MTP Report

[Matt Bowen]

The MTP report breaks into new highs using the "No Trend = No Trade"
(setup confirmed with the weekly trend). We are only taking trades based
on the Trend rules that Steve Griffiths has outlined in "Chapter 16" of the
MTPredictor trading manual.

Here is the latest MTP report: http://www.mtptrader.com/MTP5-12.pdf

Here is the weekly trend report: http://www.mtptrader.com/CWT5-8.pdf

If you have trouble opening the file click on the Adobe Acrobat button below:

http://www.mtptrader.com/reader.gif (http://www.adobe.com/products/acrobat/readstep2.html)

[CapTech]

Good Show Matt!!

Those numbers are truly "Golden" and all that glitters is surely gold:) .....jim

[stevej]

Matt,

Have you looked at how the earlier trades would have been affected by using the "No Trend = No Trade" approach?

Steve

[Matt Bowen]

Hi Jim,

Thanks for the vote of confidence... The performance was really nothing special. Anybody can put these trades on exactly like I do for the report. In fact, I have a few people that have watched this portfolio for a few months and are now trading...I have told them to filter the trades with the weekly charts as this will help the performance. You might miss picking a few tops and bottoms but who cares, there is nothing like riding the coatails of a few big Hedge Funds, Commodity pools, or CTA's.

Seriously, I didn't do anything special. In fact for the first six months all I did was take the raw signals. In other words, if the trade came in the scanner I took it regardless of the direction of the main trend on the chart. I did turn the scanner restrictions off because I want to see all the setups.

I had people telling me that they couldn't make money on the raw signals that I got fed-up with all the BS excuses and just started recording the signals. After the first coupl of weeks I had a few rants about my risk and they were justified because I was trading it like a larger portfolio and once I adjusted it for the initial $50,000. starting account then it was smooth sailing.

A couple of things came out of this exercise that some traders were probably not expecting.

1.) Some traders didn't realize that when trading on Daily bars it's not uncommon to have a position on for weeks or months. I find that So many people are fixed on taking "X-amount" of dollars out of the market everyday. I call these traders ATM (Automatic Trading Machines) It's like these people want to stop at an ATM machine grab some cash and get back in their car! Who on God's green earth came up with this concept? I don't know ANY trader who makes a living like this! The vendors out their must be really pumping people with ideas to get traders to buy their wares. I'm not kidding you, some of the vendors out there today are like a "Three ring Circus act".

2.) Many were not using position sizing and I could tell because their equity curves were all over the place. I mean their accounts looked like yo-yo's back and forth...you can tell the manager's risk control by looking at their equity curve. It's like the people who buy MTPredictor Real-Time and load it up on eSignal and TradeStation and wait for it to spit out trades and then they take all of them without doing the Risk/Reward (Seriously we have people that do this) and then they say they took too big of a hit. My retort is: "How can you take too big of hit an ANY one trade if you are using position sizing?" I love when they try and wiggle their way of of that one.

In any case, I'm looking forward to the next 6 months and some more stories from ATM traders, Ha Ha!!

All the best,

[Matt Bowen]

Hi Steve,

Thanks and a very valid question. We most certainly would have not taken many of these raw signals (especially during late January through April) and missed only one of the big trades. In addition, we would not have been chewed-up by a larger amount on back to back losing trades. Overall, we still managed some great gains and proved that the raw signals on MTPredictor can make a trader successful...(the important part is he or she must manage the trade correctly and have the discipline to ride the trend).

I didn't go back and look at all of the big previous trades taken in the report. The No Trend -No Trade concept is nothing new and certainly nothing I came up with myself. I think it's just a universal truth among veteran traders. Kind of like the old 4-9-18 period moving average trend setup developed by R.C. Allen in the early 1970's. I learned about all this stuff from my mentor/Grandfather. The bottom line was (as he always put it) Get behind the Institutions and funds because they've get a hell of lot more money than you do. He always said look: "Tom Dick and Harry down they street with their 100 share orders do not make a trend go up or down, however, Jack Dreyfus and the boys have big bucks and if they want to move markets they will over several months" (Jack Dreyfus who started Dreyfus Funds back in the 1950's).

