All you need to trade is a horizontal line - TheRumpledOne

[TheRumpledOne]

bansir:

Looks like you are OVER TRADING!!

 

[bansir]

bansir:

Looks like you are OVER TRADING!!

Hi TRO,
Nah, this is over trading:
Buy Zone trades for today:
7 3 -4 0 0 -4 -6 6 2 -6 -6 3 -5 -7 -1 -7 1 -2 13 -7 -6 -4 1 3

24 trades and -26 pips.

I'm pretty fed up tonight; This week I set a target of 10 to 15 pips per day then stop.
This morning, by 10:55am I hit my target (on the second) trade but couldn't resist just having one more shot.
It was all down hill after that. Hands up, discipline blown.

Serious questions,
1)How many trades per day is BZ good for?
2) Why is the strategy limited in this way?

Many thanks for any guidance.
I'll be demo trading BZ through March if you get chance to drop by.

Best Regards,
Neil

 

[kauaibobby]

what is the buy zone.
i read a lot of the posts here and i cant seem to find an explanation of the buy zone.
could some please explain this strategy
thankyou
happy trading

 

[bansir]

what is the buy zone.
i read a lot of the posts here and i cant seem to find an explanation of the buy zone.
could some please explain this strategy
thankyou
happy trading

Hi KB,
See this link:
http://www.trade2win.com/boards/forex-strategies-systems/28252-buy-zone-therumpledone.html

Best Regards,
Neil

 

[bansir]

what is the buy zone.
i read a lot of the posts here and i cant seem to find an explanation of the buy zone.
could some please explain this strategy
thankyou
happy trading

Two trades from this morning by way of illustration:

 

[bansir]

Hi Wilkelec,
I've been following cable on daily candles charts. Haven't found an entry yet though.

Today's Buy Zone Demo results:

9am -5
10am +8
11am -5
12 noon +5
1 pm -5, -5 whipsaw, miss an hour
3pm +11
8pm +2, +5

+10 pips 9 trades

Best Regards,
Neil

 

[wilkelec]

Yeah the conservative none gambler approach I like it. I also have another method. I take a small amount of investing capital that I could not care less about winning or losing. (because I know my other trades will give it me back) I then look for a weak currency like the USD and I place a BUY against it and I leave it. Couldnt care less if im wrong or put stops on because well hey its a small amount of money not going to destroy my other income. I got in the GBP/USD with a BUY this is my 13th trading day and its gone up the whole time with a few slight pull back days. I couldnt care less about riding all the noise up and down its 1 too much stress and 2 its giving more of my profits to the broker. I pull the profits out at the end of the day and then compound them back into the same BUY trade giving me greater gains. I always take this approach on forex but if I was to ride the ups and downs I would be making as much loss as profits. 1 with broker fees and another with making the wrong decision. THE BUY SELL BUY SELL THING ONLY SPELLS OUT ONE THING TO ME. YOU PAY THE BROKER PAY THE BROKER ETC. If I look at every currency I see these perfect opportunitys all the time. The key is ignoring the noise and investing money you dont care about as a side line to your conservative wins. My other form of trading is to guarantee small pip increases every day and compounding the winnings once again. Everyone can easy make a small amount of pips with minimum effort. They can go out and enjoy life and ok its smaller returns than my who cares method but thats the dumb money method but it works if you dont care about losing it. The few pips a day on a leveraged trade can amount to substantial gains over a longer period. This I call my safe money. Hope this helps a few people make better decisions.

 

[wilkelec]

I have not looked at cable. But I will admit that the BUY sign for me on the GBP/USD was taken from the glorious horizontal line you speak about on a daily chart. It hit a previous low and I thought with the FED printing money this thing cant get any stronger.

 

[wilkelec]

Im a strong believer in the less information you give the broker the greater your gains. My stop loss is my finger and eyes. My limit is when I decide enough is enough or its time to compound some more money into a BUY/SELL on a pullback. This way someone cant use it against me for there own gain. I believe in knowing a few things really well instead of everything a little. I also think without a doubt you make greater gains taking long positions with small amounts.

