The Incredible 10.4 - For Dummies

[nanningbob]

I'll start.

10.4 is truncating the Stochastic Oscillator.

Go to the indy's properties. Uncheck Fixed Minimum and Fixed Maximum. You can also change the values to 0, 100 as well.

Don't forget to re-save your template.

Untitled.gif

Having said that, Bob probably wanted the settings to be at 20, 80, since that is what flattens out the peaks - at least visually.

I have noticed that my Sto Osc is different than the study guide. I have a few more peaks and valleys. I compared my settings with the template, and they seem to be the same. Can't figure out why, unless Bob changed something.

Which indicator you use as your box in will determine the screen look. Put the Sto Oscillator on the screen first set to 20/80 and then put the AO inside the sto box. If you put the AO on your screen first then the AO box becomes the main indicator the Sto fits inside it. This will give you a different look because the box settings are different. I set the STO at 20/80 because visually it reads similar as the RSI 2 inside the Slope indi. If you set your settings to 0/100 then you will miss the visual that the RSI 2 does. I was trying to imitate that reading and that was the closest I could get it.

So in answer to your question, the first indicator you place on your screen is your box indi which sets the high/low of the indi. Use the STO to make your box in which the AO sits inside. You probably have the STO sitting inside the AO which will give you different setting and different reads. Just my best guess.

[WideEyed]

I have a bit of trouble understanding the SL.

For example, in scenario 1, Bx is triggered first and Ax second. Bob says that when Ax is triggered we move the SL for Bx up to BE and "we can't lose".

I don't see how we can't lose. We can't lose on Bx, yes, but it looks like we can indeed lose on Ax. As it turns out the price moves to our advantage. But at the point the Ax trade is triggered and an SL is set on Bx, the Ax trade is still vulnerable to loss.

The same applies to all the other week examples even when Bob talks about worst case scenario being BE. Am I understanding this incorrectly? Or are we talking about setting an SL for Bx at a point between Ax and Bx to give us a BE on the combined trades i.e. a loss on Ax and an equal profit on Bx making an overall BE on the two trades taken together?

I'm in the process of drawing up some spreadsheets of visual backtests - which I will share here on the forum - but want to make sure I understand everything properly before I compile all that data.

[WideEyed]

"an EA something Steve came up with"

Sorry, it turned out funny but that wasn't intended. I was replacing "something" with "EA" and in my editing hurry ended up not deleting the "something".

For more Steve somethings there's always this thread: Useful 10.4 Thingies by Steve and Others

[mjws00]

WideEyed,

You move the stop on the entire position to BE. That will leave you with a stop half way between your two entries as the new stop. The downside is the amount the trade has to breathe is limited, the upside is your position is larger if it stays in profit. Essentially you end up with half the distance of one level as wiggle room. You have to pray you don't get a 51% retrace as it takes out your whole position and you may not see another entry for the week. But if the move is impulsive in your favor... profit.

[WideEyed]

WideEyed,

You move the stop on the entire position to BE. That will leave you with a stop half way between your two entries as the new stop.

Thanks for your reply, mjws00. I like that interpretation, but it doesn't seem to fit with the below example (and maybe others).

Look at Bob's B and C trades in week 2. They would have stopped out. One bar after the B trade is triggered the price drops below the halfway point between WP and WMS1. Have I read that wrong?

[mjws00]

Could be. It looks very close. I read the example for the intent of showing the system. If you are very aggressive on your entries, you will get tagged on your pyramiding more often, if you allow a slight buffer to remove a few "peeker" trades, you end up with more swing room. If you wait for a retrace and test you may end up with more safe B entries.

I think people will find they get tagged frequently on the retraces, and may want to experiment with skipping a level, or allowing a buffer, or waiting for a test.... but now we are into discretion and Bob's brilliance is teaching and simplifying.

I found when backtesting manually. It is very easy to have a pending spiked, and then suffer drawdown through multiple levels. Especially on the more volatile pairs. I find it more useful to wait for the rsi/stoch to twitch before placing orders... Waiting for AO to change is consistently late for entries fine for exits (noted by Bob).

There are a lot of nuances to be figured out. The setup and signals are very good. The 240 filter in trending markets is super safe. Around the 240 and on turns can be a disaster quickly. I personally will go into "range mode" if I don't have room for a clean signal before the line. Interestingly just taking the signals when they appear, or popping down to a 1H does very well in those conditions.

We'll have lots of eyes and people testing. Should be great.

[WideEyed]

It does look like there a lot of discretion required to make a profit using this. From a visual backtest on some pairs, going by my understanding of Bob's rules, you'll lose very considerably more than you'll make. That's the case whichever of the two interpretations one takes on setting SL.

Bob does say that some pairs are more suited to this method than others. But if a large amount of discretion is required to trade this even on the "suitable" pairs then maybe it's not really for beginners at all.

People like Bob will probably make money whatever the system! Deep respect to him for that (and for trying to teach his methods to us)!

I hope I'm wrong (on the extent this method relies on discretion and experience over rules).

[mjws00]

For me it's too early to tell. I jumped back and started testing pairs manually from random weeks and a few months at a time. I got absolutely crushed. So my intent became seeing where the errors occurred.

When a pair is turning. You will be hating life while the 240 keeps you in long and it spikes short over and over. This occurs for weeks at a time. Bob knows when to stay out.... we'll figure it out and quantify it. The forth coming EA's will eat dirt on those runs. They are not infrequent. That said the signal is strong enough that a jump stop would get you out around BE often. SL at 240... not so much.

For me the gem is the RSI(2) on TMA slope. This is a very very strong setup! Pure beauty and not as noisy as the stoch equivalent. It is every bit as pretty on other timeframes as well. I love this one and am already applying it to the other systems I trade. It is a brilliant heads up on a forth coming significant move. AO I can take or leave it is pretty laggy.

The weekly pivots and midpoints as they relate to 4H trading, taking the week as a unit, are another highlight every single swing trader should master. Unfortunately broker timeframes and start times will affect these significantly. So use pivots that auto correct. Or grab an demo like Cowboy IBFX and use Bob's templates. Sadly I couldn't believe the difference this made. I have been using Paul's dwmpivots forever, the Cowboy IBFX solution better matches Bob's candles.

Hopefully we'll be seeing lots of charts, both failed and successful soon. First fresh week after release.

[analda3]

I'll start.

10.4 is truncating the Stochastic Oscillator.

Go to the indy's properties. Uncheck Fixed Minimum and Fixed Maximum. You can also change the values to 0, 100 as well.

Don't forget to re-save your template.

Untitled.gif

Having said that, Bob probably wanted the settings to be at 20, 80, since that is what flattens out the peaks - at least visually.

I have noticed that my Sto Osc is different than the study guide. I have a few more peaks and valleys. I compared my settings with the template, and they seem to be the same. Can't figure out why, unless Bob changed something.

I had the same issue when i was using the 10.4 V 1.02 template but when i use the 10.4 V 1.01 template this issue is solved.

By the way many thanks to Bob, Steve and the rest of the starts on 10.4 - Amazing

JLC

[MurphyMan]

I have a related Empty4 question.

I'm looking at AUDNZD, which is in a down trend. I have entered a sell (demo of course) and would like to set another pending trade. Unfortunately, the moving priceline on the chart is only about 3/4" from the bottom of the window, and I can't see the next resistance lines.

Does anyone know how to move the priceline to the center of the window, so you can see all of the resistance/support lines?

Thanks.