This simple idea might be a better one: If the weekly baseline is sloping upward, enter long positions when price bounces off the bottom of the daily price range below the weekly baseline and exit when it hits the top of the daily price range OR when it begins to retreat. Do the opposite if the weekly baseline is sloping downward.
Sunday / September 6, 2020 / 5:15 PM PST I'm going to try just scalping a couple of pips at a time based on the short-term (hourly) trend and price range while I wait for the "ideal" setups I'm seeking, and then when I get the designated structure...go for the "kill."
At 0.8956, EURGBP is just 30 pips away from what I calculate to be the ideal price for entering a short position. However, at its present level, the plan from Post #151 calls for me to sell the pair as soon as the hourly trend turns bearish with a take-profit target of 0.8889.
Having climbed as high as 0.8992, I am hoping that EURGBP heads south over the next few hours. If this is what actually unfolds, my projected ideal level for entering a short position (0.8986) will have been off by only six pips...
Monday / September 7, 2020 / 8:40 AM PST EURGBP climbed back up to 0.8993, so having now entered a short position, I was off by seven pips (unless the pair does the same thing again and stops me out). Shorting USDCAD was my first trade using this methodology based on the newly added simple moving average, which I'm regarding as a weekly baseline... As of August 2017 I had pretty much concluded that anything outside of intraday trading was beyond my pay grade. But I feel I'm seeing evidence that the interpretation of price action based on these newer longer-term parameters might have some validity. I am therefore making other trades in my Forex.com demo account (in addition to the one above) based on this system, but using a position size of one Lot instead of four. It has been my modus operandi to shoot for a one-to-one reward-to-risk ratio at best, so I will be interested to see if these trades employing three-to-one reward-to-risk (more-or-less) actually pan out. CORRECTION: It has only been two months.
NOTE: With this approach you will need to update your take-profit targets as price ranges adjust to the most recent data/market structure.
Wednesday / September 9, 2020 / 2:20 AM PST You were stopped out of EURGBP, which has now climbed so high that its weekly baseline has transitioned from bearish to bullish. (By the way, the absolute earliest point you are permitted to enter a position is when the instantaneous moving average crosses over the red moving average, as defined in your notes dated today. However, what is probably a safer and is most definitely a more conservative trigger signal occurs when the red moving average crosses over the blue one—again, as defined in your notes dated today.) Take heed that the next signal triggered between 4 and 5 AM GMT today when AUDJPY climbed to 76.48 after having fallen as low as 76.10 three hours earlier. But, just before the market makers took the rate higher five hours after that at 10:22 AM, they pushed price all the way down more than 20 pips to about 76.25 shortly after 9 AM, which is an example of why you absolutely must give yourself at least 30 pips leeway/breathing room to avoid being stopped out when the big multinational financial institutions go looking to take out stops just before they move rates in the direction they actually want to go...
END OF THREAD My contributions to this thread/journal are over in that I've determined the most sensible way to use this system such that drawdowns are virtually eliminated and the percentage of successful trades is maximized is to do so with a one-minute to two-hour horizon while letting the situation/conditions of each trade dictate how much of a return to seek rather than set some predetermined number of pips.
THIS THREAD IS REOPENED I recently commented that daily analysis is not all the relevant when it comes to how I've ultimately settled on trading NPP and therefore have no plans to add to that topic. I had no plans to add to this topic either, but in deleting almost all my one-hour chart setups, the single configuration I saved got me thinking. Even though I'm trading with a one-minute to two-hour horizon, I think it might still be possible to use the four-hour baseline to uncover potentially monstrous trade opportunities, and have therefore returned to this thread to analyze whether this is so. Unfortunately, there is only one asset at the moment properly structured to begin my evaluation. It is USDJPY, but this pair is a horrible specimen in that it has not maintained a trend beyond one or two days for some time now and it has been range bound for more than two weeks! I'll go ahead and enter a long position and then see if it climbs from 105.48. But, there is a very strong possibility this "joker" will simply turn south and pull the four-hour baseline down with it. UPDATE: In fact, I just moved my take profit target to try to exit this trade with just a half-pip's worth of gains in my pocket. With the two-hour baseline already bearish and this pair's haphazard behavior, I think the odds of the above-described plan turning out well are almost nonexistent, and in fact, I believe I might even have to eat a small loss on this one. SECOND UPDATE: Well, at least I'm not in the red yet... However, EVERYTHING is bullish except for the two-hour baseline. So, if USDJPY manages to pull that measure upward as well, I'll go ahead and buy the pair again at that time.
Tuesday / October 13, 2020 NPP FOUR-HOUR BASELINE STRATEGY AUDJPY and particularly AUDUSD are setting up nicely—especially if they keep climbing. I'll try to sell them as soon as the hourly baselines turn south, if ever. USDCAD has been attempting to turn north for two or three days now. I'll go ahead and buy the pair since I have no idea when it might break free, if at all. If it does however, I'll want to be there when it happens.