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Pure & simple Abonacci system

  • #121
  • Mar 25, 2014 8:48am Mar 25, 2014 8:48am
Anyone else having problem with murrey indicator ?

It seems to show different MM values on different timeframes even when tf and period are predefined in the indicator.
  • #122
  • Mar 25, 2014 8:52am Mar 25, 2014 8:52am
Quoting hollowhead
{quote} Because the fib levels are between the Abonacci phase levels ie a phase is whatever length you put in the indicator (122, 244, 356 etc) . then fibs are drawn between the phase levels. The fibs in Abonacci have nothing to do with swing highs/lows. I don't really know why Abonacci uses 76.4%. I would think it is because it creates equal distance between pairs of levels 0 to 23.6 = 100-76.4 23.6 to 38.2 = 76.4 to 61.8 38.2 to 50 = 61.8 to 50. This means the trading rules in relation to the fib levels will be the same whether going short or...

Gotcha! Thank you for the clarification.
  • #123
  • Mar 25, 2014 9:06am Mar 25, 2014 9:06am
Quoting fx01
Anyone else having problem with murrey indicator ? It seems to show different MM values on different timeframes even when tf and period are predefined in the indicator.
We have set it to look back over 256 periods (a year on the Daily TF), so when you look at the smaller time frames it will be different, bacuse it is looking back 256 hours, for the 1h TF etc.

I am looking for a version that will allow us to set P to a specific date range, as oppossed to a dynamic period.
  • #124
  • Mar 25, 2014 9:22am Mar 25, 2014 9:22am
Quoting hollowhead
First off, all kudos and respect goes to 'Bobi' of Abonacci fame, who is a genius and legend in my eyes, much (if not most) of this system is derived from his studies and observations. I won't go into it here, but you can read about his work here. Second, hats of to ubenders - who appears to have put 2 and 2 together and made 4 (which is quite a feat in this business). He may well have discovered a missing link for those of us who have been trading the Abonacci way. So some rules (as...

Hi Steve,

I see in the example chart, GBP/JPY, you are trading from the H4 TF but the Abonacci Template is set to 625 which is for the daily TF is this correct?
  • #125
  • Mar 25, 2014 9:33am Mar 25, 2014 9:33am
Quoting stevepatt
{quote} Hi Steve, I see in the example chart, GBP/JPY, you are trading from the H4 TF but the Abonacci Template is set to 625 which is for the daily TF is this correct?
Hi Steve, welcome.

Yes - to be honest most of the time it doesn't matter what TF you are trading on. The Abonacci levels are set to the MM levels. The MM levels to look back 256 periods (a year on the daily). The MM levels are mostly the same on the Daily as the 4h. It is when you get to the 1h and lower that the MM levels might change. But - my superficial eyeball backtesting at the moment shows the MM levels looking back 256 trading days are the most respected and so I would want to match my abonacci levels to those.

Abonacci levels are set to price, so they are the same whichever TF you have your chart. I chose the 4hour for that chart for aesthetics because it expanded enough to show a few trades and also see the numbers and levels.
  • #126
  • Mar 25, 2014 9:43am Mar 25, 2014 9:43am
Quoting hollowhead
{quote} Hi Steve, welcome. Yes - to be honest most of the time it doesn't matter what TF you are trading on. The Abonacci levels are set to the MM levels. The MM levels to look back 256 periods (a year on the daily). The MM levels are mostly the same on the Daily as the 4h. It is when you get to the 1h and lower that the MM levels might change. But - my superficial eyeball backtesting at the moment shows the MM levels looking back 256 trading days are the most respected and so I would want to match my abonacci levels to those. Abonacci levels are...
Hi Steve,

I get what you mean about the MMLs but it makes a big difference to how far a trade has to go to reach it's TP level as you can see from the two charts below.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 25th Mar 14 GBP:USD H4 Chart.png Size: 143 KB
Click to Enlarge Name: 25th mar 14 BBP:JPY H4 Chart 2.png Size: 115 KB
  • #127
  • Mar 25, 2014 9:53am Mar 25, 2014 9:53am
Is there a way to avoid situations where the market ranges around a 100% level

