Very positive daily score for Monday - 61%.
However, the market seems to be in consolidation.
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You know that sometimes traders can earn good money by this ācalmnessā on the market. High volatility sometimes can bring more harm than flat in my opinion. Moreover, there are lots of strategies which can help you to determine the initiations of trend movement after the flat. And there are traders who brilliantly handle with such situations on the market. The matter is in your strategy, you know that it can be mixed with various indicators. To my mind, youāre quite right that traders better wait for the good conditions to enter market, sometimes there can be a ācalm before the stormā and it really confuses.
Only 21% for Wednesday.
Tommor, I donāt have the benefit of any historical data. Is it an indication of a range bound market?
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Yesterday was definitely an unusually low score and it followed an equally low score on Tuesday, both 29%. In the last 18 weeks I have not yet scored two other consecutive days both under 30%.
We definitely aināt trendingā¦
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What do you do in this case?
Stay in cash or do you look for trends in other markets? I know you also trade major indices. How do you identify where the money is flowing into?
Iām down to just one maybe two trend-following forex orders, which will trigger as and when these trends resume.
Meantime the Dow or Nasdaq are as bullish as ever.
To be honest I am putting most capital into results trades on company reports and business updates. I go for positive market reactions to reports released into established uptrends, just to keep things simple.
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Hey Mezaā¦
In order to give you some possible answers to that, you got to think about what weāre doing here, first.
Weāre just following one particular dynamic the market can be followed by. There are others. Volatility. Risk-on vs. risk-off. Strong vs. Weak. Fundamental. Technical. Etcā¦But what we are looking at is one of the simplest. Trending or Non trending (normal or not normal). More specifically, whether all of the assets (pairs) are going in the same way or not. Thatās all.
Itās an insight.
We are learning how our market behaves, in this respect.
There are ways we can use this information in our trading.
That is fundamentally why we do this.
But when it comes to trading, there shouldnāt be anything more important to us than our trading plan.
- Develop ā the way to trade (trading strategy)
- Backtest ā for proof of concept
- Implement & follow ā Trade it (demo)
- Record results ā for whether to continue with it or make changes
Since youāre in the business of tracking the pairsā trends, then it only seems most logical to have your strategy based on that premise. You want to take advantage of when the asset is trending (Iām assuming).
But, you still need to answer the questions that pertain to coming up with how you are going to trade. The strategy.
- What makes you get into a trade?
- What makes you get out of a trade?
- Know what your risk management plan is.
- Have some kind of goals to reach (reasonable).
- Obtain all the data you can to tell you whether something works or not
- Develop different methods for different market environments
In this instance, you can start with if the market is normal or not. If it is normal (and something will have to indicate to you that itās normalā¦indicator) then you should or could trade. On the other hand, if the market turns not normal (and again, youāll have to have an indicator that tells you that) then you shouldnāt be in a trade.
BTWā¦a lot of mature traders will tell you that, that is the most prudent way to go. Sitting on the bench. Knowing when to be in the market and when not to be in the market is golden advise.
In fact, the more you can actually abide by that, being in the market when itās trending, and out when itās not trending, I think youāll end up with some very positive results. I mean, what else makes any more sense than that?
Look Meza.
Iām sorry if this is beneath you. Or that you are totally aware of all this. Or somehow this doesnāt apply to what youāre learning on your journey.
But it is good advise for others to see though.
So. Maybe there are others who can learn from it.
Trust me. Iām still trying to figure out the best way to capitalize on opportunities that presents itself (Iām quite the perfectionist). But honestly, the more I think about it, you canāt get any more simpler and easier for a trading strategy than :
ā Trading a trend strategy when the market is currently trending.
ā Being out of the market when itās not currently trending.
How many traders out there have wondered whether their trading strategy is working or not? The answer could be a resounding YES, but you think itās not. And so you go ahead and make a lot of changes. Or go back to the drawing board.
