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JetTrader: Developmental Live Cash Journal


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JetTrader: Developmental Live Cash Journal

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  #1 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

Whenever I get close finishing a system or a system component upgrade (or sub-component upgrade), I like to do some public proofs with real cash, for psychological reasons. This developmental journal will be for that purpose and that purpose only. I won't be going into too much technical detail of each trade, or how the signals are derived, as that will take me beyond the scope of my purpose. I merely like to do public trials of any new additions to my trading system, just before I fully integrate the new work.

I am not a retail trader, but I use a small retail account for proofing purposes such as this.

For informational purposes, the anticipated trade types will be:

- OmegaWave on the H1 time-frame
- CD Harmonic Intercepts on the M1 time-frame
- AB-127 Recovery from CD Harmonic Intercept Failure on the M1 time-frame


A lot of other indicators will be used in conjunction with each signal/entry, which again, gets beyond the scope of my purpose. Just know that I am looking at additional parameters before each entry. This is a sub-component test of a much larger system that I think might be ready for final integration into the larger schema.

Essentially, this sub-component signal would serve as a final trigger/filter for an already existing primary signal - at least that's what I think its value to the overall system will be. Or, these test results could identify an 'anti-primary signal' of sorts, or quite possibly a new kind of 'dual-primary signal' where I would then have to work on a weighting algorithm to determine which signal has dominance over the other for primary status. At any rate, this is how I integrate new work.

My trading philosophy.

Why am I in this business and how do I plan on achieving my goals - should be the two dominant questions every trader asks him/herself at some point, sooner rather than later in the process.

- Buy a new car
- Buy a new house
- Put the kids through college
- Travel the world on a private Yacht
- Own a small fleet of 747's
- Start a global Non-Profit to help people in need
- Add a few dollars to the month income to help pay the bills
- Build real financial independence and real wealth

All of these and more are valid reasons why one would want to be in this business, but how one goes about reaching any one of those goals, is what typically separates those who achieve the desired outcome, and those who don't. I trade according to a Revenue Model. That means, I trade to specific revenue targets over time. Let me repeat that: Revenue over Time. My goal is the former. To build real independent wealth. For me, that simply means the ability to fund any project that I can dream up. And, that means, I need the ability to generate massive amounts of capital over the course of a fiscal year, all growing geometrically to the point of what is critical mass for me. For me, critical mass is somewhere between 1-2 billion in working capital. The revenue annual revenue generated from such a base, is sufficient to fund all ideas and projects that I have going forward.

Those are my personal/business goals. Yours may vary.

I don't wander the markets, looking to "make money." I systematically seek to build wealth and that requires a schedule of revenue growth, set to a specific time in the future. That level of trading requires precision to a specified target for each trade and a specific number of trades per unit of time. My benchmark unit of time for revenue growth is 1 month, or approximately 20 trades per calendar month. That means, in order to keep the revenue model on track, I need N number of pips per trade, through 20 total trades per calendar month. This is the timeline for my revenue model approach.

Why use a Revenue Model approach - why not just wing it?

Revenue model trading focuses my development and research on specific signals that yield a specific range of MAE/MFE. This reduces development time and development costs. Yes, there are now costs associated with my research and development. How? Because, I am now a full-time trader, all of my personal and business expenses comes directly from trading. Therefore, anytime spent doing research and development, costs me time out of the real market and that costs me real revenue.

The Revenue Model approach says: research, develop, design, engineer, test, analyze and accept only those technical tools that produce a minimum expectancy MAE/MFE range, that is sufficient to fulfill the revenue requirements of the model over the period of time specified by the model. That single declaration keeps me from wandering the market looking for "pips" at all costs and it forces only the best signals to the surface through hard core research. This is also a more restrictive signal development process, but since I already have a production trading system, I can afford the wait time until such signals are found/discovered. At this stage in my career, it could take me months or even a year or more, before I am able to bring a new signal into the system. That's because every new signal goes through a certification process - which is time consuming, but in guarantees a minimum of revenue production as a result.

Trading on purpose. Or, trading with a purpose.

Which simply means trading on a time based schedule, and it comes from the basic tenet that all businesses have revenue targets set over time. Good business managers set specific revenue targets over time and then measure the progress during revenue generating periods, so that adjustments can be made if/when necessary, to keep the revenue model intact. I've always treated my trading as a business and thus, my research reflects that same approach. The level of protocol established in one's research for trading signals, will show up in their trading results long-term. It will also have a lot to do with the kind of belief in the goals that one sets for themselves as a trader. The purpose defines the mission objective.

Controlling costs and maximizing revenues.

For me, the two most important factors for controlling costs and maximizing revenues are: MAE and MFE. Oddly enough, when you plot the MAE/MFE trajectories (simple lines from entry to MAE and entry to MFE) you get a specific two-dimensional geometry of price behavior for the duration of each trade executed. That geometry says a lot about the signal used to create it and it provides a wealth of opportunity for enhancing the signals clarity and strength. In fact, it has become such an integral component of my testing and analysis process that I gave it a name. I call it the Signal Mode Shape, or the SMS.

As I run through these trades, I'll be looking for minimal SMS configurations. The eventual mode shape of a signal is also its signature. However, to fully understand and/or appreciate mode shapes, you have to be well versed in the concept of what I call Trajectories - why they matter and why they help to demonstrate technically, that Trends don't exist as a matter of physical certainty. Quickly, one comes to realize that Trends are indeed extensions of Trajectories in larger time frames, and that the only real tangible and measurable (quantifiable) price behavior that exists in the markets are Trajectories coupled to periodic retracement across multiple and connected time frames.

Whenever one thinks they are observing a "Trend," one can be assured that they are observing an extension of a Trajectory, in a higher (larger) time frame. That will be true, 100% of the time. One of the keys to successful trading, is learning how to recognize points of high probability pivots in larger Trajectories, that will ultimately appear as "Trends" in lower time frames. And, in order to do that, one needs to develop tools that map the very nature of price behavior itself, inside every bar of data produced by the market. And, that is accomplished by developing tools that measure the relationship of every Open, High, Low and Close, in every bar and across every time frame. This will provide one with the basic Signature of every market they intend to trade. From that point, one can begin the process of developing some fairly accurate trading signals.

Until one understands the differential between a Trajectory and a Trend, it is very hard to know where to set a stop, or even if a stop is needed. Sometimes, stops can be the trader's worst enemy, especially when they are placed randomly and without an appreciation of the dominant Trajectory. In fact, one of the secretes to my trading is that I do not use stops. Essentially, I am the stop. I set a certain number of hours per day to be available for emergency action messages form my system and I act accordingly. False stop placements, or stops placed right in the middle of a dominant Trajectory, is an almost guaranteed loss of capital. It is like being robbed in broad daylight by a man with a wooden gun, as price begins to move back in the direction of your original trade. [how many times as that happened!] No doubt, we've all been ripped off like that many times in the past.

Ok, enough of Trajectory Concepts 101. I'll start the trading journal as soon as I tie up a few loose ends out where I live. My next post will be a description of precisely what these trades are all about.

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  #3 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received


- OmegaWave on the H1 time-frame
- CD Harmonic Intercepts on the M1 time-frame
- AB-127 Recovery from CD Harmonic Intercept Failure on the M1 time-frame



- OmegaWave on the H1 time-frame:
Omega was the first indicator that I created, almost 10 years ago. It was patterned after Wilder's ATR. Like ATR, it measures the volatility in all bars and for all time frames. It is the purest form of real momentum in existence. There is no other form of market momentum as pure as ATR. Omega, goes a few steps beyond ATR, by plotting multiple moving averages of the Deltas produced by the High and Low of each bar within a specific range of dates. Those MAs produce the OmegaWave effect that can been witnessed inside a chart's indicator window. In addition, I use a modified calculation to produce the Deltas that Wilder, first created. So, my Omega Indicator will not produce the same Delta that is obtained with a basic ATR Indicator.

Research shows that all currency pairs produce an OmegaWave, but that not all OmegaWaves are reliable for the purpose of executing momentum trades. However, the secret to understanding the OmegaWave effect is very simple. The higher the volume, the smoother the OmegaWave. The smoother the OmegaWave, the more reliable the momentum. Poor OmegaWaves, produce momentum price action that is subject to rapid stalling characteristics.

