10.2 for Dummies

[garyfritz]

I've been spending too much time reading ABOUT this approach and not enough time getting my hands dirty. I need to learn how to trade this beast manually. I'd like to work through a few examples and make sure I understand how to handle them. Thanks for any feedback!

I grabbed AUDUSD for a test case. Starting back in May:

AUDUSD.gif

On 5/8 (8 May) the D1 TMA dropped below -0.4, and pivots were in order. Unfortunately in the process of dropping under -0.4, price also crossed the DP (daily pivot) on the same bar. How would you trade that? Jump in immediately (it dropped 150 pips before the next pullback) or wait for it to cross back over the DP? Would you be inclined to say "D1 TMA is dropping steadily and it's almost to -0.4, so let's take the DP cross even though D1 TMA isn't quite -0.4 yet" ?

Where would you put your stop? Above the recent swing high?

Depending on your preference you might jump out with a TP at some point. But if you wanted to let it ride, the D1 TMA kept dropping so you could ride it with a trailing stop, or stay in as long as the D1 stayed low -- the move continued for 500 more pips, and it was still 300 pips lower by the time TMA crossed above -0.4 again. (And I would tend to prefer that longer-holding style, since I don't have time freedom to watch the charts & manage trades all day.)

But let's say we want to get in & out more nimbly. Say you were out by the time we got the pullback on 10 May. So AU pulled back above the DP. D1 TMA still < -0.4 and going lower, so we should jump on it again. When would you get back in? Would you wait for it to cross the DP, or would you be aggressive and jump on it as soon as the H1 TMA turns down?

If you wanted to stack your position, I imagine any pullback over the DP offers a good opportunity. So does any significant H1 TMA peak.

After the trend changes in early June, the D1 TMA doesn't get above 0.4 until the market has already moved 300 pips. I guess that's the price you pay to be fairly sure you're in a strong move.

AUDUSD2.gif

When the D1 TMA finally gets over 0.4 on 14 June, it happens to be during a small pullback so you have an immediate DP cross to enter.

On 20 June the move tops out. D1 TMA stays above 0.4 until July, but the DP crosses under the WP. Would you say "no trades until DP>WP" ? Or would you say "D1 TMA is still strong, let's enter when the H4 TMA turns up" ? That was a great entry this time but I don't know if it's a good idea in general. Maybe it's smarter to stand aside until you have good D1 TMA *and* pivots in order.

By the time the DP > WP, the market has topped out. It crosses above the DP on 5 July with D1 TMA still > 0.6. If you used that as an entry you'd get burned, but that may be the inevitable loss you're likely to take when the trend turns.

After that the pivots are out of order and we're done on this pair.

Any comments or suggestions?
Thanks!
Gary

[harry45]

I've been spending too much time reading ABOUT this approach and not enough ti
After that the pivots are out of order and we're done on this pair.

Any comments or suggestions?
Thanks!
Gary

Gary,
please look at two vert.lines.USD index becomes stronger and Diff. reduces,that is why we shouldnt
trade long.
Regards

[SteveHopwood]

Gary, your first chart looks perfect to me, and it is how BJS lines up the individual trades to form the basket, if the triple enforce thingy is enabled.

Sticking to individual trades, your Monthly, Weekly, Daily pivots lined up, so the market was heading downwards. Every time the market crossed above the Daily, then crossed back below, you sold again. Looks dead right to me.

So, it looks as though you have this nailed. Also, you provide a simple translation of 10.2A that even an idiot can follow.

[garyfritz]

Well that's good, because there are definitely times when I qualify.

Plenty of questions in my post, if anyone would like to add their insight...

[SteveHopwood]

Well that's good, because there are definitely times when I qualify.

Plenty of questions in my post, if anyone would like to add their insight...

Not in the mood to plough through the rest of your post tonight, but your questions about sl caught my eye.

FWIW, when I set a stop it is indeed a few pips beyond the recent swing. Mostly I don't bother as the trade always comes around in the end.

Gary, my friend, you are one of the brightest minds here. Are you perhaps over-complicating things in your own head? 10.2A could hardly be simpler. Do you perhaps think it is more complex than it actually is?

