[quote=“roddysmith, post:1292, topic:71504”]Guys,
There’s been a recent interest spike in strength meters. In your view is it worth aligning one alongside the average range data, session & round number levels?[/quote]
I have one up on a screen roddy along with aggregated retail bias weightings & the top 8 higher range pairings, which is the only time I’ll use a meter triggering potential intraday bets.
For what it’s worth (being end of month settling) today the readings highlighted strong $US early doors matched with weak $NZ. That pair doesn’t rate on the day trade radar at all due to its woeful average range coverage, so the next strongest bet was EURO v/s CAD. That pair ranks as one of the 8, has over double the range of the NZD/USD + the bias weightings were also more attractive leading into the Frankfurt/London open.
USD/NZD (short) was registering a 61% long on retail bias whereas EUR/CAD (short) was reading 76% long. So more punters were holding longs & vulnerable to continued downside on a pair offering significantly higher average daily range coverage & turning over into early London trade below the prior weeks close & Friday’s low.
It also had more than 85% of range left in the tank as it dipped on lower intraday highs off 1.5550. Not only did it comfortably cover it’s average range (108%) into the lows of the day, but that level is a prior weekly low from weeks ending 13th & 20th April.
Those are the typical types of intraday punts that will offer up decent odds when combining the basic structural levels, retail positioning biases & a strength meter, but as with the longer range stuff, they’ll still require filtering to heighten the odds.
If you’re going to use a combination confirmer such as the above i’d stick to the 8 strongest average daily range pairings if i were you & only trigger when the odds are favourable in tandem with directional momentum pressure.
apache – point taken re; the unnecessary use of it when working rollover orders. I guess it could have minimal impact when a pair is in transition or breaking out of a prolonged consolidation, but it looks like its merits lie elsewhere.
corpellan – having just spied the range numbers of the 8 highest performing pairs today I note, rather unsurprisingly, that Euro/Canadian Dollar is the only one of the 8 to effortlessly cover it’s range, justifying the earlier top spot filtering ranking. In fact it beat the others hands down
I take it from that comment that it is common for longer-term players to trail stops under the weekly lows, compared with the short/medium term folks would be using the day/session lows?
It will very much be individual objective dependent Matt.
How strong they grade that particular regional currency v/s it’s competitor
How many positions they’re running
How diversified they are
Whether they’re running side-by-side exposure - playing the long game with one regional currency in a specific pair, whilst playing the short game with the same currency in a different pair.
But relating it to your likely exposure preferences; as a rule of thumb, if you’re tracking a pair or instrument that you’ve decided to roll over and/or pyramid into then it stands to reason if it’s continuing to stack up above or below a key level such as a daily or weekly high/low, there’s no real incentive to kill that gamble.
You no longer need to make the exit decision because it’s constantly being made for you each time it holds a higher low going up (above it’s prior key level) or holds a lower high going down (below it’s prior key level).
Way way back in this thread & repeatedly in the templates thread you’d have read the comments about price having to hurdle & put to bed a prior day and/or prior week high or low in order to advance. If it doesn’t put those levels in the rear view mirror it aint going anywhere fast, hence why we’ve always advised to focus less on the textbook support & resistance levels & more on the key ones.
How do you currently manage your positions in sync with your objectives Matt?
If you’re considering running your bets into multiple sessions along the lines of that quoted text from José utilising end of day stops, then you’re going to have to get used to compromising on either your bet sizes or your objectives.
There’s no definitive answer because no-one knows how far or how long a leg or cycle will run before it turns or flattens. Neither do we know what financial circumstances or psychological tolerances you guys are wired into.
That’s why we’ve constantly hammered home the need to get your objectives & your capital exposure tuned into how comfortable you are maintaining open positions. Psychology is a huge part of this game & one which is very underrated. It’s also the reason why the set up/concept is presented the way it is. It offers an either or solution to using standard tools across a varied game play.
If you’re adequately capitalized right off the bat it’s a lot less stressful to achieve a long game objective than it is when you’re stressing over available capital, constantly checking & fiddling with stops & analyzing the ass end out of every move because you’re pushing or stretching those account limits.
Trusting your model is also imperative.
