Advanced Structured Forex Trading

[fxmarkets]

LOL.. Dont hold back now Depth Trade, say what you feel mate..

 

[7thSignalTrader]

Feb 15-16 Dashboard 15 minutes prior to Close

Closing position for 48 pips.
Closing previous position for 16 pips.
Now flat until Engine update in about 15 minutes.

(Pic below)

 

[7thSignalTrader]

Nice trading 7ST.

Likewise, Punch.

 

[7thSignalTrader]

Feb 16 - 17 Dashboard Panel at the Open (7:05pm, 0005GMT, 4:05pm pac):

 

[7thSignalTrader]

Feb 16-17 Notes:

This one will be a bit more volatile then the last three (3) and therefore, I expect the system to rapidly adjust the Stop downward if necessary below $1.1881.

I'm already in at $1.1907 given there was no IM signaled by the system. The lack of an IM Short signal here, does not remove that fact that there will be a draw-down on this trade. The system for its own reasons, has decided not to allow it.

The on-paper Alpha-5P is projected this one right at 27.8 hours into the future at this point - so that could really allow for some draw, here. Volatility is always present during major shifts between TCD's.

 

[7thSignalTrader]

System's Long Range Projections:

Ceiling: $1.2359
Floor: $1.1831
Median: $1.2095 (currently under)
Time Frame: up to 5 months (real-time could change)

These are the systems super long range projections and they are not on the Panel for now. Last long range projection had a Ceiling at the $1.2300 level on the 1st of January. That was struck through the $1.2325 (not 2355) level not shortly after. The Floor at that time was in the high $1.1700 level, coming off the long range low of $1.1640.

I pretty much post these to outline the entire battle field within which the system generates its short-term targets. They are real-time super long range projections and are subject to change.

 

[echelon4x]

Hi 7th,

I see the trading pip tally has been nicely boosted with today's takings - great trading from the system there !

I thought about adding monthly data to the merged candles chart too, though I took the candles from MT4 and I think I'll need to mess around stretching the monthly candles widthways because you can't get the resolution that big in MT - It should be an interesting chart even if it will end up a little cluttered.

Thanks for those Charts which I intend to take a much closer look at - particularly the peaks and troughs !

The higher the TCD value (scale on the right side of each chart) the stronger that TCD. So, one can easily see just by looking at these analysis charts, where the TCD trend is currently on the EURUSD. But, that’s high school analysis! The Ph.D level analysis comes when you start to analyze the peaks and valleys that make up the Negative Mean for each chart. That is where your Probability resides for the “next” move depending on your time frame.

I'm not sure what your interpretation of "negative mean" is. I've Googled around and have spotted that it's referred to in artificially intelligent musical acompaniment systems as a form of compression, elsewhere I've read that it indicates speeding up. I've seen that there's an unintelligible (must be PhD) article which starts "Many important probablistic models in queuing theory, insurance and finance deal with partial sums of a negative mean staionary process (a negative drift random walk)...." - this seems to be connected with what you're talking about. I'm slightly concerned that to enable me to fully crack these high probability densities I'm going to have to get my maths up to the pace of this article - please tell me it's simpler that that lol !

 

[echelon4x]

I'm in on this trade too (it looks as though it's the remainder of that long move which I was expecting to appear yesterday - i.e. Thurs.).

It's interesting to look at the retracement candle formations of the current long move on the hourly chart - both with a doji in the middle.

I've found candle formations to be generally unreliable, some can be quite good like the hanging man - though if you understand the magnitudes of price moves you can see these men being hanged before the price even gets there lol !

 

[7thSignalTrader]

I'm not sure what your interpretation of "negative mean" is.

Yes - I see your point.

Take two means or medians. Apply one to all of the TCD's above the 0 line and all of the TCD's below the 0 line. What you end up with is a mean for the negative values and a mean for the positive values. I'm more interesting in the negative mean values because because that is where the "reversals" come from and those tend to be where the bigger move come from in this system.

So, examine all four (4) TCD charts and keep in mind that these are Real-Time TCD's, not Tactical or Strategic TCD's. So, their negative values have real meaning. Take a look at the pincer move taking place on the Weekly TCD chart. The straight trend lines were Short with the red on top of green right up until Week 2, where you can see it start to physically converge. About the same time, you see the Long TCD's bottoming out near -75 and the Short TCD’s topping out near the +297 level. That’s a 372 pip delta with the weakest being the Long TCD in a negative state. Knowing that Real-Time TCD’s cannot remain negative as that would violate every weekly data pattern over the entire history of the EURUSD, you can clearly see where the next “big” move “must” come from.

These are not micro-timing indicators, you use the daily data for that – but these are very good Swing indications. Your proof is in this week’s daily data.