The idea, is to enter a trade during the highest period of momentum, while the OmegaWave is in its Expansion Phase and at the intersection where Omega (the bar's High/Low Delta) crosses one of more of the MAs produced by the OmegaWave calculation. Essentially, these MAs are what I call Tactical Omega (fast) and Strategic Omega (slow). There are other advanced Omega derivatives, but they will be beyond the scope of my purpose, here. Again, the quality of the trade, is typically dependent upon the quality of the instruments OmegaWave Form.

The OmegaWave essential has four (4) physical phases: Expansion, Upper Compression, Contraction and Lower Compression. It should also be no secret that each of these physical phases are usually timed with the four major market sessions of: Asia, Europe, U.S. and Australia.

All time frames (M1, M5, M15... MN1, etc.) produce their own OmegaWave signature. However, research shows that the H1 time frame produces the most uniform and consistent OmegaWave of all other "standard" time frames in existence, regardless of the global trading session currently underway.

Again, I created this indicator roughly 10 years ago, with modifications extending over the same time period. Omega, has the largest influence over the trading system, because there is no market outside of Omega's range. Omega, is all there is. Ironically, the first indicator I created, became the last and most important class of indicator.

The first shall be last, and the last shall be first.

- CD Harmonic Intercepts on the M1 time-frame:
A simple review of my other thread on Harmonics, should provide the needed information to follow along. Essentially, I'm always looking for an early edge on the market. I'm always looking to do what the market is not yet convinced it must do, or will do at some point in the near-term future. I like to be in position before the market moves. Harmonics, is a tool that allows for early detection of potential market moves. The fact that all Harmonic structures have six (6) dependent price points that follow a specific sequential pattern in time, is a slam dunk welcome mat for setting-up and optimizing triggers.
Because, I like to get there before the market does, I began studying Harmonics to find out why so many Harmonic patterns fail. What I discovered is that so many people were focused on entering the market at point "D," that they never seemed to realize that one of the longest legs in most Harmonic patterns is the CD leg and that failures in Harmonic patterns, typically extended point "D," running the stop of most traders somewhere above the 127 to 161.8 region of the BC leg.

So, my thoughts were - why bother. If the pattern is truly Harmonic, then point "C" most hold. If point "C" holds, then one gets a free ride to point "D." If point "C" does not hold, then the pattern must turn into some form of AB=CD, where point "C" degrades, becomes point "B" and price moves past point "A," giving rise to the AB=CD pattern. If price stalls in this region, then it forms either an Ascending Triangle, or a Descending Triangle. Either way, price cannot remain in this region forever, as long as one used a small enough time frame to isolate the pattern at the beginning.

This also runs counter-intuitive to the common belief that larger time frames are the best time frames to use while hunting for Harmonic patterns. If one uses a larger time frame, then the region where price stalls (between points "A" and "B") can be significantly larger and take significantly more time for the formation of the break-out Triangle to occur. This forces one to remain in a stalled trade for longer periods of time and reduces revenue generation for the amount of time one is stuck in a stalled region of price.

Thus, my use of the M1 time frame for hunting Harmonic patterns. Trade confirmation is quick. Stalling regions of price are relatively short and as long as one uses a large enough XA leg, the pips available are typically sizable enough to warrant being trade-worthy, depending on the revenue model's requirements for pips per unit of time.

Read it a few times until it makes sense. I don't want to belabor the point too much.
- AB-127 Recovery from CD Harmonic Intercept Failure on the M1 time-frame:

This simply means that if the point of entry is point "C," then the Stop & Reversal is the failure of the CD leg to occur, which by definition must occur at point "A." So, there is a Stop and Re-Entry back into the market in the opposite direction at point "A," which should extend to 127% of the AB leg (at least).

Again, a re-reading of how I use the CD Intercept inside my thread on Harmonics, should provide enough information to follow on here. Most people are looking to trade point "D" to some projection point. I'm not interested in entering after the Harmonic pattern is complete. I'm interested in using the structure of the Harmonic pattern as leverage to take advantage of the fact that point "D" will either happen, or not happen. If it happens, I get a free ride to point "D" from an entry at point "C." If it does not happen, then the structure turns into a simple AB=CD pattern, where the Stop and Reversal entry in the opposite direction takes me to recovery.

The simple theory here, is that no market can remain compressed forever. If that happens, then there is no market to trade and we all go home to find other careers. Markets thrust, and then they retrace - all day long. That's all they do - regardless of the time frame.

All of it predicated on and coupled with the OmegaWave. There is no more important indicator in all of my trading. Everything stems from Omega. Trajectories are merely directional price vectors within an Omega expansion. Thus, in every so-called "Bullish Trend" there are Bearish Trajectories and in every so-called "Bearish Trend" there are Bullish Trajectories.

Knowing which Trajectory is dominant and why, is the ultimate hat trick.

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  #4 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

I'm already into my first EURUSD trade. However, I keep getting logged-out of the BigMikesTrading forum - seemingly on a timed basis of inactivity.

The OmegaWave trade types can take a while to develop, so I can't possibly post live while always having to re-login and click my way back to the journal. That takes time - and my OmegaWave entries are based on precise price levels.

So, is there a way (Big Mike) to not have my forum session constantly timed-out? If not, the OmegaWave type trades won't be possible on a live basis and that's what this was supposed to be all about. The Harmonic type entries can be done, because the wait time for the exit is typically a lot longer. These OmegaWave deals can be over in a matter of seconds, minutes, or they can run for an hour or two max (typically).

Here's the pic of my EURUSD OmegaWave Short:


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  #5 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

Ok, image is fuzzy. Going through TinyPic.com (a pain).

Red Ling on H1 chart shows entry (if trade type is short), while green line on H1 chart shows entry (if trade type of long). Currently up +22 pips, but I was very late to my post. I'll also have to work on sharpening the image.

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  #6 (permalink)
Little Rock, Arkansas
 
 
Posts: 198 since Jul 2011
Thanks: 106 given, 108 received

Looking forward to reading more posts from you.

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  #7 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

I'll explain the entry technique in a bit on the three (3) trade types, so one will know what to look for on the chart.

Right now, as you can see - I'm using the M5, M15, M30, H1 and D1 screen set-up, with a little digital black-box on the bottom. You can see my live FXCM developmental cash account dealing window on the bottom right.

In each chart, you simply see one of my indicators: OmegaWave.

Gray line: Omega-Tactical (fast MA)
White line: Omega-Strategic (slow MA)
Blue bar: Omega-Absolute Value in Compression
Yellow bar: Omega-Absolute Value in Expansion

OmegaWave is in compression when Omega-Tactical is < Omega Strategic.
OmegaWave is in expansion when Omega-Tactical is > Omega Strategic.
OmegaWave is nominal when Omega-Tac = Omega-Sac.

Each chart contains the same indicator. However, not every fast MA and slow MA is carries the same value. The values I use are something of a *trade secret* but with a sharp eye, one can play with the values (according to my original post that describes the math behind the OmegaWave) to arrive at a similar Wave Form.

The two MA you see directly on the price chart, are nothing more than an EMA8 over an EMA21, with the Green line being EMA8 (faster) and the Red line being EMA21 (slower). Not to be confused with my post above that talks about the green and red horizontal lines representing Long and Short entries.

1300 (GMT) hour is over. I took 18 pips while typing all this up. I won't be dong this much typing while trading in the future as it throws off my concentration.

1400 (GMT hour has just begun and the H1 OmegaWave looks like this (until I can correct the fuzzy image problem):


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  #8 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received


r3algood View Post
Looking forward to reading more posts from you.

Good to have you.

Because this is all manual and given the TinyPic hoops and form log-out issues, I'm only going to be able to focus on one trade type at a time. So, I'll do the OmegaWave types from 1200 GMT until the Wave subsides. Then, I'll move over into the Harmonic types, if I have enough time in my trading day. I don't work 20 hours a day anymore (thank goodness).

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  #9 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

Current H1 OmegaWave condition:




Note H1 Chart. Price is currently between Red and Green (horizontal) lines. OmegaWave entries are dynamic - so the entry location changes depending on where the H1 bar's high and low happens to be when Omega-Absolute (the Yellow bar) intersects with Omega-Tactical or Omega-Strategic (which ever is the smaller value).