In the meantime, the truth is, your strategy isnāt working because the market is counter trending (non normal). Now, if it was trending (normal) then how do you know that your strategy wouldnāt be killing it? You probably would be seeing some good things happening. And those are the times when you start feeling good about yourself.
All Iām saying here is that itās vitally important to be trading the strategy in the same type of environment.
I think itās also important to realize this when you are doing the back testing. Can you determine when the market is trending, and when itās not? Does the strategy work only when the market is normal? Do you even know under which circumstances the market in when you are back testing?
Questions like that.
This thread is quite insightful.
Look. It might be impossible to predict when a day is gonna be normal or not.
But thatās not to say that we canāt find some patterns that the market tends to follow, regarding when it wants to be normal or not.
Again, sorry Meza.
These are just some questions that I think every trader, especially newer ones, should think about.
Mike
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Thanks, Mike
I use MN analysis on a daily basis to see if we are ānormalā or not. I also use SW to determine which pairs to trade. The entry is on a pullback.
Iām currently paper trading this. I would like to keep it as simple as possible.
However, in reality, to determine how simple the trend following system could be, one would need to backtest:
- MN, SW, pullback
- SW, pullback
- SW, market Oder
- 20ema, 50ema order and slope, pullback
- As above, market order
Obviously, there are other variations.
Unfortunately, my skills in automated backtesting are very limited.
So, for now, Iām just paper trading oneā¦
Interested to hear your thoughts.
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Hi Meza.
Iāll help you. Weāre talking about your trading strategy, right?
You did give me (us) a good bit of info on some of the things you look at. But Iām gonna need a whole lot more of the details.
First off, what kind of trader are you? Scalper, day trader, a couple days open, swing, position? Basically, whatās the time period you like to keep your trades open? From min - max.
Whatās gonna tell you that you should get in? An indicator?
Ok Mezaā¦ Looks like this is gonna get lengthy.
So, why donāt you send over to us some real specific things you have on your trading plan so far.
Iām willing to help in every way possible.
Mike
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What a true gent you seem to be Mike, and what a great offer you gave there. Your helpfulness will definitely be reflected back to you.
Look forward to your continued contributions
Cheers John
Thanks, Mike
My style is swing trading of daily charts.
I use SW ranking to identify possible pairs.
I also use 20/50ema order and slope to determine how strong the trend is.
The entry is on a swing low/high.
The length of the trade would probably be 10 days max.
I would also pyramid on 1r if the trend and momentum is very strong.
Tommor has assisted me in developing the above.
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Forex normality this week struggled to get as āhighā as 49%. These will be lean times for trend-followers but forex being what it is, I still hope for a reversion long-term to a slightly positive score as pairs revert to following their underlying trends. I had hoped it would be sooner and more dramatic but thatās lifeā¦
Thought Iād look at which pairs and currencies have been most and least trend-following in the last 4 weeks. Most pairs have been either trend-ignorant or neutral. EUR has been the most trend-following currency, 5 of the 7 EUR pairs have positive normality scores across the last 4 weeks. AUD is second most positive with 4 of 7 positive pairs. The rest are all negative.
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Hello.
My conclusions are the same.
We are coming at this from different perspectives, but arriving at very similar ends.
Youāre finding out how many pairs are trending or not.
Iām looking at the currencies as a whole and then determining how those are following their particular trends.
But where we differ is that Iām considering the depth of the trend.
How strong or weak.
But hey, all info is good and helpful, right?
Take a look.
The table shows the daily results, in their complete currency status. Another way to think about that is if you added up all their common denominated pairs. These are those results. Just one figure.
And that table just shows the order in which they came in, for that day. Strongest down to the weakest.
But I have a determination for each one of the currencies. Either trending high or trending low. Look.
This determination gets evaluated on the weekends. It doesnāt change throughout the week.
And then my depth comes by how I add up each of their % for that day, and then compared to one another.
