QUAD CANDLE SYSTEM
D1 Time Frame
My view on trading is to take what works and bin what doesn't.
Everything else is either a theoretical or research oriented exercise !
"Being in the brokerage business myself and handling large accounts, I had opportunities seldom afforded the ordinary man for studying the cause of success or failure in the speculations of others. I found that over ninety per cent of the traders that go into the market without knowledge or study usually lose in the end"
W D Gann=================================================================================================
Alleged Trading Performance by WD Gann
1908 – $130 account increased to $12000 in 30 days.
1923 – $973 account increased to $30000 in 60 days.
1933 – 479 trades were made with 422 being profitable. Strike rate of 88% and a 4000% gain.
1946 – 3 month net profit of $13000 from starting capital of $4500 – a 400% profit.
W D Gann=================================================================================================
Compounding a 1K account (no regular deposits) at 5.93% monthly ==> 1K to 1 Million in ~10 years.
This is basically doubling the account equity every year for 10 years.
Year 1: 1000 to 2000
Year 2: 2000 to 4000
Year 3: 4000 to 8000
Year 4: 8000 to 16000
Year 5: 16000 to 32000
Year 6: 32000 to 64000
Year 7: 64000 to 128000
Year 8: 128000 to 256000
Year 9: 256000 to 512000
Year 10: 512000 to 1024000
LIVE TRADING PROGRESS
MT5 Account #1 (NO regular deposits)
This account now has a 12 month trading history and will continue to be traded in the background so the focus can be solely on Account 2.
The account history is now set to private.
Account Start Date: 8 JANUARY 2018
Account Start Balance: US$1000
Current Account Growth
Year 1 (Dec 2018) Net Gain in Equity = 40.50 % @ 19.98 % DD
Year 2 (2019) Net Gain in Equity = _____ % @ _____ % DD
Account has been set to private and updates discontinued due to a lack of thread participation.
Account #2 :: mt5_dl5
Trading Peformance Monitoring
Note: Now discontinued due to a lack of thread participation.
Account #3 :: MT4 or MT5 or cTrader (... coming soon)
This new real trading account will commence from August 1, 2019.
I have decided to start another account because there is renewed interest in this thread.
Dream Levels (DL) through the Power of Compounding
Compounding Monthly Projections to create the Dream Level (DL):
DL1. Compounding a 1K account (with regular deposits of 1000, Tot Inv Cap. = $120K) at 2.84% MoM ==> 1K to 1 Million in ~10 years.
DL2. Compounding a 1K account (with regular deposits of 1000, Tot Inv Cap. = $116K) at 3.00% MoM ==> 1K to 1 Million in ~9 years 8 months.
DL3. Compounding a 1K account (with regular deposits of 1000, Tot Inv Cap. = $94K) at 4.00% MoM ==> 1K to 1 Million in ~7 years 10 months.
DL4. Compounding a 1K account (with regular deposits of 1000, Tot Inv Cap. = $80K) at 5.00% MoM ==> 1K to 1 Million in ~6 years 8 months.
DL5. Compounding a 1K account (with regular deposits of 1000, Tot Inv Cap. = $48K) at 10.00% MoM ==> 1K to 1 Million in ~4 years.
Note 1: Tot Inv Cap. means Total Invested Capital made up of Start Balance plus the sum of all regular deposits until 1M (Equity) is achieved.
Note 2: Based on continual deposits over the course of the preferred DL period it will not be possible to state later that 1K went on to make 1M.
Note 3: It is the traders choice whether a regular deposit strategy is applied to the trading account or not.
DL1 suggests that about $120K would be applied to make 1M;
DL2 suggests that about $116K would be applied to make 1M;
DL3 suggests that about $94K would be applied to make 1M;
DL4 suggests that about $80K would be applied to make 1M; and
DL5 suggests that about $48K would be applied to make 1M.
Note: This outcomes entails successful trading over the longer term such that milestones and goals are achieved.
Example Risk Values for an aggressively traded longer term account:
Assigned Risk Per Trade ARPT (Max.): 5%
Assigned Risk Per Account ARPA (Max.): 15%
Drawdown (Max DD): 30%
Peak To Trough (Equity Max.): 30%
Dream Level Variation:
- if after a 3 month (calendar) trading period the DL rate has not been met at least once then the next lower DL rate will be applied;
- the ARPA must be reduced immediately by a factor of 2 commencing from the start of the next calendar month;
- if the original DL rate is again met on any future month then the ARPA may be increased up to the applicable maximum.
Breaching Drawdown and Peak To Trough limits:
- if the DD limit is breached then the Risk Per Account must be reduced by a factor of 2 over the following calendar month (penalty month);
- if the limits are not exceeded during the penalty month then Risk Per Trade may be increased up to the maximum of the applicable DL;
- should the penalty month limits also be breached then Risk Per Trade must again be reduced by a factor of 2.