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  #10 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
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OmegaWave Short Entry:



Short was triggered (at red line) for -28 pips (typing and posting delays cost me some pips too), as the Long was then triggered (at green line).

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  #11 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

OmegaWave Long Trigger:



Long is now +5 and moving. I'm looking for the H1 Maximum Omega-Absolute value to be struck today. That can be seen by way of the White Dotted Line inside the Indicator Window on the H1 Chart. Maximum Omega-Absolute value represents a routine daily expansion point on the H1 chart. At some point during a normal OmegaWave range, the H1 bar will start to produce at least one strike against Minimum Omega-Absolute value (Purple Dotted Line inside Indicator Window) and Maximum Omega-Absolute value (White Dotted Line inside the Indicator Window). Thus far, there has been no H1 strike on Maximum Omega-Absolute value. That tells me that the big H1 bar has probably not happened yet.

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  #12 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

The -28 loss was way too much for this type of signal. I got caught between typing my post and closing the trade. By the time I got back to the trading platform, it was too late. Like I said, these OmegaWave trades can be over in seconds.

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  #13 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

Because I don't have a Short re-trigger, I am holding the Long position in the 1400 GMT H1 bar. Currently, -2.1 pips with 10 minutes remaining in the 1400 bar.

The way this works is that I will continue to hold the previous signal (Long in this instance) through the start of the next H1 bar, and wait to see if the OmegaWave continues to push through. Currently +4.8 pips.

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  #14 (permalink)
Little Rock, Arkansas
 
 
Posts: 198 since Jul 2011
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JetTrader View Post
- OmegaWave on the H1 time-frame
- CD Harmonic Intercepts on the M1 time-frame
- AB-127 Recovery from CD Harmonic Intercept Failure on the M1 time-frame



- OmegaWave on the H1 time-frame:
[INDENT]Omega was the first indicator that I created, almost 10 years ago. It was patterned after Wilder's ATR. Like ATR, it measures the volatility in all bars and for all time frames. It is the purest form of real momentum in existence. There is no other form of market momentum as pure as ATR. Omega, goes a few steps beyond ATR, by plotting multiple moving averages of the Deltas produced by the High and Low of each bar within a specific range of dates. Those MAs produce the OmegaWave effect that can been witnessed inside a chart's indicator window. In addition, I use a modified calculation to produce the Deltas that Wilder, first created. So, my Omega Indicator will not produce the same Delta that is obtained with a basic ATR Indicator.

Research shows that all currency pairs produce an OmegaWave, but that not all OmegaWaves are reliable for the purpose of executing momentum trades. However, the secret to understanding the OmegaWave effect is very simple. The higher the volume, the smoother the OmegaWave. The smoother the OmegaWave, the more reliable the momentum. Poor OmegaWaves, produce momentum price action that is subject to rapid stalling characteristics.

The idea, is to enter a trade during the highest period of momentum, while the OmegaWave is in its Expansion Phase and at the intersection where Omega (the bar's High/Low Delta) crosses one of more of the MAs produced by the OmegaWave calculation. Essentially, these MAs are what I call Tactical Omega (fast) and Strategic Omega (slow). There are other advanced Omega derivatives, but they will be beyond the scope of my purpose, here. Again, the quality of the trade, is typically dependent upon the quality of the instruments OmegaWave Form.

Just to try and begin to wrap my head around the idea behind your system here, you say that "The idea, is to enter a trade during the highest period of momentum, while the OmegaWave is in its Expansion Phase and at the intersection" meaning that this system has some of the same characteristics of a trend following system? What I mean is, you won't be trying to (the system won't) be picking tops and bottoms?

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  #15 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

Have to deal with Q&A later - I'm barely able to keep up with TinyPic, print screen saves and update posts - not to mention, actually trading the signal. Normally, (obviously) I don't have to do all this. Sorry.

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  #16 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
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H1 1500 GMT now underway. Holding previous OmegaWave Long @ -3.1 pips.

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  #17 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

OmegaWave 1400-1500 continuation Long (Hold):


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  #18 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

Note that Omega-Absolute (Yellow bar seen in Indicator Window) is just starting out for the H1 1500 hour. I'm still looking for a strike on Maximum Omega-Absolute Value (now seen in a White Solid Line). I changed the line properties to make it easier to see. Minimum Omega-Absolute Value is now a Purple Solid Line inside the Indicator Window. Both are in the H1 chart.

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  #19 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
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Note also that I have not moved the OmegaWave trigger lines (dotted green and red) in the H1 chart. That's because I am holding the "previous" or "last" OmegaWave Signal.

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  #20 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
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I have not checked the news at all today, which is something I normally do before 5am. These are just live confirmation tests, so it is not that critical. However, normally, I am well aware of any news events that might coincide with my trades. Current: +5.3 pips.

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  #21 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
Thanks: 12 given, 162 received

Note the M5 OmegaWave form. Going all the way back to 13:15 GMT, the M5 OmegaWave form has produce Yellow bars for the Omega-Absolute and the M5 Omega-Tactical and Omega-Strategic lines have shows consistent and steady growth over time. That is what I like to see going into the bigger H1 OmegaWave trades. Current: +25 pips.

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  #22 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
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OmegaWave Long Continuation 1400-1500:



Price is now starting to Gap on the M5 chart. That's a sure sign of a lot of pent up frustration. Price wants to move. Also, note the huge Weekend Gap to the downside. On the EURUSD, all gaps under H1, typically get filled. So, this OmegaWave signal is in a good position.

Note how H1 Omega-Absolute (Yellow bar) intersects with Omega-Tactical and Omega-Strategic MA lines (White and Gray respectively). I'm still looking for Omega-Absolute (Yellow bar) go reach up and strike Maximum Omega (White Solid Bar). That move is characteristic of the H1 bar - typically at some point during the trading session. I just need to lurk around and make sure I take the OmegaWave signal that leads to the strike on Maximum Omega. Minimum Omega (Purple Solid Line) has already been struck at 0600 GMT. Typically, the time between the strike on Minimum and the strike on Maximum, is between 6 to 12 hours.

Timing is everything in FX.

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  #23 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
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New bars from M3 through M30 at 1530 GMT. Looking for their respective OmegaWaves to continue the upside move. Else, I'll have to wait on a new H1 OmegaWave cycle, which could mean some push to the downside in the lower time frame Omega-Absolute values. Current: +24.6 pips.

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  #24 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
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Note hug drop in Omega-Absolute (Yellow bars) on the M5. That's what I call Internal Omega Cycling (IOC). So, we've got some serious M5 IOC, which means a thrust should be forthcoming sooner - rather than later.


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  #25 (permalink)
Edmonton, Canada
 
 
Posts: 187 since Apr 2011
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... and there it is.


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  #26 (permalink)
 
 
Posts: 1,176 since Nov 2009

how is this a "live cash" journal when the account clearly states DEMO ... am I missing something here? which part is the cash part?

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  #27 (permalink)
Edmonton, Canada
 
 
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The market needs to get beyond the failed small Harmonic that was just breached on the M5 chart. The market also will have to deal with a possible 2B Vic Short trigger in the M5 chart as well at 1.36379. The other issue here is that on the H1, there is another signal that I have which is fighting against my current Long position, as the H1 needs to unwind a bit to the downside.

The confluence of these things is causing the congested stall seen at this particular price level. Still, Maximum Omega-Absolute Value is out there lurking and I'm lurking with it.

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  #28 (permalink)
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sysot1t View Post
how is this a "live cash" journal when the account clearly states DEMO ... am I missing something here? which part is the cash part?

I don't trade on the IBFX platform - I use their data for my test signals. Observe the box in the lower right corner of all the screens posted - that might help.

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  #29 (permalink)
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2B Vic kicked in Short. For those of you that don't know what a 2B Vic looks like, try a google on Suri Notes and Harmonics. He's got a pdf out there on the set-up. I don't trade them, but it is coinciding with my current Long position, just as I indicated it might above.

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sysot1t View Post
how is this a "live cash" journal when the account clearly states DEMO ... am I missing something here? which part is the cash part?

You guys might want to go get caught-up by reading the first thread of the journal.

This is a small, live, test account and a live test (certification) journal.


