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Trade Trends with Bollonger Bands and Twiggs Money Flow

Archive through October 31, 2010

Chart Forum » Hilarius' Hall Of Fame » Elliott Wave Watching » Archive through October 31, 2010

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ehmu
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Post Number: 79
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Wednesday, October 27, 2010 - 01:13 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Dolphin (alias tazman):

Referring to the false buy signal May10, I would like to see some method for anticipating false breaks. False breaks take all of the fun out of this method.

ps
I have noticed that many of the trend lines drawn on the W% for the purpose of these discussions intersect breaks (and tests) at three points -20, -50 and -80.






_____ n a m a s t e

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rdumas
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Wednesday, October 27, 2010 - 07:09 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hey Hal,

It wasn't until you reposted Dolphin's chart above that I noticed that he has a number of incorrectly drawn blue 'buy' trend lines drawn on his chart. The one that you have shown as a false break line is one of these incorrectly drawn lines.

Under my W%R rules to determine 'buy' signals you use the intersection of a trend line off the 'tops' (not the bottoms as illustrated in Dolphin's chart above) and a rising W%R signal.

It is extremely important to apply the rules that I nominated in my initial post for this system to work correctly.







I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Wednesday, October 27, 2010 - 07:38 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Wash Up of Last Night's Price Action on the S&P500

Well last night the S&P500 did move down but at this stage it looks like it was only a minor move as it bounced off support at 1177.72 before closing flat at the end of the trading session. At present the W%R indicator is saying that it is an even money bet.

The sell signal was confirmed under my W%R rules but whether it turns into a significant drop in the index is still in question. Yesterday's top remains in tact and we now require further price action to see if it remains that way or if it will be taken out.

It could very well be that my cycle analysis suggesting a top on Tuesday next week mentioned in my post 4242 may still be on track. I don't regret pulling out of my longs on the basis of the potential W%R signal as on the balance of probabilities my cycle analysis could have been proven to be out by a few days. For me it was not worth the risk to give up the profits that I had already made.

The following daily chart shows that the W%R signal has now been confirmed.





The following intraday chart shows that there is still plenty of support for the index at this stage and the index remains in its multi-week ascending trend channel.





I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Wednesday, October 27, 2010 - 08:47 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Andrew,

I actually remember when you posted your thoughts on ASF and is was probably around that time that we started our friendship. I was impressed with your methodologies then and have become more impressed as my exposure to those methodologies increased over the subsequent period and I grew to understand the importance of them.

It is clearly those methodologies that convince me that the Prechter style decline is highly improbable at this time of the market cycle and that the March 2009 rally is not complete at this point in time.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Wednesday, October 27, 2010 - 09:27 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



No Significant Fall in Sight for SPX

One of the indications that the SPX isn't even close to a significant turning point at this stage of the cycle is the weekly chart and the W%R triggers. Note that I have put in some trigger trend lines (in yellow) that don't meet the -20% level requirement of my rules but still provide turning points.

The important thing to note is that the current W%R indicator line is nowhere near intersecting a sell trigger trend line which to me indicates that there will be no significant move down at this point in time.




That yellow trigger trend line that I have drawn in which will eventually cut the W%R indicator high up in the % range could possibly hit next week.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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ken
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Wednesday, October 27, 2010 - 11:20 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hello Rudy,

ETF GOLD is rising rapidly as the AUD falls. It has created an island reversal today and is up nearly 2%.

Ken


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gdd3
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Wednesday, October 27, 2010 - 11:34 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Rudy,

Thanks for pointing out the errors of my interpretation of your W%R-method; you did clearly say "I use any 2 tops that will intersect a rising W%R signal...for a BUY signal" and "I use any 2 bottoms that will intersect a falling W%R signal... for a SELL signal".

I simple looked at your lines as 'decision' lines, i.e. sometimes joining numerous peaks and troughs so you'll understand my confusion came from when I saw these two lines illustrated below...one BUY signal line and one SELL signal line...

BUY.........................................................SELL


...............................

However, I'm still concerned that you only require "ANY 2 TOPS/BOTTOMS" for buy/sell validity because as you can appreciate there are numerous available lines that would satisfy that category.

Take for example the following a 'zoomed-in' highlight of the false break that was question by our Canadian reader and your two buys you showed on your chart and that I had also highlighted. Firstly, I slightly adjusted the incorrect 'false breakout' line(the purple one now) to satisfy your rule...i.e. any two tops. Secondly, to illustrate that you can find many 'BUY' lines to satisfy the "any 2 top rule" I zoomed in on your two buy signal areas and drew just a few more (shown in pink). Obviously the question arises(as I hinted in my previous posting)...Which one do you use or rely on? This is the very reason I was using, and illustrating, my 'decision' lines(numerous peaks and troughs) to add more 'weight' to your chosen lines shown to pick up the swing lows/highs?

Please understand, I'm not trying to 'diminish' your findings here or belittling you; I'm just suggesting that most chartists would want to use more than 2 points to 'validate' a reliable trendline to use for possible entry signals I would have thought.





Cheers
Dolphin

P.S. VMS languishing a bit; just can't seem to get above 58c. Mind you, its real 'dull' day overall in the markets(here and OS...a state of limbo waiting on a catalyst for some direction?????


