I established as my personal measure of the extent to which I might regard my approach to trading as credible and the degree of competence I should attribute to how well I can or cannot apply the mechanics of my system as the ability to take a $10,000 Nadex demo account to $100,000 in a (relatively) short span of time by trading my system with wild abandon—a goal which has thus far proved to be beyond my reach. However, since renting an office (around mid October) from where I can trade (if I choose) 24 hours a day, five days a week, I've been able to study and test various strategies, tactics and techniques with an intensity not possible before, and am now halfway to reaching my goal... So at this point, I'm hoping I can get to that final figure (without blowing up my account) by mid February, 2024. (Time will tell.)
first off, well done. second, any chance you can give us a general recap up to this point? normally I would just read through the 50 pages but I'm currently working through a 1400 page thread that i don't want to break from. not asking you for the specifics just a simple style changes, things that helped you along the way, etc...
I wouldn't recommend reading through all 50 pages anyway since you're likely to find my thoughts wandering all over the map with there being little rhyme or reason or a cohesive thread holding them all together. So as a recap, let me just cut and paste a previously written description of my system, which I call Numerical Price Prediction (NPP). But be forewarned, there are any number of contributors to ET who probably consider anything and everything I write to be equivalent to a pile of manure, so bear that in mind before you read any further... Copyright © 2023 Fred Duckworth Numerical Price Prediction is a unique and innovative day trading system that relies on a methodology similar to that used by meteorologist to predict the weather—one based as much as possible on statistical analysis and mathematical probability. The idea is to gather and evaluate precise, up-to-date, quantitative data and use it to calculate the odds of price reaching designated values within a given time period by patterning the system's elements after the equations, wave functions, and computer models used in weather forecasting. But, instead of monitoring wind velocity and direction, cloud formations, humidity, temperature, and barometric pressure; it evaluates the synergy between such factors as typical price ranges, reoccurring chart patterns, horizontal support and resistance levels, trend lines, and market structure, all in multiple time frames—with the result being a graphical depiction of current conditions that traders can then use to help make precise, well-timed trades. The system incorporates the idea of cycle theory, which holds that cyclical forces, both long and short, drive price movements, and can be used to anticipate turning points. It's also compatible with Edgar Peters' fractal market hypothesis, which views financial markets as fractal in the sense that they follow cyclical and replicable patterns—ones consisting of fragmented shapes that break down into parts which then replicate the shape of the whole. I used these cycles to generate what some call "baselines" by conducting a thorough analysis to first uncover the cyclical waves formed in the wake of price action, followed by the defining of their general frequencies and magnitudes; and then finally plotting centered moving averages that came as close as possible to approximating the zero amplitude of the corresponding waves/cycles. Even so, to trade with the clarity and precision I desired required me to carry out an additional step in which I assigned a specific temporal value to each individual baseline and its corresponding or associated price-range envelope(s)—to answer the questions: What moving average best conveys in which direction and by how much price moves every five minutes? Or every thirty minutes? Or every four hours? Or even every day? And yet, even after this "final" step, their emerged still another aspect to interpreting price action that proved deserving of my consideration which I had not envisioned at all—the concept of "temporal" support and resistance. In other words, not only do I believe there is a certain amount of distance beyond which exchange rates will typically resist separating themselves from the central tendencies of key price distributions. It seems to me I have also observed that there is generally a limit to the amount of time exchange rates will advance in one particular direction without deviation. I refer to these limitations as temporal support and resistance, and they have proven to be a welcome enhancement to my system. (AJ Monte does something similar, except his approach incorporates what he calls "stale green / stale red candlesticks.") Numerical Price Prediction was developed based on the following five biblical principles: Test everything and hold fast only to that which proves valid and reliable. Systems generally operate at peak performance when the interactions between their component parts evidence strong, healthy relationships. The best plans are usually established in the presence of a multitude of counselors. Rightly interpreting the signs of the times is an absolute necessity. Positive outcomes are typically the result of having made good choices. To my surprise, applying the principle of "testing everything and holding fast to that which is good" led me to reject many strategies wholeheartedly endorsed by any number of trading gurus, such as Elliott waves, Fibonacci ratios, harmonic patterns, pivot points and the like. In effect, I replaced the advice to "keep your eyes on the road" with a mandate to "focus on your destination," a subtle, yet profound, distinction. Obsessing on the former tends to be constraining—dictating one's movements and