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  #31 (permalink)
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OmegaWave 1400 - 1600 GMT continuation:



H1 OmegaWave still intact and still has Omega-Tactical over Omega-Strategic. M5 OmegaWave has cycled twice, while M15 and M30 are both working on their first OmegaWave cycle. As long as the H1 Omega-Tac (Gray MA line) remains > H1 Omega-Sac (White MA line), the daily session is still in Expansion Phase (see original OP post for explanation).

Neither 1200, 1300, 1400 or 1500 brought about a strike on Maximum Omega-Absolute (White Solid Line inside H1 Indicator Window), so my expectation would be for that strike to occur during this hour - if not, the next hour and so on, until H1 Omega-Tac crosses below H1 Omega-Sac, which would indicate the end of the Daily Omega Expansion Phase and the start of the Daily Omega Compression Phase. At that point, the types of trades that I take would change, as the probability for Omega continuation through its TAC/SAC level(s) starts to diminish.

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  #32 (permalink)
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Since this is essentially the certification phase of a new signal, which will ultimately become a filter for the already existing primary trade signal for the system, I don't have any particular rules of engagement for money management on these types of trades.

Right now, the current money is: +21.9 pips. 21.9 + 18.4 = 40.3. 40.3 - 28.9 = 11.4. So, I could take the 11 and wait for the next H1 OmegaWave signal. But, I'll just hold this current Long position, given that I know Maximum Omega-Absolute is still lurking for the day on the H1 chart (White Solid Line inside H1 Indicator Window).

OmegaWave is an ND signal and a pure momentum trade. So, there is no directional bias to the signal. The entry is purely determined by the intersection of Omega-Absolute (Yellow bar) and Omega-Tactical/Omega-Strategic (White and Gray MA lines seen inside H1 Indicator Window).

Right now, the 2B Vic Short signal at 1.36379 is providing the source for the stall in upward MO on the EURUSD.

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  #33 (permalink)
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H1 OmegaWave Entry Levels

Entry = Intersection of Omega-Abs with Omega-Tac + Omega-Sac

Right now, for H1 1600 GMT, Omega-Tac = 32 pips and Omega-Sac = 29 pips. So, those two averages make up the entry level for either the Long or the Short trade (If I were flat the market right now).

Because these are hourly signals, I simply subtract Omega-Tac + Omega-Sac / 2 from the current High to obtain the H1 OmegaWave Short entry level. Or, I simply add Omega-Tac + Omega-Sac / 2 to the current Low to obtain the H1 OmegaWave Long entry level. So, one can see that the entry levels are dynamically changing until the intersection between Omega-Absolute (Yellow bar) intersects Omega-Tac/Omega-Sac.

Right now, I'm currently holding a previous OmegaWave signal (Long). If I were flat the market, my next (dynamic) H1 OmegaWave Long Entry would be 3660.1 and the H1 OmegaWave Short Entry would be 3615. Note - both entries locations are dynamic and subject to change based on where price happens to be at the moment Omega-Absolute (Yellow bar) intersects Omega-Tac/Omega-Sac (White and Gray MA lines plotted inside the H1 Indicator Window).

As price changes AND until the intersection occurs, the actual entry levels will adjust as well. These are not fixed entry points - they move with the market, up to the point of Omega-Abs and Omega-Tac/Sac intersection.

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JetTrader View Post
I don't trade on the IBFX platform - I use their data for my test signals. Observe the box in the lower right corner of all the screens posted - that might help.

so you trade off a demo data feed for generating your signals? interesting...

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  #35 (permalink)
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Only 14 minutes remaining in H1 1600 (GMT) and still no strike on Maximum Omega-Absolute Value (White Solid Line inside H1 Indicator Window). Which means either two things:

1) Today's Daily range will be truncated

or

2) A fairly large scale thrust is imminent

Again, OmegaWave is a non-directional signal - the key is to lurk and pounce. The timing comes with the entry intersection as described above.

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sysot1t View Post
so you trade off a demo data feed for generating your signals? interesting...

For testing purposes, yes. On BARX, no. BARX tends to be a lot smoother and that's where my production trading takes place, until I get over to FXall.

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  #37 (permalink)
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6 minutes remaining before the new H1 1700.

IOC re-cycling on M5, M15 and M30, which is a natural occurrence before the next larger move - or - just before Daily Omega goes to sleep. It seems a bit early for Daily Omega to start sleeping (though it can sleep early), and the H1 Maximum Omega-Absolute Value spike has not happened yet.

So, I wait/lurk patiently.

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  #38 (permalink)
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H1 OmegaWave 1400 - 1700 continuation:

Note M5, M15 and M30, all have Blue Omega-Absolute bars in their respective Omega indicators. This simply shows that Omega-Tactical (Gray MA line) has crossed below Omega-Strategic (White MA line) for each respective indicator. Recall, Omega-Tac is the faster, while Omega-Strategic is the slower of the two MAs.

The most important thing that stands out in my mind is on the H1 Omega Indicator. You can see H1 Omega-Tac and Omega-Sac is now 29 pips. That means they are at parity with each other in the middle of the U.S. trading session. Either volatility is going to sleep on the EURUSD for the remainder of the day, or a rather large spike is forthcoming.

Still, H1's Maximum Omega-Absolute has not yet been struck and that's what I'm hunting.

The hunt for Max Omega.

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  #39 (permalink)
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r3algood View Post
Just to try and begin to wrap my head around the idea behind your system here, you say that "The idea, is to enter a trade during the highest period of momentum, while the OmegaWave is in its Expansion Phase and at the intersection" meaning that this system has some of the same characteristics of a trend following system? What I mean is, you won't be trying to (the system won't) be picking tops and bottoms?

With things a bit slower now...

What's being posted here is not the trading system I use. In my first post, I indicate that I am in the final phase of certification of three (3) new additions to the larger scale system and that I expected to either find that they act as Filters or Anti-Primary Signals. So, there is no system being shown here.

However, to answer your question, no. Omega might take-off and run against the trend (as it has for the past 4 hours). Also, when speaking of trends, one has to define the time frame, else the term has little to no meaning. An M1 "trend" -vs- the MN "trend" can be quite different.

Ultimately, the OmegaWave signal should put me directly inline with the 'current' market flow - whatever that is and whenever it occurs. So, OmegaWave simply becomes the on-ramp to the market's freeway. But, the idea is to only use this type of signal/indicator when the probability for continuance AFTER the entry is the highest. That's the key. If that probability is high, then momentum takes care of the rest. The indicator itself simply breaks down the natural volatility into measurable and quantifiable components that can be used in an algorithm for entry.

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  #40 (permalink)
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Current money picture is now: +16.9 pips. I won't let this one get negative. The previously mentioned 2B Vic Short entry turned out to be trade-worthy for those that use such signals.

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  #41 (permalink)
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Love to listen to this while trading:

Game of Thrones - Main Theme (Official Soundtrack Version) - YouTube

and this


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  #42 (permalink)
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OmegaWave 1400 - 1800 continuation:

Haven't had a continuation this prolonged in a good while, but it is nice to see the residual memory holding inside the Wave.

A very critical hour, this one. As you can see, H1 Omega-Tac has finally crossed under Omega-strategic, signaling what could be the start of the Compression Phase that I spoke about earlier. Or, it could signal a rapid expansion of price coming soon. The reason for the belief that a rapid expansion in price is still possible for today's trading session, is due to the fact that Maximum Omega-Absolute (White Solid Line in H1 Indicator Window) has not been struck yet.

There are days when Maximum Omega-Absolute Value (White Solid Line in H1 Indicator Window) does not get struck. When that happens, Daily Omega is being compressed, which typically foretells of a rapid expansion in price occurring in the next session.

Current: +44 pips.

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  #43 (permalink)
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And, just like that - before I could finish typing, she starts her ballistic rant to the upside. The hunt for Maximum Omega-Abs is still on and I'm in pursuit.

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  #44 (permalink)
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Hopefully this will be the Maximum expansion run I've been waiting patiently for. She reaching escape velocity. Current +65 pips.

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  #45 (permalink)
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Note how H1 Omega-Tac (Gray MA Line) cross back above H1 Omega-Sac (White MA Line).

Just under Minimum H1 Omega spike level (Purple Solid Line in H1 Indicator Window).

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  #46 (permalink)
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Targeting 3723.

