This thread is opened to allow side-discussions that arose from Tymen1's excellent thread

on trend trading. Trolls will find no home here and flames will simply be ignored and not

responded to. Otherwise everyone of all experience levels are welcome and wide ranging

discussions of trend trading are encouraged.

I'm in favour of trying that kind of approach, as well as trying the 5 lots system.

Some of those walks are begging for a ride, and using 5 lots allows that to happen.

Any thoughts on trailing stops? Set a target per lot (as you mentioned earlier, first to 30,

2nd to 40 and so on). Use candle patterns or the closing of the opposite BB?

Many interesting possibilites to create a productive exit strat here.

I manually trail stops as I have found no automatic trailing stop setting that meets my

needs. My first goal of moving a stop is to remove all risk to capital from the trade. After

risk is removed, I want to use profits to make profits.

Once risk is removed from the trade, all effort is devoted to not reintroducing risk and

maximizing profits. I use candle patterns, Bollinger Bands and everything else at my

disposal to minimize risk and maximize profits.

5 Lot Position Sizing

Let me be clear that I am not encouraging anyone to over-trade. Over-trading is a quick

and sure path to failure in Forex. The 5 lot strategy is used to minimize risk and maximize

profits only with correct position sizing. To start with this strategy you should demo trade it

until you have found it either works for you or it doesn't. It's not for everyone.

So this is what I suggest. Set up a demo account. $1000 to trade micros, or $10,000 to

trade minis. I will refer to lots and pips. A lot for a micro demo is 1 micro. For a mini demo

it is one mini. Of course, for a $100,000 standard account it would be one standard lot. But

for simplicity I will just refer to the unit as a lot.

The positions are taken as follows:

The first lot entry is made using Tymen's BB DNA method with stop just outside the

extreme candle (allowing for spread) just as in his method. The stop will vary depending on

the TF being traded. I will exit that position if it goes negative more than 15 pips. The

reasoning is if I have made a good entry it should never go negative beyond the initial

spread loss more and just a few pips. Since we are entering risking our trading capital, we

are completely concerned with minimizing risk to that capital until all risk is removed from

the trade. So at this point, it's all about minimizing risk to trading capital.

If the trade goes positive we let it run. When it is 15 pips ahead, we move the lot #1 SL to

BE and enter lot #2 (same size as lot #1) with a 15 pip SL. Note that we now have 2 lots

on, but our risk is now about the same, or in some cases much less, 15 pips max.

If the trade goes negative we have a decision to make, let both trades run negative until

they both hit SL, losing 15 pips, or exit with less than 15 pips loss.

At this point the results would be close to the same either way, but remember the rule,

"Trading capital is sacred. Only profits are for risking to make more profits."

If the trade goes positive, we are in a happy place. When lot #2 is 15 pips ahead we move

it's SL to BE, move lot #1 SL to capture 15 pips, or +15 pips, and enter lot #3 with a 15 pip

SL. We now have three lots in, and have removed all risk from the trade.

If the trade goes negative, we have the same decision as above, but there is now no risk if

it stops out. We are now in a happy place, three lots on with no risk. This happens several

times a day in my system. If it stops out we go look for another trade. "No harm, no foul"

If the trade goes positive we let it run. At another +15 pips we close lot #1 for 30 pips

profit. Move lot #2 SL to capture +15 pips. Move lot #3 to BE and enter lot #4 with a 15 pip

SL. We have now captured 30 pips profit and removed all risk from the trade. Once we are

at this point, all risk is removed from the trade and now the point is only to not re-introduce

risk and to maximize profit. It's easy the rest of the way.

If the trade goes negative we let it stop out and happily take our 30 pips profit and go

merrily on our way. It yields a 1:2 risk to reward ratio which is considered by most to be

very reasonable. Risk to trading capital was well contained throughout the trade and the

potential for greater profit was there, it just didn't work out this time. This will be the result

most of the time with good trade selection and Tymen's entries.

If the trade continues to go positive, at +15 pips we move the SL on lot #2 to capture + 30

pips, move the SL on lot #3 to capture +15 pips, move the SL on lot #4 to BE and enter Lot

#5 with a 15 pip SL. We are now riding the breakout with 4 lots. This will happen about

once a week in my system.

If the trade goes negative, which it will half the time we let it stop out and we now have 60

pips profit for an initial 15 pip risk, yielding a 1:4 risk to reward ratio, considered to be

excellent by most.

If the trade goes positive, which will happen only about half the time, we let it run,

adjusting our manually trailing stops on the 4 lots to 20 pips now since, "Profits are for

risking to make more profits." We ride the breakout as far as it will go. This only happens

about once every two weeks in my system on average. Though I have had it happen several

times in a single week. That's a good week!

When we see signs of a reversal, we have a decision to make. If we think it's just a little

bump, we may decide to ride it out. If it is more than just a little bump then we were

wrong. We take profit off by closing lot #2 and tighten stops back to 15 pips on lots #3, 4 &

5 in case of a spike against us.

If it continues to drift against us, we have a decision to make. We definitely do not want to

lose any pips back. if the remaining three lots look like they are going to go negative as a

group, close all three lots quickly and go merrily on your way with 80 to 100 pips profit off

one trade. If it turns and starts to resume the break out, or BB Walk, we'll keep the 3 lots

on and manually trail the stops, but this time more conservatively, "Once burned, twice

shy." We NEVER want to get in a situation where we have to give pips back. That is the

WRONG way to trade this position sizing system.

Any questions?

My system uses multiple time frames, from 1 Month down to 1M. There is lots of philosophy

and math behind it but I won't go into most of it. This however, you need to know.

Every tick on the tick chart represents a point where a buyer and seller have agreed on a

price. It represents the market consensus of price at that point in time. It is right by

definition. It is valuable information. In the most extreme case, we will even be watching it

tick by tick, but in most cases that will not be necessary. Most of the time I will keep the

tick chart for EURUSD displayed off in a corner as I trade. Being the most traded pair, it's

sort of my market barometer. I don't have to glance at it often, but I do sometimes.

The reason I don't have to look at it very often is the motion of all those ticks is nicely

compressed into the one minute chart giving us the most important information each

minute, open, high, low and close. Often the 1M chart doesn't carry as much detailed

information as the tick chart, since it's highly compressed data, but for our purposes it's a

nice summary of what happened for the last minute. So for most practical purposes the 1

minute chart gives all the definition of price movement we will need. The 5M chart is the

same information, but even more highly compressed, giving the range of the last 5 1M

candles. We lose a little fine detail of the data, but it starts to smooth out more. But realize,

all the data in the 5M chart is just a sort of a smoothed out sum of the 1M chart. It's the

same data, just shown in a different way. And so on, right up the line to the one month

chart. All the larger charts are just compressions of the data of all the smaller charts, all the

way back down to the tick chart, where the actual uncompressed data is shown.

So the long term trends do not control the shorter time frames as many believe. It's really

the opposite. The long term time frames are just a compressed representation of the

shorter time frames. In that sense, the tick chart controls them all.

But we will spend most of our time using the mid timeframe charts, at least to start. There

is good reason for that and it will be obvious as we move along.

This is the underlying philosophy of Multi-Time Frame Trend trading. All time frames are

really just the same price information shown in a more or less compressed form. Time is

arbitrary, something someone chose way back when. But price is the real information we

trade. We don't trade time, we trade price.

So the answer is, we will trade all time frames at once. It's not a difficult as it first sounds.

The monthly chart only forms a candle a month. So if you had a really good memory, you

only need look at it once a month. Since I'm old and my memory isn't that good, I glance at

it quickly every morning. And so on down the line. I'll answer any questions if you have any.

But I don't think it's challenging enough for this fine group to just trade all time frames at

one time, so we we will trade multiple lots in all time frames (see my multiple lot description

above). And really, for a group with this much promise, I would be remiss unless we did all

that in multiple pairs at the same time. So fasten your seat belts and hold on. This will be a

wild ride.

The logic of trading multiple pairs at the same time is simple. We want to diversify some of

our risk away. We can't diversify it all away, but anything we can do to reduce risk to our

trading capital we will try our best to do. Why? Because, "Trading capital is sacred."

Also, we make lots more pips trading multiple pairs at the same time, but that just a side

benefit

I will refer to Tymen's BB DNA entry method here, as I have adopted it into my system.

Anyone who hasn't any exposure to it should read his enlightening thread on the subject of

trend trading. To make things simple though, we will use the "simple" entry method he

discussed for the most part, which is when the candle just pulls free from the Bollinger

band. We will give a glance to the single CBL though, just to help make better entries.

EVERY trade consists of only 5 parts.

1. What is traded

2. The direction of the trade

3. The size of the position

4. The entry point

5. The exit point.

We have already discussed how we will handle 3, 4, and 5. So all we are left with is 1 and 2.

I'll be happy to answer any questions on 3, 4, and 5.

With what you know now you could probably throw a dart at a list of pairs and flip a coin to

pick direction and do better than 95% of traders, but we want to do better, much better.

So we will first start with #1. Pair selection. We will want to trade only the best pairs, but

by what criteria?

OK, some more philosophy you will need to know.

There are two camps about price movement in the markets.

The theory camp says price movement is a random walk with no real discernible direction. If

that's so, no one can make a living off just trading price because the spreads will always

cause them to lose in the long haul.

The practical camp says price is driven by individuals who are trading on fundamental

information, at least part of the time. That creates trends and then more people jump on

those trends making them larger and longer. This is called the "fat tail" of the markets,

because price moves differently than a math model like a normal distribution says it should.

There are trends that create a tail of extreme moves out on the end of the curve.

