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Ms. Mae’s Trade Strategy

  1. Long USDCAD—week of December 3, 2017—with a ridiculously wide spread at the open!


    This journal will chronicle the results of trades made based on the principles of Ms. Mae’s Trade Strategy, an intraday approach to buying and selling foreign currency pairs online that relies on multiple simple moving average envelopes (MSMAE) to pinpoint precise entry and exit levels constituting high-probability opportunities.

    The approach is predicated on three major suppositions:
    1. There are very specific simple moving averages which accurately reflect the overall trajectory of price in various timeframes.
    2. Generally speaking, price is willing to distance itself only so far from these representative moving averages before it is compelled to return to more typical deviation levels. These “maximum degrees of separation” are referred to as “statistical support and resistance” levels, and are assumed to be controlled by market makers and automated trading algorithms.
    3. By correctly interpreting the relationships between actual trends, average price ranges, statistical support and resistance levels, horizontal support and resistance levels, and reoccurring price patterns, it is possible to forecast with unprecedented accuracy exactly when and where price is likely to reverse direction; enabling traders to enter long and short positions when the mathematical odds are very much in their favor.
    (I wish to see how close this strategy is able to come to achieving a 90% success rate [if at all] or perhaps even better.)
  2. Have you backtested this strategy?
  3. No, I don't back test.
  4. The pair has stalled at 1.2717, the market is dead right now, and I have no desire to sit around to manage this trade (i.e., exit the position if the trend turns against me), so I opted to lock in about 11 pips worth of profit now and walk away. I'll wait for the London session before I execute any additional trades.

    ScreenHunter_6740 Dec. 03 17.18.jpg
  5. Not trying to give you a hard time and I wish you the best of luck but how can you possibly throw the above statements around so easily if you have no sense of how this has performed in the past? You can't just declare something to be "high-probability" without any type of testing.

    Saying that you are highly confident in your discretionary methods is fine. Saying that you make a profit is fine. But throwing around trading terms that describe objective forms of measure without actually measuring anything is pointless.

    Pretend that you are a real-estate person talking to a potential buyer:

    You: I have a really big house in a great area!!!!
    Buyer: How many rooms in the house?
    You: I don't know.
    Buyer: How many square feet?
    You: I don't know.
    Buyer: So the area is great, how many reported burglaries on this street within the last 5 years?
    You: I don't know.
  6. Short USDCHF from 0.9820.


    I wasn't planning to execute any additional trades before the London session, but this was technically about a near perfect setup, so I went ahead and pulled the trigger.
  7. My sense is derived from the performance of earlier permutations of corresponding elements in a less refined state. Having achieved an 80% to 90% success rate in the past, I am hoping to do at least as well in the present given that this system appears to be an improvement on what I was doing before.
  8. Okay great, even better than a backtest. Successful experience forward testing live. I have to admit that I am skeptical with such a high rate of success with a methodology based on moving averages but you appear to be discretionary so anything is possible.

    I had a 90% Success Rate selling SPY .10 Delta PUTs. It felt like free money until my strike got hit!

    Good luck.
  9. Please not the dreaded "success rate" again. I've achieved 90% success rate for a long period many many years ago and lost money, think on that.
  10. Why?
  11. OANDA stopped me out even though no candlestick hit my stop loss level on the MT4 chart. That now puts me at 50%.
  12. EURUSDM1.png

    Though EURUSD theoretically has a lot more room to rise, given the fact that I’m going against what I conceptualize as the short-term trend and the intermediate trend both, I’ve once again decided to be satisfied with a modest 10-pips or so worth of profit from my trade.

    ScreenHunter_6742 Dec. 04 00.06.jpg
  13. It’s very possible that the fundamental influences at play here are so strong as to force USDCAD even lower (right-hand chart). Nonetheless, from a technical standpoint, I see this region as a valley from which I would not be surprised to witness price climbing, so I’m going to enter a long position, set by stop loss, and let the chips fall where they may.

    ScreenHunter_6743 Dec. 04 01.04.jpg

  14. I don't really know what it means.

    To a skepchick like me, to be honest, it comes across as one of those things designed to sound very meaningful and slightly dressed up in technical language, which makes sense only/mostly within its own (conveniently undefined) terms of reference, i.e. it's perhaps superficially unarguable but it may not really mean very much at all?

    This tends to be true, but what it conceals (in my opinion) is that by the time the price returns to more typical deviation levels, as defined with reference to the indicator, the indicator can easily have moved so far that - for example - a price-movement "down" from an upper extreme to a norm can involve an increase in the price itself (and vice versa). In other words, it may technically be true, but it's not actually helpful.

    I offer the observation that referring to them as "statistical support and resistance levels" doesn't make them support and resistance levels. And they're not.

    Support and resistance levels are determined by price-movements, not by indicator-movements.

    That clause strikes me as what Wikipedia editors refer to as "weasel words": they clearly beg the question "Assumed by whom, and with what evidence?".

    No offense intended at all, but I'm like you in that I wouldn't back-test this, myself (albeit, I suspect, for a very different reason from yours).

    I wish you nothing but well with the experiment.
  15. It's amazing how so many fail to see the difference and grasp this basic fact, isn't it?
  16. I was able to escape AUDUSD with a tiny profit, but not so USDCAD. So far, trading during the New York session has been relatively light, so I might have to wait until Tuesday before I can begin making up for any lost ground (if possible).


    (Currently long EURGBP)
  17. I locked in about 10-pips worth of profits from EURGBP, which seems, at least for the time being, to be “threatening” to become a pattern of mine. Of course, that means I missed out on the approximately 60 or so pips I would have collected (given where I placed my take-profit target) had I not done so before the BBC reported that they don't expect a deal from Brexit talks today. I’m now long NZDJPY and “planning” to hang around for a much more significant payout this time around, but that all depends on how price behaves in the interim, assuming the pair does not stop me out first.

