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Trade Description - October 29, 2009

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Oct 29, 2009.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Trade Description
    October 29, 2009

    I am adding a new feature. I will be describing some of the trades I place. You can follow these trades here.

    Sive Morten Signals - Forex Trading Signals Test by Forex Peace Army

    Buy EUR/USD 1.4706 s/l 1.4695 t/p 1.4755 (1.0 lot).
    Result : manual close at 1.4744 “+377$”


    Well, this was an 1Hour basis – 5 min enter trade. Let’s go through it…
    1. Context
    Context was described in details in my Weekly Research (I did that trade in the morning) (European Forex Professional Weekly Signal for October 29, 2009 - Forex Peace Army Forum). We had a strong support level at 1.4686-1.4707. First, 1.4686 was a predetermined extreme daily oversold level. Second around 1.47 was a conjunction of daily Fib support levels. Third, 1.4708 – target (objective point, based on Fib expansions) of hourly chart move. These three things have built a strong support, and I’ve expected that market will retrace from there.

    Daily chart

    [​IMG]

    Hourly chart (at the moment, when I look at it)
    At Hourly chart trend was up, no overbought level, so I have needed a level to enter the market on the buy side – I needed a retracement on a 5 minute chart.

    [​IMG]

    5 minute chart
    There was a rather deep retracement. I enter at 0.618 support when market reversed already from that level. Usually I wait for retracement after first up move from the level, but in the current trade I’ve entered at once, because of the great oversold level at 5 min. There was a little probability that the market could go significantly lower, besides, it was last 0.618 Fib support. If it didn’t stand, I can get a move to 1.4686-1.4707 again and hourly trends turn bearish then.
    But this situation was within my scenario and the market has shown strong upside move. Due to this retracement I‘ve calculated targets, and had chosen OP abc = 1.4755, because COP was too near (the hourly trend was up), and XOP too far (it was higher than some resistance levels). Besides, I had a solid (but not extreme) overbought level on the hourly chart.
    Exit
    When I've saw that the market had shown a possibility of not going higher (look at exit chart), I took a look at hourly overbought level, it was high. There was not too much till 1.4750 and I’ve decided to close the trade. But even If I had kept it, the market reached an OP=1.4755 after some retracement. May be this was a single mistake – too hasty to close the deal, but who can know for sure, besides, I had good reasons to close it.

    Sive.

    [​IMG]
     
  2. Rubin Hood

    Rubin Hood Private

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    This is highly useful! I'm learning a lot from your explanation. Thanks!
     
  3. tadinda

    tadinda Private, 1st Class

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    Goldmine for those who want to larn

    Sive,

    You are a goldmine of information for any of us who want to learn.
    Call me selfish but am a learnaolic.
    Would you be so kind as to list the Indicators you use and their setting and the settings and type of average line syou are using.
    Am sure this information wold help us to follow the logic of your decisions better.

    Thanks
    Ernest from Malta
     
  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    In general this is Joe DiNapoli's trading method. I use it, cause it mostly adequate to my personality.

    Forward displaced simple moving averages:
    3x3 - 3-period displaced for 3 period forward
    7x5 and
    25x5
    3 indicators:
    MACD (with exp. type of averaging all lines including signal line) - parameters are:
    8,3897;17,5185; 9,0503
    Slow Stochastic parameters 8-3-3, based on modified moving average
    Oscilator= Close-7 day simple MA.

    If you use Metatrader 4 (I use CQG and all indicators are correct there), you need to reprogram MACD and Stochastic a bit, cause, MT4 does not allow to use decimal numbers for MACD periods, and it use simple averaging for signal line (it's very simple to do). A bit worse with Stochastic - it use exponential averaging, instead of modified averaging. Oscillator is OK, Moving Averages also Ok.
    AS for MA's. I use 3x3, because of some indicators, that can appear based on 3x3. And 25x5 - it shows long-term trend and sometime gives solid support. 7x5 I use rare enough.

    Sive.
     
    #4 Sive Morten, Nov 1, 2009
    Last edited: Nov 2, 2009
  5. kappa2547

    kappa2547 Recruit

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    Hi Sive,
    You are very informative. I was wondering though could you explain OP, COP and XOP and how they are calculated or direct me to where I can get the information. Also are these the same as the oversold levels you speak of, if not could you explain how the oversold level is found.

    Thank you,
    Fitz
     
  6. tadinda

    tadinda Private, 1st Class

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    Hello Fitz,
    I am going to try to be bold and answer myself. THen maybe Sive can just confirm or tell me to get off somewhere. LOL.
    The OP, COP and XOP are the Fib Leveks which are obtained when the Fib Expoansion Tool is used. The order if it is an up EXtension is first COP, then OP and lastly, the highest, XOP.
    The oversold and over bought levels are from the indicators which Sive uses. So if the indicator is at its lowest point this would be oversold.
    Hope Ihave helped out here. Do not mean to interfere or sound as if I know it all. I certainly do not.
    Ernest
     
  7. kappa2547

    kappa2547 Recruit

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    When using MT4 do you know which exact oscilator to use as my oscilator list does not seem to have one that just says oscilator or am I missing it from my list and need to locate it.

    Fitz

    P.S.
    Does Oscilator=RSI
     
    #7 kappa2547, Nov 2, 2009
    Last edited: Nov 2, 2009
  8. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Well,
    Look at the graph - there are three points - A, B and C,
    So COP, OP and XOP are just Fibonacci expansions:
    COP = (B-A)*0.618+C
    OP = B-A+C
    XOP = (B-A)*1.618 + C

    Well, for Oversold Overbought level I use Oscillator (look at previous post about calculation) When it reaches extreme points (maximum for overbought and minimum for oversold) for about 135 periods - this is a level of OB/OS.

    Sive.

    P.S.
    Tadinda, thanks a lot. In general, you're right.
     
    #8 Sive Morten, Nov 2, 2009
    Last edited: Nov 2, 2009
  9. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Fitz, no, RSI is a RSI (Relative strength Index)
    Ocsillator (Usually it calls Detrended Oscillator or just DOSC)= Close-7-day SMA.
    I do not use relative Osc's, like RSI, Stoch etc for OB/OS calculation, because they do not show OB/OS. You should use absolute oscillators like Oscillator, Momentum (may be it works, but I didn't use momentum in practice).

    I've checked MT4 and remembered, that I programmed it by myself...
    But may be there is something, that can be adopted to the formula, that I've mentioned above.


    I also have changed the MACD code a bit for decimal input numbers, and exponential averaging method for signal line.

    I'm not finish with Stoch yet, (now I use exponential averaging for Stoch in MT4), but it is not so neccesary.
    Main things are - DOSC and MACD.
    Besides, I use MT4 only for deals, but I also have a CQG. They are the best.

    Sive
     
  10. kappa2547

    kappa2547 Recruit

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    On Wikipedia I found something called detrended price oscillator (DPO). With an equation of: DPO = Close - Simple moving average [from (n / 2 + 1) days ago], is this the oscillator you are speaking of.


    Could you instruct me on doing this for myself or maybe post the text from the mq4 files??

    Fitz
     

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