jago25 wrote:Hi Bob! Didn't expect to see you on this thread. Nice to see you.

Here's some more 2 live examples from today.

Not completely sure what to make of this setup:
bigger pic:http://i.imgur.com/XdE3HFW.png

The 2 areas below the 240MA green line would have been good for trades surely? Yet the light is green now that we're above the 240MA. The area we're now in seems like it could be levelling off, running out of steam so it looks like a sell signal... only on H4 scale we're below the daily pivot so I've missed possible entry. Correct?

This is a pair I'm watching:
bigger pic:http://i.imgur.com/GsPAWzE.png

No setup in the screenshot, I'm keeping a lookout. The pair isn't supposed to be ranging according to CSS info page.
To recap, because we are below the 240MA we're looking for buy signals. Can I confirm that point A would have been an entry any way because we would have identified that downward trend anyway? Thus point B would have been a safe trade because by that stage we know the trend downward has changed?
As for where exactly to enter, more exactly than being below both the pivot and 240MA you have to guess a bit, feeling the momentum of the waves. Is that correct for the 10.4monkey system?

Here's a more interesting one:
bigger pic:http://i.imgur.com/Ryxb2xI.png

The points previously at the top A on the top side of the daily pivot would have been OK for a sell signal because there's a large number of pips between price and the 240MA. But the point B we are at now, although both the far side of 240MA and pivot for buy signal, we only have ~70pips of distance between price at the 240MA average; we're not at an extreme. This is because the pair have just changed direction on the CSS info page. Hopefully there'll be enough movement down to increase the extreme and therefore give us a safer trade.

What do you think? All good? Anyone else monitoring for signals with the monkey system here? Did you find any others?

edit:
To clarify, I'm deliberately using different templates as examples. Want to understand them all.

nanningbob wrote:

ManDrone wrote:Hello all... this is my first post. I've lurked around FF for a while, did the babypips school program and have read a number of Forex trading books. I'm a data geek by trade, but not a programmer (though I'm starting to learn) and have some ideas (like the rest of you) about creating and modifying systems for trading. I hope to contribute in positive ways to the forums!

I have a few questions and while I looked for the answers I certainly didn't read every post. Frankly, going through posts is often like sorting through the trash - lots of off topic or tangential threads. This is fine, as it is the nature of conversation, but it sure does make you have to work if you wanted a simple understanding!

First set of questions: In the NB system, why is 240 MA the magic number? Bob talks about 240 candles in a month (which is actually a rough calculation of a month of candles) if you use his system (which uses 4h charts). Why is our magic number not 200? or 371? Why not different values for different pairs based on their behavior? Why not a dynamic changing of the values based on the most valuable number from the last 6 months of backtesting (or some other method)?

I'm curious about some of the base fundamentals that others might take for granted (or just already know the answer to). Thanks for your help!

These are explained in the 10.4 manual, why 240 is used. You will need to read it.

ManDrone wrote:

nanningbob wrote:

ManDrone wrote:Hello all... this is my first post. I've lurked around FF for a while, did the babypips school program and have read a number of Forex trading books. I'm a data geek by trade, but not a programmer (though I'm starting to learn) and have some ideas (like the rest of you) about creating and modifying systems for trading. I hope to contribute in positive ways to the forums!

I have a few questions and while I looked for the answers I certainly didn't read every post. Frankly, going through posts is often like sorting through the trash - lots of off topic or tangential threads. This is fine, as it is the nature of conversation, but it sure does make you have to work if you wanted a simple understanding!

First set of questions: In the NB system, why is 240 MA the magic number? Bob talks about 240 candles in a month (which is actually a rough calculation of a month of candles) if you use his system (which uses 4h charts). Why is our magic number not 200? or 371? Why not different values for different pairs based on their behavior? Why not a dynamic changing of the values based on the most valuable number from the last 6 months of backtesting (or some other method)?

I'm curious about some of the base fundamentals that others might take for granted (or just already know the answer to). Thanks for your help!

These are explained in the 10.4 manual, why 240 is used. You will need to read it.