Everyone here should believe that trends do exist in markets. If you do not believe that, I

can't help you. Now, our goal is to get on those trends when they have shown themselves,

and ride them as long as is reasonable to do so. To do that, we want to select pairs that are

trending.

It's very important we don't try to force a trade. We want the trades to come to us,

effortlessly. So now we know what we are looking for, trending pairs. But, you might ask,

trending in which time frame? We trade price, not time. It would be wonderful if a pair had

a price that was trending up in all time frames. That would be an easy pair to select to

trade. But things are rarely that neat and tidy in the markets. I have seen it happen a few

times though, and predictably, price went up, at least for a while.

One thing you can see right away is when we have #1 answered, we will also have #2

answered, which direction to trade. So we are really down from 5 questions now to just one.

See how easy this is?

So let's rephrase #1 as pair selection, for Forex trading, and look at it from a different angle

Originally Posted by RenaLa

Graviton, please correct me if I wrong

If the trade goes positive then we will close a lot once it reach 30 pips

and let the rest continue to run for profit? right?

sorry for my english I will verify from time to time

Good question. Yes, generally that is what we are doing with the 5 lot strategy, throwing

fresh lots on the bottom and pulling chunks of 30 pip profits off the top.

I have given an average case in my example. Remember my rule, "Every rule has an

exception, and every exception has an exception."

In very active fast moving markets, or very volatile, 15 pips may not be enough SL to keep

you in the trade, you may need 20 pips. In that case you can pull 40 pip chunks of profit off

the top. You will see that when both London and New York are both trading.

In very slow moving markets, like right after NY closes and Before Asia opens, you may

need to adjust SL down to 12 (or even 10) pips. In that case, you will be taking 24 (or 20)

pip chunks of profit off the top.

You can use the Average True Range indicator to help decide, but after a while you will get

a feel for it. 15 pips is just an average case. We can talk about it more as we get into demo

trading.

Originally Posted by RenaLa

We need to find where "fat tail" is and where it started for each pair that we going to select

Very correct!

So we are on a treasure hunt for trending pairs, but trending in which time frame.

Looking at it from another angle, we know that shorter time frames yield smaller trends.

Like with the 5M the outer band to outer band BB moves are only about 10 pips or so on

average. That's one reason it's so hard to make a profit there. By the time you identify the

trend it's half over and what ever you can get is eaten up by spread. If you look at the very

long time frames, like the monthly and weekly, their trends move thousands of pips. But

those trades come around rarely and you have to enter with a really big SL, which is not the

same as a really big risk, but perhaps we'll get to that in a position trade addendum to this

thread later.

We also know we want to pull off chunks of profit about 20 to 40 pips in size. So our trends

need to be a little larger than that for us to get in on them and pay the spreads (lots larger

is nice too). Say, 30 to 100 pips bottom to top. If you look at the Average True Range for

moves in the majors, you'll see those sizes of moves occur sometimes in the 1H and often

in the 4H and Daily Charts.

So that's where we start our treasure hunt There's a rule, "Do not trade dead or thin

markets." It's in my list of rules in Tymen's trend trading thread. There must be a hundred

of the darned things. My suggestion is you print them out, clean them up, ask questions if

any aren't clear or seem contradictory, then start adding your own. I just put down the ones

I could think of off the top of my head. I'm sure I forgot some. I forget things sometimes.

Anyway, read them each Saturday when the market is closed and add to them as you

discover good new ones. Thats really how old timers trade. Notice, you don't see lots of

poor old traders

So, back to the treasure hunt. Let's start with the majors. This is something you need to

learn to do, because you will be doing it a long time. Open up your chart software and look

at the monthly chart of eurusd. Adjust your zoom to see about 4 1/2 years of candles, back

to around mid 2005. See any trends?

Of course. They are easy to see. The eurusd trended up for about 2 1/2 years, then down

about 9 months, then back up about 11 months, and most recently down another 5 months.

And look at the sizes of those trends! Thousands of pips! Wouldn't you love to get in on one

of those! I can show you how. But let's move on for now. zoom in to get a better look at say

the last 2 1/2 years. see the trend down that started at the end of Nov 2009? We are still in

it, but it's curling up a little at the end, just in the last month.

it was uptrend until the crisis in 2008 now the price is moving down

Last edited by RenaLa; Yesterday at 04:54 PM.

Yes, good observation. If you look at that same time frame in the weekly you can see more

detail. You can see how it broke up about the begining of march and again just a week ago,

but still making lower highs, so still in a very long down trend.

Now move out to the daily and zoom out to show just this year, you can see those bumps

up clearly. The daily trend was down, but Friday we got an up candle, like it might be ready

to break up, but overall that is sort of flat now, looking at the mid-bb.

Move to the 4H showing just this month, you see more detail of the down trend and this up

kick at the end of last week.

Move to the 1 hour showing two or three days and you see a good detail of the retracement

already well in progress.

If you look at the last hour candle you'll see a little tick down. if you look at the 15 or 20

minute chart you can see some detail of that last minute turn down on Friday. Even more

detail on the 5 minute chart. now look at the bollinger bands.

See the entry? Ha Ha, you are getting good if you do!

I must take a break now. I've been hard at it for 10 hours. I love this stuff, but I have a

rule. Take care of your health. You can't trade if you are dead.

I'll be back in an hour or two.

Graviton, I am confused

PA (1h chart) didnt reach 1.3420 yet we cant consider it as uptrend. its still retracement?

Sorry, I confused you. I didn't have a chart up and was going off my faulty memory of

Fridays late action. But, realizing when your confused will save you more money than

anything I can teach you. The rule is, "If you are confused, sit this one out." And that's just

what we will wind up doing. Let's look at why.

You and other smart people saw the downtrends and consolidation mess above on the

monthly and weekly (Good Job!). The Daily and 4H are mostly going flat. The 1H, 30M and

15M are in up trends. What a mess! We don't trade messes.

The trend is our friend. The counter trend will kick our behinds in this system. We know we

want to trade right around the 1H since we can grab lots of pips there. But we are flexible.

We will trade what might turn into a multi day swing trade off the 4H if we can trade WITH

the trend (but not on Friday!). But the 4H mid bb is downish and the price has broken

above it. Conflicting information. Even worse, the daily above it is flat. Flat isn't a trend, it

some type of whipsaw generating consolidation mess. We don't trade messes. And we don't

guess. The rule is, Never Guess. This isn't a guessing game. So the 4H is out, for multiple

reasons. If that's not clear, I'll be happy to answer questions on it.

The 1H, where we would really like to make a good day trade, is in an up trend, as are the

30M and 15M on my charts, and we might settle for a really sweet scalp of 15 or 30 minute,

but we could only trade those up. What do the higher level charts say? Flat, Flat, downtrend

consolidating mess, downtrend. I don't think the higher level charts could say we don't have

a good trade with the trend any clearer. Again, I'm happy to answer any questions as to

why.

OK, so we have no good trade under my system. Next we ask, what do we need to get a

good trade? Well, the monthly and weekly won't change quickly or at least not today, and

tomorrow is another day. The 20 SMA mid BB of the daily may be headed for retracement

up, but it's not going to change quickly either.

But look more closely at the 4H. The previous candle was sort of bullish engulfing. A very

bullish candle. The last two candles were up. The current candle has just crossed above a

longterm trendline that was set back at the end of Nov and in Dec and January when

longterm trend changed from up to down. But all of that is just confirming what we we can

plainly see, the price has moved above the mid BB. If it keeps going, soon, very soon, we

will have an up trend on the 4H. That could change today! Above the 4H is still a bit of a

mess, but if the 4H turns to up trend, we can look again at trading the 1H, 30M or 15M up.

This is where you need to pull out your traders journal and make a note so you don't forget

things like I do sometimes. If the mid bb on 4H turns up, look again at 1H, 30M and 15M for

trades.

What else could happen to give us a good trade WITH the trend?

We could get a trade with the trend if 4H price reverses! The 4H trend is already a little

down. If price reverses to down it could create a down candle for the new day and start to

pull the daily mid bb down. H1 would have to go down for 4H to go down, and of course for

H1 to go down M15 would go down first and then M30 would follow. So, we put another

note in our traders journal, if price drops below 4H mid bb, check for down trades on M15,

M30, 1H.

So in final analysis, getting a good trade with the trend on eurusd requires 4H to take off up

or down. Flat won't do it for us. We see a long wick on the current candle of 4H, it's not far

from the mid BB. It could happen. We now just have to wait.

There is nothing more we can do here. We can't plan a trade until 4H moves. We move on

the next pair.

Hard to believe all that analysis can be done in 5 to 10 minutes a pair, but after you do it

several days in a row it gets repetitious.

Let's look at GPBUSD. Monthly has been in a strong down trend but is now retracing UP.

Weekly same, retracing up. Daily Trend UP. Price action flattening out a bit, but still up

overall. H4, trend flattened after a small retracement, but now price above mid bb. Nice

bounce of the bottom BB. Promising. H1, Oh, looking good. Price driving solidly above mid

bb. Top bb trumpeting open. Oh yea. You need to see what other people see on this one.

Set up an additional GPBUSD chart. put price, Bollinger bands, and a 12 period RSI with a

little heavier line and on the same indicator window put a 3 period RSI with a thin line of a

different color. See how the 12 period RSI is above the mid point. it says buy me. See how

the 3 period RSI is well above the 12 period? It's saying I'm not getting weaker any time

soon. I always set up a separate screen so i can see what other traders are looking at. It

doesn't matter if I believe it is valid, I just need to know what they are seeing.

