Before I get into Version 2.0 of the trading algorithm, directly below the 20 Day
Range MA’s for selected pairs … 2 things of note … 1) the Russian Ruble
continues to strengthen against the U.S. Dollar, which figures natch, since
“Taliban Joe” smirked his sanctions would turn the Ruble into rubble, and
2) turmoil among central banks with interest rate policy has the “VIX Genie”
smiling as she wrecks havoc on FX pairs … don’t expect this to end
anytime soon.
Over in the right hand column under “DOWNLOAD LINKS”, is the trading
algorithm, version 2.0 … as I make clear in the updated trading manual, there’s
nothing wrong or incorrect with version 1.0, except the fact that it’s too SLOW
for markets today … and as a scalper [or short term trader if you define it that
way], I’m looking for markets that have volatility [VIX] … not necessarily bat shit
crazy [BSC], cuz that invites “scumbaggery & fuckery” from the bank / HFT LP’s,
who at the slightest provocation will blow spreads out & increase slippage for
their own benefit and profit, AT YOUR EXPENSE! … they simply aren’t gonna
allow you to scalp effectively without paying a heavy price, cuz they don’t like
getting picked off with quick moves … fortunately, the vast majority of the time
this scenario is rather isolated to news events, and once they pass things return
to normal.
You can view the Adobe PDF manual via download to your device or view online
… all files I have are guaranteed virus free, and come from my shared file folder
at “box.com” … this is FREE to everyone … no gimmicks like leaving an email
address or other horseshit, just click the link and choose to view online or
download … that’s it, enjoy!
I wouldn’t use the analogy unless I thought it fit perfectly … version 2.0 is to
version 1.0, like quantum physics is to Newtonian physics … quite frankly, you
can’t get there from here, cuz it’s a completely different approach and wholly
concentrates on “order flow” within a short term trend … momentum is your
“friend” until it changes, and then it’s your “friend” on the other side … as a
scalper, I appreciate a longer term perspective as well, so the m1 chart isn’t
completely irrelevant, as it still has the HULL 200 EMA, AND THE CCI & MFI
… however, version 2.0 is much, much faster to the draw, being on a 15s
[15 second] candlestick chart at Netdania [if you like spending money, you can
get the same thing at Trading View for $1200 per year], and has its own
TOTALLY AWESOME DIRECTIONAL INDICATOR [Holt EMA (HEMA)] that keeps
you on the “right side” of the market for MOMO based profits … there is no
directional bias to the version 2.0 trading algorithm, so it can be used
interchangeably with long and short positions equally … what the version
2.0 algorithm confronts and addresses is the super fast paced nature of today’s
markets and how to conquer them … you can’t get there from the m1 cuz it’s
too slow … and it does it quickly, thus with the propensity of markets today to
put in double & triple daily reversals, you’re never gonna be far from either the
top or bottom before the HEMA picks up the trend change and puts you on the
right side of the market before others notice it and adjust … quite frankly, with
the cost of going SUB M1, the number of traders worldwide that choose to
“pony up” for the privilege, are very small in the aggregate, and thus ignored
by the scumbag bank LP’s.
I will continue to “bang the table” and insist that you seek markets with the
LOWEST TRADING COST AVAILABLE, at your brokerage house of choice … for
the uninitiated, the manual spells out the concept of the “Trading Ratio” [TR] and
how to use it to identify a market to trade very easily … in general, the higher the
TR, the better the scalping opportunities, with the “sweet spot” of most markets
hitting the value of 3 - 7, with the caveat that anything higher than 7 or 8 will most
likely bring the inevitability of higher spreads & slippage … this past week is
evidence of this, as USDJPY saw it’s bid/offer spread at Turnkey TRIPLE over
normal … the point, though, is it makes ZERO sense to trade a high spread pair
with slippage [most likely an FX cross] just to get more VIX or a bigger daily
range … e.g., on Friday at the London Fix the DAX40 had a TR = 6.5;
GBPAUD = 3.0 - 3.5 TR; EURUSD = 8 TR; GBPUSD = 5.5 TR … DEPENDING ON
WHERE YOU TRADE, which of these 4 markets offers the best conditions for
making money? … well, IMHO, it’s a “slam dunk” for either EURUSD or GBPUSD,
cuz of 1) both are easier to escape the spread, 2) both have far less potential
slippage than the cross or the DAX40, and 3) both have far greater liquidity than
the cross or DAX40 … if your goal is to make money, and if not then why are you
here?, you have to go where conditions are best! … but since I’m not your
MOM, it’s completely up to you!
As I said before, the m1 still provides important perspective, but on the 15s at
least in GBPUSD a trend change will show up within ± 10 - 13 PIPS, which is very
fast, with IMHO the least amount of “false positives” to get speed to be on the
right side of the scalp trade … and while the HULL 200 EMA is very helpful for
longer day trades, it has little to ZERO value for scalp trades, especially in
markets like Cable that move … sure, I want the “bank wind” at my back, and
want them to goose the shit out of the market in my profit direction and squeeze
everyone on the wrong side, and that’s the whole point … get them to work for
you!, not against you!