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billt
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Wednesday, October 27, 2010 - 05:18 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



$SPXA50R: Percentage of Stocks above 50d MA

One of the many indicators I am tracking made a further bearish cross last night. Prices on the $SPXA50R crossed MA 10 & 20. In the previous two major tops this year this signalled that the top was already in.




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rdumas
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Wednesday, October 27, 2010 - 08:21 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Dolphin,

I've been out all day so have only just turned on the computer.

I could be wrong of course but through our private emails and public postings I think that I have come to know you well enough to feel that any comments you make about my postings would always be meant to be constructive and helpful. Have no fear that I may misunderstand your intentions.

Just to respond to what I believe is the main point of your post.


It has always been my view that when drawing trend lines that a valid trend line is one that is touched by the price action on at least 3 occasions. So we are in total agreement on that score.

When I started testing this W%R technique I discovered that every back test I did using only 2 tops or bottoms always put me very close to a turning point. At times it would intersect the first day of the rise or fall and other times it would even give me an indication one day before the actual turn.

Even in the examples that you have given on your chart using multiple purple trigger lines, I think that you will find that they all work provided that you accurately draw the trend lines using any two tops or bottoms (depending on whether you are looking for buys or sells). Why it only requires 2 points for the trend line that works I can't explain......all I know is that it works. In the end that's all I care about. I'll leave the explanation of why it works to the academics.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Wednesday, October 27, 2010 - 08:56 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Ken,

Unfortunately I didn't get to follow the market during the day so have only just noticed how well ETF GOLD performed today. Not sure what to make of the pattern at this stage. I'm happy to stay out at this stage.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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ehmu
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Thursday, October 28, 2010 - 02:06 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Rudy:

I went back and reviewed posts on the W% subject and think I discovered what I was missing.

You use any sign of weakness as (-20W%) a sell signal, and are willing to re-enter if it proves to be a short term consolidation rather than a pull back.

Whereas, I try to limit the number of trades in an overal price move, aim to not get shaken out of good positions, and accept greater weakness than you do before selling. I use the -50W% crossing as a signal of breakdown.

Consequently, what I was calling "false" sell signals are not false at all to your trading style.

This was my mistake, trying to fit your technique to my style.

Thanks for your patience.




_____ n a m a s t e

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billt
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Thursday, October 28, 2010 - 06:56 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hi Guys

With the price action over the past few days it is not surprising that most of the indicators I mentioned previously have all firmed up more bearish, with the VIX bullishly piercing the falling wedge pattern for the first time since the April high.

SPX looks to be in the process of forming the initial two waves down. The closing price puts us within the range of wave iii and iv of wave 1, so we might be set for a bit more wave 3 action tonight.

The more bullish count on some EW websites are trying to make this 5 wave pattern down into a series of i/ii & 1/2 patterns to fit into a larger corrective pattern.

It looks more of an initial series of impulse waves, but we will see....early days though

It would appear that the SPX top is in....





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billt
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Thursday, October 28, 2010 - 07:09 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



I forgot to add, if this is an abc correction, the wave length of wave a is 24.44. If we turn south tonight I will be watching the 1158 level as a turning point for an abc corrective move.

My target for a wave 3 is 1147.

bill


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rdumas
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Thursday, October 28, 2010 - 07:50 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Hal,

You may recall I was hoping that you would end up having a Gestalt experience and it would appear that you did have one by putting in the necessary effort. I'm delighted.

During the bull market prior to November 2007 (in Australia) my preferred investment methodology was to stay in the market for months at a time. That methodology worked great and I did very well out of it for my SMSF. For me the game changed when we entered the GFC. All of the tripe that financial advisors fed to investors that it was the time that you spend in the market rather than trying to time the market that gave you the greatest success in my view is no longer applicable. That 'truism' whilst based on a relatively long period in our life time, was not based on the cycles that have occurred during the life of the stock market.

If my study of Elliott Waves has taught me anything it is that the market moves in cycles both at the intraday level and at the multi-decade level. The GFC was a multi-decade cycle event that will ensure that anyone practicing the 'stay in the market' methodology will over the next 2 to 3 years lose a large percentage of their money.

Now if you (not you personally Hal, but investors in general) are early on in your superannuation cycle, then perhaps losing a large proportion of your capital doesn't matter much because you will have time to recover. That is not the case for someone in my position who is in pension drawdown stage and must live on the capital base accumulated.

What my period as a professional punter taught me is that there are no certainties, there are only probabilities. A 100/1 pop may not win a race very often but when you've seen a number of these win over time you realise that you can never completely ignore the low probability event. In share market terms it's called a 'Black Swan' event.

So, having entered a new dangerous phase in this multi-decade cycle I am more than prepared to

1) make safety first (capital preservation) my first priority

2) trade on a short term basis with no more than 10~50% of my capital base

3) change my mind in a trade if it suddenly behaves in a way that is different to what I expected.

The downside of my current investment style is that I will sometimes leave money on the table. The upside (which greatly makes up for any downside) to my current investment style is that I have bugger all capital losses. In order to live a life to which my wife is accustomed I need to make 7% on my capital each year. Any more than that and it means that we increase our life's little pleasures.

The W%R tool that I have developed for myself and those who wish to use it allows me to fairly accurately anticipate when a turn is about to occur. Please note that the turn signals that I provided for both the SPX and XJO have now been proven to be correct. Note also that the signals were based on using the rules that I posted on this thread in some detail and were obviously not derived from a line of best fit method requiring judgement. The trend lines were drawn in accordance with the strict (but few in number) rules that I provided in the postings on the subject.