Going to 30M, all strong up. 15M, good up. It's very clear we have good trends up here.

Now we need to look for an entry. We want to enter on a retracement from the up trend

and get the best price we can. Buy low sell high.

Going to 5 minute and 1 minute, breaking out high. We have potential trades, but not a

good BB DNA entry on any TF that I see. But this one goes to the top of our watch list.

Looking at the M5, the minimum needed for a good entry just because it's not as jerky as

the M1, we get a peak to valley cycle time of only about 1 hour.

We flag this one for entry and watch for a dip in price to at least give us an M5 entry. We'd

like an M15 or better, but we'll take what the market gives us. We'll put this one up on the

tick chart in the corner and look at it's screen every 15 minutes or so. We will get an entry

on this one. We just have to be patient.

Now to another.

You can see the routine now. Let's look at USDJPY.

monthly, up, see the down trendline that runs from about July 2007 to Feb 2010? that was

a long good trend It was just broken march of this year. I don't know if we need to go

further, or just skip to look for an entry

Just kidding, weekly, up: daily, up: H4, up. Starting to see a pattern here?

Sorry the eurusd was so messy and I chose that one first. This is usually more the way it

goes with majors.

H1, up but nice pullback

30M, up, more pullback

15M, bingo. Houston we have liftoff.

You smart people can handle it from here. we'll enter as soon as we get a breakout up on

the 15M chart. this one gets 2 stars in the journal . Watch it close. don't miss the entry.

Watch the 5M and even the 1M. That's where the breakout originates. Well, really it

originates on the tick chart and moves up the time frames. You'll be able to see it coming.

You could probably take a BB DNA entry off the 5M and make an extra few pips. Your

choice. See what I'm doing here, sliding up and down time frames?

So we have a really pretty picture in our heads about what is going to happen here.

If the picture doesn't come true, we toss it like yesterday's rubbish and start to paint

another

OK, you're closer than you've ever been. You understand multi-time frame trend analysis

now. See, that wasn't so painful, now was it?

Assignment: complete a multi time frame trend analysis for 10 of your favorite pairs. You

can include the three I've done, as part of that 10 if you like. We will review later. Feel free

to cheat off each other

Yep, that's it. Nice chart. The RSI doesn't tell you anything you can't clearly see in price

action. We trade price, not RSI. But it's important because other traders are watching it.

Now that you have created a junk chart, may as well load it up with junk. Throw a 100SMA,

200SMA and 50SMA on it. Might as well throw a stoch, macd, and adx on it as well. just use

default settings, or customize as you like. It doesn't matter. That should be enough to cloud

price and let you see what people see who don't know how to read price. That's about half

the traders out there, so it is something you need to know about.

In addition to the three I listed are audusd,eurchf, usdchf, usdcad, gpbjpy, eurjpy, eurgpb.

Though if one doesn't act right, I may drop it and replace it with another.

It's not that critical as long as we have the majors and some comdolls. The number 10 is

arbitrary, but you do want enough to give you a good chance of finding 3 to 5 trades each

day, and you don't want to miss too many really good moves on majors. Let's at least

comprimize on 8, eh?

As to other stuff posted here, it's no big deal. Once you learn these basics, it just practice.

I'll check back in and answer any questions, but it's simple really. Just a couple more items

and we're done.

As far as correlated pairs, I haven't see much effect one way or the other. But that's just

me. I just take the best trades and trade price. I don't even look much at the charts once I

have entry. I watch the prices change on the profit line and if the price goes up I buy more

and take profit, per my 5 lot strategy. If the price goes down I exit according to that

strategy. For me at least, once I'm in, it's all about price. Looking at charts is a distraction

from managing positions based on price. with 3 or 4 positions on 3 or 4 pairs, some days

it's all I can do to pull profits off fast enough, put more lots on and make sure I drop any

losers fast. Customize as you like. I can't say whether it will make it work better or worse. I

only know what works for me in the end anyway. Till it be morrow

Well, I'll clarify a couple statements. The goal is to have 5 pairs to trade. Some days I get 5,

some days less. I take what the market gives me. I may get three on fairly quickly, and

then review charts of others on my watch list and wind up with 5 in a few hours. But it's

important to not force a trade. Just let it come to you like the USDJPY looks like it will. The

diversification of 5 pairs really offsets many other problems.

Sometimes I will stop and reverse quickly if I see I'm on the wrong side of a pair and I have

an entry going the other way. More often though, I just close a pair if it's not performing. If

things get slow, I may check back on it and I may even put it back on later, but I will never

allow more than two losses on any pair in a day. You just have to cut it off somewhere.

More on trade management tomorrow.

Yes, these crosses can be nasty.

Monthly-agreed. If it goes into a squeeze expect a breakout, but which way? We can't tell. We

have to wait and let the market tell us.

Weekly-agreed, this leveling is causing the squeeze to form in the monthly.

Daily-Yes, very bullish last candle. causing the leveling on the weekly. Really some good price

action up. Yes, trend is up.

H4-Yes, we like trumpets. The hanging man probably caused by late Friday close out action. I

was one of the guys taking profits there. I'll see when I get to the H1. Trend is flat. When you

have flat trend, look to the time frame above you for a clue, which is up and bullish daily.

H1- Yes, trend is up. The late Friday close out action is clear. The contraction of the opposite

BB along with a price pull back off the top BB is screaming warning, we may be headed down

from here. But, I can't trade this down as I would like because the trend is up and the higher

time frames are generally up.

30M - just a close up of the H1 action above, PA down, trend up. This is where we start

looking for a good retracement entry. If PA moves down to the mid bb and turns to resume

trend, we will probably have a good retracement entry on a lower TF. Almost all our entries

will be made off a retracement off the main trend, so that's what we are always looking for.

15M- Going on down a bit to see if it confirms my search for a good retracement entry. Oh

yes, into a squeeze. Watch for a bounce off the lower BB for entry. That bounce will originate

at lower TF's and filter upward to this 15M chart.

5M- Nothing to see here yet, but if M15 is going to give us an entry, it has to come through

here.

1M- This is where our entry will start forming. Well actually, it will form in the tick chart and

this is where we will see it first, probably in the form of a bb bounce off the lower bb and an

O-O or O-BB move up.

This is how we tell the future of the M15 retracement entry we are looking for. We build this

pretty picture in our head of what we expect to see. If the trade follows that picture, we take

it. If it doesn't we don't.

The purpose of this exercise is a treasure hunt. We are looking for trade set-ups using out

multi-time frame analysis. If we find one, as we did in this case, we put it in our journal and

watch it to see if the picture plays out as we envisioned.

If we can't find a trade set-up, we ask ourselves, what has to happen to give me a trade-

setup. What else could happen? Then we put those possibilities in our journal and watch for

them. Almost always there is something that can somehow happen that will give us a trade

set-up.

These pictures of possible futures we create in our heads and write down in our journals are

the treasure we hunt. If the picture works out, we'll make lots of pips. If it doesn't. We'll toss

it away like the lie that is was proved to be.

We do this for each pair. All that's left to do then is go collect our pips like a farmer bringing

in his crop.

This gets much easier the more times you do it. But never forget, it is not just an exercise in

analysis. We are hunting the treasure of those pretty pictures of possible futures. Don't give

up until you find one, or more!

Good question. The simplest thing is just to stay with the system as described and either you

make a ton of profits or it stops out. Having diversified among 5 pairs, if our analysis is right

on only 3 of the 5 we will do very well indeed, in the range of 100 to 200 pips per day with

very few losing days and hardly ever a losing week.

The problem with deviating from the system is where does that deviation stop? I think the

only reason we can use to justify deviating from the system is the most fundamental rule

that, "Trading capital is sacred". Say our entry requires an entry with an unusually wide stop.

For my system that would be anything over 20 pips.

First of all, I would say, that's a bad entry. Don't take it. If you are patient and your analysis

was correct, you will get a better entry. If your analysis was incorrect, you will have saved

yourself 20 pips of valuable trading capital. But let's suppose you are in, you have three pairs

performing very well, one near BE and this one drifting down over a long period of time so

now it's down 10 pips including spread. This is not a good trade, but once you are in a trade

your analytical powers drop to that of a Neanderthal. What to do?

In my system you have two choices, stay in the trade until it stops out, or err on the side of

preserving capital and closing it early. Either choice is acceptable in my system, since if we

are going to make a mistake it must always be on the side of protecting our sacred trading

capital. I do encourage some flexibility in trading systems, but only to that extent. So if you

are having a bad day and have a few that are doing this to you, probably due to some new

fundamental news that has come out that you couldn't anticipate, then it's not unreasonable

to close one or two of the worst performers to further limit downside risk to your trading

capital.

But in the end, you are very correct. In the vast majority of cases that news will be digested

by the market and it will come roaring back, only to find you aren't there when it does. This

known error is the only one allowed, since protecting our sacred trading capital is a prime

directive that can override any other rule or analysis. After you miss a few roaring

comebacks, you'll be very cautious about using this allowed and known error. But it's always

there for you. You can always close any trade any time in the name of protecting your sacred

trading capital. If you think this is foolish, to allow a known error in the system, you can

remove from your version. That is to say, removing it feels bad emotionally, so that is

probably good. Your choice.

Originally Posted by RenaLa

hello all,

I have analyzed five pairs usd/chf, usd/cad, eur/jpy, gbp/jpy, eur/gbp

Graviton, when I read your analysis of the pairs it looked very simple. But now I see that

everything is not so simple. Sometimes it’s hard to determine the trend direction on

monthly charts.

For me its difficult to recognize the entry points.

