Multi-Time Frame Trend Trading

gerard1 · July 17, 2010, 12:29pm

Hi Graviton
Is there a link for this tool yet?
[I]So the tool is, PTE = AP/MFE [/I

Thanks

Gerard

tymen1 · July 17, 2010, 12:37pm

More high quality comments from [B]Graviton[/B]!!

Graviton · July 17, 2010, 12:52pm

RenaLa:

Hi Graviton

Can I ask same questions?

What do you use as benchmark for direction of movement upper and lower Bbands or do you do it by highs and lowers or you just see the last candle is it bullish or bearish?

Please include a chart example with your question. I’m not sure of it’s meaning. I use higher lows and lower highs, BB midband and whether the price is above or below it, direction of the last 5 to 10 candles and stoch and RSI to determine if price is going up or down in a timeframe for timing entries. I think that is the reason for your question. Making a clear headed decision on which way price is going at any point in time is a critical skill in trading. It gets easier with practice.

How long you can wait until all charts are lined up if you trade 1H charts? I need to know because when I am waiting I think that it takes forever.

I wait as long as it takes for the price to line up. Usually I’m trading several pairs at the same time, so I have plenty to do. I have multiple screens, so I throw that chart up on a screen and just glance at it as the new candle is formed for the TF I’m waiting on. So if I’m waiting for the 15M TF to turn up, I’ll glance at it every 15M. When it does, I’ll drop down and check the 5M, when it does I’ll drop down to the 1M. It’s not unusual for me to wait for 4 hours or even days for a set-up to be perfect. At that point I’m watching it very closely, maybe continuously to get my very best entry moment. But like I said, I’m multi-tasking on looking for setups and monitoring trades in progress and waiting for set-ups to give the right signals on about a dozen pairs at any one time. It’s very intense and I never get bored. Sometimes when things are very slow, I have a few minutes to make these posts or trade live in the chat room, but it’s always very busy here at the Graviton Central Command

Is there a situation for instance when 1H, 30 min H are up, but 15 min is down and 5 min and 1 min is up or its impossible?

Yes, it just means the 1M and 5M have turned up, but that hasn’t turned the 15M yet. In that case, you wait until the 15M has turned in the direction of your trade before entering. It can be in 30 minutes or in 4 hours, you just have to be patient and wait.

Do I understood correctly if 1H chart is moving up, 30 min and 15 min charts are also moving up and they will continue to move in this direction until 1min chart is starting to move down
In common any particular chart will continue to move up until next “dropping down chart” changed its direction is it right?

Yes. A 15M candle is just the sum of three 5M candles, so the 15M cannot go down unless the last three 5M candles went down. If the last three 5M candles went up, the 15M must continue go up. That is a mathematical fact. I went through all this at the beginning of the thread. I guess you forgot? You are way to young to be forgetting things. Give it another 40 years before you can use that as an excuse

If I make a trade off 1H chart Is it enough to watch only 30min and 1min charts to go in the direction of a trade?

You can try that, but I go down in TF’s as I said. So if the 30M chart is going down, it can’t go up unless the 15M chart goes up. If the 15M chart is going down, it can’t go up unless the 5M chart goes up. If the 5M is going down, it can’t go up unless the 1M goes up. That’s the reason I time entries by going from highest to lowest, and stop on any TF that’s not going in the right direction and wait, Does that make sense? Now occasionally, the 5M will go up so long, by the time it turns down, it has already turned the 15M up. In that case, I have to go back up a TF to the 15M and wait for it to turn down again. More rarely, the 15M went up so long it turned the 30M up, so I have to go up to it to wait on it before working back down again. Sometimes the 30M will turn the 1H up, in which case I just avoided entering a bad trade which was destined to turn and go the wrong way on me. That is the basis for timing every entry or additional lot. It keeps you from taking many trades at a bad moment, and it keeps you from taking some bad trades altogether. So there is a very logical system to what I’m doing. With practice this gets very easy. OK?

