Jem's Uber Basket Trading Thread

[garyfritz]

I haven't watched these setups enough to be an expert, but my impression is: everything starts with the setup, e.g. the slope > 0.8. Those setup conditions MIGHT NOT STAY IN FORCE while you wait for the retracement to trigger -- but the setup is still active! NB says the 0.8 value indicates there's enough staying power in this trend that you should be able to get 2 or more trades out of it. So most of the time, once you hit 0.8, you might pull back under 0.8 during the retracement, but eventually the trend strength will re-assert and you'll move back through the trigger point. (At which point the slope may OR MAY NOT be > 0.8 yet.)

And in the cases where the retracement was actually a trend change, the retracement hopefully never crosses back across the trigger point. It retraces, then the trend ends.

Have I got that right, Jem & other experts?

Question for you experts: at what point do you say "this is no longer a retracement, the trend has ended, I'm cancelling the >0.8 slope signal" ? Otherwise at some point you're bound to cross the 5.1 or whatever and you're going to try to enter in the direction of the original signal, but that trend is dead now.

[f451]

Yes. And that is EXACTLY what you want. Deep retracements should FAIL to hit the entry criteria (break back across daily pivot or 5.1 MAs) until they stop being retracements as price switches around to re-confirm the trend. If the retracement does continue until it becomes a NEW TREND or RANGING behaviour, then the TMA slope should change to keep you out of the trade too. Again, exactly what you want.

Okay, so as long as things line back up (including the TMA) before the trigger then we're good to go? I guess I was just looking for a minor retracement to the 5ma or pivot.

Yes. You need the TMA slope as your first filter - that allows you to decide if this a candidate for a trade (because it's trending strongly enough). Then you wait for the retracement against the trend (back over the daily pivot or 5.1 MAs) and only enter if price comes back over the pivot or 5.1 MAs and the TMA slope is still indicating a strong enough trend.

Be aware though, that you could get a DEEP (i.e. not minor) retracement, which would still be OK to trade if price then comes back over the daily pivot or MAs to reconfirm the original direction, and the TMA slope is still indicating there is strength left in the trend.

[f451]

I haven't watched these setups enough to be an expert, but my impression is: everything starts with the setup, e.g. the slope > 0.8. Those setup conditions MIGHT NOT STAY IN FORCE while you wait for the retracement to trigger -- but the setup is still active! NB says the 0.8 value indicates there's enough staying power in this trend that you should be able to get 2 or more trades out of it. So most of the time, once you hit 0.8, you might pull back under 0.8 during the retracement, but eventually the trend strength will re-assert and you'll move back through the trigger point. (At which point the slope may OR MAY NOT be > 0.8 yet.)

And in the cases where the retracement was actually a trend change, the retracement hopefully never crosses back across the trigger point. It retraces, then the trend ends.

Have I got that right, Jem & other experts?

Question for you experts: at what point do you say "this is no longer a retracement, the trend has ended, I'm cancelling the >0.8 slope signal" ? Otherwise at some point you're bound to cross the 5.1 or whatever and you're going to try to enter in the direction of the original signal, but that trend is dead now.

It's a good question, and one Bob is leaving open to our personal judgement.

My own experience suggests that trends have waves, and the strength of the those movements will gradually reduce until you get a reversal and new trend. So if a trend has started and |TMA| > 0.8 then you would feel very comfortable getting on the entry trigger. You might or might not then get more retraces and opportunities to re-enter with the trend with |TMA| > 0.8. But as the TMA slope begins to becomes smaller, the strength of the trend is waning, and you need to be increasingly wary about re-entering in the current trend direction, because the retracements (against the trend) will be getting deeper, and stronger, until one of the them becomes a reversal and a new trend in the opposite direction.

Jem has chosen |0.6| as his threshold for setups, and that seems to be working for him. Equally well I bet he likes the setups with |TMA| > 0.8.

Watch the charts and your own trades and pick up experience on this question. It's one of the few discretionary parts of the method.

[spyderman]

Thanks for the insight guys. That helps a lot. Now if I can just get this Shelley Now basket trader to work for me.

Do you have to add pair suffixes to the pairs you list to trade to get them to be recognized?

[The_Snowman]

Another great thing about the TMA Slope, compare a Daily chart of EUR-AUD (to name just 1) against EUR-USD for the last month; which would you rather trade?

