Scripture characterizes patience as a virtue, and even goes so far as to say that lack of patience can cause one to miss blessings. For me, a valuable lesson can perhaps be gained by considering the life of Joseph, whose dreams generated expectations that caused him to wonder how they would be fulfilled, and to question what was going on when his life began to unravel. Nonetheless, through whatever disappointments, Joseph was never a complainer. He chose not to worry about that which he had no control over, and simply bloomed wherever he was planted at any given point in time, even when he was in prison. Joseph never jumped ship, but rather, stayed the course to see where destiny would lead him in the end—to see how God would use everything to put Joseph exactly where He wanted him to have an effect. It is often true that we must learn how to loose before we can handle winning. It is also said that we can only handle power and position when we can live without them. In the end, Joseph concluded that the events of his life led him right into the place where God wanted him. The most anyone can ask us to do, wherever we might be, is the best with what we’ve got.
This morning the Cable pairs offered a classic example of why I believe the B.A.T Guerrilla Warfare style of buying and selling foreign currency pairs online can theoretically offer superior returns to a buy-and-hold approach. For example, I made money buying GBPUSD at 1.2455. So the pair was on the rise, right? And yet, I then made money buying the pair AGAIN at a LOWER price approximately 17 minutes later! How was that possible? Moreover, I turned a profit selling GBPJPY at 134.51, so the pair was bullish, correct? But then I added to my haul from the Cable-Yen by buying the pair about 40 minutes later, so it was bullish, no? As I suggested more than a year ago, I believe the key is the possibility that there exist specific, precise, arduously, painstakingly selected (or coded) moving averages which reflect the true, actual, genuine direction of price far better than all others, and that there are general limits beyond which price is typically unwilling to deviate from these key moving averages. Accordingly, executing trades as dictated by these moving averages and their associated price ranges is what makes it possible to order a number of trades in multiple directions in less than 60 minutes buying and selling the exact same assets, and still make money doing so.
Thursday / May 20, 2021 / 7:45 PM PST I'm returning to this thread after a year-and-a-half so as to make it unnecessary to come up with a name for this final "wee" version of Numerical Price Prediction, which is taking everything that applies from the final DOT-TAB version (with which I am 100% satisfied) and translating it down to the five-minute time frame... To get things off the ground, it makes sense to me to start by formulating a set of questions I need to answer with respect to each currency pair on my watchlist. Is the sentiment of the 16-hour baseline clear or wishy-washy? Is the 2-hour baseline aligned with the 16-hour baseline? Are the slopes of the 2-hour and 4-hour price range envelopes angled in the same direction? Hmm… I think that's a good starting point. So ideally, I'm looking for pairs where the answer to all three questions is “Yes,” so I can enter a position following a pullback once the rate bounces off the appropriate four-hour temporal support/resistance level. That said, are there any pairs that currently meet all three of these conditions? Yes, EUSUSD, and in fact, it's a resounding yes. But I need to wait for the candlesticks to bounce off the 1.2223 level/area before I enter a long position. No other pairs qualify, but EURAUD and USDCHF come close. The problem with EURAUD is the slope of four-hour price range envelope, and in the case of USDCHF, it's a wishy-washy 16-hour baseline. Even so, I think I should see what happens if I pull the trigger on either of these two anyway, provided price pulls back to the appropriate temporal support/resistance level.
USDCHF illustrated why you should not set your stop losses in accordance with the 1:1 minimum reward-to-risk ratio rule or by support/resistance levels—but rather, by 35 pips—in order to allow for the types of shenanigans often perpetrated by the big institutional players...
Friday / May 21, 2021 / 2:00 AM PST The 2-hour and 16-hour baselines are bearish and the 4-hour baseline has just joined them. Price has made contact with the 4-hour temporal resistance level, but I cannot stay awake all night waiting to see if it is rejected there, or perhaps at the 14- and 26-hour temporal resistance levels up at 154.47. However, I do not wish to pass on this possible opportunity, so I am going to place my stop loss at the upper band of the 90-minute price range envelope at 154.55 to see whether this works out for me...