The point he was trying to make back then then was that like today, the Hedge Funds, institutions, commodity pools(commercials/Hedgers) and CTA's might not be the smartest as a group as a whole, but when you take people like John W. Henry (those select few great traders) and see what a huge business he has built by following trends...there is a loud and clear message.

I've actually been spending a lot of time working on a new idea of how to get back into an ABC after it has been stopped out, but not because the setup failed, but because the stop took us out. It actually compliments MTPredictor setups because the trade was initially found by the scanner inside MTPredictor. For example, the market volatility at the "C" high or low juncture was a little too much we get stopped out. If the trade goes to 100% initial risk but then falls back to our entry (and because we have moved the stop back to breakeven we are now out of the trade. I remember this clearly from a Copper trade in late February and this exact same thing happened (See Chart below).

Now because we controlled the risk we did get stop out and that is fine you have to control the downside in this business or you'll never survive, but here is the interesting point: The ABC labeled by MTPredictor was never taken out and it NAILED the low. However, we never got back into the trade and we left $45,000. per contract on the table...this is what got my attention, and this is not the first time I've had this happen either!!! A trade like this can make your entire year!!!

I mean look at the chart below, the top portion is the copper trader and the bottom portion is the weekly chart, the trend is screaming bloody up and here I'm stopped out watching this climb day after day. It's not MTPredictor's fault we are not in the trade because the "C" leg is still in place (even this moment), we were stopped out because of money management. Now normally you wait for a market to give you another ABC pattern to re-enter the market , but look at that Weekly chart... It's not going to happen and this thing is literally making millions for fund managers as each week goes by. Now, for us small traders that 10 week rally would have netted us close to $41,000 with a re-entry at 231.40... now you can see why I've been working on this!!! Even on the re-entry I'm still controlling the risk, but the we are not missing the move we found on the original ABC pattern. In fact, using this technique I had 3 additional entries into the trend after the 231.40 buy signal (the last one came on 5/1/2006).

Once I review it with Steve and he's ok with it, we will probably release it as a free upgrade because it requires an add-on indicator that I have been using and it's very easy to program.

All the best,

[Rimu]

Matt..
Interesting to see you have been working on the exits too. What I have been doing is if it looks like like an abc into an obvious wave3 or wave 5 I place two separate trades as one , and use a quick MA and slower MA to try to catch the c and 3 or targets separately, taking half out on the short MA cross and the rest on the long MA cross. Doesn't always work, but when it does it pays off. Was toying with the idea of a re-entry after the c target had been taken out but found that often the RR on the new entry left a lot to be desired compared to the original entry RR, due I guess to the volatility involved in the retracement that often follows immediately after the c target is hit. (Still trying to figure out a way around this).
Meantimes, the MA's worked well with Gold from October abc into wave3 last year, and again with current abc into wave 5 from March this year.(although I got too nervous with the current wave5 and closed out both halfs a couple of days ago!!!). Have only tried this with daily and 4 Hr trades.
SteveH

[stevej]

Thanks Matt,

On trades that appear to be in strong trends I have been using a Wilder type volatility based stop to keep in the trade (see, as I am sure you have, Van Tharp for particulars).

On using the "No Trend = No Trade" principle, the only difficulty seems to be making an objective assessment of whether the market is in a trend. Gold, for example, is easy - it is in an uptrend - so is copper. But others are much less obvious. For example, the sugar trade indicated on 17th April. Altough sugar had been rising for months, both the weekly and daily charts had become messy by April. A further example is Eric Detterman's assessment of KC in his analysis for 30th April. Eric's assessment is 'unclear' but I think I would have considered it 'down'. Many thanks to Eric for his work!

Any suggestions out there for a rule based assessment of trend to get rid of the subjectivity?