It's only this hard the first time. After that, it get's a little easier each time you do it. After

a month or two, you will probably be better than I am. I won't be satisfied till that's the

case. I'll go through all your hard work and comment, though you can already see my

comments above on Eur/Jpy

Graviton

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#80 (permalink) Today, 12:47 PM

Graviton Senior Member

Join Date: Apr 2010 Posts: 209

Hunting Treasure

Just to make the point once again, this is analysis with a purpose. It has a very definite

direction. We know just what we are looking for. We are looking for trade set-ups. Either one

that exists now, or one that could possibly exist in the future if something changes. Don't

give up until you find one. If you can't find one, ask yourself, what is the easiest thing that

could change to give me one? Carry on.

Here are my comments on your analysis:

USD/CHF

Monthly, there is long engulfing pattern in the end of 2009,

Price still below MBB. It looks like PA is going up, but PA is kind flatly a bit - Agreed

Weekly uptrend, down trendline that that runs from march 2009 has been broken in

Junyary.- Agreed, good catch of that broken downtrend line

is daily chart flat? There is current extreme retracement candle. – close to flat, a very slight

uptrend

4H, uptrend, PA is below MBB –yes, if PA crosses to the bottom bb, we may have a

retracement against the trend. Usually the kind of entry we look for. Put a watch on this.

1H – downtrend, BB is shaped as sausage-PA just pulled off bottom bb. Contraction of

upper BB. 4H in uptrend above so ok to trade by all rules. Note lower trends also in

uptrend, so uptrends all around, which is also good. THIS IS AN ENTRY!! So drop down to

5M, if it is falling let it fall until it bounces off the bottom BB. Check if the 10M or 15M is

falling, if so, wait till it turns up to enter. If not, enter.

30M uptrend, BB sausage, Price is above MBB-Agreed

10M, uptrend, the price is in BBe squeeze-Agreed

It is slippery.

USD/CAD

Difficult for me to say is it uptrend or downtrend? But the PA is going down. And pulling

MBB down,- yes, with strong PA down, I’d call it a downtrend.

Weekly is in strong downtrend-yes

Daily downtrend but its possible PA reversal –with downtrends above and below, reversal

unlikely

4H, downtrend, PA below MBB PA -yes

1H PA is in the squeeze BB, below MBB, extreme candle produced CBL line for short-for sure

we want to go short, but no good entry yet.

30M, Difficult for me to say. is it uptrend or downtrend? –flat trend with strong down PA

10M downtrend, PA below MBB

we can go short

Well, everything is down. We want to get in on this with a short. But I don’t see a good

entry. We will wait patiently for at least a 5M retracement entry. Flag this one for watch,

EUR/JPY

See my previous comments on this one. That 1H chart BB prevents a comfortable up entry.

If it weren’t for the up trends above and below, this would be a perfect Tymen BB DNA

down entry. I won’t trade against Tymen on this one. I’ll wait for that 1H chart to change

shape or confirmation of down entry on lower TF’s, mainly the 15M chart.

Montlhy downtrend,

Weekly, downtrend down trend line that that runs from October 2009 hasnt been broken

yet.

There is uptrend on daily chart since march 2010 and the price is in Symmetrical Triangle

4H: uptrend, we have extreme candle and good chance for the price retracement.

1Н uptrend, opposite BB contracts,

30 Min chart is in strong uptrend.

I wouldnt trade this pair

GBP/JPY

Montly downtrend, there is PA retracement

Weekly, I drew downtrend line that has been run from august 2009, it has been broken 3-4

weeks ago.

Daily chart: PA is continue to rise after 50% of retracement.

4H: PA is very closed (like 50 pips) to the Resistant line

1H, 30M: there is strong uptrend,

15 Min : PA in BB squeeze, its where the trend usually starts. The problem is will it go for

retracement or it will continue to rise.

I would definitely choose this pair to trade long today.-Maybe, but look at the 1H chart PA

pulling away from upper BB, lower BB contracting. If this is just a retracement, it’s good

entry, but wait to make sure it’s not O-O Top BB to bottom BB action that would stop you

out. Agreed that 15M chart will tell you first so watch that to signal a trade.

EUR/GBP

Monthly: uptrend, but currently PA on its way down

Weekly: PA close to support line. MBB is going down

Daily: I can see long engulfing pattern, that formed last Friday/

4H, H1: PA bounced off the Resistant line, MBB is going down

15M:MBB is going down, PA is below MBB, I'll wait to enter short or long until

resistant level 0.8695 or support level 0.8715 is broken-It’s one of those messy cross pairs.

We have an entry short here on the 1H chart, but the SL is too wide. Wait for a break down

on the M15 and enter short out of a M15 squeeze.

Here's the wrapped up results of our analysis. We analyzed 8 pairs. I have two more to go,

which I'll do on the fly like I usually do every morning. Note the entries.

EUR/JPY-Messy Cross, 1H Tymen short, Surrounding Trends-weak up, take break out of

M15 down or wait for 1H pattern to change. Watch for cleaner trade set-up

W-USD/CHF-H1 in long entry pattern, surrounding trends-H4 up, but falling PA-30M down

and rising PA, watch M15 and below for long breakout entry.

*USD/CAD-Everything down. Wait for M5 retracement at least for short entry

W-GBP/JPY- H1 Looks like retracement from up trend. Surrounding trends, up. Take

breakout up off M15 for tight stop breakout off squeeze

W-EUR/GBP-Waiting for break down and enter short out of M15 squeeze.

EUR/USD-Messy pair, needs big 4H move up or down to enter

*GBP/USD-Good Long, look for at least M5 retracement for entry

**USD/JPY-All Good Long. Enter off any retracement

So, we have three good for entry off retracement and three on watch list. Your traders

journal should have notes something like this

And here are the final two. Two more possible entries. That gives us 5 possible entries and

3 on the watch list. 2 are messy no-trades. The only one you could pretty much enter from

anywhere was USDJPY, which I just did!

*AUD/USD - Very long term up, opened today down, Trends H4-down, H1-Flat, 15M-Up,

enter down w/ tight stop off M15 BB Bounce

*EUR/CHF - Very long term down, daily-squeeze flat, H4-flat BB DNA entry down, H1-up,

30M-flat,15m-down, M5-up, take H4 BB DNA entry down as soon as M5 retracement

completes.

That completes this exercise. If you have any questions I'll try to answer them. If you have

set up a demo account, try it out now to get some practice.

Tomorrow morning, and every trading morning, I will do this all over again for my account.

After just a few days of demo you should see if this is working for you or not.

Happy Trading

Thanks. Well, the way this works, if we only get 3 out of 5 entries with nice long trends,

we'll make really good pips. Even 2 will do quite well. The more practice, the easier and

better the analysis. The better the analysis, the more pips

Great! This works best when London or London + New York are trading. Not so good in

slower markets as there is just not the volatility to hit profit targets.

It's Monday morning here in the energy capital of the world, Houston Texas. The pair

selections we did over the weekend for the Sunday Aussie open (my US CDT) are no longer

valid. That means I'm in the middle of my morning routine of re-evaluating pairs for today's

trading. Some may stay the same, most will change. I'll respond to questions as soon as my

business is done. I hope everyone has a great trading week

When you do your evaluation, are you looking primarily at the angle of the midline or pa?

Often the midline will be at a different direction than the pa. Also the pa may be bouncing

off the outer or midline. Just trying to see what you see.

PTB

#106 (permalink) 04-26-2010, 10:27 AM

Graviton Senior Member

Join Date: Apr 2010 Posts: 275

for best results PA should confirm angle of mid bb. we trade price though, so if a conflict

decide if it is a good retracement entry to main trend

Originally Posted by qwertymyfx

the problem with multi timeframe trading is that you're using lagging indicators, so when

weekly is showing down, and daily is showing up, it could actually be the reverse.

Those closest trends to your home trading range count the most. PA rules. It MUST confirm.

We trade price, not trend lines. Trend lines just improve our odds, sometimes. but we don't

want to get carried away with them and trade against PA. Tymen's BB DNA entry method

will put you in at the end of a retracement to the trend, but WITH PA. Questions?

So both multiTF and BB DNA must be used together for best results. MultiTF is just looking

for set-ups with trend. BB DNA is for entry. I sugest reading Tymen's thread on trend

trading, it's long, but well worth it.

I'd suggest that to evaluate the PA within a squeeze, you'd be best to utilise the BB DNA

method as it stands.

Look for the extreme candle, observe the PA advancing in your recognised trend direction,

then enter when the CBL is met.

As long as you trade with the trend, there is no reason I would say (looking for confirmation

here) not to use Gravitons 5 lots system, as the squeeze may turn into a trumpet coupled

with a significant BB walk.

Originally Posted by RenaLa

I have one how we can recognize direction of the PA in the squeeze and after?

Very difficult, because of many false breakouts. The best you can do is look for a BB DNA

entry on another TF. If you can't, then enter when PA clears the old range that was in the

squeeze.

Originally Posted by RenaLa

cordite, if I understood correctly the entry price in the squeeze equals high or low of

extreme candle depend on your entry long or short, right?

but how you can say that the price is going to retrace or continue to go in trend direction?

You only trade in the direction of the longer term trend, as established before.

So, if you know that you will only take long trades, then you wait for an extreme candle to

break the lower BB. You then enter based on the CBL rules for that candle, as outlined in

Tymens thread.

You don't know that the price will retrace, or if it will continue, as you can never KNOW

what price is going to do. However, what you can do is recognise patterns in history and

attempt to use those patterns to best predict that the PA will have a PROBABILITY of going

in the direction of your trade.

