Thursday / March 25, 2021 / 8:40 PM PST Here is yet another newly-cooked-up strategy, tactic, or technique that might help you avoid being stopped out of positions when employing the low-maintenance "swing-style" of trading you seem to be evolving or morphing into as of the end of last week and beginning of this one.
Thursday / March 25, 2021 / 9:10 PM PST This too looks like it might have some potential. If the purple trend line is sloping downward, enter short positions when the candlestick formation reverses direction above the black indicator. If the purple trend line is sloping upward, enter long positions when the candlestick formation reverses direct below the black measure...
USDCHF did indeed reverse to the north, but not until crawling just a little bit lower than the forecast "buy zone" (to a level of previous support).
Friday / March 26, 2021 / 7:55 AM PST UPDATED EMPHASIS: For the ultimate direction of exchange rates—from more of a swing style perspective—rely on the twelve-day baseline rather than the six-day baseline (which is too sensitive to price fluctuations to serve in this capacity, yet also turns out to be too lagging to be assigned the significance it was previously given). (By the way, the 36-day baseline is almost totally irrelevant here, and is of interest if and only if you care to evaluate in which direction rates are headed from year to year.) Direct the focus that had been pointed in the direction of the six-day trend to the two-day baseline instead, and always evaluate price action in light of the slope of the two-day trend (not to mention the two-day price range, which turns out to be perhaps the most critical price range of any). Do not execute any trades until reversals have been confirmed by the eight-hour baseline. Be careful when doing so, however, if not simultaneously supported by the slope of the one-day and/or two-day baseline(s). Nonetheless, do not wait for such confirmation in that these two measures are too lagging, so that delaying entries until receiving the okay from one or the other will often prevent executing trades in a timely fashion. Just be prepared to exit (with available profit) quickly should there be a change of sentiment in the intraday (shorter-term) trend. You should also be prepared to reverse direction should the eight-hour baseline turn around to align itself with the two-day baseline if the latter measure never confirmed the corresponding entry. Especially if this decision is supported by the 1½-day baseline and the black indicator referenced in Post #282. (But don't forget the fact that there is less chance of this happening once the change in bias has been confirmed in the manner described in Post #281. Also, note that the updated color scheme now in use displays the 1½-day baseline in dark green rather than purple, as it appears in Post #281.) It is hoped that the above protocol will help secure performance results similar to today’s (or even better, God willing) on a more-or-less regular basis...
...from 1.40% to 2.30% deviation. It's also important to monitor the four-hour price range at about 0.40% deviation, and the 90-minute price range from 0.20% to 0.40% deviation.
Wednesday, March 26, 2021 Updated NPP Explanation (The last six paragraphs have been revised.) Copyright © 2021 Fred Duckworth Numerical Price Prediction is an approach to trading foreign currency pairs that I came up with based on five biblical principles: The first being to test everything and hold fast to only those things which prove to be valid and reliable. The second was a belief that, as in life, when you have a system operating at peak performance, more often than not, it's at least in part due to the interactions between its various components evidencing strong, healthy relationships. The third is the fact that the best of plans are typically established in the presence of a multitude of counselors. The fourth is the necessity of being able to rightly interpret the signs of the times. And the fifth is that, once again, as with life itself, positive outcomes are usually the result of having made good choices. The first principle led me to reject the use of almost all common indicators, such as MACD, RSI, CCI, stochastic oscillators and the like; along with any approaches involving harmonic patterns, Elliot waves, pivot points, Fibonacci ratios and whatnot. Instead, I attempted to rightly interpret the signs of the times by devising 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 was 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; I evaluate the synergy (or "relationships") between such factors as typical price ranges, reoccurring chart patterns, horizontal support and resistance, trend lines and market structure (which is to say, "a multitude of counselors that proved to be valid and reliable" over several weeks and months) all in multiple time frames—with the result being a graphical depiction (computer model) of current conditions that I could then use to help me make precise, well-timed trades (or in other words, "good choices based on rightly interpreting the signs of the times"). 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. So, the notion that there are no "best" moving averages to use when trading is not one to which I subscribe. Again, at the heart of my system is the use of carefully selected baselines which I calculated in the manner explained above. (By baselines, I mean painstakingly selected moving averages able to rightly discern whether price is rising, falling, or maintaining its altitude within a particular time frame.) However, it is not enough, in my opinion, to stop at merely determining which are the best moving averages to use when trading charts of a given time frame. To trade with the clarity and precision I desired required me to carry out one final step in which I assigned a specific temporal value to each individual baseline and its corresponding or associated price-range envelope—to answer the question: 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? Determining the specific moving average that best represented price movement for each of the major time intervals along with their corresponding price range envelopes seemed to be the final step I needed to carry out in order to complete the development of my trading system to my full satisfaction. 