Jerome's Journal

[Jerome32]

This thread started off really well, focusing on Engulfing patterns.
I would still put a lot of store on such a pattern, especially at key
levels of S/R

Everything I’ve ever written over the last 20 months regarding
Price Action I still stand by.

Where this thread has gone silly is where I infatuate a magical
combination of ‘infalllible’ repainting indicators that has 100%
success (in hindsight)

So how can you make a million dollars with the right combination
of repainting indicators?

Allow me to give you a masterclass ( which btw is quite convincing
looking back in hindsight )

First we see price has gone well below the Bands and it will
ALWAYS revert to mean ( really?) and of course, you
can bet your life price will always revert to that colourful
nose of Market Profile indicator. and of course we have the
confluence of that mother of all repainting indicators, the
white harmonic arrow

and of course the XABCD Harmonic patterns do actually
work out sometimes

but thats only because price does indeed sometimes go up
or down

and how long was I deluded by that STR window, and note
below that perfect STR line crossing right up through zero
line

It never happened in reality!

It is all utter and total BS!

Beguiling BS I grant you, but it is just chasing after the wind

I have trialed several other indies but most of them at least had
some merit.

but the ones I most obsessed over were the ones that never
seem to lose historically, the ones that rewrite history to put themselves
in a favourable light, or repaint as we say.

One or two reliable non repainting indicators may help to put the
price action into a context

Lets say that price keeps respecting 20 MA or an established
Trendline

These are merely visual aids that contextualize the Price Action,
they are not predictive in themselves

This ties in with the whole concept of trading in the zone

I lampooned myself recently for taking a trade because it ‘looked
like’ it would win, despite no set up

but actually you do recognise a really good set up.

The Gambling Adage is so apt

Don’t go looking for bets, let the bets come looking for you!

An outstanding set up screams out at you. You can hardly
miss it.

All we have to do is wait for them to appear

Several indicators, especially repainting

Are your False Friends, as we see in the SC below

[frandlost]

Where this thread has gone silly is where I infatuate a magical

combination of ‘infalllible’ repainting indicators that has 100%

success (in hindsight)

LMAO!!! So True!!! I’ve gone down the same rabbit hole!!

One or two reliable non repainting indicators may help to put the

price action into a context

Exactly! This is what I believe and have been saying but not as eloquently. I had a mile long list of indicators that I downloaded and have ended up on the trash heap. The primary ones that I use now are ADX sans +/-, sheved_supply_and_demand for confirmation of zones, and fibs (these don’t stay on the chart). These with s/d lines and bushels and bushels of patience!

Don’t go looking for bets, let the bets come looking for you!

Patience is a virtue but is also very hard to corral and ride!!!

Great post, Excellent screen shot - I am sure you will be receiving the question “How do I set-up my charts like that?!” and asking for a list/link to all those inicators.

Honesty is the best policy!

Big Thanks @Jerome32!!

KC

[Jerome32]

KC, I thought exactly the same! a ton of enquirers
completely missing the point. Yes, even i thought
it was a great looking template. You could easily
market that system template.

Imagine if selling repainting indicators carried a ten
year jail sentence, that would shake things up a bit,
if all systems were then really as good as they looked

but my indicators above always get it right! They truly
have a marvellous strategy! They wait until the
price makes a big move, and then they pretend
they were alerting you to that move before it happened

But they didn’t. They have no predictive ability whatsoever.

ADX is actually one of the better indicators, without modification,
when green crosses red supported by appropriate colour of
signal candle, is very effective indeed

credit to Las L - the guy has real aptitude for patterns, all his
100+ video strategies work but this one of the better ones.

[frandlost]

credit to Las L - the guy has real aptitude for patterns

Not familiar with him. Is that the correct spelling?

[dpaterso]

Hey.

Well first (and re: my “analysis paralysis” comment on that other thread): my apologies. NOW I get what you were trying to say.

Second (and more important):

This not directed at you so if you know what I’m talking about then skip this. BUT: there’s a pile more to ADX than just the two DI lines. As but one example the actual ADX line is uncannily good at indicating the end of a move. If you take a look at my TPS thread there’s a download link to Wilder’s book there which explains in minute detail. This is possibly the most misused and misunderstood indicator on the planet if the truth be told.