You are often the first to answer a newbies question. I know you are busy with a day job, and have a family. How about taking a week to trade 10.2A without worrying about other stuff here? You could return with fresh insights that could benefit the rest of us?

Hehe. Shall I ban you for a week then you have no choice?

[garyfritz]

Thanks, I can ban myself.

Yes, I tend to over-complicate things. But I also tend to hesitate to leap into the pool if I don't know what's under the surface. My mind will struggle less if it has more tidbits to munch on. But my intent here is to follow it for a while and see how simple it actually is. (Might as well, since my live account was at PFG...)

This week will be interesting anyway. I shall be sharing timezones with you. I have to attend an online training that's being offered in the Euro timezone. Do you realize you blokes over there start work at 2am!? You're as bad as upside-down Shelley!!

[NeoTrader]

Hi Gary...

since you like it complicated ...and just to confuse you even more...
I put up the task and tried to analyze your charts the way I would do it...based on NB...but with more weight on the TMA(s)...
This is more for short Term Trading

audusd h1 analysis may with 2 tmatrue mtf (mn,w1,d1 & d1,h4,,h1,m30).gif

(Entry)

• Price Action is moving below the daily Pivot
• The Pivots are lined up M>W>D
• I also use one TMA MTF Indicator with settings MN/W1/D1 (I call them Long Term TMAs or Long Term Trend or short LTT)
  Jemook told that these could also give us the same or equal Informations as the Pivots. The colors of the Pivots and the LTT are the same.
• The long term TMAs (LTT) also line up as the Pivots and the daily also shows a nice step down movement.
• The Mid Term TMAs (MTT) (H4/H1/M30) have now all an angle that points down.
• M30 is already below D1 and below -0.3 (I use the new levels of NB).
• H1 has a nice angle down and is also almost below -0.3 and below daily
• H4 is below -0.6 and made a first step down movement.
• Time to set an Pending Order a few pips below the last low or open Market Order.
• Stop Loss a few Pips above the latest Swing High

(Exit)

• The MTT all angle up the first time (Exit1)
• H4 goes above -0.9 and H1 goes up -0.3. M30 already crossed the 0 (Exit 2)

If you would go more longterm you could also let it run until the H4 crosses the -0.3

audusd h1 analysis june with 2 tmatrue mtf (mn,w1,d1 & d1,h4,,h1,m30).gif

(Entry)

• Price Action is moving above the daily Pivot
• The Pivots don't line up D>M D>W W<M
• Same with the long term TMAs (LTT). The daily makes nice steps up, crossed almost 0.3 and is above W1 and MN.
• The Mid Term TMAs (MTT) (H4/H1/M30) have now all an steep angle that points up and all crossed the 0 Line and are near 0.3.
• We could wait a few bars to see them cross 0.3 or the daily...
• But since PA is already moving above the DP i would pull the trigger and set an Pending Order a few pips above the last high or open a Market Order.
• Stop Loss a few Pips below the latest Swing Low

(Exit1)

• The MTT all angle down the first time (Exit1)

If you want to stay longterm same as above wait for H4 to cross the 0.3 or you see multiple step downs on the H4 slope.

(ReEntry)

• H4 is angling up again an the other two MTT are also angling up
• PA is still above DP and also crosses above TMA True on the Chart.

(Exit2)

• The MTT all angle down the first time

audusd h1 analysis june2 with 2 tmatrue mtf (mn,w1,d1 & d1,h4,,h1,m30).gif

(Entry)

• Price Action is moving below the daily Pivot
• The Pivots don't line up for a sell M<W<D They are aligned for buy only
• The long term TMAs (LTT) also don't line up. The daily makes steps down but is still above 0.6 with a strong buy bias...
• The Mid Term TMAs (MTT) (H4/H1/M30) show another Picture and are aligned almost perfectly (D1>H4>H1) all have a angle that points down and H1 and M30 crossed the 0 Line. D1 and H4 making steps down.
• We could wait a few bars to see the M30/H1 cross -0.3 ...
• But since PA is already moving below the DP I would pull the trigger and open a Market Order.
• Stop Loss a few Pips below the latest Swing Low
• Since this is more of a counter trade I would tighten the stop loss even more.

