Though both of the trades mentioned in Post #29 resulted in positive outcomes within the limited spans of time they were intended to take place, neither of them predicted with 100% accuracy the direction price would take soon thereafter. For example, I had no idea that USDCAD would begin to head north an hour and forty-five minutes later, climbing a surprising 17 pips away from the course that seemed most logical/rational... And yet, both of these trades, along with the successful trade mentioned in Post #30, appear to confirm that whatever else price might do, it will ultimately find itself being dictated to by the slopes of similarly aligned 1⅔- and four-hour baselines, if and when both of these measures are angled in the same direction.
Wednesday | April 20, 2020 | 7:10 AM PST So, based on all of this, I just purchased an AUDUSD two-hour binary option put contract that is already halfway to expiry with a 0.7434 strike price for a $15.75 payout. It would have been safer to use the 0.7438 strike price for about a ten dollar payout, but I want to really put my theories to the test, not to mention how much more awful it seems to risk almost a hundred bucks just to make a mere ten! I did this, even though the four-hour trend is still bullish, because the intraday short-term reversals moving average (i.e., the 13- to 15-minute baseline) turned south BELOW the all-important 1⅔-hour baseline (which is still bullish) AND the 45-minute price range envelope is bearish now, both of which suggest this southward push might very well last for a whole hour. UPDATE: At 7:17, the short-term reversal moving average is headed north again. So, the question is: Is the bearish 45-minute price range enough to save this trade, to disallow price from finding itself too high at the time of expiry? Or is it ALWAYS foolish to enter a short position when both the 4- and 1⅔-hour baselines are still bullish? At 7:21 price is climbing so high that it is bordering on pulling the 45-minute price range envelope north with it. So then, it would seem that the latter is true: It is ALWAYS foolish to enter a short position when both the 4- and 1⅔-hour baselines are still bullish!
AUDJPY saw its overall trend transition from bullish to bearish about five hours ago. This should make it a GREAT pair to short (i.e., purchase Nadex Knock-outs) following pullbacks over at least the next 24 hours! The same is true of EURJPY.
I will be testing whether the theory that a reversal is likely to follow through if the short-term moving average's lower panel histogram is greater than 0.066 or less than -0.066. In the case of AUDUSD, it WAS, but only for one 15-minute candlestick. Still, that means this criteria has just come up against a false positive/head fake! At 0.7451, AUDUSD is now testing/pushing the last, most extreme band of the 45-minute price range envelope. So, I'll take a look at AUDJPY to see if it is doing the same. If it is, this might be an ideal moment to purchase an AUDJPY bearish knock-out. Wednesday | April 20, 2022 | 7:48 AM PST I just purchased an AUDJPY bearish knock-out (the second one down) in my live account. I am not going to set a take-profit target. This trade has just about everything going for it that it possibly might, so I am going to be ambitious/aggressive in this instance and go for broke...
Based on the fact that at this point, the pair is hardly moving, along with the breadth of its 45-minute price range, I have now set a take-profit target of nine pips for my AUDJPY position.
Since testing/pushing the last, most extreme band of its 45-minute price range envelope at 0.7451(maxing out at 0.7457), AUDUSD has come down about eight pips to 0.7443... MILESTONE Wednesday | August 20, 2022 | 12:00 Noon PST This was my first live trade applying the new (final?) "Middle Knock-outs Bias Overlap" methodology to employing the Numerical Price Prediction Forex trading system...
Actually, there was one aspect which was not favorable, and this is that the 45-minute price range envelope was slightly bullish at the time of entry.
Yesterday, when USDCAD's hourly trend line dropped below the four-hour baseline, I wrote that this is usually followed by a significant leg in the new direction, and indeed, USDCAD fell more than 100 pips. However, AUDJPY's hourly trend line also dropped below its four-hour baseline (earlier today) but the pair has already reversed north again. So, it's a good thing I cashed in with 10 pips profit because perhaps about 13 pips was the maximum the asset offered before turning around and climbing to the upper knock-out/stop loss. I'm going to take a look at the weekly and monthly charts now to see if they are any help in explaining why everything might have unfolded the way it did. (On second thought, I don't think that is going to be of any help. However, the latter pairs DAILY chart IS bullish, so let me see what relationships appear, if any, if I plot the daily trend on a 15-minute bias overlap chart.) When it comes to USDCAD, the daily chart has been rather noncommittal since the beginning of the month. No... I don't think the daily charts really help to explain much either. So, what does this say? Maybe it points out the wisdom of using the 4-hour baseline, the 1⅔-hour baseline, AND the 45-minute price range envelope in not only choosing the direction in which to trade in, but also where to set the most reasonable take-profit targets. The 15-minute charts are more helpful than the daily. I've run out of time right now, but what I will do later is to use the 15-minute carts to evaluate the 8-hour and 16-hour trends, especially the former. My first impression is that they will help to clarify why one pair might have followed through on a new direction for the four-hour trend, whereas another might not.
They do help. For example, AUDJPY bounced off the eight-hour baseline when it headed north again. But the fact of the matter is, there is simply too much lag in anything above the four-hour measure to maintain the kind of accuracy and precision required to trade with an 85% or better daily success rate at the intraday level. (I even tried the six-hour baseline.) However, the one constant that did seem to emerge was that trading from the "pullback side" of the 45-minute price range envelope to its "surge side" was the most profitable strategy in both of the cases I have been looking at recently as well as in general with every other foreign currency pair.
I'm not planning to make any trades today. To my eyes, the Forex market is almost with any direction whatsoever this morning. UPDATE: It looks like Greg Michalowski agrees with me...