7/27/2019 10.2A update

http://slidepdf.com/reader/full/102a-update 1/6

10.2A UPDATE

JUNE, 2012IT IS ASSUMED YOU HAVE READ THE 10.2 MANUALS AND TRADE SYSTEM AND ARE

FAMILIAR WITH IT. SOME OF THIS WILL NOT MAKE SENSE UNLESS YOU AREFAMILIAR WITH THE MAIN TRADING SYSTEM FIRST.

10.2 has been up for over a month now. What have we learned? In volatile and trending markets it has workedvery well. We have been able to make some money. The week starting 6-03 offered some challenges and I took 

a look at one portion of the system to see if making an adjustment would make it better. I wish to offer this up

as a test to see if my theories hold water with experienced traders. First let me state the problem and then thesolution.

I. FIRST THE SUCCESSES

What have we done well with the system: Defining the trend and following it became much easier. We not only

knew when they started but stayed with them to the end.

I have had successful days in the past but during the runs in May I was able to enjoy more success with more

currency pairs than I have ever had in the past. I knew I had a high chance of success to keep trading in the

direction of the trend following the strength of the slope. I also had good success in getting out of the trend.

Very few pairs kept running when the slope went back inside the 4 lines, however most of the month was atrending month and we have yet tested it during range or quiet periods.

II. SOME CONCERNS

What to do when price quit running and news was not forthcoming. I noticed the preoccupation on the Euro

crisis thereby missing any news that caused a sudden JPY run. This came as an unexpected surprise to me and I

have several wrongly placed trades because of it. I also had some problems staying away from some very goodGBP trades because some pairs were strong buys and some were strong sells. How do I handle schizoid moves

where some are going up and some are going down at the same time? Plus how do I read what is referred to as

whiplash? Can I see a potential whiplash coming? Also is there a better way to get entrances/exits especially

when you get outside S1/R1? For example aud, nzd pairs seldom go outside S1/R1 but when they do can we

still have a good entrance/exit strategy? Can we have a good entrance/exit strategy when price is ranging andyou are only going to get one move before it reverses? I think I have solved these issues with a small change in

10.2. Please test and let me know.

7/27/2019 10.2A update

http://slidepdf.com/reader/full/102a-update 2/6

III. LOOK AT THE PROBLEM

In the picture below we can see that the aud/jpy had a big 4 day drop following the trend on the daily chart(#1). It followed by a strong 4 day rise that was stronger than the drop and there is no indicator to tell us this is

happening. So we are expecting a rally with possible continuation of the DT. We look to sell.

Maybe some may have picked up it was a SRF trade but because the last several weeks have shown a verystrong DT we really are not looking for that trade. So we look for spots to enter the DT again. #1,#2,#3, ???

#1 Maybe we look to reenter off of the pivot, like I did, had some immediate success and then whiplash.

#2 Maybe take a trade off of the MA lines, again with some immediate success and then whiplash.

#3 Hey this is the AUD surely we can get a bounce off of R1, whiplash again.#4 Now what should I do?? Sell?? Buy?? Is there a clear way to handle this and see it coming or see it is

happening??

7/27/2019 10.2A update

http://slidepdf.com/reader/full/102a-update 3/6

Let us take a look at the gbp/jpy

Again we have the same thing but this time 4 days down and 4 days up but it failed to break the monthly pivot.So on the aud/jpy we have a break of the monthly pivot with price staying above the monthly pivot and the

gbp/jpy being rejected at the monthly pivot and staying below. So what do you recommend, buying the aud/jpy

and selling the gbp/jpy?? I don’t know? I could hazard a guess but that is exactly what it would be. Trend

continuation after a rally gbp/jpy, trend reversal on the aud/jpy?? See pic below gbp/jpy and compare with theaud/jpy.

7/27/2019 10.2A update

http://slidepdf.com/reader/full/102a-update 4/6

IV. 10.2A UPDATE-- A SUGGESTED SOLUTION TO THIS PROBLEM

Keeping our basic screens the same as much as possible I am thinking of some changes.1. Taking the MA lines and S/R lines off the screen.

