MP some of his Becoming-MORE-Secret secrets

Beginner Questions
21

Bravo Sandpipper, you are my new hero :smiley:

I think almost everyone is done with the virtual *****slapping now so hopefully the demons will stay on the sidelines and we can all get back to constructive interaction.

I had only just come out of ā€˜lurkā€™ mode on the original thread before we were rudely interrupted. Now that you have picked up the torch Iā€™ll be sure to contribute whenever I can.

But right now I have a tequila inspired hangover so Iā€™ll come back and post something of more use when the hammers stop pounding.

Shane

ā€œEvery parting gives a foretaste of death, every reunion a hint of the resurrection.ā€
-Arthur Schopenhauer

22

Be very, very careful Mikey, do you really think hauling up comments like this will do the thread any favors? :rolleyes:

Itļæ½s only on page 3 & already the moderators/admin will now be scrutinizing the content very carefully indeed for posts that blatantly break forum rules.

Wasnļæ½t your last alias (fireice) & comments responsible for the deletion of that particular thread??

23

I see we are drifting off subject already ā€¦

Back on subject: I have a few scalps open at the moment. I trade the Cable on the 5M. The price was heading down towards the bottom of the Shi, I had taken one trade before now and it gave me 21+ odd pips. The next setup from the LRC was to go short, so I did but the price continued down, past the Shi, creating a new 3 (ziggie), and kept pushing down. It was also around the 1.4000 handle, a significant level. Iā€™ve had bad experiences trading near the top or bottom of the Shi before, but the LRC was good to trade, along with some other indicators. Is a pattern emerging here ?

Right now the wifey is bugging to go to bed, so Iā€™ve left them open thinking they will come back to the centre of the Shi while Iā€™m asleep (New Zealand time). The DSS is in my favour and the A/D is creeping upwards. The Stochs and CCI are haning around the middle, not really showing which way theyā€™ll go. Iā€™ll be eager to wake up early and check my positions first thing tomorrow morning !!

Drawdown is getting larger, but Iā€™m not placing and SLā€™s. I want to see if my thinking is correct, by price returning to the centre of the Shi. Weā€™ll wait and see

Has anyone else had a similar experience ?

24

Remember the Brits are getting ready to release at least 3 pieces of news in a few minutes. It looks to me like they are driving the price down in anticipation of this. I have shied away from the cable for this reason this morning. Also remember that in 3 hours there is a bunch of USD News to be released which adds to the zaniness.

Edit: It is now about 30 minutes after the release and you can see that it played out exactly (up to this point, remember USD news is getting ready to be released) as planned by the Interbanks and shrewdly pointed out by TBO. For the last 3 or 4 hours the Price was pushed down down down until about 3 minutes before the release. At which point they raised the price 20 pips or so to resistance. As son as the news was released the price plumetted to the Daily Support 2 and bounced. Currently it is working itā€™s way back to pre release price. AGAIN though USD news is coming up, so Iā€™m not sure what is goint to happen.

Here is a pic of the 1m showing what iā€™m talking about.

AND

Sleep Well

25

Raising the price prior to the release of US news ?

Interesting indeed !

I see a bet here (and a pattern)

26

Yes, I didnā€™t even check the news calendar. What an idiot. I went to bed and the thought came to mind soon after - maybe there was a news release ?

I donā€™t intend to jump on and trade news releases, Iā€™d rather avoid them for now

Atleast my thinking was correct - the price did come back towards the centre of the Shi, but after a drawdown of about 150 pips. The channel expanded to the new low and the Shi-Bottom is now the Shi-Centre. I feel like a dodged a bullet right now because the price has only just made it back to my TPā€™s, this point is now the new Shi-Top, being a downward trend on the 5M

The 68 pips I made doesnā€™t feel all that great after this experience, but I have learned from it and will take it into consideration with my future trades. Iā€™m thinking about creating a ā€˜pre-trade check-listā€™ to minimise situations like this

Thanks for the info sandpipper

27

Whatā€™s the best source for the news release calendar ?

Iā€™ve heard a few people praising Forex Factory ā€¦

28

Thats what i currently useā€¦Itā€™s very handy, but i donā€™t know if it is the best or not but it works quite well for me.

29

Ok lets get the juggernaut jugging people!

Lets start our discussion off by talking about the handy dandy LRC. I remember the day a couple of months ago that I didnā€™t even know what a LRC was or where to find it and I surely didnā€™t know what the heck it was for or how it could help me.