When you do cbl entry how much pips do you allow going against your trade (meaning its not amount of your SL) on 30 min, 1H chart, 4H chart and Daily charts?

[B]I’ve discussed this a lot before. As your entry efficiency improves from picking better trades and timing your entries better, your average Maximum Adverse Excursion for a particular time frame will reduce. Your average Maximum Adverse Excursion for a particular timeframe is the best possible measure of your entry efficiency. If you aren’t keeping that data, start now. I won’t be able to help you improve your trading if you don’t have the data to show me. You will want to use a stop loss that will contain about 90% of your individual Maximum Adverse Excursions for a time frame. You can do the statistics and work that out with standard deviations from the mean, or you can just do it quickly by eye. If you have recorded MAE’s for 20 trades, your stop loss should be set so only 2 MAE’s are larger than your stop loss, or go out side your stop loss and would have stopped out. The more trades you record your MAE for, the better your data and the more accurately you can set your stop loss. Don’t forget, in my trading system, your goal is to almost never hit a stop loss. In reality a quick unexpected spike will stop you out maybe once every two weeks or so, but as your MAE’s get smaller by better trade selection and entry timing, your stop loss can come down and you will lose less and less on those rare unexpected spikes.

My stops and numerical settings have nothing to do with your trading. No need to ask me about them again. Instead, collect your own data and ask me how to use it to best set your numerical values. That is something I can help you with. OK?[/B]

When we set SL isn’t it purpose and distance that we believe to give the PA some room to change its direction back to favor of our trade which also protects the trade from spikes?
By closing trade before PA hit SL (while price is moving against) how do we know that its wrong direction but not expected (unexpected) spike?

You can’t know that, but you don’t need to know that. All you need to know that if a trade is going in your direction, it has a higher probability of continuing to go in your direction than a trade that is going against you. Then you trade that probability. Does that make sense?

I also would like to ask you, if you can see at the bottom of this page there is reviewpips.com. As I understood there is a live trading rooms can be set up to make a live trades and see it on the charts directly. Can you setup one for practice please?

[B]We already have a live trading room set up. I go in there several times a week and give live trading lessons. Tymen also does almost every day, sometimes twice a day. Many of the traders that you see in these threads show up there. You are invited to join up and trade with us. The trading chat room for mine and Tymen’s threads is located at:

Bollinger Band DNA - FOREX Trading using the Tymen Bollinger Band Strategy

Tymen gives lessons on his stuff and I give lessons on my stuff. While that might seem as if it would be confusing, it turns out we think a lot alike and it works out. You are invited and welcome to join in

I hope I have answered all your questions. If anything is not clear, feel free to ask it again with a chart example. I value your questions since many others probably have the same question but are too shy to ask it, so keep the good questions coming, preferably with chart examples to make them easier to understand. We may have different first languages, but the chart looks the same to everyone. Happy Trading :)[/B]

tymen1 · July 17, 2010, 1:11pm

[B]Graviton[/B], please be aware that just now there is a poster called “witsnpips” who is going around the threads posting absolute insulting rubbish.

He has not appeared here yet.

So I post publicly rather than send you a PM because he might just see this post and think twice about polluting your thread.

If he does post here, hit the red triangle in the top right hand corner and report him.
Also let [B]o990l6mh, Honorary FX Member[/B] know.

gasanvill · July 17, 2010, 1:19pm

Thanks tymen for the advice!
Not only i have to thank graviton, but also you. Thanks to your CBL entry method, i have improved my trading in a way you cant imagine! You and graviton have been excellent teachers, and the lesson you are giving tu everybody in this forum is priceless!

Graviton · July 17, 2010, 1:22pm

gasanvill:

Well, as i promised i will post my results of the week. I´ve been using this method to take profits:

at R:R = 1 move my SL to BE
R:R = 2 lock 25%
R:R = 3 lock 33%
R:R = 4 , close the trade.

I took 12 trades this week, and i´m attaching the result (JPG).