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  #47 (permalink)
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3723 is the Daily Omega-Tac/Omega-Sac range. Though I am using the H1 time frame, the Daily time frame sets the expected range. If the lower time frames remain active (their respective Omega-Tac over Omega-Sac) then the Daily has a better change of seeing its range fulfilled.

Right now, there is some question about M5. If you note, the Omega-Tac and Omega-Sac MA lines on M5 are scaling downward. That's not what I would normally expect to see at 1800 GMT and that give me cause to be somewhat hesitant about reaching the Daily target of 3723.

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  #48 (permalink)
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9 minutes remaining on the hour. Current: +73.5 pips.

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  #49 (permalink)
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Nice little H1 Trailing Short for the scalper - it was worth more than 20 pips if you caught it.

The new hour begins now at 1900 and still no Maximum Omega-Absolute Value spike to the white line. I am concerned about this price action at this point. Typically, the Maximum Omega-Abs Val spike does not take this long to materialize.

Still, patiently waiting at +54 pips for now.


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  #50 (permalink)
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Nice little development underway here. M5 Omega-Abs has turned Yellow again and both Omega-Tac and Omega-Sac, are starting to turn upwards. If that behavior in the M5 OmegaWave continues, then that will open the door for the H1 to finally see its Maximum Omega-Absolute Value spike to the White line.


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  #51 (permalink)
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Quadruple High break out is possible at this level: M5, M15, M30 and H1. That could be the catalyst near 3693.4.

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  #52 (permalink)
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Quad breaking now. Let's see if she can sustain it.

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  #53 (permalink)
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3705, brings the Weekend Gap closure into play, which is up near 3783. Current: +80 pips.

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  #54 (permalink)
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Seeking Max...

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  #55 (permalink)
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Note the H1 Omega-Absolute bar (Yellow) in H1 Indicator Window. It is now the largest Omega-Abs bar for the entire session. This is absolute confirmation that Omega had more to give and that the Wave to Trade Direction relationship was correct back at hour 1400, with the reversal out of the Short signal and into the Long signal. No matter what happens with the rest of this session - I'm pretty happy with the test results. Current: +90 pips.

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  #56 (permalink)
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20 minutes remaining on this 1900 H1 bar and still no Maximum Omega-Absolute price level seen by the market during this session. Multiple strikes on the Minimum Omega-Absolute level (which is the 45 pips per hour Purple Line in the H1 Indicator Window). Whereas, Maximum Omega-Absolute Value is 74 pips per hour. That means that there should be an H1 bar this session that ranges to 74 pips. And, that has not yet happened today.

Pair now seeing some resistance near the Daily high for the EURUSD, which has spiked price back down below 3700.

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  #57 (permalink)
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My workday is over (typically around 2000 hrs. GMT). Given the huge Weekend Gap gift sitting above my head, I'm going to Swing this Day Trade into tomorrow's session with a fair amount of confidence - discounting any negative news item that comes up between now and tomorrow morning.

Overall, it has been a good first public airing of this one. I'll get to the other two later.

Pip Totals:

Trade #1: +18.4
Trade #2: -28.9
Trade #3: +69.9 (current hold into swing position to cover weekend gap)

Net: +59.4 (real-time; trade #3 current)

Have a nice day.


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JetTrader View Post
My workday is over (typically around 2000 hrs. GMT). Given the huge Weekend Gap gift sitting above my head, I'm going to Swing this Day Trade into tomorrow's session with a fair amount of confidence - discounting any negative news item that comes up between now and tomorrow morning.

Overall, it has been a good first public airing of this one. I'll get to the other two later.

Pip Totals:

Trade #1: +18.4
Trade #2: -28.9
Trade #3: +69.9 (current hold into swing position to cover weekend gap)

Net: +59.4 (real-time; trade #3 current)

Have a nice day.


Great trading today JetTrader, I have read through the entire thread and I am starting to understand how you are working this method. Looking forward to more posts from you

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  #59 (permalink)
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JetTrader View Post
I'm already into my first EURUSD trade. However, I keep getting logged-out of the BigMikesTrading forum - seemingly on a timed basis of inactivity.

Check the 'remember me' box when you sign in (which is the default), and don't use third party cookie removal software or cookie deleters, etc etc. In short, a normal user never has to log back in to futures.io (formerly BMT) after you log in the first time. If you are having to log back in, it is because of configuration changes you made to your browser or third party software.

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  #60 (permalink)
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JetTrader View Post
20 minutes remaining on this 1900 H1 bar and still no Maximum Omega-Absolute price level seen by the market during this session. Multiple strikes on the Minimum Omega-Absolute level (which is the 45 pips per hour Purple Line in the H1 Indicator Window). Whereas, Maximum Omega-Absolute Value is 74 pips per hour. That means that there should be an H1 bar this session that ranges to 74 pips. And, that has not yet happened today.

Pair now seeing some resistance near the Daily high for the EURUSD, which has spiked price back down below 3700.



A few hours after I wrote that, history proved that it likes to repeat itself. Take note of the September 19th, 2011, 2200 (GMT) H1 bar. Maximum Omega-Absolute Value, finally came through.

a) The move came to the Short side, so it went against the current Long Hold position.

b) The move was for 77 pips during the 2200 hr.

b) The OmegaWave trigger (Omega-Tactical + Omega-Strategic / 2) would have been at roughly 35 pips - which was price level 1.36466.

c) The absolute pips available on the move would have been 41.9 - given the H1 2200 hr low of 1.36047.
-----------------

So, I'm happy with the OmegaWave signal performance thus far. Given the fact that I was still in the market waiting on another unexpected test (the Weekend Gap) and given the fact that I retired for the day before Maximum Omega-Absolute Value, I was not able to participate in the move. However, it is nice to see that it did transpire as projected.

Maximum and Minimum Omega-Absolute, does not happen everyday 100% of the time. However, it does give me an indication about whether or not the market still has good potential to deliver an opportunity worth trading down the road, in the same session, before the OmegaWave begins enters its Compression Phase.

Because I am live and because I only have one cash test account, I won't be trading anything until this Weekend Gap test is over. I did not expect to have a Weekend Gap when I started trading on Monday, but when I looked at the chart, I realized that at some point, I would attempt to close the gap with a big swing trade.

I am not a Swing Trader. However, unfulfilled Weekend Gaps on the EURUSD are not the norm. So, I'm going to let this one run just to see what happens. Anyone that has been around the business long enough, knows that there are some people out there who do nothing but hunt for Weekend Gaps - huge ones. They make only one trade per week and they seek to close the Weekend Gap for profit. Others have written EAs that hunt for gaps intraday. FX can be good for that kind of trading, but you have to make sure you've done the homework on the historicity of Gap Closure, Rate of Gap Closure and Pips Available during Gap Closure. So, I'll be back after this Weekend Gap thing works itself out, either to a final profitable outcome, or to a failure.

During this quasi-downtime period, I might be able to take some questions, though I will be dong other things away from the computer from time-to-time.

Current: +76 pips.

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  #61 (permalink)
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r3algood - welcome!

Mike - thanks for the explanation, though ironically, I never got logged out yesterday. That was because of the number of posts I made. I don't expect to be posting that much in a single session going forward, so we'll see how things work out from here.

It was 5am when I got to work today. Gap closure seems to be underway, so I'm going back to bed to get some more sleep. I'm typically up and at work by 5am Mon-Fri, so I can catch the 1200 H1 bar. 3752.9 is Gap Closure and today's high thus far has been 3743.6. So, 9.3 more pips to go with almost half of the trading session remaining.

I'm not a Gap expert, so I don't know if we will get there today or not.

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JetTrader View Post

Until one understands the differential between a Trajectory and a Trend, it is very hard to know where to set a stop, or even if a stop is needed. Sometimes, stops can be the trader's worst enemy, especially when they are placed randomly and without an appreciation of the dominant Trajectory. In fact, one of the secretes to my trading is that I do not use stops. Essentially, I am the stop. I set a certain number of hours per day to be available for emergency action messages form my system and I act accordingly. False stop placements, or stops placed right in the middle of a dominant Trajectory, is an almost guaranteed loss of capital. It is like being robbed in broad daylight by a man with a wooden gun, as price begins to move back in the direction of your original trade. [how many times as that happened!] No doubt, we've all been ripped off like that many times in the past.