  18. I can’t even imagine what kind of stuff you must have been doing to accomplish that.
  19. Not really, selling .10 delta options is one way. Pairs trading until a pair breaks. Mean reversion without a stop loss. Buy & Hold Scalping (holding a loser long term until it becomes a winner while taking really small profits on winners).

  20. There are many ways of losing money with a 90% win-rate, Expiated (some of which Matthew's mentioned, just above).

    The important thing, though, if I may say so, is not to assume/imagine that a very high win-rate is necessarily going to make it easier to make overall profits: not only is that not so, but the exact opposite is actually much more likely ... and the reasons for that are good and valid and pragmatic ones, and they're going to apply to you just as they do to everyone else.
  21. I got you do not want real discussion or risk answering key questions.

    From what I have read so far I would bet against your being profitable 12 months from now. You sound too far behind the learning curve, to my ear.

    However, of course I can not know this for sure and I wish you the best.
  22. Simple, mean reversion, large but rare losses. Everything I do now is like 55-65% win rate.
  23. I think you should check your initial hypothesis. You may have it backwards.
    What I mean is that your entry signal should be momentum ignition when price begins to seperate from these multiple MA's.
    You are viewing the end of momentum as a fading opportunity to enter a trade.
    End of momentum, when price and lagging MA's converge , does not mean that price is not still
    drifting or continuing in the same direction. Possibly you are anticipating(wrong thread) a change in price direction but if you are reacting to price(wrong thread again) you may want to wait for price to ignite and diverge from MA's in the direction of your entry.

    It is true that different stocks , assets, having differing volatility characteristics that do end momentum at similar extremes (sucha s 5% consistent divergence in one vs 10% in another) .
    But I think its a stretch to view therse as support and resistance areas.
    Just my opinion but I have looked at this concept.
  24. That was an unpleasantly long amount of time to have to wait to exit my positions, besides which I got my times mixed up. I’ve made a slight adjustment to one of my key settings/parameters in an effort to avoid duplicating the premature entries I made with respect to AUDJPY and NZDJPY hours earlier.

    (I did not allow myself to be stopped out of these two positions because everything about my system was telling me that the exchange rates were due to reverse to the north at any moment.)


    I somehow got it in my head that Acting Governor Grant Spencer was speaking at 00:30 instead of at 00:15, so when I turned on my laptop at approximately 00:25, NZDJPY had already reacted. Fortunately, I’d left enough room so that I wasn’t stopped out, and “price” had not quite reached my take-profit target, so I adjusted it to manage a 13-pip gain.

    By that time, 00:30 had already rolled around, and the economic data out of Australia, which I had confused myself into thinking was going to be released later on, was already playing around with price action, so I locked in 5-pips profit while I had the chance and was happy to have avoided being stopped out for a loss simply because I entered the positions five hours too early.
  25. I don’t back test because my system relies on an ongoing analyses of the relationships between key moving averages and their corresponding envelopes, horizontal support and resistance levels, average price ranges, and reoccurring price patterns—relationships too subtle and nuanced for me to write hard and fast rules as opposed to acting on a set of guidelines and principles. Moreover, I have to manage my trades given that these factors are dynamic, requiring me to make adjustments as the relationships between these elements change, something I cannot incorporate into a back test.
  26. I was able to pick up about 13-pips from NZDJPY on the way up. Theoretically, I should be able to pick up at least about another 10 pips from NZDUSD on the way back down, even though this does constitute trading against what I perceive to be the overall prevailing trend.


    Long EURAUD

  27. EURAUDM5.png

    This trade will compare what happens after entering a long position as suggested by the key settings/parameters that were slightly adjusted in an effort to avoid duplicating the premature entries I made with respect to AUDJPY and NZDJPY many hours ago, with entering a long position according to the original settings, which led to my being stopped out of EURAUD earlier.
  28. Who is Ms Mae?

    Those who successful in trading wouldn't tell you how to select currencies which has high probability of success and when to enter.
    Notice that these are the two very important things forex writers are unable to write.
  29. There is a sense in which the decision-making process based on the slightly adjusted settings was an improvement. But there was another sense in which the decision to go long EURAUD was highly questionable to begin with.

    From that perspective, the types of trades that would be more justifiable include such options as shorting GBPUSD from 1.3447...


    ...going long CADJPY from 88.80...


    ...or shorting USDCAD from 1.2691:

  30. I’m quite sure that what you have explained above is more sophisticated than my mind is able to grasp. Nonetheless, I don’t think it is descriptive of what I’m actually up to. For instance, in the example below, I would enter a short position as soon as I confirmed (or verified) that the short-term trend had genuinely turned south from about 1.2690, not because of any moving average, but rather, because I would interpret this situation as a pullback in an overall bearish day-to-day trend (represented by the long red diagonal line)--a pullback which has reached the upper level of the typical day range (as represented by the parallel red lines) which is also a pullback in the intraday trend.

  31. This is why it is necessary to analyze the situation in terms of the relationships between a number of factors, including the overall trends in multiple time frames, average price ranges in multiple time frames, reoccurring price patterns, and horizontal support/resistance levels. It is also why it is important to use precise, carefully selected moving averages and their corresponding envelopes. By the time price returns to more typical deviation levels, the trade is already over, or soon will be, in that such levels more typically constitute take profit targets:

  32. Over the last couple of days I’ve been analyzing my unsuccessful trades in an effort to refine the decision-making process I use for entering positions. I’m hoping the insights I’ve gained are valid, and based on this refined approach for selecting to execute trades when the probability of realizing a positive outcome is at its peak, I’ve opted to short GBPUSD here as it is falling below the 1.3423 level.