[Trendswithbenefits]

All this BS about repainting Indicators…It’s the reason you utilise Data from more accurate Indicators to steer the direction of a superior visual Indicator… It wasn’t repainting for the 5 days of the previous uptrend…

You have had 3 days warning (420 pips) from this so called “repainting” Indicator setup that price is heading south and this includes confirmation from the Price action.

As someone said to me over the weekend…“An Indicator of an Indicator”…

Simple strategy… 250+ pips had 48 hours later…

Above - Chart from Friday 28th (XAUUSD D1)

Above - Chart from Monday 30th (XAUUSD D1)

So, before the usual suspects start throwing toys from the pram…This is not “my” Oscillator displayed on this Chart… It’s the DiNapoli Stochastic… Instead of the cross of the stochastic which at times is hard to visualise… It’s just an overlay simplifying the data from the DS Indicator…

One clean concise Indicator on a clean and concise Chart…So so simple…

Unfortunately some traders in here couldn’t make a dollar out of a Bank heist… So busy looking for the next best thing or complicating their strategies with Intellectual pretentiousness…

[dpaterso]

couldn’t make a dollar out of a Bank heist…

Now that’s funny!! LOL!!!

[Jerome32]

credit to Las L - the guy has real aptitude for patterns

Not familiar with him. Is that the correct spelling?

No sorry, it is Laz L. I think he wishes to be
semi anonymous

His strategies are all extremely simple, just two
MT4 standard indicators, but they are all profitable

I have seen his video course for $7, I personally
didn’t even pay that, it is available free online

He’s a great guy, in his webinars he even goes to a lot of trouble
to make sure colour blind traders can distinguish what
he is doing on the charts

[Jerome32]

This not directed at you so if you know what I’m talking about then skip this. BUT: there’s a pile more to ADX than just the two DI lines. As but one example the actual ADX line is uncannily good at indicating the end of a move. If you take a look at my TPS thread there’s a download link to Wilder’s book there which explains in minute detail. This is possibly the most misused and misunderstood indicator on the planet if the truth be told.

That’s quite correct, and what Laz L is doing doesn’t even make sense. ADX
is, I believe, a measure of volatility not direction of price. I don’t even know
why the simple cross works so well, but it really does.

but savvy traders do this all the time. One guy has no interest in Stochastic
overbought/oversold but simply checks that Stochastic is pointing in
the right direction along with his other criteria.on 5M TF.

[Jerome32]

@Trendswithbenefits

All this BS about repainting Indicators…It’s the reason you utilise Data from more accurate Indicators to steer the direction of a superior visual Indicator… It wasn’t repainting for the 5 days of the previous uptrend…

I’m sorry to be so obtuse here, but is anyone claiming any configuration
of the Stochastic indicator repaints? I’ve never heard any suggestion
of this before

I personally had a nice little win on Gold with the DiNapoli Colour
Stochastic. yes TP was not ambitious, but this does make for a
high win rate.

Are you defending DiNapoli from dissenters on another thread?
I seem to be missing something here.

My problem with repainting indicators, is the same problem so
many have, when you have an arrow that historically always alerts
you to the start of a new trend, you really want to believe this
happened in real time too. It doesn’t!

Trust me, I would be the happiest man in the world if anyone
can prove me wrong

I don’t want to be right, I want to be rich

We now have an arrow to go long on EURCAD

As you can see, this arrow ‘always’ gets it right

it never fails!

This is the class of BS indicator I have been referring to

Not bone fide indicators that justifiably recalculate during
the course of the candle forming, but total BS scams, where
arrows routinely disappear, and reappear in a far more impressive
place

[dpaterso]

Well. Read the section in the book and all will be revealed. There’s even more to the DI crossings than most people are aware of. And there’s an entire trading system based purely on ADX in the book.

It’s not a volatility indicator. It is an index of the strength of directional movement (both ADX and ADXR). As i noted: it’s ability to indicate the end of sustained moves in one direction or the other is something to behold.

[Jerome32]

I’ve read a summary of Wilder which is interesting. He
suggests combining with PSAR for exit.

yes it can work well on sustained moves, but personally
I see nothing spectacular here. Many examples where
Engulfing pattern will get you out earlier and save you
a lot of wasted pips.

but…

an reverse engulfing pattern thats backed up with cross
of ADX?

you would have to be brain dead to ignore that

and in writing, that then should hold true for entries

An Engulfing pattern closing out off and back into BB,
supported by cross of ADX

With no testing whatsoever I know that would be a very
powerful system

Although setups may never happen

I’ve noticed that with theoretical strategies. When a strategy
almost never fails, it also often never happens

but I will look into this, it does really seem like a killer
combination, although BB out and in with DiNapoli is
extremely good anyway.