Steve

[Matt Bowen]

Hi Steve,

Here is another recent example of this syndrome "C" wave in action. I'm ok with getting stopped out, but not ok with leaving massive profits on the table. Notice that when this "C" wave is found the moving averages are all on top of one another...it's a complete mess and the thing could go either way.

Even on the weekly chart you had nothing to go by for direction, but by the time the re-entry (idea I'm working on) came into play, the British Pound had rallied from 1.74 to 1.79 and we get the re-entry signal (plus trend confirmation)...now the Pound is at 1.89

[ericd2281]

Steve/Matt Etc. all,

I agree with Steve's point that determining the weekly trend is the most difficult & subjective task that must be completed to only trade in the direction of the trend. I am certainly open to new/other ideas on how to evaluate the weekly trend (currently I am using the 13-period EMA).

Another idea on how to evaluate the trend would be to have several members of a group agree or disagree on the trend direction and then only consider it a trend if a certain % of the people agreed.

I do feel confident that with proper position sizing and risk management, it is possible to still make money even if one's subjective analysis of the trend direction is incorrect from time-to-time.

Regards,
Eric

[stevej]

Hi Steve,

Here is another recent example of this syndrome "C" wave in action. I'm ok with getting stopped out, but not ok with leaving massive profits on the table. Notice that when this "C" wave is found the moving averages are all on top of one another...it's a complete mess and the thing could go either way.

Even on the weekly chart you had nothing to go by for direction, but by the time the re-entry (idea I'm working on) came into play, the British Pound had rallied from 1.74 to 1.79 and we get the re-entry signal (plus trend confirmation)...now the Pound is at 1.89
Hi Matt,

Only just seen this post. If there is a sensible indicator to get back into a trend I for one will be glad to have it.

As to the £ trade, the initial entry was at a point where the trend was indeterminate (and there was a large opening gap) whereas the 2 later entries were well and truly with the trend!

Steve

[NHN123]

Matt,

Huge apologies if I have missed something here....

I have a question re the no trend = no trade module. More specifically the GBPUSD trade.

How did you come to the conclusion that the trend was up at the point of entry (first entry, not re entry)?

The moving averages on weekly charts were down, all the significant tops were lower than the last. OK, you had 3 higher lows, but that still makes 2-1 to the downtrend in my book...

I'm not a critical person, and I congratulate you on a great trade. I'm asking in the interests of education so I don't have to miss out on trades like this.

Many thanks in adavnce
Nick

[Steve Griffiths]

Hi Nick,

Please see my post on another thread - http://www.mtptrader.com/showthread.php?p=3467#post3467 here you will see that the prior down trend had ended as the Wave 5 came in on the weekly chart.

As I discuss in the Trading Course, traditional "trend indicators" will always be late in turning over when Wave 5's come in....... and as such a major trend reversal occurs.....

Steve

[NHN123]

Hi Nick,

Please see my post on another thread - http://www.mtptrader.com/showthread.php?p=3467#post3467 here you will see that the prior down trend had ended as the Wave 5 came in on the weekly chart.

As I discuss in the Trading Course, traditional "trend indicators" will always be late in turning over when Wave 5's come in....... and as such a major trend reversal occurs.....

Steve

I see..

You're right, the wave 5 ended very nicely at the WPT (MTP seems to have uncanny accuracy doing this!).

My objection to this is that it made a very nice looking ABC straight after the 5 wave down, could have been perceived to be in wave 1 down on weekly to continue the larger degree trend... So with that in mind, I would have never took a long trade here (although I wish now I did!)

I know I sound like I'm just picking holes here, but I can assure you that is not what I am trying to do.... I'm just wanting more discussion on trend determination, as I have run out of ideas myself....

Thanks

[martinrcox]

I see..

You're right, the wave 5 ended very nicely at the WPT (MTP seems to have uncanny accuracy doing this!).

My objection to this is that it made a very nice looking ABC straight after the 5 wave down, could have been perceived to be in wave 1 down on weekly to continue the larger degree trend... So with that in mind, I would have never took a long trade here (although I wish now I did!)