  33. The refined set of criteria I’ve begun using for deciding when to enter trades is simpler and more clear-cut than the previous. GBPUSD worked out fine, so I’ve purchased USDJPY based on the same set of requirements.


    AUDJPY as well, except that I got in about six pips later than I would have liked.

  34. After waking up this morning, I was able to adjust my targets to milk a tiny profit out of AUDJPY, but I probably would have been stopped out of USDJPY had I not provided for a generous amount of “breathing room” before retiring to bed for the night. In other words, things definitely did not develop in the manner I anticipated, so in comparing these two trades to GBPUSD for a possible explanation, the evidence suggested to me that my simpler and more clear-cut set of criteria for entering positions was insufficient, and such factors as the day-to-day trend, the relationship of price to the intraday trend line, and the slope of the intermediate trend still needed to be taken into consideration.
  35. I bought AUDUSD on the downswing instead of on the upswing, so I’ll need to work out a better timing mechanism.

  36. AUDUSD is not panning out, but maybe it was just a fluke, so here's a second test:


    You see, this is the type of price action I expected to get out of AUDUSD (see below), but in that case, it never developed...

  37. Did your system catch the pop in USDCAD?

    What timeframes are you looking at?
  38. No (my broker's platform said "off quotes"), but I WAS set up to catch the pop from EURAUD 20 hours ago, except my stop loss was at 1.55509, and the market makers took price STRAIGHT down to 1.5481 before sending it STRAIGHT up to 1.5585—those little mischief makers!

    I use one-minute charts to enter and exit trades like the NZDJPY trade pictured in the post directly above, but five-, fifteen-, and sixty-minute charts for overall structure and possible trade setups depending on how big of a picture I want to get.
  39. I made a successful trade by buying EURAUD about three hours ago, and I’m now trying to do the same thing again. It’s taken me roughly three days, but I think I’ve just about got the puzzle all put together now.


    Had CHFJPY not jumped down at the start of the Tokyo session, or had my broker’s platform been responsive at the time so I could have seen what was going on and managed the position accordingly, I would not have experienced any losses so far today (since that was the only trade I couldn’t exit while conditions were in my favor).

    I’m also shorting AUDJPY…

  40. “MSMAE” is an acronym for “multiple simple moving average envelopes.”
  41. I’m nobody, so you shouldn’t care in the least what I think. Nonetheless, I commend you’re skeptical demeanor tempered with an openness to the slightest possibility that my approach might actually be legitimate.

    It’s taken me a good chunk of the week to fit together all the moving parts so that my system is finally firing on all cylinders, but better late than never. God willing, things should just get better and better from here on out. (In fact, though I won’t go into details, my initial loss was just a fluke and actually should have been another winning trade.)

    ScreenHunter_6758 Dec. 07 08.17.jpg
  42. Near the start of the current round of trading sessions I put myself in a hole big time! In analyzing why and how this happened, I believe I acquired a certain valuable insight that I subsequently introduced into my chart setups which I hope will enable me to avoid repeating the same "stupid" blunder ever again.

    ScreenHunter_6760 Dec. 08 10.55.jpg

    Thankfully, I was able to dig myself out of the hole moving forward. In addition to perfecting my system to the point that it results in a consistent 80% to 90% success rate (if not higher) I also have as one of my goals an aim to ensure that every single day is a profitable one. At least in that regard, today was successful, and in any case, it was fruitful in the sense that I learned something I should be able to put to good use from now on.
  43. I am new trader and in need of an advisor/mentor. I would be satisfied in learning futures trade from you. Please accept my request. Email fyusuf5551@gmail.com

  44. To a dubiously doubtful dude like me (which is why I am developing my own system rather than paying someone else to teach me theirs), your skepchick suspicion that my conveniently undefined moving averages and moving average envelopes might not really amount to much is perfectly understandable.

    On the other hand, if I have engaged in a serious and thorough study resulting in the identification of precise settings that enable me to grow my measly little trading account into something quite substantial over the next year or so, I will have made a heretofore unknown discovery of more than little value—one whose details anybody would be foolish to place in the public domain for free.

    Consequently, I must be satisfied to let time make my case for me, or to expose me as a complete charlatan, if that be what I am, justly deserving of whatever barbs and daggers others wish to throw my way.
  45. Lacking the background, knowledge and sophistication to understand the strategies to which you, d08, and MoneyMatthew are referring, I’m going to conclude that they all pretty much come down to doing something ill advised in conjunction with the attaining of a high success rate—something akin to ignoring the basic rules of risk and/or money management—such as the 1% rule, a minimum one-to-one reward to risk ratio, and the like. Let me therefore pray that wisdom would be my guide, and that I would avoid the temptation to stray too far from the KISS principle (keep it simple stupid) that has seemed to serve folks like AJ Monte so well.
  46. To be honest, Ms. Mae’s Trade Strategy is probably near completion, but not quite there yet (i.e., it’s still in development). I’m writing a book describing the system simultaneous to refining it, so if you’re serious, let me know, and as soon as I publish it I’ll make it available in the “Classifieds” forum under the title: A Biblical Approach to the Forex Market. Otherwise, best of luck to you!
  47. I agree that simply referring to something as support and resistance does not make it so. I also agree that support and resistance levels are determined by price movements—not by indicator movements. However, I completely disagree with your conclusion that what I find to be support and resistance is not.

    From my perspective, if price is rejected at the upper and lower bands of the 100-period simple moving average envelope at the 1.50% deviation level on a daily chart again and again, day-after-day, week-after-week, month-after-month, and year-after-year (a completely fictitious scenario since I do not wish to share my actual data), then price action itself is suggesting, based on the frequency with which this behavior occurs and the statistically significant odds implying that these are not just random events, that 1.50% deviation from the 100-period simple moving average on a daily chart does indeed constitute a significant level of support and resistance.