If you’ve done the ground work & you know your background/foreground, prep & tools afford you positive expectancy it eases pressure & offers confidence to execute & manage according to your normal set up criteria.
Those individual parts form the complete package.
You can’t run a consistent model if one or more of those parts are sub-par.
roddy,
i’ve only been looking at them for a short time, certainly nowhere near as long as corpellan or stakz, who also incorporates one very successfully into his daily regime judging by his performance stats. I will admit though its highlighting opportunities i would normally have overlooked & i’m in no way disappointed with the resulting returns.
Some of the opportunities match up with the directional momentum dominance sequence & some don’t. But the advantage you have in both options is the use of adjudging key session & round number levels + average range availability to help decide if a trade is worth getting involved in or passing.
apache is right when he says it won’t particularly add much to the grading of A & B list candidates during the identification & filtering stages if you’re considering longer term trades, but it will confirm when a currency is heading back into favour having pulled back within its directional move, offering the option of adding another stake to the pot if so inclined.
I’m definitely intending to persevere with the testing & observation, particularly given the impressive results from both the guys currently using them on their intraday orders.
It looks like you have a decent handle on the first 2 steps of the process judging by your example choices. It’s really not a difficult concept to align yourself with at all & as the guys have constantly reiterated throughout the thread, it not only keeps you focusing on the value candidates but offers a solid set of guidelines about when to engage & how long to ride them.
If i can add any further value to your comments i’ll try. Best of luck getting involved.
You won’t regret it that’s for sure.
No surprises really. Standard filtering of markets by looking for those clearly trending on the 1h/4h. Entries on 5m pullbacks (break of 123 or traders trick). The only part that is perhaps not to everyone’s taste is I require the pullback to occur at a level of interest (Asian/Day/Session H/L) with the stop under that level.
For managing the positions:
Move stop to BE if price has travelled a reasonable distance and is either at initial resistance or beyond initial resistance and shows signs of reversing.
Take half off and move to Break Even at 1R.
Trail the stop on the remainder of the position under 5m swing lows until taken out.
I’m a scientist not an artist. I work better with rigid rules and I’ll take whatever the market gives me. I certainly don’t fiddle with trades or second guess entries. If it stacks up I take it and manage it, until I’m out.
Obviously I’m relying on short term momentum and I don’t roll over bets into multiple sessions (the question to José was more for academic interest if I decide to extend automation in the future to longer term trades).
With regards to automating this, rigid rules should be easy to code but I’m finding it a lot easier to code the entry and management of trades than to code the initial market filtering. It seems to me that the best approach is to code the trade entry and management but partner that with a manual approach to choosing the markets to run it against.
Then if that’s working out & affording you positive expectancy, stick with it.
Far better to be psychologically stable than implementing an aspect that causes even mild anxiety, because that would definitely be (long term) counterproductive.
And over the years the set-up has proven to offer those in abundance, regardless the market conditions, which is what makes the approach attractive to both sets of market participants.
You’ve been around these couple threads long enough Matt to adjudge which type of game play suits your own personal comfort level, something we’ve majored on time & again.
If it aint broke buddy boy then it don’t need fixing.
Thanks Sylvan, apache & corpellan.
Appreciate the feedback.
Those are good points you guys make, especially the average range/worthwhile odds argument. That’s an important consideration given the costs-fees-time factor.
I certainly wouldn’t be looking to take on day trades with poor average range percentages because once the big volume sessions kick off in Frankfurt & London some of those pairs will have already covered 25-30% of their daily ranges unless they’ve pulled back in Tokyo & are gearing up for a continuation spurt.
That NZ Dollar/US Dollar pair corpellan referenced falls into that category. It’s perfectly ok for rolling positions over once they trigger day & week session levels, but not very attractive for anything shorter.
I’ve defaulted the 8 high performance pairs on a separate template attaching the horizontal round number grids & average range data.
Sterling & Canadian$ are holding up well today with Australian$ & Swiss Franc under-performing so I took a long Pound/Aussie day bet as it bounced 1.81 an hour into the London session spurred by a full tank of 130 pips worth of average daily range. It’s one of the higher of the 8 perf pairs & my research informs me it reacts well to round number bounces as well as adr coverage.
