HGI for beginners.

[Ezzy]

I didn't find any trades yesterday matching my criteria of 4 hr trend with 1 hr trend confirmation. I wanted to enter a few trades yesterday but don't want to give back my $ from the previous day.

Lesson for me is = This is a 'very good' indi, but patience, emotion control etc is still required, and is key in making trading decisions.

Today (a few minutes a go) I entered 3 trades meeting that criteria.

Aud/Jpy
Eur/Jpy
Usd/Cad

Lets see how they go

[Rio]

Eurjpy was easily the best performer.
I also got signals on the gbpchf, gbpjpy, and usdjpy that hit css alerts quickly while in drawdown, so I took a number of small losses.
The huge single one-trade win from the eurjpy covered them, and left me in profit (chipped away at my 30% gain, but 25% gain is still pretty good)

The lesson is to be wrong small and right big.

I've mucked about with many a hedging/averaging EA ... And they all fail because they are right small and wrong BIG. They all rely on price to come back ... and in ranging markets they often do ... But this is forex, and FX respects Murphy's law - "What can go wrong will go wrong!"... and all it requires is the market to rocket off and trend without any retracement until all the equity wears out, then POP goes your account!
Yes, you can use low risk to try and weather the drawdown, but what's the point of risking all your equity for such little gain? More importantly, who wants to wait forever for your equity to come back? What happens when you want to book profits and you can't because it takes months (if ever) for your hanging trades to close out... And all that time you are praying that your account won't explode?

Instead, let the losers be small and let the winners run - the exact OPPOSITE of what hedging EAs rely on.
Hedging EAs have many tiny wins, but the few big losers trash the account.
So, just do the opposite! Accept numerous tiny losers and let the big winners clear your order book for you in profit

The other obvious thing in forex is to sell at the high, buy at the low.
Seems so simple, yet it takes ages for people to figure it out. Mostly this rule is useful for lower TF entries, because if you're at the high of the day, taking a short in line with the higher TF trend, how much drawdown will you get? ( hint: not much) ... And how much will you suffer if the larger trend turns around on you after you make that trade? (hint: not as much as if you sold at the low!)

Is there a repeatable, predictable pattern in Forex? Why yes there is. It's staring you in the face!
Just look at any candle! It opens, and then heads one way to form the wick, then turns around to go the other way to form most of the body, and then it pulls back a bit off the other end to form the other wick, and then closes!

[Ezzy]

Eurjpy was easily the best performer.
I also got signals on the gbpchf, gbpjpy, and usdjpy that hit css alerts quickly while in drawdown, so I took a number of small losses.
The huge single one-trade win from the eurjpy covered them, and left me in profit (chipped away at my 30% gain, but 25% gain is still pretty good)

The lesson is to be wrong small and right big.

.....

The other obvious thing in forex is to sell at the high, buy at the low.
Seems so simple, yet it takes ages for people to figure it out. Mostly this rule is useful for lower TF entries, because if you're at the high of the day, taking a short in line with the higher TF trend, how much drawdown will you get? ( hint: not much) ... And how much will you suffer if the larger trend turns around on you after you make that trade? (hint: not as much as if you sold at the low!)

Is there a repeatable, predictable pattern in Forex? Why yes there is. It's staring you in the face!
Just look at any candle! It opens, and then heads one way to form the wick, then turns around to go the other way to form most of the body, and then it pulls back a bit off the other end to form the other wick, and then closes!

Hi Rio

I agree.

This is why the way I am trading (pull backs) generally have a small SL, and a potential much bigger TP. If price hits my SL.... so be it.

Good luck mate.

Cheers
Ezzy

[Rio]

I prefer to hedge when equity is in positive territory above balance and let the larger TF signals tell me I'm wrong.
Reason? I've gone the day trading route of the lower time frames, trying to get in and out quick and placing stop losses and take profits. Trouble is, picking the high/low extremes of the day is a dark art, and a tight stop will often end up killing you through death-of-a-thousand-paper-cuts
After all, this is how most traders end up losing.... by placing stops for the market makers to gobble. They can see where they are, don't forget - unlike us innocent lamb retail traders.

Similarly, grabbing a take profit will often deprive you of profits you could have had if you stayed in. Sure, you may lose some when price turns and the signal says to get out - but in this game, as long as you don't lose money, you win

After all, it only makes sense to enter trades when your signals say so, and get out when they say so.
You need that heavy positive floating equity to chance other trading opportunities without feeling that you're going to lose, and you need to hedge yourself as you lean into the longer term trend, so you keep those winning trades running. Those long term trends are like steam trains with heavy momentum, that give you plenty of time to recognize when they're going to stop, and it takes a lot of time for them to turn around.

