I would agree, the Future Candle indicator is doing something, but what I am just not sure. It did seem to show GBP/USD would continue down until the 1.5556 area & it hit 1.5532 before turning up. Now was the indicator correct, or was it just what happened just happen to fit the indicator signal? That is something I just can’t determine at this point. At this point I think it is better that a new indicator be developed using Adam Theory. How are you plotting Adam on the chart…the paste way, or using the simpler method as described in the pdf? Thank you for joining in & sharing.
Taking a short break from my second reading of the Adam Theory pdf. Again, this is very thought provoking & yes I do feel that I knew most of this before, but sure was not doing most of what is being described. In fact it seems according to what I am reading I was breaking all of the rules according to Adam Theory. I am a short term trader at this time, but in the past I did medium to longer term positon trades following the trend, so the trend part comes easy. Now after almost completing my second reading it is starting to sink in & make much sense to me. I gave up the traditional indicators long ago & started to focus on the trend along with S&R and S&D Zones with the S&D Zones coming just recently, but I can see an indicator plotting the Adam Theory would be a great benefit & could not be considered a traditional indicator, but what I would call a specialty indicator. Now several questions I have if you would be so kind to indulge me.
#1. How difficult do you see the coding of this indicator?
#2. From your manual plotting of Adam Theory, how do you feel about the results so far?
#3. The paste method as you are using, or use the one described in the pdf, is one as accurate as the other, or would that be determined soley by the trader doing the plotting?
That is about it for now, but after finishing the second read I will start trying to plot the moves. Thanks for your view & help as it is alway appreciated.
One last item before I retire for the evening. I just stumbled upon something that I think will be of great benefit to using The Adam Theory. Check this out…www.zentrader.de - trading system development and monte carlo simulation methodology …. If that fails to open check this out…Free Reflection Tool at the Trade2Win site. I hope I am not out of line posting this, but if I am sorry & the mods can kill it. I did not open the file up, but just by the name it looks like it is of benefit. Good evening, day my friend.
I am using the cut and paste method as suggested by Dale. His method produces the same result as using the acetate paper suggested by the book.
From what is said in the book, I think Dale is correct that we do not need to solve Adam on hourly or daily basis (or any other timeframe). Adam need to be solved only when there is a pullback or “price reaction” against your entry.
I’m still trying to see if Adam can be used on the H1 timeframe. Appreciate any suggestions.
That’s my problem too!!! It’s doing SOMETHING but what??? But like I said: that particular indicator may not be based on Adam Theory at all because as I noted this ‘idea’ of ‘future prediction’ is nothing unique to Wilder. There are others (well one or two of them) that have had similar ‘ideas’ and maybe that indicator in based on their work and not on Adam Theory.
Not to complicate matters here but Bill Williams believes in the ‘Fractal Nature Of Markets’ hence his Fractal Indicator. It’s (as I understand it) based on the principle that ‘for every action there is an equal an opposite reaction’ (cannot remember if that was Newton or Einstein)!!! LOL!!! Something like that anyway.
