. So far everything is unfolding according to "the script," and I would think this will be the case even more so as I'm identifying what I should look at and what I should ignore.

What this all suggests to me is that there is no one single Holy Grail. It's more like there are any number of factors, or "data points," impacting on price, with the Holy Grail being the ability to figure out the correlation between them.

It's all about interpreting what's happening at the moment based on market generated information, which is to say, technical analysis. (Non-market generated information [i.e., fundamental analysis] is not to be trusted.)

It comes down to "ruling reason," which for me, is just another way of saying the numbers or the math—the summation of all those correlating data points that are a part of the market generated information. It's a matter of crunching the numbers and doing so in the correct manner, plain and simple.

 

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Finished! (I think)

This would have been a perfect day of trading had I not set my stop loss 4 pips too tight on NZDUSD before retiring for the evening yesterday (because I can't stay up all night waiting for my trigger signals to go ahead and give me permission to enter developing opportunities).

So then, as of Wednesday, June 2, 2021, it's a sure thing that there are finally no additional modifications which need to be made, at least not as far as my four-hour and one-hour chart configurations are concerned.

I'm about to start (rewriting) the chapter of my book that analyzes one-hour charts (I've already finished the chapters dealing with daily and four-hour charts) so I should know if my lower time frame charts are set in stone as well by the end of next week.

 

[expiated]

I should know if my lower time frame charts are set in stone as well by the end of next week.

There's no need to wait. I tested my scalping theories during the last 24-hour market cycle using 1- and 5-minute charts and they all look to be valid...

So, I just need to finish writing the chapter or chapters that describe(s) them and insert a bunch of examples and I'll be all finished writing my book. (I'm still shooting for publication by the middle of this month.)

 

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AMONG YOUR FINAL MILESTONES:

The writing of your book led you to carry out a very systematic analysis yesterday of how you day trade (excluding scalping/guerrilla trading) with the result being these six scenarios for entering positions. Aside from scalping, these are the only situations (set of conditions) under which you will consider placing orders:

1. Look to enter positions when price is located within the regions bounded by the upper or lower bands of the 2-day price range envelope between the 0.65% to 2.40% deviation levels—bearing in mind that the 1% deviation level holds particular significance.
2. Look to enter positions when price is located within proximity of the area targeted by the upper or lower bands of the 16-hour price range envelope between 0.40% to 0.80% deviation.
3. If the 16-hour price range envelope is clearly headed in one direction or the other, you should also look to enter positions when price pulls back to the center of this envelope, only to bounce off (be rejected by) this newly identified statistical support/resistance level.
4. And finally, if candlesticks are trending (painting) between the 40% and 80% deviation levels of the 16-hour price range envelope, they often find support or resistance, as appropriate, just inside the 40% deviation level before climbing even higher (or even crawling lower). So, this too is a potential trade setup for this particular price range.
5. When it comes to the 6-hour price range envelope, look to enter positions when price is located within proximity of the area targeted by the upper or lower bands between 0.33% to 0.53% deviation—but only if the envelope is clearly sloping in the direction of the planned trade, or if the envelope appears to be neutral or ambiguous. On the other hand, never execute this type of trade if the direction of the trade will be opposite the trajectory of the envelope (that is...unless it falls within [is supported by] one or more of the other scenarios above).
6. As with the 16-hour price range envelope, if the 6-hour price range envelope is clearly headed in one direction or the other, you should also look to enter positions when price pulls back to the center of the price range, only to bounce off (be rejected by) this newly identified statistical support/resistance level. Oh, and by the way...this category of trade is often supported or confirmed by the 20-hour temporal support/resistance level.

Oh, and another thing...all of these potential trades receive addition justification if they are supported by the four-day temporal support/resistance levels. This is very cool, because now when you glance at a one-hour chart, there is no ambiguity whatsoever in terms of what you are looking (i.e., waiting) for.