The lower time frame gives you space to challenge the daily stop-hunts that occur in a post-accumulation/consolidation phase that the markets engage in. You can stuff it up a bit here, but as long as you are in a larger trend, you can't mess it up too much (will just have to withstand the drawdown longer if you really screw up)

Also, I like to build into a trade using increasing lot sizes.
Institutions call these tests, probes, and "all in"
Getting yourself in that larger position is the goal. Even if the long TF signals fake you out and your tiny test gets munched by the market makers, it's not a huge loss. However, if you get it right and the market confirms, and you stay in, you are already hedged a bit when you get another signal to continue the trend - so you drop in your probe lot size, and you are hedged further when you get a chance to go all in on a new signal within that multi-week sharp moving trend when it shows up.

...and being hedged in positive territory means that if you really want to, you can close all your trades and withdraw profits whenever you want.

Good Luck to you too

[NewTrader]

Bob,

You posted this about v. 16 using the 15.08 update...

"... this version is 16.00 1H designed for use on the 1H chart. It uses the 15.08 update."

What does it mean when you say "it uses the 15.08 update? Do we need to have 15.08 installed in the indi folder first and then put 16 in as well. I haven't used the 15.08 only the 15.06 because I was not using the Hurst.

Thanks,
Chris

[milanese]

Bob,

You posted this about v. 16 using the 15.08 update...

"... this version is 16.00 1H designed for use on the 1H chart. It uses the 15.08 update."

What does it mean when you say "it uses the 15.08 update? Do we need to have 15.08 installed in the indi folder first and then put 16 in as well. I haven't used the 15.08 only the 15.06 because I was not using the Hurst.

Thanks,
Chris

no you need no other HGI installed for using 16.xx H1 Bob intended that it is a modified 15.08 version, just adpated for trading on H1, OOTB the hurst filter is set to false...

Cheers

Tommaso

[NewTrader]

no you need no other HGI installed for using 16.xx H1 Bob intended that it is a modified 15.08 version, just adpated for trading on H1, OOTB the hurst filter is set to false...

Cheers

Tommaso

Tommaso,

As always ... thank you.

Chris

[Amit]

With version 15.08 USDJPY had a buy signal on H1 post the lows made on Tuesday NY session. These have continued all through.

But on the H4 , there is a sell signal , retracement on Wed , where in another sell signal opened up , (BIG RED down) , but the price has continued to go up.

Question is that how does one know whether to rely on h1 or h4.... since this is one scenario where h1 and h4 signals were opposite .

thanks

Amit

[Rio]

The thing about signals... any signals.... is this: they are just guesses - however educated - about where price MIGHT go.

Another very good and useful indicator is a trade that is up in profit

When you set down a trade and for whatever reason it fakes you out and won't go into profit within a set time frame, close it out.

If it starts picking up, and keeps going, and you add into it on a larger timeframe, then you are hedged positively into a trade on that larger timeframe where you can scale in. If you place that secondary trade and price fakes it out... not such a big deal, you have one positive trade and one negative.... but you are only eating into positive equity and not losing money. This should allow you to keep your head straight as you continue trading. Eventually price turns back around into the main trend direction and then continues for a few hundred pips. Eventually you have a stacked deck:

for example:

500 pips
400 pips
300 pips
200 pips
100 pips
-150 pips

As price starts to turn around, you have one trade go negative, but you don't care because you are up overall.
...and then you get a signal that tells you to close your trades.
End result, you win.

It all comes down to money management.

There are a bunch of other things happening on lower timeframes, but setting take profits and stop losses there just set you up to be killed by the market makers. Some traders get good at seeing how the dealer hits stops everywhere and learn how to play on this level, but all the mad rich traders I know about typically hold massive decks of trades open on longer term timeframes and triple their money over and over.

Most traders want to get rich quick, so they go onto the lower timeframes and get cut to bits by the market machinations that occur in a daily cycle. Very few have the patience to trade long term TFs and keep winning trades in profit open long enough.

[Etecy]

With version 15.08 USDJPY had a buy signal on H1 post the lows made on Tuesday NY session. These have continued all through.

But on the H4 , there is a sell signal , retracement on Wed , where in another sell signal opened up , (BIG RED down) , but the price has continued to go up.

Question is that how does one know whether to rely on h1 or h4.... since this is one scenario where h1 and h4 signals were opposite .

thanks

Amit

Its suggested to check a higher TF for trend confirmation.
Like the pdf says "A TREND IS THE LONG TERM MOVEMENT OF A CURRENCY USUALLY CAUSED BY GOVERNMENT POLICY AND CAN BE EASILY SEEN ON A MONTHLY CHART."

So i check the montly