But all of these things make sense to me AT LEAST insofar as STOCKS are concerned. I don’t want to start YET ANOTHER debate on the subject of EQUITIES vs. FOREX. But there is more of a ‘human factor’ that comes into play insofar as Equities are concerned. Call it more ‘people power’ or ‘sentiment driven’. In other words: there is only so much a person or persons will pay for a stock regardless of any fundamentals or data releases etc. Once it gets to a certain point or price level ‘the human factor’ steps in and the stock will stop going up because nobody ‘wants’ to buy at that level. ‘Psychology’ is probably the word. Now while that ‘flies in the face’ of Adam Theory: I honestly do believe this is what happens. I’m not sure that the same can be said for FOREX. To be very honest with you (and YES this is going to get me ‘in trouble’): I don’t think that FOREX was meant to be a ‘tradeable market’. FOREX, not too long ago in the bigger picture of things, was simply a function of the banks in different countries exchaning currencies at certain rates and trying to make a bit of money on the transaction (whether the exchanging of funds was for business or tourism or stuff like that). Somebody, somewhere, just saw the potential to ‘make a market’ out of it is my belief and here we are. As a matter of fact: there is an Investopedia Article on this which I’ll look for and post here on this very topic. I could be wrong here i.e. I think I’m already ‘known’ for my ‘radical’ ideas (‘radical’ or ‘dumb’ or ‘uninformed’ i.e. I’m not sure). In other words (no matter what my reasons for my belief): FOREX is LESS ‘sentiment driven’ than Equities. That’s why I find it difficult to ‘get my head around’ the concept that ‘supply and demand’ exists in FOREX. Take Commodities. There are various reasons why demand may exceed supply (prices will go up) and supply may exceed demand (prices will go down). Take Equities. A company only SO many shares available for sale allocated. In other words: the ‘pool’ of shares is finite. So let’s say I own stock in IBM and somebody else comes along who WANTS to own stock in IBM and comes to me and makes me an ‘offer’ for that stock. I’m happy with that ‘offer’ (maybe I need the money or am satisfied with the profit I will make if I sell that stock to this person at the price being ‘offered’) so I sell the stock at that price. Obviously from that point what happens afterward is not my problem but the buyer’s (new owner’s) problem. FOREX (to me anyway) is some giant, disjointed, ‘virtual market’ somwhere in the ‘sky’. All you’re doing by trading FOREX is ‘shadowing’ the movements of the big banks or institutions that are simply conducting business e.g. buying machinery and equipment from one country and having to pay for it in a certain currency so: they try to negotiate and get the ‘best deal’ on the transaction. And there is your ‘rate difference’ between the two currencies which is, it would appear, trade-able. But then again remember: when it comes to the fundamentals of FOREX then I’m not the person to be asking or making these observations let’s face it. It’s just my perception and the only one that makes logical sense to me.
But as USUAL: I’m off topic and just POSTING (THINKING) away!!! LOL!!!
I think you may find that you were breaking other rules NOT specific to Adam Theory too (well: I speak for myself). Put it this way: I don’t think that those ten trading rules are Adam Theory specific in any way. Apply those same rules to ANY half decent trading system and you SHOULD STILL be profitable!!! LOL!!!
Your questions:
#1. I see it being difficult!!! LOL!!! There’s the short answer. I say this if for no other reason than remember: your actually ‘asking’ your trading platform for draw objects ‘into the future’ and to move those objects (the future bars) with each price movement. Most ‘indicators’ are simply drawing and calculating their CURRENT value. Now you’re asking the platform to sort of ‘move’ an entire ‘block’ of ‘historical’ data (be it fourteen bars or forty bars) ‘in the future’ which it also has to ‘flip and rotate’ in the process. Put it this way: if nothing else I can see this being a ‘dog’ of an indicator if coded correctly. In other words: I don’t see it being QUITE as ‘responsive’ as one would like. BUT: ‘never say never’ because I’ve not even tried yet.
#2 So far as I can tell: Adam has has been ‘pretty much spot on’ if you compare my FIRST charts ‘solved’ and what ACTUALLY happened after that. But again a caution: the EUR has been dropping in value (trending) down for a long time. So is it merely CO-INCIDENCE that Adam Theory has been, for the most part, ‘spot on’, or is Adam Theory INDEED ‘predicting’ the ‘most likely’ direction of the instrument being traded. ‘The proof of the pudding’ will be when we hit a ranging period I believe. Adam Theory SHOULD denote the ‘probable’ ranging period ‘in the coming’ (at which point you’ll simply do nothing until the market starts moving in one direction or the other). The ‘scary’ and confusing part though: take a look at the EUR/JPY chart of Adam for last week and compare it to what has happened with EUR/JPY up until this morning??? In this particular case: one could have traded Adam Theory ‘in real time’ and you would be showing a nice profit right now. In other words: the Second Reflection Adam Chart was ‘spot on’ when ‘solved’ on Friday and when compared to what’s happened thus far with the pair. The question is: is THAT the ‘NOW’ moment??? Do I have this all WRONG (in waiting for price on EUR/JPY to turn down before deciding to short it)??? Not sure and it’s confusing. A sort of ‘damned if you do and damned if you don’t’ type of thing. But then again: that’s why we’re JUST TESTING at this time!!! LOL!!!