Look at the greatest negative trending day, on Tuesday (10th). The 3 Comm currencies took the top 3 spots. But whatās their trending status? All 3 trending negative. And then, look at the bottom 5 currencies. 4 of them are all trending high. The JPY was the only currency that day that matched their (aggregate result) trend.
Well, adding up their %'s according to whether they matched their respective trends is the result. The only positive resultant currency was the JPY (2.72%). The rest were all negative (cause they all were against their respective trends). -9.33% is quite large. Btwā¦disregard the CNY. They are not in play with this.
Iāll tell you what else I find interesting.
-
We were hoping for some positive trending results this week (given the previous results that have been more negative). We have not gotten these results yet. My bottom line result for this week turned out to be a negative resulting week (-5.61%). Not as much as last week, but still, negative.
-
3 days were trending (normal). 2 days were non trending (non normal). I think thatās fact that skews the data a little. The depth of the negative days out weighed the positive days. This is interesting, cause there were more days (time) spent trending than not trending, but, when it was non trending, boy, it really went that way hard.
This is just how the market moves.
Weāre (well, me) just trying to view how the market moved in the manner of whether it trended or not. Thatās all.
Our methods are quite different. Weāre coming at this from different perspectives.
But at least we are able to see and understand a little bit more about our market.
It does twist and turn. Right? Enough to make you mad.
But, I would conclude this. About our latest analysis.
We seem to be getting closer to normal than non normal, weekly basis bias.
If I could box it up this way, I think the pendulum is swinging more towards normal than non normal. And again, thatās looking at a complete week.
Weāll have to see.
I would say, though, regarding trading.
IF the market starts to indicate more trending (normal) days, then I would get a little more brave and confident on a pertinent trade. Cause we should be due for some big trending days. Just like we seen last Tuesday for the contrary, why not a big win for the home team?
We should be learning that the days switch back and forth.
Trends are difficult to follow.
If you can be in the market when itās trending and not be in the market when itās not trending, I think thatās the biggest battle.
Letās just keep that in mind as we navigate our way through it.
Mike
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Imagine your assumption is true and this system can consistently generate profitable trading signals. This implies that you should be first or among the first to discover this market peculiarity, otherwise other traders would take this opportunity when it arises basically eliminate it. Do you believe in that?
I think the system, if eventually proven - which it isnāt yet - will be of more use in identifying periods when trend-following trades should be avoided. I donāt see it as a signal-generator, but it might come to be more useful as a āsignal-ignorerā.
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Hey guys.
Iāve been thinking.
More and more Iām really liking this subject.
Iām liking some of the content being thrown around in here.
Maybe we can work together on this.
Tommor. Meza. Fish.
Tell me what you think.
Iāve been taking a good look at our B.P.'s Market Milk. Itās taking me some time to wrap my head around all this good info. And I think itās gonna take a whole lot more. Itās just that Iām trying to find the correct perspective and context in which to use this info.
And well, that brings me to my point here.
What about our normality perspective?
Can I (we) fashion some of this particular data, found in the Market Milk, in which can tell us what is normal? What trends are considered normal? Is there a way in which we can monitor this via the M.M. way? Is there a way in which we can see changes occurring?
Iāll stop with the questions, for the time being.
Let me throw out to you guys how far Iāve gotten on this. And like I said, Iām not done. I think I might have made a break through at this time. But I wanted to stop and come in here and see if any of you guys would think much of this idea. And if notā¦itās ok. Honestly. But, I am gonna try and find some particular way of fashioning this M.M. stuff, on my own.
But check this out.
This is the question I am posing.
How can I track and monitor whatās normal?
How about this. This link will take you there.
Currency Strength Meter by MarketMilkā¢ (babypips.com)
It looks like this.
This is my favorite. Because Iām pretty sure weāre dealing with the daily time frame. Not only does it give us a good daily comparison one currency against another (you should know that I do that myself), but we also can see some trajectory also. Meaning, momentum (by the slant).