limiting the parameters within which one is free to operate, often locking people into notions that are not truly worthy of the reverence bestowed upon them. But, emphasizing the latter allows folks to be creative and take any route desired, so long as it carries them toward that on which they have resolutely set their gaze. So, when strategies involving moving average convergence/divergence (MACD), stochastic oscillators, the relative strength index (RSI), the commodity channel index (CCI), the average directional movement index (ADX) and other indicators failed to live up to their reputations, I had no qualms about discarding them entirely and searching elsewhere for the "signs of the times" which, if interpreted correctly, would result in market forecasts of unusual accuracy. Again, as it turned out, I found that the absolute best "atmospheric barometer" for predicting the direction in which an exchange rate might ultimately be headed was nothing more than a simple moving average, with a handful of key moving averages evidencing superior accuracy in this role. Nonetheless, there are any number of factors, or "data points" impacting foreign currency exchange rates, with the "Holy Grail" being the ability to unravel the hidden correlations between them. It's a matter of crunching the numbers and doing so in the correct manner, plain and simple. And speaking of "correct manner," I think I should probably mention that, though one often hears traders stating "the trend is your friend," from my perspective, it would almost surely be more accurate to say that the trend is merely one of several friends! For it seems to me that what would have to be considered at least equally as important as trend is the location of rates within the entirety of a given asset’s price distribution. So then, though investors often speak of trend lines, I've ceased to think of trends as being represented solely by lines, and have come to conceptualize them as belts as well, with the location of price within the expanse of values constituting the width of these oscillating bands being just as important (when deciding exactly where to enter and exit positions) as the general direction that each "breadth of values" is headed. Accordingly, my final decisions on when to buy and when to sell are always made based on the consensus of various input data, sampled in multiple time frames—data which includes baselines, market structure, temporal support/resistance, horizontal support/resistance, price ranges, and reoccurring chart patterns, as stated above. It is the consensus opinion of all these various factors that determines what I will decide to do in the final analysis. The moves I make depend on what each of these determinants means in light of all the others and how they all will affect and impact on one another. It is the interpretation of each moving part individually—and of all these assorted components as a whole—that constitutes Numerical Price Prediction. So then, Numerical Price Prediction is all about interpreting what's happening in the moment based on market generated information, which is to say, technical analysis. (I choose not to put my trust in non-market generated information—meaning fundamental analysis.) It comes down to "ruling reason," which for me, is just another way of saying the numbers, or "the math" if you will—the summation of all those correlating data points that are a part of the market generated information. Now without a doubt, I've had critics tell me that trading in the way I've just described—especially the way I use moving averages—cannot work because it "contradicts the findings of just about every independent, objective, systematic, statistically significant research-trial ever published on the subject!" But as far as I'm concerned, it's not about anything I claim. Rather, it's about actual results. But of course, whenever I point to NPP's phenomenal results, they'll tell me that the system will stop working…eventually. Nonetheless, I have my doubts. Again, in designing the approach, part of my goal was to come up with something reflective of flight dynamics (which uses the laws of physics to explain how forces act on vessels to govern their performance, stability and control to ultimately determine their velocity and attitude with respect to time). For with all due respect, if a plane flies the first time you take it out by angling it upward at two to three degrees per second with a maximum angle of 10 to 15 degrees, and does so again the second time you take it out, and the hundredth, and the thousandth, and so on and so on—it's not going to suddenly stop taking flight on some particular day for no reason whatsoever, all things being equal. The same thing applies to a "numerical" approach to day trading. To illustrate what I mean when I say "trading by the numbers" and entering and exiting positions based on "objective criteria," here is an except from the last entry I posted today in one of my threads…
Again, this was just a "fun little exercise" to test the robustness of my system and my proficiency in implementing it. The manner in which I reached my target balance was unrealistic in that it required I accept a ridiculous amount of risk. However, this meant making near perfect trade decisions, which was the main point of the effort. So, from my perspective, this now validates my system, but NOT the way in which I applied it. And now that it's done, I will take the same protocol (which I am already doing) and use it in trading my live accounts in a responsible fashion—abiding by the one percent rule, etc. And as for "silly" (but not really) little endeavors like the one above, in light of the live trading I'm now doing on a weekly basis, they no longer hold much interest to me in that they've ceased to really serve a purpose in terms of making new discoveries and advancements.
