Mickey's Journal

[wiseambitions]

Hi there
Just wondering what was your definition of "momentum". I know there's an indicator called by that name which might be useful as an oscillator but like CCI and many others probably not even as good as AO or QQE
You did well to get out with 80 of 90 possible pips of gain. We all hate round trips, which is what happen sometimes if we let things come back to a slowly trailing stop loss like a fractal or green line or ultra-signal or anything else.

Also while I seem to remember from my early study of Aims that the idea was to winners run rather than set a TP, hoping to catch a nice long move, there are several members now who are trading things like "hunting" whereby they will take a gain of say 2 times initial risk off the table and be thankful for it........

[kiravon]

2 times initial risk off the table and be thankful for it........

Interestingly I have been musing on this very point

Some of the most profitable mentors I know who have vast in depth
insight into technical analysis and should know the optimum exit -

simply say as above - 'set 20 pip SL and 40 pip TP'

with no regard to market conditions or anything else - one size
fits all.

by momentum I simply mean I see the price suddenly starts
moving fast. thats all the indicator you need unless its
possible to know its going to happen in advance - unlikely

In the meantime I have been backtesting the idea of 25 EMA
cross over lips or teeth. It certainly shows promise but it would
be very hard to set rigid rules.

For example you will probably lose in spikey conditions even if
all other conditions are met.

On EURUSD M5 chart I took eight consecutive set ups.

One lost because there was absolutely no confirmation by
reversal indicator, I use Samurai and PZ both equally good
although I'm sure there are others that can be used

Another set up was BE because entry was amidst extremely
spikey conditions - should not have entered.

Another ended in BE because there was absolutely no confirmation by
reversal indicator

Set SL always 5 pips so very minimal risk
Average profit is +15.4 pips so 1:3 RR which
is good

Its worth pursuing this but its not the easiest
strategy and the screenshots alone will deter most I
think

The basic idea is simple

Wait for price to cross over 50 EMA ( thick coloured MA in my screenshots )
Set up if price retests the 50 EMA and respects it
Enter at close of candle
Exit at cross of 25 EMA ( blue line ) over Lips ( sometimes teeth discretionary )

The retest factor eliminates most of the whipsawing losing trades

So now its basically cross over Lips unless there is reason to choose
cross over Teeth

I'll make some commentary on each of the following screenshots
Trade 1

1.JPG

Great trade for +16 pips, straightforward exit at cross of Lips

[kiravon]

Trade 2

Again, very straightforward - cross over Lips for 11 pips

2.JPG

Trade 3

3.JPG

A good trade for +25 pips. we had a cross of both Lips and Teeth very
early on, both yielding around 5 pips - I would have rather been stopped
out for BE, but giving price a bit more breathing space the next cross
of Lips or Teeth would both have yielded +25 pips. I mainly stayed in
because the TRS line was still red and Gators pointing straight down

This is what I mean about rigid rules, and where some list all
their filters, questions etc, in the end its all down to the traders
chart reading ability
Trade 4

4.JPG

Would have been BE but hopefully I wouldn't have entered because
there was no reversal indicator ie arrow or small coloured circles
plus the TRS line was still green and pointing up - three good
reasons to hold back

You know, some indicators are phenomenal such as these three
and PZ arrow costing $299 is probably worth that, nevertheless
no indicators actually make you money

but they can help you in your trading decisions
Trade 5

5.JPG

Another great trade for +16 pips exit at cross of Lips, you might have
gone in again after that minor retracement for another 10 pips -
of course easy to see that in hindsight
Trade 6

6.JPG

Too spikey, would have broke even at cross of Teeth, in fact
it was entagled with Teeth all along - everything about this set up
was wrong
Trade 7

7.JPG

nice trade for +9 pips. this was a bit dubious because no arrow/circle
confirmation surprisingly but price action was very neat and the TRS
highly reliable line had just turned down to red. Looking at TRS you
might assume it repaints - it absolutely doesn't!
Finally Esther
Trade 8

8.JPG

absence of reversal indicators but TRS would just have turned red
and cross of teeth would have been a -4 pip rent.

[kiravon]

One of many things I've picked up from Ray is
his sharp eye for detail - and how it really points up
what a dreamer I am

but maybe there is hope for me yet and I wonder if anyone
else noticed something in the above eight screenshots
hidden in plain view?

Firstly I am not introducing a non AIMS strategy here, this
is simply an observation that leads me to two critically
important conclusions -

Firstly the importance of our powers of observation

Secondly, and most encouragingly - that it is most
definitely possible to succeed in trading the markets

Here is the observation-

after price breaks through 50 EMA and then retests it
the candle after the retest candle will always close
in excess of the close of the retest candle.

Thats it!

It may be just 3 - 5 pips or something paltry like that -
but it does seem to happen virtually 100% of the time!

Could that be useful?

Well much as I have no respect for market makers
and their binary options which is purely betting
on one of two outcomes - heads or tails so to
speak....

this is probably a 'guaranteed' way to win with
binary options providing you avoid spikey
conditions and very importantly enter only
when price moves up two or three pips
which it usually does ( this is important in
case the next bar is a doji as it should
ensure you still win )

I am not recommending anyone get involved
with binary options but it is nice to know
that money can be made

I might try it just out of interest.