Max Lot Size (per trade) and Recommended Volume Ranges:
- Max Lot Size = Equity/10000
- Recommended Volume Range = [Equity/100000 to Equity/20000]
If Equity >= 1000 then Max Lot Size = 0.10 lots --> recommended [0.01 to 0.05]
1K Equity (Max Lot Size = 0.10)
Trade 1 @ 0.01
Trade 2 @ 0.02
Trade 3 @ 0.03
Trade 4 @ 0.04
Trade 5 @ 0.05
Tot. Volume = (0.01 + 0.02 + 0.03 + 0.04 + 0.05) = 0.15 (1.5* Max Lot Size).
If Equity >= 2000 then Max Lot Size = 0.20 lots --> recommended [0.02 to 0.10]
2K Equity (Max Lot Size = 0.20)
Trade 1 @ 0.02
Trade 2 @ 0.04
Trade 3 @ 0.06
Trade 4 @ 0.08
Trade 5 @ 0.10
Tot. Volume = (0.02 + 0.04 + 0.06 + 0.08 + 0.10) = 0.30 (1.5* Max Lot Size).
If Equity >= 3000 then Max Lot Size = 0.30 lots --> recommended [0.03 to 0.15]
3K Equity (Max Lot Size = 0.30)
Trade 1 @ 0.03
Trade 2 @ 0.06
Trade 3 @ 0.09
Trade 4 @ 0.12
Trade 5 @ 0.15
Tot. Volume = (0.03 + 0.06 + 0.09 + 0.12 + 0.15) = 0.45 (1.5* Max Lot Size).
If Equity >= 4000 then Max Lot Size = 0.40 lots --> recommended [0.04 to 0.20]
4K Equity (Max Lot Size = 0.40)
Trade 1 @ 0.04
Trade 2 @ 0.08
Trade 3 @ 0.12
Trade 4 @ 0.16
Trade 5 @ 0.20
Tot. Volume = (0.04 + 0.08 + 0.12 + 0.16 + 0.20) = 0.60 (1.5* Max Lot Size).
If Equity >= 5000 then Max Lot Size = 0.50 lots --> recommended [0.05 to 0.25]
5K Equity (Max Lot Size = 0.50)
Trade 1 @ 0.05
Trade 2 @ 0.10
Trade 3 @ 0.15
Trade 4 @ 0.20
Trade 5 @ 0.25
Tot. Volume = (0.05 + 0.10 + 0.15 + 0.20 + 0.25) = 0.75 (1.5* Max Lot Size).
If Equity >= 10000 then Max Lot Size = 1.0 lots --> recommended [0.10 to 0.50]
10K Equity (Max Lot Size = 1.0)
Trade 1 @ 0.10
Trade 2 @ 0.20
Trade 3 @ 0.30
Trade 4 @ 0.40
Trade 5 @ 0.50
Tot. Volume = (0.10 + 0.20 + 0.30 + 0.40 + 0.50) = 0.75 (1.5* Max Lot Size).
If Equity >= 20000 then Max Lot Size = 2.0 lots --> recommended [0.25 to 1.25]
20K Equity (Max Lot Size = 2.0)
Trade 1 @ 0.25
Trade 2 @ 0.50
Trade 3 @ 0.75
Trade 4 @ 1.00
Trade 5 @ 1.25
Tot. Volume = (0.25 + 0.50 + 0.75 + 1.00 + 1.25) = 3.00 (1.5* Max Lot Size).
If Equity >= 30000 then Max Lot Size = 3.0 lots --> recommended [0.30 to 1.50]
30K Equity (Max Lot Size = 3.0)
Trade 1 @ 0.30
Trade 2 @ 0.60
Trade 3 @ 0.90
Trade 4 @ 1.20
Trade 5 @ 1.50
Tot. Volume = (0.30 + 0.60 + 0.90 + 1.20 + 1.50) = 4.50 (1.5* Max Lot Size).
If Equity >= 40000 then Max Lot Size = 4.0 lots --> recommended [0.40 to 2.00]
40K Equity (Max Lot Size = 4.0)
Trade 1 @ 0.40
Trade 2 @ 0.80
Trade 3 @ 1.20
Trade 4 @ 1.60
Trade 5 @ 2.00
Tot. Volume = (0.40 + 0.80 + 1.20 + 1.60 + 2.00) = 6.00 (1.5* Max Lot Size).
If Equity >= 50000 then Max Lot Size = 5.0 lots --> recommended [0.50 to 2.50]
50K Equity (Max Lot Size = 5.0)
Trade 1 @ 0.50
Trade 2 @ 1.00
Trade 3 @ 1.50
Trade 4 @ 2.00
Trade 5 @ 2.50
Tot. Volume = (0.50 + 1.00 + 1.50 + 2.00 + 2.50) = 7.50 (1.5* Max Lot Size).
If Equity > 100000 then Max Lot Size = 10.0 lots --> recommended [1.00 to 5.00]
100K Equity (Max Lot Size = 10.0)
Trade 1 @ 1.00
Trade 2 @ 2.00
Trade 3 @ 3.00
Trade 4 @ 4.00
Trade 5 @ 5.00
Tot. Volume = (1.00 + 2.00 + 3.00 + 4.00 + 5.00) = 15.0 (1.5* Max Lot Size).
Adjustments may need to be made at times to ensure that the designated DL is achievable from both a theoretical and practical point of view.
The above plan will be very close to how I will trade the real DL5 account over the most part however, I reserve the right to trade at greatly increased lot sizes from time to time with any intermediate alterations outlined in the thread for the specific interest of achieving set goals.
Drawdown (Max) will remain within the set levels up to a maximum of 30% when deemed appropriate.
Account Risk Per Account for the most part will be as per DL designation up to a maximum of 15% when deemed appropriate.
The trading plan must be usable and exhibit a reasonable degree of flexibility.
This is a guideline only and traders are encouraged to modify the plan to fit within their own preferred risk tolerance levels.
July 14, 2019
Since thread participation has again started to increase, I may start a fresh real trading account for the sole purpose of trading the Quad Candle System methodologies.
Account Details to be added here on August 1, 2019.
The Home of Longer Term Consistent Trading=================================================================================================
QUAD CANDLE SYSTEM METHODOLOGY
The QUAD CANDLE SYSTEM (QCS) is designed for trading the higher time frames only !
The QCS system is based around 4 by D1 candle formations with respect to the following:
a) 2 bullish candles followed by 2 bearish candles looking to go short the market
b) 2 bearish candles followed by 2 bullish candles looking to go long the market
ENTRY (Basic criteria)
Enter short after the Short Quad Candle Pattern (SQCP) has completed and price is currently trading in the Upper Octive extreme zone.
Enter long after the Long Quad Candle Pattern (LQCP) has completed and price is currently trading in the Lower Octive extreme zone.
Since the trigger for entry must occur after the close of a daily candle, be sure to realize that this does not suggest an entry in the early Asian session and indeed an entry may occur at any time within the current D1 candle (QCS trigger candle).
An advantage of this is in the situation where a pullback occurs allowing a trader to get into the market at a 'better' price.
The traders reward to risk ratio may also be more ideal because the SL will typically be smaller.
The disadvantage is in the event that price does not pull back and the trader is left behind resulting in a missed opportunity.
It is not advisable to enter too late into a trade but this is at the discretion of the trader and in any case the TFs traded are higher making late entries a possibility.
1st entry in a setup should follow the Quad pattern entry criteria as posted above;
2nd and subsequent entries of the same Quad Setup can follow a Quad Pattern but they do not need too.
The addition of trades is at the discretion of the trader and can be based on the following:
a) Support + Resistance;
b) Fibonacci ratios;
d) Daily Range ratios (pip count);
e) Quad Patterns (next in series or in confluence with S&R levels);
f) Gann octive levels; or
Note 1: The addition of all trades that form a Quad Setup must be designed such that the sum total of all the SLs is less than the total assigned risk.
Note 2: The assigned risk per trade is typically in the range 0.5% - 5%.
Note 3: The total assigned risk across the account is typically 1.5% - 15% for a group of 3 trades.
Note 4: It is highly recommended that minimal risk be applied on initial entries and as trading progresses favorable then increase trading volume.
The 1st entry is arguably the most important of the sequence of trades in a Quad Setup since it is in a location that the trader expects to be the start of a new super trend either UP or DOWN as the case may be and the addition of trades is expected to add considerably to the growth of the account.
The careful addition of trades to a given Quad Setup is what provides the potential acceleration in growth.
At all times the risk should be monitored and controlled as much as possible from the traders end.
Some risk such as broker negative slippage, flash crashes and black swan events may not be possible to control by the trader.
ADVANCED TRADING TOOL ACCESS:
Please be advised that due to a number of reasons access to my trading tools is only currently available to traders who are willing to provide the following information:
1. Trading Account Number;
2. Trading Account Type; and
3. Contact Email address (for QCS_password generation)
ps. Traders should decide if access to the trading tools suits with their current trading needs before providing such information.
Master Octive Indicator (MT4 and MT5)
MT4 (beta version)
Ceased - Only increased thread participation can bring this tool back !
Octive Trading Frame
The Master Octive indicator will produce an Octive Trading Frame that draws a Grid of horizontal and vertical lines commencing from a Yearly Reset Date (YRD) in January.
The YRD is a date known well in advance since we know all of the future Moon phases for Full and New Moons and it is chosen as follows:
1. If the Full Moon date falls on or before January 15 of the following year then this date is used as the YRD.
2. If the Full Moon date falls after January 15 then the New Moon date is used as the YRD.
3. The Full Moon date will always be chosen if it occurs up to and including January 15 even if the New Moon occurred earlier in that month.
The YRD can be sourced from many locations but I will refer to the Time and Date website shown below:
Referring to the screenshot of the Moon Phases for 2019 it is clear that:
1. Full Moon occurs on January 21 2019; and
2. New Moon occurs on January 5 2019
Since the Full Moon occurs after mid-month it is rejected and the New Moon date is used which in this case is January 5 2019.
The Octive Grid Reset Date (OGRD) will be Monday January 7, 2019 (the next trading day that falls on a Monday after the YRD).
An elaborate algorithm is applied both internally and externally to the Master Octive indicator in MT4 and MT5 formats.
In short this simply means that there are 2 components that generate all of the levels for both the horizontal and vertical levels.
Due to not fully trusting the protection against decompiling code in both ex4 and ex5 variants I have decided to split the algorithm into 2 sections.
One part of the algorithm is stored completely separately from all other indicators performing its calculations in semi isolation.
Private Development continues in the background ...............
Quad Candle System D1:
P=64 [Period in bars]
Note: Default settings should be applied on a D1 TF unless otherwise stated.
Splitting the Symbols into different categories:
(a) Turtle (ADR < about 60 pips)
(b) Medium (ADR >60 and <100 pips)
(c) Fast (ADR >100 pips)
A specific setting can be applied to a given symbol or alernatively an average 'best fit'.
The Octives may change size when the parameters are altered.
In cases where the PA is seen to be 'out-of-sync' then we need to change the settings slightly.
Generally placed above or below the Quad Candle Cluster (QCC).
Basically above or below the major swings.
However, the following may be used at the discretion of the trader
1. Swing Highs or Lows or at QCC locations as mentioned above (allow a minimum gap of 20 pips above/below this level);
2. ATR trace indicator;
3. Chart structural highs or lows as the case dictates;
4. Octive SL Logic
(a) If an Entry (Not Recommended) is to be made from either the Base Octive Price level (Base OPL) or Top Octive Price level (Top OPL)
i) minimum SL of at least 50% of the current Octave Gap should be applied
ii) maximum SL of 100% of the current Octave Gap
b) all other SLs from Octive levels should be a minimum of 1 Octave Gap up to a maximum of 2 Octave Gaps.
c) exceptions may occur based on the chart structure and other factors for a given instrument (currency, index, commodity etc).
Minimum 1 to 1 ratio (TP to SL).
Preferably 2:1, 3:1 or 4:1 is applied.
Determine the pips for the SL based on the preferred SL method and then make the TP >= SL pips (always consider chart structure and adjust).
Chart structure, Harmonic completions, Octive zones and Fibonacci ratios (127.2 and 161.8 or higher ratios) may also be used for potential TP levels.
However, the setup must make sense and a TP at least equal to the number of SL pips (SL must be applied in a well thought out location).
The idea should be to start with a larger TP such as a 4 to 1 ratio and as the trade unfolds favorably look to trail your entry from a large distance.
Trades may be trailed as the trader sees fit.
Alternatively a trader can use:
a) BE + some pips after price has moved favorably X_pips.
b) ATR indicator (or %ADR, %AWR or %AMR)
c) Octive Master indicator
d) Chart structure (eg longer term Support or Resistance zones OR Candlestick Trailing)
e) 2 by D1 opposite colored candles (in series) form anytime after trade entry
f) other methods (eg Fibonacci Trailing, Candlestick trailing, ATR trailing etc)
Note that the trailing method applied is determined by the trader.
Price will not always go in the direction you would like and indeed it may reverse after going a certain number of pips so it is sometimes necessary to simply close out the trade for some profit or a loss and search for the next opportunity.
Often the trader will need to balance between applying too tight of a stop and too generous of a stop.
Too tight of a stop and you might be kicked out of the trade too soon.
Too generous of a stop and you might give back too much floating profit.
Since this system applies HTF trade setups some fundamental analysis may enter the thread and this is most welcome from all traders.
Some sources include the following:
1. Central Bank speeches
2. News feeds (Bloomberg, Reuters, Ransquawk among others)
3. Economic Calendars (Banks, FF, myfxbook and hundreds of others)
4. Trading Economics website and other academic sources (sites, pdf's, relevant articles)
5. Political commentary (Tweets and speeches among others)
This will be dependent upon the movements of the market on the traded instrument and the controls that are put in place.
It is not unlikely that some trades may run for several weeks!
This system is meant to be very simple to apply.
The idea is to get into a long trend and stay in there for hundreds of pips or as long as possible and have your trailing stop take you out.
The trader will need to exercise patience and allow trades to run as much as possible.
If a trader makes a profit on a trade then they really have not done alot wrong however, they may have foregone a greater opportunity.
On a D1 trade setup, very often the trades run over several days into weeks and perhaps over several months.
At 5pm EST (US) rollover occurs on positions left open and either positive swap or negative swap is added to or deducted from the trading account via your broker almost instantaneously.
The swap rates are updated on a weekly basis via Financial Institution passing on rates to brokers.
Wednesday incurs a triple swap rate (markets in FX do not trade over the weekend).
Friday incurs a triple swap rate for CFD's.
Brokers may pass onto customers a financing fee.
So the formula for calculating swap rates below may vary from what the broker actually shows in their platform.
Note: If a broker shows 2 relatively high negative swap rates for the same currency pair, ask questions why and investigate.
The formula for calculating Swap Rate is as follows:
Daily Rollover Interest = Contract Notional Value x (Base Currency Interest Rate - Quote Currency Interest Rate) / (365 days per year x Current Base Currency Rate)
Contract Notional Value is the volume in quote currency eg EUR/USD: 100,000 (or 1 Lot) - swap will be in USD currency.
The interest rate differential is the difference in interest rates between the Base and Quote currencies.
You will need to know the lending and borrowing interest rates of the currencies you trade (many sources online).
The Daily Rollover Interest Formula calculates based on a 1 day rollover, if its more than a day then simply multiply by number of days.
Swap Rate accumulation should certainly be considered in longer term trade setups.
Swap Rate accumulation has a meaningful impact over trades running in the markets over several months.
D1 (Longer term trading)
QUAD CANDLE SYSTEM Zip Folder (contains basic Indicators and templates)
QCS_D1_MT4 zip folder (basic version)
Indicators go in the "Indicators" folder;
Templates go in the "Templates" folder.
Quad Candle Dashboard (beta version)
Please ensure that the bars on your charts are absolutely refreshed and that no missing bars are present especially the first 5 bars (counting from current-far right and backwards-to the left --> 4 3 2 1 Current Bar).
If an automated refresher is not available please use MT4 "Refresh" by Right Clicking and selecting "Refresh".
Open all relevant charts 1 at a time and repeat the manual process; using the MT4 cross hair tool check all the bar dates have been updated.
If you fail to ensure that bars have been updated then very likely the Quad patterns will be incorrect.
Column 1 (far left side) displays all the Symbols (default contains 36 symbols - these can be changed in the settings using comma separated ",";
Column 2 is the Bid or current price of the symbol;
Column 3 - 7 show colored boxes representing previous D1 bar color, C = current D1 bar;
Column 8 currently shows an "x" or a smiley face depending on Quad pattern present or not, column will be used for Bar Status later (ID missing bars);
Column 9,10 and 11 display "NO SIGNAL" when signal is not present or display Quad Short or Quad Long, Octive Short or Octive Long
Column 12,13 and 14 display current trend based on confluent groups of 3 TF's (M1,M5,M15 / M30,H1,H4 / D1,W1,MN1 == L M H);
Column 15 displays the ADR (average daily range in pips or points);
Column 16 R refers to current days range in pips, values will change based on current price above or below Daily Open price;
Column 17 and 18 display the Broker swap rates (long and short); and
Column 19 displays the symbols spread in pips.
The dashboard will be updated so that functionality and useability remain current and the software functions flawlessly.
However, major functional and display upgrades will be limited because the MT5 version will likely be used for this purpose.
Over several months the MT4 Dash is very likely to be phased out however, this could take up to a few years, no-one really knows.
Using the QuadCandleDashboard:
The purpose of the Dash is to quickly identify several symbols worthy of additional analysis (economic, fundamental, political and technical).
1. Quad Signal (Q_Signal) ;
2. Octive Signal (O_Signal)
3. Quad+ Octive (QO_Signal).
Entries may be taken from any of these signals but should comply with the guidelines outlined throughout all of the material of Post 1.
Entries should be highly confluent using the D1 TF and a Reward Risk ratio >> 1 with stops and targets using the Octive levels as per QCS methodology.
I hope the Dashboard is useful and if traders have suggestions for improvements please post them to the thread and I will consider them.
Please ensure that your price data (OHLC) is refreshed and that no missing bars are present otherwise signals may be false !
I will add in extra code at a later stage that correctly identifies any relevant missing bars and offers a solution.
For example, a trader should ensure that a minimum of 5 D1 bars are present counting from current bar then backwards and also of the correct date (use MT4 crosshair tool).
The Octive line values require that 64 (+1 current bar) D1 bars are valid and present on the chart otherwise incorrect levels may result.
If the bars are missing or are incorrect dates post this to the thread and I'll provide a means to recover the missing data.
1. v1.01 --> Released early Nov
2. v1.02 --> Released mid Nov ... Fixed an issue with QO_Signal output.
3. v1.03 --> Released Nov 19 ... Added in extra data columns, more user functionality (Pip Value per lot, various ranges, slow, med and fast pairs).
..............--> YHd | YLd columns now show pips from current price to Year High and Year Low (bullish color if price> Yr Open) else Bearish color.
4. v1.04 --> Pending Release ... Major upgrade, Buttons for charts, highlight rows, W1 data, borders color, multiple alerts and much much more.
Quad Candle Dashboard_EA_MT4
Quad Candle Dashboard_EA_MT5
Ceased - Only increased thread participation can bring this tool back !
MT5 - Additional indicators will be placed in this zip folder (updates will occur so please check here often)
Ceased - Only increased thread participation can bring this tool back !
Note: Additional information may be added at a later date.
- Basic candlestick patterns - http://www.candlesticker.com/BasicCa...s.aspx?lang=en
- Bullish candlestick patterns - http://www.candlesticker.com/Bullish...s.aspx?lang=en
- Bearish candlestick patterns - http://www.candlesticker.com/Bearish...s.aspx?lang=en
- Basic candlestick patterns - http://stockcharts.com/school/doku.p...o_candlesticks
- Candlestick Patterns for Dummies (its actually a good place to start if you are a complete novice)
- Japanese Candlestick Patterns by Steve Nison (various updated versions)
Gann, W. D. 1923. Truth of the Stock Tape;
Gann, W. D. 1927. The Tunnel Thru the Air or Looking Back from 1940;
Gann, W. D. 1936. New Stock Trend Detector;
Gann, W. D. 1946. Forecasting Grains by Time Cycles;
Gann, W. D. 1949. 45 Years in Wall Street;
Gann, W. D. 1951. How to Make Profits in Commodities; and
Gann, W. D. 1954. Why Money is Lost on Commodities and Stocks and How to Make Profits.
Concentrate on the basic ABCD and AB=CD patterns as a 1 to 1 completion with an expected price reversal to follow, or at exhaustion 127.2/161.8)
Advanced harmonic patterns such as gartley, bat, crab, butterfly, shark, 3 drives, 5-0 may be applied in setups from January 2019 !
Ratios - http://harmonictrader.com/fibonacci/fibonacci-ratios/
Extentions - http://www.investopedia.com/terms/f/...extensions.asp
Retracement - http://www.investopedia.com/terms/f/...etracement.asp
Golden ratio - http://www.investopedia.com/articles.../04/033104.asp
Note 1: the sites listed above are to gain a very basic understanding of Fib ratios and may be expanded in the thread.
Note 2: Fib ratios that I apply are only 38.2, 50, 61.8, 78.6, 88.6, 100, 127.2 and 161.8.
I will address within the thread what elements are important to understand and apply and those that do not fit in with the QUAD CANDLE SYSTEM.
Websites with useful content:
NYSE (US) http://nyse.com/
NASDAQ (US) http://nasdaq.com/
Japan Exchange Group JPX (Japan) http://www.jpx.co.jp/english/
Shanghai Stock Exchange (China) http://www.sse.com.cn
Euronext (EU) https://www.euronext.com/
London Stock Exchange Group (UK) http://www.lseg.com/
Hong Hong Stock Exchange (HK) http://www.hkex.com.hk/
Shenzhen Stock Exchange (China) http://www.szse.cn/main/en
Deutsche Borse (Germany) http://deutsche-boerse.com/dbg/dispa...r/dbg_nav/home
TMX Group (Canada) http://www.tmx.com/
Korea Exchange (Korea) http://eng.krx.co.kr/
SIX Swiss Exchange (Switzerland) http://www.six-swiss-exchange.com/
ASX (Australia) http://www.asx.com.au/
Taiwan Stock Exchange (Taiwan) http://www.twse.com.tw/en/
New Zealand Exchange NZX (New Zealand) http://www.nzx.com/
Chicago Mercantile Exchange (CME, CBOT, NYMEX, COMEX) http://cmegroup.com/
U.S. Commodity Futures Trading Commission (COT Data):
Google: Search for other sources via Google/other search engines to expand your knowledge base.
QUAD GENERAL GUIDELINE FOR TRADE SETUPS
1. FIND A GROUP OF SYMBOLS USING THE QUAD CANDLE DASHBOARD
SEARCH FOR A POTENTIAL QUAD CANDLE PATTERN (QCP) BY USING TEMPLATE:
a) D1 TF ONLY or
b) Octive Master indicator
2. IF SYMBOL IS NOT A MAJOR LOOK AT RELATED MAJORS ON D1 Chart
a) Example CHFJPY (Get D1 Chart for both USDCHF and USDJPY)
b) Check Correlation Table (Daily, Weekly, and Monthly)
3. CHECK FUNDAMENTALS
(before you ever take a trade you must have a global bias direction Up, Down or Neutral)
a) Forex Factory Economic Calendar
MQL5 Economic Calendar
b) News sites (purpose is to be as market aware as possible, this is ongoing)
4. CHECK QCP SETUP LOCATION
a) Chart structure resistance and/or support levels
b) Fibonacci Ratios (38.2 to 88.6 and extension ratios 127.2 and 161.8)
c) Harmonic completions (ABCD or AB=CD patterns)
d) Key Handles (check to see where price currently is trading with respect to these price levels)
5. CHECK QCP CANDLESTICK TYPE (SQCP and LQCP; short and long Quad Setups)
a) reversal type candlestick patterns after a long upward or downward trend
b) look for rejection or piercing of a given candle type at a key Octive level
c) consider lower TF analysis within the QUAD setup boundaries
d) consider the quality of the reversal candle pattern
e) consider the relative ranges between the D1 candles of a Quad Candle Pattern
6. CHECK THE FOLLOWING
a) Day of Week an entry is likely to be made (eg if Friday not advisable, consider weekend risk)
b) Proximity to high impact news and the expected impact on a proposed entry into the market
c) Swap (check to see if the pair has positive or negative carry swap, this adds up over multiple weeks)
d) Check that the Stop and TP locations make sense
e) Know your potential maximum loss on a given trade
f) Know how you will trail the trade (ATR method, move SL to BE+ pips are X_pips, S+R etc)
g) LOOK FOR ANY REASON WHY THE TRADE SHOULD NOT BE ENTERED (is the reason strong enough to cause you to not make an entry, determine the risk based on the reason for possible rejection of a trade)
h) ASK OTHER TRADERS FROM THE THREAD IF THEY CAN THINK OF REASONS WHY YOU SHOULD NOT TAKE A GIVEN TRADE, CONSIDER THEIR REASONS AND MATCH IT TO YOUR OWN THINKING.
