Hey J, fortunately for you, you have never heard of ICT, you are a richer man for it. 
The Ever Under The Log Viper
The Actual trade itself was on another PC but
the blue line at top is where it happened for 50 pips.
You also see the first Divergence where there was
no retracement at all, Pound Sterling was unstoppable.
Even the best system canāt dictate to real world
market forces - referred to at some length in
my last post.
So losers will happen and rescue trades will be needed,
hopefully not too often.
This strategy is not what it seems -14/15 winners may
seem like the Holy Grail but it isnāt.
If you can really stay disciplined enough to stick to very
prudent money management - that might be the Holy Grail.
I used to have a great signature I copied from another trader-
āStop looking for the Holy Grail, youāve already found it, itās
inside you!ā
It just went to the Green zone but that was coincidental,
actually there was 208 pips available from Divergence to
full distance of retrace, but at x 10 Lot size I wouldnāt be
going for the maximum. I think 50 pips should more
than recoup initial loss. Most of the time I should be able
to get over 100 pips but at this point a 2% loser would
not be encouraging. Later, several 100 pip rescue trades
may far outweigh a very rare Rescue failure but Iām
not going to get ahead of myself.
This might be a very profitable system - I just read a brilliant
article on BP about fear of winning
Emphasis is now more on emotional consolidation.
With experience everyone gets better.
So if I can make 5% per month with safety that can grow,
whereas even 100s% per month is doable but if it
suddenly turns nasty and blows the account I will
probably never trust the system to try again.
A slow and steady equity curve is the only way, like
the tortoise and hare fable is an absolute truism
we see in all human endeavours.
1 Like
Iāve shared this on a couple of forums,
its thought provoking
Stanford university proved that trading
indicators donāt indicate future price
direction. S and R levels and Fib levels
are only of of use in your imagination!
Harsh words!
So I did my own experiment. I threw a
load of moving averages on the chart
all with random periods
Price respected all of them!
I did the same with S and R, drew random lines
on a zoomed out weekly chart where bars not really
discernible, then zoomed in on H4
Voila! All my bogus S and R levels respected!
and as you can see - Resistance even turned to
Support! - all on random lines on a chart.
Exactly the same for Fibs - I created my own non Fib
levels quite randomly 17, 31, 40, 55, 67, 85
yup, they were all respected just like true default Fib
settings.
It sort of makes you wonder, doesnāt it?
Divergence must likewise be based on nonsense too
but it seems to be profitable enough
go figure
Coming to the realization that all we hold sacred is
proven BS, myth and magic - Iām OK with that
but what Iām not OK with is enrolling in a five year
university course on āMarket Profileā trading, and
another five years on VSA - You get my drift.
Iāve been doing some research on FF forum and
some of those guys really like to get as highfalutin
as they can, whether it is just an ego trip or they
really believe Forex needs to be that complex I donāt
know - but what a contrast to Big E - so simple and so
profitable!
Whilst incorporating Market Profile in my strategy I
was wondering how deep do I need to go?
I found it is connected to VSA and I already did a lot
of work with that, but again, so many make it so
complex!
I think my very rudimentary grasp is probably
more than enough - Iām not a Market Profile
trader.
My take on it is the chart is sort of bell shape
and the more the bell extends this represents
the area of value - when price is away from this
it is out of balance, interestingly the expression
āunfairā was often used.
Now weāre getting down to normal conversation.
Market Profile is taking the Auction perspective
which is precisely what the Forex Market is.
If you were at a farmers market and tomatoes were
$10 per pound or 50c per pound, neither would
be a fair price. Iām not American but i guess the
price would vary due to seasonal and other factors
but a fair price would be a zone somewhere
between those two extremes.
So that can be represented graphically on a
Market Profile chart.
Whereas tomatoes donāt fluctuate too much in
price during the course of the day, there is
fluctuation after the decimal point in Forex.
The point being if the price is unfair and not
balanced, it should be drawn back into balance
Now how to trade Market Profile when the price is
within the Value area?
I have no idea and I donāt care.
I am only interested in the price being out of
the Balance zone and making itās way back into it.
What my research uncovered is that price being
well out of Balance zone invariably equates with
oversold or overbought on Stochastics. No big
surprise there.
but the two are not interchangeable. stochastics
can be OS or OB even when MP shows price in
Balance zone. So MP is by no means superfluous.