So, what else can the m1 candlestick give us, in terms of perspective? … while
obviously it doesn’t happen at every top or bottom turn, it happens often
enough to make it significant and worth paying attention to … and that “it”
are “Doji” candlestick patterns … see below.
The two most popular you’ll see on the m1, regardless of market, is the “doji”
and “long legged doji” [often called a “spinning top”] … they come at tops &
bottoms all the time … the key here is CONFIRMATION out the top or bottom on
subsequent m1’s no longer than 1 - 3 or 4 minutes later, and for bottoms they
don’t see the low violated, and for tops the high breached … what usually occurs
on the 15s chart at Netdania, is a collective group of at least 2 - 4 of them
together before the market blows … often times though, doji’s are simply a
CONTINUATION pattern of the move if there is no confirmation out the top or
bottom, and the trend simply continues up or down … but after longer moves,
they show up often enough to keep your eyes on the m1 for them … at Netdania,
you can highlight doji patterns on the 15s candlestick chart … forget the fact
that it’s near the end of the day, my example is for purposes of pointing out the
doji patterns … note the “cluster on the 15s chart.
A few things to note from this 15s chart … 1) on the breakout of the group of
Doji’s”, the HEMA reacts quickly, within a few PIPS!, and even though still RED,
it’s SLOPE HIGHER is a warning flag to NOT take further short positions until the
slope is negative again … and 2) on the way up, we see doji patterns act as
CONTINUATION patterns, as they have no downside price action on the chart
… if you happened to be short Cable into this collective group of doji patterns,
cuz HEMA RED is sloping lower, you’d have to be cognizant of the 1) breakout,
and 2) the slope change of the RED HEMA … this should prompt a very quick
liquidation of your short position … there isn’t enough here to get long, so there
is no “buy signal” from this chart, but note also the HEMA changes color to LIME
GREEN within about 10 PIPS from the bottom or breakout … I very much like the
candlestick recognition patterns that Netdania supports … too bad the vast
majority of brokerage houses don’t have it in their MT4 and/or MT5 standard
packages … why not, too expensive? … give me a break … try the banks don’t
want it offered, and you’ll be closer to the truth then you’ll ever know!
From today’s blog update, plus the updated Version 2 algorithm manual, I hope
you can see and understand the vast superiority of trading using 15s charts, and
why I updated to it when I realized it was available to us … FREE IS EVEN
BETTER! … we are much closer to turns than ever before, and in active to very
active [NOT BSC] markets that we see today, the vast number of signals is
amazing … sometime during the upcoming week, I’ll give a more thorough
review of why I prefer to trade FX dollar pairs from one side or the other
[long / short] almost exclusively.
This doesn’t apply to FX crosses cuz the dollar is taken out of the equation
… and while I would prefer to trade crosses [especially YEN], right now sees
every YEN cross with heightened bid/offer spreads & higher than normal slippage,
even on Turnkey’s fastest platform … as I stated earlier, the TR for GBPUSD at the
London Fix on Friday was 5.5 … for EURJPY the TR = approximately 6; for
GBPJPY the TR = approximately 4.5 … for both of these crosses, the TR values
assume NO SLIPPAGE [well, good luck with that!] … so where right now is the
“advantage “ in trading either of these 2 crosses? … right, there is NONE … and
there are more than a couple of big disadvantages, including slippage and too
fast movements that can take your position out of your comfort zone, getting
you to puke, only to see it rebound / drop quickly and make you feel foolish
… right now, you’ll get better conditions in either EURUSD or GBPUSD than
either of the YEN crosses, without the disadvantages, and it’s the reason I’m not
trading them … simple!
Tomorrow is a “Holiday” in the U.S. … “Juneteenth” … another pandering
Holiday for federal workers, who don’t do shit anyway, so why not another PAID
day off? … what difference does it make? … and while commendable to
remember the 1865 freeing of slaves in Texas, thus in effect ending slavery, 1865
ain’t exactly yesterday … why wasn’t it recognized for its importance in the 20th
century? … if it was so important, why didn’t Obama do it? … is Obama as
“racy-ist” as 20th century POLS? … I’m not holding my breath for anybody in
the MSM to ask some questions? … when do we get the “Holiday” to remember
the Japanese American citizens who were FREED from internment camps [that
would be “prison” for you Biden voters] by order of that Democrat Icon FDR
during WWII? … “crickets” … see my shocked face.
Despite “Juneteenth”, the world turns & trades … onto the week … outta here
… “The future’s so bright I need 2 pairs of sunglasses 😎😎, and my own
Brinks armored truck” 💓!! … Onward & Upward!!
-vegas
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