 

[bansir]

Hi Folks,
Thought a chart may be better than a list of numbers today.
I've changed tactics due to the poor results earlier in the week.

Did +9 pips in 4 trades, no losers.

Have a good weekend all.

 

[bansir]

Thank you very much for your feedback and observations wilkelec, much appreciated.

First of all I take my hat off to you that you are a good day trader. You made 9 pips after spread in the most unlikely places. Your good I can not do what you did with precision over a long period of time I end up with losses. I get too involved with trying to second guess and it goes wrong.

But..
Have to say I have not managed to make the hourly BUY ZONE work yet.
I made -43 pips for Feb and I'm on -20 pips net for March to date.

Take your point regarding the advantages of just taking a single trade for the day.
1. Only one fee and/or spread to pay.
2. Very little screen watching.
3. Higher pips reward.

Thanks for outlining your approach using this method.

The reservations and concerns you raise regarding the risk/reward ratio and spreads are noted and have also been clearly voiced by JTrader. See previous posts on this thread.

Trendie's concerns regarding my daily targets and potential losing runs are also born out based on my current BUY ZONE results.

TRO does recommend using a broker which offers zero spread and a small transaction fee which I think addresses these problems to some extent. TRO has also mentioned more than once that I am over trading.

Regards the squiggly line (SMA12), I don't use it for taking positions but I left it on there just as an indication of the general hourly direction of the price.

This comment surprises me:

ALSO I AM CONVINCED THAT YOUR TRADE POSITIONS WENT AGAINST THE HORIZONTAL LINE TOPIC?

The one thing I've tried really hard to do is to stick to the BUY ZONE rules for each trade.
After all, my goal is to test the BUY ZONE strategy using demo trades.
If you find time, I would like to know the specific features of my positions which are not in accordance with the BUY ZONE strategy.

Thanks again for your input wilkelec, I will take a look at daily stats and start to measure and monitor ranges and percentage swings with a view to developing a winning strategy.

I will continue with BZ demo through March; I wanted to give it at least 2 to 3 months, fair crack of the whip before making any decisions.

Best Regards,
Neil

 

[wilkelec]

If your making +9 pips per day with leverage and no losses and have been trading since 2002 then your already a multi millionaire so who am I to judge!!!! Happy trading.

 

[bansir]

If your making +9 pips per day with leverage and no losses and have been trading since 2002 then your already a multi millionaire so who am I to judge!!!! Happy trading.

Hi Wilkelec,
Like I say, I'm just testing TRO's 5min BZ strategy on Oanda demo account.
If you reckon my entries aren't in accordance with TRO's system then my test may be invalid.

Best Regards,
Neil

 

[wilkelec]

I decided to try the oanda demo. Its crashed out on me 50 times or more in less than a day. funny enough its always at big moves??? It also shows diferent price to other platforms. I would imagine this becomes slippage with a real account?? I would not use them the charting system is not the best and like I say it crashes and the prices are funky by other comparisons. The only thing I would give it is its not slow. Apart from when it crashes out and you miss all the best trades. It would not effect my style of trading but if I was going to place money on a system I would not want them to turn around and say your stop didnt happen because the system crashed for the 100th time today. WE ARE NOT RESPONSIBLE FOR SYSTEM FAILURES AND SEND ME SOME SMALL PRINT. Your trades look fine its a profit. but again i would not trade that way just because i dont see a profit. swing trade if your going to day trade big moves almost always have a correction. again oanda crashes at these critical times from my experience. Its notmyinternet connection because other things work fine.

 

[bansir]

I decided to try the oanda demo. Its crashed out on me 50 times or more in less than a day. funny enough its always at big moves??? It also shows diferent price to other platforms. I would imagine this becomes slippage with a real account?? I would not use them the charting system is not the best and like I say it crashes and the prices are funky by other comparisons. The only thing I would give it is its not slow. Apart from when it crashes out and you miss all the best trades. It would not effect my style of trading but if I was going to place money on a system I would not want them to turn around and say your stop didnt happen because the system crashed for the 100th time today. WE ARE NOT RESPONSIBLE FOR SYSTEM FAILURES AND SEND ME SOME SMALL PRINT. Your trades look fine its a profit. but again i would not trade that way just because i dont see a profit. swing trade if your going to day trade big moves almost always have a correction. again oanda crashes at these critical times from my experience. Its notmyinternet connection because other things work fine.