What the W%R tool does not do is to give you the potential depth of the decline or extent of the rally. For that you need to use other tools in your kit of investment methodologies. This is where Elliott Wave analysis, Fibonacci levels, channels, support and resistance level, etc come into play.

As I have said a number of times on this thread, it is my view that our market will continue the March 2009 rally and will peak sometime early next year. I believe the probability of that occurring to be probably be around 70%. For me the probability of a Prechter style decline is no greater than 5% and other scenarios of market action to be around 25%.

Now am I willing to risk a great percentage of my SMSF capital on the basis of my 70% probability scenario? Hell no!!! But what I will do however is to play the long side with the view that we are in an up trending market and not withhold my capital from the market out of a fear of an Armageddon style decline appearing out of the blue every time the market goes up.

What I will also do is to play short term and pull my money out of the market when I see a turning point which is close to an Elliott Wave higher level retracement pattern that may take away 3~5% of my paper profits. I would rather cash in my chips at that time and wait for another re-entry. The other advantage of doing this is that if I am wrong in the EW count of the pattern and it turns out to be a much more bearish pattern then I am already out of the market with my money safely locked away in a bank vault.

We are all different Hal, as you know. We all have different risk profiles and it is crucial that we operate according to our own risk profile and not to someone elses.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Thursday, October 28, 2010 - 08:17 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



I noticed this entry on another site today.




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gdd3
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Thursday, October 28, 2010 - 11:43 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Rudy,

Late start for me this morning so just catching up with the 'lastest' now myself.

Re: Our understanding of each others intent/postings; you have perceived my intents with my postings to not only you but I think most others here as correct....always meant to be constructive and helpful... so no issues re: understanding each other here, accepted, OK!.

Anyway, back to the XJO and where we are at, with particular reference to the W%R14. If you recall(in my post No.1097 above) I said...The 'yellow' trendline I have drawn on the Williams is the trendline I'm going to use to determine an end to this congestion we are in OR support for any fall that may occur! A 'close-up' of that chart in that post is below and shows how yesterday's 'W%R14' action fall to the yellow trendline and has found support(today's quick bounce). In addition, you will note that the W%R3 position at yesterday's finish was also in the TAZ desired zone(at or below the -80%.) Remember, I also have said that whilst most of my B/S decisions are based on the W%R14 position I also 'marry' it with the W%R3 position. So in TAZ terms, yesterday's action provided a 'secondary TAZ' set-up and technically has been confirmed with today's price action(higher high than yesterday...just!) and only needs a higher vol. day today as a final confirmation. Having said all this, I DON'T like to use/rely on this TAZ method for indicies or Top 50 stocks etc. I have highlighted the yellow support line(thick yellow) I mentioned in post No.1097 along with your 'sell' W%R14 line(thick red)so no confusion arises.



I'm so close to 'pulling the trigger' on VMS(at 49c); our only hope(saving Grace)may be is our Williams%R friends and my faith in the TAZ set-up method....another potential set-up playing out today perhaps....though I have to admit she's looking 'wobbly' as I said a couple of day's ago! Oh well, 'stoppies' in!

Cheers

Dolphin


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billt
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Thursday, October 28, 2010 - 12:54 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



TRIPLE YOUR MONEY IN 4 MONTHS!!!...check this out...

Look what you guys have started! :-)

Here is my US Small Caps Russell 2000.

I have had a go at 'the system' and if I have done it correctly it seems that it 'nailed' the recent 4 months tops & bottoms bang on!

One 'high' - position D - proved to be a 'premature'...

I assume in that instance you may have sold but bought in again once the W%14 shot through say -10 again, buying back in at a similar price? Any 'rules' you use for 'false tops' guys?

Playing the market long & short against this system on my x3 bull & bear ETFs (TNA & TZA) would have netted zillions...In the AB leg TNA would have netted +44%, the BC leg TZA added another +44%, and leg CDE added a further +74%. A $100k initial play in July with 'winnings' rolled up could have achieved c.$360k in 4 months! Allowing for some slack in the buy/sell entry points, $300k would have been a reasonable outcome!

If you started this back at the April high, the outcome would be closer to $600k. Swing trading at its peak!

Dolphin/Rudy - happy to have my homework marked!

Bill





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rdumas
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Thursday, October 28, 2010 - 01:03 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Dolphin,

Thanks for sharing your thoughts mate....much appreciated.

What I am discovering is that the methodology is excellent for getting turning points with a very high degree of accuracy when used correctly. What it does not do is to let you know the range of the decline or rally that will eventuate. On many occasions you will get a significant range move but there are a lot of other times when the range is quite small.

More research required on the other methodologies that need to be 'coupled' with this one in order to determine the 'bigger picture'. Anyway, I think that this whole discussion has been worth the effort in order to extract what can be used from this indicator.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Thursday, October 28, 2010 - 01:04 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

Excellent research. You have another tool for you money making tool box.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Thursday, October 28, 2010 - 01:30 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



I have completed the same exercise on the actual TNA IC chart (x3 Bull Small Caps) and the actual trades would give a +273% gain during the 7 July 10 to 18 October 10 period. I used the closing prices on each trading to keep it real, and assumed I would have bought back in on my 'false' high at a similar level. TZA would have been used for the 'bear' leg......