Average profit efficiency = 76%

Win/loss ratio = 60%

risk/reward= 0.2

Increased my account in 0.5% (My account size allows me to trade mini lots, but i´m trading microlots 0.01 until i get the hand of it).

Next week i´m incorporating ATR to my analysys so i can calculate the MAEn.

As you can see the results for this week were good. This is the first time that i feel that wasn´t luck. I have a feeling that every profit i made in the last months, i was just lucky. I will try to have another winning week, i know the king knog effect wiil be there, but i wont let it win!

Thanks Graviton for taking the time and giving as such great advices!

Great trading Gasanvill. I can see your progress in just one week. I’ll suggest that along with ATR you also record the home chart TF of each trade. If you always trade the same home chart TF, or the same combination of TF’s, then it’s not necessary. Usually when you first start this process you can make huge improvements in your trading right away and you can become profitable quickly. Of course, quick is relative to a degree in Denistry that takes 8 years. After months of improvements though, your improvement starts to flatten out. You’ll be making steady bank by then, so no worries. The tracking must continue the rest of your trading carreer though to keep you from going astray. Let me know how next week goes for you.

Another Note: I believe your pips won or lost includes spread. You need to record spread so you can back it out of those numbers. It will need to be backed out of all your numbers including MAE and MFE for more accurate tracking. If your spreads are fixed, just record the pair traded and you can do that anytime. Otherwise different spreads will mess up your calciulations. You need to record pair traded, stop loss used, and time of day also, long or short also, but those are all in your platform trading log, so you can go back and enter that later if need be.

RenaLa · July 17, 2010, 2:09pm

Hi all :),
gasanvill I didnt know you have been trading for 3 years. I thought you are newbee as I am

How was your trading before for past 3 years? have you lose or was gaining?

Thanks Graviton for being patient answering me even some questions again

I have to say to my Casey thousand times before she knows what to do. she is only 2.5 month since she was born and looks at the world.
guess I am the same in trading.

Casey is my pretty dog if anyone doesnt know
there is no way to see live trades at the BB chat room or I missed something is there a trading room to watch the live charts??

gasanvill · July 17, 2010, 2:49pm

Yes Graviton, i also record for each trade: time, day, long or short, and paste daily, 4h, 1h and 15 min chart at the moment of the entry and exit. that way i can analyze on the weekend. i keep that in my trading journal

gasanvill · July 17, 2010, 2:57pm

Hi Renala…how was you trading for this week?

Yes i have been trading for the past 3 years It has been a very difficult road. I blow two accounts, learned a lot, and this year finally i´m seeing the light! dont give up if you lose money, your eureka moment will come. With the advices of tymen and graviton you will learn a lot. My little advice: keep record of all your trades. That was the difference for me, i never kept a trading journal so i made the same mistakes on an on.

hope that helps!

and go to the chatroom, graviton and tymen give ver important lessons there, you can see live charts and learn a lot!

RenaLa · July 17, 2010, 3:19pm

I didnt trade this week much I was busy with other things. I didnt take more then 8-15 pips per trade. thanks for asking
Last week I have waste too much pips(Included spread) - too much times pa went against my trade.
I wonder if we use cbl entry should we still use timing key?

next week I will practice more on cbl entry.
what time do they teach in the chat?
I have gained important knowledges I need practice I would like to see the live trades.

RenaLa · July 17, 2010, 3:33pm

Can anyone update Graviton’s pdf please.
I was trying but I dont have such option in my adobe reader
thanks

highland_trader · July 17, 2010, 4:18pm

this ids probably one of the best pieces of advice for any newbie trader, is to keep a journal and records. Its probably as powerful a tool as any indicator thats out there. I have not yet seen a professional trader who does not keep a journal. Therefore starting and keeping one is one step closer to your goal.

And if you cant be bothered then chances are you will not succeed.

