Ask Bob Forex Questions-no banning allowed

[renexxxx]

Hey I want to ask a question. Can we change the start times on the daily candles? I want to see how they look if they start at 1,2,3, etc. just wondering if there is a TF where you get full candles and little wicks.

Hi Bob,

The easiest way to do this is by creating an offline chart, with the desired time shift and period. Pips4Life has done some work in this regards, and has created an indicator that creates the offline charts. See topic at FF for the full story. With the attached indicator (.ex4 file), I was able to create an EURUSD+5H,Daily offline chart, by attaching the indicator to a (online) H1 chart and setting the TimeShiftAdd_in_HptMM parameter to 5.0 and the PeriodMultiplier parameter to 24. This shifts the hourly candles by 5 hours, and aggregates them to daily candles.

The attached indicator is apparently a modified version of Pips4Life's 'P4l PeriodCon.mq4', and I did notice that it leaked some memory.

Hope this helps.

[nanningbob]

Playing the 1MA median against the 1 MA open looks great on full candles. Just want to see if there is a constant time that you get full candles. I suspect 1 hour into a session open will do this but needed charts to look at to see if this is true. So if you want to play with the idea too, you can. basically the logic goes like this. If 1MA median is 5 or 10 pips greater than 1MA open BUY, reverse the logic for sells. The median moves at half the speed of a a move so if price goes up 20 pips Median goes 10 pips. The median then becomes your SL or TP line. TP is whenever you want to take the profit or let it run 23 hours profit and then try again the next day. You only need the open to be full candle the rest can spike and do whatever it wants. In other words once the open commits to a move it will normally stay that way.

I am in the middle of a house closing so may not get much chance to play with it in the next couple of weeks but I am sure some of you may want to play with the idea. Needs daily candles I think for the idea to work.

Thanks

Bob

[ahad]

Hi Bob,

Thanks for the answer to my previous question. I've been reading those threads since, and there's some valuable lessons in there. It's "Aha" moments one after the other. Super valuable for newbs.

Can I get your latest thoughts on trading without stop losses please? This is something I've been wrestling with lately. I can understand the logic in not placing stops is to not get trapped in stop hunts. But then my thinking swings towards "Well if this trade goes bad and I intend getting out at this point anyway, why not set a stop .."
I've allowed myself in the past to let trades run and run against me, until they're in a very bad place. It's knowing the difference between a stop hunt and a trend turn that's difficult. I guess that's experience?
But anyways, could I get your latest thoughts on stop placement (if any)?

Thanks.

[nanningbob]

Trading without a SL doesn't mean I don't stop out trades. HGI lets you know if strength and direction has changed so you can decide to bail or hang in there. You also must trade small enough so you don't damage your account. When entering a trend or trade don't play your full position. There is no precision entrances when your trading hundredths or thousandths of a penny. That's what a pip is a tiny fraction of a penny. So if your trading long term you enter maybe a third of your position and then add as your trade develops. If your position goes down you can decide to add or bail. Watch your CSS reads and fundamentals.

To do this kind of trading you have trade small to account size. (I learned this from a trader who traded a million dollars and trade ten dollar lots. That's one dollar lot to 100k or ten cent lot to 10k or one penny to 1000 account). At one penny per 1000 you'd have to lose 100,000 pips to lose your account.) That was the most valuable lesson I've ever learned in Forex. Trading in a way you never lose your account, trade in a way you can trade another day. I have never lost an account since learning this. So if price goes down 100 pips I've lost a dollar. 1000 pips, Egads holding a trade like that could be months, is 10 bucks. So the million dollar trader had zero chance of ever losing his account.

Now you control your losses not the broker, not a margin call, or banker spikes, etc. have I had news spike my trade 2-300 pips down. Yup. Have I let it run and the look for the rebound after the run to recover the loss yup. Learn to use HGI on a lower TF to counter trade a loser. That takes lots of practice and using penny accounts to learn. Or just close the trade and go to next trade. I know over the years my win rate hovers around 75% so I just play those odds. HGI will tell you your on the wrong side of a trade fundamentals will tell you if the run is long term or not.

[nanningbob]

Hey I want to ask a question. Can we change the start times on the daily candles? I want to see how they look if they start at 1,2,3, etc. just wondering if there is a TF where you get full candles and little wicks.

Hi Bob,

The easiest way to do this is by creating an offline chart, with the desired time shift and period. Pips4Life has done some work in this regards, and has created an indicator that creates the offline charts. See topic at FF for the full story. With the attached indicator (.ex4 file), I was able to create an EURUSD+5H,Daily offline chart, by attaching the indicator to a (online) H1 chart and setting the TimeShiftAdd_in_HptMM parameter to 5.0 and the PeriodMultiplier parameter to 24. This shifts the hourly candles by 5 hours, and aggregates them to daily candles.

The attached indicator is apparently a modified version of Pips4Life's 'P4l PeriodCon.mq4', and I did notice that it leaked some memory.

Hope this helps.

I will take a look. If you want to develop this together on this thread it would be good. I dont think traders know the time and effort that goes into a trading method. If your willing to talk about your side of the equation while this is developed I think it would be neat for traders to see how and idea gets started, tested and then put on the market or thrown into the trash. Let me know if your interested in doing such a thing. My house closing is not giving me much free time for development but will see. Others can also take a shot at it. I will try to post a pic of my idea later this weekend.