With these results who needs to find little aussie miners with low volume to do the deed?




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rdumas
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Thursday, October 28, 2010 - 03:02 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

You are starting to sound as excited about the method as I am. I'm delighted that you see some value in it.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Thursday, October 28, 2010 - 04:42 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks Rudy

I test drove it on SPX, to see how I went. (L Plates on)

The system works well when the price movement extends more than a couple of weeks and there is sufficient volatility to get prices going.

The top that occurred between tag 1 & 2 (it wasn't much), failed to get to the -20 level, so it was missed.

As you suggested, one important key is to have the prices at the -20 or -80 level. If prices are well off these levels, the likelihood of a change in momentum is significantly less. On 'parabolic' stock the triggers may need to be raised to -10/-70, but unlikely on the major indices and blue chips.

It seems to work particularly well with the major indices, and it works with my TZA & TNA very well too...

What I like about it, is that as I trade both sides of the market, I care somewhat less as to how far a correction or rally is going, as long as I'm loaded in the correct direction. The coming correction may be 5% or 20%, but this indicator will give me a pretty good indication when the trend has changed. Coupled with my long list of other canaries it reduces the risk, and gets me closer to the tops & bottoms. During this last rally, there was not really a 'false' signal from this system. The VIX & Put/Call indicators gave off several.

I don't care if the horse is chasing the ambulance - as long as I'm on it!

It takes a while to get into it, but a very worthwhile tool to add to the tool box!





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gdd3
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Thursday, October 28, 2010 - 05:56 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Rudy, assuming you have given me your permission, I have just taken out a patent and named it "Rudy's Wonderful Willies Indicator"(RWWI) or "BillT's" for short....William(s) = Willies or Bill for short in case you didn't get it, ha! ha!

On a serious note(using the 'RWWI' method), if you look at VMS, you have to ask "why did we buy?" I have observed if you only take the potential buy and sell signal trend lines that originate from peaks/lows nearest to the previous swing price highs/lows these are the ones, when projected forward, that should be used for future potential swing changes(hopefully eliminating 'false' breaks or just 'intermediate' swing changes). So, in VMS's case, whilst my premature TAZ set-up signal the other day(which actually failed to be confirmed) gave a one day breakout above a legit (long blue) buy line coming from the last major swing high(april 21st) and a breakout above the buy line from an intermediate swing high(july12...orange), no legit buy signal has yet been given(via the RWWI method) coming from the latest swing top(Oct.12...the latest blue trend line) or any other intermediate swing change top(eg the green line) for that fact. To illustrate further, see how the only valid sell line for a (red line sell line) sell near the swing high(on Oct.12) is started from the valid/legit price swing low(June30th) and nearest William%R low. That low was also to represent the swing low to take the initial buy from the legit (blue) buy line that originated from the April swing top!

So, to summarise, just may be we have to only start our future buy/sell lines from those W%R14 closest to the previous major swing highs/lows to validate future cross-over points from the correct trendline...ala your current sell line on the XJO! Hence, the(pink) sell line drawn on VMS's chart would not be used even though it satisfies your 'any two lows' rule because it did not originate from/near a 'major' swing low as the red one has.

Interesting, aye...what do you think???





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ehmu
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Friday, October 29, 2010 - 02:08 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




rdumas wrote on Thursday, October 28, 2010 - 07:50 am:

The downside of my current investment style is that I will sometimes leave money on the table. The upside (which greatly makes up for any downside) to my current investment style is that I have bugger all capital losses. In order to live a life to which my wife is accustomed I need to make 7% on my capital each year. Any more than that and it means that we increase our life's little pleasures.




Interesting that we are both in almost exactly the same life position. You and I have just taken a slightly different tack in the wind.

Hopefully we will arrive at the same destination for the celebrations.


____________________




_____ n a m a s t e

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ehmu
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Friday, October 29, 2010 - 05:04 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




billt wrote on Thursday, October 28, 2010 - 04:42 pm:

I don't care if the horse is chasing the ambulance - as long as I'm on it!




Extending the number of periods (to exagerate the point) to say 55 periods reduces the false starts by about 80% on the daily chart.

Then looking at a 2hr chart gives a magnified view of the price fractals. In this case one would need to use the -50 crossing instead of the -20 crossing as the trigger.









_____ n a m a s t e

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ehmu
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Friday, October 29, 2010 - 05:06 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



then the 2hr chart






_____ n a m a s t e

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rdumas
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Friday, October 29, 2010 - 06:55 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Dolphin, Bill and Hal,

I know that this thread is supposed to be specifically for Elliott Wave Watching but I have found that there are times during a cycle where the wave counting gets to a stage of 'sea spray' counting rather than actual waves. All this does is lead to frustration and I usually go up a time frame and wait for the next significant pattern (or part of pattern) to emerge.

In the meantime I think that it's great to explore any method that will assist us in making money out of the market. As I said to Dolphin off line what I like about this method is regardless of which tops or bottoms you use, the method will give you a turning point (whether significant or otherwise) in a huge proportion of cases. There are so many times in our trading lives where we are unsure whether a rally or decline is going to continue or to do an 'about face'. At least this system takes out some of that 'unsureness' (I have just invested a new word ).

