ADX Engulfing Millipede - MT4/MT5 Resources
A few people have sent me private messages asking about my ADX Swallowing Millipede Trade Browser and system, so I thought I'd post it in a thread.
First of all, it's nothing really new, it's me putting a few pieces of the puzzle together to make a picture that works for me. Thanks to pipEasy for revealing so much. Bobi Abonacci showed me (accidentally) how to find some great long-term goals and be patient and wait, HDA showed how to stick to your plan, FXDayTrader helped me make indicators work the way I intended, and many others have shaped my journey so far (I'm still learning, but it feels like I've turned a corner)
I believe all you really need is a trading skill to be profitable. This is an entry method with a high probability of breaking even .
Once you have this (and it's relatively easy to find - there are hundreds of threads on FF that offer this, but I'll tell you what I tend to use), then everything else is about controlling your mind and heart.
So, let's start with the ' Millipede ' element of the thread title
This is a long-term swing/position trading style. The aim is to open multiple positions in the direction of the long-term trend and hold them for huge profits. By reading Graham's (pipEasy) I came to understand (and like) the power of building with equity millipedes thread. Before doing anything else, read this - take your time and absorb the principles. This article is accompanied by a PDF version of Graham's article.
In short, all we have to do is participate in the market. Let’s bust a myth here. Many people believe that as a position trader you must operate with a larger stop loss and therefore a correspondingly smaller lot size in accordance with good money management. This is a very narrow view of position trading.
In fact, all you need to do is trade with a tight stop and once the danger zone is crossed, move it to BE and forget about it. And then do it again, and again and again. You will have many trades that close with BE or with small losses, but that's okay. This is the first battle your mind and heart need to face - you may have weeks/months of trades closing BE or in the red before you gain traction and build trades in your favor. You can lose 30-50 trades to establish 5-10 good positions. Can you handle it? Can your mind handle multiple losses? Know that it will lead to good results and your wins will far outweigh those small losses.
Generally speaking, you want to focus your entries in the direction of the long-term trend (weekly/monthly). As Graham said, “This trend doesn’t change just because you have a demo account”.
If you are not sure about the trend, then either look for another currency pair with a clear trend, or enter the trade in both directions and let the market figure it out. You can easily place multiple trades and short trades. Then let the market decide which ones survive. pipEasy describes each position as a soldier – some will survive, but many will die. But those who survive will take home the glory (not exactly a politically correct analogy in this day and age, but you get the point).
As far as taking profits is concerned, this is a personal thing, the general idea is to keep the trade going until you feel the trend stalling or reversing, then close out some huge profits and let others continue to take profits, or start to enter in other ways. Graham spent a lot of time discussing and describing his principles, which I think are sound, so I won't repeat them here.
So – that’s the “Millipede” part, now the “ADX Swallow”
Average ADX
So if we're entering deals and hoping there's a good chance they will materialize, then we look for momentum. I find the ADX indicator very helpful in understanding where the momentum is and making predictions.
There are basically 3 lines: D+ (green), D- (red), and ADX (white). I marked three levels: 10, 25, 40.
D+ shows the power of bulls and D- shows the power of bears.
When green is above red, bulls are stronger
When red is higher than green, the bear is more powerful.
The ADX line is used to indicate the strength of the short or long positions (i.e. the strength of the trend). Up, it means getting stronger, above 25 means the trend is strong, above 40 means the trend is very strong.
In the image below, the green arrow shows D+ passing through D- and the red arrow shows D- passing through D+.
Application - You can use it as a filter to view trades for consolidation and breakouts. You can also use this as a BE signal – i.e. move to BE on the next ADX cross after your entry.
As they say, a picture tells a thousand words (ignore the diagram layout, that's from my other thread)
On the template that accompanies the post, you will see that I have two ADX indicators, one showing the lines and the other showing the multi-time frame crossover – this gives me an overall idea of the MTF trend.
engulf
Follow the directions on the can pretty much. Remember, we are looking for motivation. Engulfing lines, outside lines, and needle lines are all signs of momentum. To me, they indicate a good chance of a successful trade. Trading at the 50% retracement can further increase this probability.