Open up an hourly chart on the EURUSD, now. Format your chart so you can see all of this week price action. Now, go back to the start of this week’s session which was Monday, Feb 13th, 2006. The open price at 0000GMT was $1.1899 (the exact same price that has been on the Swing Signal’s trade profile for a Long move this week). Now, take a look at the Low of Feb 13th at $1.1877. Notice how everyone this week has been saying that the EURUSD is in a pure “bear market”. Well, they are correct. But, you see – all they have at their disposal are conventional TA trend indicators and none of them have precise hyper-short-term Predictive capability. So, all they can see is the “trend”.

What they don’t see is this…

Take a look at the Low’s for Feb 13th, 14th, and 15th of this week. What do you see? You see a hard pull into the vertical after the low was established that day. Your TCD’s at work! But, that’s only the tip of the iceberg. Now compare that to every single Day Signal that you’ve seen come from this system “this week”. All have been Long through today with most of them having Initial Moves Short, first before going long. Now, look at the data for the week again in these TCD charts. Look at the Daily and Weekly TCD chart. Notice where the Daily Long TCD was on Monday, and notice where it is today. Then notice where the Weekly Long TCD was last week at position number 2 (at the bottom of the chart) and then compare that to where it is now at position number 1 (this week).

So, Real-Time TCD’s going negative (especially on the Weekly data) help to define the where the good Probabilities reside for reflective action off a bottom (low) or off a top (high) on a Daily basis. The rest is taking good measurements of where the daily tops and bottoms need to be in order to make good timing decision on the entries.

So, this week, the system already knew that there would be good reflective properties on ever single Day Trade after its Low had been reached. Thus, the reason why you saw three Long signals in a row. In channels like this, you can literally trade in either direction and still turn a good profit or at least break-even as long as you enter with the right TCD.

Because the trend was Short from last week and this system called three (3) Long signals in a row with relatively small targets starting on Sunday/Monday of this week, that is proof positive that the system saw this weeks Channel forming before it happened.

 

[7thSignalTrader]

I've found candle formations to be generally unreliable, some can be quite good like the hanging man - though if you understand the magnitudes of price moves you can see these men being hanged before the price even gets there lol !

Sometimes, way before, lol!

This trade is exactly what I was referring to in my other post regarding Offensive and Defensive type trades. This one is purely Defensive in nature. Why? Simple – the short-term TCD in charge right now is the Long. The long-term TCD in charge is the Short. That fact will always product higher volatility for the Day Trade regardless of what that signal might be. If you recall, I made a system configuration change that placed the Day Trade signal close to the short-term trending side of the equation. That is what’s providing the Long Day Trade signal right now. However, the Swing is still virtually “Mixed”.

It is official; we will not see the Long Swing Trade signal get released this week. However, that means the system nailed that decision dead-on, because as the first Panel posted here shows earlier in the week, the Swing Trade Entry was $1.1899. The current close this session is now $1.1893. No Swing trade Entry should ever be that close to the current close going into a Friday. The move should be just about over up to $1.2148, if the Swing was not “Mixed”, or in the “Off” condition.

So, this is a Defensive Long Day Trade because it coming off of yesterday’s Long move up from $1.1848 (the low), being supported by the very week/mixed Swing Trade and the very strong Outlook Trade. So, the question here is how much draw before either a Long launch or at the very least a Long break-even. In other words, the system is playing more strongly into the shorter-term trend which was coming off of yesterday’s long move.

 

[7thSignalTrader]

Feb 16-17 Dashboard Update at 8:29pm est, 5:29pm pac:

 

[7thSignalTrader]

System has adjusted Stop appropriately.

 

[7thSignalTrader]

Feb 16-17 Dashboard Update at 8:51pm east, 5:51pm pac:

 

[7thSignalTrader]

Another adjustment in the Stop by the system. The max allowable is 50 pips. Since I don't like going beyond that, I've restricted the system to 50.

 

[echelon4x]

7th,

That post of yours on reading the TCD charts and the candle chart for this week was excellent !

All the gaps in my understanding of how the double helix nature of the TCD charts can show what is going to happen next suddenly got filled all at once !

And the really great news is that I don't need to become a maths PhD to work out a similar system. It really is all in the data as you've kept on saying time and time again. I can also appreciate to a degree how you're able to expand upon some basic concepts derived at the lowest level from OHLC by using inspiration from elsewhere to achieve even greater accuracy.

It's as though a light has gone on my head - all the fuzziness from looking at a myriad of scientific and mathematical research on financial time series analysis etc. has disappeared - I now have a recharged enthusiasm to really look much closer at the data patterns I can see and work out my own manipulations of the metadata which goes into their construction.