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. As of today, when putting this system into practice, I switch back and forth between daily, 240-, 60-, 15-, and 5-minute charts to get different perspectives, even though all of these time frames are basically configured with the same relative/corresponding measures. I rely on the 36-day baseline to gauge in which direction price is headed from year-to-year, with the outer limit of the corresponding price range set at 10% deviation. However, to monitor actionable price movement from a swing trading perspective, I have to drop down to the twelve-day baseline, though I'm generally looking to trade in the direction of the slope of the eight-hour baseline. Even so, there are actually four different categories of trade setups of which I might take advantage: If rates veer off to the outer limits of the 2-day price range, there is a high probability that mean reversion will come into play, in which case, it makes sense to enter positions as the 4- and 8-hour baselines reverse direction such that price begins to regress back toward the 2-day baseline. This is especially true if price is at the same time switching from a trajectory that was contrary to the slope of the 12-day trend to instead flow in harmony with it; even more so if the 1-day, 1½-day, and/or 2-day baselines join in the reversal. (Completing such a maneuver can sometimes take as long as two days, if not longer.) If the 8-hour baseline is sloping in a given direction, and candlesticks cross to the opposite side of this measure, look to enter positions as the 40-, 60-, 90- and 120-minute baselines reverse course, thereby initiating a return of price to the side of the 8-hour baseline that matches its trajectory (assuming of course that its slope has remained unaffected). If the 36-hour (1½-day) baseline and the 4-day temporal trend line (i.e., arbitrating measures) are sloping in a given direction, and candlesticks take off in the other direction so that they begin painting on the opposite side of these indicators, look to enter positions as the 40-, 60-, 90- and 120-minute baselines (or 8-hour baseline?) reverse direction, thereby initiating a return of price to the side of the "arbitrating measures" that is aligned with their trajectory. And finally, if the 2-day (1½-day and 1-day) baseline(s) is/are sloping in a given direction and price pulls back to the "inside" limit of the 4-hour price range and/or the 10-hour temporal support/resistance level, enter positions as price is rejected at these levels, as conveyed by reversals in the 40-, 60-, 90- and 120-minute baselines—provided that the 8-hour baseline is aligned with the 2-day (1½-day and 1-day) baseline(s). (The one exception to this conditional caveat is when rates are returning to the 2-day baseline under the influence of mean reversion—especially if this move is in agreement with the slope of the 12-day baseline, as described in the first setup above.)
By the way, the upper and lower bands of the 4-hour price range confirm a bullish bias above and a bearish sentiment below the "arbitrating measures," as described in Post #281.
Saturday / March 27, 2021 / 9:00 AM PST Use this new five-minute chart configuration as a fifth category of trade setups of which you might take advantage, with the "arbitrating measures" serving as a "chop zone" of sorts, and the 5-, 8-, and 14-hour temporal support/resistance levels as "launch pads" for entering profitable positions based on the slopes of the corresponding baselines:
Sunday / March 28, 2021 / 5:30 AM PST I have no forecast for this week (about a month later) either. Everything is conveyed in the charts, so there's nothing for me to do beyond simply look at them. And now that I've made the adjustments (since March 1, 2021) for implementing more of a swing style approach to trading, I don't know that my current setups are likely to change much going forward, if at all.
Saturday / April 3, 2021 / 9:15 AM PST After re-evaluating everything I'm doing now, I again wrote out a description this morning, which turned out to be pretty similar to what I wrote last Wednesday. However, there are a couple of things I want to make sure I highlight for myself... While the two-day price range maintains its importance, the 90-minute and four- (or five-) hour price ranges do not. This is because the roles they filled are better handled by the 14-hour temporal support/resistance levels. (But, don't forget what you wrote in Post #287—that the upper and lower bands of the 4-hour price range confirm a bullish bias above and a bearish sentiment below the "arbitrating measures," as described in Post #281.) Other than conveying the general directional flow of price, about the only thing the eight-hour price range is good for is defining where support or resistance might begin to have an effect on the half of the price range that MATCHES the trend. (It becomes irrelevant on the other half of the price range, the half that is AWAY from the trend.) Yes, the eight-hour baseline rules, but the two-hour baseline confirms "actionable" intraday price action. Consequently, when these two measures are misaligned, the decision-making process can get a little messy, so you should keep this in mind and monitor conditions closely when this is the situation.