No reason at all why you can’t look out for both

[dpaterso]

Don’t get carried away. Parabolic SAR would only have cost you points (or pips in your case).

If there’s one indicator I spent my life on it’s Parabolic SAR so I knows it’s drawbacks and pitfalls pretty well. Parabolic SAR is unfortunately one of those very indicators that always looks good on paper. That said (and as usual) wasn’t designed for spot FOREX.

But and in just using your own chart: check out the exhaustion indicated by ADX(14). I personally always used Wilder’s 14-period defaults for everything but I do see many people shortening the period to 10.

[Jerome32]

Now that is interesting!

I was looking at the cross to exit, not the exhaustion
and we see the exhaustion is perfectly supported by Engulfing
patterns - another powerful combination

I must say the synopsis of Wilder I read was both murky and convoluted,
he even says ignore Wilder’s recommendations and find something
you like better ie the different zones are suitable for different trading
styles eg 10 - 20 best for scalping etc. possibly true, but it just didn’t
gel with me

but your example above is very impressive indeed

Mainly because you didn’t cherry pick an example to prove your
case, but you threw my cherry picked example back at me!

and you scored 3/3!

I hope others are taking note of that - this is very powerful
stuff!

[dpaterso]

My pleasure!!! LOL!!! Just trying to help is all.

And here. I’ll even save you the trouble of having to sift through my thread for Wilder’s book (pretty much been my “Trading Bible” since the day I started and certainly the very first book that I bought). There’s good stuff in it.

And yeh: be careful of these brief overviews and stuff when it comes to Wilder. Normally a LOT of stuff is left out.

New Concepts In Technical Trading Systems - J. Welles Wilder Jnr. (1978)

[Jerome32]

Many thanks for that! Only about 100 pages of reading
without worksheets and appendix etc

I read the conclusion… it makes sense. It is of course
about defining directional movement and ADXR is to date
the only definitive answer to that, not perfect but the best
we can hope for at the moment

That was 1978 and I presume no one has found anything
better yet

In my quick tests I was pleasantly surprised to see it didn’t
especially perform better on higher time frames such as
Daily, Weekly

It does extremely well on H1 and H4

The sc below is awesome

entering at Engulfing pattern, closing out off and back into BB
supported by DiNapoli Stoch on H4 timeframe

Exit at ADXR Exhaustion for 500 pips on H4

I don’t particularly have a problem with that!

so thanks again, there is definitely mileage in this!

[dpaterso]

Once again. My pleasure.

It’s not an easy read that book i.e. it’s fine detail after fine detail (no fluff) so sometimes you have to read a paragraph like then times to get it. But it’s worth it. And plenty of other nuggets in it too especially at the end.

Just one word of warning (to anybody that bothers with it): Wilder didn’t trade with leverage. So when he says to not margin more than 50% of your account: don’t try that with leverage (ask me how I know!!! LOL!!!).

And if you like little dots: take a look at the Volatility System.

[Jerome32]

Knowledge is Power!

On the screenshot below my scout trade is well into DD.

I don’t consider this a losing trade when it is such a valuable
learning experience!

I entered the trade in good faith just before ADX went
into exhaustion.

No disgrace in that, I wasn’t to know that was going
to happen. although I went short while DiNapoli was
oversold, thats probably disgraceful

but the pity is, if I had known about ADX exhaustion
I would have bailed out immediately I saw it

You can’t see what you’re not looking for

or as Metallica put it, ‘How can I be lost if I’ve got
nowhere to go?’ I’ve no idea what that means
but it sounds very profound

also on sc below we see a previous opportunity
that would have worked out really well

[dpaterso]

I’m not going to explain ADX here because you have the keys to the kingdom already. But just be careful to not second guess it i.e. you have to wait for it to turn down and CLOSE and then act from there. Also (and if you read about it) Wilder says that it’s not uncommon for it to turn down, then up, and then down again citing that it’s usually the final blow off stage (words along those lines).

[Jerome32]

I really like this

but curious he has disabled comments and likes,
that usually denotes legions of haters

He does speak to you as though its your first
exposure to a Forex chart, which was precisely
what I was looking for, an Idiots guide to
F. Welles Wilder as he is not for the casual reader