Daily is on the rise. Has been for about a month. This could be a change in trend, but we only have the november highs broken. I can still see see the highs in the mid 30’s from october and then up in the 40’s from august, so lets be pragmatic. It would need to break above the october highs in the mid 30’s. I reckon 35.8 would be an approximate entry, assuming the 2nd projection looked good. I certainly would not be entering now as it is approaching the october highs (support).
This is much better, close to entry I think. There were highs on the 23rd Jan which were broken in a big move on the 25th Jan. I would have entered then, say at 33, with a stop just above 31. If I hadn’t taken that (so, like I am now), there was a high formed yesterday. So I am looking to wait for a break of 34.3 ish. Assuming that break occurs, I would redo the 2nd projection and if it confirmed entry look to enter at about 34.5
This is looking a bit choppy, especially if considering the 2nd projection going forward. That said, this projection is being done at the wrong time, there is no reason to be doing the projections at this time (according to the rules of Adam). With that in mind, I see no entry anywhere at the moment. I would be looking for the break of 34.3 and would then redo the 2nd reflection and re-evaluate. There might be an entry, but it is too hard to tell using the 2nd projection from this chart.
So, that’s where I stand on silver with Adam at the moment… at least, that’s where I think I stand
I’ll bet the indicator will do its thing as it is designed to do & it may need some tweeing along the way, but I also bet we as traders are not going to do our thing & our thing is to follow the rules. Now some of us will & I intend to follow what The Adam Theory states in the book. The theory only gives three reasons to do a second reflection & that is what I am going to try & stick to. When I first read the Adam Theory book, the Turtle Traders of the Richard Dennis fame came to mind. From what I read about those traders, Dennis & his associate laid out a simple set of rules for them to trade by, but some had other ideas & went on to crash & burn. Others go on to be quite successful traders. The same will be true for those trading The Adam Theory of Markets.
The indicator look clean & clear on the charts as I have it loaded on 5 at this time. The Adam Theory state that it will work on all market across all time frames. I am short term trader & will focus on such using the 1H, 4H & Daily, but will try to stick strickly to the rules. I do have the indicator on a 5M & 15M chart just to see what it does on those shorter time frames. As we progress along you will probably see a need for some refinement of the indicator, but it is too soon for that now. Your post #291 is an outstanding post along with your others.
From my many readings of the book, The Adam Theroy of Markets, appears to be a sound theory for keeping on track with the prevailing trend of the markets you are trading & the title does say “MARKETS”. The theory also is telling you what to do in the event of a retrace, or a change in the trend direction. It is all very clear & concise. I am a fan of Wilder & his work & I find The Adam Theory one of his best as it is simplistic in design & contains few rules. Will it be correct 100% of the time? NO & NO OTHER TRADING METHOD WILL BE EITHER. The big question is "will we follow the rules, or try & add or subtract as we go to suite ourselves. Don’t get me wrong, I have been guilty of doing this myself. I guess it is human nature to try & second guess everything.
Over the next few days I will follow the what I see the indicator showing & will take notes, but will not trade using its signals just yet. From what I see so far you have it coded just right & since it is coded according to the theory, it will be up to each individual to do what they think is best…TAKE THE TRADE, OR NOT.
Somewhere I read a statement by W.D. Gann that said something like…“If you want to know whats in the future, look to the past”. Now that sounds like what The Adam Theory of Markets is saying. These are just my views & nothing more. Yes they could be wrong & probably are. Thats all I got.
Jedster…thank you for taking your time & skills to code this indicator. Now let see what happens. Have a good week.
Funny. I’m just busy ‘solving’ Adam in ‘my own little way’ and I received an ‘Instant Email Notification’ that there was a post here.
AceTrader:
Just to pick up on ONE point (and something that I meant to post about last week) and that is where you mention ‘MARKETS’.
Now this is NOT me being ‘full of it’ (as is usually the case) but this IS something that has AGAIN been concerning me and that is this: ONCE AGAIN and as with ALL of Wilder’s work at NO POINT is SPOT FOREX even MENTIONED or FEATURED. As a matter of fact: The Delta Phenomenon is actually QUITE SPECIFIC about the ‘MARKETS’ (instruments) that are ‘solved’ with it.
I am NOT trying to ‘spoil the fun’ here. I promise you that. I’m just ‘vocalising’ this to provide some food for thought. For those of you who wish to become (or are) profitable Spot FOREX Traders: I REALLY AND SINCERELY DO HOPE that I am WRONG on this. I DO know though WITHOUT ANY DOUBT IN MY MIND: EQUITIES and COMMODITIES ‘move’ differently from SPOT FOREX.
