Fractal System: TTM Bars

I was thinking about including the indicator TTM to my fractal system. I've used the TTM indicator in a number of systems I've setup, but the TTM is always just one bar short of giving me my perfect system. However, now that I have a fast trend following system (the Fractal System), and a great positioning method, I might have a use for the TTM once more.

The Fractal System will essentially filter out false signals made by the TTM, and subsequently the TTM will filter out false signals made by the Fractals. This is the idea anyway. Still need to test a few things before I give the thumbs up, but so far so good.

The idea is this:
The TTM will typically display after the 2nd bar has closed (keep that in mind when looking at the picture; I would hate to have you think that the TTM bars are displayed at the close of the current bar).

In addition to TTM and the Fractal indicators we use a method called 2nd Bar Low/High. This method involves using the high and the low of the two previous bars to determine the entry and exit points: for example, if price passes the High of the two previous bars, then that would be our entry point, and the stoploss would be the Low of the two previous bars (vice versa for price passing the Low of the two previous bars).

This 2nd Bar Low/High is kind of what my Fractal Dimension Channel/Histogram does, only it's a little more selective. So I will be using the 2nd Bar Low/High mostly for stoploss values, and the Fractal Indicators as my entry points.

Setup is this:

• When TTM displays a Orange or Green Bar, we wait for the Fractal Histogram to display a Red or Blue Bar for our entry. 
• Stoploss is the 2nd Bar Low/High;
• TakeProfit (70% of order) is set a the next support level, or just 10-30 points from entry;
• Remainder of the order (30%) will be trailing the 2nd Bar Low/High stoploss for any further profit points.

RSI Divergence: New Territory

Hey everyone, I haven't been posting at all these past two weeks because I'm still trying to work a possible system with fractals. I believe I'm close to something here, but I'm still having problems with the all-so-many false signals. Still not giving up on it, but I have been looking around for a different setup. Which brings me to today's topic: RSI Divergence!

I've posted about this topic before in my blog, but I failed to notice this very interesting divergence pattern.
I call this pattern the Itty-Bitty-Tiny-Little-Winnie RSI Divergence.

This RSI Divergence pattern comes when the price makes a new High/Low, but the bar displayed is a down bar (if new High is made) or a up bar (if a new Low is made), and RSI is showing a decrease (if a new High is made) or a increase (if a new Low is made).

This might sound a little confusing, so I made you a picture (blue lines show the Itty-Bitty-Tiny-Little-Winnie RSI Divergence):

You can see from the picture that it can get most of the major tops and bottoms, which is wonderful for the everyday swing trader. I should also attach some rules to this pattern:

      -   If you make an entry using this pattern, then enter at the High/Low of the Diverging Bar
          (the bar that displays the pattern).

      -   The Diverging Bar should be the opposite colour of the previous bar

      -   This Divergence pattern should only occur between two bars (which is why I call it the
           Itty-Bitty-Tiny-Little-Winnie RSI Divergence)

So, if the Diverging Bar is displaying a downward reversal, then the entry point would be the Low of that Diverging Bar (opposite if the Diverging Bar is displaying a upward reversal).

I've seen this pattern on all timeframes and all markets, so if you want to include this pattern in your RSI Divergence armory then it could give you that nice reversal confirmation. I will also tell you that this pattern does not work 100% of the time (like all things that deal with markets). There are false signals, so cover your ass with a stoploss. 


P.S. I may not have marked EVERY Itty-Bitty-Tiny-Little-Winnie RSI Divergence Pattern on the chart displayed, so if you see one don't think I'm ignoring it, I just didn't see it is all.

Armada Markets: Available For Canadians!

I just recently signed on to Armada Markets, and asked them if they allow customers from Canada. I received a email (with 30 minutes of sending it by the way) from Armada saying:

"Both Armada Markets and LMAX Exchange accept clients from Canada"

This is a very welcomed relief since I saw on a Armada forum from the Forex Factory website that they do not except Canadian traders. After I deposit my funds into the Armada account and enter a trade, then I can fully verify that Canadians can trade with this company.

It is too bad that we have to dig so hard to find out if a broker is straight or crooked.  

Switching My Brokers

I missed yesterdays Tally (and will again today) because I decided to switch brokers, and right now I'm in that in-between area. After the problems made clear from my old broker Trading Point, I decided to switch to (hopefully) a better broker.

The broker I chose is called Armada Markets. So far from their demo accounts they seem very promising. If the demo account reflects what the live version represents (and Armada claims that it does), then their spreads look fantastic, and their no minimum TakeProfit or Stoploss will be a very welcome addition to trading system.

I will say that Trading Point did offer good customer service, and was willing to help me with my trading. I even believe that their spreads are adequate, but I cannot over look the minimum TakeProfit and Stoploss they apply to every trade.

What this means is I can't make 10 points of profit (this is after I've covered the spread) with a TakeProfit. I would have to manually exit my trade if I wanted those 10 points, which means I would have to constantly watch the price in order to catch those profit points.

Same goes for stoploss. If I wanted to put my stoploss 10 points below/above my entry point they wouldn't let me. I would have to put at a minimum of X amount below/above the entry price (the minimum depends on the market, but it can be anywhere from 10 to 150 points).

Keep this in mind when choosing a broker:

• The lack of freedom from choosing your own TakeProfit and Stoploss levels will result in losses

GOLD: Closed Out Of Trade

I was magically closed out of my GOLD trade today (which, by the way, would have made me several hundred point today). The only way I can explain it is that I had two EAs runnning at the same time, which caused it some confusion and simply closed out my GOLD trade.
Really pissed about about that. This was, most likely, the big move for today.

Tally for Tuesday: +87

Mostly GOLD today again, but I did enter a trade in USD/MXN and EUR/USD. As explained in the previous post, the USD/MXN trade was suppose to exit when it reached 30 points (reached over 300 points last I looked), but the EA didn't recognize how many digits the market presented. So, I ended up losing 37 points with that trade. In addition there was a GOLD trade that resulted in a good TakeProfit, but the trailing 2 bar low/high did not work as well, and closed out with -150 points.

The -150 point trade was not an entire loss as one might think. Since this was the trailing 2 Bar Low/High portion of my trade, I only make (or in this case lost) 30% of my total order. The other 70% is the TakeProfit, which did well (+36 points). So, lets say I made it so that 1 point will give me $1, then for this trade I made $25.20 with the TakeProfit (70% of 36), and only lost $45.00 with the Trialing 2 Bar Low/High (30% of 150). If I relied just on the Trailing 2 Bar Low/High I would have lost $150, instead of $19.80 ($45 - $25.20) i did lose.

If I applied the same $1 per point with 70% for TakeProfit and 30% for Trailing 2 Bar Low/High, I would have made $69.40 (the collected profit from all 6 trades made today). If I made every trade with a $1/point and not divide them up, I would have made $87.00. But that option would apply way more risk to my trades, were as the divide method reduced my risk considerably while still giving me a profit close to the high risk option.

Problem With EA: Manage TP v2.4

I think there is a problem with the EA I'm using for my TakeProfit portion of my trade. The EA I got is called Manage TP v2.4 (Forex Factory... I think), and I believe they mentioned on the forum that 5 digit brokers didn't work. This EA is a little old, so I wouldn't be surprised if the digits were the case.

I discovered this when I traded USD/MXN, making roughly +300 points, but the EA didn't close me out (I set it at +30 points). So, I'll have to fix this. Works fine with GOLD though!