#3. The paste method (painful as it may be) shouldn’t be any different between trader, broker, or the manual plotting. All you’re doing is creating a ‘flipped mirror image’ of a historical chart and ‘merging’ them together. The only time you could have ‘issues’ is if you trade with a broker that is in the habit of ‘messing’ with historical data!!! As a ‘way out’ example: let’s just SAY that a broker (they would be VERY foolish to do this but this is a radical example) remove those huge spikes from the Gold and Silver charts. That would ‘throw off’ your Adam Theory Second Reflection Chart and give it a whole new meaning and ‘look’. But as I say: that’s a ‘radical’ example. The odd bit of ‘historical price manipulation’ here and there (by a few pips) shouldn’t make any difference in the ‘grand scheme of things’. Yet another good reason though to choose your broker VERY carefully!!! LOL!!!
Does that mean you have the actual book in your hands (what with the ‘acetate’)!!! LOL!!! Mine has not arrived here yet. It takes AN AGE if you don’t pay those ABHORRENT prices to Amazon for quick delivery (in my case and shipping to Africa the cost of ‘expedited shipping’ is more than double the cost of the fuc*ing book)!!! LOL!!!
Whether you do have it or not: there’s no way my ‘cut and paste’ method COULD be different from Wilder’s old manual method let’s face it.
As I noted yesterday: without the luxury of an indicator it would probably be better and easier to simply print out the hourly chart every hour and ‘plot’ of ‘solve’ Adam using the ‘acetate’ (or equivalent) until your see a valid entry point etc. Of course: you could get very ‘quick and nimble’ using PC Paintbrush but I know that I’m unable to ‘solve’ Adam using my method anywhere near under five minutes of so. As a matter of fact: I’ve just (let’s say) ‘acquired’ some screen recording software. I’ve been ‘playing’ with it and it’s quite neat. MAYBE I’ll make a video of how I do it a) to test the software and b) to show you how I do it and how long it takes!!! LOL!!! The only problem: it’ll probably take three DAYS to render the final output!!! And then it’s got to be uploaded to YouTube or one of my sites and believe me: these files are NOT small. There’s one or two little things that I’ve been trying to sort out with the recording software (I’m a bit ‘OCD’ when it comes to ‘quality’ ESPECIALLY when it come to music and video production)!!! LOL!!! That’s probably why I never get things ‘done’. I mean: left to my own devices I could probably end up making a broadcast quality five minute training video with Dolby Surround Sound or Digital Theatre Sound JUST showing how I use PC Paintbrush to ‘solve’ Adam!!! LOL!!! But again: THAT IS JUST ME!!! LOL!!!
By the way: I had a look at that link and site. I have NO IDEA what it’s about. It APPEARS to be some type of combination of indicator and trading system with a ‘simulator’ but I’m not seeing any correlation between it and Adam Theory unless I’m missing something.
Morning all.
Dale, that’s the third of Newton’s ‘[I]Laws of Motion[/I]’.
He states that forces always occur in pairs, hence every action is accompanied by a reaction of equal magnitude but opposite direction.
I find the issue about ‘forex being less sentiment-driven than stocks’ quite interesting and hope you’ll find and post a link to the Investopedia article dealing with the assumption that forex trading somehow started ‘by mistake’, or at least by chance.
Sounds like it may offer some additional insight into the markets, which never hurts.
I beg to disagree with your perception of Supply and Demand in Forex though: I’ve understood you to mean that price is (mainly or entirely) determined by banks and/or institutions conducting business. While those ‘big players’ certainly have some effect on price movements, it is mainly the state of a country’s economy that determines a currency’s value. The best example for this is the effect a change in interest rate of a country has on its currency: the change of rates is always ‘nominal’, intended to steer a country’s economy in a certain direction, while the country’s currency (after some delay) rises or falls in accordance with the ‘real’ or ‘effective’ interest rate, i.e. it just mirrors its host country’s economic strength.