    As for who is making the assumption that market makers and/or automated trading algorithms are most likely behind this phenomena—I am. As for what evidence I have to support this assumption, other than the fact that it happens with frequency, regularity and consistency, I have no evidence, which is why I identified it is an assumption—not a conclusion or a fact.
  48. "Precise settings" sounds like overfitting.

    You are overestimating your sophistication here mate.

    If you are "falling in to a hole" on any one day your variance is too high. Fixing any particular 'hole' means you are just one step away from the next big one that you 'didn't see coming'.
  49. Maybe I am over-fitting, but I don't think so. Perhaps if I tried to apply my strategy to stocks, futures, indices or commodities I would agree with you, but it seems to be relatively compatible with all the major currency pairs...time will tell.

    I fell in a hole because one of my parameters was flat out wrong. It was not doing the job I thought it was doing. I fixed it with the correct setting, the one that actually does monitor and reflect what it was supposed to be measuring.

    Being just one step away from the next big hole I didn't see coming is simply an inescapable fact of life. It is unavoidable, so I embrace it as part of the challenge, part of a possibly life-long process of perfecting my "craft" as a trader.

    As for overestimating my sophistication, that might be, but I'm a pretty simple guy with a pretty simple system, and if I'm guilty as charged, I have every confidence that it will bite be on the butt to let me know that this is the case.

    I try not ever to forget that "pride goes before destruction and a haughty spirit before a fall."
  50. EURAUD and USDCHF both decided to reverse direction on me, which saddled me with two rather significant setbacks, not to mention that trading has been relatively slow so far, resulting in somewhat of a shortage of opportunities, so that I was only able to manage a 71% success rate during this first round of daily trading sessions and was unable to equal the amount of gains I enjoyed during peak profitability.

    ScreenHunter_6771 Dec. 11 11.30.jpg
  51. I want to make a study of this trade to test a theory on the most effective way to maximize the amount of profit available from a single asset on a given move (or leg) up or down.


    EURUSD looks like it might be reaching its take-profit target faster than AUDUSD, so I'm going to add it to my study.

  52. On second glance, I noticed that EURUSD does not have the necessary structure to qualify for what I am assessing, so I plan to lock in a handful of pips profits at 1.1734 (if it manages to return to that level) and only give it my attention afterward if warranted for other reasons.
  53. AUDUSDM5.png

    This plan would have worked okay, but I was never in front of my laptop at the right time to re-enter the position.

  54. I’m hoping EURAUD is establishing the foot of what will eventually be a protracted trek northward.

  55. The paid DID initiate a turn north, but unfortunately, it was NOT protracted.

  56. Sounds about right: there was certainly significant overhead resistance, in the chart you posted (not to mention an obvious downtrend). [​IMG]
  57. Are you doing counter trend trading?
    I don't like this Madam Mae trading strategy.
  58. No.
  59. EURAUD turned around at what I call the second level of “statistical resistance” at about 1.5549. Today I’m hoping to see EURUSD (currently at 1.1831) take a protracted trip south, but if not (if it disappoints me like EURAUD did yesterday), I calculate its first level of statistical support at 1.1824 and its second level at 1.1812. Should the intraday tend reverse north in either of these two areas I will exit the trade early to lock in my profit there.

  60. EURUSDM5.png

    Next target is 1.1812 or less:


    Locked in my profits at 1.1812...


    Supreme Trader wrote that he does not like Ms. Mae's Trading Strategy, but that's fine with me. As long as the system enables me to correctly forecast in advance where price is more than likely headed and where there is high statistical probability it will run into support or resistance, others can hate it as much as they like.
  61. The way I see, Madam Mae's strategy focus on catching meagre pips.
    It is not going to work in the long run.
  62. I’m anticipating that EURUSD is going to begin heading north from here.


    And that USDCHF is going to begin heading south.

  63. I’m hoping the tumble taken by USDCAD was a bit excessive.


    And that AUDJPY will begin climbing its way out of this hole.

  64. My style is most closely aligned with...

    Guerrilla Trading
    By Investopedia Staff

    ScreenHunter_6776 Dec. 14 11.53.jpg

    "Guerrilla trading," as the colorful term suggests, refers to the technique employed by nimble traders who dart in and out of the financial jungle in short skirmishes that aim to generate quick profits while keeping risk to a minimum. A guerrilla trader’s defining characteristic is a very short-term trading timeframe that is even smaller than that of a scalper, and makes a day trader look like a long-term investor. Only computerized trading systems such as high frequency systems have shorter trading timeframes than the guerrilla trader.

    Since the objective of guerrilla trading is to make small profits in multiple transactions, its success depends on low commissions, high leverage and, most importantly, tight trading spreads. So while guerrilla trading techniques can be used in any financial market, it may be best suited to foreign exchange trading, especially the major currency pairs that have abundant liquidity and low spreads.