RED = Loss

Green = Win

Blue = Break Even
Attached Image (click to enlarge)
Click to Enlarge Name: 25th Mar 14 AUD:USD H4 Chart.png Size: 141 KB
  • #128
  • Mar 25, 2014 9:58am Mar 25, 2014 9:58am
Ok - I see - yes I had the abonacci template set to double the MM level distance.
  • #129
  • Edited 10:29am Mar 25, 2014 10:18am | Edited 10:29am
Quoting stevepatt
Is there a way to avoid situations where the market ranges around a 100% level RED = Loss Green = Win Blue = Break Even {image}
Like most systems, ranging can hurt alot. One of the reasons we want price to have come from the 23% (or 76%) level is to try and ensure there is some momentum. I am searching for some more patterns to recognise - but I guess if anyone could predict when ranging is going to come they would make a fortune. Certainly the ranging is a bigger problem on the smaller templates.

The reason for wanting an EA is to thoroughly back test multiple entry, exit, TP, BE combos, to find the most reliable and robust method.

The other alternative is to allow two fails and then quit that pair until it resumes trending (ie completed a full phase without you). If your RR is 1:2, then the damage should be limited, and overall you should still be profitable.

Folk who know me from the other Abonacci thread know that I often hedge, and sometimes use a hedge zone strategy, but that needs a decent amount of margin and 24hour chart watching to be safe.

I know some people martingale until it breaks - which it will eventually, but it is high risk and not something I am suggesting or recommending. I am looking for other methods at the moment.

I suspect people will want to throw stochs, macds, RSIs and others at it - my experience is that they can't predict a ranging market, and once you start to get whipsawed it is hard to cut losses.

In the end I think it will always come down to money management and capital protection.

PS - On your chart I wouldn't have taken the first 4 red trades, or the second blue as price had not come from the 23 or 76 level. The first green is a close call, I would probably have left that out as well. The last red I would probably have given a miss - although price had originally come from swing low, when it broke down below the 100% again, I would want to have seen it come further back to the 76% again, bafore considering another long.
  • #130
  • Edited 12:06pm Mar 25, 2014 10:58am | Edited 12:06pm
Quoting hollowhead
{quote} We have set it to look back over 256 periods (a year on the Daily TF), so when you look at the smaller time frames it will be different, bacuse it is looking back 256 hours, for the 1h TF etc. I am looking for a version that will allow us to set P to a specific date range, as oppossed to a dynamic period.
oh..

I thought this indicator is static because we have to mention the period (1440).
  • #131
  • Mar 25, 2014 1:17pm Mar 25, 2014 1:17pm
Quoting hollowhead
{quote} We have set it to look back over 256 periods (a year on the Daily TF), so when you look at the smaller time frames it will be different, bacuse it is looking back 256 hours, for the 1h TF etc. I am looking for a version that will allow us to set P to a specific date range, as oppossed to a dynamic period.
hollowhead

I could be wrong about this....... but I was of the understanding that the whole concept of Abonacci was based on predetermined levels set
from the very first day of the year to the last day of that year(specifically JANUARY TO DECEMBER) as Bobi explained). Seems any template or any other settings based on start date of 2013 is no longer valid as we speak(according to Bobi). All because S & R levels for that year are SET on the first day of that year.

Seems we have to determine the HLC for 2014, then we can have a good and effective EA to carter for the current calender year.

Last night I worked on this(OILUSD) and foud that the MML could be put on constant values thru out the year using calculations based on a monthly value of 43200 and STEPBACKED BY 90 days(given we are now in the month of March).......... this would give an instant baseline on the chart. I think P=1440....needs to be reviewed. ( I used 90 days just to find out where exactly we are now)

I did these calculations on OILUSD and it all fitted perfectly(from 02/01/2014) covering all time frames from MN1 down to M5. I think we have to find those preset-beginning-of year-levels.......that way the ranging of prices and all that can be easy to spot. My accounting background taught me that anything to do with numbers can be traced and verified.