Market Profile is far more relevant to what I am
looking for.
But in the process I note VSA is also very much
in sync with MP
So really, everything should come together at the
same time.
Divergence appears
It should hit the top of the Autofib chart.
That should be way out of the Value area on MP.
Volume should be peaking.
Invariably price will be drawn back into the Value
area as an imbalance has occurred.
To make it easy to visualize, if tomato price at auction
has gone too high and is āunfairā, out of the value area,
there will be no demand and price will have to fall back
down into the āvalue areaā. You actually see this happening
on an MP chart.
If tomato price falls right down to an āunfairā level the buyers
will come in and drive the price back up into the āvalue areaā
Another curious observation
Right in the heart of the ā value areaā you usually find the
Monthly Pivot.
I only actually take note of missed weekly pivots so that
was noticed by accident.
It does seem to get hit.
I am not completely clear on the red and green zones but
I would guess buy and sell zones and of particular note
is where they meet
So an āunfairā price at the bottom of the MP chart will be
in the green zone and will be aiming for the red zone.
So it will hit the red zone and maybe the monthly pivot
but there is no reason to assume it will go any further
Price is now in balance and will stay there until something
happens to knock it out of balance again
This is a highly simplistic overview and so far I see no reason
to get into the complexities.
In the three screenshots I think we see everything Iāve just
alluded too. If Iāve got anything wrong it will soon become
obvious.
In all three screenshots it might be safe to say that the Monthly
pivot would have been hit.
But aiming for where red and green meet should be a very
conservative exit
when I say green meets red, depending on your
colour scheme, which can be blue meets red
but in the bottom screenshot note again that
divergence is accompanied on both occasions
by exhaustion candles and then a Divergence
candle.
Divergence, the Autofib zone, the Monthly
pivot, candlestick patterns have all been
debunked by Stanford university
there is no intelligent reason to believe
they have any significance
Except price nearly always comes down from
the peak of the Divergence back into the
value area!
It may be that MP hasnāt been debunked as it
is simply the auction principle
that could be the one central truth, and
when other indicators seem to be confluent
that seems to vindicate them
but otherwise they may have no meaning.
who knows, Iām just trying to make sense of
nonsense allegedly.
Hello, the volume numbers you see on any platform are compiled from the Brokers Hub, and whatever PB hubs the are connected to. Generally, most brokers have a only a couple of PBās that they interact with, so, that volume information is very limited in scope. We need to remember that there is no central exchange in Spot Currency, with futures, and stocks you know exactly the volume moved on each product.
So since this is the case, my opinion is that āvolumeā in Spot Currency, is not a valid indicator since it does not reflect the actual ātotalā volume traded. Oh and I have had arguments about this on the past, please donāt misunderstand, I donāt think you will argue with me, but I think others might. So I will not argue this.
The Ever Not Arguing VIPER
Not withstanding I looked back at my one loser on the GU.
One loser was great and I would have thought inevitable
but not so!
of course everything is obvious in hindsight but there are
some glaring clues I missed
In the screenshot below note the difference between
the divergence where I lost and the subsequent
divergence where I won
Notably TDI green on the first was still climbing up, the
synergy candles hadnāt changed colour, and tick volume
was decreasing on the first but rising on the second
That said, things do look very obvious in hindsight
and if I was using MP at the time I might have been
too focused on the confluence of divergence and
price out of balance on MP.
and Iām assuming all the winning trades didnāt
have such lack of confluence
another danger, is if you wait for all such confluences
to manifest themselves, price may already have moved
too far toward the value area.
the objective is not to avoid all losers but to simply
be profitable overall.
My last post may be largely irrelevant
I missed the obvious!
The reason I shouldnāt have taken the
first GU trade was none of the above!
It was in the middle of the chart and not
at the extreme of the Autofib
I think that should be a cardinal rule, to be
as far from value as possible
Under normal circumstances price will
invariably retrace 100 + pips even if it
continues the trend afterward
this strategy is just concerned with
catching some of that initial retrace
You need to be at your screen
I have set up alerts for Divergence on 42
charts, 21 pairs
Plenty of set ups could leave me over exposed
but trading small looks after that
One of the things, that really helped my trading was rather than focusing on more profitable trades, I focused on reducing my negative trades. It may sound weird, considering most stuff on trading boards is concerned with ātaking my account from $5.00 to $5 trillion in six monthsā, well you know.
