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Harmonic Currency Pair Cross Index

  #12 (permalink)

Edmonton, Canada
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

feelnot View Post
Hello JetTrader

Would it be a good idea to trade non-standard time frames or a few pairs together to ridden some of that competition while I trade very standard lagging indicators?

I don't use standard technical indicators of any kind, other than an EMA8 over an EMA21 and the only reason I use those combined EMA ratios is for a visual reference in my test trading of my new Harmonic set-ups on the M1 time-frame - mostly for testing and data gathering purposes. I'm basically a Delta Trader, as outline in brief above. It is a different way to trade the markets and certain it won't float everyone's boat - mostly because of the enormous research involved in building good Trajectory Frameworks. I have also noticed over the years, that some people have a little difficulty at times, grasping the Delta concept, or in how to apply it to actual trading. I've discussed the fundamentals online for a few years, some time ago. I don't in-depth or detailed discussions of that kind anymore, but I still tend to spend some time discussing the matter on a conceptual basis - when I have the time to do so.

As far as multiple pairs simultaneously is concerned, I do have a Non-Directional pair strategy that is not predicated on my trading system, but it does use one of the systems older principles that I created many years ago. The principle is simple:

1) All positions are entered at the end of the trading session and just before the start of the new session. I typically use the D1 bar, but this can be done with H1 and H4 for quasi-day traders. Or, you can use W1 and MN1 for longer term "swing to position" type traders.

2) Long if: current session Close is < current session Open. Short if: current session Close is > current session Open.

3) Use either a small basket of currency pairs with correlation coefficients as close to zero as you can find, or use a larger basket of currency pairs with as close to symmetric weighting as you can find and as much global representation as possible.

4) No Stop Orders are used and No Limit Orders are used.

Now, before any of this can be done correctly, one has to know the Magnitude of each pair, in order to make sure that the pair qualifies for entry into the basket. One also has to weight the impact of high spread currency pairs on the overall performance of the basket as well - especially when attempting this strategy in the lower time-frames. Some currency pairs have inherent low Magnitude, which basically means that their ATR will be low (although I use a bit more complex formula for determining my definition of Magnitude). Basically, you need movers and shakers in the basket, so you'll need a way to determine whether or not each pair has good movement within the time-frame that you have selected.

Your Stop and Limits are manual. So, if you are doing this on the small time-frames, then you need to manage each position in real-time. If you are using the larger bars like the D1, then I basically enter my positions before the end of the current session and then check them in the morning to determine which positions I will close and which positions I will allow to run. Essentially, I am the Stop and I am the Limit.

Essentially, I'm looking for an aggregate net gain for the entire basket, over the course of the time-frame used. So, I want to see a baseline ROI on my cost basis used for that particular basket - then I make the decision to shut down the basket.

feelnot View Post
Because (off topic!) I am checking out DMI-/DMI+ or ADX going by an older post of yours saying that you could trade with just that.

You'll have to show me that post, given I don't use conventional TA, other than what I listed above as a test measure, or unless I take something and modify it well beyond its normal parameters with something that I created.

feelnot View Post
Before I had just developed a great parabolic mechanical system but then I noticed the Parabolic SAR re positioned its dots like crazy.

Incorrect usage of Magnitude (what's the probability for movement in both directions for this bar) is what typically kills PSAR, unless one uses it as a very simplistic way to trail a stop. Use the wrong time-frame and you also increase the risk, which could have a negative impact on your RR, depending on what you are trying to accomplish. Reducing the PSAR values, speeds up its responsiveness and makes the ride more choppy and all PSAR configurations typically get whipsawed to death in horizontal markets. So, it is clear that one will have to either modify PSAR with something that makes it dynamic, or suffer the consequences of whipsaw when deciding to use it.

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