Thanks for all of your input. I have always found that the pooling of minds on any field of endeavour will reap greater rewards. You guys have given me some great thoughts to research. I couldn't have done it without your efforts.

Hey Dolphin, perhaps we could call it the EWWWI method.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Friday, October 29, 2010 - 07:03 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Hal,

Yes there are many ways to do things in life. I remember during my punting days my methodology was to have about 4 highly selective bets a week with a large amount of money riding on them. These bets had 40% strike rate over 7 years and produced a profit on turnover of around 20% over that time period. The longest run of outs was 8 but a mathematical genius friend of mine worked out that over a longer period I would eventually hit a rough patch of 13 outs. I only give you these statistics to show you that I knew my methodology very well.

At the same time I had a friend who turned over millions of dollars per year placing hundreds of smaller bets per day. His methodology called for making a much smaller percentage profit on turnover (in the region of 1 to 2%).

Both methods worked but I could not possibly be happy using his method and he couldn't possibly be happy using mine because we had different risk profiles.

That's the nature of the investment game. We have to be true to our risk profile if we are to be successful.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Friday, October 29, 2010 - 08:18 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Waiting for the Signal

For bears, the passing days and perhaps weeks has been spent wondering when that top will be put in place. For bulls wishing to use the next dip to either add to their positions or initiate new positions they also are waiting for the 'promised decline'.

Using Dolphin's thought of a major bottom as the initial 'bottom' for a sell signal I have also used the latest 'bottom' for the second level to draw my sell trend line. As it bounced from that second level last time I would like to see that level cleared even though it veers away from my -20% level rule somewhat. This is obviously a trial of a new aspect of this system.

It is obvious that if I had used another second 'bottom' created earlier in time I would in fact already have a sell signal generated at the -20% level (as per my original rule) at this point in time. Perhaps we can have this 'warning signal' in the back of our minds and now look for a confirmation signal for our new target level in order to eliminate a possible false signal.

What we can clearly see is that the descending trend line on the price action is situated near the UBB level at 1187. We can also see from the dashed horizontal lines that the index has been trading in a band most of the time during the last week and I would be looking at the breaking out of this band as our best indicator on the next direction of the next signficant move.




I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Friday, October 29, 2010 - 11:27 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



When there are at least three possible 'exits' out of this topping phase it makes other indicators invaluable.

Scenario 1: Black Type, H&S Shoulders Wave ii of 3 completing, of a much larger correction south, or back to fib retrace target

Scenario 2: Red Type, abc pattern, completing 1160 and then heading north

Scenario 3: Green Type, abcde pattern, completing 1175 and then heading north (mini inverse H&S off 1171/1177)

...or none of the above!





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rdumas
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Friday, October 29, 2010 - 04:08 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Ken,

It sure is looking like ETF GOLD may hit $136 at this stage of proceedings.






I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Friday, October 29, 2010 - 04:41 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hi Guys

Forget 'Rudy's Wonderful Willies Indicator'(RWWI) it may turn into 'Willy Wonker's Chocolate Factory Indicator' if it predicts those turning points so well in the future!

Rudy's 'rules' certainly seems to have picked the tops & bottoms in the recent XJO & SPX activity whilst not giving false signals.

All three signals on the XJO would have allowed you to exit the Sept/Oct rally trade very near the top.

On the SPX the two earlier signals were at the -10 level and failed to clear the -20, so those signals could have been ignored under 'Rudy's rules'. Nevertheless, if you exited the Sept/Oct rally trade there you would have been more than happy - as you were very near the high in any event. The third signal, when prices were falling through the -20, appears to have 'nailed' the top.

Projections to the next low may be mid November on the SPX, but early days to call as yet. I'll be looking for a -60 hump to form to help nail the bottom. Interesting to note that the previous market low turning points were given the best indicator off intermediate highs off the W%14 at the -60 level, I'll be watching that in the coming week or two.


Finally, the SPX futures tonight look set to leave all three of my EW exit Scenario's alive to fight into next week and the market reaction to QE2 issues ...GDP figures for Q3 out tonight.









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billt
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Friday, October 29, 2010 - 05:04 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



The 'system' works here too!

Interestingly, the next 'high' may be mid November (the green line) which corresponds with a potential low on SPX using the similar system. Perhaps XJO /$AUD weakness, a bit of a spurt for POG with a 'flight to safety' rally?

The EW count on POG is a bit of a concern - we could be in an abc correction, with wave b completing? How do you see the count Rudy?




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billt
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Friday, October 29, 2010 - 06:36 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hi Rudy

POG: EW charts & W%14 chart

There is some possibility that we may see POG go lower based on the W%14 chart. A low may have formed, off the initial signal?

Prices appear to be establishing a base?










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ehmu
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Saturday, October 30, 2010 - 01:33 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Rudy:

I'm writing to discuss your procedure for drawing the trend lines on the 14W% indicator. You may be following this simple procedure already, but perhaps other readers are not.

I discovered by trial and terror that it is easier to meet your criteria for two peaks and a rising -80% intersection by making the origin of the trend line at the -80% intersection (or anticipated intersection when we are getting close to the rising intersection).

So to say it in words, select the origin at the rising crossing of the -80% marker, then whilst keeping the left mouse button depressed, drag other end of the line to the left until you find a position where it intersects two or more 14W% peaks.

The same would apply for sell signals, only with the origin of the t/l at the downward break of the -20 marker, and then dragging the other end of the line to the left until you find it intersecting with two or more valley bottoms.

