Duxon's Archive
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I just skipped through a video presentation recorded by Alex and Nicky Ong of Forex Masterclass.
They contend that a successful approach to trading consist of four parts... First is determining the direction, which they do using interest rate differentials. Determining the direction makes sense to me, but I prefer to do this via temporal baselines.
Second is valuing the asset, which they recommend doing by way of a trading grid. However, my preference is to use typical price ranges.
Third is entry rules. For me, this too involves the use of typical price ranges and designated baselines, with key (support/resistance) levels being verified by reversals in the latter.
Their fourth and final component is managing your portfolio (through multiple positions). This does not apply to my approach however, due to the clarity Numerical Price Prediction offers with respect to interpreting price action. There is no guesswork associated with when to enter or exit positions, so it would make no sense to enter more than one position at a time regarding any given currency pair.
They contend that a successful approach to trading consist of four parts... First is determining the direction, which they do using interest rate differentials. Determining the direction makes sense to me, but I prefer to do this via temporal baselines.
Second is valuing the asset, which they recommend doing by way of a trading grid. However, my preference is to use typical price ranges.
Third is entry rules. For me, this too involves the use of typical price ranges and designated baselines, with key (support/resistance) levels being verified by reversals in the latter.
Their fourth and final component is managing your portfolio (through multiple positions). This does not apply to my approach however, due to the clarity Numerical Price Prediction offers with respect to interpreting price action. There is no guesswork associated with when to enter or exit positions, so it would make no sense to enter more than one position at a time regarding any given currency pair.
SOME OF THE NUANCES OF TRADING NADEX BINARY OPTIONS USING NUMERICAL PRICE PREDICTION (NPP)
Friday, March 11, 2022
The Differences Between the Major Stock Indices and the Foreign Currency Pairs…
When trading the indices, I use the magenta four-minute baseline as the primary measure indicating the directional tendency of immediate price flow (as confirmed by the eight-minute "garter snake moving average"), whereas when trading Forex pairs, this role is filled by the yellow eight-minute price range envelope at 0.08% deviation, with the indigo five-minute baseline tracking more temporary or fleeting, less significant, fluctuations in the general immediate flow.
In other words, both the four- and five-minute trends each constitutes more of a fluctuating measure in the context of Forex, whereas the four-minute trend is a much more stable/predictive measure applied to the indices
So then, while it makes sense to use the eight-minute price range envelope at 0.08% to select the most promising contracts/strike prices when trading Forex (along with the 45-minute dynamic/adaptive price range envelope), when it comes to trading the major indices, it is more appropriate, in my opinion, to use the (magenta) four-minute price range envelope at 0.20% deviation.
Moreover, within this first context (i.e., the indexes) the 20-, 45-, 60- and 90-minute baselines lose much of their importance as measures that suggest the general intraday price flow, yet on the other hand, the envelopes associated with the 20-, 45- and 60-minute baselines are deemed to be of much value when it comes to gauging potential reversal levels—the first at 0.30% to 0.70% deviation, the second at 1.00% deviation (during periods of greater volatility/liquidity), and the last at about 0.40% deviation (but in dynamic/adaptive form).
The longer-range baselines lose their importance due to the amount of lag which typically occurs during reversals. You’re therefore safer if you trade the four- or eight-minute trends, because if you enter positions as they turn around to rejoin the twenty-minute (and higher) measures, they are extremely likely to ultimately follow through on such moves. But on the other hand, if they never turn around, you will be witnessing an advance warning of an intraday reversal as they eventually pull the twenty-minute (and higher) trends in the new opposite direction with them. Otherwise, you might find yourself in a bind because you entered a position thinking you were trading with the trend only to discover too late that the trend was actually over.
With respect to the foreign currency pairs, aside from the 45-minute dynamic/adaptive price range envelope, potential reversal levels are sometimes suggested by the 60-minute price range envelope at 0.28 deviation, and the 90-minute price range envelope at 0.30% and 0.73% deviation (during periods of higher volatility/liquidity).
The four-hour price range envelope can also assist in anticipating reversal levels, at 0.40% deviation and 0.80% deviation (under more extreme conditions) when it comes to Forex, and at 1.50% and 1.85% deviation when it comes to the major indexes.
Friday, March 11, 2022
The Differences Between the Major Stock Indices and the Foreign Currency Pairs…
When trading the indices, I use the magenta four-minute baseline as the primary measure indicating the directional tendency of immediate price flow (as confirmed by the eight-minute "garter snake moving average"), whereas when trading Forex pairs, this role is filled by the yellow eight-minute price range envelope at 0.08% deviation, with the indigo five-minute baseline tracking more temporary or fleeting, less significant, fluctuations in the general immediate flow.
In other words, both the four- and five-minute trends each constitutes more of a fluctuating measure in the context of Forex, whereas the four-minute trend is a much more stable/predictive measure applied to the indices
So then, while it makes sense to use the eight-minute price range envelope at 0.08% to select the most promising contracts/strike prices when trading Forex (along with the 45-minute dynamic/adaptive price range envelope), when it comes to trading the major indices, it is more appropriate, in my opinion, to use the (magenta) four-minute price range envelope at 0.20% deviation.