Have to agree Wilkelec, execution of orders is usually very fast but the connection is dropped many times during the London / US sessions.
It seems to fix itself fairly quickly, within seconds but it's very disconcerting. The disconnections seem worse when I go through a proxy server.

One thing to watch is that although you can preset your stop level on the order ticket, if your order gets filled light years away from the price you were originally quoted, your stop will still be in the position you specified on the ticket.

On Tuesday I went long with a -6 pip stop. I got filled 13 pips up from where I wanted.
Before I could drag the stop up, the price moved down 19 pips and took it out.
I went short straight away and closed for +18 pips. Very unsettling.
This was around 12 to 12:30 around the start of US session.

Best Regards,
Neil

 

[bansir]

Well it's been a week of ups and downs for me using BZ on demo.

After a disastrous day on Monday I had to make a few tweaks.

Mon 10th March -6 +2 +2 +2 -6 -6 +5 +3 -6 +1 +7 +2 0 -5 -6 +2-6 0 -6 -6 +4 -6
22 trades -29 pips

Tue 11th March 0 +2 0 -7 -19 +18 +5 +4 +1 +5 +4 +3 0
13 trades +16 pips

At this point I decide that rather than just use the hourly open (on the hour) that I should be more selective. I now look for a trade within each hour but also look to avoid congestion and 'noise' periods.
I noticed that the vertical axis tends to be marked in 5 or 2 pip steps during congestion.
During these times i stay out and just draw two horizontal lines, one at the lower extreme of the noise and the other at the upper extreme.
I only consider entering a trade as the price passes through one of these limits.

As soon as it crosses I take the entry as per Buy Zone +3/-3 range rules.
I look to capture 5 to 10 pips and out. Couldn't care less if the price flies off; I'm scalping. I will just wait for a return into the range or if a trend develops I will look to work around pivots or other s/r lines.

Target is still 10 to 15 pips per day.

Wed 12 March +1 -7 -7 +0 -7 +9 +2 0 +1 +1 -1 -5 +6 +7 +1
15 trades +10 pips

Thur 13 March +16
1 trade +16 pips

Fri 14th March +9 -7 +5 +3
4 trades +10 pips

+23 pips for the week.
I'm up +3 pips for March.
Not sure this is still Buy Zone though?

A couple of charts, my best day and worst day for comparison:


Best Regards,
Neil

 

[jayjay121]

Well it's been a week of ups and downs for me using BZ on demo.

After a disastrous day on Monday I had to make a few tweaks.

Mon 10th March -6 +2 +2 +2 -6 -6 +5 +3 -6 +1 +7 +2 0 -5 -6 +2-6 0 -6 -6 +4 -6
22 trades -29 pips

Tue 11th March 0 +2 0 -7 -19 +18 +5 +4 +1 +5 +4 +3 0
13 trades +16 pips

At this point I decide that rather than just use the hourly open (on the hour) that I should be more selective. I now look for a trade within each hour but also look to avoid congestion and 'noise' periods.
I noticed that the vertical axis tends to be marked in 5 or 2 pip steps during congestion.
During these times i stay out and just draw two horizontal lines, one at the lower extreme of the noise and the other at the upper extreme.
I only consider entering a trade as the price passes through one of these limits.

As soon as it crosses I take the entry as per Buy Zone +3/-3 range rules.
I look to capture 5 to 10 pips and out. Couldn't care less if the price flies off; I'm scalping. I will just wait for a return into the range or if a trend develops I will look to work around pivots or other s/r lines.

Target is still 10 to 15 pips per day.

Wed 12 March +1 -7 -7 +0 -7 +9 +2 0 +1 +1 -1 -5 +6 +7 +1
15 trades +10 pips

Thur 13 March +16
1 trade +16 pips

Fri 14th March +9 -7 +5 +3
4 trades +10 pips

+23 pips for the week.
I'm up +3 pips for March.
Not sure this is still Buy Zone though?