Graviton · July 17, 2010, 8:31pm

Ha Ha, it’s a group effort. But I’m very pleased that it’s working! I don’t think it would have worked without your help Tymen. I always believed my method of trading could not be taught. Compared to others methods, it seemed overly complex, cobbeled together from 1000 things I’ve learned over decades, and way too dependent on making many right decisions for each trade, each of which can be adversely affected by a traders emotions or mood. I never tried to teach it to anyone and even told many who asked me to show them how to trade that it couldn’t be taught. I wasn’t being selfish, I just believed it took me decades to learn it and it would take anyone else at least almost that long if it was even possible to teach. I never considered even trying to teach it until I read The Finest In Trend Trading thread and thought, maybe it is possible. Maybe very difficult, but maybe possible.

Now I’ve seen two traders with some prior experiance become successful with slightly different combinations of BB DNA and my old timey tape reading method. The reason my method is so crude is we didn’t even have such things as live charts when I started learning. We literally just watched prices print on a black and white TV screen and visualized in our mind what they would look like if plotted on a chart. We spent half of each day flipping through paper charts to remind ourselves of the patterns on each. Having a really good memory was essential. I thought it was fantastic when I saw the first automated black and white real time chart plotted on a computer monitor powered by an IBM main frame computer as big as a house. Back then,we’d update our paper charts and do calculations in the evenings, but all quick decisions had to be made on the fly from direct price action information only, basically just tape reading.

I’ve yet to see a newbie trader just start making profits quickly like in the Turtle Traders book, but I see many advancing at 10 times the rate I did and I’m sure many are just about to the point of having the light come on. It’s frustrating to use every day a simple concept like, don’t ever take a big loss, but not be able to explain it to others. But if some, even 1 or 2 traders get it, then this all lives past my time. It’s a little bit of imortality and at my age I’ll settle for any little bit I can get. I wanted to teach my kids how to do this, but they just weren’t interested at all. I still have hope for one grand child, we’ll see. In the end, I feel very proud, very happy, very pleased that I could help a couple or few traders in some small way. It has been a hell of an effort, but hey, we trade Forex. We aren’t afraid of an almost impossible task. The harder the chalange, the more it makes our blood boil, right? Happy trading all.

Graviton · July 17, 2010, 9:10pm

Ummm, there probably is. Type in Maximum Favorable Excursion to google and you’ll see several links to articles about the concept. I made it up a long time ago and called it Maximum Profit Available and used it a long time before I realized some other people were doing the same thing and called it Maximum Favorable Excursion, so I renamed the measurement to MFE to be consistent with other literature. I created the Profit Taking Efficiency tool, now named PTE to avoid confusion with price earnings ratio, and I’m not sure if anyone else is using it under another name. But if you find something good, be sure to share it. Note that PTE can be normalized for volatility at the time of the trade using ATR by the same process as used for normalizing Maximum Adverse Excursion. It’s also helpful to seperate the trades by home chart time frame with MFE as well once you collect enough data. It’s very revealing.

Graviton · July 17, 2010, 9:16pm

Thanks, will do. These trolls contribute nothing. They really need to get a life.

Graviton · July 17, 2010, 9:24pm

We all just watch live charts on our screens from our own platforms while we chat about them too. the chat page has a popout feature so you can put it on top of a chart if you like. Tymen uses live charts in a blackboard application that is great when he gives lessons. It’s cool.

fartist · July 18, 2010, 4:07am

Graviton:

Ha Ha, it’s a group effort. But I’m very pleased that it’s working! I don’t think it would have worked without your help Tymen. I always believed my method of trading could not be taught. Compared to others methods, it seemed overly complex, cobbeled together from 1000 things I’ve learned over decades, and way too dependent on making many right decisions for each trade, each of which can be adversely affected by a traders emotions or mood. I never tried to teach it to anyone and even told many who asked me to show them how to trade that it couldn’t be taught. I wasn’t being selfish, I just believed it took me decades to learn it and it would take anyone else at least almost that long if it was even possible to teach. I never considered even trying to teach it until I read The Finest In Trend Trading thread and thought, maybe it is possible. Maybe very difficult, but maybe possible.