Please let me know if you disagree with this idea.




_____ n a m a s t e

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rdumas
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Saturday, October 30, 2010 - 06:24 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Hal,

The procedure that you outlined in your post is exactly what I do in drawing my trend lines. Well done!


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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skyhawk
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Saturday, October 30, 2010 - 07:47 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Guys,

I would not get too carried away with this just yet. Whilst it may have potential to help clarify the picking of tops and bottoms, at this stage IMO it is largely an unknown.

Backtesting shows good results. However hindsight analysis is always
easier.... For instance, it seems that the picking of certain points appears to be "curve fitted" to attain the desired results.
Only after using a tool in realtime with real $$$ can we get a real understanding. Even then, the tool is only a small percentage of the decision making process, the rest is the psychology behind it.

I think you maybe surprised with the results once a real time history study is done.

Cheers

(Message edited by skyhawk on October 30, 2010)


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ken
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Saturday, October 30, 2010 - 10:12 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Rudy/Colin,

Could I suggest that the posts defining this new method outlined in the EWW thread be moved to a separate thread so it can be found readily in future?

In a month or so we won't know which archive it's in.


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rdumas
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Saturday, October 30, 2010 - 10:17 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Ken,

I have no objection but it could be a lot of work for someone. I personally don't have the time at present.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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gdd3
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Saturday, October 30, 2010 - 11:58 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Skyhawk....I have to say, whilst I think this RWWI/EWWWI(for crying out loud, Rudy, give it a name) method is showing 'promise', I have to agree 100% in what you have said above!

To try to 'validate' its merits, I have often "scrolled" charts(indicies and stocks) back in time, i.e. 'hiding actual data', before starting to draw in what I think will be valid decision trendlines going forward. My results of 'hiding data' have been very mixed. However, as a result of doing this I am finding(not emphatically)that the best chance of 'coming close' to picking the right ones was to have the origin of the (buy)line from a rising Williams closest to a known major swing low.

To Rudy's credit, though, it seems 99% clear almost alway's this method will at the very least 'give a point of respite' in the market under question; whether that turns out to be another 'major swing point' will not be known obviously until time passes....and Rudy himself} also has admitted that, right!

As you said, Skyhawk(and Rudy and I have also said this)... the tool is only a small percentage of the decision making process hence I would 'encourage' everyone also to try my exercise(hiding data), honestly, and determine the 'results' yourself before making a decision on its 'uniqueness'.

As a side to this subject I had mentioned to Rudy and others before that from a personal perspective I give more "weight" to trendlines drawn on 'leading'(not 'laggers') momentum indicators, eg Williams%R's, Slow Stoch's than price trendlines because they will often 'foresee a break about to happen'.

Cheers
Dolphin


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billt
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Saturday, October 30, 2010 - 12:10 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Hal,

I noticed from your last post that perhaps I was not using Rudy’s ‘system’ as precise as Rudy had previously described it.

Rudy previously suggested:

“It has always been my view that when drawing trend lines that a valid trend line is one that is touched by the price action on at least 3 occasions. So we are in total agreement on that score. When I started testing this W%R technique I discovered that every back test I did using only 2 tops or bottoms always put me very close to a turning point.”

My recent posts 463 – SPX & XJO, 464 – ETF Gold, and 465 – POG touched the price action at only one occasion between the top & bottom. Nevertheless, it seemed to work with few false signals. Any signal in the -10 or -90 range was dismissed, the prices needed to be approaching the -20 or -80% levels as Rudy suggests - that is what I found too.

One thought to 'the logic' of the system? If you are using the system within a 5 wave impulsive set-up, one would assume that either wave 2 or 4 would create a larger reaction on the W%14. Joining the humps within a wave pattern perhaps is identifying a very basic EW fundamental. If it happens to be a 3 waver, the wave B component may throw out a sizeable W%14 signal to attach your lines. Just an idea? In the end when the W%14 is at extremities, prices will generally be at a good buy or sell area in any event. As to why joining points not within the same wave pattern seems to work too is unclear, but perhaps it is that 'level confusion' thing Rudy often refers to. Could we be seeing cycles within cycles, waves within waves, materialising in the form of this indicator? Beyond my pay grade, but if the system works I'll use it.

Andrew is correct however, the proof will come in the actual usage. Rudy and Dolphin have been using this for sometime with success. I will add it to my armory. I might continue to use my 'one intermediate point is good enough' approach, as it seems to work most of the time!

cheers

bill


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billt
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Saturday, October 30, 2010 - 12:30 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hey Dolphin

We have the 'E Dubya' for EW... what about 'The Big Dubya' for 'W%14'?

ps.

I forgot to add a few other posts last week that I test drove the 'Big Dubya' (W%14).

I generally used 'my system' of touching the price action at only one occasion between the top & bottom, but occasionally two lined up as well which proved decisive:

459 – US Small Caps,
460 – TNA x3 Bull US Small Caps,
461 – SPX, last 3 tops & bottoms,
463 – SPX & XJO,
464 – ETF Gold, and
465 – POG


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skyhawk
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Saturday, October 30, 2010 - 02:49 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



I have been looking at this indicator on a lower timeframe chart of the AUDUSD 15 min bars using the W%R 14. Just some trades I put on in real time recently. This method was used in isolation as per the discussions here. I like to do this, collate the results after x amount of trades and then look at where and how things cane be improved.