A couple of charts, my best day and worst day for comparison:


Best Regards,
Neil

yeah but you are slowing tweaking and finding something that is beginning to look like a system.

Keep up the good work. You have given many good ideas.


jason

 

[bansir]

yeah but you are slowing tweaking and finding something that is beginning to look like a system.

Keep up the good work. You have given many good ideas.


jason

Hi Jason,
Thanks for the encouragement. My impression is that local S/R levels and trend have to be taken into account rather than just taking an hourly close as the marker. Not surprising really.

I'm still using BZ +/-3 entry levels to take S/R breakouts. Even if the breakout is a fake there may be enough pips for a scalp.
Also limiting myself to just 1 or 2 trades per hour is proving good for me; I seem to be prone to "runaway trading syndrome" on occasion.

I am keeping an eye on MA(12) as well for judging the general direction. The vertical axis I find makes a good indicator too; if it's scale is smallish then you're in noise.

How's er2 going for you? Any good pips lately ?

Very Best Regards,
Neil

 

[jayjay121]

Hi Jason,
Thanks for the encouragement. My impression is that local S/R levels and trend have to be taken into account rather than just taking an hourly close as the marker. Not surprising really.

I'm still using BZ +/-3 entry levels to take S/R breakouts. Even if the breakout is a fake there may be enough pips for a scalp.
Also limiting myself to just 1 or 2 trades per hour is proving good for me; I seem to be prone to "runaway trading syndrome" on occasion.

I am keeping an eye on MA(12) as well for judging the general direction. The vertical axis I find makes a good indicator too; if it's scale is smallish then you're in noise.

How's er2 going for you? Any good pips lately ?

Very Best Regards,
Neil

im very much still like you and tweaking alot to find a framework i can stick too for good.

It is going well still, i still use the two losses rule.

i like this style of trading, i think i found something i can at last stick with and that works for me.


jason

 

[bansir]

Wheels fell off

Hi Folks,
I've had a mixed week with buy zone demo.

Here's the results:

Mon 17th : -72 pips 38 trades
Tue 18th : -55 pips 30 trades
Wed 19th : +9 pips 16 trades
Thur 20th : +27 pips 4 trades

After a good week last week, Monday and Tuesday were
meltdown. I just lost all disciplin.

Looking back, I was drawn into trying to regain losses
instead of just accepting them.

When I started the week I was looking to continue with the
quick scalping method I had used to some effect last week.
It began to unravel as whipsaws quickly ran up my losses.


Some experimentation and re-thinking during Tuesday led to
corrective action.

Here's what I came up with:

It's a set of rules that seem to work although I need to see
how they pan out over the next trading week. I've had to
use MA(12) to judge general price direction over the hour.
(Sorry TRO)

Entries:
How?
Enter using Buy Zones +/-3 pips.
Use Hourly Buy Zone entries or
Buy Zones at local S/R levels.

Which direction?
Only take short entries if price is below 12 MA
Only take long entries if price is above 12 MA

Is there enough room for a profit?
Only trade when vertical scale is in at least 10 pip increments.

Exits:
Exit when stop is hit. Use -5 pip stop.
Exit half trade when +6 pips or more is hit. (As original BZ)

Move stop to BE and leave the other half to run, take
BE stop out or discretionary exit.
Limit trades to between 1 and 3 trades per hour max.

Essentially I'm using half the position to scalp and half to run the trend.
Best of both worlds.
Each trade has a scalping component and a trending component.

If both components fail and I'm stopped out, I can take one more
trade for that hour slot. If I get the same result I skip at least 1 hour
slot.

If both components win then I may take another trade or quit for the
day if daily target pips are made (10 to 15 pips or more).
If the scalping part wins but the trand part loses then I may take another
trade for the hour or quit for the day if target pips are hit.

If I run up 4 double losers in a row, I'm done for the day.

I've attached todays chart to show the general idea.

Well, let's see if it will run now I've stuck the wheels back on.
Have a good Easter break....

Cheers All,
Neil