All the ‘big players’ can do is enhance or dampen this convergence, to an extend.
Thank you for your response. I agree it is probably not necessary to plot Adam hourly unless there is decent change noted, but from my two readings of the pdf it appears that Adam can be used on any tf, but would using the shorter tf’s be worth the trouble? When I start plotting Adam I intend to use the acetate method & see how it goes. Will probably use it on a daily tf, but will take a look at the 1H, 4H & Weekly as well. Thank you for your views & comments.
Thanks for your response. I sent you the site because on the part I pointed out it seemed to be coded for The Adam Theory, but I did not open it up to see for sure. Sorry about that.
It does appear coding an indicator to duplicate what the Adam Theroy is about would probably be a task of great challenge, but that is not to say it can’t be done. If it can be developed it would be a great time saver & truely a unique indicator.
From my two readings of the pdf it appears Adam Theory can be used on all time frames, but I see the 4H, Daily & Weekly being the best. I intend to try all time frames from 15M to the weekly once I start, but being I am a short term trader I will most likely focus on the daily & update only if there is a significant change in the trend. I will be trying out the acetate method first as I am not much into cut & paste, but may move to that if acetate does not work out. My book should arrive in about 3 days.
I have a friend who is a coder & after I use the acetate method & get more informed about Adam I just might send him the book & see if he has an interest in tackling this indicator. If it can be done he could do it. Months ago I did come across another indicator that plotted a line out in front of the last candle on a chart in any time frame the lead the last candle by about 15-18 candles in a fashion similar to what Future Candle is doing, but this line only pointed in the direction it was saying the trend would continue in. This indicator look much more accurate than Future Candle. I had a computer crash shortly after the discovery of this indicator & it along with chart data was lost forever. I have made several attempts to locate this indicator, but no luck so far. Cannot even remember the name.
From what I have read so far, I see The Adam Theory as being very good at keeping you in the trend. It appears fom the material in the pdf that Adam works across all time frames on any market. It has been a long time since I have come across anything that show as much promise as the Adam Theory does. This does not mean I am giving up on my current method, but I am sure going to devote much time to learn Adam. The Adam Theory, Gann & Delta have all had my great interest for severl yrs & there is a nugget in each if we can just find it. Gann it seems took many of his secrets to his grave, but I do believe he left some of them behind hidden it his works…who knows he may have just left them all hidden if we would only dig deep enough. Anyway, with Adam I am digging away.
Thank you Dale & all that join & share their views, comment & suggestions.
I’m not saying (didn’t say) that the ARTICLE is confirming my ‘belief system’. But it makes for interesting reading anyway. I do realise that the value of a currency is affected by many things. But it’s not affected by ‘people’ if that makes sense. Does that make sense??? I mean: you don’t hear the pit noise escalating when EUR/USD starts to rally do you!!! I guess what I’m TRYING to say ‘in my own special way’ is that with FOREX I believe that it is a misnomer that for every buyer there has to be a seller (LOGICALLY there has to be of course but it’s not necessarily another trader). MAYBE at your BROKER yes e.g. if they’re a Market Maker and matching their own internal client orders. But I fail to understand how this ‘plays out’ in the BIG picture. Put it this way (and at the moment anyway): there is no finite number or EUR or USD in circulation. It’s just ‘paper’ and you (well not YOU but the Central Banks) can print AS much or AS little as they please. It’s the same thing as saying that Bank of America can issue as many shares as they want and when they want with no restrictions in place or based on ‘nothing’ and no underlying value or basis). Eventually those shares wouldn’t be worth the cost of the share certificate itself (aright Bank of America is probably the WORST POSSIBLE example I could have used at the moment but you ‘get the picture’ I’m sure)!!! LOL!!! I know I’m not getting my point across here clearly. I know what I’m trying to say but I don’t know how to put it into words (can you believe THAT coming from me)!!! LOL!!! I THINK what I’m trying to say is that we (people) don’t think what the word ‘trading’ actually means. I see it as going to a live auction. Let’s say there is ONE office desk for sale. The bids are made and somebody buys the office desk. Then somebody else comes to him and says ‘alright: I’ll pay you an additonal sum for that office desk’ BEFORE the original buyer has taken delivery of the said office desk. If the two agree on price: then a ‘trade’ has been made. Right??? And so on and so forth. I don’t see this ‘holding true’ in the FOREX Market per se. In other words: the likes of the big banks and the likes of Rennies Foreign Exchange or American Express are just ‘going about their business’ and exchanging currencies and trying to get the ‘best deal’ for themselves. The Spot FOREX Market is just ‘riding those coattails’ is the way I perceive it. And as you mentioned: yes the value of a currency is affected by various other economic factors or fundamentals but it’s not ‘people driven’. Am I making ANY sense here??? LOL!!! This is not the same as saying ‘well there is negative sentiment on the EURO’. That’s ‘negative sentiment after the fact’ insofar as ‘human sentiment’ is concerned.
