Duxon's Archive

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The 7- to 10-minute baselines track the waves and suggest entry and exit points/levels.

On a five-minute chart, it looks to me like 11-minutes is as low as you can go and still get a relatively stable baseline, with the 23-minute baseline offering a more valid and reliable picture (confirmation/validation) of when an intraday short-term reversal is in progress, as reflected in the slightly lagging 35-minute price range envelope at 0.09% deviation.

 

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On a five-minute chart, it looks to me like 11-minutes is as low as you can go and still get a relatively stable baseline, with the 23-minute baseline offering a more valid and reliable picture (confirmation/validation) of when an intraday short-term reversal is in progress, as reflected in the slightly lagging 35-minute price range envelope at 0.09% deviation.

• On a 15-minute chart, when the 6-hour trend is neutral, I'm looking for reversals at 0.10% to 0.30% deviation.
• On the other hand, if the 6-hour price range envelope is trending and the 2-hour baseline is more-or-less neutral, I'm looking for reversals as price is rejected at the 0.08% deviation level of the 2-hour price range envelope or beyond.
• Otherwise, the key level tends to be the 34-minute price range envelope at 0.09% deviation (the same as in the above quote) unless the envelope is itself pulling back, in which case, positions should be entered (trades should be executed) as the (21-minute?) baseline reverses direction to rejoin or realign itself with the slope of the 6-hour trend.
• (Minor fluctuations are defined by the 0.05% deviation level in the 21-minute price range.)

 

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Friday, June 25, 2021
WEEKEND WRAP UP

Just a side thought…

I happened to be reminiscing this morning on a moving average that, four or five years ago, I regarded as indicating in which direction price would eventually be heading on 15-minute charts. And out of curiosity, I just now calculated what temporal value that moving average would have based on the math I’m now using. Interestingly enough, it was very close to the six-hour baseline, which kind of reaffirms the validity of the settings and parameters on which I've ultimately settled. But that really has nothing to do with the purpose of this entry, which is to help clarify in my mind where things presently stand with regard to how I might best implement the "irreducible complexity" style of day trading Forex using Numerical Price Prediction.

The first thing I need to say is…though it’s certainly good to know the sentiment/bias of the 2- and 6-hour trends, this information no longer has the preeminent significance it had up until now. For example, yesterday I said that I believed GBPUSD would be heading south from around 1.3920, and it certainly did. But look at the path it took to get there!!!

At one point, after falling quite a ways, the pair climbed all the way back up to almost reach its point of origin, which illustrates why, rather than rely on the 2- and 6-hour baselines to determine in which direction to enter positions, this role has now been relegated to the 23- and 34-minute price range envelopes.

So then, the new or primary role of the greater measures is to suggest levels where reversals in the intraday and/or short-term trends are most likely to occur.

This would be 0.10% to 0.30% deviation when it comes to the 6-hour price range. However, price is not going to be operating within these parameters if an asset is trending. So, the 2-hour price range at 0.08% deviation must also be considered—at least when one has the intraday trend in mind.

When it comes to the short-term trend, one needs to monitor the 27-minute temporal support/resistance levels, the 23-minute price range envelope at 0.05% deviation, the 60-minute temporal support/resistance levels, and the 34-minute price range at 0.09% deviation. The first measure is particularly useful as a launch pad for trade entries—especially when confirmed by convergence with one or more of the other three. These same four measures (on the opposite side of the channels/envelopes) should be employed as landing sites (i.e., take-profit targets). If a position is not exited prior to a crossover (reversal) of the instantaneous moving averages, profits should certainly be pocketed at that point.

Because you will never be risking a loss of more than a dozen or so pips, it should be relatively safe to increase the size of your average trades to 0.03 lots. (If it is not already obvious, virtually all trading will now be carried out via one-minute charts, as has been your practice at various points over the past six years.)

 

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These same four measures (on the opposite side of the channels/envelopes) should be employed as landing sites (i.e., take-profit targets).

Use the 34-minute price range envelope at 0.09% deviation as your stop loss.

 

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The first thing I need to say is…though it’s certainly good to know the sentiment/bias of the 2- and 6-hour trends, this information no longer has the preeminent significance it had up until now.

And yet, there are certain related situations for which one should be on the alert.

For example, if the six-hour price range envelope is sloping in a given direction, and candlesticks should happen to pull back to the center of this measure or beyond, a trader ought to be prepared to enter positions in the direction matching the slope of the six-hour baseline as price "corrects" its trajectory by bouncing off this statistical support/resistance level to rejoin the longer-term trend.

Similarly, if the two-hour price range envelope is sloping in a given direction, and candlesticks should happen to pull back to the center—or even to the far side—of this envelope, a trader ought to again be ready to enter positions in the direction matching the slope of the two-hour baseline as candlesticks reverse direction to realign themselves with the slope(s) of the longer-term trend(s).