[wiseambitions]

I'm interested in your observations with the 50 line, but most certainly not interested in binaries. I sat down with a colleague (another financial adviser) and we found it needed a bit more than a 60% win rate, sometimes nearly 70 just to break even because of the way the costs were weighted in favour of the broker. Then the observation that few of the option dealing brokers are registered in countries like the UK where they are (or should be) properly regulated. In other words they can easily get away with cheating you, and not giving you your profit on a trade or not letting you withdraw your capital. Too many horror stories. Even just last week the UK Daily Mail (a popular newspaper even if criticised for being full of sensational rubbish) carried an article about it http://www.dailymail.co.uk/news/article ... icide.html

[Tomi]

Also while I seem to remember from my early study of Aims that the idea was to winners run rather than set a TP, hoping to catch a nice long move, there are several members now who are trading things like "hunting" whereby they will take a gain of say 2 times initial risk off the table and be thankful for it........

This is a personal thing for every trader. Letting winners run will get you bigger gains in the long run (dislaimer: at least I think like that) but in the same time you encounter bigger drawdown from time to time. I'm closing between RR 1:2-1:3 which ever suites better per trade basis. Never below 1:2. If trade doesn't have the potential to minimum of 1:2 -> trade is skipped. Yes, big winners are cut off but also on crappy period the drawdown won't pile up that much as you are not dependent on big market moves, small moves are enough. On crappy period there's a good chance to get to break-even and on good period get some modest net outcome. That's my experience at least.

Another thing is simplicity. There are no complex exit rules. No hesitation due to possible hindsight that the trade should/could/must have been closed earlier or later. After RR 1:2 everything is ok and target zones define the exact targets.

Simulation goes smoothly as everything is so simple. Exits are the same whether you simulate with time or trade live with faster pace.

So, it's a personal thing. Which ever way suites you best, go for it. I like simple and 100% consistent approach as it's absolutely stress free.

[kiravon]

I don't doubt that the most profitable approach might be
some cross of MAs that can sometimes run for thousands
of pips, but where 90% of trades reverse for a loss you
incur serious drawdown before that happens

and you simply might not survive emotionally that long!
in fact most definitely wouldn't

Stress free trading is not to be underestimated - after
all you will get there in the end if you are consistent

In the meantime another helpful insight for me is the
false signal below - yes a bounce off 50 SMA in the second
blue ellipse.

The first blue ellipse was valid having gone right above and broke
down through 50 SMA before retest

It has to break through before retest to be valid

and note too in second example how 25EMA had already crossed
through teeth of Gator

Again, when this happens its best not ignored as we see here

[kiravon]

Three M5 trades
A. Break of AIMS supported by cross of EMA 25 over Teeth
B. Simple break of Triangle
C. Break of AIMS - 25 EMA not crossed down over Lips or Teeth so
trend looked strong but on M15 a very different picture as we had reached
a level of resistance that had recently been formed twice and repelled
price, Third time lucky? I'm not interested in luck and there are
conflicting indications
If you can see the red circle with number 7 in it? Apart from being a
reversal indicator I don't know what the numbers mean but I will
hazard a guess - reverse because prior support/resistance!

This backs up what Tomi was saying, trading is hard enough without
drowning in confusion!

and sure enough I did the right thing to get out - price immediately
plummeted after screenshot was taken

[wiseambitions]

Kiravon. I have not read all of your posts carefully enough but I believe you have made quite a few comments about the 50 EMA

In my own words you are saying that very often the price will "respect" the 50 EMA and bounce back off it. Is that right?

As you know, I am a little bit keen on a system which looks for crosses of the 6 and 50 EMAs and it can put me in and keep me in a trend which goes well, or give me a fair amount of whipsaw especially if the signal starts inside an Aims box and in ranging markets. But what you are saying (if you see the price often bounces back off the 50) does support my concept which relies on the price going through the 50EMA and staying the other side of it sufficient for the 6 period EMA to confirm the break through, otherwise to be cautious that it is going to deflect and perhaps then act like Immy's "hunt" strategy.

Cheers

[kiravon]

If I understand your question correctly Ray you
would like to be sure that price will stay the
other side of 50 EMA after retest?

Sadly that is the one thing I really can't
help with at all. Sometimes it will continue
for thousands of pips but usually it will
whiplash back over again.

The only observation I made which gave
rise to my Binary Options reference was that
providing you avoid spikey conditions, when there
is a decisive cross of 50 EMA and accurate
retest more or less just touching the MA and
bouncing off it....

then the next candle will invariably, I would
say 90% of the time, also move away from MA.

What happens after that is anyone's guess

Technically this information should make you
untold millions, in reality probably not

I tried it on Binary Options

Yes I won every time - but....

Ever tried winning when you're playing with a really
bad loser?

up to six 'errors' and requotes before I could place
the trade. by the time I got he trade on price had moved
considerably and my initial paltry return of 87% shrunk
every time to 70%.

So in the end I was only winning around 50% for 70%
return! I believe yourself and your colleague have
already done the Math. Its all a big scammy joke,
and not a very funny one in the case of many of it's victims.

but I believe a more viable option is to trade the next bar only
on the H4 or D1 TFs as you do not need much of a Stop Loss.

It would be nice to catch those unending runs and filter out all
the whiplashes but I suspect that it really is unknowable in advance
unless possibly any accurate interpretation of Fundamental
Analysis is employed, but that would only relate to
the Higher time frames.