Ray's amnesty page

[wiseambitions]

Yikes, I have just noticed on the Widget (free from http://www.for-exe.com) that the 5d ADR of Dax is over 320. That is like 2.5% movement in share prices every day, and needs comparing with the 250d ADR which is about 160.........so let's say we have twice as much volatility this week as normal...............

Yes some will say these are the conditions in which money can be made, but it needs quick response on the lower TFs.........

Much of the progress of Dax is inversely related to the movements of EurUsd of which there have also been plenty


AND IT LOOKS LIKE GREY MARKET PRICE MARGINS ON DAX TODAY AND MONDAY - extended bank holiday for much of Europe........... so a day to look for different things to do........

[wiseambitions]

Not much doing today at all. FTSE100 lethargic, although it gave me about 20 pips this morning (long trade before 0900 closed after about an hour of waiting watching). GBPUSD just falling through lower fractal of H4, I anticipate quite a few pips will come from that - I do love h4 aims level breaks, I think they are levels many market traders watch (even if they dont know anything else about Aims and alligators) and can be quite powerful

Have a nice weekend folks

[wiseambitions]

I wonder how many people have conducted a thorough research over say 200 or more setups on the following basis, for a given TF eg m1 and given pair or index.

1) Whether towards or away from purple
2) S1, S2
3) Time of entry, for example morning session, afternoon session, evenings, grey market times, etc
4) maximum pips which the trade ever offered for a given SL (eg stop loss of 10) or for the SL which the aims box suggests
5) pips available on various exit strategies for the trade eg
a) Green line
b) opposite fractal/aims level
c) any other form of trailing stop

Requires incredible attention to detail, but the results can be quite starting, I have mentioned this before but nobody seemed to want to engage in discussion. I think such a study is capable of blowing away quite a few prejudiced beliefs about various aspects of the system. Particularly point 3 (time of entry)......and capable of surprising us how many pips are there for the taking, and how the setups and stop loss levels just have to be trusted (I think Mickey and I both have the same faith and fears about all this stuff!..... I always read your journal Mickey, all the way from Poland, it is one of the very best)

[immy]

I wonder how many people have conducted a thorough research over say 200 or more setups on the following basis, for a given TF eg m1 and given pair or index.

1) Whether towards or away from purple
2) S1, S2
3) Time of entry, for example morning session, afternoon session, evenings, grey market times, etc
4) maximum pips which the trade ever offered for a given SL (eg stop loss of 10) or for the SL which the aims box suggests
5) pips available on various exit strategies for the trade eg
a) Green line
b) opposite fractal/aims level
c) any other form of trailing stop

Ray!

well, firstly thank you for raising the topic secondly all the above has already been done. Most of it. 200 setups is not a thorough research based on our parameters. We have analysed more than 10000 setups.

1) Whether towards or away from purple
ans: Purple was born as a result of statistical analysis that lead to the conclusion that more often than not, we pay rents during wave 4. We found that when price is pulling back towards red line of m5 we paid more rents than made pips. Purple was born.

2. S1, S2 are both equally profitable in the long run. I don't what you mean other than that.

3) Time of entry, for example morning session, afternoon session, evenings, grey market times, etc
ans: The concept of CIPS was born as a result of session and time based analysis.

4) maximum pips which the trade ever offered for a given SL (eg stop loss of 10) or for the SL which the aims box suggests
ans: never bothered with this.

5) pips available on various exit strategies for the trade eg
a) Green line
b) opposite fractal/aims level
c) any other form of trailing stop

ans: this is a very difficult analysis. A few grands required for this. What you're trying to do here is to play with permutations and combinations. that could take months.
But what we have found through live trading and testing is that in the long run if you use the combination of it or simply stick to one technique the results won't have much difference. But that following the green line will have better results.

I hope this helps. We have done all the research on the chart. Well, not ALL but you know what I mean. By ALL i mean whatever we have done seems to be enough for us to successfully navigate our way through the universe of the markets. However there is another research going on and perhaps its a life long research. That is in The Mind. Trading success has got less to do with your statistical and technical analysis and knowledge and more to do with the knowledge of YOU.

cheers

[wiseambitions]

Hi Immy

Thanks for your comprehensive reply. I knew many of the points you would raise, and agree with them, however what I think a personal study has shown up is that one can so easily form opinions which affect our attitudes and then our results.

Maybe a lot of your work was related with currency pairs whereas right now we find ourselves largely trading indeces. Yes, the currency strength could be likened to the share price of the sovereign country. Probably the principles still hold true, but it's an interesting one to consider... (not forgetting that in my understanding the whole Bill Williams system started with commodities, which are neither shares nor currencies).

Perhaps the biggest eye opener for me is around trading times. You rightly highlight FO/LO and NYO as good times to be active in the ebooks, however may you have noticed any difference in morning or afternoons? I have.

As to exits, sometimes it just seems that a good outcome is just to take the profit from a nice spike when it happens eg if it goes up 30 on m1, rather than waiting for profit to get chomped up back into the alligator's mouth. Of course if we were trading linearly we could just write a robot for it, but it doesn't work like that.....


Anyway it works ! ! ! We don't have to catch every trade and we don't have to stress ourselves about getting out at the top every time either.

