A-B-C-D Trade - page 241
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thank you ,, i just read all ur views and use as much i can reach u thats all , ur guiding me and im corecting my mistakes thanks again
Review of OS Trade
Attached is EUR/USD 1-hour with PSQ9 set at 45-degree intervals for both Moon and Mars. We spoke about how price tends to bounce when these 2 lines cross (intersection).
When we zoom in on the intersection, we'll see it can cover several hours. Enter doesn't have to be at exact dead center.
We marked the a candle in the intersection with a yellow "X", at 07:00.
Our fib channel plot is from the Moon 135 to the Moon 225 upward.
The fib channel has the following negative values inputted:
-25 (Entry)
-31.4
-40 (Stop Loss)
The fib extension levels include 31.4, which is the Take-profit (TP)
We also plotted horizontal fibs (gray) using
High = Oct 17th 08:00 1.39132 Low = Oct 17th 21:00 1.37232
The market came into the opening sessions very bearish Euro, after conclusion of the G20 meeting and warnings to the EU to have their plan in place within one week.
Other headline statements followed, including one by Germany's Merkle, something to the effect that it won't be fixed overnight, etc.
Anyway, things had to calm down during the European session before we felt comfortable with a BUY position.
Price consolidated after initial push down from the Asian session. The Stop-Loss zone at the -40 and 138.2 fib held its ground during this period.
Price subsequently made its way to hit the FC 31.4, closing the 16:00 candle right there at 1.37380.
If entry was on the curl back up off the bottom, at the -25 of 1.36692 + spread = 1.36772, that is effectively the same as entry on the way down.
S/L at -40 = 1.36536 + cushion = 1.36506.
R/R 60/27 and ratio of 2:1
Attached are 2 pics of manually back-tested trade performance of a system in our commercial development division, from the start of 2011:
GBP/USD & EUR/USD employed the same system, which was designed for choppy or consolidated market movement. Amount of lots scaled at 1.5% risk per trade. Profit factor (R/R) is 1.4:1.
Each pair has 2 bar charts. One tracks the Weekly ROI of original account balance. The other chart illustrates growth, compounded.
GBP/USD had a win percentage of 58%. Out of the 41 weeks, it only suffered discernible negative weekly ROI 8 times. Growth is 231% Year-To-Date (YTD).
EUR/USD had a 62% win percentage. Similarly, it only had 5 negative ROI weeks. Growth = 498%. This system had a spectacular September with this pair, and thus the higher growth can be seen at that part of the graph.
Performance differed between the 2 pairs, in that GBP/USD had a better 1st quarter of the year. Here is the quarterly ROI:
GBP/USD 48%/7%/32%
EUR/USD 10%/46%/96%
As we can see, we have to be patient as performance can fluctuate. Don't throw away a system too fast. We can also see that it performed very well during the volatile 3rd quarter.
Build your system with a good R/R. Make sure that system can survive or thrive during choppy periods. You know what they say: the market is only trending about 25% of the time.
Generally, that can translate to (in the long run), these systems winning just 1 out of 4 trades. That would require a very high profit factor (R/R) of at least 4:1 just to break-even.
On the other end of that spectrum, we can design our systems to have a good R/R and survive choppy market conditions. Here are some examples:
At a profit factor (PF) of 1.4:1, applying 1.5% risk per trade:
Wins = 9
Losses = 11
Initial reaction is that we had a tough stretch. The calculation is that this is actually a 1.4% ROI.
If the profit factor is 2:1, things get even more interesting.
Make sure you understand this part of trading, and can conduct the proper calculations. A system with a good PF doesn't need to have a high win percentage to be profitable.
We placed a simple spreadsheet that calculates risk/reward on googledocs. Think it also comes up if you google fxbaja. It's named "Quick Scaling". Click "Use This Template". Make inputs in purple boxes. Here's link:
https://www.mql5.com/go?link=https://docs.google.com/previewtemplate?id=0ApbniYyOER5MdEJXXzJhQ05pZ0VuY1JPb2dtZW04X3c&mode=public
Breaking news - Germany and France increasing rescue fund by 500%.
Sean Egan, head of a credit agency Egan Jones, states that this also can be viewed as an increase in exposure and result in a credit downgrade.
Anyway, this explains the current spike up in Euro and stack market.
Here's the CFD XAU_USD that tends to mimic Gold Futures.
Classic ABC:
A = Oct 17th 09:00 high 1694.45
B = Oct 17th 18:00 low 1664.38
C = Oct 18th 01:00 high 1676.48
D = FE 161.8 1626.97 (hit Oct 18th 14:00)
Pullback back to Point B.
With MurreyMath1.0, and RSI(4).
BAJA bearish divergence at 2nd peak Oct 18th, and at MML 4/8th.
Fib channel plot from Moon 225, pulling up to Moon 315-degree.
This version of the OS trade has:
Entry = -31.4
S/L = -40
Tp = Moon 315
Entry triggered Oct 13th 10:00 hit to -31.4 1.2328 + spread/cushion = 1.2332
S/L -40 plus cushion = 1.2317
TP at Moon 315 1.2365 + cushion 1.2363 hit Oct 13th 13:00 period.
Additional guidance trader can use is the RSI(4), which registered oversold below a reading of 15.
Reward/Risk = 33/15 and Ratio 2.2:1
Here is a 1-Hour PSQ9 chart. Multiple tool and plots catch the 10:00 top.
Horizontal fib plot (white):
Low = Oct 18th 14:00 1.36516 High = Oct 18th 19:00 1.38162
Price hit the 127.2 during the 10:00 candle period.
Fib channel plot (not shown), pulling down from the Moon 45 to Moon 315. This has the 10:00 top price of 1.38667, as its -31.4 precisely.
Mars 315 (not shown) at top.
Yellow trend line is previous week's Moon 0-degree, acting as resistance.
BAJA bearish divergence at top.
Entry 1.38637
S/L just above FC -40 1.38750
or just above 138.2 of 1.38813
TP1 = at +31.4 of 1.37923
TP2 = Moon 270 level intersecting 23.6 fib of 1.37786.
Net each scenario:
TP1: Reward = 65 Risk = 15 R/R ratio = 4.3:1
TP2 : Reward = 80 pips Risk = 15 pips R/R ratio = 5.3:1
Previously, we had featured a GannBox_144 on the 4-hour EUR/USD, which pointed out turning points in between the vertical 1/8th lines. The start point was Jan 10th 12:00 price 1.28723. Height = 14,400 and width 360. Attached is a continuance of that box. What we did was simply used the Cycle Lines tool to get extended intervals, since the box completed its 8/8th. The mid-point of the 45-candle vertical intervals is 22 or 23. The 138.2 extension achieved April 6th during the 12:00 candle is the 22nd candle midpoint (aqua arrow).
Hi,
Is the "Height = 4,400 and width 360" the best settings for 4hr?
Attached is 1-Hour GBP/USD with MurreyMath1.0
We can see 2 instances where price overshot resistance MML level to -25%.
1st example: the fib channel plot is pulled down from +2/8th (A label) to 8/8th (B label).
Overshoot to -25 on Oct 10th 16:00 high 1.56877.
Price made the hit to the +31.4% Oct 12th 01:00 low 1.55413.
2nd example: Since there are no levels above +2/8th, just make a plot between 3 MurreyMath lines, and drag up.
Overshoot to -25 on Oct 12th 14:00 high 1.57971.
Price made the hit to the +31.4% Oct 13th 12:00 low 1.56649.
Both examples also had BAJA bearish divergence.