[RisklessPips]

In other words once the open commits to a move it will normally stay that way.

Bob

My observation of candles is once they start they form the low wick (on a buy) or the high wick (on a sell) before retracing and then going to their conclusion. This happens in my observation better than 50% of the time.

Is this observation what you are referring to ?

If so, would the following add any small value to your idea ?

For a defined number of candles in the past (say 14) calculate the average of differences between candles start price and lo price (long candles) and between hi price and candle entry price (short candles) -

This tells you on average how far prices moved low before retracing and moving up on long candles and how far prices moved high before retracing and moving down on short candles.

Trade Entry

When a new candles starts you don't know if it is going to turn out to be long or short. So you place a buy limit with the buy calculation above as the no of pips limit. You ALSO place a sell limit with the sell calculation above as the no of pips limit.

Price then does its own thing and moves up or down.

Say it moves down - it hits the buy limit order and if our observations and calculations are accurate it will (more than 50% of the time) now retrace and go to conclusion as a long candle.

Trade Management

SL / TP = ATR (1:1 RRR)

Trade Exit

SL / TP or candle close.

Some questions I foresee

When one limit order is triggered do you close the other one ?
Is there any way of conclusively confirming that a buy trade will form the low wick and then retrace to its conclusion 50%+ of the time ?

Apologies if I'm off on a wild tangent

Charles

[nanningbob]

Here is the logic in picture. When a candle opens the 1MA median and 1MA open are the same. Price moves up and down until it takes a direction for the day. There is a 20 pip range where we believe once price commits more than 20 pips you will make a profit most days. So the 1MA open is static and price moves up 20 pips. The 1MA Median moves 10 pips because its half of the high and low. The lower line or -10 red line moves up with upward movement and when it passes the open it does a buy. You then ride the candle until you take your profit.

If price goes up more than 20 pips and reverses you will use the 1MA as a SL or 1MA -10. you stop for the day. If price goes up 40 pips and reverses it has to move 80 pips the other way to move the 1MA so you dont want to play it anymore. The 1MA median always moves at half the speed of price action. On spikes it will move up the wick and catch the profit on the way down. You can slide the SL so it goes from -10 to median line and then later to median plus 10. So a reversal will catch you half the move plus 10. Here is a pic to help you understand.

If we find a time when there are almost always full candles at the open with small wicks you have a big winner. That will take some study. One trade on each currency pair a day. Those that go over 20 pips but less than 30 will be losers. those that go over 40 pips and reverse will win something. Those that go one direction all days will be biggies.

Wanna take a shot at it and then post them here for traders to test??

[James Roscoe]

Trading without a SL doesn't mean I don't stop out trades. HGI lets you know if strength and direction has changed so you can decide to bail or hang in there. You also must trade small enough so you don't damage your account. When entering a trend or trade don't play your full position. There is no precision entrances when your trading hundredths or thousandths of a penny. That's what a pip is a tiny fraction of a penny. So if your trading long term you enter maybe a third of your position and then add as your trade develops. If your position goes down you can decide to add or bail. Watch your CSS reads and fundamentals.

To do this kind of trading you have trade small to account size. (I learned this from a trader who traded a million dollars and trade ten dollar lots. That's one dollar lot to 100k or ten cent lot to 10k or one penny to 1000 account). At one penny per 1000 you'd have to lose 100,000 pips to lose your account.) That was the most valuable lesson I've ever learned in Forex. Trading in a way you never lose your account, trade in a way you can trade another day. I have never lost an account since learning this. So if price goes down 100 pips I've lost a dollar. 1000 pips, Egads holding a trade like that could be months, is 10 bucks. So the million dollar trader had zero chance of ever losing his account.

Now you control your losses not the broker, not a margin call, or banker spikes, etc. have I had news spike my trade 2-300 pips down. Yup. Have I let it run and the look for the rebound after the run to recover the loss yup. Learn to use HGI on a lower TF to counter trade a loser. That takes lots of practice and using penny accounts to learn. Or just close the trade and go to next trade. I know over the years my win rate hovers around 75% so I just play those odds. HGI will tell you your on the wrong side of a trade fundamentals will tell you if the run is long term or not.

I had a scenario like that just last week when the RBNZ did something to the rates. It caused a 300 pip news spike on GBPNZD. Because I trade two cents per thousand it had no impact. Another benefit of trading that way is that you do not need to use stops, nor do you need to get out of the way of news. You can trade whatever you system is like a machine. Al Brooks calls this trading a "don't care" size. So that is some critical information Bob and it is good that you continue to beat that drum.

Edit: Trading small also eliminates worry about spreads. My broker widened spreads to 60 pips during the event. They are normally 7-9 pips. Just putting that out there for people unclear about position sizing and money management.

[nanningbob]

Good reminder. Oanda has large spreads when the market opens to protect themselves on spikes. I entered gbp/NZD sell and it had like a 50 pip spread. I waited an hour later and entered again at 7 pip spread. It went 50 pips like I expected and brought the first trade back to zero and still got my 50 pips. So trading small allows you to cover mistakes.

[krzysiekqq2]

Hi Bob/All,

Is any significant differance between Slope and CSSDiff in numbers/value what they present?

Thanks Bob, for all knowledge you are passing on this forum.

Cheers,
Krzysiek