Where do you seek an exit in the market if a position goes against you?

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r3algood View Post
Where do you seek an exit in the market if a position goes against you?

It depends on what these two system modules tell me:





The first system module is called the MetaBrain and the second is the Targeting Package. The brain provides the trade signal, while the targeting package provides the answer to your question. Behind each "PE" and "PT" value, sits an algorithm for determining the 'optimal' target range. That range is called the Primary Entry Mask and the Primary Target Mask. The Stop is geared through the MetaBrain signal's magnitude indicator and coupled to the Primary Target and Primary Entry Masks. The Stop is a derivative of PT coupled with PE and balanced (or, stabilized) by the signals magnitude indicator.

There is no one Stop location - there are many. They are all synthesized into a high probability 'negative' price target - meaning, a location adverse to the purpose of the trade signal. It is a 'real' system, as opposed to what you see me doing here in this thread.

For this thread, because I'm only certifying a new component within the broader system, I am the Stop and I am the Limit.

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  #64 (permalink)
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Both modules above have been disconnected from the live data stream, so their output in the pic is all invalid. It is merely a pic to show what the modules look like inside the signal engine.

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  #65 (permalink)
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1700 GMT starts the 'next day' given the test platform I use for FX data. So, the battle for Gap Closure begins again this session. The bottom of the Weekend Gap is 3752.9 in the platform I use (yours may vary slightly). Last session (9/20/11) saw a high of 3743.6. So, the Weekend Gap is still (technically) open - albeit not by that much.

A break of 3743.6 clearly brings Gap Closure into play. After that, I'll make the decision to take the pips, close the trade and move back into the OmegaWave testing. Sorry, for the delay, but I don't see many unfilled Weekend Gaps of this size and clarity as often as I like. So, I'm going to take advantage of the live testing opportunity.

I've added one more indicator, just to help me better measure some of the OmegaWave entries a bit better. The indicator added is called Distinct Vega. It is a modified version of what I originally created - as the modifications were just done about 2 weeks ago. So, the output of this DV Indicator is not exactly what is used to be previously.

DV measures Open to High, Open to Low, High to Close and Low to Close, over N periods for each bar (where N can be any measure of time you like). There are other, more advanced components of the DV Indicator, but that's the basic framework you see on screen. After that, the changes I've made since are highly proprietary and I don't discuss them in public.

Current: +100 pips.


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  #66 (permalink)
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Gap Closure complete.




I'm waiting for either a double-top confirmation of the highest high, or a very large AB=CD pattern to continue through the Gap level. Gap Closure Retracement is now underway, pulling price back below the Gap. This should be a temporary condition.

This is also a good example of why I am not a Swing Trader. I'm not knocking that form of trading, but the longer the market remains close to, or slightly outside-the-money of your entry, the closer your trade signal moves to a 50/50 condition. So, if you have a trade signal with an historical accuracy of say 90% to a specified target, if price remains at or near your entry, that 90% will erode down to a flat 50%/50% the longer the position remains open in the same price region of the original entry.

This is one of the hidden "negatives" about Swing Trading that only empirical research of the data will reveal to you. If one has not take the research of the data they trade as a very serious project, then one is doing themselves a disservice, because there are a lot of hidden truths about the market, lurking inside its data. Swing Trading can be done correctly, but it takes either a massive amount of gratuitous fortune, or somebody has to have studied the data for long term success.

Semi-High Frequency Trading, offers the lowest exposure risk (believe it or not - it is true when you look at the data), when you are trading with high probability trade signals - signals that have a historicity of being accurate to a specific target level.

I'll more than likely go ahead and dump this trade at some point today, so I can get back to the certification trials.

Current: +130 pips.

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  #67 (permalink)
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OmegaWave Instructive:

Below is the current screen shot of the H1 chart with annotations.



I post it to show that Maximum Omega-Abs (MxO) does not always occur. You can look back through the days on the H1 chart to see that it does have a fairly good strike history. Keeping in mind that both MxO and MnO (Maximum Omega-Absolute Value and Minimum Omega-Absolute Value) are dynamically generated values. So, for the certification testing, I have to continually make minor adjustments to the both the White Solid Line and the Purple Solid Line, which represent both MxO (White) and MnO (Purple). I have not been very diligent in making those minor adjustments, but the adjustment range is very small anyway, and thus far in the week have been negligible.

Here's the point - whenever Omega-Abs (the Yellow bars in the H1 Indicator Window) start to [u]under-perform[/b] MxO and MnO, you can expect the market to be in the process of making a larger scale pivot. In this case, we have witnessed MxO and MnO being underperformed on the H1 and now the transition from a Short biased Trajectory, to a Long biased Trajectory in the market.

The Omega Indicator has two external variable inputs: Omega-Tactical (Gray Line showing MA) and Omega-Strategic (White Line showing MA). The values used to set the "Period" for both Omega-Tac and Omega-Sac, is what determines the time frame for the transition to a pivot in the market after MxO and MnO fail to occur.

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  #68 (permalink)
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Pretty much reaching Daily Omega exhaustion, which is Omega-Tac 145 pips and Omega-Sac 155 pips. Daily Omega-Abs = 147 pips. So, the EURUSD is pretty much in the sweet spot right now. Anymore upside move today, will have to come from news and/or economic reports. However, as you can see from the charts, the H1 Omega-Abs (Yellow bars inside the H1 Indicator Window) appear to be very strong and showing no signs of letting up. Remember, however, that Omega is a non-directional indicator, so those yellow bars could very well be massive spikes to the downside just lurking behind the scenes. One needs directional indicators to give insight about direction.

I'm back to the same headline: No Minimum Omega-Absolute (MnO) strike on the H1 time frame. So, given the regularity with which the MnO occurs, I'll continue to hold this position until I get the MnO strike - with the key being, to get that strike to the upside, as downside strike on MnO would wipe out close to 45 pips of profit at this point - not something I would normally want to give up in live production trading. But, since this a certification test, I can and will allow the added risk, but not exiting the market right now. Current: +161 pips.


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  #69 (permalink)
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Another instructive about trading with Omega is that it forces patience and it removes some of the emotional banter within that could occur with pure directional trading. If I know the cycles of the Wave form, and I know when the periods from Peak to Peak, then it helps to cut down on some of the whiplash that many have experienced this week while trading the EURUSD.

Inside every large scale Trajectory (the big time frames), resides an OmegaWave in all the smaller time frames. It took me a long time to make that logical connection, even though I had built the indicators years prior. You can think of Omega-Absolute (the Yellow bars inside the Indicator Windows) the same way you would light photons. And, you can think of both MA lines (the Gray and White MA lines inside each Indicator Window) of the Omega-Tac and Omega-Sac, as the light wave.

So, you get light particles traveling in the form of a wave. Commensurately, you get Omega-Absolutes (Yellow bars) traveling in the form of an OmegaWave (Omega-Tac and Omega-Sac), for each Trajectory, regardless of its size. Essentially, taking the pulse of the market's price behavior.

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  #70 (permalink)
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MnO (Minimum Omega-Absolute Value) has just been struck (Purple line struck). More importantly, it was struck to the upside before peeling of a bit back below Ask 3768.7. This starts the new 1800 GMT hour and I expect some pull-back, as the 1700 hour ended with a high spike - which could indicate the start of a double-top move into the OmegaWave Compression phase. On my test platform, there are still 6 hours remaining in the trading session, but that will run through the U.S. equities EOD.

Same story - I'm waiting for MxO and I want it to be to the upside. Current: +164 pips.


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  #71 (permalink)
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And, just like that, MxO arrives on schedule. Unfortunately, it occurred to the downside, which further illustrates that OmegaWave is non-directional in nature. According to the numbers, had I been simply trading the OmegaWave and taking profits after each trigger, that last Omega-Absolute burst would have net a nice 58 pips in less than 30 minutes total (from the start of the 1800 hr bar). Of course, I was holding the Long from the Gap Closure and unable to respond to the move.

It looks like it might have been something in the news - I have still not checked my economic reports for this week, so it could have also been some economic indicator that caught the market by surprise. Currently sitting at +109 pips, but doing so in a very volatile H1 chart. Looking to retest as much of the day's high as possible before the setting up the exit as gracefully as possible.