So I thought of this. What if at the end of every day I would take a snap shot of what this looks like. Itāll be like the EOD result. What would I have?
āIn the context of the last 30 daysā
- Strength to Weakness comparison, one to another
- In which direction are they continuing to go in
Well, I think thatās all I can deduce from that. Basically, itās how they are all relating to one another, and whether that is increasing or decreasing.
Can we determine what would be normal in here?
In this chart, the 2 currencies on the top should be considered tracking normal. Right? Cause they are on top, and they are tracking higher. And the same goes for the bottom 2. Both on the bottom, and tracking lower. But the middle 3, shrug.
Can we determine a trend in here (making the word trend correlate with normal)?
The only thing I can think of is, since thereās a hierarchy, is to go by # 1 down to # 8. And if they change numbers, or placements, then thatāll be breaking the trend.
I donāt know. None of that makes sense.
But maybe you Tommor could adopt the thing that you do, but with this. Nahhhā¦Youāre looking at the 200 ma and the daily candle. Right? We donāt have anything comparable in here to that. In fact, we donāt even have a particular daily figure. So maybe this chart is out.
I do know thereās the 200 ma line floating around here in different places.
Well, just below that chart is this chart.
I changed the parameters to the 200 ema. But we, again, do not have any concept of a complete day in here either.
Ok guys.
I ran out of ideas at the moment.
But I hope you can understand where Iām coming from.
Can we come up with whatās normal? Or trending?
Can we keep track of that on a daily basis?
Can we therefore come up with a way to measure whether the market went more normal or non normal?
Iām gonna stay on this subject for awhile. If you guys can catch my drift, let me know.
Mike
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Hi Mike
I was actually looking at this today trying to see how it compares with Dennisās SW ranking.
Please see Trend Momentum below.
I think it correlates well with SW ranking and also gives us actual values that can be plotted against each currency.
Not sure yet if this will be of any value.
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Hey Meza.
You read my mind. Cause I was thinking the very same thing. Let me show you.
I took this pic at EOD yesterday (5pm ET). Bottom right proves it.
Well, if you read the explanation above, it does say that the trend is indicated being either bullish or bearish. So, I was thinking, why wonāt I go ahead with that determination? Meaning, if itās above 50, then itās trending high. Below, low. Simple as that.
Iām gonna keep track of the EOD numbers and see how it turns out. Look.
Iām not too sure how quickly these trends will keep. In what particular time frame are we talking about here? Short? Little longer? Medium? I have no idea. But I need to know. Is this suited for us swing traders? Or is this used for the shorter term traders? Many questions I have. But this is just something that Iāve started to do . First day was that (Mon).
I wish we could find out exactly where these numbers come from. I know itās a particular indicator, Iām just not that fond of following something I havenāt developed myself. Maybe someone from BabyPips can explain more of this.
Anyway, this is just a start. Maybe this can establish what trend each currency is stating. But the next step would be to determine whether it went that way or against that way. Right? For normal or not.
In any case, Iāll keep you informed how quickly these trends will change. Cause Iām gonna keep the daily totals.
Good work Meza. Itās nice to see our thinking is on the same path.
Mike
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Hi Mike
I think the indicator they use is the RSI(14)
They have the same chart under watchlists overview- overbought/ sold which actually tells you that it is RSI.
Also, see below with 50/20 SMA instead of 20/5
This lines up perfectly with the currency strength chart and the trend momentum chart.
The only one that doesnāt make any sense is the currency strength meter - it should have AUD as the weakest and JPY as the strongest currency.
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Hey Meza
Yeah, I like it. The Matrix. With those settings, 50 SMA & 20 SMA.
But is that the daily time frame? As opposed to being on an hourly time frame?
Why canāt they specify what intervals weāre dealing with here? 50 what. And 20 what.
Iām spending a lot of thinking time on this stuff.
