YouTube video: https://youtu.be/Q6gOIKQjl44
This follows up on my Jan 29 warning of the danger of a major top coming in markets. This technical study is a good one for highlighting the historical record of periods like we have had in the last two weeks and what may be coming.
It also gives the case that this might not be a major turning point from the beginning of the current bull market in 2009 but just more of the normal correction. They talk about the need to watch the forward trend and not let established trends or preconceptions of traders (bull and bearish) prejudice a traders actions in the immediate sense.
Most of us work on shorter time frames most of the time, but every decade or so there are two big opportunities thanks to the greed and fear of the market makers. These are Global Recessions and are a disaster for the world but a gold mine for those who prepare in advance.
Do whatever trading you do normally, but keep an eye on the US Dow and US SPX CFDs because it is the chance for big moves with a little entry. The key is the monthly, but you can also watch the D1 and W1 for the beginning of the turn down (plus you will hear the screaming in the financial programs.).
I am NOT talking about the 10% and 20% corrections, but rather the big destruction of capital that occurs due to big market adjustments in the world. In the US it could happen almost anytime (if Warren or Sanders win in Iowa?? maybe, but for sure it it looks like Trump is out.)
I would expect more of sideways period now due to the global trading, but when the Crash comes it will come full on just as it did in 2008. Obama was at the right time to turn things back up but it would have happened no matter who was president. Presidents are NOT magical people and they don't determine when the crash or recovery comes.
Even with 1 position in 2009 until today, it would have really been the big gain of $150,000 if people had the nerve to enter and hold until today. This is why rich people stay rich, they can afford to be patient.
The idea of this system is obvious, but to state it anyway: the higher time frame gives the most general direction and signals can be taken when there is confidence that the probability (NOT the certenity) is the trend can continue ... more or less.
Depending on the pair and its characteristics, lower time frames can give more insight to timing the exact entrance or exits.
As to the Chinese advice of "never test the water with both feet." Use the minimum lot as the trade indicator and add positions only when the position remains in positive territory. Exit all positions on a trend change. Avoid positions when when the trend is flat and not rising or falling.
I like to use the median price so that the big moves are averaged into the trend and also I avoid a hasty decision based on a closing price with little volume behind it.
I get asked a lot if I know a good trading robot... sorry, but after 30 years the answer is still "no."
But I do have some ideas to share with my family since that is my focus now that I am retired. See below the chart about what not to do that comes first.
Update on MT4 Signal Investicum.
First announcement from the Signal provider: see attached image.
Investicum started to lose more positions but since I monitor closely and consider drawdown the most important criteria I shifted the signal from my live account to a Demo account to watch it for about 3 weeks.
I have always been critical of the counter-trend investing when the Signal looked for so many short term quick profits, but it was working from October 2018 until this Spring. Since I watch for the eventual drawdowns I reacted to protect the profits that had accumulated. Everybody knows that no signal or system is profitable forever but what people need to do is be ready to move to neutral (like on a Demo) or cancel completely and watch to see if the party is over.
My subscription ends on 5 June and I will let it run out on the Demo.
I decided against going to the new signal because it seems the only thing that is different is the introduction of some money management and a more open trend following method, however the new signal is buying the GBPUSD which I don't think is a smart trade this week with the clear trend down and the bad news coming with Brexit, PM May being ousted, and the turn to harder Brexit which I think is all bad for the GBP for the coming months
My main interest is finding a good way to hand over trading to my family since I am now retired and Investicum isn't a good prospect for this now.
My main trading interest is still using Laguerre and Hull Moving Averages on longer term charts coupled with the price movement awareness that Renko charts give, so I use the pair of charts for trading. This is all described in my posts on my profile page.
One last thing on Investicum: The Signal stopped trading for about 2 weeks during the worst of the volatility and news/confusion. I stopped trading around the end of the month to now. I will resume this week.
Investicum (Signal for MT4) update:
I subscribe to only one Signal and previously I reported that it has not made a loss during any of the 8 months I subscribed since October. Unfortunately this update shows a loss from March 1 to today (April 15). However I am staying with the Signal for now.
--The signal concentrates on long positions over short
--The signal focus is on the GBPUSD and the EURUSD, both of which have been volatile due to the Brexit confusion in the UK
--The Stop Loss and Profit Target is managed manually (apparently) with initially no SL or PT with both added shortly after trading with a "disaster" setting -- unreasonably wide range just to have one entered expecting to manually close or tighten the range later.
--This increases risk since the trends are often counter-trend rather than with the longer dominant trend.
You can judge the results yourself and look over my previous posts on this signal and the Signal's MQL5.com webpage
A few weeks ago I posted a comment on the signal Investicum. It performed well for 5 months and as of 28 Feb it is running a nice profitable trading program. I recommend you look into it if you are looking for an MT4 signal to use.
Since March 1 there has been a slight glitch that I should add but please remember this is a very short period to evaluate a signal and not nearly something that changes my opinion. I just want to highlight how it interacts with my trading, in particular the Stop Loss program I am using: Envelopes Trailing Stop.
The first two trades were a signal error that was immediately reversed. The lot size was incorrectly entered into the Signal and sent out. It was reversed so the loss was small. S*** happens. The signal was profitable for the next set of trades but then a lot of stop losses were hit that was due to the signal's trading strategy and my Stop Loss system. In response I changed my Stop Losses for the EURUSD.
The signal is biased toward the long side of EURUSD and trades against the general trend for quick profits. The signal provider picks and chooses the entries carefully so the system is profitable each month for the past 5 months, but as a trend follower this makes me nervous.
It turns out the Envelopes Trailing Stop trails all trades of the pair and not just the trades on that chart. A second chart for my trend following trades of EURUSD did not segregate the trades by my manual trades vs signal trades. So my SL would stop out the Investicum trades that would be immediately be reentered causing a lot of small losses and increased number of trades.
To avoid this I now only trade the 1 chart and use pending orders in the case I was to do a trend following trade.
Cheers. My next post will show my chart with the SL attached for the current trades.