N.B.
Other things to keep in mind are the daily/weekly/monthly supply and demand areas - as well as support and resistance levels - I am watching for these areas to take good action to start building a position.
So, to summarize.
1. Find the motivation to enter and trade - be patient
2. Repeat - be patient
3. Don't worry about small losses or BE closures - be patient
4. Hold a position – be patient
Example
As posted in Cable Topics - I recently used this approach during the recent downturn, which I viewed as a correction in the long-term bull trend.
I closed 19 separate trades (across two live accounts) at 4388 pips
However, this is not the whole story - in order to open these positions, I had to make 71 trades - 20% of which were closed on BE, 55% of the trades had small losses, and the remaining 25% were profitable.
After deducting losses and BE, the total profit is 3371 points. My average losses were much greater than they should have been due to lack of discipline. Throughout my entire account, my average loss was 12 pips, but my profits were hundreds or thousands of pips.
Now, I am entering a long position for the continuation of the bull trend - do I think it will start now? I have no idea. But as long as I manage the risk and get the position to BE, I'll be there to profit when it happens.
Templates and indicators
They are attached below (I hope everything works - you may want to try it). The template looks busier than I would like but I need push notifications etc as I am no longer in front of my computer during trading hours observing signals so I use a virtual server to send me instant notifications that I can check and trade on my smartphone. I have notifications set up to let me know about needle lines, engulfing lines, outside lines, and ADX crossovers.
You'll see some MAs, I don't actually trade with them, they just help me understand what's going on with the dynamic SR.
That's it - I hope something is useful to someone. Please feel free to ask any questions - if my explanation is unclear, I will edit this post to clarify. I'm no expert, I just found what works for me and my life/trading style.
Thank you everyone and bring green dots to everyone
Steve
First of all, it's nothing really new, it's me putting a few pieces of the puzzle together to make a picture that works for me. Thanks to pipEasy for revealing so much. Bobi Abonacci showed me (accidentally) how to find some great long-term goals and be patient and wait, HDA showed how to stick to your plan, FXDayTrader helped me make indicators work the way I intended, and many others have shaped my journey so far (I'm still learning, but it feels like I've turned a corner)
I believe all you really need is a trading skill to be profitable. This is an entry method with a high probability of breaking even .
Once you have this (and it's relatively easy to find - there are hundreds of threads on FF that offer this, but I'll tell you what I tend to use), then everything else is about controlling your mind and heart.
So, let's start with the ' Millipede ' element of the thread title
This is a long-term swing/position trading style. The aim is to open multiple positions in the direction of the long-term trend and hold them for huge profits. By reading Graham's (pipEasy) I came to understand (and like) the power of building with equity millipedes thread. Before doing anything else, read this - take your time and absorb the principles. This article is accompanied by a PDF version of Graham's article.
In short, all we have to do is participate in the market. Let’s bust a myth here. Many people believe that as a position trader you must operate with a larger stop loss and therefore a correspondingly smaller lot size in accordance with good money management. This is a very narrow view of position trading.
In fact, all you need to do is trade with a tight stop and once the danger zone is crossed, move it to BE and forget about it. And then do it again, and again and again. You will have many trades that close with BE or with small losses, but that's okay. This is the first battle your mind and heart need to face - you may have weeks/months of trades closing BE or in the red before you gain traction and build trades in your favor. You can lose 30-50 trades to establish 5-10 good positions. Can you handle it? Can your mind handle multiple losses? Know that it will lead to good results and your wins will far outweigh those small losses.
Generally speaking, you want to focus your entries in the direction of the long-term trend (weekly/monthly). As Graham said, “This trend doesn’t change just because you have a demo account”.
If you are not sure about the trend, then either look for another currency pair with a clear trend, or enter the trade in both directions and let the market figure it out. You can easily place multiple trades and short trades. Then let the market decide which ones survive. pipEasy describes each position as a soldier – some will survive, but many will die. But those who survive will take home the glory (not exactly a politically correct analogy in this day and age, but you get the point).