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  #72 (permalink)
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Of, course. The Fed decides to buy Treasuries and the market uses that information to push the EUR down against the USD. If someone sneezes, this market will move. Still holding Gap Closure. I would expect the market to realize that what was said by the Fed, was already expected and not earth shattering, moving the EURUSD back to the upside at least temporarily.

Current +55 pips (that's a 100+ pip move on the Fed).

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  #73 (permalink)
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The 1800 hour OmegaWave signal to the Short side would have been very nice, with its strike through MxO. The Omega-Absolute intersection with the Omega-Wave happened at 3751.4, triggering the Short trade. That trade ran through MxO and had an absolute profit range of approximately +105 pips thus far, with 7 minute remaining until the end of the 1800 hr bar.

Illustrating that no matter what the news happens to be during the trading session, with OmegaWave, I'm always going to be in the right position to take advantage of the move. Of course, not when I'm holding a position in the opposite direction, which would not be the case in a production trading environment. Overall, very happy with the OmegaWave and its key performance indicators thus far.

Still holding he previous Gap Closure test - looking for a 1900 hr retracement. Current: +55.5 pips.


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  #74 (permalink)
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1900 bar commences now. There has been on strike on MxO. There could very well be a secondary strike on MxO and given the surge to the downside, that strike could come in the form of Short side retracement. Holding previous Gap Closure position Long. Current: +70 pips.


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  #75 (permalink)
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Another OmegaWave illustration. There is a reason why I call it the OmegaWave. Its form can be seen no matter where you apply the indicator throughout the history of the currency pair. This is a wide angle snap shot of the EURUSD H1 OmegaWave.



Whenever you encounter such sinusoidal-like patterns in any traded financial market, you'd be wise to find a way to take advantage of it. Regularity, is what all traders seek. When I first discovered the wave form, being an engineer (among other things), my eyes lit up with curiosity because I knew that I was looking at nearly sinusoidal market behavior. And, sinusoidal-like behavior means predictive repetition. If you can couple a series of good Directional indicators with something like the OmegaWave concept, you can turn your trading into a virtual Pip Machine.

The OmegaWave totals for today were as follows (if traded):

1200 hr: +11 pips
1300 hr: +7 pips
1400 hr: -3.5 pips
1500 hr: +10 pips
1600 hr: -3.5 pips
1700 hr: +13 pips (strikes Minimum Omega-Absolute Value)
1800 hr: +105 pips (strikes Maximum Omega-Absolute Value)

* All entries would have been based on the Omega-Absolute intersection with OmegaWave (Omega-Tac + Omega-Sac /2) *

139 pips in the absolute profit range. You would then have to subtract your cost for doing business in the FX markets, such as: Slippage, Spreads and Trader Error upon entering and exiting orders. Usually, total costs will run about 15% of absolute profit range. So, net profits would have be in the 117 pips range for the day on OmegaWave trades.

So, while I get through this Weekend Gap Closure deal (which I did not expect to be in this week), I also get confirmation this week of the OmegaWave capabilities. Each day thus far, it has met and exceeded the profit requirements of my revenue model. That surprises me a bit, as initially I did not think that it could be used as a stand-alone trade signal. I could be wrong about that, it could be that good. We'll see.

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  #76 (permalink)
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Another OmegaWave signal. This time, the 1900 hr bar triggered a Short at 3642.8 (which was the Omega-Absolute [yellow bar] intersection with the OmegaWave [Gray and White MA lines]. The 1900 hr bar low was 3606.5, which makes the take profit range on the OmegaWave signal at 36.3 pips deep with a secondary strike on MxO.

[the white horizontal line in the H1 chart depicts the OmegaWave entry trigger level]

So, again. Got the secondary strike on MxO, supporting the OmegaWave key performance indicators - which is all good. However, I'm still holding the Weekend Gap Closure test and was unable to participate.

So, I can add 36.3 pips minus the cost of doing business to today's OmegaWave totals. It has been a very good OmegaWave kind of day. I think I'm going to like this one - it is like a little money machine.


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  #77 (permalink)
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Current: -4.9 pips.

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  #78 (permalink)
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Hyper-Volatility. Which will be very useful for OmegaWave. Not to useful for people holding Long positions through Weekend Gap Closures, however. LOL. Got-a-love it. Current: -15.8 pips.

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  #79 (permalink)
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Lessons Learned on Weekend Gap Closure:

1) All gaps get closed on high liquidity currency pairs (most of them, not all actually).

2) When the gap gets closed, exit the trade (most likely).

I've seen EURGPY gap all over the place and you can sit there and scalp tiny trades off the M1 chart all day long when she's really in "gap mode." But, I don't see a lot of Weekend Gaps that don't get closed during the latter stages of the late Sunday night session, before my work week begins. So, having seen another, I went for it and it worked out nicely, until the Fed news.

So, lessons 1 & 2 above, just might be worth me paying some attention to in the future. Of course, this is a live test, so I'm more interested in seeing the full scope of what's possible. Holding Weekend Gap Closure at current: -23.7 pips.

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  #80 (permalink)
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1900 is done. OmegaWave potential on that ran down to 3586.9, from an entry of 3642.8, for a absolute profit range of 55.9 pips minus the cost of doing business. 1900 closed on 3593.6, for a wire-to-wire net profit of 3642.8 to 3593.6, or 49.2 pips minus the costs.



OmegaWave continues to hit its key performance indicators for profitability and usefulness as a viable trade signal.

Still holding previous Weekend Gap Closure Long at current: -25.1 pips.

This really does illustrate the differential between semi-HFT trading -vs- buy and hold, or sell and hold type trading methods.

Some big lessons being taught here for the wise.

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  #81 (permalink)
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Pretty much reaching Daily Omega exhaustion, which is Omega-Tac 145 pips and Omega-Sac 155 pips. Daily Omega-Abs = 147 pips. So, the EURUSD is pretty much in the sweet spot right now. Anymore upside move today, will have to come from news and/or economic reports. However, as you can see from the charts, the H1 Omega-Abs (Yellow bars inside the H1 Indicator Window) appear to be very strong and showing no signs of letting up. Remember, however, that Omega is a non-directional indicator, so those yellow bars could very well be massive spikes to the downside just lurking behind the scenes. One needs directional indicators to give insight about direction.

I'm back to the same headline: No Minimum Omega-Absolute (MnO) strike on the H1 time frame. So, given the regularity with which the MnO occurs, I'll continue to hold this position until I get the MnO strike - with the key being, to get that strike to the upside, as downside strike on MnO would wipe out close to 45 pips of profit at this point - not something I would normally want to give up in live production trading. But, since this a certification test, I can and will allow the added risk, but not exiting the market right now. Current: +161 pips.



I made that statement just before the Fed announcement and it turned out to be fairly on target. The decision NOT to exit on the Daily Omega-Abs Indicator showing exhaustion, was the reason why my Weekend Gap Closure position is now sitting at current: -12.9 pips.

So, overall, I'm exceedingly happy with the results - because I understand the errors made and how to correct them.

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  #82 (permalink)
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This is what live testing is all about. It is not a game. It is a serious opportunity to improve trading results long-term. There must be lessons learned and those lessons have to be applied to production trading. So, the analysis of every single step along the way, is vitally important to long range success in a production environment.

As long as one learns something about what happened, then their time and money spent is essentially a deposit in the bank of experience, from which one can make withdrawals in the future.

A double breach of yesterday's High and Low has just commenced, which means an almost guaranteed return to BE on the Weekend Gap Closure position. So, I'll hold that through the next session until it recovers, as the Daily bar is now engulfing the previous Daily bar. Current: -46.7 pips.

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  #83 (permalink)
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So, essentially, we got a technical reversal to the Upside, followed by a fundamental reversal to the Downside on the Fed's statements. That caused the Daily engulfing of the previous Daily bar. Expect more volatility in the next Daily session on the EURSUD.

No OmegaWave signal/trigger on the 2000 hr H1 bar. H1 OmegaWave (the combination of both Omega-Tac and Omega-Sac MAs) has now exceeded its signal range. That basically means that all OmegaWave triggers get reversed from this point forward in the trading session, should they occur.

Why?