TMA makes it easy to spot pairs that are trending, instead of struggling with the EUR just cause everybody trades it

:arrow: IMHO :!:

Yes, if you have suffix, I believe you need to add them

[f451]

And in the cases where the retracement was actually a trend change, the retracement hopefully never crosses back across the trigger point. It retraces, then the trend ends.

Yep, and if the retracement zig-zags a bit and does recross the daily pivot or 5.12 MAs for entry, then this is one of the few situations which will get you in a bad trade in Bob's method. Fortunately this is fairly rare, (as long as the pair isn't wide ranging - hopefully in these situations the D1 TMA will be < |0.4| - although we haven't really seen this kind of market yet to be sure).

Question for you experts: at what point do you say "this is no longer a retracement, the trend has ended, I'm cancelling the >0.8 slope signal" ? Otherwise at some point you're bound to cross the 5.1 or whatever and you're going to try to enter in the direction of the original signal, but that trend is dead now.

Personally, I'm reconfirming the TMA slope level with the entry trigger. If it has reduced a lot (say below |0.6|), then trend strength is waning, and I pass on the trade.

[Jemook]

Here's some snippets from the first post:

Please not that the .8 is a recommendation for the best setups. if you see a pair fall between .4 to .8 it may still be tradable. Is up to you to work out if we are still trending or not by using your 10.2 brain

If a pair falls below the 'strongly trending' D1 TMA Slope then it's up to you if you'd like to remove it from your basket or not. Sometimes it is just retracing and setting up for a bigger move. I definitely would not recommend trading any pair that falls below .4 threshold as this means range or reversal time.

--------
The threshold you choose is totally subjective. Remember that greater than .4 is a trend and greater than .8 is a strong trend. Right now I've got AUDJPY sitting at .49 and I will still be trading it in my basket. As soon as I see it go below .4 I'm going to take it off my watch list.

I'm sure there will be times when all of our .8 pairs suddenly reverse and we will be stuck scratching our heads with a full stop out. This is okay as long as the baskets keep making us good pips from when the trend starts to finish. Nothing is going to be fail-safe.

Again!

.8 to add a pair to your strongly trending list
.6 means still got lots of steam left
.4 means this pair might be running out of steam, still tradable though.

Anything under .4, chuck it out!

[Jemook]

Ok after telling you guys that the best setups have deep retracements I'm going to show you that this is not always the case and you can still get in without deep retracements. I have just entered a basket using the same pairs I was using last week without a deep retracement. But why Jem? You told us to wait for that deep retracement! Sometimes the market will just run and run and run and not give us a deep retracement. So you can still get in but you need to be smart and know when to get out if you do decide to jump in.

Today the following long pairs opened up on the other side of the pivot:
AUDJPY, AUDCAD, AUDUSD, NZDJPY

However these pairs haven't didn't even dip below the pivot:
AUDCHF,NZDUSD,NZDCHF

Also the short pairs didn't go above the pivot:
GBPAUD, GBPNZD, EURUAD

As soon as I saw the AUDJPY, AUDCAD, AUDUSD, NZDJPY crossing over the daily pivot I knew it was time to enter my basket. So the question is why did I not enter yesterday but I entered today?

Yesterday was Monday and I was being safe not entering because I was waiting for the usual retracement that didn't eventuate. Price actually did move for a bit and Spydie and Fok got some nice pips. So my thoughts today are maybe we won't get a retracement this week and price is going to run.

Also, all the H1 CSS Slopes were not pointing the right way yesterday but they look a bit better today. If I was trading this on a real account I would look to shut the basket at a loss if price reverses now and (with my buys) price closes back under the pivots. I am testing my baskets max pips and max DD so I'm going to let this run until the next basket and see where it goes.

2012-07-03 11.37.54 am.png

Since writing this I'm up 140 pips. Not a bad start to the first basket of the week. If this trade goes against me then I'll be able to say "See I told you to wait for retracements!" and if it continues in the right direction I'll also say "See it can work this way too". So I can't lose this one really

[The_Snowman]

Hey Jemook, have you seen the new Slope Value Indicator over here?

Looks great, easy to sort he trading pairs

http://www.stevehopwoodforex.com/phpBB3 ... 110#p16110

[Jemook]

I have updated post 1 to include the latest release of the templates for this system. Please download them if you are following along. Let me know if there are ANY issues.

Please note that with DWMPivots you may need to adjust the true/false value for addSundayToMonday depending on your criminal to get the pivots correct for your br0ker.

Here it is if you CBF going to the first page:

10.2 x JemBasket v1.zip