BarroMetrics Views: Change in Methodology (II)
Our trading methodology needs to fit our personality. That being the case, my search for a new approach meant that I would need need to look for an answer among indicators and moving averages. My personality looks for ‘price structure alone’ rather than ‘price structure as moderated by some indicator’.
I had some other requirements: the approach had to be price-based and had to provide a more refined measurement for trade management.
It took a while. But I finally found an idea I could adapt. The initial tests have been excellent. The Expectancy Return per trade is just under 1% of capital. It is unlikely the results will be maintained over a large sample size but even a 50% diminition would be very acceptable.
Those following the Forum-Twitter service were exposed to the idea yesterday when I said that I was looking for a move to 1.3281 over the medium term; but to do that, we needed to see acceptance below 1.3438.
Instead we saw 1.3438 provide support. So,, for now, as long as we do not see acceptance below 1.3438, the probability is we’ll see 1.3594. From there we’ll need to see whether the EURUSD will turn down and retest 1.3438 or move to 1.3750.
Following on from yesterday’s comment, today I placed a specific day-trading recommendation on the Forum. It will be interesting to see how the idea turns out. And no, I shall not be teaching the support/resistance method – at least not in the foreseeable future. If you are following the Forum recommendations, remember that I look for setup and an entry bar at the zone.
I have some more real-time testing to do. But I am sure that the support and resistance levels add a new dimension to my set of tools. Even better, is there robustness is apparently unaffected in the lower timeframes
Figure 1 is the Daily EURUSD containing only the new levels. I have omitted Barros Swings and MIDAS lines.
FIGURE 1 EURUSD Daily