By going with the longer term trend, and by using Tymens BB squeeze rules, you are

attempting to increase the odds in your favour that the trade will go with you, given that

historically more times than less the PA will continue with the trend once an extreme candle

has penetrated the opposite BB. So effectively you are utilising an entry system that

historically produces more winners than losers, at least when combined with an effective

R:R ratio and money management plan. That is where the 5 lots system of graviton comes

in. By using 5 lots, you are trading only with your PROFITS and not yuor CAPITAL, at least

as soon as the first lot has reached it's TP or there abouts.

And what if TP1 does retrace and hit the SL? No matter, as it's a small investment of your

trading capital, and thus a small hit - something which your capital can take (ie, 1% or

there abouts - Graviton please confirm).

Trading with profits can only have two outcomes - increased capital or horizontal capital,

but it cannot result in a LOSS to your capital. As Graviton says, protecting your capital is

the number one goal of your trading plan.

I hope that makes sense. If not, I will try and re-word. I've tried to make it succinct, but it

might just all be whaffle

Originally Posted by Graviton

Very difficult, because of many false breakouts. The best you can do is look for a BB DNA

entry on another TF. If you can't, then enter when PA clears the old range that was in the

squeeze.

Using the squeeze as a mini S&R and enter as soon as the PA penetrates either (as long as

it's in agreement with the LT trend)?

Yes, Cordite did an excellent job of answering this question. Very precise, as all of Tymen's

work is.

Without exception I use Tymen's entry methods. I was using short TF's today to

demonstrate how to use the BB DNA in conjunction with MTFT. Tymen came into the chat

room! He gave the 5 lot system his official stamp of approval. The MTFT is just a fancy way

of answering the question, Which trend do I trade with? The answer is, the trends closest to

the TF you are trading, and the more trends going in the direction of your trade, the better.

Is the pair analysis getting easier for you now?

Oh, the point I wanted to make was that BB DNA makes LOTs more pips on longer TFs.

Since the 5 lot system requires long trends, it also makes LOTs more pips on longer TFs. It's

just difficult to demonstrate those things to people if you have to wait for hours for good

entries. I'm testing a variation on the BB DNA system that does yield more good entries. at

the expense of a few more stop outs, but it's not quite ready to roll out yet. Maybe I'll have

it tested by the time Tymen comes back from his move. I hope so.

Note that the two best pairs we found as a result of our pair analysis over the weekend was

USDJPY and GBPUSD. I traded both of those on the open with the 5 lot system and made

100 pips Sunday night my time, US CDT, Monday Morning Aussie time. Actually very good

for that time period

For London trading only, use 15 pip stops and 30 pip TP's from entries. a new lot is thrown

on every 15 pips, and a tp is hit every 30 pips profit (but still 15 pips apart) as explained in

my 5 lot system post. For London + NY session, use 20 pip increments, for after NY session,

and before London open, use 12 pip increments.

I'm not sure what platform you use, but these are called conditional orders. say for a rising

market you will use, buy stops to enter, so it will buy at a preset point. You can then set

stop loss and tp to engage if and only if the conditional buy is executed.

Graviton

#138 (permalink)

04-26-2010, 06:11 PM

Graviton

Senior Member

Join Date: Apr 2010

Posts: 279

Typically, you can type your platform name, like Onada and conditional orders, into u tube

and there is already a video there showing you just how to do it.

Graviton.Which pairs had you have the most success with in the long run?

thank you.

Majors most. Comdolls second most, popular crosses, third most. Most success on 30 min

and greater TF's.

Graviton, does your system use take profit orders or its must be under the management all

the time while trade is open?

Reread my post on 5 lot system. You will see it is just a ladder of entries with sl and take

profit orders every 15 pips. The only trick is you skip the first tp to move the sl to be. Study

it, think about it, draw a picture of it if need be, and then you'll see what I mean.

The important point is to make sure all conditional orders are cleared out of your account

after the trade is over. Otherwise, you can wake up and be many pips down when you didn't

even intend to trade. If you have problems with this, call your broker customer service and

tell them you want to speak to the MT4 guru about conditional orders.

Until I test out some things, look for BB DNA enrties in 30M, 1H and 4H TF's to get more

trades. 15M usually just doesn't trend long enough. Also add more pairs to your scan, like

12 or 14. There is a shortcut method that I use during the week while I'm trading and don't

have time to do detailed analysis on the fly. If the angle of the mid BB above and below the

TF I am trading in is in the dirrection of my trade, I'll take a BB DNA trade. It's really fast.

Not quite as accurate, but good enough if you do the detailed analysis each weekend. Try it

in demo.

If you are willing to accept a few more stopouts, I can show you how to get lots more

trades. It's something you could try in demo I suppose. I'm uncomfortable with it though as

it isn't as well tested as the other things we've discussed.

There are many shortcuts that yield more trades, but all at the cost of more stopouts.

Another shortcut to MTFTT is to only check the timeframe above the TF you are taking the

BB DNA entry in and clear the entry if and only if the mid BB is headed in the direction of

your trade. That's about as short as it can get. You'll get a few more stopouts, but many

more trades.

If you want still more trades, I can't advise this because I'm still testing it myself in a

separate demo, but you can demo test it. Just go back to Tymen's simple entry method.

that is, after the extreme candle penetrates the BB, take entry on the first candle closing

that pulls free from the BB. You'll get eaten alive on this though if you don't at least require

the mid BB trend on the TF above to be in the direction of the trade.

DO NOT LIVE TRADE ANY OF THESE SHORTCUTS WITHOUT DEMO TRADING THEM FOR A

LONG PERIOD OF TIME FIRST.

You will get more stopouts. I can promise that.

Originally Posted by unrepipant

Graviton, One question I want to ask. In reading your analysis of charts from monthly on

down and deciding to make an entry...what I don't quite have yet is how you come to pick a

certain timeframe to make your entry. On one you said to wait for a bounce of the lower BB

of the 5M. Another watch the 15M for an entry. Another was 1H. Is there a way to explain

how you choose which time frame to base your entry on? Is this something that comes with

lots of expeirence and can't be explained. Are the sceneros so varied and different that

there are no hard and fast rules?

Generally, the BB DNA should only be used on 30M time frames and above. You need to

have a long enough time frame for a good trend to make it worth trading. But, in my

system, we look at trend strength also.

In the most extreme case, every trend is in one direction, as every trend on usdjpy was up.

Every time I've ever seen this happen, the pair moved up. I'm sure there are exceptions,

but it's a very high probability long trade. I made 60 pips on it right after the open. This

being the case, I called it an enter on any retracement trade.

Next down the trend ranking list was the GBPUSD, which looked very strong, just not quite

as strong as the usdjpy. I said it needed a M5 retracement. Now I don't trade M5, but It

was so strong that any retracements were likely to be short lived, so if you had to wait for a

longer TF for entry, you would probably not get into the trade at all. I took the trade right

after the open and made 40 pips.

For the others, I waited for better entries, some I got, and some never offered me an entry.

So the answer is yes, the more you use this system, the easier it is to say what kind of

retracement you want for entry. To start though, only take 30 minute TF or better BB DNA

entries. Those will offer the best trends to follow.

Unrepipant

The price is in a sausage bb walk down on the 1Hr and 30M chart. This looks like a little

retracement of a stronger trend up on the daily chart. Problem is, who knows how far down

it will walk and how many head fakes it will give before it really returns back to the

uptrend? The hourly chart shows 7 seperate extreme down candles, so picking the right one

that will return back to up-trend is low probability, like 1 in 7. So no, I would not take this

trade. At least not without some further study. This is not a nice smooth BB bubble. If it is a

smooth bubble on the 4H chart you might have a trade there. Otherwise I would refer to

Tymens rules on sausages. I find his rules to be very well tested.

Even though I'm always saying I trade price, not time, there is something to be said for the

time value of your margin. After a period of time tying your margin up in a trade that just is

not performing just does not make sense. You do have to give your trade time to develop,

and in a slow market that could be hours if you are trading a H1 timeframe, but we paint

pretty pictures in our head about what a trade is supposed to do. A good trade to me will

move in my direction soon after I enter it and keep moving that way at least long enough

for me to move my sl to be. a bad trade will go a little negative and either stall a little

negative or keep going negative. There is nothing wrong with exiting what you consider to

be a bad trade in my system. I just exited one on usd cad for this very reason. This is the

gut feel of trading that I find so hard to mechanize. Of course there will be retracements in

the course of even a very good trade, but that's not the case we are talking about. We are

talking about a trade entry that has stalled, tying up margin and not conforming to that

pretty picture we have of a good trade. Anytime a trade does not follow your plan for it,

consider exiting it and finding one that will follow your plan. That's the way I usually handle

this situation. So I guess I agree with that post.

Of course if you knew the trend would continue the optimum would be to put 5 lots on at

the beginning and ride it to the end, just paying spread one time. But you can never know

that with certainty in advance. So to guarantee we get some profit out of the trade, I pull

30 pip chunks of profit off the top and put on 15 pip's of risk on the bottom as long as it

continues. But note that once you hit BE on the first lot you have really taken all the risk out

of the trade and there is nothing but profits the rest of the way. Never re-introduce risk to

your capital in a trade once you have removed it.

Yes, you will pay spreads to use this system, but you are winning those spreads, so you are

paying for them with profits, not trading capital. That makes a big difference. As long as you

are pulling 30 pip chunks of profit off the top, in a sense, spreads don't matter. You are

using profits to make more profits. Cutting losses short and letting profits run. Good

trading, in my own humble opinion.