Saturday | January 4, 2024 It's been almost a year since I "closed" this thread. Since then, I've taken what I consider to be a profitable approach to trading Forex and "fiddled" with it until, at this point, an extra crystal clear picture of what the system is all about seems to have emerged. Accordingly, I am now switching my focus back from understanding how to apply (implement) it better and better to fixating specifically on making money—plain and simple—which is why I've returned to this journal. However, given that life is not all about making money, let me begin with the following entry to remind myself as to what should be my focus in this regard... The Bible makes clear that with wealth comes a responsibility to serve others and to manage resources wisely, that it should not be regarded as a personal accomplishment but as a blessing from God which must be used for good, and that God has the ultimate authority over all anyone possess, making them accountable to Him for their use of wealth. Moreover, Proverbs 22:4 states, "The rewards of humility and the fear of the LORD are wealth and honor and life." The scriptures emphasize the need for humility and caution among the wealthy. They are warned that trusting in riches can lead to spiritual downfall. Proverbs 11:28 teaches, "He who trusts in his riches will fall, but the righteous will flourish like the green leaf." Additionally, Jesus instructs that one cannot serve two masters; thus, the love of money can lead to strife between serving God and pursuing riches. The bottom line: Make sure it's God and not money that continues to have first place in your life. As stated by the apostle Paul... As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy. That said, rich people are also instructed to practice generosity actively. 1 Timothy 6:18-19 commands, "Command them to do good, to be rich in good deeds, and to be generous and willing to share." This aligns with Proverbs 11:24, which states that "one man gives freely, yet grows all the richer; another withholds what he should give, and only suffers want." The notion of giving is further highlighted by Jesus, who emphasizes that generosity leads to blessings, stating, "Give, and it will be given to you." On the other hand, the Bible advises the wealthy to manage their resources prudently and in a manner that leads to its increase. Proverbs 21:20 emphasizes saving and wise investment: "The wise have wealth and luxury, but fools spend whatever they get." Jesus's parable of the talents (Matthew 25:14-30) underscores the expectation that one should actively grow and multiply their resources instead of hoarding them. Even so, while wealth can be a blessing, scriptures also caution about potential pitfalls. 1 Timothy 6:10 notes, "The love of money is the root of all kinds of evil." Wealth can lead to greed, causing individuals to forget their true provider. Deuteronomy 8:10-14 warns against pride and forgetfulness towards God after experiencing prosperity: "Beware that you do not forget the LORD your God by not keeping His commandments," all of which harkens back to the previous paragraph that mentions how trusting in riches can lead to spiritual downfall. One other thing...the Bible also calls for the rich to be advocates for social justice and to care for the less fortunate. Proverbs 31:8-9 urges individuals to "speak up for those who cannot speak for themselves, for the rights of all who are destitute." This sense of social responsibility extends to ensuring fair treatment of workers and assisting the needy, which again, goes back to being generous, rich in good deeds, and willing to share. In summary, the Bible offers a comprehensive framework for how wealthy individuals should regard and manage money. It teaches that riches should be viewed as a stewardship responsibility rather than a personal triumph. Rich people are called to maintain humility, practice generosity, handle their finances wisely, and advocate for justice. Wealth can be a blessing if used appropriately, but it poses spiritual dangers if approached with pride or greed. Through this lens, the Bible emphasizes that the rich are to reflect God's character in their financial dealings, promoting the well-being of others as a fundamental part of their wealth management.
SWING TRADING FORECAST USDJPY – From a swing/position trading perspective, you don’t want to be trading this pair. Wait until the rate retreats south, deep into the very bullish monthly price flow, which turned north at the end of October, last year. Then buy the pair when the two-day baseline turns upward, preferably below 154.34 or better yet, below 151,87. AUDJPY – The monthly price flow is slightly bearish to neutral. MAYBE buy the pair if and when the rate is rejected at the lower band of the slightly bullish four-day price range envelope? AUDUSD – This pair is extremely bearish. Be prepared to enter a short position following even the slightest pullback to the north. EURGBP – Bearish but does not become a sell candidate until and unless it ventures into the 0.8366 neighborhood and above. EURJPY – Hope that the rate continues to fall for several days so you can buy it when the 24- and 48-hour baselines turn north again somewhere below 161.31 down to 154.42. EURUSD – Same as AUDUSD. GBPJPY – Same as EURJPY. GBPUSD – Sell it if the rate rises again and is then rejected at the upper band of the four-day price range envelope. USDCAD – Extremely bullish. MAYBE buy it at the bottom of the two-hour price range envelope. USDCHF – Same as USDCAD
Monday | January 6, 2024 | 6:20 AM PST This morning's first and possibly only trade was a profitable USDJPY 23-pip long position. After the rate plunged (while I slept) at 3:00 AM (was this due to reports of Trump exploring tariff plans to cover critical imports?) it found itself well under my projected 24-hour price range (support level) calculated to be at 156.81, which is what made the pair a buy candidate. I therefore pulled the trigger when the ten minute price flow turned north, looking to be on the verge of pulling the 20-minute measure up with it. However, I did NOT wait for confirmation from 30-minute price action, which is standard practice, seeing as how the radical nature of the pair's maneuvers were likely to prove too fast for the slower measure to accurately reflect the reality of the unfolding situation. I set what simply "looked" to be a relatively conservative take-profit target, which turned out to easily be hit within approximately five minutes of entry. AUDJPY and EURJPY would have been buy candidates had they elected to drop down to their respective (bold dark slate gray) 4¼- to 4⅓-day price ranges, but they opted to head north instead without even remotely considering this possibility. USDCAD became a strong (potential) buy below 1.4331, but that ship has sailed. Even so, if the 30-minute and two-hour baselines both turn north, the pair will be deemed to have once again donned a bullish intraday bias/sentiment, thus justifying buying the asset at that point. The exact opposite is true in the case of AUDUSD. Likewise with EURUSD. It would be wonderful to see the two-day flow on USDJPY, USDCHF and USDCAD turn south so they could be bought if and when the trajectories turned north again, but USDJPY and USDCAD remain neutral, and USDCHF remains bullish. EURJPY and GBPJPY indeed HAVE already registered two-day reversals south, but it remains to be seen as to whether there will be any significant follow through. This makes both of them candidates for short positions IF the hourly price flow turns south, ESPECIALLY if confirmed or validated by the two-hour baseline, and even more so if the four-, eight- and/or 12-hour measures turn bearish as well. By the way, with its 30-minute baseline having already turned north, you (I) should buy USDCHF as soon as its two-hour price action does the same.