 

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Saturday | July 26, 2021 | 9:30 AM PST

Provisional Protocol for day trading Forex using the ICT version of NPP:

1. Evaluate your (one-hour) charts to determine the present location of rates within the realm/domain of each pair’s 2- and 6-hour price ranges, especially in terms of how current positions relate to the slopes of the associated envelopes.
2. Identify potential key levels (in advance) where prices are most likely to "correct" trajectories whose direction opposes the flow of the longer-term intraday trends, if applicable.
3. Continue to monitor markets, noting what happens once candlesticks reach these potential key levels.
4. Enter positions (using one-minute charts) in the appropriate direction following reversals in the 23- and/or 34- minute price range envelopes, as confirmed by the 60-minute temporal support/resistance channel.
5. Ideally, positions should be entered immediately following rejection of price at the 27-minute temporal support or resistance level, as appropriate.
6. Set stop losses at the upper or lower band (as appropriate) of the 23-minute price range envelope at 0.05% deviation. (If this measure is determined to be too tight of a stop loss, use the upper or lower band of the 34-minute price range envelope at 0.09% deviation instead.)
7. Take profit as candlesticks make contact with the appropriate/opposite side of the 60-minute temporal support/resistance channel. (Set your take-profit targets at this level.)
8. Evaluate the feasibility of using pullbacks behind the 4-minute baseline to the 0.1 or -0.1 level of the associated lower-panel oscillator (as appropriate) as an additional entry level for continuing to reenter positions after having taken profit when trading ongoing trending markets.

 

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• Evaluate your (one-hour) charts to determine the present location of rates within the realm/domain of each pair’s 2- and 6-hour price ranges, especially in terms of how current positions relate to the slopes of the associated envelopes.

• Identify potential key levels (in advance) where prices are most likely to "correct" trajectories whose direction opposes the flow of the longer-term intraday trends, if applicable.

• Continue to monitor markets, noting what happens once candlesticks reach these potential key levels.

BIAS THEORY:

The above steps might be enhanced by the "bias theory" notion you just conjured up, which holds that: If you divide the 2- and 6-hour price ranges into a top, middle, and bottom zone, when either prince range is bullish, candlesticks will be extremely averse to spending much, if any, time in the bottom third of the corresponding range; and when either price range is bearish, candlesticks will be extremely resistant to spending much, if any, time in the top third of the corresponding range.

 

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Tuesday / June 29, 2021 / 1:30 AM PST

• Enter positions (using one-minute charts) in the appropriate direction following reversals in the 23- and/or 34- minute price range envelopes, as confirmed by the 60-minute temporal support/resistance channel.

• Ideally, positions should be entered immediately following rejection of price at the 27-minute temporal support or resistance level, as appropriate.

• Set stop losses at the upper or lower band (as appropriate) of the 23-minute price range envelope at 0.05% deviation. (If this measure is determined to be too tight of a stop loss, use the upper or lower band of the 34-minute price range envelope at 0.09% deviation instead.)

• Take profit as candlesticks make contact with the appropriate/opposite side of the 60-minute temporal support/resistance channel. (Set your take-profit targets at this level.)

• Evaluate the feasibility of using pullbacks behind the 4-minute baseline to the 0.1 or -0.1 level of the associated lower-panel oscillator (as appropriate) as an additional entry level for continuing to reenter positions after having taken profit when trading ongoing trending markets.

I'm now thinking...no...forget this "reducible complexity" stuff, and go instead with the 40-minute price range at 0.12% deviation, as confirmed by the 4- and/or 9-hour temporal support or resistance level(s) as appropriate—for both stop loss and take profit targets...

The "bias theory" notion still looks good though, except that you can probably get rid of the 2-hour price range and simply go with the 6.

You haven't switched to trading 0.03-sized lots yet, but if the above works out during the remainder of the week, it will probably be "safe" for you to start doing so next week..

 

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Thursday / July 1, 2021

Today marked a milestone in that you were able to realize over $30 of profit trading 0.01 and 0.02-sized lots using the five-minute chart configuration constructed around the 40-minute price range and the 4- and 9-hour temporal support/resistance levels...

Curious as to how or where this fit into your daily chart setups, your evaluation led you to hourly charts, which you adjusted in accordance with where the daily and five-minute charts overlapped. The resulting perspective follows...

Price is ultimately headed in the direction of the four-day trend, so whenever it isn't, you always want to be watching for when it makes the correction. However, this can take several days to happen, so it often has little or nothing to do with the decision-making process involved in intraday trading.

The ultimate direction of price at the intraday level is suggested by the 6-hour price range at 0.34% deviation. Reintroducing the 16-hour baseline as a measure confirming this reading is very helpful in assisting the eye to see this at a quick glance.

Beyond 16-hours, readings begin to evidence too much lag, so the 24-hour measure is, for the most part, useful only as a price range envelope and to note when price is trending sharply.

Again, the main job of the daily, 2-day, and 4-day price range envelopes is to suggest those levels where there is the greatest probability that one might observe a reversal in the intraday trend.

In addition to conveying in which direction price is headed at the intraday level, the 6-hour price range envelope can also be used in conjunction with the 4- and/or 9-hour temporal support/resistance levels to calculate take-profit targets. These two temporal measures are also used to gauge or recognize temporary pullbacks in the intraday trend, with the corresponding side of the 6-hour price range envelope serving as a logical stop loss.

 

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Price is ultimately headed in the direction of the four-day trend, so whenever it isn't, you always want to be watching for when it makes the correction.

I just configured a daily chart with the weekly price range, which translates to the five-day trend, and generates an envelope that essentially does the same thing as the four-day price range envelope.