I know I sound like I'm just picking holes here, but I can assure you that is not what I am trying to do.... I'm just wanting more discussion on trend determination, as I have run out of ideas myself....

Thanks

Hi Nick,

Here is the daily chart showing that a TS1 set up unfolded after this low point right at the wpt. The only problem would have been whether I would have had the patience to hang on for so long with it going sideways !! However you would not have got stopped out. I probably would have sold out when the intial rise off the (2 or B) started to petter out.

As you probably know it is worth looking for Higher Lows or Lower Highs coming after an extended move as for me the TS1 is one of the strongest and most reliable signals in MTP (as we found out to our cost with EUR/JPY :( ) but most of the time you do have to find them manually

[NHN123]

Hi Nick,

Here is the daily chart showing that a TS1 set up unfolded after this low point right at the wpt. The only problem would have been whether I would have had the patience to hang on for so long with it going sideways !! However you would not have got stopped out. I probably would have sold out when the intial rise off the (2 or B) started to petter out.

As you probably know it is worth looking for Higher Lows or Lower Highs coming after an extended move as for me the TS1 is one of the strongest and most reliable signals in MTP (as we found out to our cost with EUR/JPY :( ) but most of the time you do have to find them manually

Hi Martin, thanks for this.

I thought the entry was further forward in time than the one you are showing here. Yours is Dec 05, I thought the entry was early in Apr 06??:confused:

[Steve Griffiths]

Hi Nick,

"if" every "forcast" worked out exatly as anticipated, then tradimg would be easy..... but it does not, we are dealing with human emotions and probabilities in technical analysis, not the 2+2=4 type of maths we all learnt at school !

On your ABC, yes that was correct, but then look at the decline off that high - only another ABC (not another impulsive down swing), so this was the best point for a long trade.

I agree, this is not an obvious and easy example, so I think people are making far too much of "over anlysing" a less than perfect example here.

Steve

[martinrcox]

Hi Martin, thanks for this.

I thought the entry was further forward in time than the one you are showing here. Yours is Dec 05, I thought the entry was early in Apr 06??:confused:

Hi Nick,

Here is the other one which I think you are reffering to. Blink and you would have missed it and as you can see it is not in line with the wpt. However I do not know your criteria for a high or low but if you are using no less than 3 down bars after the prior high to constitute the next low you would have reached this point as the start point for the next low coming off the previous high (and not the earlier point at the wpt which would also have shown as a TS1 set up) . As it happens it did not decline any further and went up like a rocket from here

[Steve Griffiths]

Hi Martin,

Yep, that was also a TS1 buy set-up, which as you say, nailled the last corrective low just before the strong Wave 3 type rally :)

Steve

[NHN123]

Hi Nick,

"if" every "forcast" worked out exatly as anticipated, then tradimg would be easy..... but it does not, we are dealing with human emotions and probabilities in technical analysis, not the 2+2=4 type of maths we all learnt at school !

On your ABC, yes that was correct, but then look at the decline off that high - only another ABC (not another impulsive down swing), so this was the best point for a long trade.

I agree, this is not an obvious and easy example, so I think people are making far too much of "over anlysing" a less than perfect example here.

Steve

Thanks very much.

I know people - including myself - try to forecast too much.

Can I just say again, and re-word it slightly, that I was not trying to find fault with what Matt had done. Indeed, his results are testiment to MTP's way of trading - not just the ABC stuff, but the whole mindset of good money management etc... it has taken a great deal of stress out of my trading - I'm digressing here - sorry!.... What I was trying to achieve was a look into why you guys would have taken a trade, using this one as an example because it was not straight forward (the best ones to discuss and learn more from, I think). I am still very much in a learning phase, and love to listen and learn from what you say, because I think it is all great!

I think what I'll do it just take the ABC signals to an extent, and try and manage them the best I can, cos I will more than likely get the trend wrong anyway, and by the time I realise what the trend is and get the confirmation, it will probably be over done ... As Martin says, TS1 are best, and they will more than like be against the trend anyway...

