seeing what you said jerked me up short
what i see is a number of systems that bring you into a trade a bit late, either because some exotic indicator has to actually determine a trend change, or the moving averages have to wait till they cross or any of a number of reasons, and while this is easily documented (simply look at the entry points these systems point to and you will see the entry is invariably LATE) but the EXITS are also LATE, taking place as far down as a 1/4 of the total move up --- ie: the price reaches top resistance, reverses down and 1/4 of the total distance of the upside move, you get a SELL signal ! THAT is a lot of pips to give back to everyone !
While giving BACK pips may not bother some, it irritates the heck out of me
What I'm Sayin', mp!
Retracement entries are nothing new but that's what I use. They make for nice entries along a trendline. The only problem is that at a main trend pivot that strategy loses money. So I have been just going in on the retracements immediately AFTER a trend change. The entry is by a trigger that first is selective due to it being based on a key I found in each elliott wave. So it weeds out the trend continuation retracements and targets the turn.
Now this elliott wave key is something I discovered over many years of research. It is generated by the wave itself and so has the integrity of the elliott wave. But you don't need elliott wave knowledge to do it.
But seeing what you said about the indicators being "exotic" jerked me up short. Check out why:
I have discovered many new things as a result of finding that key. One was a particular technical analysis setup. That in turn led to a signal which because of being "keyed up" on the wave's key was remarkably letting me know whether the trend pullback was a trend failure or whether there would be a continuation after the pullback.
The experienced traders at this point are probably thinking that this must relate to timeframe. It absolutely does. The relationship is so critical that this is the reason that software or Expert Advisors have a real disadvantage in the area of recognizing the difference between continuation and failure.
They rely on oscillators and trendline breaks and the like. But the price action is way too complex for that. We all know that trendline pullbacks come in several varieties from the shallow to the deep and from the sharp quick snap to a cautious stair step to that drift that seems to last FOREVER (followed often times by the sharp quick snap).
Think about this: How long have we had the technology to make humanoid like robots yet we do not see them? We have extremly sophisticated robots that build whole cars but each task is given to a "sophisticated" bot that performs basically one task. It does it REALLY WELL. Just don't ask it to do the task of the one that is two bots down the line. Robotics stalled out when they tried to tackle some of the most simple human tasks. And the fantastic physics based machine is sitting there waiting for its brain, the logical machine still an infant.
And this forex action will shake every single one of those algorithms out just before it goes on to finish the move - often the best part. The proof of that is that if there REALLY WAS a software solution to the complexity of the market everybody would have retired, this group forum would not be here and you would not be reading this.
So here you are reading this and your intention is to improve your technique. After all you are the "human" in the humanoid, right? You have the pattern matching skills any programmer would give his right arm to be able to copy (yeah, I think they are still having trouble with resaurant menus). Well we are also the problem to the solution.
Yes we can spot patterns and even remember them really well. We can also remember when the same one that turned out to be a buy, on another occasion turned out to be a sell. I know all my indicators take a special pride in not revealing when either situation will apply. That is inherent because an indicator IS a robot. Pattern matching is good, its important, but it is also somewhat a robotic function.
You can bet that in a competitive environment if you think the pattern or the indicator "says" this or that then there are automatically engaged forces kicking in that will drive traders and now even computer programs towards AND against that tendency. Of course, there will even be emotions at work. Will those forces balance each other? Yes and no - or up and down - you get my drift.
The whole point of all this? Well I have wandered a bit from the timeframe issue but it really is necessary to assure you that the software is NOT the answer. And the indicator is NOT the answer.
The answer is in the balance of the forces at work which create a set of patterns known as elliott wave. Now there is not much use in Forex of that method of analysis so esteemed in the stock market. I started with all this in the stock market but when I tried the key on currencies it didn't work. Later I found out there was a factor that if you multiply it on all your technicals in stocks they will work in exactly the same way for forex. [Note: exception is my usage of an 89 setting of Williams %R - that does not work with the factor so it should be kept the same for stocks and forex]. The factor is directly related to the key. And the key is always there and is generated by the wave itself. It doesn't get any better than that - to put your analysis right IN the wave.
So back to timeframe; its well known that there is always a timeframe governing your trade. Or more correctly stated a Trend. Take any currency and look at a 5 minute - 1 hour - 1 day - and 1 month - all 4 charts tiled on your screen and I will then ask you: "What IS the Trend?"
The trend is your friend. Trade with the trend. Pigs get slaughtered. We traders like our sayings. Well here is the correct answer to the question I posed. There are many concurrent trends depending on the timeframe. It ALL relates to TIMEFRAME. And the ONLY trend that is YOUR friend is the one on which your trade depends.
OK so you already knew there is always a trend governing your trade but how do you determine which timeframe to use? You could get stopped out a thousand times while following one of those sage addages. Reason is is that the trend signals will not change PERCIEVABLY at a main pivot. By main pivot I am refering to one that is an actual trend change on this wave's timeframe.
But get this: the timeframes we all use as standard settings on our charting packages are NOT necessarily the timeframe being used by ANY wave at the moment.
Did anyone ask the wave? (now they think I am losing it)
That is right - a standard technical analysis setting on a standard timeframe may miss the wave's own clock. This is the main problem with many methods. Whatever timeframe you call up... that's where the analysis gets applied, right? So if you hit it by chance let's say and the trades were working for a while but then the trend changes and it doesn't get recognized (remember our secretive robotic friends, the indicators).
It is likely that at that point the analysis which was working will fail for more than half of the following move causing much whipsawing and many stoplosses. This is because each wave has its own timeframe and the new move is on a different one than the last and yet the trader continues to apply his analysis on the former timeframe. Is this possibly the reason oscillators, EA's and Bots (and traders) leave anywhere from 40 - 70% of the super trades on the table? By super trade I mean the total potential from main pivot to main pivot on a given time basis.
I've mentioned a wave's "clock". What exactly is that? Well whatever it is I do know that the wave and consequently the super trade "run" on it. Standard timeframes are NOT the only timeframes there are. There is such a thing as Fibbonacci Timeframes. These things I have described have so much impact on the technical analysis as to render the wrong approach being applied and having an effectiveness of basically useless about half the time.
But this is why I wouldn't touch automated trading at all. Maybe that is the consensus you are getting? Sure are a lot of traders banking on "exotic" / "robotic" indicators/software/EA's.