I mean no disrespect, but the manual does not appear to explain it (hence my questions). You explain that 240 MA is equivalent to 2 months MA (pg. 8) and you use this to determine an uptrend vs. a downtrend (pg. 6). I did not see any explanation why 2 months is a good value versus any other longer or shorter term value. I also did not see why 2 months is the right amount for all currency pairs at all times. Maybe you really like 2 months... or it works well enough... or you picked it because of extensive backtesting on a million possible trades and found it to be the single greatest time period to use regardless of currency pair, time of year, or political situation. The manual explains what it is, not why it is used.

I'm not trying to be a pain in the ass, I just want to understand at a fundamental level where each of the decision values come from. I understand the trading rules and the method, but am unclear on why particular lines are where they are. Thank you for any help you can provide.

SpiderX wrote:Hi Bob,

It seems like they are:
EURNZD,
NZDCHF
AUDCHF

In that order.

cheers

nanningbob wrote:
I am sorry my 'why' did not meet your expectations. I defined a long term fundamental trend as the 2MA Open on a monthly chart. I posted many pictures/charts showing every major currency over a period of many years. These pictures/monthly charts would trend in a certain direction and this direction could change 1-4 times a year. This makes a good definition of what a long term fundamental trend is. In other words I defined a long term trend, meaning many months or even a year as price being below/above the 2MA open. Now you are either going to like that definition or you are not but that is my why as I explained in my booklet. It gives us a good long term trend to follow and to know when the trend changes direction. But that is my answer to why. From my booklet page 5.

Those that use a combination of both technical analysis and fundamentals.
a. This is going to be us with 10.4 but we will use a very simple indicator to determine the long term fundamental trend and we won’t need to know the information that is actually driving this long term trend. We will spot it with technical analysis and adjust our trading accordingly.
b. So without knowing the driving fundamental of a currency pair, which is usually caused by long term govt. policy, we are just going to trade it and let the fundamental traders follow the news.

A TREND IS THE LONG TERM MOVEMENT OF A CURRENCY USUALLY CAUSED BY GOVERNMENT POLICY AND CAN BE EASILY SEEN ON A MONTHLY CHART.
There I did it, now go trade. Let me show you. I will show an example from every major currency group. Notice the yellow line in each picture. It is the 2MA OPEN on a monthly chart. Buy above and sell below the yellow line. Even in congestion or slow times it will bias up/down from that 2MA line on the monthly.

That is my why and that is my definition.

ManDrone wrote:

nanningbob wrote:
I am sorry my 'why' did not meet your expectations. I defined a long term fundamental trend as the 2MA Open on a monthly chart. I posted many pictures/charts showing every major currency over a period of many years. These pictures/monthly charts would trend in a certain direction and this direction could change 1-4 times a year. This makes a good definition of what a long term fundamental trend is. In other words I defined a long term trend, meaning many months or even a year as price being below/above the 2MA open. Now you are either going to like that definition or you are not but that is my why as I explained in my booklet. It gives us a good long term trend to follow and to know when the trend changes direction. But that is my answer to why. From my booklet page 5.

Those that use a combination of both technical analysis and fundamentals.
a. This is going to be us with 10.4 but we will use a very simple indicator to determine the long term fundamental trend and we won’t need to know the information that is actually driving this long term trend. We will spot it with technical analysis and adjust our trading accordingly.
b. So without knowing the driving fundamental of a currency pair, which is usually caused by long term govt. policy, we are just going to trade it and let the fundamental traders follow the news.

A TREND IS THE LONG TERM MOVEMENT OF A CURRENCY USUALLY CAUSED BY GOVERNMENT POLICY AND CAN BE EASILY SEEN ON A MONTHLY CHART.
There I did it, now go trade. Let me show you. I will show an example from every major currency group. Notice the yellow line in each picture. It is the 2MA OPEN on a monthly chart. Buy above and sell below the yellow line. Even in congestion or slow times it will bias up/down from that 2MA line on the monthly.

That is my why and that is my definition.

Thanks for the explanation. It appears you use 2 month windows of MA as your long term trend because it "makes sense to you" as a long enough time period that does a good enough job of indicating a trend. I wonder if you or others have changed this value (longer or shorter) with any better results as the base indicator for trading direction? I'm interested in dissecting this stuff, so the basics of each value are of interest to me.