After a great deal of experimentation between November 2011 and November 2015, I developed what I regarded as a successful guerrilla warfare style of scalping the Forex market, which I called a Multiple Simple Moving Average Envelope (Ms. Mae’s) trade strategy. Between August of 2016 and August 2018, I refined Ms. Mae’s strategy and called the modified version of my approach the Numerical Price Prediction (NPP) trading system. Due to circumstances that took me away from full-time trading, I was forced to make an attempt to adapt NPP’s scalping methodology to more of a pseudo-swing style of trading, even though prior to this, all my attempts to trade profitably using anything other than a short-term approach to intraday trading proved futile. However, unlike all my previous efforts, this time the majority of my "longer-term" trades (though usually no more than 24 hours) were ending with a positive result. This has motivated me to start a new thread (this one) for evaluating this recent offshoot of NPP, which I am calling Dynamic Probability Trading (DPT). To oversimplify the system, DPT is built on typical price range from the perspective of three different time frames and on the intraday trend. Despite warnings not to attempt to pick tops and bottoms, this is exactly what the system is designed to do. The chart setup is essentially comprised of three proprietary price range envelopes and two proprietary moving averages, greatly simplifying my former arrangement. The envelopes are generated using statistical calculations based on a sampling of historical data. In a nutshell, whenever the candlesticks make contact with the upper or lower band of a price range envelope, there is an increased likelihood that price will reverse direction—a likelihood that is heightened in proportion to the number of price range envelopes involved. Reversals are confirmed via the moving averages, though in actual application, positions are entered and exited as dictated by what is happening on lower time-frame charts. I am very hopeful that the system will continue to work, so the main function of this thread will be to help me maximize and standardize the way in which I employ it.
I don't know about your ability to make money trading, but the one for naming trading system is worth mentioning...
Since I'll probably not be spending much time in the future developing ideas, I'm just marking this as a place I can go each day when seeking a momentary diversion...
Supposing I had seen Cristian Moreno's call earlier on November 15th and wanted to try to act on it, I would have had two opportunities to enter long positions when candlesticks closed in a region occupied by the lower bands of all three price range envelopes. Theoretically, this would have provided an opportunity to realize about a 70-pip gain. However, given that EURNZD remains so bearish, the more statistically justifiable trade would have been to short the pair once the candlesticks rose to breach the upper bands of the lesser two envelopes.
i like bands a lot i think your analysis is very subjective and you are seeing what you want to see and not what is actually there. many of your signals are not meeting the same criteria when under scrutiny. i would keep working on your bands and seek out low to no lag math that makes better bands then what you have which tend to overshoot and lag too much.
This is my first trade for the week and it illustrates exactly how Dynamic Probability Trading is supposed to work... Even though USDNZD's intraday trend is bullish, the fact that the candlesticks dropped below the four moving averages on my 15-minute chart setup indicated a bearish short-term bias. But exactly when and where should I sell the pair or take profit? For my answer, I dropped down to my one-minute setup... I sold the pair at the (bold blue) upper band of the short-term price range envelope and set my take-profit target at the (bold crimson) lower band, with my stop loss up at the (thin blue) outer band. Another factor suggesting that I short the pair where I did was the fact that the candlesticks rose above a down sloping (green) "true-direction" trend line.
Thanks for the advice, but I'm very happy with this system as is, and after seven years of tinkering, I am thoroughly convinced that I have arrived at a point where the smartest thing for me to do is resist any temptation to try fixing what ain't broke. My bands identify general regions where the statistical probability of short-term trend reversals occurring is significantly higher than usual, so lag is not an issue for me, nor is overshoot. My analysis (for entering and exiting positions) is not subjective at all, but it takes place at the level of one-minute charts to maximize the accuracy of my decisions. If I am seeing what I want to see and not what is actually there, it will become very clear very quickly in that I will be losing money, so I will look to my percentage of successful trades as a valid and reliable indication of the truth in my analyses.
make it into an actual system and show the back testing you will face the truth before you lose your money or someone else's. then again there is nothing like real money trading to expose flaws the human eyes ignore in the chase of unearned money.