Sorry: I’m ‘tying myself in knots here’. I know what I’m trying to say but I’m not ‘getting it right’!!! LOL!!!
Anyway: read the article. To me: the RETAIL Spot FOREX Market ‘happened by chance’ in my opinion. And I’m sure I don’t have to tell you that Wall Street can ‘make a market’ out of ANYTHING if there is a demand. People think I’m joking whenever I note this but you CAN trade WEATHER FUTURES AND OPTIONS. I don’t know HOW because I’ve never done any research on the subject but have a look at the CBOT’s (or is it the CME’s or the CBOE’s) website. It’s there!!! LOL!!!
Anyway: GIVE ME YOUR THOUGHTS (you and anyone else that either agrees or disagrees with me is fine)!!! LOL!!!
No problem (about the link and website). MAYBE if the ‘nitty gritty’ wasn’t in German I’d be able to make more sense of it but it doesn’t APPEAR to be anything to be like Adam Theory or anything else similar to it.
As far as coding an ‘Adam Indicator’: well it CAN be done. As I say: there’s one for TradeStation but I think it costs something like $400 or something (there’s a link to it somewhere on this thread). How ACCURATE THAT one is??? NO idea. Coding an Adam Indicator SOUNDS simple. I mean: how difficult could it be to get the data of the past, say 14 bars, ‘flip’ it both horizontally and then vertically, and then align this newly created series of bars with the last bar on the chart. BUT: if it’s going to work in real-time then it’s going to constantly have to be moving ALL of these ‘future bars’ up and down as a ‘block’ with every tick. THERE’S where I see a problem. And ACTUALLY: ONE thing I’m pretty sure about and that is that no trading decision based on Adam can be taken before the current bar has CLOSED. And then again: how many bars are ‘enough’. I don’t see 14 bars are being enough. Take a look (well I’m sure you have) at how far out some of those ‘reactions’ take place??? As an exercises: just take the EUR/USD chart and cover up a good portion of the Second Reflection chart (the yellow part of the chart). All of a sudden the whole picture changes and one would be easily fooled into thinking that EUR/USD could go to ZERO. Does that make sense???
But I’ll tell you this: if Adam Theory ‘works out’ for us then I’ll definitely start ‘delving’ further into The Delta Phenomenon. I mean: what IF you get get ‘confluence’ between Adam Theory and The Delta Phenomenon for any given period given that they’re ‘solved’ in two very different ways???
For me: what started OUT as nothing more than using PROBABLY confirmation of the immediate and PROBABLE future trend (for use with Wilder’s Swing Index System) has become quite intriguing (Adam Theory) I must say.
I don’t THINK that Adam Theory is a trading ‘system’ that could be used exclusively. I see it as more of a LONG term trading system. As I said: sort of ‘set and forget’ while using your ‘normal’ trading system to trade daily our hourly or whatever. But like I said: I could be wrong on that too. Look what Adam ‘said’ about EUR/JPY daily over the weekend and look where the pair has moved??? ‘No brainer’??? Who knows!!! LOL!!!