The funny thing is, even though I'm not currently ready to trade the system I'm developing which is aiming to be based on similar concepts to yours, after reading your posts, studying how your system appears to work and looking into data relationships for myself, testing magnitude theories etc. I find that I'm a better trader - I can look at a normal naked candlestick chart and feel more confident in placing a trade than I ever did when I used to have a screen full of conventional TA indicators, spent all day watching them and then found I was very lucky indeed if the signals they gave were better over a year's worth of trading than flipping a coin - no wonder my confidence was sagging somewhat in those days lol !.

Thanks again for a really enlightening post !

That swing trade call the system made was spot on as you say, the "hands off" swing trader going long on Monday and calling back 4 days later to pick up his 150 pips would indeed be surprised to see -6 pips instead. It's such a waste of a trade and best not to trade at all as the system rightly informed us.

I noticed that you mentioned the strong outlook trade - as this is much longer range, you've already mentioned that it will be subject to adjustments - is it safe to put much reliance on this signal over the short term ?

 

[7thSignalTrader]

............That swing trade call the system made was spot on as you say, the "hands off" swing trader going long on Monday and calling back 4 days later to pick up his 150 pips would indeed be surprised to see -6 pips instead. It's such a waste of a trade and best not to trade at all as the system rightly informed us.

I noticed that you mentioned the strong outlook trade - as this is much longer range, you've already mentioned that it will be subject to adjustments - is it safe to put much reliance on this signal over the short term ?

Good questions and observations. To answer your questions let's use this current trade as an example.

Long from the Open is the premise. Why? Well, for me its easy – the current real-time Daily Probability and Weekly Probabilities calculations are turning UP, not down. To wit: take a look again at the Lows for this week on a basic Daily Chart and then note the “rally from” each of those points. This is where the trend trading community and I, part company. They see the Short term trend ONLY. I see multiple Trajectories within the trend and I see these Trajectories turning UP. That’s where I like to be on the leading edge of the “next” dominant Trajectory. Not on the Trailing Edge of the Trend, which is where about 90% of all other traders live. I live at a completely different address.

So, in this trade what we see here is this 6 out of the first 10 bars of 15 minute data plunging to the down-side right at the Open of this session which for me was 0000 GMT. Why? Because the previous Long trade closed near its Apex and its Highest High was made at the tail end of the session. This is where the new Alpha-5P is going to be a big help and how the Alpha-5P is going to play multiple roles in the system.

On the one hand, the Alpha-5P does two things:

1) It projects the 48 hour Trajectory
2) It projects the Initial Move

So, the Alpha-5P will serve to Off-set some of the Trending components within the Daily Trade Signal cluster and also add inputs into the Initial Move cluster. So, in this trades case, you notice that the Initial Move signal status was in the “Off” position. That is because I have restricted that clusters effect on the system by requiring a higher degree of signal input before the signal is allowed to be in the “On” position at the Open. Alpha-5P’s role will be in part to boost the IM cluster to allow for more Initial Move “On” conditions. Had that been done in this case, there would have been the opportunity to capture these IM pips on the way down before turning up. Just like the other IM trades.

So, I will have to find the right balance (it always comes down to balancing your signals) between the primary IM cluster and how much additional 5P to use as off-set to get the light “On” when the 5P is projecting a short-term downward move from the Open. The 5P is going to be a “from the Open” signal cluster. So, if you drew a line from the Open of today and 5P was projecting Long, then I would expect the High of the next day to be at least 30 pips above that Open price (same for the Short). So, it will serve a dual purpose once I get the code written.

Now, using this same trade as an example, the fact that there is Outlook Signal in the 90%+ probability range, give ample tendency for selling off any rally. Remember, there are still those “short trend traders” who are in the market selling rallies. That will continue throughout this week. So, given the last session’s highest high came at the very tail end of the session, you could expect like clockwork for the short trend traders to get in there and start selling the rally of last session.

Take a look at a Daily chart. Note the first day of the month. The open was $1.2148 and the Outlook Trade status light was “On” and has never gone out. What’s the current price today? Current close is $1.1885. That’s a 263 pip retainer on the Expected 304, which is 86.51% retention on the Outlook and this is just the 16th of Feb. So, all of these Long calls coming from the Day Trade signal are going to face opposition.

However, the Outlook is created by persistent Daily movement (repeat that several times and it becomes clear). So, the question is, do I want to be on the trailing edge of the market, or the leading edge of the market. The Day trades this week are the leading edge and therefore will typically be volatile until the tide has changed (or, until the majority of the market catches up).

My job right now, given the changes made to the system a month ago, are to find the optimal Limits for the Initial Move trades and the optimal Entry points for the Day Trades. Everything else is pretty much on par.