Moreover, within this first context (i.e., the indexes) the 20-, 45-, 60- and 90-minute baselines lose much of their importance as measures that suggest the general intraday price flow, yet on the other hand, the envelopes associated with the 20-, 45- and 60-minute baselines are deemed to be of much value when it comes to gauging potential reversal levels—the first at 0.30% to 0.70% deviation, the second at 1.00% deviation (during periods of greater volatility/liquidity), and the last at about 0.40% deviation (but in dynamic/adaptive form).
The longer-range baselines lose their importance due to the amount of lag which typically occurs during reversals. You’re therefore safer if you trade the four- or eight-minute trends, because if you enter positions as they turn around to rejoin the twenty-minute (and higher) measures, they are extremely likely to ultimately follow through on such moves. But on the other hand, if they never turn around, you will be witnessing an advance warning of an intraday reversal as they eventually pull the twenty-minute (and higher) trends in the new opposite direction with them. Otherwise, you might find yourself in a bind because you entered a position thinking you were trading with the trend only to discover too late that the trend was actually over.
With respect to the foreign currency pairs, aside from the 45-minute dynamic/adaptive price range envelope, potential reversal levels are sometimes suggested by the 60-minute price range envelope at 0.28 deviation, and the 90-minute price range envelope at 0.30% and 0.73% deviation (during periods of higher volatility/liquidity).
The four-hour price range envelope can also assist in anticipating reversal levels, at 0.40% deviation and 0.80% deviation (under more extreme conditions) when it comes to Forex, and at 1.50% and 1.85% deviation when it comes to the major indexes.
Friday, March 18, 2022
As of Wednesday, I transitioned completely away from my NADEX demo account and will only trade my OANDA live account on those rare occasions when it occurs to me that a particular binary option trade might translate nicely to a traditional brokerage as well.
I got off to a rocky start, making thirty bucks trading the U.S. indices on Wednesday, losing it trading Forex on Thursday, and then getting it all back by Thursday night. So, after two days of evaluating how to avoid giving back any of my gains, here's what I find myself concluding…
In the context of Forex, one does not really observe stable measures until reaching 90 minutes. It therefore makes sense to trade in the direction of the 90-minute trend, and to trade the outer edges of the 90-minute price range. Obviously, in light of everything written in the previous post, such trades (entries) will be governed by (reversals in) the four-, eight-, ten-, and/or 20-minute baselines, depending on how aggressively one wishes to act, and market liquidity/volatility at the time.
This will especially be true when price action is taking place on the half of the 90-minute price range envelope that is away from the direction/trajectory of the 90-minute price flow.
I got off to a rocky start, making thirty bucks trading the U.S. indices on Wednesday, losing it trading Forex on Thursday, and then getting it all back by Thursday night. So, after two days of evaluating how to avoid giving back any of my gains, here's what I find myself concluding…
In the context of Forex, one does not really observe stable measures until reaching 90 minutes. It therefore makes sense to trade in the direction of the 90-minute trend, and to trade the outer edges of the 90-minute price range. Obviously, in light of everything written in the previous post, such trades (entries) will be governed by (reversals in) the four-, eight-, ten-, and/or 20-minute baselines, depending on how aggressively one wishes to act, and market liquidity/volatility at the time.
This will especially be true when price action is taking place on the half of the 90-minute price range envelope that is away from the direction/trajectory of the 90-minute price flow.
Saturday / March 19, 2022
On second thought, don't try to trade the outer edge of the 90-minute price range if and when it counters the slope of the 90-minute baseline.
Also, include the the four- (and eight-) hour trends along with the 90-minute measure as the determiners of the direction of your trades, ideally looking for opportunities to enter positions when price action is taking place on the halves of their corresponding price ranges that is away from the direction of price flow (as the four-, eight- and especially the 20-minute baselines reverse direction from trajectories opposite that of the overall price flow to resume a course aligned with it.
On second thought, don't try to trade the outer edge of the 90-minute price range if and when it counters the slope of the 90-minute baseline.
Also, include the the four- (and eight-) hour trends along with the 90-minute measure as the determiners of the direction of your trades, ideally looking for opportunities to enter positions when price action is taking place on the halves of their corresponding price ranges that is away from the direction of price flow (as the four-, eight- and especially the 20-minute baselines reverse direction from trajectories opposite that of the overall price flow to resume a course aligned with it.
Wednesday | March 23, 2022 | 11:55 AM
The system I use to trade NADEX binary option foreign currency pair derivative contracts online is profitable because it enables me to forecast the market correctly more often than not. But still, I am never happy to see how I could have theoretically finished the day with a return of, let's say, around $56, only to find that the amount of gains I was actually able to pocket was a mere $30, or $18, perhaps even as little as $8. It's like taking two steps forward and one step back, and then repeating the process over and over again, effectively VOLUNTEERING to give back some (or a lot) of what I worked so hard to earn.
Accordingly, my goal during this first week of trading, from Wednesday of last week to today, was to stop giving back any money at all. It took two days of analysis to reach that goal, but as of Monday, whatever I've been able to earn during each day I've been able to keep.