    Characteristics of Guerrilla Trading
    A guerrilla trader’s modus operandi is to make low absolute profits per trade, but to trade multiple times in a session so that the overall gains are substantial enough to justify the risk incurred in such short-term trading. Based on this profile, guerrilla trading generally has the following characteristics:
    • Very short-term trading timeframe: The average trade for a guerrilla trader only lasts a few minutes, and hardly exceeds this timeframe. This is because the longer the time spent in a trade, the greater the risk that it can go against the trader.
    • Small profits, even smaller losses: The guerrilla trader is quite content to make only 10 to 20 pips on a forex trade, compared with a scalper who may have an objective of more than twice this amount, or 25 to 50 pips. This means that the guerrilla trader cannot afford to risk more than a few pips on a single trade, with the maximum loss capped at levels as small as 5 to 10 pips.
    • Large number of trades: Successful guerilla traders may execute more than 20 to 25 trades in a single trading session when conditions are conducive to such frenzied trading. This is generally likely to happen when important economic data such as the monthly U.S. payroll numbers or trade data is released.
    • Technical analysis: Due to its short-term focus, guerrilla traders usually rely on technical analysis for timing their trades, and are adept at using tick charts or 1-minute charts to pinpoint entry and exit points for their trades.
    • Low commissions and spreads: Because of its high trading volume and low-return nature, guerrilla trading is heavily reliant on low commissions and tight trading spreads. Guerrilla traders therefore limit themselves to the major currency pairs where liquidity is assured, rather than exotic currencies that may have greater profit potential but significantly lower liquidity.
    • Experienced traders: Guerrilla trading is usually the province of experienced traders who possess enough trading acumen to have survived for a number of years. It is not recommended for novice traders, as such rapid-fire trading may wipe out their risk capital in a few sessions.
    • Calculated risk-taking: Since guerrilla traders engage in calculated risk-taking that entails having a stop-loss of only a few pips per trade, they may often choose to stay on the sidelines when the markets are too volatile and the risk of loss is too great.
  65. ScreenHunter_6786 Dec. 18 11.05.jpg

    I’m still fine tuning my system, even after two weeks. However, this last modification looks like it has the potential to remove the undesirable outcome of my average loss trades always being greater than my average profit trades, especially since my two main losses this last round of sessions occurred while I was asleep, and had I been awake to manage ALL of my trades, I WOULD have exited BOTH of those positions while they were still profitable.

    That would have given me six out of eight winning trades, which is close to my goal of a minimum 80% success rate. In any event, my takeaway here is that this is definitely not a system where I can simply place my trades and walk away—at least not if I want maximum performance.
  66. ScreenHunter_6788 Dec. 19 09.57.jpg

    I’m hoping today’s adjustments will be the last significant modifications I make to my setup and that going forward will merely entail sharpening how I use the various components. The changes led to my average loss trades once again besting my average profit trades by more than double, so that’s where I will initially be focusing most of my attention.

    What happened today is beginning to approach the kind of success I’ve experienced in the past, and reflects the potential I believe this newer, theoretically “multiplied-opportunity” producing method offers. Though it took me a couple of weeks, I’m thinking maybe I’ve finally just about worked out most of the bugs...but only time will tell.
  67. A couple of days ago I wrote the Ms. Mae’s Trading Strategy is not a system where I can simply place my trades and walk away if I wish to maximize performance, and today, which was a losing day, certainly bore that out.
    ScreenHunter_6798 Dec. 21 09.42.jpg
    Everything was fine until I retired for the night. The problem was, I assigned preeminence to one set of factors when I should have assigned it to another. The reading(s) that I thought represented the most dominant aspect of price action was actually subservient to another that I had erroneously assigned less importance. The result was that four positions turned against me big time as I slept, turning my respectable winning day into an absoute monster of a loser.

    When I awoke and saw my folly, I exited the remaining positions I had entered based on the incorrectly assigned priority, and entered new ones in accordance with my fresh insight.

    Yesterday’s initial experimentation (which consisted of more than 45 trades) did not lead to the modification of any additional indicators, but did involve combining those from two separate setups on a single chart such that they complemented one another. I am still in the process of finalizing the corresponding rules, but once complete, the percent of profit trades should theoretically be significantly higher (it was approximately 63% today) and likewise the ratio of average profit trades to average loss trades, which was an absolute disaster this round of sessions.

    Combining the two setups has resulted in a rather cluttered look , but each line serves a distinct purpose, with which I am very familiar (I’d better be, since I originated the system), so this does not really present much of a problem for me.

    Multiple Simple Moving Average Envelope (Ms. Mae) Trading Strategy final setup:

    The example pictured above illustrates conditions under which a trader would be wise to stay out of the market.

  68. Nobody's going to argue about that one: it's usually best to stay out of the market when you can't even see the price on your chart. [​IMG]
  69. :D
  70. I have a handful of discrete thoughts that I’m hoping I can paste together in a manner that makes them less disjointed than they currently seem in my head.

    ScreenHunter_6807 Dec. 22 22.48.jpg
    (I have come to trust these key moving averages and they are not likely to ever change.)

    I believe it was on Thursday—the day I made far more trades (70+) than usual—that I claimed to have run into trouble due to giving priority to a factor that was actually subordinate to one I had erroneously assigned less importance.

    Yet, the only reason Thursday's disaster was able to occur was because I was not managing my open positions, seeing as how I was in need of a few hours sleep. For I am convinced that price action lets me know the moment the intraday trend has turned against me, and it is my practice to exit positions immediately upon seeing this happen rather than wait for price to hit my stop loss (but I cannot do this while I am asleep).

    It is this trusted “reading” (which I have now given the prominence it deserves) that makes these well-timed exits possible. However, on days like Friday, when there is practically no movement (in the Forex markets) over all three of the sessions, this particular measurement becomes unstable and problematic.

    And to make matters worse, the possible solution I was entertaining to deal with the problem of having just four trades erase all my profits from the previous 50 trades, or my average loss trades bettering my average profit trades day after day (which was to increase my typical reward-to-risk ratio from 1:1 to 2:1, 3:1, or possibly even 4:1) would, under such circumstances, be moot.

    In analyzing the cluttered “final” setup I posted on Thursday, I might have found my solution. You see, I removed all the envelopes and focused on the most essential moving averages. In fact, one of my formerly key moving averages was ultimately deleted due to its falling between two measurements that really mattered the most.