Thanks very much for your reply steve

[NHN123]

Hi Nick,

Here is the other one which I think you are reffering to. Blink and you would have missed it and as you can see it is not in line with the wpt. However I do not know your criteria for a high or low but if you are using no less than 3 down bars after the prior high to constitute the next low you would have reached this point as the start point for the next low coming off the previous high (and not the earlier point at the wpt which would also have shown as a TS1 set up) . As it happens it did not decline any further and went up like a rocket from here

That's the one.... when you take it down to basics, it is perfect (though I don't know what the R/R would have been...) That's Steve's point I guess. I think I have been making it too hard for myself, in that I have been trying to analyse too much. If I had kept it simple, I would have been very much quids in there!!!

Look at Chris Eddison, for example (sorry to use your name, Chris) He has traded a lot of set ups that I would not have lately, but they worked out - cos he kept it simple and managed them well.

Thanks

[martinrcox]

That's the one.... when you take it down to basics, it is perfect (though I don't know what the R/R would have been...) That's Steve's point I guess. I think I have been making it too hard for myself, in that I have been trying to analyse too much. If I had kept it simple, I would have been very much quids in there!!!

Look at Chris Eddison, for example (sorry to use your name, Chris) He has traded a lot of set ups that I would not have lately, but they worked out - cos he kept it simple and managed them well.

Thanks

Since I have got esignal I have been spending a lot of time analysis a range of different pairs so that I can refine my approach to trading. I must admit that I adopt a slightly more conservative approach to trading a TS1 because I do not want to find that I have entered on the wrong bar (as you know this is a manual exercise and the wpt can be quite large) only to find that there is a false start before it triggers properly. I wait until the 5 day MA crosses that 10 day for added confirmation that the move is definately going to happen. This has two benefits and one drawback. The benefits are that you are unlikley to enter the trade too early and get stopped out and I can use a smaller stop distance because it has moved decisively in the direction that you are trading (although the stop distance will vary from pair to pair). The disadvantage is that it does reduce your potential profit.

[NHN123]

Since I have got esignal I have been spending a lot of time analysis a range of different pairs so that I can refine my approach to trading. I must admit that I adopt a slightly more conservative approach to trading a TS1 because I do not want to find that I have entered on the wrong bar (as you know this is a manual exercise and the wpt can be quite large) only to find that there is a false start before it triggers properly. I wait until the 5 day MA crosses that 10 day for added confirmation that the move is definately going to happen. This has two benefits and one drawback. The benefits are that you are unlikley to enter the trade too early and get stopped out and I can use a smaller stop distance because it has moved decisively in the direction that you are trading (although the stop distance will vary from pair to pair). The disadvantage is that it does reduce your potential profit.
I saw this when you posted it a few days ago. I wanted to ask you, but forgot, when do you take the trade? When the MA crossed realtime for the 1st time, or when the day ends with a crossover?

Thanks

[martinrcox]

I saw this when you posted it a few days ago. I wanted to ask you, but forgot, when do you take the trade? When the MA crossed realtime for the 1st time, or when the day ends with a crossover?

Thanks

I will try and take it in real time. In the example I posted for EURCHF if you had waited until the end of the day the close would have been way below the cross over point. It is not an exact science because as you know it can appear that it has crossed on the chart in real time only to find that the price position reverses and it does not quite cross. I have loaded the equivalent of the 5 day (120 hours) and 10 day (240 hours) only my 1 hour chart to help get the entry point more exact. If you look through a number of charts which have shown an intermediate or major TS1 (not minor) then when the 5 day ma is moving clearly up or down and is close to crossing the 10 day even if it does not happen that day my analysis shows that it is highly likley to cross over during the next few days. Obviously the angles of the swings also have a bearing on how attractive it looks to take the trade

I hope that this is clear

[NHN123]