Tymen has approved this 5 lot position trading as a reasonable alternative to his two lot

system. His only comment was it depends on the trend continuing, which is the whole basis

of MTFTT. No trend, no profits, so do your trend analysis throughly. Don't take trades that

don't look as though they have a nice long trend ahead of them. Stick to H1 and H4

timeframes. M30 is a minimum that I have mixed results on. As always, throughly test in

demo before going live. I recommend at least three months of demo testing before going

live.

I've discussed the nasty ways to get more trades at the expense of more stopouts. I can't

say I'd recommend any of them. You can try them in demo if you like, but I'd never risk real

capital on any of them.

Here is the cleanest way I know to get more trades with more stopouts. This deviates from

Tymen's system and I'm sure he would have questions about it. Here, we add another inner

set of Bollinger Bands to our chart with the setting of 20 periods and only 1 standard

deviation. Just give them a different color so they will stand out as different. Then if you are

convinced you want to make an entry, but the PA never quite penetrates the outside band,

use Tymen's BB DNA entry system with the inside BB for entry.

In theory, this should yield about twice the number of trades with only 15% or so more

stopouts. This should only be used in conjunction with MTFTT and every trick in the book

should be used to protect capital.

I have only had a short time to test this system, but it looks close to performing according

to theory, twice the number of trades with 15% more stopouts. I am testing it in demo right

now, and as always, I insist you test this, or anything that deviates from Tymen's tested

system, in demo for three months before going live with it.

Graviton, Any chance of a quick wrap-up on how your trades worked today?

unrepipant

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#179 (permalink)

04-27-2010, 05:58 PM

Graviton

Senior Member

Join Date: Apr 2010

Posts: 279

Sure. Today was one of those wild days. I was trading in the chat room with several other

people from this and Tymen's thread. I think just about everyone was winning, so we were

having fun. I had been short GPBUSD, EURUSD AUDUSD and long USDJPY. I entered at the

open of the NY session and was up about 200 pips by the close of the London session. I then

lost 50 pips back in a quick market reversal. My open positions all stopped out. Fortunately I

was running very tight stops at the time. Then the bottom dropped out of the EURUSD right

after the NY close and I made 70 pips back. Apart from the quick nasty retracement after the

London close, everything went according to the pretty picture in our collective heads.

So you got four lots on at the same time! Well then, you have arrived. Great! Isn't that a

blast?

I didn't want to tell people how many pips a day they could make with this. It's kind of

embarrassing. I just thought they would figure it out eventually.

It's so much fun that once you get it going, in the future you have to be really careful with

your trades so that you don't take a bad one just hoping to get it going again. Of course,

when you are getting a 1 to 6 or or better risk to reward ratio, no need to sweat the small

stuff.

It's not a scalping system though, it's designed to work with a nice long trend. That's the

reason for so much work analyzing charts to try to find a pair that will trend for it.

I'm testing a greatly simplified and more objective method for performing the pair analysis

for MTFTT. It has performed well so far

If it tests out well, I hope to roll it out this weekend. I think that combining Tymen's BB

DNA entry method with the 5 lot system and a really powerful but simple trending pair

selector will take down some major pips.

Woo Hoo! I'm very happy to hear that. Tymen was in the chat room today. He called a nice

counter trend move that went for 50 pips. I didn't take it as I had already made my pips in

the morning and I wasn't taking any chances on a quick reversal today. Wish I had taken it

though, could have had a record day.

Once the risk is out of your trade and you have a few lots on, one of two things will happen,

the trade will continue to run and you'll make even more pips, or it stops out and you walk

away with your first chunk of profit you took off the top. You should NEVER give any of that

first chunk back.

It takes practice, but I can guarantee you there are lots of traders that would be pleased as

punch with taking 65 pips today. If you have any questions please ask. Happy TradingI

believe if anyone is having trouble with the 5 lot system, you can take my written

description and the graphic that is here and go over and over it until it is a crystal clear

picture in the head. If you print out a large chart of a really nice long trend run, you can

paper practice by looking where you would put your entry, and how you would move your

stops and put more lots on. I had been trading this for years and never wrote it down until I

started this thread. What seemed so natural for me in trading turned out hard to put in

words. The graphics really help. Thanks, Guys.

My way of trading is to create a trade plan and if the market follows that plan all I have to

do is select my entry. If the entry doesn't develop then I've lost nothing. If the entry

develops I take it if I feel good about it. Before entering a trade, you still have an option. Of

course, I find that usually when I pass up on a good BB DNA entry, I regret it because it's

such a high percentage entry system. Anyway, once I'm in a trade, my I.Q. drops to about

10% of normal. I'd be better off flipping a coin to make decisions. That's why I created the

5 lot system It's totally mechanical. I can't screw up a good trade if I follow it. I won't win

every trade, but losses are minimal and really don't even bother me compared to the wins.

So if you haven't figured this system out, please spend as much time and ask as many

questions as need be to get it down cold. It wouldn't hurt if you set up a demo just to

practice this 5 lot system taking random trades as fast as you can and following them to the

end, however long or short that may be. You'll probably lose, but the point is to just get the

system down. After you do this lots and lots of times, it gets really easy.

Ironheart, cracking chart, tanks for that makes it nice and easy to follow.

Graviton, any chance of some had and fast rules that can be glanced at RE which pairs get

which size R:R (15:30, 20:40 etc) in relation to the markets that are open and the volatility

of the market?

I jumped on the EURUSD 30 mins too early today (was using the M30). If I'd waited for the

H1 to show a squeeze entry would have made profit, as it was I got stopped out by the 2nd

extreme candle. Twas interesting to see it run.

As to why the first lot gets closed, it's an interesting question. Take the guaranteed 30 pips

profit, or try for more with the knowledge that should it reverse on you you will still have 15

pips, which is a 1:1 R:R, as long as you've since set the 2nd lot to BE. However, as the first

lot hits 30 pips you will have also entered a 3rd lot. This 3rd lot will then reverse too, hitting

its SL. This means that -

lot 1 = 15 pips profit

lot 2 = BE

lot 3 = -15 pips

So the total would be BE.

Not using a trailing stop would be -

lot 1 = 30 pips profit

lot 2 = BE

lot 3 = - 15 pips profit

This would then net you that 15 pips profit of 1:1 R:R...

graviton has said how important it is not to lose 50% or more of any profits you have made

with that 1st lot. I guess it comes down to what type of trade you think this will be - a

runner or a staller?

I'm tirec, hope that made sense and was correct...

Cord

Originally Posted by hachiko

Does that mean you don't recommend going back into a trade if you got stopped out on a

retracement but then you see the trend is still continuing?

No, that would be a different trade. Sure you can take a different trade in the same pair.

Really, the only way to give back the first chunk of profit in the same trade is if you were to

move your stops to stay in the trade when the system says you should exit. Moving stops

against the direction of the trade to stay in a trade is a huge NO NO in this system. Never

do it.

Really, there are only two ways to mess this up. One is moving stops to stay in a trade,

putting risk back in the trade that you worked so hard to get out and the other is

overtrading. You need to follow the position sizing I recommended at the beginning of this

thread. The reason is, some day you will have a bad week or two. The temptation will be to

increase your position size to make it all back. That is the opposite of what good money

management calls for. Good money management says you never risk more than 1% of

trading capital on a trade. So as your capital drops during a bad week, you should reduce

your trade size, not increase it. You must use good money management at all times.

The other way to mess this up is to take ever more questionable trades until your win/loss

ratio plummets. You should track your win loss ratio and if you see it dropping, you need to

think about the trades you are taking and tighten up your criteria for taking a trade to raise

your win/loss ratio to back where it should be. Happy trading.

That is my question as well? If you have a Trailing Stop the 30 pips is already locked in

anyway, so you may as well let it run?

I believe you are right! I just wrote it down the way I had traded it all these years, but if

you move your stop to lock in the profit on the first lot and let it continue to run with the

other four, you make EVEN MORE PIPS! Oh My Gosh, it's a flood of pips. Pips falling from

the sky. I'm tripping over pips. Pips are in my cereal in the morning. Pips are in my chair

when I want to sit down. What ever am I going to do?

Thanks to all who saw this and pointed it out.

OK, I just took the top inner bb (1 std deviation) entry for shorting the EURUSD. As I said

before, it carries a higher risk of stopout, but my win/loss on this method is very good when

it is WITH the major trends, which is down for eu. I would never do this in a counter trend

trade. The lesson here is, if you try something different, test it in demo. Calculate the win

loss ratio and the risk reward. Only then try it live. Don't fool around with your live account.

That's what demos are for.

Here is another shortcut. In the morning when you are just waking up, you don't want to

spend lots of time doing pair analysis from scratch. Since you did a complete pair analysis

over the weekend (right?), and you know right where everything was when you went to

sleep, all you need is a quick check to get back into the groove.

Remember, Price Action rules! We trade price. All nine time frame charts are only different

ways of looking at the same price action on a pair. So do a quick check of price action on

each chart. Start at the monthly chart and ask, is price action above or below the mid BB? If

it's above, give it a +1, if it's below, give it a -1, if it's just about even or on top of the mid

bb, give it a 0. Do that for each time frame as you look at them and then add the numbers

up. A +9 is trending as consistently as possible up. A -9 is trending as consistently as

possible down. Numbers in between indicate less consistent trends. This quick count is only

good at the moment you take it, but since it is a direct observation of price action It gets

me started in the right direction in the morning. This quick count does not replace detailed

pair analysis, but it does add some structure to my mornings. Try it, if you like it use it, if

not, toss it.

