I know that well, but I think you didn’t get my point, no pun intended.
Just saying: If the resultant predicts the direction of the price, why would be have to change the way we calculate that resultant when we go long? The price doesn’t know when we want to go long, hence it should still obey to the former rule.
Edit: Btw, I am a student in sciences, so I try to understand the logic of things.
May the pips be with you! 
I think if you re read that area of the thread that the answer will appear to you.
Perhaps your scientific approach has confused you a little.
This is what I’ve read:
Again we set up a 5 minute chart with the Bollinger bands and the Keltner bands with period 4, factor 1.
But the Di Napoli MACD, as it stands, will not work.
In its normal state, we use it for short entries.
We need to set up the Di Napoli MACD for long entries.
This is done by turning the MACD upside down.
How do we do this?First, by finding what the values of the Di Napoli MACD are.
They are :long moving average = 17.5185 (17.52)
short moving average = 8.3897 (8.39)
signal = 9.0503 (9.05) - not needed… Make this one invisible if you can.To turn this MACD upside down we invert the values, as follows.
long moving average = 8.3897 (8.39)
short moving average = 17.5185 (17.52)
signal - not neededBy doing this, we get an inverted MACD.
The red MACD is the original Di Napoli MACD.
Note that you cannot put the inverted values into the Di Napoli MACD.
You have to open a new MACD to put the values into.The green MACD is the result when you put the values into inversion.
By doing this we are now ready to set up a 5 minute chart to trade long.
On the 5 minute “long” chart you have :
The Bollinger bands - standard values as before.
Keltner channel - period 4, factor 1 as before.
Inverted Di Napoli MACD - long period = 8.3897 and short period = 17.5185.You can set both the MACD’s on the same chart and expand/contract them as needed. (On the above chart, the candlestick chart is contracted or minimized - you can see the colour bar above the MACD’s).
When it is time to enter a trade, we do exactly as before.
We draw or note the middle BB vector, then draw or note the inverted Di Napoli MACD vector.The resultant will give us the best possible long entry price.
I don’t see the answer to my question there. 
Perhaps you don’t get exactly what I’m trying to say?
I just finished reading the whole thread. What a learning experience! Thank you Tymen for your effort, patience and generousity. It is extraordinary.
Everything was so clearly explained that I had no questions until you suddenly introduced the UM. I don’t see the wisdom in the 10 pip stoploss. Why not put it above (for a short trade) the possible retrace price? It seems like a guarantee to be stopped out, unless most trades are pip first trades.
My biggest challenge seems to be living in the Pacific time zone. I can’t seem to find any way around having to stay up all night to catch the European session. If anyone knows an alternative, I’d really like to hear it!
Thanks again to tymen.
“Ay, there’s the rub”
A difficulty for me as well since I live in the -5 GMT zone.
Pairs can move anytime but generally;
The /jpy pairs seem to move throughout the day because of the US / Asian sessions. Also, take a look back on your hourly charts; alot of the time you’ll see a swing roughly the same time of day.
The European session seems to start moving on average from about 1am to about 12pm my time, (10pm - 9am the next morning for you). My answer is to get up at 5am and catch it till it settles down and then keep watching the /jpy pairs the rest of the day.(I’m lucky, I have free time at work).
However you are three hours behind me so you could stay up a little late to catch the beginning and then get up early to catch the end. One way or another, there will be sleep lost (gotta make a sacrifice of some sort to succeed). You just need to figure out when would be good for you.
Hope this helps
After this message from teacher tymen, here is the result of my homework. Please correct if needed and i’ll raise the version of this post.
Note : This post won’t explain UMS nor UML.You will notice it is not the exact index of tymens post. It is another way of setting the charts (mine) and the reader may also click on the provided links at the end of this post to have tymens precise settings.
After all the goal is to understand and feel confortable…
[B]Introduction[/B]
We’re all here to recall… sounds like a church, let’s change that one…
Once upon a time… hmmmm that is not the history course neither…
Ok ok, so let’s say we have to set our computer in order for UMS and UML works fine.
First of all if you have that computer (or any Comodore CPC64, ZX 80 or ZX 81 with the 4K extension memory for over $100, or even ATARI 520 ST) then you should think about fishing rather than trading.