[immy]

Hi Immy

Thanks for your comprehensive reply. I knew many of the points you would raise, and agree with them, however what I think a personal study has shown up is that one can so easily form opinions which affect our attitudes and then our results.

Maybe a lot of your work was related with currency pairs whereas right now we find ourselves largely trading indeces. Yes, the currency strength could be likened to the share price of the sovereign country. Probably the principles still hold true, but it's an interesting one to consider... (not forgetting that in my understanding the whole Bill Williams system started with commodities, which are neither shares nor currencies).

Perhaps the biggest eye opener for me is around trading times. You rightly highlight FO/LO and NYO as good times to be active in the ebooks, however may you have noticed any difference in morning or afternoons? I have.

As to exits, sometimes it just seems that a good outcome is just to take the profit from a nice spike when it happens eg if it goes up 30 on m1, rather than waiting for profit to get chomped up back into the alligator's mouth. Of course if we were trading linearly we could just write a robot for it, but it doesn't work like that.....


Anyway it works ! ! ! We don't have to catch every trade and we don't have to stress ourselves about getting out at the top every time either.

I don't know if you know but I'm assuming you don't know that the reason I don't need to research every other chart in the world is that all the charts create the same patterns. Our System is based on Bill Williams indicators and that research was based on the research of Benoit Mandelbrot's research for IBM. He found the dimension of a irregular shapes. The dimension of dot is zero, a line has 1 dimension, a square has two dimensions, a box has 3 and some objectives in space have 4 dimensions

but what is the dimension of a squiggly line going through a square?

the answer baffled scientists (the human race) for centuries until Mandelbrot came up with a simple solution. The dimension of irregular shapes is fractional. Hence Fractal was born. Then he found that the fractal number of the bank of mississippi river and cotton and corn prices was nearly the same upto 4 digits.

That's when the concept was born. Any data which is the result of natural chaotic changes will result in creating similar chart patterns. So yes, no matter you apply this to an Index, a Commodity, Stock or Forex it will give you good results because the patterns and patterns within patterns are the same. That's the whole concept of AIMS.

One more thing, these patterns works WORST on forex, they said, and we proved it that it still works quite good but its true that they work better on indices and commodities and stocks so we don't need to prove whether they work on these markets, the challenge of AIMS was to prove they work on forex too.

And its already happened. Bill Williams himself said that these patterns work on all markets but may be not as good on forex because bankers create their own markets. What he meant was that fractal patterns show consistency because fractals are created by "natural activity" and not artificial price changes. But still there is enough data in the markets that is the result of natural events hence the charts/patterns are reliable and profitable.

I hope this helps!

[wiseambitions]

Yes that about the river is fascinating stuff, and why I think fractals and aims breaks are so magic became immediately obvious to me once I started delving into what Bill Williams was saying. And makes more sense to me than any other sort of trend line (usually diagonal) which various people see when they pull up their charts.

We know so much here now about "chaos", the way to make anything out of it comes to consistently following the ground rules, and we all talk about the gremlins which so often try and stop us doing just that ......

[wiseambitions]

Today's thoughts on discipline as shared with a trading buddy:

(Regarding m1)

1) We must only trade valid setups, opened preferably with pending orders

2) A max SL of say 12 must initially be set

3) The SL must be reduced as the green line moves to reduce the maximum loss

4) We have to mentally accept lots of fairly small losses and the occasional win which counteracts them all


What happens after suffering a stop loss? Either the trade goes much worse, and we are glad we are out. Perhaps a reverse entry should be opened (if price bursts other end of Aims box), OR Sod's law also has it that after suffering a stop out, the price will turn back round and go to profit, we just have to treat those situations as freak and not try to be clever if the green line is telling us otherwise


We already know this ! But we have to continually remind ourselves how to make it work. And be happy to incur a lot of small rents, on the basis big losses start by small losses..........a few winners far more than compensate for a few moderate rent trades

Here endeth the lesson

Send me Patience Lord. Quickly.


43 pips today. Discipline score 3/10 It was not a stress free experience, due to some rash decisions on my part, and my IT was also playing up. I could have done far better, the market offered many dozens of pips. In spite of all that I am very happy with the result.

[kooky]

I want Patience Too, and I want it NOW !!!!!!!!!!!!!!!!!!!!!!! (wd)

[wiseambitions]

5 day ADR of DAX is still coming up at 250 pips

That is about twice the average of the last year, and we have been seeing this amount of volatility for several weeks by now

While trading m1 we have normally been wisely advised not to trade when Aims box (the difference between fractals) is more than about 15 pips, and to avoid giving trades stop losses of as much as that or more than say 13.........
However I am noticing this rule has filtered out a lot of trading opportunities especially around LO, in fact I think the only valid setup so far this morning was about 0720 BST (small aims box and highly profitable). Since then we have had a few AO crosses and twisting of the alligator lines, but aims boxes of 25 to 50 or more pips, and surges on breakouts of typically 20 to 50 pips.

Therefore I am caused to ponder whether to carry on trading but at smaller lot sizes subject to all other ground rules being satisfied in the setups. Like I say this is only on account of the greater ADR which we are currently experiencing.

I wonder how many other people have had similar thoughts.