Not too long ago, NZDUSD's 2-, 4-, and 16-hour baselines were all bearish. The only reason the 2-hour baseline is now slightly bullish is because price has pulled back all the way up to the upper band of the 90-minute price range envelope. But, this means the situation is only temporary, right? Price is likely to be rejected at this level, and when it resumes its descent, it will probably repaint the 2-hour baseline in such a manner that it might appear to have never assumed the bullish attitude currently being conveyed at all, no? I'm going to go ahead and see what happens (sell this pair) if I assume that this is true. On the other hand, if you look at a one-hour chart, you're looking at a pretty long one-hour candlestick, which hints at a reversal north, unless the "big guys" are once again up to do good before ultimately taking the pair south. Also, the 8-hour baseline has been bullish since yesterday, and this takes precedence over the 16-hour baseline. If this is true, your only hope lies in the fact that price is currently located near the upper band of the 8-hour price range envelope. If it regresses back toward the 8-hour baseline and you move your take-profit target up to that level, you might be able to get out of this position with a profit either way. I should probably note as well that from the perspective of the one-hour chart, the 24-hour price range envelope is also bearish (in addition to the 16-hour baseline) but the 32-hour baseline and 4-day price range envelope are both more-or-less neutral. In fact, it looks like the rate hasn't make much progress in either direction, up or down, in at least the last six days.
Let's think this through... On the five-minute chart, EURJPY is bearish, with the 2-, 4-, and 16-hour baselines having turned south. However, the 40- and 90-minute baselines are hooking upward with price having bounced off support. So, I should wait for the candlesticks to bounce off resistance and then sell the pair, right? But, from the perspective on the one-hour chart, the bullish 32-hour and 4-day trends are pretty strong, though admittedly, no upward progress was made yesterday. So, am I to believe the one-hour chart, and interpret this as a great pullback opportunity before the rate climbs higher, or am I to gather that the pair is turning over, with the 24- and 32-hour baselines soon to join the 4-, 8-, and 16-hour baselines in hooking south? This question leads me to conclude that it might be safer (i.e, better) to enter positions as price is bouncing off the upper or lower band of the 2-hour price range envelope rather than the 4-hour temporal support or resistance level, and that this is especially true if the relevant band is converging with the matching bands belonging to other price range envelopes. In fact, I think the 4-hour temporal support/resistance levels need to be discarded entirely as undependable, and it might also make sense to replace the 14-hour temporal support/resistance levels with 16-hours instead.
And in accordance with statements you've made in the past, what you're seeing now suggests you should replace the 16-hour baseline with the 8-hour baseline.
In light of my observation during the last 24-hours, I'm in the process of formulating a different set of questions, such as... Which price ranges can really be trusted? Possible candidates: The 40-minute price range at 0.22% deviation. The 8-hour price range for 0.55% to 0.85% deviation The 16-hour price range at 1.20% deviation The 24-hour price range at 1.35% deviation The 96-hour price range at 2.75% deviation When is the optimal time to enter positions? Possible candidates: When candlesticks are crossing (reversing) back over the 40- (to 45-) minute baseline after having made contact with an outer edge of the 40-minute price range. When candlesticks are crossing (reversing) back over the 2- and/or 4-hour baseline(s) after having made contact with an outer edge of the 8-hour (and/or other) price range(s). You shouldn't even be concerning yourself with the 8-, and 16-hour baselines. Your only concerns with respect to these measures should be their respective price ranges (i.e., price range envelopes). No! The 2-hour price range envelope is not to be trusted either. Look for opportunities to enter positions following price rejection at the outer edges of the 8-hour price range envelope and beyond. Note the changes... Your new set of questions: Is the sentiment of the 2- and 4-hour baselines clear or wishy-washy? Are candlesticks painting on only one side of these measures, or are they crisscrossing back and forth? Have candlesticks made contact with the upper or lower band of one or more "trusted" price range envelopes? Are candlesticks crossing (reversing) back over the 40- to 45-, 120-, or 240-minute baseline(s) after having exhausted their push toward or beyond the outer edge of one or more relevant price ranges? So then, you are back to relying on the 8-hour measure (not 16-hours) for the gist of intraday price direction—but this means you should be primarily concerned, not with its baseline, but with the outer edges of its typical price range.
A fourth question... Are candlesticks painting on only one side of the 40-minute baseline, or are they crisscrossing back and forth? Exit positions with the reversal of the 40-minute baseline.