Time will tell of course.
I really did think this worth mentioning though.
Right: back to PC Paintbrush and Deltastock MetaTrader 4!!! LOL!!!
My friend post #302 applies to everyone…we are all guilty, or least have been of the very same you are describing. The method I currently trade is a mixture of about three…how do I say this…well three different methods, or systems with most of the rules redefined by me & I still find myself trying to break my own rules. My greatest trading success has been when I follow the rules.
I gave the Swing Index a look & I prefer Adam along with what I am curretly doing at this time. Adam Theory is a nice fit for how I currently trade. I like Wilders Delta Phenomenon, but just cannot get my mind around it. The charting package is needed, but have read that some traders have found a way to plot the Delta without the charting package.
Post #304…You raise a valid point & that is the very reason I will follow the indicator over the next week on the pairs & time frames I posted earlier to see what happens. I have NO DOUBT the indicator will perform as it is designed to do, but the concern is whether The Adam Theory applies to forex. Forex is a somewhat different animal from stocks & other markets, but the book (THEORY) does say all markets. I think it will apply, but we will see as time will tell.
You are not raining on the parade, but raising a valid point & I appreciate you sharing that with everyone.
Looking at Adam again - Wilder says all [I]freely[I] traded markets. Is spot forex freely traded? I’m not so sure as there is probably a lot of government manipulation going on to control the value of a currency. Forex may not move the way it should:)
Another thought: what if we stopped looking at forex as a 24 hour market? What if we choose the London session and get rid of the rest of the noise on the chart? Now solve Adam for the previous London session and place it on the opening bar/candle of the current session to get and idea how it will act now. One caveat - although this is anti-surrender to the market it seems to me when the previous session ends with a large bar/candle that Adam doesn’t predict too well. Thanks to all for this thought provoking thread!
Edit - I have been using the 1H bars when I solve Adam this way.
I’ll still keep solving Adam for the same four instruments for testing purposes regardless of my statements about ‘MARKETS’ previously noted. As a matter of fact: I’m even prepared to ‘jump in’ on a EUR/JPY short for REAL just for fun (but a ‘proper’ trade i.e. proper trade size based on my risk management and the rest). EUR/JPY ‘interests’ me because if you take a look at the Adam Second Reflection Chart it sure does seem to me that almost BY DEFINITION EUR/JPY would have to take out at east one of its previous lows in order for there to be a valid Adam entry point (where a projected pullback or reaction would not go higher than your initial stop placed).
Anyway: attached are EUR/USD and EUR/JPY. Both are daily charts, after the close on 03/02/2012, (so by definition these are the daily charts for the week ended 03/02/2012).
Attached are XAG/USD (Silver) and XAU/JPY (Gold). Both are daily charts, after the close on 03/02/2012, (so by definition these are the daily charts for the week ended 03/02/2012).
Feel free to comment but:
The more I look at these two charts the more confusing things get. I’m NOW starting to think to myself that it’s only the very FIRST projected probable pullback or reaction that one should be looking at as opposed to looking as far ahead as possible. Why do I say this??? Silver is a good example. As I noted in a previous post here: any half-decent trend following trading system would have had you in long LONG ago. By looking TOO far ahead (for any projected probable pullbacks) then you are INDEED waiting for a ‘glacial move’ or ‘paradigm shift’ in the market being looked at. Gold is a good example. Based on my ‘take’ I’d only SUPPOSEDLY get in long somewhere about NOW. And THAT is only because of the part of the chart that I’m showing. If I condensed these charts more and therefore showed more data then the Adam Second Reflection Chart would show to wait EVEN LONGER to enter based on my ‘take’. That cannot be right.
I’m thinking like this (and this logic coming a bit from the Swing Index System): wait for a turn in price (after a trend in either direction). Such turn to last for three consecutive days (periods???). Solve Adam. Look only at the VERY FIRST projected probable pullback (forget about what MAY happen TWENTY YEARS from NOW). If that VERY FIRST projected probable pullback won’t (probably) take out your initial stop then ‘go with the market’ there and then. This makes a little more logical sense to me because by doing this and looking at the FIRST projected probable pullback you’re CLOSER to the NOW moment (see my comment on the chart of Silver and that may make my ‘change of heart’ clearer).
Sorry: I know I’m ‘chopping and changing’ (my mind) here. But it’s only from solving Adam manually and examining (as if in slow motion) that I’m going to understand this to a point where I’m happy with it. So don’t be too surprised if I contradict myself AGAIN (and even AGAIN) along the way here.
The bottom line (for ME anyway) is this: if one has to wait for price to take out previous highs, THEN solve Adam, THEN hope that there’s no projected probable pullback that will take out your initial stop, and only THEN entering THEN I’m not seeing the point here. If I were trading any ONE of these four instruments that I’ve been solving Adam for: I’d have made profit on the previous downtrend, stopped and reversed when the trend changed, and would probably stop and reverse when the trend changed again (and alright: probably a few whipsaws along the way). What I’m saying is that I fail to see that Adam can be T-H-A-T ‘wrong’ at tops and bottoms. The Swing Index System is ALSO ‘wrong’ at tops and bottoms (or should I say that it doesn’t try to pick them either) and ALSO (for the most part) will have to ‘go with’ the market. The only difference being is that it’s far quicker to react to pullbacks or reactions (it’s more ‘sensitive’ than Adam is another way to put it) and those pullbacks or reactions may very well be JUST THAT and not a change in the direction of the trend hence the whipsaws inherent in the system. But looking at Gold and Silver: it would be UNFORGIVABLE to miss these most recent trends in my opinion???
Either the above or ‘you takes your chances’ and trade Adam ‘in real-time on-the-fly’.
BUT as I keep saying: TIME WILL TELL!!! How MUCH time is going to be required is yet another issue altogether.
The more I look at these two charts the more confusing things get. I’m NOW starting to think to myself that it’s only the very FIRST projected probable pullback or reaction that one should be looking at as opposed to looking as far ahead as possible.
Yes, totally. I only project about 50 or maybe 100 bars. After then it is too far. We only need to project long enogh to decide whether we would take the trade. Whether we take the trade basically depends on where it projects the next pull back. So, we only go one step at a time. The number of bars differs a bit depending on the timeframe, but it doesn’t need to be many…
Incidentally, I took 2 trades based on Adam, both on Friday evening. I should post the analysis…
Yep: that’s making more sense to me. As I noted: based on my trying to look ahead to the next CENTURY (LOL!!!) I doubt that I’d ever get into an Adam trade!!! LOL!!! UNLESS you were trading the ANNUAL time frame and THEN only MAYBE!!! LOL!!!
Best of profits (not luck but profits) on those two trades!!!
Although the book said you can go back as far back in history as you wish, in his illustrated example on Cotton and Kodak, he only retraced to the start of the new trend. So if you only retrace the gold chart to let’s say the last fifty days, you would not have this problem. This is also how I solve Adam. Am I making sense here?
So towards the end of Friday I took two trades, one on the S&P, the other on the AUDUSD. Both from the 4H chart and the setups of both appear to be very similar.
The S&P had broken through highs from 25/26 Jan. I put the stop below the lows of 1st/2nd Feb. However upon reflection, I think they should have been placed below the lows of the 30th Jan, because that was the swing low. I can’t move the SL now because the risk was based upon that size of SL. So, we’ll have to see.
For the AU, highs of the 1st/2nd Feb had been broken. Like the S&P, as I look at it today I think the stop is too tight.
Note these are not live (I’m not that brave), but like you said, they were calculated “properly”…
Well as you can see: I think we’re all still leaning here but I’m agreeing with you too (yes you’re making sense is what I’m saying).
Just some more ‘musing’ to ‘provoke some thought’:
Look at it from a totally different angle. What if a new instrument (FOREX pair for example) was ‘created’ TODAY. In other words: you’d HAVE no history to work from. How you would you THEN solve and apply Adam Theory??? See where I’m coming from. The way I see it: you’d have to wait for the possible probable pullback (there’s GOT to be an easier way to say that) or reaction before solving Adam and then entering. Just think about that for a while.
Why do I say to wait for three consecutive bars??? Mainly because the number ‘three’ and ‘five’ seem to be very widely used numbers in technical trading systems (there’s even trading systems, which are apparently quite effective, where all you’re looking for is three consecutive higher closes for a buy and then hold and stop and reverse on three consecutive lower closes). Also Wilder questions whether a reaction is one, two, or three bars (in those ‘least arbitrary’ things that we can do part). Swing points are normally defined by three bars. Stuff like that. That’s the only reason for my suggesting three bars. But come to think of it: you could (as Wilder says) solve Adam every DAY if you like. Maybe that’s the way to go???
As far as the looking WAY into the future: I guess the shorter your projections, like with any other trading systems, you’ll simply be more susceptible to erroneously being stopped out too many times (basically the same thing as whipsaws except that you’re not be stopping and reversing thus compounding your ‘troubles’).