And yes: ONE thing Adam DOES do (and I believe that’s it’s MAJOR FEATURE) is keep you trading WITH the markets as opposed to trying to trade AGAINST the markets. That little ‘nugget’ IN AND OF ITSELF is worth a lot of money!!! LOL!!!
Regards,
Dale.
Edit:
To be QUITE honest: I believe that a lot of stuff like this (Adam Theory and The Delta Phenomenon) has not ‘taken off’ BECAUSE of the amount of time and effort involved!!! Let’s face it: ‘slapping on’ a moving average or two on a chart and ‘hoping for the best’ is a WHOLE lot easier (and the reason why most brokers have the most EXQUISITE of office buildings)!!! LOL!!!
Even WITH Adam Theory: I think we’re all going to find that the shorter the time frame the more susceptible to whipsaws we’re going to be. That’s just ‘inherent’ when trading the shorter timeframes with ANY trading system unfortunately.
Wilder’s Volatility System by his OWN admission is one of his best offerings. And if you have a good look at it: it also gets you in VERY late but is WAY less susceptible to whipsaws than any other trading system I’ve ever seen UNTIL you start trading on any time frame shorter than the daily time frame. Personally and EVEN ALTHOUGH I no longer do this simply because I cannot sit and do NOTHING all day: the only time frame that ‘counts’ is the DAILY time frame and the only price that ‘counts’ is the DAILY CLOSE. At least insofar as Wilder’s trading systems are concerned. But: we’re ‘human’ I guess. And that’s why we close out trades with a few dollars (be they tens of dollars or hundreds of dollars and take an almost equal NUMBER of losses on the shorter time frames) whereas you’ll note in ALL of Wilder’s books: when he closes out a trade we’re talking tens of thousands of dollars per trade BUT he’s had to wait a LONG time for that profit i.e. the trade examples span MONTHS not a few hours.
Damned if you do and damned if you don’t!!! LOL!!!
That is a great observation & I think you are correct. The shorter the time frame the more unstable it will be. The Daily is the king, but I guess you could do as you did on the 1H & get out sooner. Shorter is a double edged sword for sure.
Could you post what you plotted on the 1H? Thanks for sharing your observation.
On further analysis, there should not be any trade because the chart did not give any clues (Clue #1,2 and 3 as mentioned in his book). I guess I was impatient and just wanted to solve Adam and trade. Lesson learnt…I hope.
I was just going to say: looks like you got it right to me!!! LOL!!!
Look like a perfect Adam Second Reflection Chart to me!!! LOL!!!
The only reason I compress my charts using WinZip is because they’re too big to attach or upload because of the file size and limitation on the size of the actual graphic.
Now if I MAY ask out of interest sake: can you indicate where you entered, where you placed your initial stop, and where you were stopped out (I’m assuming that’s the chart that you took your trade from)???
Let’s compare notes. Just by looking at that chart I see where I would have gone long and I would in all probability either still be long or have been stopped out for a small profit based on the way I interpret Adam Theory to work.
ONE thing I think we need to work on is where to place your initial (and subsequent) stops. I’m not too happy with Wilder’s assumption that if a reaction is ‘projected’ to, say, $46 (using his Coffee Chart or whatever it is), then your stop is to be placed at $45. That’s sounds a bit more like ‘guess work’ and ‘hope’ to me. I’m thinking more along the lines of using ATR(14) (or even a multiplier thereof) to calculate where your stops are to be placed. I’m not sure what anyone else thinks but remember we’re talking FOREX here at the moment. Using Wilder’s logic on FOREX: where are you going to place your stops if EUR/USD, for example, is trading at 1.3000??? At 1.2000??? At 1.3100??? If you’re any good at identifying support and resistance (which I’m not) then that may be another way. Just give this some thought is all.
Long at 1.30276
Stop loss at 1.30096 which was hit
Adam showed no pull back but a short term rally of at least 50 pips.
Appreciate all your feedback. Hope to learn and make a better entry decision using Adam. Thanks a lot!