    What was left is what you see above, minus the yellow MA.
  71. Your chart is extremely messy and untidy.
    That is why I don't like Madam Mae's strategy.
  72. GBPJPYH1.png

    That Ms. Mae’s Trading Strategy enables me to accurately diagnose the direction of the intraday short-term trend under “normal” conditions is something about which there is no question in my mind.

    However, if I hope to at some point be able to enter positions and walk away, confident of profiting in the long run without having to micromanage my trades due to timing my entries in a manner that allows for a minimum risk-to-reward ratio of 2:1 (if not 3:1 or 4:1) so that, instead of collecting 5 to 10 pips at a time, I am reaping 10 to 40 pips per trade, I will need to become much more strategic about when to act and when to remain dormant.

    Looking at how most of the foreign currency pairs are currently structured, now seems to be a period for sitting on the sidelines. The only exception is GBPJPY, which, according to my read on conditions as of Friday’s close, demands an ambiguous forecast of bearish behavior. So depending on where it opens next week, I might opt to sell the pair with a 15 pip stop loss and 30 pip take-profit target.

    (Correction: CHFJPY, GBPUSD and USDJPY currently look extremely bearish as well.)
  73. ScreenHunter_6833 Dec. 26 07.21.jpg

    I could have sworn that before Friday’s close I made sure I was out of ALL my positions, but the fact of the matter is that this was not the case. Because I was still short AUDJPY, I started off the week seriously “in the hole!”

    To make matters worse, I enacted “The Solution” I wrote about on Friday, only to have the market makers send several assets careening in the “wrong” direction three hours after this week’s open, so much so that NZDJPY and NZDUSD put me even further in the hole by hitting my stop losses.

    (Ironically, I actually could have profited from the AUDJPY trade due to this occurrence, but I had already exited my position by then.)

    Thankfully, all my other trades (and reentering NZDJPY and NZDUSD long positions) were able to return me to profitable territory, so today’s results suggest that Friday’s “solution” might have some validity after all and is deserving of further testing. Feeling that a bird in the hand is better than two in the bush, I locked in all my profits while I had the chance, before most of my positions hit their take-profit targets, so that my average profits were once again smaller than my average losses.

    I trust that if “The Solution” is able to prove itself again and again, I will eventually remain in my trades until the very end (having gained confidence in the strategy) and that this will correct my lopsided (almost 1:2) reward-to-risk ratio(s).

    Subsequent to the above-mentioned strategy, another idea occurred to me that also appears to have some validity, as demonstrated by NZDJPY and NZDUSD. It is illustrated by the trade I am in now, having purchased USDCHF this morning (see the image below).


    The ideal setup occurs when the red oscillators and green oscillators are on one half of the (proprietary) channel in the lower panel, and the white oscillator spikes on the other half. The conditions pictured here indicate that the day-to-day trend (the red oscillators) is bullish. (It would be super if the overall intra-day trend [the green oscillators] was bullish as well, but presently it is not.)

    That the white oscillator has spiked on the side of the channel opposite the day-to-day trend means that the odds of the asset continuing south to stop me out prior to hitting my take-profit target are statistically relatively slim (and would be even smaller if it were opposite the overall intra-day trend as well). This strategy has the potential to be much more profitable than the above-mentioned solution per each individual trade and to have a much higher success rate, but such setups are likely to occur less frequently, so I will need to decide if I wish to use this technique exclusively, or in tandem with the above “solution” as well.

    I believe I have pretty much gathered all the information I need, or am likely to glean, from this little jaunt in my overall quest to perfect the art of trading foreign currency pairs online.
    ScreenHunter_6836 Dec. 27 06.59.jpg
    My previous approach to guerrilla trading saw me executing an average of about five trades per day, with some days lacking any trades at all, and others resulting in a maximum of about ten. My success rate was around 90%, and it was not uncommon for me to put together a string of consecutive days in which there was not one single loosing trade. The typical amount of profit I realized per trade was approximately five pips.

    My current approach to guerrilla trading: Ms. Mae’s Multiple Simple Moving Average Envelope Strategy, sees me executing an average of about 20 trades per day, with some days resulting in as few as seven or eight trades, and the maximum to date being more than 70. The typical amount of profit I realize per trade is approximately eight pips, but it is not unusual for that to rise as high as 13 to 20 pips. The percentage of trades averaging near the upper end of this profit range is likely to increase as I come to feel more confident about this emerging style of trading.

    My daily success rate currently fluctuates between 70% to 80% on average, so one of my primary goals going forward will be to hone my decision-making process so that this climbs nearer to (or reaches) 90% on a regular basis.

    The last major change I made to my setup(s) was on Thursday, December 21, 2017, when I realized I had assigned a prominent role to a simple moving average that was not doing the job I incorrectly ascribed to it. I reassigned the job to the correct moving average and have not made a mistake in diagnosing the direction of the intra-day trend since then.

    In reviewing my most recent forecasts at “South Winds, Red Skies & Clouds in the East,” I am completely satisfied with my ability to read the Forex market’s “atmospheric conditions” and anticipate with a good degree of reliability the most likely trajectory of the exchange rates in the near future.

    I was happy enough with Thursday’s busy, messy, cluttered setup, but removed all the simple moving average envelopes from the chart to perform an analysis that I hoped would deal with my lopsided reward-to-risk ratios.

    I am still using the resulting chart, which I posted on Friday, December 22, 2017, except that I reintroduced two of the simple moving average envelopes, though this is still much fewer than were on the chart originally.

    The technique for which I use this setup, which I was calling “The Solution,” I will now refer to as “Method 1.” At present, my preference is to apply this setup to 15-minute charts.

    Subsequent to Method 1, I came up with the idea for a “spiking” chart, which I’m now calling “Method 2,” the image of which I posted yesterday. My current preference is to apply this setup to 1-hour (60-minute) charts.