7. Apply sound Risk and Trade Management techniques
Be clear about what you stand to lose on a given trade as a % of account.
Consistency over the longer term should be the aim and applying a compounding approach MoM.
Basic Check List:
1. Swap Short (or Long)
3. Quad Short (or Long) Pattern (QSP) confirmed
4. Quality of QSP (candlestick patterns, harmonic completion zones and Fibs as appropriate to the given chart)
5. Location of the QSP to Chart Structure (up high, in the middle or elsewhere)
6. Location of the QSP to Octive zones (near extreme octives or elsewhere)
7. SL location
8. TP location
9. Reward to risk ratio
10. Does the R:r fit in with recent PA and does it potentially offer at least a 1 to 1.
11. Check related major pair D1 Charts (what can these charts tell you about the pair about to be traded if its a cross etc)
12. D1 Entry Candle (attempt to get in at a better price to reduce SL, so an entry later in the day eg London or NY Open might be a good idea)
13. Entry must occur on the same day as the D1 Entry Candle or the trade is invalid.
14. Fundamental alignment of the individual currencies.
15. Risk management (appropriate lot size matched to SL per given symbol; what do you stand to lose if your SL is hit as a % of the account)
16. Trade management (how will you manage the open position, future news impacting negatively on your open position etc)
17. Trade Setup Risk Rating (Class 1 to 3; How do you genrally feel about this setup: Good, Ok or worried it will fail)
18. A feeling of complete uncertainty may mean passing on the trade altogether.
19. Continual market awareness (economic and political and any other type likely to impact on the progress of your trade)
20. Trader Discretion (you make all the decisions, you choose to analyse, assess, place or not place an order in the market, so be responsible!)
Note: This is only a basic guide and is by no means complete, it may be modified and improved upon in future updated versions.
ADVANCED GANN TRADE SETUPS
Traders should understand that not a single person alive has all the information pertaining to Gann's methodologies and therefore no person can assume to know Gann's material in a complete context.
Therefore, interpretations of Gann's trading methods is the only true reference.
Many so called Gann Gurus claiming to understand all of Gann's knowledge are simply fake and should be avoided at all costs.
I have studied and applied much of Gann's methodologies to my own trading for well over 30 years.
However, any use of Gann in my own trading methodologies is based on my own interpretations of what should be used in trading and what should not.
Having a very strong mathematical background allows me to adequately analyze time cycles very accurately and produce price in time charts that can be used for accurate trading.
Trading successfully is a journey of discovery and my own research tells me that an excellent approach is one that applies what works and discard what does not work.
Undoubtedly, a critical part is being able to build a highly confluent case for entry into any market setup and apply a reasonable and realistic amount of risk is very important.
Law of Vibration:
This is a critical part of understanding what Gann was on about and requires a very solid understanding of both mathematics and geometry.
Unfortunately Gann kept much of this knowledge to himself insisting that it was his 'secret Law of Vibration' but did imply that it was possible for others to learn it.
Cause and effect are the keys to understanding the Law of Vibration since without a cause there is no effect.
I would direct traders to read (and re-read) Gann's original work entitled "Tunnel Through the Air: Looking Back from 1940" since it contains many secrets and is not just a book about love and war as your first reading might imply.
Critical Observations are:
1. Law of Three;
2. Golden Ratio;
4. Cosmic Laws; and
5. Law of Seven (Law of Octaves).
Planetary motions and their alignments can offer some extraordinary predictive powers in the trading space of financial markets.
Yet for these to be successfully applied to the markets requires an indepth working knowledge of astrology, planetary phases, time cycles and maths.
Major Aspects are provided below:
Conjuction = 0 Deg;
Sextile = 60 Deg;
Square = 90 Deg;
Trine = 120 Deg; and
Opposition = 180 Deg
Understand that a cube contains 6 sides (bottom, top and 4 walls) which is important for understanding how the Gann Square progresses from a lower level to a higher level or from a level to another level up or down.
Gann Grid Zones of Intersection:
Known as GGZIs these are zones where 2 Gann lines intersect with a symbol who's PA has previously shown respect to the GG.
Powerful moves can be forecast from or towards these zones as they act as powerful forces of attraction or repulsion.
Confluent setups at the time of a Full Moon date offer potentially the most powerful short term moves.
On a D1 TF these moves are typically comprised of the 'primer' bar followed by the 'momentum' bar.
An alert trader applying reasonable risk to such a setup can make significant shorter term gains.
45, 60, 90, 120, 180, 240, 270 and 360 degrees.
Squaring the Circle:
The circles centre is assigned the value 1 with numbers increasing in steps of 1 via a clockwise direction which continues outwards.
Projection of Price in Time:
In the QCS Methodology what interests us most is predicting where turning points are likely to occur well out in the future.
Such zones may provide clues as to when profit taking should occur or when new setups can be considered.
Confluence is at the sole of the QCS approach because we trade with the idea of forming higher probability trade setups with favorable RR.
The use of Gann analysis complements the QCS Methodology because historically the turning points occur with uncanny accuracy.
Since QCS is primarily geared towards trading the D1 TF the use of Gann will be provided only for D1 trading.
A series of projected dates will be provided in advance as a suggestion of possible turning point zones.
Solstices and Equinoxes:
HIGH CLASS TRADE ENTRY:
Traders are encouraged to seek out highly confluent entries into the market having considered all of the material of Post 1.
The QCS methodology is far more than entering after a signal appears, rather it is simply the beginning of a comprehensive analysis.
Ultimately, the highest class trade entry considers all relevant information, performs a rigorous analysis and enters after accounting for risk.
A high class trade entry has nothing to do with the trades result !
This is because as professional traders we know that the market can turn price against our entry immediately and head towards our stop out level.
This is independant of any of our trade entry analysis.
Trade management is a key factor that separates the Equity curves of great risk/trade managers from the common traders over the longer term.
Signal (QCS Dashboard) >> Rigorous analysis (QCS Methodology) >> High Class Trade Entry (Risk Control) >> Trade Management
--->> Longer Term Equity Growth <<---
Price Action before entry
Aggressive PA into the extreme zone followed by exhaustion/strong rejection candle(s) and a Quad candle pattern.
Extreme Octive Zone entry for a Short setup or a Long setup.
Quad requires a rolling over of price and the completion of a Quad (4 candle pattern with 2 bearish/2 bullish or 2 bullish/2 bearish D1 candles)
The current D1 bar is irrelevant in the formation of a valid Quad Candle pattern.
Entry can be taken after exhaustion candle completes but entry must occur inside the extreme zone.
Lower TF analysis documented before the fact that shows the entry timing into the trade must be considered.
Friday was not used as an entry day (due in part to weekend gaps and the added risk attached to having no control over the trade at this time).
Note: Friday entries may be applied provided the reasoning for doing so is reasonable and realistic and that risk applied is << usual risk.
Considered location of the setup on a zoomed out chart
Longer term support and resistance levels
Fibonacci retracement ratios and extentions or expansions
Harmonic 1 to 1 completions using ABCD or AB=CD patterns that complete within the Extreme Zones
Fundamentals considered and either a sentimental or longer term bias is applied
Any trade setup that applies or attempts to apply MAs, RSI, MACD, Stochastics, TDI, CCI or other similar type lagging indicators = IGNORE CHART.
A 'trader' who posts a chart classed as an "Ignore Chart" will be given 1 warning to delete the post after which they might be ignored permanently.
My plan is to apply trading knowledge at a simple but effective level so all can follow along and trade the QUAD CANDLE SYSTEM.
The gained knowledge from the above is simply to help a trader to form an expectation of where price is likely to go and then based on how price reacts look to take trades on a daily time frame, manage the trade throughout, apply sound risk management, protect any floating profit and gain as many pips as possible on a longer term time frame.
I have been successfully trading the financial markets (multiple instruments) since the mid-80's so there is not much I have not seen.
I do not endorse the work of any other person or entity and any information in the form of websites or links is for educational purposes only.
Several tools are likely to be coded by myself in mql4 or mql5 or C++ or Python or MATLAB or other progamming languages.
Traders are expected to conduct their own due diligence and if trading live in the market be aware of all of the risks involved and the distict possibility that not only is your capital at risk but the losses may also exceed the initial deposit.
FX retail trading is very much different to FX institutional trading.
As an FX retail trader the odds of being consistently successful or successful in general are heavily stacked against the trader.
Keep an open mind and remember the system seeks longer term entries with a typically larger pip count which means that the setups require longer time periods to unfold as the market plays out its typical rollercoaster type trajectories of price in time.
If a trader seeks very short term scalping type trades then this thread may not be for you.
Show respect to your fellow traders and be mindful that this is an international community of traders.
The intention of which should be focussed towards facilitating the advancement of trading knowledge.
Please refer to the thread for real transparent trading setups and links to trade analytic software as I use this approach to outline before the fact genuine trading.
Patience and exercising sound trade management and risk control is the Key to longevity in the FX business!
Note: I am not affiliated nor associated in any way with any of the listed websites, they are provided as a potential source of information only and I do not guarantee the quality of the information provided on these websites.
Please use the information at your own risk after undergoing your own due diligence!
A trader should never risk more capital than what he/she is willing to lose and that such a loss would not impact heavily on their lifestyle.