[dpaterso]

Yo!!!

'The book' says to go back two or three weeks and SOMEWHERE AROUND THERE find a significant high point or significant low point and start the sequence from there and it does not matter whether the instrument of pair was ranging or trending BACK THEN ONLY what it's doing now. Also remember that the 'three-days-up-two-days-down' 'phenomemon' I don't think is supposed to be taken 'literally' as it were. In other words: remember that you're looking back HISTORICALLY i.e. you're seeing the bars AFTER they've closed. You're (we're) trying to trade a ranging market so EVEN IF you have FIVE 'down days' in a row it does NOT mean to say that DURING those five 'down days' the RTS levels were not hit. Remember: they're Pivots and 99.999% of the time price will trade to, and stop, and turn again at one or the other Pivot i.e. at one or the other RTS level.

As far as the LRC's are concerned: I'm 'with you' on your idea of finding 'roughly' where the instrument / pair started trading in a range. What I'm currently testing with LRC's (14,100) is to find a pair that's trading in a range and placing my buy or sell orders at the FIRST OR CLOSEST RTS level that falls OUTSIDE of the LRC's and then following the RTS through for an exit. In other words: if my B2 is the closest RTS level AND it's OUTSIDE the LRC i.e. BELOW the red line in our case then that's where I'm placing an order and if it gets hit then I'm making my TP S1 as per the RTS and adjusting that every day if the TP has not yet been hit. Yes: I'm making fewer trades of course BUT I'm ALMOST ensuring that if my TP i.e. S1 in this case is NOT hit on the 'correct RTS day' and price moves against me then the next day, even although S1 has moved CLOSER to me, if I manage to TP then I still make a profit as opposed to either breaking even or having to close out at a loss when I'm required to close out as per the system. I hope that makes sense.

You guys seem to be having the same problem as I had with the book (and no offense is meant here i.e. this is meant to help not 'hinder'): I don't know if it's because the information is presented in such a 'dense' or 'concise' form or what but sometimes you need to read each sentence as if you were back in 'kindergarten' because it's REAL easy to miss a word or something that can change the whole outcome of your understanding of what you've just read.

Also: I am currently 'experimenting' with using ADX/ADXR(7) again to detect a range. The reason being that these RTS trades appear to be relatively 'quick' trades so you want to know ASAP when a pair has started trading in a range and you also want to know ASAP when a pair has started to trend. I'm currently not sure whether I'm on the right track or not i.e. only time and experimentation (and resultant profits of course) will tell.

Again: every day I find more and more that you need to 'see' the systems 'as a whole' i.e. take a 'broader view' of things e.g. don't JUST look at the ASI or the RTS levels BUT ALSO take into account the 'slope' and 'direction' of the ADX and where +DI and -DI crossed because that is also a 'key' level (take any instrument or pair, see where +DI and -DI crossed, and look at the closing price on that day keeping in mind the 'extreme point rule' and you'll see that most times that level is either support or resistance). Just one example of course but you get the picture.

Edit:

I thought I'd attach a chart of USD/ZAR (ADX/ADXR < 20) 'for good measure'.