As you may have guessed, I'm not fond of scalping. I've tried it, but I could not beat those

guys with the lightening fast bots, multiple price feeds, inside information and razor thin

spread costs. But as someone even older than me said, everyone is good for something. If

nothing else, they can serve as a bad example. And so in our never ending quest to find

even one more lowly pip hidden between the couch cushions, we look at what scalpers do

for a living.

You will usually find a scalper staring at at least three computer screens displaying the, the

5 minute chart the 1 minute chart , and a tick chart. They trade very large size for very few

pips. They make a huge number of trades trying to get just a few pips off most.

They watch for a pair that is cycling smoothly in a range on the 5m chart. When price

moves near the top of it's 5m range, they look at the 1m chart, when it moves near the top

of it's range, they look at the tick chart with their finger on the button. When the tick chart

hits the top of it's run and price starts back down, they hit the sell button. If price moves

unexpectedly up even a couple pips, they close the trade. If it continues to move down they

move back to the 1m chart and watch it fall. As it continues to move down, they move to

the 5m chart and watch it fall.

As the 5 minute chart gets near the bottom of it's range, they move back to the 1m chart,

as it gets back near the bottom of it's range they move back to the tick chart, when the

price quits falling there they click the close button for hopefully 10 or 15 pips profit on a

very large lot size. They do this 20 or 30 times a day. Sometimes unexpected news comes

out and wipes out a half days profits in one quick spike stopout. It's a dreary life, but we

can learn something from it. These guys really know how to squeeze the last pip out of a

trade.

As high flying day traders we aren't really interested in the dreary life of a scalper, but we

are interested in more pips, even just a few more. So we'll copy them for just a few minutes

out of our day.

When it's time to put on a second lot, we won't just buy immediately because our first lot is

15 pips up, we will set the first lot SL to BE and look at the 5m chart. If price is going up,

we look at the 1m chart, if the price is going up we buy, no harm no foul.

But, if the 5 minute chart is going down, we wait until it is near the bottom of it's range and

look at the 1m chart, if it's going down we wait until it has hit the bottom of it's range and

starts back up, then we buy. Buy low, sell high.

With a little practice you can save a few pips per lot. That is enough to pay the spreads that

some folks worry about! In any case, it gives you something constructive to do on slow

days. Hey, every pip counts. Of course when the market is taking off and I'm managing 15

positions I don't have time to fool with this. I'm too busy pulling profits out But if it's slow

and I have time, I try to make a few extra pips per lot.

Originally Posted by Xelnar

Recently - both in the chat room and here - there has been more and more attention given

to what I would call "the shorter time frames," by which I mean those under M30.

Personally, I'm still trying to develop some skills at the H1 and above TFs.

Given that somewhat different focus, it seems to me that I should NOT be evaluating (i.e.

quantifying) the TFs below H1...certainly not below M30. Focussing there not only puts the

emphasis/importance on the longer time frame evaluation but it also has the benefit of not

requiring as frequent a re-assessment of the numbers.

I'd appreciate any feedback anyone would care to give.

Thanks

I know of two answers, one is that all these timeframes are just different representations of

the same price information. It's hard to understand any one in isolation. But there is a

better answer. I will present it shortly.

Good morning everyone.

I've been away from trading for the past almost 2 weeks and this weekend got caught up on

Tymen's thread and than moved to this thread and I'm almost done with it.

For those of us using GFT Dealbook 360, when considering scaling in using the 5 unit

method explained here.....Dealbook averages your entry price

What that means is that when you enter a 2nd unit at +15.....you do not have 1 unit at +15

and 1 unit at 0. you have 2 units at +7.5.

When you close your 1st unit at +30 from your orginal enty you will have given up 7.5 pips

+ spread. Thereby only bagging about 20pips vs 30pips

When you enter your 3rd unit....dealbook avg's that in with your current open position and

you lose more pips again....and so on.

I have not thought though yet how to overcome this obstacle.

Thanks

Jack

Indicators are visual aids, nothing more. remember, Price action rules. Someone suggested

weighting the lower time frames less and the higher ones more, someone else suggested

just dropping out the lower time frames. All good suggestions, play with it if you like, but

it's no magic bullet, there is none. If you find something that works consistently for you, let

us all know. I'm sure the programming can easily be revised to fit it. But the point is to

learn to trade price action, not to waste time playing with pretty indicators.

I have other indicators I use as a visual aid, 100sma, 200sma, Price above for long and

below for short, PA crossing both, one confirms the other.

RSI 8 and 3 on the same window, I play with periods of 3 to 12, if the longer period is

below 50%, good for short, above 50%, good for long. Short period above long, getting

stronger, short period below long period, getting weaker.

Stoch std settings, short period above long period, good for buy, indicator saturated up, go

to next higher TF to confirm buy; short period below long period, good for sell, saturated

down go to next TF up to confirm sell.

MACD, look one TF down to get better look at trend.

ADX, good trend indicator.

ATR, good to decide if more or less sl is needed

These are all just visual aids. None are a magic bullet. I keep them all on a "Junk" chart and

look at them as I am thinking a trade over. After a while, you start to see the same things

even better and faster directly in price action. But they may help you to get started. Don't

get stuck with analysis paralysis though. If indicators disagree, as they often will,

remember, PA rules.

Please don't tell me about your fav 5000 indicators. This thread isn't about indicators. There

are many other threads about them. I'm just responding to people who were trying to use

my simple morning scoring method to trade by. Trade by price action. That's where the pips

are. Anything else at best is a visual aid, and at worst will mess up a good trading system.

Another suggestion was to just trade your home chart in the direction of the three higher TF

charts only. So if you are trading a 1h home, it would be in the direction of the 4h, daily and

weekly only. Good suggestion. This is trading with the trend and will make the most pips.

Another suggestion is to only use Tymen's position system in counter trend trades and only

use 5 lot position system in trades with the trend. Great suggestion. If you test it. let me

know if it works out better for you.

Finally, much discussion about getting in late to a major trend move. We all have to sleep

sometime and so we miss the entry on a great trend move. First look at relevant TFs and

make sure there is not an entry on another TF. If you want to risk more to get in late, you

can progressively take more risk (get more stopouts) by entering for a down trend on the

top inside BB (20 period, 1 std Dev), mid bb, lower inside bb. I suggest though that if you

do anything other than Tymen's tested method, you do it in a separate account and track

your W/L and R/R very carefully. Don't mess up your good account record with tests.

Somewhere I mentioned that a good trading account record with only 100% gain per year

and no monthly draw downs is worth a $200,000 hire in salary at major trading houses and

$500,000 a year or much more if you can keep it up. So don’t mess up your good account

record with screwy tests. That’s what demo accounts are for.

Do not move stop losses against the direction of your trade. Never, Ever.

Do not risk more than 1% of your trading capital per trade.

Do not over trade. Pick your trades carefully. One good trade a day using these systems

and one limited stopout a day will put you among the best traders in the world. The best

make $10,000,000 a year and more. Don’t mess this up by overtrading.

I have lots more to say about all this, but I'm old and time is valuable. Happy Trading.

Really straightforward and, as Graviton has pointed out many times, including a VERY

recent post, these calculations are aids and nothing more. PA is where it's at.

Having said that, I DO get some help with a quick assessment using Grav's scoring system.

Because I trade at H1 (my home chart) I am most interested in it and the longer TFs above

that. Hence, my first calculation is a 5 value sum (M, W, D, H4 and H1) where the values

are as Graviton has defined them. My second calculation is a 7 value sum (now including

M30 and 15) and that gives me a feeling - nothing more - for what might be happening at

slightly lower TFs where I might go for a better entry. Often, I will enter with a CBL at M30

if I interpret the action as supporting what I believe is developing at H1. Yes, I might be

early. Yes, that might cost me. So, before abandoning H1 for M30, I have to be pretty

certain I'm going to get a close on H1 when the time comes.

As an aside, Grav worked with me during a recent slow period and convinced me that ALL

TFs have something to show. To paraphrase Graviton, ALL TFs are simply different pictures

of the same basic PA.

Ok...Having included 7 TFs I now go for the final 2 (i.e. I sum all 9) and the differences

across the three sums give me a clue as to where PA might be deviating from what I think I

see using the 5-value sum.

Note that, in spite of the objective nature of the quantified values/sums, I STILL impose my

subjective opinion about what it all might mean.

I have a lot of studying yet to do - both with Tymen's info and with the 5-lot system.

The good news: I REALLY believe I am making progress and I can see it in the

way/frequency that I trade.

The bad news: Damn it's tough when you're an old timer.

The best news: This is one HELLUVA community and I'm delighted to be here!

Originally Posted by TraderAlan

Therefore I am wondering depending on the home timeframe that we trade off, should we

also include the lower ranking TFs in our scoring system and doing so seems to hide strong

trends on the higher TFs that we should trade with?

I would ask if ignoring the lower time frames is prudent? The higher TF are a consolidation

of what happens at the lower time frames. The higher TF don't set the trend, they really

only show the trend that already occurred. Using the laws of probability, we can make

predictions of future trends, however they are predictions only.

However, the lower time frames set the trend insomuch as they are the first indicating of

changes to come. They are more forward indicators of a possible reversal and can help

provide warnings of a trend reversal before it appears on the larger time frames.

It is sorta like a traffic jam on the interstate. Looking at a 10 mile stretch of road at one

time is like your larger time frames. It will show basically the overall traffic flow, but nothing

really concrete. As you zoom in on smaller stretches of road you get more details about how

traffic is performing. If you have a traffic camera at one point, you may witness a crash.

This crash and subsequent slowdown in traffic won't appear on the larger time frame (10

mile stretch of road behind the crash) until much later and with varying degrees of

slowdown.