So to start off the Linear Regression Channel is a part of the MT4 platform. The problem is that on every demo MT4 platform that iā€™ve tried it is buried in the menu structure and not super easy to find. To find this little guy simply go to insert/channels/linear regression.

Ok so now we found it! The next question which I struggled with for a couple of hours was how in the world to properly draw the sucker. I reread MPā€™s first post a whole bunch of times trying to decipher
the right way to do it. I was making it harder than it needed to be, but of course like anything in life once you know how to do something it is simple. The below picture is the pic MP posted and shows two yellow LRCs drawn by hand. All you do is drag the channel over the part of the price movement you want to study. Notice the first yellow LRC. MP just started dragging from bottom left (lowest price) to upper right (highest price). Same idea with the second LRC but in this case he outlined just a smaller portion of the move going from the highest price in the move to the lowest. Hopefully that makes sense. Itā€™s really not tough.

Now for the magic question: DOES the LRC tells us anything useful in our quest to understand what is going to happen next with the price?

Due to the fact that iā€™m just learning myself and not really qualified to be teaching anybody anything Iā€™m going to leave this question open for discussion. I will come back and edit this post adding the answers later if need be to make it easier to digest for future readers.

So does anybody out there use the LRC? If so what do you like about it and what are its weaknesses. Can it help us predict what is going to happen to the price in the future or is it just some pretty lines on the screen? Does everyone at least understand how to draw it? etc etc

30

Hey sandpipper,

I just did this and it has been helping me dramatically so far. I bought a whiteboard that is hung up just behind my monitors and it shows my max lot size for the day, the level at which I would quit for the day (my daily ā€œstop-lossā€ which is a pretty conservative 3%) and the level at which I would quit for the month and finish out the month demo trading (10% drawdown from start-of-month level).

Finally, the most important part is a little checklist that say ā€œnewsā€, ā€œpivotsā€ and ā€œcalmā€. I plot all news events in the time Iā€™m trading with a vertical trendline, a plot a pivot point from the previous 4 hours, and then I gauge myself to see if I feel relaxed enough to start trading. If I can check all those off the list, Iā€™m ready to trade. Of course, I have to reevaluate the ā€œcalmā€ part after each and every loss. But, so far this has been working. Iā€™ve had trading discipline problems in the past so I really need this type of self-babysitting.

31

Reserved for condensed lrc info to be added later

32

I think this is truly a great great great idea. Personally most of my large losses have been because of the following simple scenario. Sit down, start trading. Thats it! Iā€™m always eager to start clicking not wanting to miss the next big 15 pip move and invariably since I havenā€™t spent time figuring out what is going on with the pair, I get burned.

Lets flesh this out a bit more! It seems like you have hit on 3 essentials already that are super important.

My checklist might add something like this.

Trend Baby Trend! I need to spend some time figuring out trend i.e. price direction on the higher timeframes. That way if you are playing the 1, 5, or 15 then you can with more confidence get into positions in the direction of the overall trend as well as bail sooner if price goes against you and you are against the trend. MP in his trading works his way down from the higher tf to the shorter. Most of the time he sets a TP on one of these longer timeframes for a longer term trade and then spends his time Vultching the shorter timeframes confident that he knows where the price will end up down the road a bit.

TBO Quote: [I]ā€œKnowing the TREND of your currency is far more important than knowing the tp of a particular timeframe, because if you miss your 5 minute tp point, perhaps a higher tp exists for the 15 minute ---- only trend will tell you that and getting out of a trade a loser, when another hour or so will make you a winner, really really hurts when you see it happen.ā€[/I]

Whole Numbers in the vicinity. For whatever reason price is always attracted to the 1.4200 and 1.4300s more so than 1.4333 it seems. This is also where often times you find your areas of support and resistance.

Umm lots of others things are important too for this checklistā€¦but iā€™ve got to bug out of here for awhile. Great, Great idea though and one I will be incorporating soon.

33

If I may contributeā€¦

Iā€™ve always found mp a bit whimsical for my taste. That said, we share significant similarities in our trading methodologiesā€¦

As we both give appropriate weight to certain key price levels, Iā€™ve attached an ā€œindicatorā€ that I keep on every chart that may well be of use to those of you continuing their discovery in this thread.

34

I check the FF calendar everyday. Anywho, the calendar just correctly called a 200 pip spike about an hour agoā€¦ hmmm, not too shabby.