 

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A Difference of Opinion...

On the other hand, never execute this type of trade if the direction of the trade will be opposite the trajectory of the envelope.

This didn't really make sense to me, so I went back and reevaluated my analysis, verifying that the only reason to abide by this rule is if one wishes to be super, super safe, because often, you can execute this type of trade in the direction that is opposite the slope of the envelope without any problem whatsoever. I therefore suspect that if one uses the 1-, 2-, and 4-hour baselines to validated each trade before pulling the trigger, it will eliminate those situations where price continues in the same direction rather than reversing its trajectory.

 

[expiated]

The writing of your book led you to carry out a very systematic analysis yesterday of how you day trade (excluding scalping/guerrilla trading) with the result being these six scenarios for entering positions. Aside from scalping, these are the only situations (set of conditions) under which you will consider placing orders:

From page 38 in your book...

"I would be happy to enter a long position anywhere below the center of the (crimson) 2-day price range envelope—but only after I observe a touch-and-go pattern/maneuver involving the (blue) 4-hour baseline(s)."

When you get a chance, you need to evaluate how this fits with the six scenarios described above.

 

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Saturday / June 5, 2021 / 8:00 AM PST

When you get a chance, you need to evaluate how this fits with the six scenarios described above.

Go ahead and insert the overlooked setup from page 38 in your book as the second scenario in your list of what is now seven:

1. Look to enter positions when price is located within the regions bounded by the upper or lower bands of the 2-day price range envelope between the 0.65% to 2.40% deviation levels—bearing in mind that the 1% deviation level holds particular significance.
2. However, if the 2-day price range envelope is evidencing a pronounced trend in either direction, it is permissible to consider entering positions from anywhere beyond the center of the envelope (across from/opposite the direction of the trend) following a touch-and-go maneuver executed by the 4-hour baseline.
3. Look to enter positions when price is located within proximity of the area targeted by the upper or lower bands of the 16-hour price range envelope between 0.40% to 0.80% deviation.
4. If the 16-hour price range envelope is clearly headed in one direction or the other, you should also look to enter positions when price pulls back to the center of this envelope, only to bounce off (be rejected by) this newly identified statistical support/resistance level.
5. And finally, if candlesticks are trending (painting) between the 40% and 80% deviation levels of the 16-hour price range envelope, they often find support or resistance, as appropriate, just inside the 40% deviation level before climbing even higher (or even crawling lower). So, this too is a potential trade setup for this particular price range.
6. When it comes to the 6-hour price range envelope, look to enter positions when price is located within proximity of the area targeted by the upper or lower bands between 0.33% to 0.53% deviation—but only if the envelope is clearly sloping in the direction of the planned trade, or if the envelope appears to be neutral or ambiguous. On the other hand, never execute this type of trade if the direction of the trade will be opposite the trajectory of the envelope (that is...unless it falls within [is supported by] one or more of the other scenarios above).
7. As with the 16-hour price range envelope, if the 6-hour price range envelope is clearly headed in one direction or the other, you should also look to enter positions when price pulls back to the center of the price range, only to bounce off (be rejected by) this newly identified statistical support/resistance level. Oh, and by the way...this category of trade is often supported or confirmed by the 20-hour temporal support/resistance level.

Oh, and another thing...all of these potential trades receive addition justification if they are supported by the four-day temporal support/resistance levels.

And as of this morning, I have added/adopted/introduced the 10-day temporal support/resistance levels as useful measures in designating tops and bottoms from a longer-term perspective,

 

[expiated]

However, if the 2-day price range envelope is evidencing a pronounced trend in either direction, it is permissible to consider entering positions from anywhere beyond the center of the envelope (across from/opposite the direction of the trend) following a touch-and-go maneuver executed by the 4-hour baseline.

It turns out that this scenario tends to be either reinforced or overridden by one or more of the others, which kind of makes it totally optional, or should I say, unnecessary.