This is all good info on whatās going on in the market. In the comparison department. Yep, very insightful. For whatās going on in the moment. The latest.
But how does that help us?
Seriously.
Do you realize that when we look at a chart, say the daily time frame chart, very quickly our brains are able to put a lot of that info into the proper perspective. Why? Cause we can, instantly, see where it came from. The history. All of what led up to what the present price is. Thatās a great advantage that charts possess. Of course weāre limited to one pair when we see that. Well, you can get creative and put up the 7 pairsā charts in one view. I do that a lot. Thatāll show you what the one currency is up to quite quickly. A quick scan can show you a somewhat good summary of what that currency has been up to.
This M.M. data seriously summarizes each of our 8 currencyās very nicely. In many different perspectives. Itās what Iāve been up to for some years now. Iāve always called it the complete currency perspective. It is awesome. But.
We are missing the element of history. We are getting current perspective. Thatās it.
I mean, I would like to know who looks at this stuff and uses anything in here for a signal (IDKā¦maybe day traders do). When a currency gets to the top, is that when you go long that? Same with the lowest? But then you donāt know how long itāll stay up there. Like whether that trend is longer lasting as opposed to when itās all done.
Well, my only point is that this stuff needs worked on. There must be a way to track the changes that occur.
Take a pic at the top of every hour?
How about getting a video camera and taping all of the moves along the way. Then play it back in fast forward motion to capture when, say, a currency takes the top spot. Track how long a currency will stay on top. Same with the lowest. How much changes will occur during a session.
See. We donāt get a historical imprint (to look back on) of these awesome indicators like we do coming from brokers charts. Now that would be something to track!
Boyā¦Iād give my right arm for the ability to do that.
The best thing we do have is that 30 day tracking I showed earlier. We do get to see the imprint left by the strongest down to the weakest.
Well, I do have a disagreement on that particular chart. I donāt think itās accurate. At all. Remember, I do keep track of the daily results (for a long time now). So I did some comparing. Check it out.
Thatās EOD yesterday. Their way.
Hereās my last 30 day. As of yesterday.
We have conflicting data here. It doesnāt match up.
Basically, theirs shows the CHF and the JPY having been the strongest running through pretty much the entire time. Not even close to what I show. Just look at my JPY (purple). Boyā¦if I traded them long for as long as what they show theyāve been, Iād be in trouble. Surely I donāt think I would have reaped any expected profits. Now the GBP, I think so. I happen to think thatās been very much stronger than what theyāve showed.
My GBP compared to my CHF and JPY shows no contest.
Their GBP compared to their CHF and JPY, basically, shows the opposite. Losses!
I canāt buy that. Thereās something wrong here. And I donāt think itās with me.
Iām aware of the fact that they might be adding up %'s and not pips (cause it canāt be anything else). There could be a difference that way. And if there is, boy, then thatās an issue. I mean, you got to know what you believe. Whatās truth? What can we count on? Whatās more accurate?
I determined (a while back) that keeping track of each pip movement proved more reliable, accurate, trust worthy than %. I mean, donāt get me wrong, I do track %'s also. But if someone really wanted me to get to the bottom of that issue, I have the means and ability to prove it. In the meantime, I trust what I do moreso.
The GBP is the strongest currency running in the last 30 days. Iām sorry. But thatās truth.
Sorry about that.
Iām done.
Honestly, I am conflicted. I do really like that last suggestion you gave me. I do.
And if that is gonna be the tell of who is trending high and who is trending low, then so be it. But weāre going to have to agree on better settings.
Look.
I seriously donāt think the EUR and the GBP are anything other than trending high. But that shows them trending low, cause theyāre left of center. Well, maybe the GBP is trending high cause itās green. Iāll have to play with the numbers to get something more accurate. Thatās all.
Iāll work on it Meza.
Donāt worry, Iām still in it.
I just shot out to you my thoughts of late.
Mike
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