If this continues (God willing) it will cover my living expenses, so that with a fresh influx of funds next month, I will be able to devote the entire amount to trading so I can begin doubling and tripling the size of my average/typical trades, which will in turn double or triple my daily income.
If this becomes a pattern, by the third month of trading I hope to begin compounding my trading account so that a massive amount of growth soon results.
The system I use to trade NADEX binary option foreign currency pair derivative contracts online is profitable because it enables me to forecast the market correctly more often than not. But still, I am never happy to see how I could have theoretically finished the day with a return of, let's say, around $56, only to find that the amount of gains I was actually able to pocket was a mere $30, or $18, perhaps even as little as $8. It's like taking two steps forward and one step back, and then repeating the process over and over again, effectively VOLUNTEERING to give back some (or a lot) of what I worked so hard to earn.
Accordingly, my goal during this first week of trading, from Wednesday of last week to today, was to stop giving back any money at all. It took two days of analysis to reach that goal, but as of Monday, whatever I've been able to earn during each day I've been able to keep.
If this continues (God willing) it will cover my living expenses, so that with a fresh influx of funds next month, I will be able to devote the entire amount to trading so I can begin doubling and tripling the size of my average/typical trades, which will in turn double or triple my daily income.
If this becomes a pattern, by the third month of trading I hope to begin compounding my trading account so that a massive amount of growth soon results.
Friday | March 25, 2022 | 1:20 PM
As I continue to evaluate how to best go about trading two-hour binary option contracts without (as near as possible) suffering a single loss, I see where it might be beneficial to expand my current strategy outward.
Because slower trend lines are more stable than those representing lower periods, it makes sense to trade in the direction of the longer trends. However, there comes a point at which these measures become so slow that their usefulness as tools for generating daily profits becomes nonexistent—not to mention that the degree to which they lag behind changes in price direction makes any attempt to use them as a means of detecting price reversals essentially a detriment to one's market forecasting.
Accordingly, in the past, I regarded the 48-hour baseline as the appropriate measure for tracking the day-to-day trend (with the 24-hour baseline exhibiting too great a frequency of fluctuations to be relied on in this capacity). However, I now regard the 48-hour baseline as too lagging to faithfully convey the overall general directional flow of the intraday trend, with even the 24-hour baseline suffering from this same shortfall.
Hence, it is the (purple) 16-hour baseline (and moving average envelope) that appears to best serve as the arbiter(s) dictating in which direction to buy or sell a given two-hour binary option Forex derivative, with the three- and four-hour measures suggesting when price has departed from this overall dominant intraday flow.
Yet, it is the (olive-colored) 90-minute moving average, in cahoots with the 16-hour baseline, that appears to be the winning combination for highlighting the best times to enter positions—this being when the former measure (or its associated moving average envelope) reverses direction to switch from a course following a trajectory opposite that of the dominant trend to a course with a slope that is aligned with it.
Launch pads and landing sites within this context are defined in the manner that has already been established, using the three-hour temporal support or resistance levels in tandem with the four-, eight-, and most importantly, 20-hour baselines...
As I continue to evaluate how to best go about trading two-hour binary option contracts without (as near as possible) suffering a single loss, I see where it might be beneficial to expand my current strategy outward.
Because slower trend lines are more stable than those representing lower periods, it makes sense to trade in the direction of the longer trends. However, there comes a point at which these measures become so slow that their usefulness as tools for generating daily profits becomes nonexistent—not to mention that the degree to which they lag behind changes in price direction makes any attempt to use them as a means of detecting price reversals essentially a detriment to one's market forecasting.
Accordingly, in the past, I regarded the 48-hour baseline as the appropriate measure for tracking the day-to-day trend (with the 24-hour baseline exhibiting too great a frequency of fluctuations to be relied on in this capacity). However, I now regard the 48-hour baseline as too lagging to faithfully convey the overall general directional flow of the intraday trend, with even the 24-hour baseline suffering from this same shortfall.
Hence, it is the (purple) 16-hour baseline (and moving average envelope) that appears to best serve as the arbiter(s) dictating in which direction to buy or sell a given two-hour binary option Forex derivative, with the three- and four-hour measures suggesting when price has departed from this overall dominant intraday flow.
Yet, it is the (olive-colored) 90-minute moving average, in cahoots with the 16-hour baseline, that appears to be the winning combination for highlighting the best times to enter positions—this being when the former measure (or its associated moving average envelope) reverses direction to switch from a course following a trajectory opposite that of the dominant trend to a course with a slope that is aligned with it.
Launch pads and landing sites within this context are defined in the manner that has already been established, using the three-hour temporal support or resistance levels in tandem with the four-, eight-, and most importantly, 20-hour baselines...
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Saturday | March 26, 2022 | 6:30 AM
Automated signals based on the current plan:
I'm very much looking forward to this next week of trading. If the current plan works as well as it appears it might, it's possible that I will be able to switch from buying in-the-money (ITM) two-hour contracts to at-the-money (ATM) eight-hour or longer contracts. If so, within a couple of weeks, potential daily returns should exceed $100 to $200, and then explode exponentially thereafter...
Automated signals based on the current plan: