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Time to Grow up and do it properly!

StaticX

Member
Hi Guys,

This is kind of a evolution for me and I thought I would share it with you.

After the thousands of different indicators and bots I have tried, not to mention the hundreds of different systems I have adopted, rehashed and created I came to a realization on Friday that the only way to really break out and to become a super consistent forex trader is through hard work. (kind of a no brainer)

It all started after I caught an interview about Joe Dinapoli. Guys like Joe, Gann, Elliot and Gartley have created the closest thing to the holy grail with regards to forex trading. After digging a little deeper into Joe's interview he was asked this question. Why publish a book about your method? His answer was quite surprising and rather true and it applied to all the big names in trading.

He said that, besides giving something back, even if a million people bought his book, only 30% would read it to the end and of those 30% only 5% will actually use it... he said people are lazy and do not want to work. They believe that forex is easy and that using indicators is all you need.

When I thought about this I realized just how true this was. I have spent the last 12 months on a frenzy spiral looking for the ultimate indicator or system.
I shrugged of learning anything to do with harmonic trading, elliot wave or Gann. (and to that matter even truly understanding why fibo levels work)

Ironically after watching this interview it was the EURUSD thread over at Forex Factory that lead me to the final realization. A couple of the +10v guys over there were posting their charts and predictions. What was amazing to see was just how dam accurate they were. All of these +10v guys (about 6 of them) had all spent the time and energy to learn and understand either Elliot, Gann, DiNopali or Gartley.

Their charts consisted of SR and trend lines, with additional self drawn lines for things like the Gartley patterns. At most the only indicator they would use would be a fibo indi. Price Action trading was king with them.
I could really see the difference between the black box and indicator driven traders vs these guys.

Unfortunately I am at a major disadvantage with regards to trading. Being a software developer for over 15 years I am a thinker. Thinkers do not make for good traders as they get cock-sure and tend not to follow a plan or the rules.
According to Dinapoli, the best traders in the world are pilots and mechanics, basically any profession that requires someone to follow a strict set of rules logically.

So in a nutshell, I am going to focus my energies and stop being a lazy frakken git and actually knuckle down, grow up and do it properly!

To that end I am starting with Joe DiNapoli and his "Trading with Dinapoli Levels".
After getting a good grip and understanding of this I will most likely supplement these methods with an understanding of Gartley patterns. Last but not least I will end off with Elliot Wave.
Unfortunately I am not 100% sold on Gann. There is way to much controversy surround his methods. His own son said called him a liar and swindler, stating that if his father really was so good then why was he and his mother living in poor town for their entire lives.
Even to this day, Gann followers do not have his formula. This he took to his grave. Do not get me wrong there have been some very good gurus who have come 99.99999% close, and this is what most of the Gann followers use to this day. I also cannot deny that guys who use Gann methods are very successful. I know Mj uses this strategy very successfully.

Basically at the end of the day what I am saying is that it actually does take hard work to learn forex trading in order to be consistently profitable. Mj has spent many a long day reading and studying the various Gann books. (I think he said it was something like 2 years of this and that reading Gann's books was not an easy read). So no matter what method you use, be it price action with price patterns, Gann, Elliot or DiNapoli, there is some work to be done.

ps: My personal interest in DiNapoli stems from Sive Mortem from Forex Peace Amy. His daily forex analysis is incredible and over the last 6 months of following him I have yet to see him miss a mark.

pps: The next obvious question is then, great now you have a system but you still need the indicators. True... and that is something we will never be able to move away from being technical traders. But at least now the indicator search is little more focused. For me it's the search for a decent set of DiNapoli indicators for MT4 (some of which do not exist like his Macd predictor. I have managed to find some good substitutions over at Forex-TSD for them but they are not the same. The only way to actually use DiNopali indicators is to switch trading platforms to either TradeStation or CQG... however I have seen that Sive Mortem has been using MT4 lately so there is hope yet :) )

Just a little Interesting fact that I learnt from reading Joe DiNapoli's book "Trading with DiNapoli levels". 90% of traders have no clue on how to use the Stochastic indicator correctly. Majority (and that includes me) thought that it use is based on the lines crossing the oversold and overbought zones. According to the creator, George Lane, this is so far from the truth. The entire focus on using the Stochastic is to identify divergence, by using the overbought and oversold areas and not to base trades on whether the signal lines crosses the main line etc...)

Anyway that is my story so far... the journey to learn and and grow up :)

Whilst learning these new methods I still have to make use of current trading style to survive, which comprises of two systems depending on the market. I either use the CCI strategy or the Forex Rebellion.

Cheers
StaticX
 

grood

Member
Hello StaticX,

many thanks for sharing your journey, this is something you rarely read. Highly appreciated!

Similar thoughts have come to my mind. For me it's pretty clear that indicator based-trading leads to more or less mediocre performance. If applied correctly with some experience how you pair reacts, you can still make a living- until the indicator fails...

Three guys I know who trade for a living have on their charts:

- Fib levels+Pivots
- Trendlines/Channels
- Different MA

The MA are to identify general trend and areas of price action. That's it.
Still thinking what I should conclude out of that for myself - probably take a break, forget everything and start from scratch ;)

PS: would you please be so kind to elaborate when you use which system? For myself, the woodie CCI works very well if a strong move occurs. I got burned a bit though in choppy markets, trading signals with late entry, where reversals occured.

Rebellion seems to be a trend following system, if I understand it correcly? Using RSI and EMA crossover it seems to try to identify strong trends (similar to Lindencourt).
 

StaticX

Member
Hi Grood,

Correct, Rebellion is ideal for a strong trend following system. I use the CCI method for a solid 4H strategy as it identifies the strong big moves really well, with great setup.

During the 4H period I will then switch to Rebellion and use it like as a kind of good trend scalper system.

Unfortunately I will have to continue this style of trading until I have grasped the higher methods.

One of the interesting things I found out about DiNapoli is that he was actually the creator of the Fibo technical analysis strategy back in the 80's. He created the concept of levels trading back using fibo's. He also engineered (I use that term loosely as he does not program, but was the mind behind them) a set of shit hot indicators. I think there are 4 or 5 of them which are all available on other platforms besides MT4.... Interestingly DiNapoli is one of the default templates that ships with MT4, but it makes use of just his values he utilizes for his Stochastics and Macd.

Anyway I am not to stressed about the indicators as what he has shown me so far is mind blowing.

I will attach to this post the Book I am using now if anyone is interested in taking a look as well. It's called:
"Trading with DiNapoli Levels". I think it was published in 2002 or 2009 cannot quite get an exact date at the moment.

Code:
[URL="http://hotfile.com/dl/98764025/e725074/Trading_with_DiNapoli_Levels.zip.html"]The Book[/URL]

Cheers
StaticX
 

grood

Member
I think it's even from 1998 :)

By the way, just found that, seems interesting. Google for "Day and Position Trading Seminar Using DiNapoli"
 

StaticX

Member
Nice one, I also found it earlier today and downloaded it. Video is definitely from the late 90's or early 2000's.

Still the information it contains is invaluable. Especially that nugget if info about the Stochastics... I skimmed through his book and saw it has an entire chapter dedicated to oscillator type indicators, talking about which ones are good and how they are best used.

Edit:
I really recommend reading at least the first 2 chapters of that book I posted. Joe shoots straight from the hip, no BS, he tells like it is ....

Cheers
StaticX
 

stovedude

Active member
I agree StaticX. We waste so much time (and $$) on all these new systems coming out. I thank God that many are very well protected, because I just see a rehash of something already developed or already explored. Like the Good Book says: There is nothing new under the sun. This was Gann's philosophy as well. We should mainly focus on Price Action and the correct use of indicators. The main problem with most indicators is that they are based on a certain period, but this period is always changing in real time. The number of bars between highs and lows are forever different. That is why we have divergence and false signals. Moving averages are headaches, because whatever period you choose, it means you are lagging that many bars, and price never bounces off or crosses the one you're watching. And so the Quest goes on... and on... and on... I think the 5% that truly make it suddenly realize the same thing that you have concluded: Don't be lazy! Learn the psychology of the market (which includes your own). Find a system that you can stick with and STICK WITH IT! (yelling not intended of course:)).
Automating it is fine, as long as you can expect an EA's shortcomings and vulnerabilities. If you're smart enough to successfully automate a strategy, then "To the victory belong the spoils!"

We should open a new thread on DiNapoli. I think there is a wealth of information that we are overlooking there.
 

lerxst

Member
I like to bring a slightly different perspective to the discussion. While I agree for the most part in reading price action to help us trade; I think the most important part of trading is our mental aspect. Indicators are calculated from price action, so they give a different aspect of the market. and not inherently worse or better than pure price action. For example, try to identify divergence or convergence without an indicator. You can't because you need a point of reference to compare to.

There are many roads that lead to Rome or in our case, successful trading. Who is to say which way is better or not as good as others. The key, to me, lies in finding a set of indicators, price patterns, or whatever that suits your mental aspect. And diligently apply it. If you read through Market Wizards, these successful types come from all areas of life and with all different methods. Some like Tom Baldwin was a meat packer prior to going into bonds, some others develop their own systems, and some merely find something that works and just repeat it over and over. Isn't our goal to be profitable and that doesn't necessarily mean we have to be well versed with some other successful trader's methods.

We sometimes tend to discount our own experiences and know how. At the same time overrate others, myself included, to think that there must be something we're missing, something we don't know. But what if there is no sure system that wins all the time and to be profitable, you have to accept the losers and not give up on your system when you hit those streaks?

I took a look at Sive Morten as mentioned by StaticX, his demo trading records while profitable aren't that exceptional with the drawdowns. It's the type of returns that you can get with a decent manual system which many have been shared here. Now the question is, can you weather a system through it's good and bad streaks and come out on top?
 

devonfgu

Member
Dear all,

the DiNapoli compare with Robert Miner's ,

which one was worthwhile us to do research, Who have the Dynamic Trader experience could share to us?

DiNapoli CQG it is a serious trading product and more expensive than most futures trading data/software products...

here have the Dynamic Trader tutorial:
 

StaticX

Member
Hi Lerxst,

Very good assessment. Your perspective is definitely food for thought,
thank you.

Cheers
StaticX
 

StaticX

Member
Hi devonfgu,

It's not about which method is best. It is more about the fact that in order to break out of a medium consistency pattern in forex, hard work and study is required.

I chose DiNapoli as a personal choice, simply because I got a "good feeling" from his material.

One very important note I would to make. Most of us of technical traders. Knuckling down actually learning a proper methodology is the first step, obtaining indicators that assist us with this newly acquired knowledge is almost a given.

As Lerxst pointed out, obtaining a very good indicator that can assist with say a Stochastic divergence is definitely a high priority in my books.

I think the most scariest thing and almost a reality check for me is that all these "Big Boys" who have broken into the high consistency region only really did so after 5+ years :( (Which for me, being a very impatient person, is like a cold shower)

Cheers
StaticX
 

stovedude

Active member
I also agree with lerxst about indicators. They are practically a necessity for successful trading, because they are actually calculating price action anyway (at least the good ones). And yes, psychology and MM are the true key.
 

radicaltour

Moderator
VIP Member
this thread is fantastic. I think the more we discuss and confess our trading sins, the faster we'll become consistent profitable traders.

StaticX, my journey is very much like yours.
While i never looked into DiNapoli, i did spent months with Gann.
In the end, it wasn't for me...not to say that it doesn't work.
I also spent a few months with Harmonic patterns and that was okay.
In the past 2 months I've gone back and worked with Elliott and i have to say it is an awesome marriage of market psychology + fibs + harmonic patterns.
While the wave count may be subjective, at least it gives me a road map and strategy hours/days ahead of time. The stop loss is well defined and target is quite good.

And so i agree with others on this thread that the best system is the one we know and trust 110% (whatever that system may be). But to get there we really need to spent all of our efforts in a focused manner.
I think one of the first sign of success is when you just entered a position with your signal and while you're in a drawdown you still feel fantastic about the trade.. That's when you know you truly believe in what you're doing and of course that confidence would be there only after you'd spent blood and sweat working the system.
 

StaticX

Member
Hi Radicaltour,

Elliot wave is definitely something I will be learning as one of my last steps. Something quite fascinating about Elliot Waves is that their power comes from an underlying fibonacci strength.

So far I have watch the 4 hour DVD training video for DiNapoli, was very interesting. Joe DiNapoli was not able to dive into any great depths as this video was a seminar that was held in Vegas. His book is definitely more jam packed with info.

I have a new found respect for Fibonacci and those DiNapoli Levels are quite amazing. (They are freakishly accurate to the point of black magic freaky)

For the first time in a long time I actually feel like a trader. I am now spending a great deal more time on my analysis, starting with the higher timeframes and working my way down. (Weekly, Daily, 4H, 1H).

If I can offer any advice to any new comers to forex, read Joe DiNapoli's book. The actual meat of the methodology only starts in chapter 8. He builds the reader up very nicely, laying down all the required ground work.
Joe is also a no BS guy. He paints a very dark picture about the truth of trading, but then also highlights how one can make it in this industry.
His book also covers a great deal about psychology of trading and he explains just how badly it can affect you. (My wife was cursing him. I made her watch the Joe DiNapoli interview, in it he said explicitly "Never tell your wife how you are doing, even if you are profitable.")

Perhaps after some time DiNapoli I will start a new thread where I can discuss his methodology.

But for now its hard work and a great deal more studying.

ps: I definitely can see an improvement in my trading. I can also see a great benefit to supplementing this methodology with harmonic patterns.

Cheers
StaticX
 

lerxst

Member
Hi StaticX,

Good to hear the Dinapoli levels are working out for you and sharing the ebook. Like others mentioned in this thread, probably best to use a combination of materials that you are confident in.

Regarding your comment about 5 years plus for consistently profitability, a trader once told me. Where would you be in 5 years time if you weren't focusing on reaching your trading goals? Meaning that time passes by whether we are learning to become trading successfully or not, and if it weren't that important to us; we would not be wasting time and effort at it.

By all means, your cci threads and other contributions have been great. Have you simply tried to trade cci method for a period of time and then decide whether or not you need to further studying.
 

StaticX

Member
Hi Lerxst,

Correct, for quite some time now I have grown a "little lazy" and have been more reliant on "Enter here" / "Exit here" type systems.

The CCI strategy was my first step from breaking this mold as it required me to do some research into the uses of CCI. This research basically rekindle my passion for learning and further studies.

I started a small research project into the trading habits of the "super traders". (Elliot, Gann, DiNapoli, Wilder, Gartley, Elder, DeMark )
What I discovered was that although their techniques were different they shared a single common attribute. All these guys were were able to anticipate where price was going. In other words they shared a common technique that used some form of "Leading" technical analysis.

"Leading" as I discovered does not have to be some wonder indicator. In fact most if us use a leading technique every day. Support and Resistance is actually a leading indicator. It allows us to know ahead of time where price could possible stall, reverse or continue.

This concept of "Leading" intrigued me so I studied further. W.D. Gann was able to anticipate months and even years ahead of time where price was going. Joe DiNapoli is able to anticipate various retracement and expansion levels ahead of time.

W.D. Gann methodology lies in the underlying harmonic nature of the markets, he discovered that the "key" to trading successfully lay within cycles. Joe DiNapoli perfected Fibonacci analysis, basing his methodology on the golden ratio. (Did you guys know that the human body is actually a perfect Fibonacci ratio! - If you take the proportional distance from your feet to your head and then the length from your outstretched arms, it apparently works out to the golden ratio)

I was also quite surprised to see that these guys also shared the same view with regards to Price Action being a lagging indicator! However they also share the same view of that a successful system has to make use of both leading and lagging indicators. (I use the word indicators as a form of technical analysis and not necessarily a software program)

This concept of "leading" never sat well with me at first, as I was always taught to never predict and that reaction is the only thing amateur traders should be focusing on. I struggle with this concept for a little bit and came to the following conclusion. The "super traders" where predicting where price was going but their predictions where based on solid mathematical models. Amateur traders use prediction literally in the purest form. Basically this is gambling and their is no scientific backing for that form of prediction.

To end off, although my CCI strategy works, it does not work as well as the super traders methodologies. All the guys that have broken out of the mediocre profit realm have appeared to done so using one of two of the super traders methodologies. The CCI strategy I have outlined in this forum still works and it is a great little profit machine, but what you will find is that you become complacent and your brain will turn to mush as all you do is wait for the various singles to appear. I wanted something a little more powerful, I wanted to know what makes me so different from say a Gann trader. The answer to that is effort and hard work. An Elliot wave trader will spend at least 30 - 60 mins analysing the wave forms before entering the trade. Using my CCI strategy - 5 mins, whilst I surfed the web and watched YouTube videos.
Difference being, I would make 90-300 pips, they would make 500-1000 pips.

Update on my DiNapoli studies:
Joe DiNapoli's book is probably one of the best reads I have ever had. His book is jammed packed with goodness.
My only problem with this methodology is the lack of MT4 indicators. I have managed to scrap some MT4 DiNapoli indicators together, but they are not the mirror images of the original DiNapoli set. One day when I am start making $2000 a day then maybe I will consider upgrading from MT4 to a subscription platform like TradeStation or CQG (CQG is about $900 a month)

Cheers
StaticX
 

altoronto

New member
Great thread and I learned a lot from you guys. So here is my little contribution maybe is relevant maybe not, I read about it on some other forum and I think is worth at least to try. So go to daily chart and draw last 3-4 days OHLC lines, then switch to 15m TF and you will see how those lines act almost perfect S/R lines, some guys trade it as reversal some as breakout.

Later today, I'll post indicator to draw ohlc line, only draw back is that you need to attach same indicator for each day.
 

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agrajag

Member
...
(My wife was cursing him. I made her watch the Joe DiNapoli interview, in it he said explicitly "Never tell your wife how you are doing, even if you are profitable.")

...
Cheers
StaticX

Wow StaticX, I wish I had read this thread a week ago. As you may have seen in another thread, I blew my account using an EA, all just a couple days after telling my wife that , hey, things are going pretty good :(

She hasn't asked how things are going since then, although I think she knows that something must have happened because I haven't been talking about it. Needless to say, the guilt coupled with the anger at myself for trying to take the easy way out has made me re-evaluate how I trade.

I'm a smart guy - like you, I'm also a software developer, and I keep telling myself that I should, by all rights, be doing far far better than I am doing. Yet I've continued to come up short. I think you sum it up perfectly in that there are no shortcuts, and only hard work and truly understanding the market will ever lead to consistent profits.

I'm going to read the book you linked, and try to find my own rhythm. Let's keep this tread going as I'm positive I'll benefit from it, and hopefully others will too.
 

barend15

Member
StaticX

I knew Joe personally and he was my mentor 10 years ago. You can get his full suite of indicators @ GFT for $80 per month. No affiliation, but I 'm with GFT for 10 years now.
 

barend15

Member
For StaticX

Regarding the indicators Joe uses, you'll note that he is very adamant about the correct parameters for the respective indicators. As indicated from my earlier post GFT has the full suite of DiNapoli indictors. The respective MA's, MACD and the Preferred Stochastic are free but an additional fee is payable for the rest. GFT is 1 of the brokers endorsed by Joe for use of his indicators.

As you know MT has a DiNapoli template which is not endorsed by Joe.
Attached are 2 images of the respective stochastics to illustrate how they differ.
The first image is MT and the second GFT
 

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StaticX

Member
Hi Guys,

I used Joe's techniques as a mechanism to further my knowledge of Forex Trading. I never actually got a chance to implement them properly due to the complete lack of support for MT4 (and at the moment I really do not feel dishing out $$$ for a new trading platform)

As all of you are well aware there are a multitude of strategies and methods out there. All of which seem to have their own edge.

Over the last month I have been extremely quiet due to my research into this field. I have studied about 8 different major methods and about 15 crazy once off's that have been create by some "top-guns" over at Forex Factory.

I can conclude this:
1. The market is designed to purposely fool us.
2. We need suckers to keep searching for that holy grail indicator and or system
3. Hopefully those suckers will purchase said indicator(s) from scam artists to keep them making more and ** holding thumbs ** actually do real money deposits into a broker so that we can take their money.
4. It is now estimated that there are approximately 10500 new Forex beginners a day (that's a staggering figure when you start doing weekly totals) Understanding this should at least let you know that there is now a fully fledged market for scammers to produce indicators as a full time job. (Even if they themselves don't trade - Like Karl Dittmann )
If at minimum they can hook just 1000 of those new comers a day, they will be making a decent living)

I have personal stopped looking at any method / strategy that requires the use of a custom set of indicators. Instead I look for strategies that talk price action and market flow.

Over the last month I also switched from the 15M / 1H charts to the more longer term Daily and Weekly charts. I can safely say that I am now making at least 50x more than I ever was. I am less stressed and can finally get back to playing World of Warcraft :)

Now here is the punch line. I have to work at my charts. I spend at least 2 hours a day analysing my set-ups. Once I have configured my entry levels I set them with my trade manager and leave them. If I get filled into the order great, if not ... no worries there will be more.
I never enter a market order EVER. My entries are all pending. My stop loss is extremely tight and based on a very strict 3% of my equity. I stick to my rules as if it were my religion and will never deviate from them EVER.
I do not use any custom indicator and as of recently I do not even use
any of the built in indicators.
I will only use Trend and Support and resistance lines.
I do not use Fibo or Pivot levels although I am a big believer in the golden ration (0.382) and have found this number to be very useful in my manual calculations for pending entries.

I'm not going to sugar coat it, but I started with $150 and in the beginning it was very rough going as the stop loss was very very very tight for a daily chart. Lately since my equity has grown on that account I can afford to move onto the weekly chart.

My advice for all Forex new comers, start with the larger time frames, you will be able to get a much better understanding of where the market is going and what it is doing. (At the end of the day it's about growing your base equity by a percentage each week... not each hour or minute... and protecting what you have made)
The "big boys" trade the larger time frames for a reason. The smaller time frames are still traded by the "big boys" but only to exploit the repetitive mistakes made by all new comers. (In the end, all new comers utilize the same techniques and pitfalls.... which to the larger players are extremely transparent.)

As soon as I have concluded my research I will gladly share my findings and my style of trading with you all.

Having worked as a software developer in the online casino arena for the last 9 years I am all to well aware of the "instant success" addiction that such online activities like forex can breed. Trusting your equity growth on a custom wonder indicator is just plain and simply dodge. It's the same as if you had randomly giving $100 to some random person on the street, taking their word that they can turn your $100 to $200 overnight....

Cheers
StaticX
 

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