    My favorite trade is to wait for a spike in the 60-minute Method 2 chart, and then switch to a 1-minute chart to time the exact moment I should enter a trade to get in on a genuine reversal in the direction of the overall trend, maximizing the profitability of my trades while avoiding head fakes, and avoiding attempts to catch a falling knife.

    My second favorite trade is to use the 15-minute Method 2 charts to enter positions when an exchange rate is resuming its progress in the direction of the overall trend after a minor pullback or after consolidation.

    I would like to see my success rate return to 90%, but as long as I make a profit each day, I will be happy.

    (Anecdotal notes on why I believe the Multiple Simple Moving Average Envelope Strategy is working for me...)

    ScreenHunter_6846B Dec. 29 00.32.jpg

    I am not some kind of mathematician or highly trained finance professional, but rather, a simple retail trader whom I suspect the Lord has favored to develop a system for trading foreign currency pairs based strictly on statistical odds/mathematical probabilities. I have lost all interest in learning any other type of strategy because there is no other strategy which, from my point of view, is preferable to the one I use.

    My system relies on an ongoing analysis of the relationships between: (1) key simple moving averages; (2) the degree to which price (the exchange rate) is typically willing to separate itself from these particular moving averages under various conditions, including low liquidity and highly volatile markets; and (3) reoccurring price patterns.

    It is my belief that I have identified a carefully selected set of moving averages that accurately reflect actual price direction with exacting precision—moving averages that do not include your standard 10-, 20-, 50-, 100-, or 200-period simple moving averages; but that closely follow the most representative options for conveying price direction—a task tantamount to running thousands of computer models to compare how closely each of a wide variety of individual moving averages comes to reflecting price’s ultimate destinations, settling on the ONE moving average per given time frame that BEST suggests price’s true intentions.

    I also engaged in a serious and thorough study to determine the maximum amount of deviation AWAY from these key “guideposts” that the exchange rates are typically able to tolerate before they are forced BACK toward the mean.

    The result is a system that enables me to use a validated set of precise, trustworthy indicators (moving averages and moving average envelopes) to forecast what the exchange rates are likely to do in the near future—based on what they have done again and again, day after day, week after week, month after month, and year after year—with an extremely high degree accuracy.

    Though I have no means by which to confirm whether the following is true, I suspect that this phenomena is due to market makers, automated trading algorithms, or both, manipulating price action at key levels so that I find myself witnessing the various exchange rates executing the same types of recognizable behaviors with great frequency, regularity, consistency and reliability.
  76. ScreenHunter_6860 Dec. 30 11.41.jpg
    Taking my strategy on a 14-day free trial at Collective2.com to see what kind of a printout I get by the last day.
  77. ScreenHunter_6868 Jan. 01 22.05.jpg
  78. I don't like Madam Mae strategy.

    There are far too many flaws in the way summary statistics is being presented.
  79. The following was my last goal which, God willing, appears to have been reached, so this is the final image from my MT4 platform, and any other screenshots for the next two weeks will be from Collective2.

    ScreenHunter_6869 Jan. 02 01.37.jpg
  80. Everything was going “peachy” on Tuesday until I went to bed for the night and about four of my stop losses were hit. (I believe my system gives me a very accurate reading on the direction of price, so I normally micromanage my trades manually, exiting positions as soon as the intraday trend turns against me rather than waiting for my stop losses to be hit. I find this to be a very profitable approach, but unfortunately, I cannot do this while sleeping.) To recoup my losses, I had to go for short bursts of multi-lot trades the next day that I could manage while awake. In that this worked out relatively well for me, it continues to be my primary strategy (at least for the time being). This style should also help improve my % Profitable, which sank from 75% to 62%, and which I would like to see nearer to or above 90%. (I also need to catch up with and pass the S&P 500, if I can.)

    ScreenHunter_6881 Jan. 04 09.09.jpg
  81. ScreenHunter_6893 Jan. 05 09.31.jpg
  82. I’m no longer spending much time with this journal anymore because, at this point, there aren’t a lot of insights (if any) coming to light with respect to my system. It’s already verified its reliability and accuracy in my eyes, so now I just use it.

    However, from time to time, in reviewing past setups in the context of what I’ve learned since I created them, I rediscover some aspect of a previous chart that I wish to include in those I’m using presently.

    I stopped looking at daily charts months ago because they have little relevance when it comes to my style of intraday trading. The same is pretty much true of hourly charts as well. But in taking another look at them and contrasting them with some of the ideas I’ve formulated in the meantime, I was struck by the potential of using four-hour charts to monitor the weekly trend, which would provide a useful context in which to interpret the day-to-day trend I include on most all my charts today (i.e., each of the time frames I monitor regularly).

    Consequently, at least for this week, I want to once again render my forecasts in writing so I can go back and check to see whether implementing the use of four-hour charts in the way I’m envisioning is truly beneficial, or merely a notion I had that seemed promising, but that did not pan out under real-world conditions. (I will record my forecasts tomorrow barring any unforeseen developments.)
  83. You sound like a candidate for graduation to futures trading, if $50,000 in cash is what you have on hand.
  84. This is a “hypothetical performance” account. I will go back to trading my $100 OANDA live Forex trading account as soon as I replenish my balance, after having withdrawn the money in order not to leave anyone out during the gift giving at Christmas.
  85. AUDJPY: The weekly trend has been bullish ever since December 1st of last year. The last time there was an ideal setup for entering a long position was on January 3rd, when the daily trend rejoined the weekly trend after a temporary pullback/consolidation.

    AUDUSD: A bullish weekly trend and moderate climb in the daily trend equaled a number of opportunities to enter profitable trades last week every time price dropped below the daily trend line.

    CADJPY: This bullish pair offered me a profit on Friday from entering a successful short position when it hit statistical resistance in the form of the top of the maximum weekly price range. It now has room to continue a northbound trajectory, but also has plenty of room to continue falling.