But it works.
The Ever Working VIPER
Yes my 50 pip TP is intended to reduce negative trades.
In one sense the objective is obviously to avoid losers.
The context may only be obvious to me, ie fussing and
fuming over one rare loser. If you can learn from it all
well and good, but coping with loss, psychology, is at
least 80% of trading success.Mark Douglas is good,
detachment from outcome and certainty
New template courtesy of those awfully nice
PZ people.
Actually very similar to the last one except the
yellow box is all I really need.
The grey Median line is where previously
red met blue etc
Also had to grey out the Autofib as there
were major clashes with the MP colours
that tended to bleed.
So much the same except without the garishness
I have done a lot of back testing which is
of limited value
I donāt have the Autofib, or Market Profile
so what looks like half way up the screen
in real time might have been at the extreme
top of the Autofib, and what looks like
right at the top might have been halfway down.
We see what we see, and to quote the song
āand disregard the restā
We canāt afford to disregard anything in
Forex trading
Actually Iāve learnt a lot about back testing, I
would say its worth doing to get a broad overview
of whether a strategy is likely to be profitable
but it doesnāt in any way compare to forward
real time testing and it can very easily lead
you into a false sense of security.
I have already uncovered a major flaw in my
current approach, which is OK, this is all I am
really doing, testing everything out, optimizing
as best I can - but only time will tell.
The original system is Divergence and enter after
break of trendline. By that time you may have missed
much of the move although usually it will move again
in your favour.
But I have found, and especially utilizing Market Profile
is that if you enter immediately Divergence appears
you are almost guaranteed 50 pips or more, but where
the Holy Grail falls into sin is sometimes a pair will just
keep on and on bucking every subsequent Divergence
that is printed!
This is where accounts are blown!
Thatās why you have the trendline rule.
Frankly, Iām a bit stuck on this one.
Getting in aggressively usually works but if it fails
two, three or four times you are in big trouble.
There is one option -
It seems Iām merging two systems in a way and
there is a conflict, or at least there seems to be.
Perhaps I should be trialing the two systems
separately and see how they compare over time.
I have already found TDI, whilst a great indicator,
keeps you out of too many winning trades.
Tick volume however does appear to be reliable,
at least in hindsight, but I wouldnāt say its
indispensable or conclusive of anything, but I
will certainly keep it for the time being.
At the moment what is really resonating with
me more than anything is Market Profile.
But I canāt believe it is as good as it seems
or surely everyone would be trading it.
Price does always seem to revert to mean,
to be drawn back into the āValue Areaā
and that makes total sense, to me at least,
as in tomato analogy - its all about auction
The danger of indicators is they indicate this
or that but not all of us have any clue what
it is they are really indicating
but I do at least get the concept of Market Profile,
when price strays from value it should return
to that zone.
Perhaps it is really a question of what is the system
based on. So far it has been an established
Divergence system.
but I appear to be morphing it into a Market Profile
strategy with Divergence as confirmation.
It sort of reads this way - If price hits the extreme
of Autofib with Divergence that would be a very high
probability trade - but check with Market Profile and if
price is well out of value area it will almost certainly
return to that zone, usually to the Median line.
Actually I have a great deal of confidence in the strategy.
My real Nemesis is really money management. specifically
the x 10 Rescue trade
It seems to work OK on the original Divergence strategy
but its untested on the Market Profile version.
Hereās the problem - I believe the Market Profile version
is far more reliable, but entry is far sharper, ie not waiting
for trendline break
Both MP price being out of value, and a trendline break
give added assurance - but you canāt have both
Its a bit frustrating.
However, if you go the Market Profile route you may not
need the buffer of the 300 pip SL, which means you wouldnāt
need the Rescue trade, and if you donāt need the Rescue
trade at x 10 Lot size, then you can just trade the standard
1% per trade at maybe 1:1 RR
I would hope win rate would be better than 70% and when you
lose you just lose - next!
This is the whole point of keeping a journal, to keep testing,
adjusting tweaking and refining.
We donāt know what we donāt know.
This system will evolve. Currently I donāt need it to be
more profitable, I need it to avoid sudden death
somewhere down the road.
If there is no danger of sudden death then I have found
the Holy Grail!
If I had a dollar for every time I thought Iād found the
Holy Grail I wouldnāt even need to trade for profit!