I find that there a quite a few problems here when using this in isolation namely:

-it's very important that this be used as tool to try and identify possible counter trend rally peaks in the direction of the trend. Otherwise trying to trade reactions to the major trend is an exercise in nimble entries and exits.

- when a trend persists for a while the W%R 14 tends to hug either -20 level or higher in the case of an uptrend OR -80 level or lower in the case of a downtrend. Whilst it hugs these levels, it can move up and down multiple times triggering entries that would be false signals. I have shown 2 such instances in the chart below.
So really it becomes a task of trying to guess which of the intersections with our signal line will be the one that triggers a proper signal.
Our job as a trader is to reduce the probabilities of dud trades not increase them.

How can we improve this??

Well for starters we need to filter the probability of the dud signals to keep them at a minimum. To do this I look to take trades after a market reaches an extreme, that way the likelihood of the trend persisting is quite low. So examining the next chart which is that of the AUDUSD 1 Hr bars, I have drawn a centered MA whose job is to depict the nominal trend as shown by the pink line. The 4 spaghetti lines above and below this line are std deviations of the % price change of price from the Pink Nominal Trend Line. It's quite obvious to see that when price reaches at + or - 3 std deviations or more there is only a small percentage probability of it staying there in the near future as price action is contained in the bounds of the + or - 4 std deviation bands for the remainder of the time.

So straight away we have a filter so that we do not take trades using the W%R technique unless price action is at the extreme level of 3 std deviations or -3 deviations or more.

Is that enough?

Well no. Despite the fact that or 3 std extremities have been reached, there is no way of telling when price will reverse using the W%R because when price action reaches an extreme the W%R can hang around the -20 and -80 levels for a while moving up and down triggering false signals

All we can conclude at this stage is because price has reached the +3 or - 3 std dev levels or more is that a reversal is imminent!!

So more filtering.... I have used the HA (Heiken Ashi) candles to help increase the probabilities here. So when the HA candles turn green for a buy or red for a sell whilst price action is in the 3 std deviation or greater levels, then we can draw our W%R signal lines to intersect the last peak or trough (depending if buying or selling) of the indicator.

So in effect this filters out most of the dud signals of our W%R whilst price is trading at an extreme level i.e 3std deviations away from the Nominal Pink Trend line.

I have attached an example in the 1 Hr AUDUSD chart below.
Here I have taken 7 trades…
These were 7 trades taken by the W%R in isolation. I added the other tools in after..

The verdict, 4 out of 7 trades were profitable…. 57%. Mind you our sample size is not very big here but it is a start. We have no exit criteria yet for these trades as we don’t know how far the market will move in our desired direction of speculation.

Now let’s take the trades with 3 criteria I have mentioned:
-Price action @ 3 std deviations or more
-HA (Heiken Ashi) candle changes colour whilst at the 3 std deviation or more level
-W%R signal line drawn at the least peak/valley depending if you are buying or selling WHEN the HA changes colour

3 trades taken numbers 1, 4, and 7. All profitable and all reached the minimum target of the pink trend line…



Cheers

application/vnd.ms-excel
w%r_work.xls (68.6 k)



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skyhawk
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Saturday, October 30, 2010 - 03:34 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



The following is a chart of SP500 Daily using the techniques discussed in the last post.

As can be seen we triggered a buy in July of 2009 after the correction back then touched the 3rd lower std deviation. We waited for the HA candle to turn green (a bit hard to see to the chart- apologies) and then draw the highest probability W%R signal line based on the other 2 criteria mentioned. The market thereafter trended in the +2 to -2 std deviation channel until an extreme was reached @ + 3 std deviations in April this year. Once again the same technique could have been used to go short the market +3 sigmas, wait for the red HA candle and then draw the highest probability signal line based on the previous 2 criteria to time the entry...

June of this year, showed another setup for a long.
I have to stress here that as long as price is channeling in the +2 to -2 channel, it is a high probability a trend will persist until the 3 or -3 std deviation or greater extreme is reached.

Basically the market needs to CLIMAX forst before conditions are ripe to take high probability trade setups

Just my 2c worth for the arvo :-)


application/vnd.ms-excel
sp500_w%r work.xls (50.2 k)



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rdumas
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Sunday, October 31, 2010 - 10:26 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Andrew,

Thanks for contributing to the research of the W%R indicator method. It is only when I see how people have applied my methodology that I can see where my explanations have been inadequate. I find the written word a very poor form of communication especially in the hands of illiterates like myself.

Unfortunately (due to my poor explanations) the trend lines 5, 6 and 7 do not meet the 'rules' of my methodology because they cut the rising W%R indicator below the -80% level. I have said on numerous occasions I want to see the point of intersection of the trend line and rising W%R indicator as close to the -80% level as possible. I should have said as close as possible and above the -80% level for buy signals.

Note that even though your point 7 did give a valid rally, it was generated from an incorrect trend line as the point of intersection was below the -80% level. I have re-drawn the valid trend line that I would have used to get that significant rally trigger point.

The reason for this is (as you have already discovered) that when the W%R indicator is between -80% and -100% the price action can continue to drift down making many insignificant turns. Similarly when the W%R indicator is between 0.0% and -20% the price action can continue to drift upwards making insignificant turns (causing a creeping rally). To me the real action occurs between -20% and the -80% levels.