As far as taking profits is concerned, this is a personal thing, the general idea is to keep the trade going until you feel the trend stalling or reversing, then close out some huge profits and let others continue to take profits, or start to enter in other ways. Graham spent a lot of time discussing and describing his principles, which I think are sound, so I won't repeat them here.
So – that’s the “Millipede” part, now the “ADX Swallow”
Average ADX
So if we're entering deals and hoping there's a good chance they will materialize, then we look for momentum. I find the ADX indicator very helpful in understanding where the momentum is and making predictions.
There are basically 3 lines: D+ (green), D- (red), and ADX (white). I marked three levels: 10, 25, 40.
D+ shows the power of bulls and D- shows the power of bears.
When green is above red, bulls are stronger
When red is higher than green, the bear is more powerful.
The ADX line is used to indicate the strength of the short or long positions (i.e. the strength of the trend). Up, it means getting stronger, above 25 means the trend is strong, above 40 means the trend is very strong.
In the image below, the green arrow shows D+ passing through D- and the red arrow shows D- passing through D+.
Application - You can use it as a filter to view trades for consolidation and breakouts. You can also use this as a BE signal – i.e. move to BE on the next ADX cross after your entry.
As they say, a picture tells a thousand words (ignore the diagram layout, that's from my other thread)
On the template that accompanies the post, you will see that I have two ADX indicators, one showing the lines and the other showing the multi-time frame crossover – this gives me an overall idea of the MTF trend.
engulf
Follow the directions on the can pretty much. Remember, we are looking for motivation. Engulfing lines, outside lines, and needle lines are all signs of momentum. To me, they indicate a good chance of a successful trade. Trading at the 50% retracement can further increase this probability.
N.B.
Other things to keep in mind are the daily/weekly/monthly supply and demand areas - as well as support and resistance levels - I am watching for these areas to take good action to start building a position.
So, to summarize.
1. Find the motivation to enter and trade - be patient
2. Repeat - be patient
3. Don't worry about small losses or BE closures - be patient
4. Hold a position – be patient
Example
As posted in Cable Topics - I recently used this approach during the recent downturn, which I viewed as a correction in the long-term bull trend.
I closed 19 separate trades (across two live accounts) at 4388 pips
{quote} Added another brief - I think that's probably it, unless I see something very obvious. (For those who insist on messaging as evidence, a chart of both accounts) All good. {image}{image}
{quote} I decided to call it a day - leaving next week, not sure if I would have internet access, so close enough. Total statistics for this pullback - 19 trades on both accounts were short, totaling 4388 points. The 11 transactions shown below. {image} Patience pays off Good luck to everyone - and have a great weekend.
However, this is not the whole story - in order to open these positions, I had to make 71 trades - 20% of which were closed on BE, 55% of the trades had small losses, and the remaining 25% were profitable.
After deducting losses and BE, the total profit is 3371 points. My average losses were much greater than they should have been due to lack of discipline. Throughout my entire account, my average loss was 12 pips, but my profits were hundreds or thousands of pips.
Now, I am entering a long position for the continuation of the bull trend - do I think it will start now? I have no idea. But as long as I manage the risk and get the position to BE, I'll be there to profit when it happens.
Templates and indicators
They are attached below (I hope everything works - you may want to try it). The template looks busier than I would like but I need push notifications etc as I am no longer in front of my computer during trading hours observing signals so I use a virtual server to send me instant notifications that I can check and trade on my smartphone. I have notifications set up to let me know about needle lines, engulfing lines, outside lines, and ADX crossovers.
You'll see some MAs, I don't actually trade with them, they just help me understand what's going on with the dynamic SR.
That's it - I hope something is useful to someone. Please feel free to ask any questions - if my explanation is unclear, I will edit this post to clarify. I'm no expert, I just found what works for me and my life/trading style.
Thank you everyone and bring green dots to everyone
Steve
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