Catching a reversal or correction - page 8
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I'm currently thinking about one thing... purely coincidentally I also call it extremum catching for myself... Anyway, it's just a crude idea, I don't know how to make it more or less effective. So, let's look at the d1 timeframe. We see that the vast majority of candlesticks on the EUR are over 100 pips, in fact even more, but let's take 100 pips for a round number. In other words, there is a strong possibility that the price may go through 100 points in one day, almost every day, just from which point and in which direction. ( :-) ) Suppose 1/3 of all days of the year will be downwards, 1/3 from above downwards, 1/3 flat (i.e. either up then down, or down then up). Not really, of course, but that's for rounding too, sorry for such rough assumptions. Let's take only buying (for example if weekly trend is up). And we buy the whole year on the minute chart according to this scheme. Downward movement - then a breakdown of the previous local maximum on the 1-minute chart, buy, the nearest stop-loss (even if it is 7-10 points), TP=100 points, switch to Buy at the first opportunity, don't wait for Sat, or Buy or TP; after TP the working day is over, after that we wait for the next breakdown of the one-minute maximum and buy again and again, and so on. I tried this for a couple of weeks with breaks in my cent account, I expected a very large amount of sl as every buy is essentially against the move, but to my surprise I stayed in the plus. I don't know, maybe it's a good idea, maybe it's a bad one. I do not like breakout of 1-minute extrema - a lot of false positives. We may try to break through the trend line on a minute extremum - it will not reduce the number of false entries, but it will reduce the value of each separate stop loss (maybe, maybe not). I don't like moving to the Boo, the price goes back just enough to hit the Boo, then goes up again and I have to move in again but at a less favourable price. However, absence of transfer to Boo will lead to too many stoplosses and total loss.
P.S. Naturally, this whole idea is based on the unpleasant thought that the market is chaotic and unpredictable, and that trends only exist in history.) Something like a casino game. I am going to try something like this for now.
What do you think? I am going to try some more. May be somebody trades this way and make profit? Please otpishete. Thank you in advance for your critics.
imho.
It is humble, after all.
Too many "buts", "buts" and "buts"... IMHO
The biggest uncertainty here is my choice of the principle by which to enter, while the closing is very well defined. I will experiment on the following entry points:
- break of local extremum on tf m1;
- break of the trend line on m1; ... and also on tf m5;
- breakdown of MA of a large period (200, 400, 600) on m1 - though I do not believe in it, it is worse than a trend line;
- break of MA of non-long period (20,40) on m15 - I do not believe in it either, besides there is no place to put a stop-loss, or it will obviously be not so small, and my idea is all about microscopic stops, which give multiple guessing attempts, so it probably will not go right away;
- The breakdown of high-low candlesticks on m15 - I do not like it either, it is less accurate than extremums on m1;
I will tryto open a position during the day, preferably before the release of important news, to avoid bumping the price in one place.
I'll experiment for a long time, since I use my hands on the real account.
The biggest uncertainty here is in my choice of principle of entry, while in the close everything is very well defined. I will experiment on the next entry points:
- Breakdown of local extremum on m1;
- break of the trend line on m1; . as well as on the m5;
- break of MA of large period (200, 400, 600) on m1 - although I don't believe it, it's worse than a trend line;
- break of MA of non-long period (20,40) on m15 - I do not believe in it either, besides there is no place to put a stop-loss, or it obviously will be not so small, and I have the whole idea of microscopic stops, which give multiple guessing attempts, so it probably will not go right away;
- The breakdown of high-low candlesticks on m15 - I do not like it either, it is less accurate than extremums on m1;
I will try to open a position during the day, preferably before the release of important news, to avoid bumping the price in one place.
I'll experiment for a long time, as I use my hands on the real account.
Inserting a picture.
The picture is actually at night, I personally would never open anything at night, but it will do for describing the idea.
m1
at 1 point, we have a break-up of the maximum upside, buy, no chance to boo, right away we got sl=-10.
wait for
at 2, we have one more breakout, buy, we have no time to buy either, we just missed sl=-10.
In total we have -20.
We wait for .
at 3, we have one more breakthrough, buy, we put boo.
at the point 4 the boo triggers, 0 points.
wait for
at 5, it breaks through strongly, buy.
near point 6 we switch to Boo
we wait, don't move the boo, don't do anything
at about 11 o'clock according to gmt there is already тп=100 points
let's close everything and stay away from there till next morning.
MM - we calculate at least 40-50 slo, i.e. 1 slo = 2-2.5% of the deposit. That should be enough. Then 1 net TP would be around 20-25% of the deposit. That is awesome!
At the picture - it's kind of ideal.
A bad case is when from morning till evening we have 10 Breakeven losses + 10 StopLosses and the price does not move in our direction. As a result we will have 100 points minus, or even worse :-)).
Can we use the breakdown of the trend line on the m1 timeframe (I am drawing from scratch, don't judge too harshly).
Point 1 - buy, caught sl.
Point 2 - buy, we caught boo.
point 3 (it is questionable since the angle is big) or point 4 (this is more probable) - buy, transferred into bu, did not affect the bu, waited for the profit, went to rest :-).
on the picture #2. The reason is the difference in quoting in many brokerage companies may become a stumbling block, therefore their boundaries are super conditional, and in general timekeeping (a trend is a combination of price/time) is a rather shady topic, except on large time frames.
I suggest to use only price formations, moreover it is generally quite enough. I have made my point. :о)
Well, it is clear in principle... But it turns out to be very ideal because the sells will also work, that will chew a couple of losses at this point only, if we focus on those extremums that you define... I started searching for an increased probability of going in a certain direction, and not just a simple search, because I detect them easily, but an automated search.
on the picture #2. There is no or almost no confidence in trend lines, especially on small timeframes. The reason - the difference in quoting in many brokerage companies may become a stumbling block, therefore their boundaries are super conditional.
I suggest using price formations exclusively, especially as that is usually quite sufficient. I have made my point. :о)
No, the sells will not work, because I suggest just to choose a direction initially and not for one day but for many, at least for a month or two, by some sign on a large timeframe or by some fundamental data, or just at random - to choose one direction and go like a tank in this direction only, without paying attention to patterns or to breakdowns or anything else. And only pay attention to something specifically shocking in the fundamentals or on a large timeframe, etc.
Take Profit = 100, of course, I just took it out of the blue. It would be better to take and anchor the TP around +80-120 points to some level, for example to yesterday's high etc.
And by the way, i have not really thought about it, thanks for the comments. I'll discard that option.
Looks like there's a ... ...is starting to flounder...
Maybe I should start writing a poem... :)