The reason for this is that right now, Omega-Tac = 65 pips, while Omega-Sac = 56 pips. That means that a move from the H1 High or Low, will have to be be somewhere in the neighborhood of 60.5 pips (Omega-Tac + Omega-Sac /2), in order to trigger the trade. Well, since H1 OmegaWave has a peak of roughly 55 pips, the trigger itself would exceed the OmegaWave historical averages, therefore, reversing any OmegaWave signal that gets triggered for the remainder of this session.

This understanding comes from knowing that the OmegaWave will have to enter its Compression Phase at some point, before the end of the trading session, which is less than 4 hours away. So, the reversal of the OmegaWave signal, is not something I talked about previously, but its simply common sense, given the exhaustion of the OmegaWave itself and its eventual need to undergo Wave Compression.

In short, on exhaustion of the OmegaWave, all signals get reversed.

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  #84 (permalink)
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Current: -44.8 pips.

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  #85 (permalink)
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Expecting a roughly 63 pip move to the upside from here, over the next 3 hours as this session moves to a close at 23:59 GMT. That's a system trade signal, which is triggering right now. Obviously, I'm not trading that signal right now, given my involvement in these certification tests. However, it will be interesting to see how that primary trade signal does under the weight of the Fed's news in the opposite direction.

The primary trade signal, has nothing to do with this journal - I'm just mentioning it because of its timing. Primary Trade Signal Entry = Long at 3570. Target = 3633. Timing = by 23:59.

On the Weekend Gap Closure side of things - still holding Long position and waiting for BE plus 10 pips to cover earlier loss this week.

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  #86 (permalink)
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2000 hr now complete. No H1 OmegaWave signal generated. 2100 hr is expected to produce the OmegaWave Compression Phase, unless there is more news or residual downside pressure from the Fed's previous statements.


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  #87 (permalink)
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2200 hr begins. Chart shows that no OmegaWave signal got triggered to either side (no intersection of Omega-Abs with OmegaWave) and that as expected, the OmegaWave has shifted into its Compression Phase (seen by the OmegaWave turning downward in the H1 Indicator Window).

The Primary Signal Trade has launched and the hold on the Weekend Gap Closure is still in effect. Current: -20 pips.


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  #88 (permalink)
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Note the OmegaWave compression on the M5 and M15. That cannot remain intact - price must move and the directional quality of the market in the short term is Long.

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Not trading the Harmonic. Just posting its Shell for my future reference.

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  #90 (permalink)
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Current: -33.1 pips.

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  #91 (permalink)
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Typically, on CD Intercept trades, I wait for M5 and M15 Omega-Absolute to breach their respective OmegaWave levels before entering. But, anywhere before or on the XB entry slope is appropriate.

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  #92 (permalink)
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The final 2300 hr is now underway. No H1 OmegaWave signal was triggered in the 2200 hr. Still holding Weekend Gap Closure on a failure to exit at +161 pips. Primary Signal (if I were trading it) is now roughly 20% filled to 63 pips. The actual production system generates a dynamic target, so the 63 pip initial reference will most likely get edited.

Current (Weekend Gap Closure Trade): -33.6 pips.

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  #93 (permalink)
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Long CD Intercept Stop & Reversal is: 50% point "C" and 50% point "A" to BE.

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  #94 (permalink)
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C now resets to below 88.6 of AB leg, triggering Stop and Reversal of 50% cost basis - leaving 50% behind to trail. (for notational purposes - not trading Harmonic pattern). Adding the lost 50% would take place at the XB entry slope to the upside, if that occurs.

If the primary signal were being traded, it would be pushed back into the spread. Essentially, the Fed's statement is providing suppressive fire for the primary signal - if that were being traded.

Current (Weekend Gap Closure): -42 pips.

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[If it were being traded] The primary signal would now go into inter-day trade mode. As a side note - all primary trades are by definition intra-day trades. They have an profit timeline that ranges from the entry to the close of the session in which they were triggered. If the target is not struck and the dynamic stop is not reached, the trade is held into the next session.

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  #96 (permalink)
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That's the end of the trading session and the end of my work day. Since I got off to a late start today, I extended my work day for a few more hours.

Recap:

A) The net total of H1 OmegaWave trades starting at 1200 GMT and running through 2359 GMT, provided more confirmation of a well behaved trade signal and forces me to consider the signal as a stand-alone input to the larger system. That would require a different kind of integration path technically, but it can be done rather smoothly. Thus far, I am very pleased with the key performance benchmarks: Minimum Omega-Absolute, Maximum Omega-Absolute and OmegaWave propagation throughout the trading session.

B) A more than 160 pip profit was wiped away today in the wake of the Fed comments about selling/buying same term Treasuries. The EURUSD fell on the news from a high of 3784.4 to a Daily low of 3556.5, for a wide range of 227.5 pips. Enough to remove a 160+ pip net gain. Current: -52.4 pips on the Long Hold.

Will return on Thursday and hopefully, I'll be able to close the unexpected Weekend Gap Closure trade for a profit, while getting back to the purpose of the thread, which was to certify the OmegaWave and the M1 CD Intercept trade types.

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1) Simulated M5 CD Intercept trade failed to a 50/50 BE.

I've noted that the CD Intercept trade types do have more failures to produce a profit, while having a higher rate of BE potential. This one fit that same mold. Using the early entry failed. Using the optimal XB Slope entry would have yielded no signal at all and kept me out of the trade. Using the 50/50 Stop & Reversal technique, I was able to see BE on the attempt (see the chart above).

2) Simulated Primary trade is in draw phase at -24 pips, which is well within standard draw range for that particular signal.

3) Actual previous Weekend Gap Closure trade is now -68.2 pips and still open. Seeking BE or better on that attempt.

Ok, now - that officially ends my day.

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  #98 (permalink)
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As the European Markets continue the downward fundamentals on the EUR against the USD, on the Fed's comments yesterday, all long positions are flattened.

- [actual] Weekend Gap Closure trade: Margin Call at current: - 229.9 pips.
- [simulated] Primary Signal trade: would have failed at: -42 pips.
- [simulated] M5 CD Intercept trade: would have broken even plus the extension to the current close (3399.8) at + 183 (approx) split between an offset 50/50 Stop & Reversal set of trades.

Biggest lesson learned was the importance of closing out a Weekend Gap once the closure level has been met. Though this journal will be about the M1 CD Intercept trade type, the M5 CD Intercept trade worked the way it should on the Stop & Reversal trades on the initial CD Intercept failure. Since I don't typically trade the Primary Signal on the heels of adverse fundamental news as a system rule, I'm not concerned with the simulated loss on that trade - but I'm always interested to see how the Primary Signal does under the weight of known adverse news conditions.

I will now commence with H1 OmegaWave certification -- after an unexpected four (4) day delay and I will use the current pip totals to simulate the needed recovery for a single months worth of trading. Since I typically get 20 trading days per month, I will consider the remaining days at 16.

After four (4) trading days, I need to recover 299.9 pips. So, this will be a very good (unexpected) additional test for the OmegaWave trade type and a rather welcome one to boot.

- 28 pips [actual]
-42 pips [simulated]
-229.9+ pips [actual]

To make the test as hard as possible, I won't include the simulated +183 pip gain on the M5 CD Intercept and I will only include the actual and simulated losses in my recovery needed total.

Total: -299.9 pips to recovery (an average of 74.97 pips per day).

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  #99 (permalink)
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My work day begins (typically) at 1200 hrs GMT. Since I missed the start of my work day today (while waiting on the disposition of the Weekend Gap Closure trade results), I was not able to participate in the H1 OmegaWave 1200 hr signal, or the H1 OmegaWave 1300 hr signal. However, I will cover their results with this post.

1200 OmegaWave and 1300 OmegaWave results:



1200 OmegaWave = +43.1 profit potential
1300 OmegaWave = +18.7 profit potential

Totals = +61.8 pips (minus costs).

I am not including this in the actual pips needed to recover the 299.9 in losses thus far. This merely records for the record the OmegaWave performance to date.

1400 OmegaWave is now pending.

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  #100 (permalink)
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1400 OmegaWave: Long at 3468.7



MnO struck. Will be looking for MxO by end of bar. Current: -7 pips.
30 Minutes remaining in 1400. Current: -3 pips.
Exit 3472.1
Net: +3.4
1500 OmegaWave pending...

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