hi john...long time...how are u keeping...good i hope...

i want to offer u some advice...and do not take it the wrong way...please...but i can now honestly tell u...u are barking up the wrong tree...altogether...u need to step back and re-think about so called systems...for the markets are far from random...although many will have u...and the majority think so...for obvious reasons...the markets are indeed predictable...but only to the few that know...and i have been fortunate enough to meet some of these traders...that is why i am now trading options and making good money...30% in 12 weeks actually...hard to believe...but true...and u know i always speak the truth...for it is the only way...so...what u do is of course ur own choice...i just rembered you as a truthful person...so i just wanted to share my truthful discoveries with you...

rgds...cyof

In just two days the EURUSD rose nearly 200 pips. However, each time the currency approaches 1.37 the trend normally reverses.

There are many reasons for that, but one is the amount of option barriers with a strike price at 1.37.

Attached is one way to identify these barriers.

One can take advantage of this information to sell when the price reachs the option barrier.

To find more information please visit
http://www.cme.com/trading/dta/del/delayed_quote.html?ProductSymbol=EC&ProductFoiType=OOF&ProductVenue=G&ProductType=cur[/url]

Attached Images

 

Antonio the post you have is very interesting but I don't understan it. Can you direct me somewhere that I can learn to read your post.

hi,

i use the 5 minute slow stoch tactic, and it works really well for me. im in the uk, and place my trades after 8.30pm. i just wait for the stoch to be either over 80 or under 20 for a buy sell entry. i set a 100 pip stop loss, and a 30 pip limit. i trade 7 currencies doing this, and usually 5-6 of these are 30 pip profits and i may get a slight loss on 1 or 2 of them. i trade 100k lots, so the profit per day is not to be sniffed at!its a mathematical probability that the pair will at some point adjust itself back to a mean point, and by only taking 30 pips profit, you increase your chances of success. a 100 limit stops you from getting stopped out unneccesarily, but also protects you in the event of a breakout. usually by around 2-5pm the next day, all the trades have hit the limit, but never the loss. i closes all trades before 8.30pm and start again. its a good way to make pretty easy money, and keeps things ticking over!!

any comments?? critical comments etc??

shaun

Hi Shaun,
I took a look at the ---- signal service. But I do not see any true reports of their results not to mention any drawdown data, average trade size data, etc. etc. Also the writing that first for free and then only 99$ which is less then the half of the monthly subsription fee sounds to much of a marketing aproach and signals for me a red flag to even try the free service. But I am interested to find out about your findings you would like to share.

I also wanted to ask you about your aproach. For how long have you been doing this strategy and do you see any improvements or weaknesses in it you would like to discuss? Also, the term you write that it is a statistic probability the price will regress to its mean. How have you quantified this?
If so, have you quantified the probability of succes with different s/l and profit ratio's to come to an optimum. Or are you still working/improving on the strategy?

Cheers,
Danny

Hi Danny,

Regarding the ---- service, like you said no data is available, but im just trying it with the demo account to get some results. i am always very dubious when people sell their secret ways to make a billion!!!

On the other subject, my theory is that whether a market is trending or trading in a tight range, the daily upside and downside will quite often be a similar amount day to day. So I enter the market just before US closing, a point at which the market seems to be very stable. US opening seems to signify movement, and setting of the days price extremes. So I enter the market as the US is closing, and it is very time specific, ie if i enter much later it doesnt pay off as much. When i get the signal from the slow stoch set at 14,3,3, I either go long or short. Also, by setting my stop at 100, this seems to prevent me from getting stopped out when asia etc opens, as my positions always go losing straight away!! All the currencies I trade are usually in a range of less than 100, so by setting my limit at only 30, ie the bottom to bottom third of the average daily range, i usually profit. It seems to work for me, its stress free and is good money. I have never had a trade close out on a loss, the most I have lost on a trade is £110. I close any remaining trades before I start again. I am usually picking up £500-600 per day, so its not bad!! Always on the lookout for other things though Danny, so dont be shy!! Shaun

Thanks for the feedback Shaun.
The funny thing is that I am working on the same concept for the past weeks as an experiment beside my normal day trading strategy.
But I am not using the stoch. but I am using the %R indicator and have different s/l and tp. levels. I was thinking of using the ATR to get some dynamic feedback to establish the proper s/l and tp. levels for a more optimum placement. It is experimental at the moment and I am not using it for my daytrading at the moment. But your work seems to confirm the strategy and thus making it more apealing to further look into the ideas and allocate a small part of the capital to start working with it also. Are you using exotics or just the main currencies. I focus only on the main for tighter spread reasons. Do you make a correlation analysis of the possible positions or you just take every stoch. signal at its currency for the same nr. lots.