I will try and take it in real time. In the example I posted for EURCHF if you had waited until the end of the day the close would have been way below the cross over point. It is not an exact science because as you know it can appear that it has crossed on the chart in real time only to find that the price position reverses and it does not quite cross. I have loaded the equivalent of the 5 day (120 hours) and 10 day (240 hours) only my 1 hour chart to help get the entry point more exact. If you look through a number of charts which have shown an intermediate or major TS1 (not minor) then when the 5 day ma is moving clearly up or down and is close to crossing the 10 day even if it does not happen that day my analysis shows that it is highly likley to cross over during the next few days. Obviously the angles of the swings also have a bearing on how attractive it looks to take the trade

I hope that this is clear

Crystal! Thanks a lot

[Steve Griffiths]

Hi Martin,

A very interesing approach............ could I please ask - where do you place your initial protective stop ?

Thanks

Steve

[martinrcox]

Hi Martin,

A very interesing approach............ could I please ask - where do you place your initial protective stop ?

Thanks

Steve

Hi Steve,

There is no set answer and it does vary from pair to pair. I am trying to find a way of having confirmation that the high or low has definately been formed and according to the back testing that I have done this works out the best way in most of the setups. If you look at the attached chart you will see that there were 4 TS1 set ups (I am only looking at intermediate and major). In two of them you could have placed your stop at the high or low of the entry bar where the 5 day ma crosses the 10 day and you would have been fine. On the ones labelled (No 1 and No 2) you would have needed to have some points left for slippage as they come back below the entry bar in the following days before moving up or down thereafter.

I suppose you could put your stop at the high or low but in a couple of these it is a bit further away. The brilliant thing about the software is that you could have found all these set ups and you can see the results that would have been produced

If you have any better suggestions I would be most appreciative

[durgesh147]

Hi guys,

some good discussion going on here.Let me quote some of my experiences here.Of late , i have been stopped out on many setups that i took of major degree.Like Steve has said, Intermediate setups are best.Lets trade intermediate setups only.

I dunno the Do's but i can mention some of the Dont's and i believe it'll help.
We have a good system and it needs a bit of input to get better out of it.

One thing, i make sure trading on smaller timeframes is Wave C of a setup should either be a clean one swing down or should subdivide into 5 swings.then only, i take a position.One example of it is the GBPJPY 4h recent short trade setup.

Indicators like RSI also help.Trendline on the RSI breaks before it does on the prices.These are some of the filters i use....

Its not that after using them, i don't get stopped out but chances of success are enhanced.After all, its all about probabilities...not sureshot stuff.

I'll add more ideas later as i notice them.

[Eddo]

Since I have got esignal I have been spending a lot of time analysis a range of different pairs so that I can refine my approach to trading. I must admit that I adopt a slightly more conservative approach to trading a TS1 because I do not want to find that I have entered on the wrong bar (as you know this is a manual exercise and the wpt can be quite large) only to find that there is a false start before it triggers properly. I wait until the 5 day MA crosses that 10 day for added confirmation that the move is definately going to happen. This has two benefits and one drawback. The benefits are that you are unlikley to enter the trade too early and get stopped out and I can use a smaller stop distance because it has moved decisively in the direction that you are trading (although the stop distance will vary from pair to pair). The disadvantage is that it does reduce your potential profit.

Hi Martin,

You certainly have put the hours and effort in and thanks so much for sharing it with us all. Can I be sure I understand, when you say you place the 5 day and 10 day MA, I assume that is for Daily setups - but are you using the 5 and 10 period MA for lower times frames such as 4 hr, 2 hr etc - in short are you applying the 5 & 10 period MA to whichever timeframe you are taking the set up - or has your work been based only of Daily setups?

Sorry if this sounds a bit basic, but I would like to be clear - many thanks - Chris :)

[martinrcox]

Hi Martin,

You certainly have put the hours and effort in and thanks so much for sharing it with us all. Can I be sure I understand, when you say you place the 5 day and 10 day MA, I assume that is for Daily setups - but are you using the 5 and 10 period MA for lower times frames such as 4 hr, 2 hr etc - in short are you applying the 5 & 10 period MA to whichever timeframe you are taking the set up - or has your work been based only of Daily setups?