I am honestly not making this up as I go along. It is the way that I apply my rules. The only valid intersection point that meets my rules is point 3 as that did have the point of intersection close to and above the -80% level and you will note that this signal did give a valid rally.

If you apply the above rule I think that you will find that by far the majority of signals generated will be valid signals. Similarly for sell signals the point of intersection of the trend line and the W%R indicator should be as close to and below the -20% level.

My personal testing has found that a great majority of the signals will be valid signals and I stress again as I have done in the past, this method is suggested to find reasonable tops and bottoms and do not tell you the size of the resulting decline or rally. To some degree it serves a similar purpose to our Delta methodology in that that it is a turning point and not a price level determiner.



It is probably worth noting that like any other methodology, it will appeal to some and not to others. We all have different trading styles and requirements. I offer it to those to whom it appeals. To others .... just let it slip through your fingertips.

I greatly appreciate the work that many of you have put into contributing to our 'group research' on this indicator. I am sure that some of you have a better feel for what can be done with it than before I started posting on this subject so I can only see that the discussion has been worth while. I'm sorry that it has taken so long to transfer the knowledge of the method from my brain to your brains through a number of feedback loops but I think we may finally be getting there. I still remain very enthusiastic about the method and have no doubt that for those who apply it correctly, they will share my enthusiasm.

By the way Dolphin, I have done the 'blind data' tests that you suggest and providing you use my methodology in the way that I do, it continues to have good results. As you say though it is meant to be used in combination with other methodologies.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Sunday, October 31, 2010 - 10:42 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



'The Big Dubya'

hi Andrew

Thanks for sharing that analysis.

Irrespective of the time frame you are trading in, it certainly is a worthwhile tool. Overlapping with other techniques certainly reduces the 'dud' triggers.

One observation that Rudy pointed out is for the necessity of the 'Big Dubya' levels to be 'just about to attack the 20 or 80 level'. The 'duds' you referred to in the AUDUSD 15 min chart where perhaps outside that reference, and could have been dismissed as 'false'?

Three great signals were given to pick out the next bottom/top/bottom..

The first bottom had at least 5 target lines (gold lines). The first two were at the 90 level, the third at about 86, and the fourth nailed the 80 (and the low). The fifth was at 65 and the horse had bolted.

The next top nailed the 80, as did the next low.

Big Dubya isn't 100% but it gives you another weapon to use when needed...

...thanks again for posting your weekend homework.





Bill


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billt
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Sunday, October 31, 2010 - 11:04 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



...I did not see Rudy's post before I posted my 'words of not much wisdom'....we have said much the same thing!

Interesting to note that when you have 'two intermediate points' to align your trend line you rarely miss 'a kill'. My 'one intermediate point' works for me but obviously I have the possibility of numerous more targets, which I would imagine, delivers a lower probability of outcome. Nevertheless if you look back at my 'one intermediate point is good enough' homework, it still works very, very often! 80 & 20 is the key - Big Dubya needs to be hitting those levels +/-2...

Thanks Rudy for the ongoing explanations (& for the MW), a lot of effort on your behalf. The problem you have now is that you have more people to 'crit' your work!

cheers

bill


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skyhawk
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Sunday, October 31, 2010 - 11:20 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hello Rudy/Bill,

Thanks for clarifying my misunderstanding of your -20 -80 criteria. That helps a lot and I should have gone back and studied the earlier posts made on this thread with more attention to detail (a big problem with me!!)

Nevertheless, the additional tools I have presented above provide one aspect which is missing from the work done so far in so far as using this tool in isolation.
That is it gives the potential to take higher probability risk/reward trades, because of the introduction of the trading bands and only taking trades when prices are trading at "extreme levels" relative to the nominal trend and as such will revert back to the nominal once an entry is triggered.
Basically it gives you a plan to work with and an exit strategy whereas otherwise you have little to work with in terms of exiting a trade as we don't know what to really expect in terms of potential movement based only on the W%R

Thanks again for all your thoughts

Cheers

(Message edited by skyhawk on October 31, 2010)


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rdumas
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Sunday, October 31, 2010 - 11:54 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

Actually I don't see that as a problem....I see it as a major plus. As I've said to the other 3M's I have always found that group think tanks bring far superior results than individual efforts. Throughout my life I have found that the final result will always be greater than the sum of the parts.

Inevitably if you have a number of interested participants who can put their egos aside and be willing to entertain any thought regardless of how non-sensical it may appear at first glance, bouncing ideas off each other inevitably leads you into areas that you otherwise would not get to because there is such a wide array of experiences to draw from. Great work guys.







I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Sunday, October 31, 2010 - 11:58 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



On your 60 min chart Andrew, there were two possible entry points just below Rudy's Blue line. Prices were heading higher through these 'gold lines' but Rudy's Blue line was the trigger - as you had to wait until it crossed the 80.

On your Point 4 things were less clear. The '20' entry point happened to come off a lower series of swiggles, so it shows you cannot ignore any of the possible candidates. The golden arrow shows the intermediate, and the heavy gold line the turning point.

Points 2, 5 & 6 were not strong enough momentum changes to trouble the Big Dubya.

The 60 minute/Big Dubya chart seems more worthwhile for the bigger weekly momentum changes (like point 7) rather than the daily action?





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