A Balanced Approach
A balanced approach calculates the value of strong
it caclulates the value of current Price Action
Where both score highly concurrently we should
have an ideal setup.
It may not happen often enough for us and we may
wait patiently for such a setup
and it gets worse when we see that our patience is
causing us to miss out on some very profitable trades,
So we go back to impatience and soon enough incur
a string of losers
So the answer must be to take a balanced approach.
The screenshot below demonstrates this
Revisiting AUDCAD and still incorporating the indicators
we’ve been discussing, we can consider each setup one by one
albeit in hindsight please note we are talking hindsight,
that is the point of this post
The basic premise here is we do check PA. then we look for
confliuence between DiNapoli cross with ADX exhaustion above
25, and ADX cross when above 25, and there must be a close
above/below SMA 5
Ideally we want all four indicators to line and concur with PA
That never happened once!
How often is that going to happen? If never, then patience is
hardly relevant here. Avoiding the snare of impatience may
be more pertinent.
Patiently never trading, will avoid ever losing, but is clearly
not the complete answer
Setup #1 I will score 8/10
No compelling PA otherwise it would score 10/10
but all four indicators lined up for a big 225 pip move down.
Setup #2 I will score 5/10
PA is suggesting a retracement and 3/4 indicators
concur for a nice 53 pip move up
Setup #3 I will score 7/10 because PA looks to want
to resume the trend and 3/4 indicators agree for a
163 pip win
Setup #4 I will also score 7/10 because of the nice
bullish Engulfing pattern suggesting another retracement
and 3/4 indicators were confluent. Despite that, we would
have incurred a -29 pip loss. It happens
Setup #5 I will only score 6/10 because we didn’t have
the compelling Engulfing pattern although still 3/4 indicators
lined up. Ironically, although this was a weaker score than
our losing setup #4, we would actually have won 18 pips
BTW are we noticing that trading with trend yielded 225 pips
and 163 pips, whereas retracements either lost or gave 53 and
18 pip wins. Surely something to be learnt there!
but +430 pips profit overall
Anyone can be a smug git when trading in hindsight. it is remarkably
So think about this, I’ve been using price close over MA5 for years,
cross of ADX for a long time, more recently been using Stochastics
and ADX exhaustion
so I would have been monitoring AUDCAD over this period and should
have at least come close to 430 pip profit.
Just look at my real life screenshot below and try not to weep.
I don’t know if I had any tiny wins, but I appear to have been
oblivious to all but one of those setups, and you guessed, that
was the one that lost! typical.
Point is, in real time I never saw those setups, and if I did,
I obviously didn’t think they were worth trading
Is anybody getting this? Anyone can be the winning big shot
in hindsight, it really is easy
But if I was a signal service, instead of alerting you to the
430 pips profit, just look below at what you would have got for
and that is precisely the difference between Real time trading
and Hindsight Wannabees
and I’m insulting myself here as much as anyone else.
Seriously, I’m at a loss here
I’ve just gone over the chart below, checking the very far right
to approximate real time, and the setups are so obvious!
I can’t explain why I missed them, its almost uncanny, like
’hidden in plain sight’
Why did my mind filter out what is now so blindingly obvious?
I hope no one is saying ‘You didn’t have DiNapoli’
George Soros could have made a house call. I still
wouldn’t have got it
Actually, even after being introduced to DiNapoli
I did spot and trade two such setups, but can anyone
explain why I missed these nine blindingly obvious setups?
How can I see two, but the other nine be ‘hidden in plain sight’?
so eleven screenshots, two in profit and nine BSS, means
’Blind Spot Setup’
Depressing isn’t it
But here are the two I did spot
So have I seen the light, is this my road to Damascus?
I should have reached Damascus years ago, so I have misgivings,
but I am going to make a concerted effort to treat real time monitoring
just like backtesting in hindsight
it really shouldn’t be that different!