trying out the indicator now but i have a question about it, is it going to automaticaly change? and if so when? at the close of each day? also, does the channel change to fit the price reactions? or does the price actually hit the channel and bounce off?
Been using a 10m & 30m TF chart for low volatility and a combo of the aforementioned with 1h & 4h during London open with three LWMA high/ low tunnels (2,6 & 14) the last two days with excellent results… 14 trades, 2 BE’ish (-2 & -4 pip close outs) the rest have been winners all on EU.
The channel changes as the price data changes. The centerline which is the linear regression line changes pitch as new data is accumulated. The upper and lower legs of the channel changes as the highs and lows change.
As the the price data enters the chart the price moves towards the upper and lower legs just the same as the Bollinger Bands. The price may hit or exceed the channel and often it pivots at the channel. Notice the BB’s move within the channel as well as swing outside the channel. The BB’s will be confined well within the channel on a countertrend with a sharp angle and the price will stall at or close to the channel center.
Notice the bols will often show you how far the price will move to the channel. On a countertrend move the question whether the price will stop at the channel center or continue to the channel is often shown by the bols angle and position. There are other indicators such as stochastics that will top out sometimes as the price hits the channel center alerting to a change in direction.
Both the channel and the bols are lines of S & R whichever is greater is the ultimate line of S & R. I trade with the bols lines untill the price hits the channel and then it’s game over for the price in that direction. There are many other factors that will take the price through the bols and through the channels and on and on until an obvious reversal has taken place.
Be very cautious at the channel legs as the price very often bounces hard and fast. If my analysis of the fundamentals aren’t expecting a break through the channel then I don’t play with fire. I sell at the channel, period with no hesitation.
On countertrend plays the wise thing to do is sell at the centerline. If you add up your losers you will find they occurred on countertrend trades. On countertrend trades move your stop-loss to the center as quick as you can if you’re looking for the price to possibly move all the way to the channel.
ill try it but im not a fan of indicators that change to fit the price. like if the price broke through the channel then it would fit to match the price. showing that price bounce off the top. misrepresentation. but anyways but bolls do you use? 20,2? also what about the stoch? 5,3,3,? or wat?
The whole object of this game is to make money in the present time. The fact that the channel changes as new data is calculated are adjustments that are necessary to give you the current information to make good decisions. You are too concerned with history and this is no history lesson although we are using past data to predict the future. Adjusting your sight to hit the target is the only way to hit the bulls eye. We only use recent history to align our sights on the future.
Remember your goal is to follow the leaders which are the big money players. This and only this will get you to your primary goal of making money. Any other unnecessary indicators or views back in history are superfluous. Your understanding of the indicators and there mathematical formulas that make them work would be helpful in your understanding there use but isn’t critical to your success. Use only the indicators that you need to play their game the same way they are playing it. If you never know the direction the price is heading before it gets there then you’re going to have a difficult time collecting any pips.
Yesterday the Australian’s didn’t raise the interest rate from 3.75 to 4.00 as 79 percent predicted resulting in a huge sudden drop in the price of the AUDUSD. No indicator was going to show you how to play this move but 17 hours prior to this sudden drop there was another large sudden drop which put the price below the Bols-48 lower line. If you then went “Long” you would have experienced 11 out of 12 hours of nice profit and then using any one of a multitude of indicators you could have sold short and awaited the fast and furious drop and again pocketed a nice profit.
Using the Bols or the LRC would show you the opportunity if you were watching but the knowledge and past experience that big money would move the price up on this pair would have put you on the watch in the first place. Big money played this to perfection and would have won no matter what the decision.
The interest decision provided them a catalyst for the big move up and then the big move down. Keeping track of this type of information and knowing how they will play it puts you in the money. This is no different then playing good news in the stock market. The rise in a stocks value is already in the stock value when the news comes out and then they sell the stock at the news driving the price lower. If the news is bad then it goes down even bigger and subsequently rebounds because of the large drop. Big money plays this like a violin and if you’re smart you’ll go to their concerts.
you do have a point with the history and the present part of this indicator. looks like ill have to find a suitable momentum indicator for this. you said you use a bolling band what period and dev do you use? and what are the purpose of the 4 2 LWMAs? are they high/low? or just close?
i posted a buy limit on the E/U hoping price would hit the channel and bounce off. price turned away sooner then expected and my buy order wasnt fulfilled and the shi channel conformed to match the price. This is why i dont like these indicators. They dont perform properly. they adjust to fit the price showing great signals after the fact. something like a MA cross is definite. theres no conforming to price to make the MAs cross, it either crosses or it doesnt. the teal line on my chart is where my buy order was, roughly 2-3 pips above the channel. as you can see the channel conformed to the price and changed again.
i cant quite tell when this indicator updates. IDK if its based off the chart its on (hour chart so updates every hour?) if so maybe i will use it on the 4h so i will be available when price hits/changes the channel so i can make my entries.
Another thing for Johnny. you say use both of the channels may i ask the purpose of this? for me theyre both representing the same thing except one is shorter and one is longer but both the exact same channel
edit; switched the chart to a 4h chart and now the two channels are slightly different. but which channel do i use? whichever will be hit first?
The long and short of it was this was a bad attempt at a bad trade. Your chart is not depicting the whole story. Look at mine. The bols is showing a sharp angle down.:rolleyes: Did you look at the H4 chart? Doesn’t look like a good time to countertrend trade. Even if you succeed your chances of making anything are slim.
The channels are just fine. Sometime the little one gets on top of the big one.:eek: Check the allbars settings, they should be 240 and 96 or 60. Play your channels right and you may get lucky too. LOL. Try picking a better trade. Nothing was good about this trade. I don’t trade like that even if the setup is right. When the price approaches the bols or the channel I then would move to the M15. If it still looks good I then move to the M1 to make the buy.
9-Bols yellow
24-Bols red
36 Bols white
48 Bols blue
2 MA EXP High Light Pink
2 MA EXP Median(HL/2) Deep Pink
2 MA EXP Low Hot Pink
50 MA Simple Close Magenta
I’ve attached a Snake Indicator to keep you out of trouble until you get a handle on this. Don’t read the snake until the close on the M1.
Johnny thought my three tunnels were complex… I stand corrected. But would not disagree with anything youve said on EU. Its looking pretty depressed right now… theres always the London session though.
Robert, Long GU or EU tonight going into tomorrow? Looks good to me, but you’ve said you don’t trade the Asian and I’m getting that way too. But this is longer term than just one session though.
i know, i was simply placing an order to see what would happen. I was already short on E/U for a while, i just got back and closed some of the position at +55, trade is set to BE at worst with other TP at 89 144 and 233 pips. when do the channels update tho? if on a 4h chart will the channels ONLY update on an open of a 4h candle? thats something important to know.
Johnny,
With the setting i am seeing here,it is clear that you system has become apparently different from mine.I think i will maintain the status quo for now and how far it takes me.
It seems there is nothing in this attached file to extract.Or am i missing something?
Headmaster.
good news for them or is it gonna drive price lower? currently short on E/U
ya same, theres nothing in the folder. and his charts looks very complex. I’ve heard the simpler is better in FX, is that true? or are the exceptions like Johnny? also im going to add a couple of indicators to help filter signals, that should keep me on the right side most of the time
Look at mine. The bols is showing a sharp angle down.:rolleyes: Did you look at the H4 chart? Doesn’t look like a good time to countertrend trade. Even if you succeed your chances of making anything are slim.