Sorry if this sounds a bit basic, but I would like to be clear - many thanks - Chris :)

Hi Chris,

You are right I have mainly been analysing TS1 set up's on daily charts. However today I started looking at 4hr charts. I have mainly been looking for set ups shortly after a major low or major high. There was a great one on GBPUSD last night which I missed which would have got you into the big move today. However in answer to your question it is difficult to be precise as it does depend on how soon after the high or low is completed the set up takes place. I am attaching 2 examples which I have found in the 4 hr charts for AUD/JPY both the sets ups were found using the manual elliot lines intermediate function in MTP (I would advise against minor TS1's in 4 hour charts). In example (1) I am using a 58 period ma (equivalent to 10 day) and a 3 period which seems to work well as this set up happened shortly after the high. In example (2) I am using a 15 period ma combined with a 3 period ma which works for this example as it has already decended some distance from the high. I have transposed these ma's onto a 1 hr chart so I can get a more precise entry position. So the 58 period becomes 232 period on the 1 hour chart. I know that this sounds complicated but I hope that you appreciate that I am trying out different ways of using moving averages to reduce the risk of entering a trade and then being stopped out on the next bar. It also enabled you to enter a trade where the bars are not necessarily the right colours but you are confident that there is going to be a good decline. Please note that I have only examined TS1's and this approach may well not work on other set up's. Have a good weekend

[Rimu]

Hi Martin..
One thing to be carefull of with the MA's in realtime is that if they are based on the close they may cross and recross during the formation of the candle, ie if the candle turns out to have a long shadow like a hanging man or gravestone doji. In that case the only reliable entry may be after the candle has completed.

[martinrcox]

Hi Martin..
One thing to be carefull of with the MA's in realtime is that if they are based on the close they may cross and recross during the formation of the candle, ie if the candle turns out to have a long shadow like a hanging man or gravestone doji. In that case the only reliable entry may be after the candle has completed.

Hi Timo,

I do not know that what I wrote was too clear. In example (1) for this 4 hr chart I am using the 10 day ma (which should convert into a 60 period ma for the 4hr chart however for some reason when compared with the daily chart I have found that a 58 period ma is closer to the crossover point, I do not know why). Because it is easier to see where the cross over point is likely to be I take it down a timeframe to say the 1hr timeframe. For the 1hr time frame you need to use a 240 ma to replicate the 10 day moving average. At this time frame because the 240 period ma is fairly constant it is easy to predict the point at which the ma's will cross. Here is example (1) taken down to the 1hr timeframe. I hope that this is clearer

[martinrcox]

Hi Chris,

I have done some more analysis on 4 hr charts and I think that there is no set value for the higher level ma. I use a 3 period for the lower value but you will have to decide on the best higher value to use which will depend upon the angles etc. Here is another example of a great TS1 on the 4hr chart for AUD/USD which triggered on wednesday. On this example I am using a 3 period and 8 period ma. As you can see there was a previous red bar which came up with a valid set up using MTP at the wpt and came very close to triggering the next bar and you would have stopped out the following bar as you and David have been noting

[Eddo]

Hi Chris,

You are right I have mainly been analysing TS1 set up's on daily charts. However today I started looking at 4hr charts. I have mainly been looking for set ups shortly after a major low or major high. There was a great one on GBPUSD last night which I missed which would have got you into the big move today. However in answer to your question it is difficult to be precise as it does depend on how soon after the high or low is completed the set up takes place. I am attaching 2 examples which I have found in the 4 hr charts for AUD/JPY both the sets ups were found using the manual elliot lines intermediate function in MTP (I would advise against minor TS1's in 4 hour charts). In example (1) I am using a 58 period ma (equivalent to 10 day) and a 3 period which seems to work well as this set up happened shortly after the high. In example (2) I am using a 15 period ma combined with a 3 period ma which works for this example as it has already decended some distance from the high. I have transposed these ma's onto a 1 hr chart so I can get a more precise entry position. So the 58 period becomes 232 period on the 1 hour chart. I know that this sounds complicated but I hope that you appreciate that I am trying out different ways of using moving averages to reduce the risk of entering a trade and then being stopped out on the next bar. It also enabled you to enter a trade where the bars are not necessarily the right colours but you are confident that there is going to be a good decline. Please note that I have only examined TS1's and this approach may well not work on other set up's. Have a good weekend

Hi Martin and thanks for all of that.