Right on cue it covers 80% of its range into 1.82 as the meter begins easing off into the lunchtime/New York overlap period. This is one slant I wouldn’t have even considered if I hadn’t absorbed & digested the material here & overlaid the strength/adr option. Very early days for this specific aspect, but engaging with pairs offering higher acceptable odds such as those 8 you’ve mentioned, & filtering them properly I can see some particularly exciting merits for taking selected day bets.
This is the only 1 of 3 day trade opportunities identified this week that I’ve traded with hard cash, but the other 2 also romped home without breaking too much sweat. As with the longer range trades, patient & accurate filtering will prove to be a loyal friend.
[quote=“roddysmith, post:1302, topic:71504”]…so I took a long Pound/Aussie day bet as it bounced 1.81 an hour into the London session spurred by a full tank of 130 pips worth of average daily range.
my research informs me it reacts well to round number bounces as well as adr coverage.[/quote]
Most of the top 8 do. The runt of that litter is pound/swiss which is a tad more erratic on the 00 targets, but it’s also the lowest of the daily & weekly ranges amongst that grouping.
Don’t let it put you off, just bear it in mind & ensure when you get the green light to trigger that one you’ve got ample range in the tank when triggering. The rest are solid performers & consistent in their session coverage & 00 reactions.
That was a decent punt today, good spot on the prep & exit…nice one
As per my point of view, GBP/AUD is not on my radar as since April is into a trading range.
If I had to trade it, I would take short only as it has broken the low of 3 of the last 4 week…
But there are better candidates out there…
I absolutely agree mc297, far better choices if you’re adhering to the core principles of the approach, but this wasn’t one of those.
As i mentioned in one of my previous posts I’m using the 00’s, average range & session levels in tandem with a strength indicator & filtering the appropriate set ups based on that option for short-term opportunities.
Hi, I’m sorry, I have to read again your post. It wasn’t a critic at all anyway, it was just to check if my view is aligned to the principles of the core structure presented.
No worries my friend, it’s all good
You’re quite correct in your observation about there being much stronger & better established core directional opportunities out there currently & of course that is the primary objective of this approach.
The thing i love about their material is the fact the same basic principles & 4 step process can be very easily transferred from a medium to long range outlook to a short range stance with minimal effort & without compromising the structure.
I think it was AltTab quoted in one of his recent posts, “its a man for all seasons” & he wasn’t exaggerating. There are very, very few concepts where you can change hats so quickly using the same tools. Usually it requires a whole separate strategy change to achieve that objective.
[quote=“roddysmith, post:1302, topic:71504”]Sterling & Canadian$ are holding up well today with Australian$ & Swiss Franc under-performing so I took a long Pound/Aussie day bet as it bounced 1.81 an hour into the London session spurred by a full tank of 130 pips worth of average daily range.
Right on cue it covers 80% of its range into 1.82 as the meter began easing off into the lunchtime/New York overlap period.[/quote]
You got yourself a reversal of fortune today sonny jim.
A quick peek at the retail positional biases for yesterday & this morning on those 2 revealed majority leaning long on both spiking to +76.3% on gbpaud & +75.7% on euraud during middle of yesterday’s NY shift.
Aussie was as strong as the Pound & Euro were weak all through Asia & London this morning, & with the wind at your back courtesy of their liquidation stops below yesterday’s lows you ought to have had a comfortable short ride on either of those.
They’re both up around 80% of range into the lunchtime lows too, so not bad odds at all for an intraday punt……not to mention they’re weighing heavy to the downside anyway re; directional momentum, so you could have ticked that box too.
[quote=“double_6, post:1308, topic:71504”]You got yourself a reversal of fortune today sonny jim.
Aussie was as strong as the Pound & Euro were weak all through Asia & London this morning, & with the wind at your back courtesy of their liquidation stops below yesterday’s lows you ought to have had a comfortable short ride on either of those.[/quote]
Hi double6
I posted as much 12 hours ago on another thread where a like minded soul is looking at the same type of strategy.
My readings were similar too all the way off the kick start of Tokyo & never really subsided into european trade. As you say, both pairs are structured short this week anyway & confirmed the heavy tone as they pierced last week’s lows yesterday.