Otherwise, here is the ultimate advise about the technical specifications tymen is using …and most of us do now.
[B]The problem[/B]
The method require many charts if you try to focus on all major currency pairs (6) as we have for each :
[ul]
[li]all the radar timeframe from 20mn to 60mn, 5mn step (that makes 9 timeframe!)[/li][li]2 specific charts for 5mn trading[/li][/ul]
This gives almost 60 charts that is :
9 timeframes * (6 charts of currency pairs for each timeframes) + 5mn KC (= 6 charts of pairs) + 5mn KB * (6 charts of pairs) = 60
So here we can feel how hot this is going to be :
[ul]
[li]Computer power[/li][li]Software power[/li][/ul]
[B]Computer power first
[/B]
So you now understand that if you want to trade UMS and/or UML with all the currency pairs, you will need a quick and powerful computer. It is no time to set all the time all the charts spec to have the chart. It has to be fast and predefined.
So first, the [B]ONLY [/B]way to lower the need of power is to lower the number of currency pairs you decide to trade. If you are in such case, skip this content and go to the software spec below.
Charts are memory consuming on both side : the desktop AND the video card.
We came to the fact that the best screen size to be able to watch these chart is 22 inches min.
As a consequence, you must have a video card that can display something like 1680x1050 to be able to have up to 6 charts at one time on the screen. Then, because you will have all the timeframes, you will need memory on desktop and good video card with memory on it. So it is best to consider at least 2GB on desktop and 512MB for video card.
[B]Now the software
[/B]
As mentioned in post #811 there are 2 major software used here MT4 & Dealbook. Both software are free.
Dealbook has a limited time offer. It is free from GFT for 3 month then you have to open an account. There are also other providers that let you use the demo account for life if ever you open at least the minimum one for $250 or $1000 (as an example see Kinetic Securities in Sydney, Australia)
All of those who have been testing these software with these method end to love Dealbook because it is much more easier to set all the screen and be able to switch between them.
It is time to recall a very usefull line from tymen (#798) :
[B]" All readers please note that I do not receive any commissions or inducements for my recomendations.
They are entirely my effort and I get no reward whatsoever for doing this. "[/B]
Time to explain the use of Dealbook (alias DB)…
[B]One workspace and various charts[/B]
When you open DB, you will notice a window named Workspaces. There should be predefined name (CFD/FX Basics and GFT Resources). Click on ‘CFD’. You have various windows opened now. Close all of them. Now if you right click on the workspace (not the button, the green space left free) then ‘Chart’. It is asking for a currency. Select one (EUR/USD).
Note : If ever you closed the Workspace window itself. Don"t panic. At the top of them main window, you will find a ‘View’ then add the bottom ‘Workspace list’…This window is dockable. That means…well try to drag this window and drop it to the bottom or the left of your screen to understand…Now click on the chart window to get the focus on it. You will see on the top of this window different kind of information. I’ll list only the first that are of interest for us.
So, from left to right :
[ul]
[li]Type of chart (select candle),[/li][li]timeframe (let’s take 20mn),[/li][li]First currency pair (choose EUR/USD),[/li][li]Second currency pair (leave it),[/li][li]Grid kind (whatever, chose something confortable for you),[/li][li]SI (as Setup Indicator),[/li][li]SC (as Setup Chart),[/li][li]CT (as Chart Template)[/li][/ul]
Now let’s click on SI. If there are yet various indicator, we can click on each and ‘Remove’. When the list is empty, then ‘Add’ the Bollinger Band (BB) indicator with default values on current Subgraph.
While BB is selected, let’s change the style to select a thin line and blue color for the band. For the MidBB let’s select a dotted line still blue.
Then ‘Apply’. It is now on the chart screen. Everything seems ok ? then ‘OK’. Now we have our candle chart with our BB.
So now we got set our EUR/USD candlestick chart with our BB. Champagne !
Following the rules of UMS or UML, we have to make one of these for each currency pair for that timeframe.
First power of DB is the fact that you can click on CT (Chart template) and ‘Save’ to the name you chose (say ‘Main trimeframe’). Now you can right click on the workspace (the green), select ‘Chart’, click on first currency pair and chose say GBP/USD, then click on CT and ‘Load’ the chart template ‘Main timeframe’. It is then all set for this currency pair…!!! You can do the same for all of the 6 majors pairs.