Cheers,
Danny

Hi Danny,

The stoch works very well for me, and that is the only indicator I use for this strategy. As long as both the lines are above or below 80/20 i enter the market. I often find that the price increases/decreases still further after I have entered the market, so there could be potential for further gains of maybe 10 or even 20 pips per trade. But having said that, The upside/downside extremes are altered each time this occurs, ie a new low is set on a long trade immediately after i enter, so the possible upside target could be reduced by the same 10/20 pip new low, if you catch my drift? So it is difficult to try to predict negative movement away from the initial entry point, before a correction takes place.

I used the ATR initially to try to gauge my limit and stop, and get a general feel for the range, so in that sense we are certainly on the same wave length. I only trade USD/CHF, GBP/JPY,EUR/GBP, EUR/CHF, GBP/CHF, EUR/JPY,GBP/USD. Interestingly, EUR/GBP trades on a very tight range, and is the most valuable trade I do, and I (nearly!) always hit the limit! I trade each currency on the same sized lot regardless. This strategy also seems to be immune from news response trading, interest rate changes and commodity prices, probably because the limit is tight, and regardless of these factors, a currency will always trade a daily range. I have tried different stops and worked upto 100, so if there is a breakout over 100, im not going to go broke! Also, I tried different limits, and perhaps some of the currencies you could easily get away with 40-50 pips, and hit them consistently, but 30 seems to work for me.

I have tried the RSI a bit, with varying success. You can see a very overbought signal, ie the GBP/JPY etc recently and still it rises. However, with small limits and stops just outside daily range, that would be also an interesting strategy. Good to share ideas, Cheers, Shaun

MACD & RSI IS GOOD TO USE TOGETHER IF U R A PIP TO PIP TRADER (BECAUSE IF YOUR MACD IS LOOKING GOOD YOUR RSI INDICATOR MIGTH BE BELOW -25 & U THINK U HAVE A GOOD BUY BUT U DON'T,BECAUSE YOUR RSI IS SHOWING WEAKNESS U DON'T)

Shaun

Does this work in a strong trending market, when stochastics can stay over bought/sold for a long period ????

You are on the hourly charts ????



Only thing my newbie self has learned to do is to verify signals by looking at the trade from differnt time frames. The more time frames that are congruent with my long/short; the less chance I have of being on the wrong side of the net order flow.

Hi i just started trading about 2 month ago, still learning. I see that Shaun's idea with the 30 pips limit is really interesting i was wondering what time chart are you on? thankyou

hi Shaun
I am really interested in your strategy, could you answer the following please;
What chart time frame do you work from?
I am also from the UK, so I am assuming you are using a spread betting company?
If so would you mind telling what £price per pip you trade & do you need a large bank to work with to set up 7 trades?

Many thanks, I am just trying to work out funds for when I move from a demo account to realtime.

regards

kevin

1. Impressed with your method. A contribution from me follows, that I hope is not obscure and is of interest.
2. I work on 2-minute bars, referencing 15, 30, and 120 timeframes. I use momentum 6 and trade on every micro cycle period that I subdivide into eighths or sixteenths periods. No one should think it is essential to be so complex - I am cursed with such a mind.
3. The comment on 'immune' is very relevant. Although I am seen in the Forum as a forecaster using mathematics, for trading to make money we must needs develop an automatic system and forget the outside world, past present and future.
4. For the above reason, I appreciate your using many crosses. Crosses are also less affected by hedge fund games on news announcements and my favourite is EURJPY, which is an elegant and smooth pair that also trends, making easier entries. But a range-bound market is as good as a trending one - as you point out, a pair will travel a number of 'pip miles' in a period.
5. On your 30 limit, it is statistically correct that a market e.g. GBPUSD, will range three sixteenths (97% daily probability) to strongly trend up to seven eighths (5% daily probability) square root difference on the price in a 24-hr period. An eighth SRD on cable is currently 36 pips, so you can do your own calculations for that and others or use a Gann wheel (34 degrees to 157 degrees on those probabilities).
6. If, by deciding on direction at the previous NY close, and you get the main direction wrong for the following day, just under one eighth will likely be good enough to hit your limit order before it turns. However, if you do not re-enter in the daytime, pips are left to waste!
7. 100-pip stops means effectively no stop until you decide you are wrong (?). I like it - and myself do not use stops at all.
8. For European majors, the lowest true volatility or momentum is 3-4am GMT, and the first tradeable signal is not often one remaining from the previous day, but at the London open, say between 8.00am to 9.30am BST. So for your method, I would with respect consider if overnight positions are worthwhile - can be expensive in interest - unless a large move has completed and a new cycle has commenced.

Best regards

When I worked in Hong Kong, I knew of a trader that only traded the overlap or shadow from the end of one day session into the early part of the next. He made a few points every day on the Hang Seng.

Shaun's method reminded me of that, so I hope he does not mind that I have done some stats on cable to show the probabilities if you automate an entry order at the New York close. It is possible to fine-tune for each market to increase accuracy and profitability.

My recommendations are given below. By increasing gain:loss from 1:1 to 1.5:1, monthly ROCE will rise from 80% to 377% on a theoretical 50:50 win:lose performance. If anyone is interested, I can publish the performance projections.


Tony Gold

Thanks
arco