Now I’ve seen two traders with some prior experiance become successful with slightly different combinations of BB DNA and my old timey tape reading method. The reason my method is so crude is we didn’t even have such things as live charts when I started learning. We literally just watched prices print on a black and white TV screen and visualized in our mind what they would look like if plotted on a chart. We spent half of each day flipping through paper charts to remind ourselves of the patterns on each. Having a really good memory was essential. I thought it was fantastic when I saw the first automated black and white real time chart plotted on a computer monitor powered by an IBM main frame computer as big as a house. Back then,we’d update our paper charts and do calculations in the evenings, but all quick decisions had to be made on the fly from direct price action information only, basically just tape reading.

I’ve yet to see a newbie trader just start making profits quickly like in the Turtle Traders book, but I see many advancing at 10 times the rate I did and I’m sure many are just about to the point of having the light come on. It’s frustrating to use every day a simple concept like, don’t ever take a big loss, but not be able to explain it to others. But if some, even 1 or 2 traders get it, then this all lives past my time. It’s a little bit of imortality and at my age I’ll settle for any little bit I can get. I wanted to teach my kids how to do this, but they just weren’t interested at all. I still have hope for one grand child, we’ll see. In the end, I feel very proud, very happy, very pleased that I could help a couple or few traders in some small way. It has been a hell of an effort, but hey, we trade Forex. We aren’t afraid of an almost impossible task. The harder the chalange, the more it makes our blood boil, right? Happy trading all.

I like your last sentence alot and it means alot to me. Having been one of the elites in the army, i totally can’t agree more on that!

Back then whenever we were assigned a task, they’d go “if it’s so easy, why do we still need to assign it to you guys”

Now that you mention it again, it just brings back memories back then.
Tough times don’t last, tough men do

unrepipant · July 18, 2010, 8:01am

“Can anyone update Graviton’s pdf please.
I was trying but I dont have such option in my adobe reader
thanks”

Hey Renla,

Attached is the updated PDF for Graviton’s thread. I tried to upload the whole thread but it would not upload. It says the minimum size for a PDF is 20MB and the whole thing was only 2.21 MB but it continued to fail to upload. So I went in and cut out the portion I had last uploaded around page 86 and published the remainder to date and that is what you have here. Not everyones questions are included in this but a lot of yours are since you ask such good questions and Gravition amazingly answers them all in great detail.
Hope this helps.

Graviton PDF Continued.pdf (1.32 MB)

gerard1 · July 18, 2010, 10:23am

Hi Graviton
I have started reading this thread from the begining and hope to learn a lot more about trading from it. I might pop up now and again with a question or two if I dont understand is that okay?

Gerard:)

Graviton · July 18, 2010, 12:47pm

Welcome Gerard. Good questions help everyone. I really like the ones with a chart example attached. As I mentioned in chat once, every trade in the world only consists of 5 parts, nothing more:

What to trade - We discussed pair selection here extensively. Everyone who has gone through this thread should have a good idea of how to select a pair to trade.

Which direction to trade- We’ve gone through trend analysis in great detail. Everyone should have all the skills they need now to spot trends.

How much to trade - This usually is 1% to 2% of account balance risked per trade maximum per money management rules. Newer traders should never risk more than 1% of account balance per trade until they are consistently profitable. Note that if account balance takes a big drawdown (this should never happen trading my rules), then trade risk must be reduced to keep risk per every new trade below the 1% maximum.

When to enter - A good entry method, the CBL, is described in detail in Tymen’s thread. I’ve also discussed entries in much detail.

When to exit - I’ve discussed exits in great detail. In addition, Tymen has just introduced a new PSAR-BB mid band exit method that I’ve been testing out in demo and looks very promising.

All five components of a good trade are now in place. Some are already getting positive trading. Others will need a little more practice, but are making good progress. I think everyone can get there with some careful work. Happy trading