We turn the system off, and trade discretionary. just like the previous posters attachment, peace of cake!
Then again, it could have been a loser for just about ever and just started working recently. Here's the last backtest I did yesterday over the life of the EURUSD. Sobering to say the least...
-------------------------------------------------------------------------------- Quote from jack hershey: You point out two principles. Any ATS that is in all the time on right side of market Will have subroutines that deal with this. Generically these scripts are referred to anti- whiplash. -------------------------------------------------------------------------------- I guess what I'm asking is how do these scripts deal with this because right now I don't see how this model could be profitable outside of very trendy markets. Even looking at the chart the OP provided us with, there are still instances of this happening all the time. "how do these scripts deal with this". The scripts deal with this by pointing out the condition at its inception (by doing monitoring and analysis). Then, since you know what is going on, you make decisions and take timely action. By always having a complete context, you move level by level through the various stages of refinement. This is a one time activity (biulding a way to alwys have a complete picture) that then applies to markets as a strategy with appropriate tactics for all occasions. In your later post you annotate a chart that points out the market is not always trending. Other than what you worked through may also be considered. By examining more of the context, a trader gets to know better what is going on. -------------------------------------------------------------------------------- The second principle is recognizing that "trending" has two characterisitcs and that non trending also has two characterisitcs. So the OP is only considering 1 of 4 time based possibilities for trading. -------------------------------------------------------------------------------- What are said characterstics? The designations H and L point to what most people look at. It is very difficult to give consideration to what is going on with this mental orientation. As you say years can go by without any change in intellectual orientation regarding dealing with the opportunity at hand. How to understand your yellow and pink lines in a context that is not H and L (or up and down) is what I am emphasizing. When such characteristics are considered your existing issues go away. Below I added the trend characteristic annotation. In my next post I will add the nontrend characteristic. In my last post with the teo annotations available, I will compare and contrast your orignial annotation with my two and that will enable me to define the characteristics from your orientation (up and down)going to my orientation (left and right).
We are dealing with four characterisitics and two are shown by the green lines on my trending chart. The orange boxes deal with the two characteristics of my non trending chart. Notice that where your issues lie (losing trades) are in the orange boxes. Notice that the 1 out of 4 trades that work for the OP are OUT of the orange boxes and, as you will see, the green left and right lines characterisitcs contain the intellectual reasoning result desired. I will go further in the next post by proceeding form the general to the specific.
To go from an up and down orientation your need to slide a line from RIGHT to LEFT letting the line become anchored against anything it hits. As you see the thinnest green line first anchor on the top price line it meets first as you slide more to the left in the direction of the bold arrow. As progress in made other things become the anchor and the line being slipped to the left is made thincker to make this point visually. I am hoping you look at the chart less from an up and down orientation and more from a horizontal orientation. Most people will not achieve this since to them it is counterintuitive. The brain gets sifferentiated and once the differentation takes place it is difficult to replace it or dissolve it. Many examples of this mental failure follow me around and display their improperly (meaning non functional) differentiated minds.
Once the right line is firmly in place all that is needed is the other side of the container. The left side is drawn using the widest point on the chart away from the right line AND parallel to the right line. See below With this chart we can deal with how price trends and its two characteristics. You show these two characteristics: Dominant price movement is from the right to the left. Your yellow OUTSIDE of the orange boxes. Non dominant price movement is from the left to the right. The other part of price movement. All of this is scripted as I mentioned. You can have a flag or signal as the output. Your issues and the 3 out of 4 parts the OP does not deal with are found in the price movement which is non dominant.
As you would imagine the dominant and non dominant paths of price are bounded and using the slipping to the left concept simply defines these price movements that are one fractal faster than the slow fractal that is the heavy green lines. The chart shows a long dominant traverse from right to left followed by a non dominant traverse from left to right followed by a dominant traverse from right to left. Always being in the market is the OP's strategy. We keep that. At the boundaries which are left and right, we simply reverse when the boundary is hit. To draw the boundaries ASAP is easily scripted as well. By considering the non rending two characteristics, we can do all the scripting necessary on three levels of annotation.
The non trending two characteristics apply to the orange boxes. By now everyone has recognized these as "internal" formations. Most formations or patterns fit into this category. Go pick up and paste the patterns script into the ATS. All these patterns (internals have two characteristics: The pattern continues and then it ends with a BO. THE BO will be inside the traverse boundary so nothing is done but hold at this level of expertise. So far we have added script for dominant and non dominant traverse and they kept us in all of the time doing holds as we moved away from boundaries and reversals at boundaries. The internals are part of the traqverses and the orange kind are internals that a beginner holds through. At advanced beginner the person still holds. After advanced beginner and before using trading script that is more advanced than internals the person STILL holds through these patterns as he always stays in the market. at this point we can see that using the scripts we have no losing trades and we are trading the long diagonals of the traverses as we make money on each traverse. This goes a long way towards converting the fear, anxiety and anger that is conventional with trading HH and HL or LL and LH. When you convert to staying in all the time and doing hold/reversal trading your emotions relate to comfort, support and confidence. The reason is that you have annotated ahead of time and you "know that you know". The three winning trades are shown as long diagonals on the above chart. There are five more levels of skills in trading. There is a question that leads into the next skill level of discussion. I hope it is asked. On the down side will be a requirement for the moderator to step up and do his job. He usually doesn't.