    CHFJPY: This bullish pair also has plenty of room to rise AND plenty of room to fall.

    EURAUD: The weekly trend has been bearish ever since December 11th of last year. The daily trend rejoined the pair’s downward progress on January 3rd.

    EURUSD: At 1.2030, the structure of this pair suggests that buying at this level offers significant reasons to hope for a successful trade.

    EURJPY: At 136.00, this pullback in the daily uptrend might turn out to be a decent opportunity to enter a long position. (The pair has been headed north for the past three weeks.)

    EURGBP: The weekly trend has been northbound for three weeks, but the daily trend lacks momentum then keeps slipping back into or near bearish territory. In fact, for the last 2½ weeks, the pair has been relatively range bound.

    GBPJPY: The weekly trend bounced off minor resistance on Friday and has plenty of room to continue falling, but the fact of the matter is that both the daily and weekly trends are presently extremely bullish.

    GBPUSD: The daily trend rejoined the bullish weekly trend approximately 12 to 24 hours before Friday’s close.

    NZDJPY: This pair has been literally pushing the envelope (up against the top of the daily price range) for the last 24 hours, and finally pulled back a little during the last 4 hours of trading last week.

    NZDUSD: This pair is in essentially the same situation as NZDJPY.

    USDCAD: This extremely bearish pair gave me the opportunity to profit from a long position on Friday when it dropped below statistical support in the form of the bottom of the daily price range. At 1.2414, it now has room both to continue rising or to resume its southbound trajectory.

    USDCHF: At 0.9745, the daily trend looks like it is trying to rejoin the bearish weekly trend.

    USDJPY: This pair has been range bound for four or five weeks. As a result, the weekly trend line is essentially useless—much too lagging to paint an accurate picture of what is going on with price. If the daily trend is going to continue cycling up and down, the next move to make would seem to be entering a short position as soon as price drops back below the daily trend line.

    (All future forecasts will appear under my "South Winds, Red Skies & Clouds in the West" journal/thread ONLY.)
  86. I suffered a series of heavy losses due to not using my own system correctly!

    ScreenHunter_6924 Jan. 08 10.03.jpg

    I obtained dramatically different results once I made a simple mid-course correction, so I’m hoping to use this “lesson learned” to finish the last five days of my trial period strong...

    ScreenHunter_6925 Jan. 08 10.04.jpg
  87. Based on today’s P/L it should be theoretically possible for me to realize a 4% gain in a single day if I avoid putting together a string of bonehead moves like I did last night (which I ought to be able to accomplish relatively easily by simply using my strategy correctly) so that will be my goal for tomorrow.

    ScreenHunter_6928 Jan. 08 16.25.jpg
  88. ScreenHunter_6931 Jan. 09 07.51.jpg
  89. ScreenHunter_6939 Jan. 09 11.19.jpg
  90. The five or six reversals in direction and long shadows observed on the 60-minute USDCAD candlestick chart below pretty much sums up my general impression of the Forex market over the last 18 or so hours. Frankly, I couldn’t deal with it, and the idea I had for possibly mastering all this hectic activity made things even worse. I was so close to getting back to break even…but now it will be a “miracle” if I somehow managed to pull that off over the next two days.

  91. Reaching breakeven is, once again, back within the realm of possibility! The idea I had for mastering days in which price action is especially hectic did an amazingly good job of teaching me what NOT to do, and on top of that, it turns out that putting myself in such a deep hole yesterday was actually a blessing in disguise.

    By maneuvering my butt into a corner with my back up against the wall, I was suddenly placed in a position that forced me to figure out how to milk the absolute maximum performance out of my system to totally optimize my results.

    ScreenHunter_6940 Jan. 11 07.57.jpg

    Though I admit that what I’m doing here amounts to little more than fooling around, the subtle nuances I have learned in the process to help shepherd me from being an apprentice of my system to a seasoned master is almost certain to prove beneficial when I go back to trading (seriously) my live account in a month or so.
  92. The short position I still had opened when I left the house to run errands yesterday “should” have put me at breakeven. But whereas all the other euro pairs (EURAUD, EURGBP and EURJPY) fell considerably after reaching their zeniths, EURUSD only dropped to within a single pip of my take-profit target, and then floated away, never to return again!!!

    Had I been home, I would’ve locked in my roughly $600 of profit right then and there, but by the time I got back, EURUSD was vacillating between a positive and negative 100 to 200 dollars worth of P/L.

    When I finally decided to go ahead and accept a measly $100 gain, the rate STOPPED dropping, and then when the Asian market opened to begin the next round of sessions, EURUSD rose to a NEW high (unlike all the other euro pairs) stopping me out at yet another VERY significant loss.

    So, having FAILED to even reach my secondary goal (or more like my tertiary goal), this morning I concentrated on reconfiguring my charts (see below) in accordance with the nuanced adjustments I made to my approach...

    ScreenHunter_6942 Jan. 12 11.43.jpg

    I was able to make six “serious” trades after that, at which point the market was relatively dead, so that will conclude my trading for the week.

    ScreenHunter_6944 Jan. 12 12.31.jpg

    The risk-to-reward ratio was essentially one-to-one, which ain’t all that bad for me personally, and which I’m perfectly happy to accept if my winning percentage remains above 80%.

    As for Collective2, I don’t like their platform. It’s too sluggish for me, it actually failed to execute one of my trades when I clicked on the trade button (the “busy” indicator simply continued spinning around and around forever), and it would repeatedly log me out of the website for no reason at all—one time when I was right in the middle of filling out a trade order.
  93. More better...

  94. Even more better?

    ScreenHunter_6945 Jan. 13 00.24.jpg