One thing I’m STILL not happy with is where Wilder deems it fit to move your stops to after a pullback or reaction has occurred. I mean: just because something is trading at $46.78 doesn’t mean that $45 is ‘safe’. That’s a bit ‘flaky’ for me. As a matter of fact: in my opinion it’s probably the WORST type of figure to use i.e. a specific ‘round’ price. I do believe we need to work on a proper method of calculating stops when moving them. Be it using ATR (or a multiple thereof) or something like that. Whatever. I’m not comfortable with his (what appears to be ‘subjective’) method of dictating the place the for the stop to be moved. It’s not ‘scientific’ enough for me… I don’t know what you people think of what I’m saying here???
Like I said. Just thoughts. Analysis. Comments. Food for thought.
My take on this is that the SL is moved under the most recent swing low (say for an uptrend). As higher highs and higher lows are formed, you move the stop along with it. So he os basically trailing the trend. But rather than using a fixed amount (say 100pips, 200 pips, whatever), he is using a flexible amount for the trail. That would make sense as there is no defined target.
If the price does move below the swing low then there is a chance the trend could be changing, so you take your profit and get out. If the trend does indeed go on and change, then you got out at a perfect place. If not. then you just get in again once the last swing high has been passed (assuming the 2nd projection looks good).
I agree that placing stops right on big numbers is not playing to the possible strengths though. I think it would be better to place the stop a few pips under any close BRN. However I think you are trying to make it complicated. I also like to quantify things, but this strategy is all about simple observation and trend following. Once you start introducing volatility indicators to try to guage something, you risk getting side tracked. Remember, just jump on the train…
Nice to hear from you after all this time. It’s only my pleasure. I know many people think I’m just this ‘big bad market maker broker dude’ but I’m TRADER and, as you put it, a ‘comrade’, FIRST and a ‘big bad market maker broker dude’ SECOND!!! LOL!!! Put it this way: I’m just the ‘teensy weensy’ South African Branch Office my beloved broker is all. Do I need clients??? Of course (it makes me ‘look good’ to ‘the mothership’). But given that ‘the mothership’ doesn’t need to ‘pull tricks’ to make money and is quite happy to make the money that they do by being JUST THAT i.e. JUST THE BROKER they have no problem in my carrying on the way I have been and doing my best to HELP people make money and to KEEP their accounts alive. Too many people think that it’s in a broker’s interest for clients to wipe out their accounts (and alright: it does depend on the broker’s ‘business model’ that’s true i.e. ‘bucketshops’ rely on high turnover of new clients) but let me tell you: it’s FAR easier to retain existing clients and let their accounts grow (and therefore their trade sizes) than it is to solicit new clients I ASSURE YOU of that!!! There’s just too many brokers trying to get their ‘slice’ of a ‘finite pie’ and the competition is fierce (not to mention underhanded in most cases). Just start ANOTHER thread asking ‘which broker is best’ and you’ll be SWAMPED with replies (some by ‘real’ members and some by ‘virtual broker members’ i.e. members ‘posing’ ‘real members’). I don’t even bother to answer to those questions anymore. My ‘tactic’ is ‘let the broker’s reputation speak for itself’.
Thanks for remembering my dogs too. They’re doing well. I don’t know if you remember but last year I honestly thought they (both the bit*hes) were going to have puppies at the same time (it seems like a lifetime ago already). They never did. Turns out: ONCE AGAIN they were ‘phantom pregnancies’ thank goodness. It’s funny that you should appear here today and mention them because it’s ALMOST ‘that time of the year’ again i.e. ‘da two boyz’ are getting a bit ‘amorous’ again so it won’t be TOO long before I have separate them again and go through a week or two of hell i.e. ‘da boyz’ go NUTS for those two weeks!!! They don’t eat. They HARDLY sleep. And they spend most of the day whimpering and trying to eat their way through the iron gate that separates them from ‘da girlz’ for that period. It’s odd. I know that the ‘chance’ of me ‘getting into’ the opposite sex has NEVER put me off MY food or booze or sleep I’ll tell ya!!! LOL!!!
Anyway: WELCOME TO THE FUTURE (Adam Theory)!!! LOL!!!
As I keep ‘banging on’. Don’t overlook Wilder’s insights, logic, and trading rules in the book. So far as I’m concerned: they’re worth WAY more than Adam Theory. And, well, if Adam Theory ‘pans out’ then you’re ‘made’!!! Once we’ve all reached an ‘accord’ and tested it enough: it really is probably the easiest of trading systems to follow given that you’re really working with a ‘clean’ chart, no lagging indicators, etc.
Any questions??? Well I’m sure I don’t have to tell you to ‘just shout’.