At the moment i’m getting my brief from the strength data, flagging up the highlighted currencies, overlaying the tools (avg range/00’s/session levels) & where possible taking trades in line with dominant flows. However, if i can compute 2 of the 3 default confirmers, which i was able to yesterday on the Sterling/Aussie long, i’ll take it on against a directional bias as it’s strictly an intraday trade opportunity & not a standard directional set up as per your framework.
Basically i’m using the medium-long term set up opportunities in line with how you guys have presented it & taking the core of the tools to put my own spin on intraday opportunities in tandem with the strength data.
Early day’s but i’m comfortable with the risk, have plentiful capital at my disposal, using very low leverage & focusing purely on the higher average daily/weekly range pairs to maximise odds & obtain decent value.
If you guys have any input related to it please wade in, after all it’s your material that’s inspired me to shape the model according to my own preferences. I’m conscious that i don’t wish to drag the thread off topic so not wishing to annoy the regulars, will keep it to myself if requested to do so.
We’ve always maintained those few minimalist tools are there to help shape & mold your game plans. We’ve offered direction & guidance based on our collective experience as to where the best bang for your buck is & how you can exploit the weaknesses of your retail competitor, of which there are many!
Judging by your initial contributions you already seem up to the task of deploying the elements of the framework to suit your psychological tolerances & that my man is a huge leap forward when gearing up for the gambles ahead. Use the tools however you wish, that’s what we presented them for.
Identify
Filter
Execute
Manage.
It works just as effectively & efficiently when betting the short game as it does the long game.
Enjoy it & post here as often as you want – you won’t be disturbing or annoying anyone.
that’s where you’ll obtain maximum value on that score if you’re considering incorporating strength data into the mix.
corpellan’s eur/cad short bet on monday & your re-engagement with that gbp/aud short bet yesterday morning are perfect examples of using data such as that to stack favourable odds on your side.
you rightly noted the strength in sterling, weakness in aussie during early wednesday trade & although there was nothing wrong with your back-up confirmatory reasoning, you’ll need that scenario to stack up virtually every time you trigger a bet against clear directional momentum… in other words, selectivity & timing will have to be absolutely crucial because your margin for error will be a lot less than it will be when engaging with plentiful flow behind your back.
i’m sure you’ll discover via the feedback from your stats which path offers the least resistance.
good luck with it.
One of the things that kept me glued to this thread when i first began reading was the consistency & clarity of the advice you guys dispensed. I’ve not only revisited the posts a few times but also leisurely looked back at charts with the tools plotted to see for myself how consistently these events unfold. Also your comments to other new thread posters & the examples shown have added & strengthened confidence in the set up.
I’ve only been observing this model for less than 12 months, so nowhere near as long as the majority of regulars, but since i got linked here during last summer & began adopting your filtering & prioritizing sequence there have been very few days or weekends where i’ve failed to correctly identify the priority set ups. Nothing i tried in the previous 2.5 years registered anything near the kind of structured order you offer in this template & certainly not with such clarity.
I like the fact whatever i decide to trade, the process is exactly the same & that takes a lot of stress out of the situation. It’s also an easier task to gauge & identify potential weaknesses in my preparation & execution.
For the first time in a long while anxiety is low & confidence is high which translates to actually enjoying switching on the platform looking for trade op’s every day & weekend. To a degree it’s changed my outlook regards taking day trades too. I’d veered away from that approach before, but the process you’ve laid out lends itself to an either or scenario, especially when a currency begins exhibiting clear strength.
The acid test is always reflected in real live account balances & mine has been ticking over & continuing to register a steady positive curve ever since i began getting to grips with this framework. That for me says it all.
Fear not, i’m definitely not intending to sit here reacting to every little wiggle in a strength meter. My occasional day trades will be as strictly filtered as my continuation entries.
As apache mentioned earlier last week, a meter isn’t necessary at all when identifying trending/momentum set ups, but yours & Billy’s comments below regarding using one as an added nod to a potential resumption following a pullback won’t distract from the main core of your set up criteria.
Thanks again guys. I asked for input & you’re nothing if not consistent with your comments, advices & interaction & i very much appreciate it.