Ok so now we have 2 charts in our CFD workspace. This name for my workspace isn’t quite clear, let’s change it to something more clean. Let’s right click on the [B]button [/B]CFD and ‘rename’ it to ‘20mn’. Now with a quick look to my workspace list, i can see i will have my 20mn charts.
[B]I need more workspace
[/B]
Ok so now i got 6 charts on my first workspace named 20mn. I set my charts in order i can see them all on my screen at the same time. If i have a 22 inches screen, i shouldn’t need to minimise and/or maximise all the time. It is possible to tale the windows all together.
Right click on button ‘20mn’ and select ‘Clone workspace’. It waits for a name ? say 25mn !
Immediately we have all 6 charts copied within the new workspace called 25mn. It is then time to change the timeframe of each chart to 25mn…and that’s all.
Ok i let you do now the 7 others !
[B]Now the trading timeframes
[/B]
Ok so now i make a new clone and call it ‘5mn KC’.
If my goal is to trade then i should change the timeframe of each chart to 5mn. BUT we remember the use of CT. So let’s work on one chart.
Ok I set it to 5mn. Then SI, ‘Add’ KC on same subgraph, ‘Add’ DiMACD on another subgraph (settings are described in #811). Now it is time to CT, ‘Save’ to ‘5mn KC’. Then for each other chart of this workspace it is easy to CT, ‘Load’ the ‘5mn KC’.
Note : If you are using UML you should also have add the opposite DiMACD.
You should be able to clone and make the same things for the ‘5mn SB’ don’t you ?
When trading time is on, and the shape is chose, then i come to my 5mn trading workspace and maximise the chosen currency. When finished, i put it back to its initial size.
This is it. Now you should be able to be part of the hunt. Good luck.
[B]Warning : Feel confortable
[/B]
It is a description of the way [B]my [/B]screen are set. It allow me to watch all the currency pairs at a given timeframe.
Tymen set his screen differently. He use 2 workspace per pair then he has a whole view of the pairs whatever timeframe.
The method to set them is identical to mine. So it shouldn’t be difficult to do. The only goal is to feel confortable…
Below are the post he made on his settings :
FXCaribbean
"Don’t go where there is a path. Open a new one and leave a trail".
If you want to understand what we’re talking about here (UMS) then read this and set your screen and computer that way
To [B]VulcanClassic[/B]
Hi,
I would be interested to discuss via either IM if it’s ok with you. We’re both in quite the same timeframe (I’m GMT-4).
FXCaribbean
"Don’t go where there is a path. Open a new one and leave a trail".
If you want to understand what we’re talking about here (UMS) then read this and set your screen and computer that way
Yeah, no problem. Just IM me.
LOL.
Your IM isn’t public. I still can’t send messages because of the 50 messages limit i presume.
But my yahoo is public (top right of my post)…
I sent you a visitor message, did you see it?
yep and answered but dunno if that works …
edt : Seems not to work. But answer to your question is yes. Try it … 
FxCarribean
Nice work on the documentation…!!! thanks for doing that…
Tymen
I am watching only two markets at this time… I have to learn to use the vector a bit more efficiently… the two 5 minute charts are the ones I have to master…
Easy to see why it is recommended that the pattern be right on the Bollinger Band…
I have learned a lot studying this method and I am sure there is a lot more to learn…
Great stuff…!!!
dave
Oh my!
What a lot of posts since Friday!
I will answer each one, just bear with me.
Then Its back to that trade!!
Firstly to [B]FXCaribbean[/B] and that amazing post!!
Credits to you!!
You are a legend!
I am glad you are on my thread.
Many thanks for that piece of collosal work which must have taken you ages to produce.
You are welcome to give a different setting out for the charts. That will give viewers a variety and they can choose how to set out their charts.
You are obviously displaying some computer knowledge too!!
I am sure all readers will agree that this post of yours is fantastic and extremely helpful.
In a way, It puts my small contribution to shame!!
Obvously you will not get as many trades.
But it also depends on what hours you work.
Be happy with your two only choices. They are good choices.