The one thing that worries me about this approach is that it seems to me that you could be defeating the whole object of MTP. In that instead of using MTP to 'pick and trade' at the 'market turning points', you are only using it to identify potential support and resistance areas and having done that you are then moving to a Moving Average 'system' to actually make your trades.

Whilst this might well work and provide trades which have less chance of being stopped out, it does seem to me that you could do the same thing without MTP by just manually entering Fib retracement and extensions to your chart and then using your MA's to find the entry points?

What I really like about MTP is that its setups get you in right at the turning points - and whilst I accept that its very tight stops can bump you too soon, I feel that as long as a setup 'looks right' and is not 'totally flying in the face' of the Long, Medium and short term trends, it should be taken as is and as generated by MTP.

Just my threepenny's worth for what its worth and very many thanks again for your input - Chris

[martinrcox]

Hi Martin and thanks for all of that.

The one thing that worries me about this approach is that it seems to me that you could be defeating the whole object of MTP. In that instead of using MTP to 'pick and trade' at the 'market turning points', you are only using it to identify potential support and resistance areas and having done that you are then moving to a Moving Average 'system' to actually make your trades.

Whilst this might well work and provide trades which have less chance of being stopped out, it does seem to me that you could do the same thing without MTP by just manually entering Fib retracement and extensions to your chart and then using your MA's to find the entry points?

What I really like about MTP is that its setups get you in right at the turning points - and whilst I accept that its very tight stops can bump you too soon, I feel that as long as a setup 'looks right' and is not 'totally flying in the face' of the Long, Medium and short term trends, it should be taken as is and as generated by MTP.

Just my threepenny's worth for what its worth and very many thanks again for your input - Chris


Hi Chris,

I am not sure that I have made it clear what I have been doing. I have noted that David and Nick have been struggling to make money trading forex and are finding that they keep on getting stopped out. For my analysis I have not been using anything other than the TS1 signal as generated by MTP. If no signal is generated then I have not been considering the trade even if it looks like there should be a set up there. I am not experienced with Fib retracement and extensions. All I am trying to do is find a way of creating added certainty where a TS1 has been identified that it has a greater chance of success before I enter the trade. You will notice that the points I am identifying are not far from the the place at which the trade actual begins its trend in the right direction. Here is an example of EURCHF Daily where there was a valid TS1 identified at all the high points shown on the chart (between the first 2 or B and the last 2 or B) and yet you would have been stopped out twice before it finally when down. After being stopped out once you would probably have discounted this trade and missed out on the fall when it finally arrived

[Steve Griffiths]

Hi Martin,

I do like the ideal of what you are doing here, however, I am a little confused ? You say that (in this example back in Oct 2005) there were a number of failed TS1 set-ups, but I have just checked here and I cannot see any (?)

Please remeber, that a valid TS1 requires a minor abc correction to form as part of the Wave (2orB) correction. The reversal then has to be at WPT support/resistance with a colored reversal bar. The Risk/Reward then has to be in your favor as well....

I just wanted to make sure that you are looking at the correct MTP signals on which you are adding your own entry criteria.

As Chris cited above, I also want to make sure that by doing this you keep your initial risks small. As Chris says, this is the key to trading and the whole idea of the MTPredictor approach.

Please note, I am not trying to squash any new ideas here - in fact I am very pleaased to see these discussions, so everybody, please keep the ideas flowing, but I hope that I can also add my thoughts on these ideas as well.

I also have some ideas on TS3's that I will share soon as well...............

I hope this helps ?

Steve