2. Adding the daily pivot line to the screen and changing the color to black for now.

The new screen will look like this.

This gives us some new definitions and reads.

A. DEFINITION OF A TREND:1. An UT is when the daily pivot is above the weekly and monthly pivot.2. A dip in the UT is when price goes below the daily pivot and you re-enter when price goes back above

the daily pivot.

3. A DT is when the daily pivot is below the weekly and monthly pivot.4. A RALLY in a DT is when price goes above the daily pivot and you re-enter the trend when it crosses

 back down.

5. Pink area with two arrows--green daily pivot line is below both black monthly and gold weekly.

6. Reenter the trend off of the rallies at the daily pivot line. Some days are better than others. When price

does not cross you are not in on those days. You know to be out if you do have a sell going.

7/27/2019 10.2A update

http://slidepdf.com/reader/full/102a-update 5/6

B. Definition of trading against the trend, getting the whiplash trades. The CT trade and the recovery trade position. See pic below.

#1 pink area—price breaks above the weekly pivot gold line.

#2 pink area—the bars in real time will be much smaller but they will show a buy bias but are below the 4 line.#3 pink area—this is the real key; the open histogram is only showing blue bars, price is staying above the

weekly open price.

Please don’t try CT trades until or unless you are an experienced trader. These are not so

easy to see in real time. The purpose is to show you if you are in a sell trade whiplash isvery possible.#4 The trend has ended is confirmed with the daily pivot moving above the weekly, we are now in a range tradescenarios or change of trend scenario.

#5 For those of us that do recovery trades.

Point #5 is when you enter your recovery trade or level 2. However, you really should not be there because this is a 4H chart and the move off of the pivot at #1 went almost 60 pips before reversing and

you should have had a SL move up into profit at that point. But if you didn’t the move at #5 is 160+ pips

more than enough to zero out a trade taken on the last break of the daily pivot by #1.

Point #5 is if you play a bounce off of the monthly pivot you enter also off the cross off of the daily

 pivot. Makes a much safer trade and you are committed off of a clear bounce rather than a guess at atrade at the monthly pivot. In other words two confirmations for a bounce off of a pivot rather than one.

For those that like to use SL you can probably use tighter SL set on the other side of the daily pivot.

7/27/2019 10.2A update

http://slidepdf.com/reader/full/102a-update 6/6

V. INCLUDED IN THE FOLDER OF THE 10.2A UPDATE

1. 10.2A TEMPLATE2. MONTHLY, WEEKLY, AND DAILY ONLY PIVOT INDICATORS. EVERYTHING ELSE REMAINS

THE SAME.

PROFIT TAKING CAN STILL BE THE S/R LEVELS OF THE WEEKLY PIVOT BUT I FELT IT

WOULD CLUTTER THE SCREEN TOO MUCH TO INCLUDE HERE.

VI. REVIEW:

10.2A Tries to clarify more clearly your entrances into the market in DT/UT. Using the daily pivot,

hopefully, will prevent entering too early and gives a very specific point to enter. When the daily is below the weekly and monthly pivot you are in a DT and when it is above both you are in an UT. The

strength of the move will then be seen slope indicator.\

10.2A Tries to clarify more clearly your entrances into the market on rallies and dips in DT/UT. Insteadof the MA we used in the past we have a more clearly defined entrance point to work from. This also

will match you up with a method many older professional traders use, the daily pivot point. Hopefully

you will be entering with them and the moves will be strong and profitable. 10.2A Tries to better define whiplash trades and keep you from entering them and getting you in trouble.

It also gives you a chance to enter them and take advantage of the trade. I can see from the chart at #1

with crossing the weekly pivot I am also above the daily pivot and see a chance of a rally worth trading.Also using the green pivot helps prevent me from entering sells. This can be caused of an anxious

trigger finger of wanting to get back into the trend.

10.2A gives us a defined position to re-enter a recovery trade based on the 10.2 system. Hopefully we

will have less re-entry failures and more success on using only one recovery trade to eliminate a badtrade.