This one may have been a little bit too high an entry, because I don’t like large draw down phases at all. It is just a matter of tweaking the Entry so that regardless of whether or not there is an Initial Move trade, the Day Trade Entry has the lowest degree of draw. There was plenty of Short side signal in the system but the vast majority of it is Trend signal, and I need the system be more Predictive, but at the right “time”.

So, that uses this trade as a good example of what my work consists of right now, and why the Outlook Trade (as you pointed out) is having such an impact on this week.

Hope that helps.

 

[7thSignalTrader]

End of Week:

Last Panel pic has not changed all that much. Got a golf tournament to get ready for in the morning, so I’m headed to the lighted driving range to get in some iron work for tomorrow. I’ll be back in time for the start of Monday’s session. The system will adjust continue to adjust the Stop downward or upward depending on what it sees happening in real-time. It will not adjust below a 50 pip Stop.

I’ve learned a lot this week and should have some good 5P news early next week. No real major adjustments to the current Beta or Certification program necessary at this point as the Initial Move trades worked out fine. The Day Trade Stop locations worked fine as well, as I will not be including the 1 pip stop-out earlier in the week against the system as it was on news.

So, right now all test results are nominal and I look forward to implementing 5P and pushing that through Beta/Certification.

Have a great weekend! (remember, Par is good but Birdie is better and “Eagle”, well – that’s just down right lovely)

 

[Punch]

Here are the traditional and custom levels for today. These levels are set at midnight Eastern time. For EUR/USD:

Traditional levels:
Resistance: 1.1948 and 1.1917
Pivot point: 1.1883
Support: 1.1852 and 1.1818

Custom levels
Resistance: 1.1918
Support: 1.1847

Predicted:
High: 1.1918
Low: 1.1821

As you can see we have a lot of potential resistance around 1.1918.

 

[7thSignalTrader]

I've gone ahead and added the first Daily cluster of Alpha-5P to the Initial Move cluster AND the Day Trade cluster and re-ran the Panel back from the Open of this session.

What I found was the Panel pic below. Exactly what I theorized it would be on paper. The Aplha-5P was enough to turn "On" the Initial Move (because it saw the need to move Short off of yesterday's Long side move) but it did not add too much Short signal to the Day Trade cluster to turn it down. So, the result is what you see in the Panel.

Another nice Initial Move down for 21-22 pips, followed by a primary Day Trade back up for another 50+ pips thus far. So, a potential 70+ pip day using the new Alpha-5P to boost the Initial Move signal and dampen the Day Trade signal when nec.

So, I really have several options for tweaking the Certification and Beta results this week.

1) I could simply turn on the Blade/Apex profiles by allowing a "Mixed" signal on the Swing Trade to be the same as an opposing signal to the Day Trade. That would be enough to turn "On" the lights for the Blade/Apex trades and all of those worked out very nicely this week as this was a week in the Daily Channel with short side bias most of the week. Solution 1.

2) I could (and this will most likely be the option of choice) simply finish adding all of the Daily, Weekly and Monthly Alpha-5P inputs to the Engine under the Initial Move and Day Trade signal cluster to boost any weak Initial Move signal and augment the real-time Day Trade signal. This would have placed all Day Trades this week into positions that lessened the impact of draw and gone on to make a bundle of pips on each trade. Solution 2.

3) I could leave things just the way they are and simply reduce the Initial Move requirement before its light comes "On" and deepen the Initial Move Limit target while at the same time pushing the Day Trade Stop down slightly to cover for times when there is large opposing Outlook signal or when the week's Channel indicator opposes the Day Trade. That would have drilled all the IM's deeper this week and allowed enough room for the Day Trade to execute with being stopped out. Again, a result that would have led to much better pip performance this week. Solution 3.

So, I have three (3) options for tweaking which is exactly what this Beta/Certification period is all about - flushing out all the possible solutions and then selecting the best one available.

See pic below. I bet those Short Trend traders are heading for the hills now wondering what happened to the "trend".

This is the power of the TCD at work and it CLEARLY demonstrates why the data inside those TCD charts that I posted earlier are so good at pointing to the ”next” big move. It also explains the four (4) straight Long Day Trade signals the system kept throwing out this week and it explains the different between Trend Trading and a Predictive Model for trading. She was a little bit early on that last one, but I’ll forgive her for that after seeing today’s move take place.

So, compare this Panel pic (with the Alpha-5P included) with the original Panel I posted for Feb 16-17 (that did not have the 5P inputs) and the difference becomes crystal clear.

I'll get back to all the questions when I return next week! Have a great weekend.

 

[Compounding]

Good question SD, im anxiously waiting for the reply on this one. Im guessing % change might be more better, but im really not sure.