If you are a driver you want to have some sort of heads-up of possible slowdowns so you

listen to traffic reports. If you ignore the indications of a possible slowdown you could be

caught going from 60mph to suddenly 20mph in a span of a mile without warning. So even

if you were going with the larger overall pattern of 60mph as your indication you would be

caught unawares of a possible hiccup in the commute.

At least that's how I view it, if someone has another opinion please share or if you think I'm

way off please share that as well.

Originally Posted by Hordane

I would ask if ignoring the lower time frames is prudent? .....

I agree that ignoring ANY time frame is probably not in a trader's best interest. As Graviton

and others have said, all TFs have something to tell the trader.

Recent discussion have been focussed not so much on IGNORING TFs as on IDENTIFYING

the contributions being made to the trend (or lack thereof) by the various TFs.

Originally Posted by Xelnar

Here is my cut at an analysis of USD/CAD

Monthly – Current visual trend is down. BB leveling. Two most significant SR levels (1.2800

and .9380 ) are probably too far away right now to be in play in the near future.

Weekly – Downtrend from about 03/08 TF with very little upside movement within the

trend. BBs are sloping down. Some closer in SR levels are at 1.10xx, 1.02xx and .98xx.

Daily – Downtrend overall but significant bounces/retracements can be seen with peaks

hitting a downtrend line drawn from a peak high that occurred on 3/26/10. That line has

been hit (or approached very closely) five times, including this past Friday. PA on Friday is

also at the +2sigma BB . Friday’s close at 1.0155 corresponds to a level that has not been

penetrated since PA fell below it on 3/31/10. The combination of the downtrend line and the

apparent resistance being shown suggests caution for any long consideration right now.

H4 – Last three candles have been strong bullish candles. The wick on the last hit the down

trendline referenced above. Lower two BB lines are sloping up. The upper BB line is also

sloping up but it appears to be a 1day action following a contraction of a Rachel-type

formation. This might indicate that PA will be entering a “Tymen No-No” trading area.

Caution is advised.

H1 – appears to be at extreme of current upside movement. One-candle CBL is at 1.0149.

The move would require an SL above 1.0172 but it could offer an attractive R:R with the

mid BB (Tymen’s approach) currently at 1.0077.

My take: I’ll watch for an attractive entry and play this with extreme caution. I definitely

would NOT be looking for any longs in this pair, right now.

Fundamentals: Couldn’t – OK, didn’t- find any current commentary

Comments welcome.

Thanks, that's two now. Here's a hint, dailyfx.com has fundamental news on all majors. I

lifted the below. There is a very good reason I asked for this. It has to do with trading

longer TFs, less work, more stable trends, more pips

Canadian Dollar Uptrend at Risk as Positioning Heavily Overbought

Fundamental Forecast for Canadian Dollar: Bearish - Canadian Dollar sentiment points to

further gains- Extreme futures positioning nonetheless warns of a potential retracement The

Canadian Dollar finished the week as the worst-performing currency of the G10, falling

sharply against its US namesake on an apparent bout of profit-taking through Friday’s close.

There was little rhyme or reason for the sharp Loonie declines; the USDCAD began its rally

following a February Gross Domestic Product report that fell squarely in line with consensus

forecasts. Given that the currency trades near generational highs and futures positioning

remains very heavily long the CAD against the US Dollar, sharp USDCAD rallies are likely

explained by mere short covering across the forex world. Of course timing any such reversal

has proven quite near impossible, and it will be critical to monitor any and all USDCAD

moves in the week ahead. Short-term Canadian Dollar moves will likely follow the trajectory

of crude oil prices and broader financial market risk sentiment, while a late-week Canadian

employment report likewise promises substantial volatility out of CAD pairs. Consensus

forecasts call for the strongest net job gain since January, leaving substantial room for

disappointment. Yet it is interesting to note that a Bloomberg survey shows the range of

economist predictions at a substantial 8.2k to 50.0k net jobs. Clearly someone will have

over and underestimated job creation in the Canadian economy, and markets will likely

react strongly to any and all substantial surprises out of said news release. Otherwise

Canadian Dollar traders should likely keep an eye on any and all developments out of the

US economy. A substantial week of US economic event risk could force sympathetic moves

out of the closely-linked Canadian currency. - DR

Read more: DailyFX - Canadian Dollar Uptrend at Risk as Positioning Heavily Overbought

DailyFX - Canadian Dollar Uptrend at Risk as Positioning Heavily Overbought

We have lots to cover and due to my other demands, I'm falling a bit behind, so I need to

pick up the pace a bit. I don't want to discourage anyone from breaking new ground, and

some people have learned to compile MT4 programs and made improvements on my simple

trend count, but this is turning into a bit of a side topic and I want to get on with things, if

that's ok with everyone else.

I've been checking in with everyone as I have a chance. Some people are having very good

results with account increases of 5 to 7% a day. That's just fantastic. I'll say to such people

that those results are at the top of the class. I'd like to say don't change a thing, but I'm

concerned that some may not be following the rule to never risk more than 1% of your

account on any trade. There is a very good reason for this.

It's all about the probabilities of a long string of losses occurring. Even if you have a very

excellent W/L ratio, say 4 to 1, the probability of something unusual happening, like 20

losses in a row, increases as you trade longer. Trust me, I have been there, it will happen

eventually, maybe sooner or maybe later, but it's coming someday.

If you are trading to risk 1% of your trading capital per trade and it happens, you would

lose 20% of your trading or less. That's bad, but with a good system you could recover that

capital fairly quickly. I have recovered from worse. If you are trading 5% risk per trade or

more, you could be wiped out. Think this over carefully. Many never recover from that type

of loss. They tuck their tail between their legs and go off to sell their life one hour at a time

to someone else with the capital to buy it. I don't want to be a part of that happening to

anyone. So please, use good money management at all times.

I'm sure there are many who are having results a little less stellar, but still very good for

their experience level. I’d say to them, keep it up. You will experience some setbacks, but

the longer you do it, the easier it gets. I have also heard from a few who aren't having such

good results. They are the ones I want to address a bit now.

One complaint I've heard from some newer traders is they are getting stopped out too

often. I want to counsel against increasing your stop more and more thinking that will solve

the problem. Oh, if it were only that easy. I trade the 1h TF with very tight stops, usually 12

to 20 pips. If you are trading in this range and stopping out lots, there's nothing wrong with

your stops. There is something wrong with your trade selection. You are overtrading. You

need to make fewer trades and better trades. I know that it's not easy to decide which of all

the possibilities you see are the good ones, so I'll give you some hints next that you can go

and try out for yourself.

I'm not surprised that the more experienced traders are having better results with this

system than newer traders. Many have made extensive studies of candle stick patterns,

money management and other relevant material that is all coming together for them now.

Experienced traders have all sorts of loss limits that prevent them from getting so deep in a

hole they can't climb out. I have a daily and weekly loss limit, but I also have a limit that I

will never take more than two stop losses on the same pair in a day.

Tymen ran through some basics of indicators and concluded that they didn't work by

themselves. When he introduced the BB DNA entry method, but advised that it was not for

new traders. That might be because there are many other things like money management

and pair selection that more experienced traders have already practiced. So let's look at

some things that might help newer traders select fewer and better trades.

The Tymen method of BB DNA is a type of filter that selects trades that are already at their

statistically maximum or minimum values and have turned a bit to revert back toward the

BB Mid band. If you find that you are stopping out too often using Tymen's method just as

he presented it, there is nothing wrong with prefiltering your trades and only selecting the

ones that give you fewer stopouts. I suspect this is something the more experienced traders

are doing almost reflexively. I'll present a few possibilities and you can test them for

yourself.

I've noticed some experienced traders are combining candlestick methods with BB DNA.

This makes sense since it is a direct observation of very detailed price action. They watch

for a particular pattern like a star or a doji before entering and seem to be getting very

good results. I'm not saying that anything works for everyone, but if you haven't spent

some time studying these patterns, this would be a good time.

Others are using higher level time frames to filter their trades, only trading when two or

even three trends of TFs above them are in the direction of their trade.

Tymen also showed us the method of only Trading long when the MACD is above the 50%

line and only short when the MACD is below the 50% line.

Tymen also once suggested to a trader that the stochastic could be used as a filter (you

have to read his comments very carefully). I'm a Stoch trader from way back and used to

look for particular setups where the 15m was coming off the bottom (for long) and the 30m

and 1h were already headed up. This is almost the same as saying the trends for two levels

above are headed up. I would ride the 15m up and if it saturated (a complaint many have

about the Stoch) I would move one level up to the 30m, if it saturated up, I would move up

to the 1h chart and continue to follow it up. It was a simple system, but I had good long

term results from it. Walking up timeframes allowed me to stay in a good long trend longer.

There is a simpler way to just use it for a trade filter and I detailed it in an earlier post. if

the short term line is above the long term line, only trade up. If it's saturated up, move up a

timeframe for a signal. Use just the opposite for a trade down.

These are all entry filters. You can try others like the RSI or ADX. Another popular one is if

price is above the 100sma and 200sma only trade long, if price is below both, then only

trade short. Another is if price is above a up trend line, only trade up, if price is below a

down trendline, only trade down. There must be a very large number of these.

The point is not to trade these filters by themselves, but rather use them to reduce the

number of trades you are taking and then only take them when conditions are most

favorable. I can't say which, if any of these filters will reduce your stopouts. I would suggest

first try filters that are closely related to price action, such as candle sticks or PA above the

100sma and 200sma only go long, or below only go short. If nothing else, this will reduce

your number of trades and SL losses and give you more time to think over the trades you

do take.