BoldTrader posted:
Moving my conversation from 10.7 to this forum. If this is not the proper forum, please let me know.
Preparing for a 10.7 CSS MR Trade on EURUSD. Just closed long EURUSD trade, hitting my MST target, +174 pips. Price on H4 now at +2 and nearing +3 ATR. Accumulating for reversal.
I like stats..
History shows a max of +2 ATR Daily over the past 365 trading days to the Low. There are ONLY 2 exceptions of hitting +3 ATR during the same period. So statistics are in our favor for a reversal for at least at the +2 Daily ATR.
Here are some raw stats on EURUSD for the past 365 (approx) trading days using the ATR:
ATR Values: Daily
Look back period, 89, MA setting 15, fib levels 1.6185, x2 and x3
+3 ATR: Zero x. No hits to +3 ATR.
+2 ATR:
Price has hit +2 ATR 1x: After hitting, +2, time required to return to Mean (0 Level) was 2 days.
+1 ATR:
Price hit Level 1 ATR Daily, approx 17x, of which it took an average of 6.8 days to reverse back to it's mean.
Of those 17x, there was 1x price moved higher hitting +2 ATR for -272 pips and then dropping on a 38 day negative trend run. After hitting +2 ATR, it only tool 2 days to hit Mean. Of the 17x at +1, there were 6x (approx) where price moved higher than the original entry, but not hitting +2 ATR. It took an average of 8.5 days to return to mean.
The highest average negative pips on those 6x was -121 pips negative with highest spike @ -183 pips. These make great case reasons to trade small, but when market moves in your favor, adding to positions at the 50 and 100 pip levels as per Bob's progam. The longest time period to return to mean over the past 365 trading days has been approx 10 trading days.
Using H4 period Jan 1 to current date with ATR settings: Lookback period: 500, MA period 60 LWMA; Fib levels 1.61852, 2x, 3x.
ATR Level +3:
Hit 3x since Jan 1
1st instance: required 12 H4 periods to move down 2 levels, then 26 H4 periods until 0 level Mean. Position moved a max negative -52 pips, and if held to 0 Mean, made 59 pips.
2nd instance of +3 ATR: required 7 H4 periods for price to move down 2 levels, then required 19 H4 periods to move to 0 level Mean. Postition did not move negative by more than 20 pips and if held to 0 level, made 107 pips.
ATR Level +2:
Price Hitting +2 ATR: 11x (including current hit):
Required an average of 14.4 H4 periods to return to 0 Level Mean for an average gain of +55 pips. This includes adding onto any positions where price hit the +2 ATR and subsequently moved higher on a trending UP ATR requiring new positions on each new subsequent hit of the +2 ATR (approx 13x)
Over time, all hits to +2 and +3 traded back to the MR level, which did adjust over time. If the MR level moved up, when price did subsequently trade down through the MR level, it moved to what I call the lower MST levels, or to equivalent levels of -2 and -3. The longest periods to occur (top 2) before hitting MR level after hitting +2, since Jan1, has been 22 and 31 H4 periods. The average is 5.3 H4 periods (excluding the top two longest periods). If including the top two longest H4 periods, then the average is 10.5 H4 periods. So as you can see, it only requires patience and time for trades to move back to their Mean. These are some stats I use for making trading decisions using the ATR, using history to anticipate the future. No guarantee, only a guideline. Once you know the average ranges, you can anticipate the average potential gain on a position. Additionally, you can further define targets using the MST's levels left open by the crims on their attempts to clear out stops. Almost indefinitely, lower MST levels will match up with lower ATR levels, and same for higher UPtrending MST levels match with Higher ATR levels.
Keep in mind.. Mean does not always refer to breakeven on a trade. In some price action moves, it was necessary to add to a position to either be profitable or near break even. That is where the 10.7 will become a great tool to help with improving the stats.
Just thought I would share some great info..
Cheers
Is there any chance we could have the chart image in here?