I think this screenshot describes my current
approach perfectly -
you see the value area, whenever price
strays from it, up or down, it always returns
to it.
However the three crosses, although
they would have been profitable, were
negated by the divergence which was
indicating a down move.
You could have had three winning long
trades and one winning short trade
Only the short trade at the end ticked all the
boxes, and exit at Median line would have
been hit.
and another good example of confluence v
profit -
You note the bearish exhaustion candle
at the end
Thatās a good sign to go short obviously,
and you would still have made 27 pips
to the Median line
but you give half your profit away
I donāt feel you need pin bar confluence,
price being out of value with bearish
divergence is enough, and rising tick
volume is encouraging also.
Here is a 60 pip winner from last week, and
what was that about not bothering with screenshots
I hear you say
It was a great trade
but it well illustrates my dilemma
I got in at the zenith of Autofib, zenith of
Divergence, confluent with out of value
area on Market Profile. but you can see
how unhelpful TDI was in this case, and
even tick volume was decreasing
The alternative would have been to wait for
trendline break which would have been supported
by both TDI and rising tick volume for 90 pips
to Median line.
Better still, take both trades! close the first trade for
60 pips before the trendline break, then with added
confirmation go in again at break of trendline for 80
pips - you are still moving into value
the fog will clear
Regarding that second trade above, stats
show that if price enters the value area for
two consecutive 30 minute intervals, there
is an 80% chance of price making it to
the other side of the value box.
Iām not trading that, but it gives confidence
to the trendline break trade, which had
entered the value area, it is 80% likely
to hit the bottom of value box.
Whether the weekend interruption will
put into the losing 20% remains to be
seen, but generally its a nice statistic
to have in mind.
Iām sure there is a real edge here
anomalies with TDI, tick volume,
sharp entry or trendline break? -
it will all become clearer with experience
There will be losers, that is the price of
experience
there is no easy answer, just hundreds of
hours of screen time
the only time success comes before work
is in the dictionary!
I didnāt take this USDJPY trade but itās interesting.
going in at the zenith of divergence and MP
would have made 90 pips just to the edge of
value area, whereas waiting for the confirmation
of trendline break would only have yielded 30 pips
to the Median line
At this point in time Iām inclined toward the sharp entry.
If it fails trendline wonāt be hit so thats not an issue
However, if you keep keep TP as realistic as possible,
possibly just touching edge of value, close position,
then open a new position if there is a break of trendline,
it will be all the stronger riding on the back of the first trade,
particulary if supported by rising tick volume and TDI
TP should be Median line if viable. In the case of this pair
30 pips is still very likely to be hit but maybe not worth
the risk as you have already made 90 pips
In other words, given a choice of the two possible trades,
the sharp entry represents a far better value trade.
Here is an interesting chart
A clear channel has formed
Even without Divergence it would be tempting
You could target the edge of value for safety or Median
line, but whatās interesting is many traders would eye
the bottom channel line
and if you placed your TP there, that would
exactly correspond to the bottom of value box,
where price will hit 80% of the time
Well my confidence in the tooth fairy has been
restored - my last remaining trade for last week
was hit when market opened late Sunday night -
EURJPY for 50 pips - thats 15/16 winners now
This morning, Monday, no new divergences
Last week there was Divergence on USDJPY
and I placed a Sell Limit order above value area
but it wasnāt hit
Plan B is to enter as per original rules after trendline
break for 50 pips.
Its tight! The TP is only just above the Median line
but price should revert to mean
I am actually extremely confident
I should be very confident of winning each 20 trade
sequence, but detached from the outcome of any
individual trade
At very, very best you might have an edge in trading
and consistent profits can grow exponentially
but to borrow from Viper, Iām not seeking to make
$5 trilliion from $5 in six months
If I can make $5 in six moths on a micro account that
will be great!
Iām really taking my focus off money, greed and
overconfidence - ābeen there, done thatā¦ā
I just want to continue practicing and perfecting
my strategy.
Its likely that even if I am consistently profitable that
it may not help others very much. Trading is like
that. No system is inherently profitable, it isnāt
quite that straightforward.
Many even failed even with Big Eās TDI system.
So here is my USDJPY trade. Its not a signal
or a trading idea, I donāt recommend anyone copy it.
Its just to demonstrate that if you miss the OVA
(Out of Value Area) set up, you can still go in
with the original trendline break entry, as I have done
here.
