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I've got a love-hate relationship with currency trading that I'm trying to resolve. So the following is mainly just notes to myself and not a finished business plan.

This seems to be the crux of the problem. Currency prices respond faster to news and events than a retail investor can keep up with, much less position him/herself to respond in advance of them. (Aka, skate to where the puck is going to be.) Therefore, stepping away from daily prices --much less intra-day ones-- is called for, as well as ignoring "fundamentals". That means using weekly price charts and --probably-- a discretionary, trend-following, entry/exit system of the sort, "If 'X' happens, I will do 'Y' (unless the set-up just doesn't "feel right").

Choosing a 'Charting Format': Greg Morris argues that Candlesticks (and Candle Pattern Analysis) are only appropropriate for daily charts and holding-periods of no more than ten days. I agree. So scratch them. I dislike American style price bars, but the color coding offered by Elder's "Impulse System" makes for easy chart reading. So they're in. Volume bars are something I also have a love-hate relationship with. Sometimes, the info they provide can be useful. But most of the time, they are just unnecessary clutter and can easily be ignored. So, volume won't be plotted.

Choosing 'Indicators' and 'Overlays': All indicaors and overlays are just derivatives of 'Price' and /or 'Volume'. Hence, totally unnecessary. But one or two judiciously selected ones ease chart reading. Without arguing its merits, I'm going to use StochRSI as the sole indicator and no overlays.

Here's a daily chart of one of the several funds or ETFs by which bets can be made on the direction of the US$. http://schrts.co/YFW1rr The 3-month trading-range that extended from late Jan to late Apr would have been a nightmare to deal with, and the signals provided would likley have chopped an account to pieces. In-Out. In-Out. That's just crazy. But look at the clarity obtained by switching to a weekly format. http://schrts.co/VCw3Em

As a first approximation, the 'Buy'/'Sell' rules are easy. Use X-overs of the 20 and 80 lines. But a bit a 'tape reading' suggests a refinement. Genernally, normally, almost usually, beakouts/breakdowns retest the low/high, as examining the price bars confirms. Hence, this becomes the tentative set of rules:

(1) When StochRSI moves out of the 'brown zone', you've been given a 'heads up", pre-buy signal. Expect the breakout to be head-fake followed by a re-test of the lows. Use the lows to estimate a good price for a MIT order, and plan to put on half your final position.
(2) If your buy-stop is hit, give the market a couple of days to confirm that your entry was correct. If so, scale in by a third more. If that is confirmed, add your final one-sixth and start looking for your exit signal, which --ordinarily-- would be a move out of the 'green zone'. Exit 'all-out'.
(3) If prices break out, but don't do a pullback, you've gotta decide whether to chase. Dropping down to a daily chart should decide whether you're too late to the trade or not. If so, don't chase. There'll be another bus along shortly.
(4)Shorting rules are the reverse of buying rules.

Caveats: This system has not been tested. It was created for doing analysis at www.stockcharts.com. (If used at www.freestockcharts.com, some slight graphics changes would have to be made.) And it was created primarily for using Schwab's no-commish ETFs and mutual funds, supplemented by an account with M1 Finance, Motif, or Robinhood.
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Poking around a bit more suggested changes need to be made to my basic setup. This is what it now looks like. http://schrts.co/mVtwF3

To repeat, the intent of this trading setup isn't to zip in and out, but to capture a trend that is a bit longer than "short-term" and a bit shorter than "mid-term".

If you find examples of where the signals fail, please post them.
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Excellent charts.

Have to study the red (down) and green (up) arrows and when on what dated to they pop.

Going to study the charting comparison against the Tetter Totter.
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Quill,

'Super Trend' isn't an indicator I've ever seen before, nor have I thrown enough stocks against it to discover its weaknesses, plus, I need to find the formula, so I can understand what's really happening. But the few charts I drew with it looked really good, if all one wants is a simple, no-brainer, one-indicator set-up.

Arindam
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https://www.youtube.com/watch?v=SOVcHDM7-KA


Yahoo Finance uses (7) for the look-back period and (3) for the multiplier. The presenter in the linked video suggests (10) for the look-back.
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Quill,

Here's a chart that shows the wisdom of waiting for confirmation.


https://finance.yahoo.com/chart/NIB#eyJTWSI6W1siTklCIixudWxs...
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A,

Interesting.