Starting out, you are better off concentrating on only a few trades.
You can build up to the 4 majors later.
I gave some though as to how to answer this question since you are a student in sciences (good for you!! )
[B]And I think I have the answer in your statement :[/B]
… Inverting the MACD will invert the y axis component of the MACD vector and give us a bad prediction, no? …
It [U]does [/U]invert the Y axis component.
It [U]does [/U]give a bad prediction…if you were to [U]continue [/U]to trade [U]short[/U]. (evening star requires short trading).
But with the engulfing pattern, we are now trading in the [U]opposite direction[/U] to the evening star. (long trading).
So this inversion giving a [U]bad prediction [/U]for an evening star, now becomes the [U]best [/U][U]possible[/U] prediction for a long engulfing pattern.
[B]To clarify further[/B]
Since you are a man of science, I am going to use a +/- Y axis in this explanation…
Suppose we have 2 patterns, an evening star and a long engulfing.
They are traded in opposite directions.
Suppose also that the candle which opens and enters the trade with these patterns opens at “0” in both cases.
The evening star will be going [U]down[/U], so to exit at say, -20 pips, is 20 pips profit.
For the evening star, a better entry would be at, say +5 pips. (trade going [U]down[/U]).
Then the exit at -20 pips gives a better profit of 25 pips.
Now the engulfer will be trading [U]up[/U], so to exit at say, +20 pips, is 20 pips profit.
For the engulfer, a better entry would be at, say -5 pips. (trade going [U]up[/U])
Then the exit at +20 pips gives a better profit of 25 pips.
So what looks like a great KC entry prediction for the evening star (+5 pips), turns out to be a useless one for the engulfer where we need a prediction of -5 pips.
The only way to solve this is to take the evening star predictor (The MACD) and invert it for the engulfing pattern.
So for short trading patterns we use the standard MACD.
And for long patterns we use the inverse MACD.
Hope this answers your question.
[B]Thank you for the kind compliment Condor, and welcome to this thread.[/B]
The only place where the 10 pips stop loss is set in concrete in the [B]UM [/B], is at the outset of the trade.
Here, it is mandatory.
This is to stop you from making too big an initial loss, should the trade go against you right from the start.
1 amount only of 10 pips would be lost.
If your trade is a pips first trade, then you do a 2nd entry, according to the rules and you move the stop loss all the time (trailing stop loss). Then there is profit.
When all this is finished, you are ready to trade the retraces.
Each retrace entry [U]requires a stop loss[/U], and, depending on your confidence, you could place those stop losses only 10 pips away…
Or you could place them 3 pips away from the extreme candle…
Or you could place them wherever you like.
The [U]main thing[/U] with these stop losses, is to [U]move them to break even[/U] as soon as the trade allows.
Otherwise, if the trade goes your way, and then backfires, you will sustain further losses.
If you have already had a 10 pips loss with a “retrace first” at the beginning, then another loss will only make things worse and break your confidence for future trading.
Hope this helps clarify matters - if not, post again.
I think this is why Tonymand (FX honourary member), who lives just up the road from me!! …
…said that we in Western Australia live in the best timezone in the world!!
But then we should invert our conception of what we think is a good entry instead of inverting the macd! If the resultant go down, we can expect to get that -5 pips entry on our long trade, no?
Thanks for taking the time to answer my question, I appreciate a lot.
To [B]Vulcan Classic[/B] and [B]FXCaribbean[/B] :
If you two send your email addresses thro the private messaging system on this forum, you have got it made!!
To [B]Blaiserboy [/B]:
I have learned a lot studying this method and I am sure there is a lot more to learn…
Soldier on!!
You have give 2 choices here.
Both choices are correct.
I quote you…
we should [I]invert [/I]our conception of what we think is a good entry
or
2)
[I]inverting [/I]the macd
Your first choice of inversion is too difficult.
I considered it myself, but we are working with resultants from 2 vectors, BB and MACD. This consideration is simply too messy, complex, and leads to confusion to traders.
That leaves only the 2nd choice of inversion.
So the 2nd choice is the one we do.
If you are still having trouble with this concept, then follow thro with the example trades that I will continue to post. Pay particular attention to the KC entry charts.