(Exit1)

• The MTT all angle up the first time

If you want to stay longterm wait till you see step ups on the H4 slope.

(ReEntry)

• PA is still below DP and are below TMA True on chart
• D1 and H4 are still angling down an the other two MTT are also angling down
• Tight SL

(Exit2)

• The MTT all angle up the first time

(Entry2)

• Price Action is moving above the daily Pivot and above TMA True on chart
• The Pivots only partially line up for a buy M<W
• The long term TMAs (LTT) dont show any usable alignment. But the daily made a steps up and also the weeklys last move was a step up. D1 is also still above 0.6 with a strong buy bias...
• The Mid Term TMAs (MTT) (H4/H1/M30) are aligned almost perfectly (H4<H1<M30) all have a angle that points up and M30 crossed already the 0.3 Level. D1 and H4 making steps up.
• We could wait a few bars to see the H1 cross -0.3 ...
• But since PA is already moving above the DP I would pull the trigger and open a Market Order.
• Since this is not a high probability Trade and also a kind of counter trade I would have a close eye on this trade and would set the SL a few Pips below the DP.

Hope this is enough confusing for one day..


happy trading,

NeoTrader

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[garyfritz]

Thanks for that Neo!

You definitely have your own approach on this, very different from "standard NB."

You seem to not pay close attention to the pivots order -- you entered against that several times. You use the TMA True as a guideline.

You also pay a lot of attention to the angle of the MTT lines. Except you seem to use them pretty loosely -- e.g. for Exit1 on your last chart, you said they were all heading up, but H4 is still going down until Exit2.

Do you usually trade at this H1 level? Is that why you ignored the D1 TMA? E.g. in your last chart you took 2 shorts, but D1 TMA was always over 0.7 or so??

[NeoTrader]

Hi Gary,

Thanks for that Neo!

You're welcome

You definitely have your own approach on this, very different from "standard NB."

This where all examples for pure shortterm trading. I try to use the NB 10.2 guidelines wherever possible...but as more I use the TMA(s) as more I think that they are more accurate and also allow me to enter and exit the trade at a better point.

You seem to not pay close attention to the pivots order -- you entered against that several times. You use the TMA True as a guideline.

This is true but I also wrote that this are kind of low probability trades or counter trades where I also set a tight SL and go only for small fish...

You also pay a lot of attention to the angle of the MTT lines. Except you seem to use them pretty loosely -- e.g. for Exit1 on your last chart, you said they were all heading up, but H4 is still going down until Exit2.

You got me there...actually I thought that the H4 was going up there but it would be a mistake...The real exit would be at 2012.06.25 20:00 and had cashed in some more...
But otherwise it is correct that the angle of the TMAs are relevant..Bob also states this in his Guidelines...and that was also something why he hesitated from the TMATrue because the angles of the old versions where either to steep or to shallow...as I understood it.

Do you usually trade at this H1 level? Is that why you ignored the D1 TMA? E.g. in your last chart you took 2 shorts, but D1 TMA was always over 0.7 or so??

As I wrote this are kind of counter trend trades that I would have been willing to risk because the MTT where nicely aligned...this trades would have been closely watched and executed with R:R 1:1 or 1:2 with also a tight stop.
And yes I almost only trade from the H1 also the standard NB Rules. It gives me the signals a little earlier.

hope this helps...

happy trading,

NeoTrader

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[garyfritz]

I've seen a few people mention this in passing, but... do you include CHF pairs in your watch baskets? Or do you ignore them because they're nearly 100% correlated to EUR?

As of Friday's close, SlopeValues shows 4 pairs > 0.8, but all of them are xxxCHF pairs. The equivalent EURxxx pairs are < -0.8. You wouldn't want to enter on both sides, because you're basically taking a double-sized position on one pair.

I think I'm going to remove all CHF pairs from my SlopeValues watchlist, so I don't see setups for them. Is that what others are doing?