Need to find a source that produces the up arrows and down arrows right out of the gate.

Otherwise it is a waiting game for the pop ups. Many of my scanning tools find hundreds of stocks to buy and to do a compare el man u al ain't going to cut it.

will look through the stockcharts if a code has been written.

Quill -
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A,

re: comparison

BINGO.......compare https://tinyurl.com/ya99c5uo to freestockcharts cci20 crossing over the Zero (0) line heading North for DNR which just came from the barchart.com's stocks to own list a few minutes ago. DNR was half way around the first turn and that is simply chasing the stock which is against our rules. Man a lot of folks would have said: "I wish I had bought that stock." ;o)

Been trying to find any sources in producing a chart/s of the day/s list so I can do my comparing. But I think I am the closest in producing a daily list plus or minus a day or two.

there will be tymes that the CCI 20 will be ahead of the red green arrows on the supertrend charts.

still doing more research and comparisons from my scanning tool for the CCI20 crossing above the zero line heading north and see when the red green arrows appear per your latest and greatest chart.

just a thought,

Quill -
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Quill,

Keep in mind that nothing is going to work all of the time, in particular, what works well in a trending market won't work so well in a ranging one. The presenters in those YouTube videos on the SuperTrend indicator kept hammering on that point, also the need to use other indicators as "filters". Also, the dynamics of charts built on weekly bars are different than those built on daily bars, never mind that Mandelbrot claims otherwise, arguing that market time is fractal, which I do believe.

What it comes down is is by how much is the investor/trader willing to let prices move against him/her? On a daily chart, every 'adverse excursion' becomes immediately obvious and painful. With weekly bars, much of the noise is suppressed, and it's easier to stick with --and to be guided by-- the intermediate trend.

Arindam
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Quill,

Good eye. You're right that SuperTrend provides signals equivalent to using the midline of CCI.

https://finance.yahoo.com/chart/DNR#eyJTWSI6W1siRE5SIixudWxs...
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A,

Thanks for the new chart that now includes the CCI at the bottom. Must have slipped my mind to add the CCI at the bottom.

//Scan 11BB - CCI - 20 Bullish (crossing above 0 )

[type = stock] AND [country = US] AND [Daily EMA(5,Daily Volume) > 500000]
//and [SCTR > 90]
AND [Daily EMA(20,Daily Close) > 10] AND [Daily CCI(20) crosses 0]

Found 34 this morning.

//Scan 11BB - CCI - 20 Bullish (crossing above 100 )
[type = stock] AND [country = US] AND [Daily EMA(5,Daily Volume) > 500000]
//and [SCTR > 90]
AND [Daily EMA(20,Daily Close) > 10] AND [Daily CCI(20) crosses 100]

found 64 this morning

However, I saw when it begins to crown at the top after crossing the 100 line the green arrows appear like majjic.

Still, have to the hard werk of looking at each stock from a large list. However, placed them all on a re-due list for a few days and see what happens for a week to see which gets caught going up or going down at 10 am EST. Will run the going down scans at night.

It is like fishing with a net. Throw out the net and pull it in to see was caught. Still, like the "Be the spider and let the prey come to you."

What I don't like is that some of the Rail Burds watching don't chime in and confirm my findings. Maybe they can help and fine tune and tweak here and tweak there.

Something to ponder,

Quill -
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Quill,

The reality about "lurkers" is that most have nothing to contribute. On all of the discussion boards, how many who post are trying to solve the problem of how to manage serious money? Maybe one or two on the bond board or REIT board. Maybe a half dozen on the Mechanical board. But for the most part, no one else is putting in the hours you do, which isn't to say that some boards aren't extremely active, such as Saul's. But those guys aren't 'investing'. They're practicing fundamentalist financial religion, and they don't know the difference between brains and a bull market.

Here's another "reality". There are no secrets to market success other than persistence, consistency, discipline, and hard work, which is why Linda Raschke will share everything, because she knows so few will make any use of it.

On a separate thought, the more I dig into this indicators stuff, the more I see how interchangeable all of them are and how redundant they are to a bare bare. Indicators merely help make explicit what is already implicit in just price and volume.

Arindam
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