35

Excellent contribution! That indicator is going to make it onto all my charts as well. Iā€™ve been looking around and testing various overlays that show the same price levels but I like this one best from the initial look. Use this in conjunction with an overlay I posted earlier(Husky_Daily_data_full and )and you pretty much have the price levels covered.

36

Ratsā€¦I just noticed the spikeā€¦way too late of course. No more posting for a month for me!!!:smiley: Canā€™t pontificate and concentrate on the markets at the same time. Argh.

37

Wow that EU just keeps shooting upwards! Sadly, I wasnā€™t home today to catch it. Looking at the charts I see that the LRC has had it top line blown out and the price is now touching the top line of the Shi Channel.

The trend is still showing bullish, but it is also way overbought at this time too. So Iā€™m sitting and watching to see what happens. The market is in a sideways trend right now and Iā€™m waiting to see which direction the break takes.

Iā€™m sensing a correction downwards eventually, but Iā€™m going to wait a bit and maybe put a couple of buy stops on the way. Iā€™m still not sure, so Iā€™m going to watch before I jump in.

Back to LRC reflections.

I have loved the LRC since I was first introduced to it and figured the darn thing out.

Iā€™m a geek and an indicator junky. I go through indicators like you wouldnā€™t believe. Donā€™t get me wrong, indicators are not the end all and be all, nor are they 100% right, but they are great to give you little hints.

That all being said I use a couple of automatic LRC indicators. Iā€™m lazy and canā€™t be bothered to draw those lines, so I let the computer do it for me. They give me a great idea of where the trend is headed. And that is 95% of the battle.

A note here about the auto LRC indicators. They redraw the lines continuously. The shorter the time frame the faster the lines redraw. Down on the M1 charts a trend can change over a very short period of time. The longer the time frame, the slower the change. This is where additional indicators can help. For now though Iā€™m confining this portion of the discussion to the LRC.

As Iā€™m still in the learning process I try to only trade with the trend. The price moves to the bottom of the price channel as the channel aims upwards, I do a quick check with some other indicators and charts and then place the trade with the trend. I think using that method Iā€™ batting about a 95% success rate.

Now before you think Iā€™m popping the champagne corks yet, hold your horses. This is how I scalp. Iā€™m taking an average of 5 pips per trade. With more experience Iā€™m sure that my confidence will solidify.

So my basic lesson: In an upward trending market I trade from the bottom of the channel to the top. The opposite is used for a downward trending market.

Cheers!

38

skeebo

if you were to watch a tick chart and the one or five minute chart continuously, you would see support and resistance being changed (you call it redraw, which is not quite correct) constantly because they are changing constantly. The LRC simply reflects whats happening.

To find your range of movement one would use a higher timeframe, such as the H1 or H4, which establishes the parameters of support and resistance, and then use your barrys, price channels and bollinger bands for the actual short term trades on the shorter timeframes.

With activity such as today, not much exists to warn you, as all indicators were buried in overbought long before the reversal, and even the handy bols was running like mad to catch up.

naturally, if your price channel is moved up by the price, you need to go higher and higher in the timeframes until you find a solid resistance level BUT please understand, if the price channel is moving up on the 15 minute chart, you will find a large retrace will happen BEFORE the price continues back up, and this can take a few hours.

indicators and candles derive from exactly the same place which is the ā€œmovementā€ of price, so either method works but i notice continuously that the price may make a reversal but there was no candle that indicated such . . . . . . . it appears to happen far too often for my happiness.

mouse

39

great chart and it shows all.

obviously the big long one is a main trend while the small one shows what the price is doing as of the moment in a short trend.

have you checked if the price moved right down to the bottom channel, for its certainly showing us thats what should happen. I would imagine, if the price either moves past the lines of the small LRC or breaks through the bottom of the bigger LRC, that would be a very good thing to know.
At least it is for me.

thank you for the chart

mouse

40

Good to see others think the same as me !!

I do the same and having great success. I love the LRC [B]ā€˜chart overlayā€™[/B], as MP would call it. Iā€™ll trade it up or down if the spread allows at least a 5 pip gain before hitting the centre line, and if some indicators are confirming the trade (stochs are good). It works nearly every time. BUT, I have had a couple of bad experiences of trading near Shi Channel where it continues past the outer channel line. If you look a few posts back youā€™ll see last nights experience - but that was mainly due to not checking the news