The calculations are dead simple . The figures I have given are incomplete.
  • #132
  • Mar 25, 2014 3:05pm Mar 25, 2014 3:05pm
I know the MMLs are only there for a guide to set the Base Line for the Abonacci Template.

But take a look at PA around the major MMLs especially on the Daily TF they can provide very strong signals. Look for pull backs to major levels and then PA to continue with the trend check the EUR/USD D1 chart below.

Sorry if this is getting of subject but i think you will find MMLs work very well in their own right.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 25th Mar 14 AUD:USD W1 Chart.png Size: 152 KB
Click to Enlarge Name: 25th Mar 14 AUD:USD D1 Chart.png Size: 158 KB
Click to Enlarge Name: 25th Mar 14 EUR:USD D1 Chart.png Size: 99 KB
  • #133
  • Mar 25, 2014 3:58pm Mar 25, 2014 3:58pm
Quoting stevepatt
I know the MMLs are only there for a guide to set the Base Line for the Abonacci Template. But take a look at PA around the major MMLs especially on the Daily TF they can provide very strong signals. Look for pull backs to major levels and then PA to continue with the trend check the EUR/USD D1 chart below. Sorry if this is getting of subject but i think you will find MMLs work very well in their own right. {image} {image} {image}
I agree, on some pairs the MM levels are strong.

But I have also noticed that on other pairs there is a certain abonacci level between the MM levels that appears to be more respected.

I would suggest when considering a trade having a quick look left and if for example price often seems to reverse at the 50% or between the 38% and 50%, then look to manage your trade a bit closer when price gets there, or even use that as TP.
  • #134
  • Mar 25, 2014 4:05pm Mar 25, 2014 4:05pm
Quoting breakthru56
{quote} hollowhead I could be wrong about this....... but I was of the understanding that the whole concept of Abonacci was based on predetermined levels set from the very first day of the year to the last day of that year(specifically JANUARY TO DECEMBER) as Bobi explained). Seems any template or any other settings based on start date of 2013 is no longer valid as we speak(according to Bobi). All because S & R levels for that year are SET on the first day of that year. Seems we have to determine the HLC for 2014, then we can have a good and effective...
Funnily enough breakthru, I was just going through the same process. From what I have tested so far we don't need to change anything on the majors. That is probably due to the rubbish ranging we've had recently!! Good spot and suggestion though.
  • #135
  • Mar 25, 2014 4:08pm Mar 25, 2014 4:08pm
Quoting hollowhead
{quote} I agree, on some pairs the MM levels are strong. But I have also noticed that on other pairs there is a certain abonacci level between the MM levels that appears to be more respected. I would suggest when considering a trade having a quick look left and if for example price often seems to reverse at the 50% or between the 38% and 50%, then look to manage your trade a bit closer when price gets there, or even use that as TP.
What you will, usually, find is this will line up with a MML on a lower or higher TF. I used to trade, a lot, using MML on lower TFs this is the first time I've really looked at them on higher TFs.

I think I will pay it more attention in the coming days.
  • #136
  • Mar 25, 2014 5:10pm Mar 25, 2014 5:10pm
hollowhead

May I present a veeeeery tiny method for your approval/scutiny.........This is what I found last night on OILUSD....

i) To get the Base line for this year (2014) say 43200 X 3 months(02/01/2014 to date) =129600
ii) Imput 129600 in MML... thus: MMPERIOD=129600 and set P=0
iii) STEPBACK = 90 ( Now we are looking back 90 calender days)........for April ..it will be plus 30 days =120 .....(30/31days whichever applies that month)until December 2014.

[ Now... this 129600 is for the past 3 months, therefore... at the beginning of each and every month we imput 43200 x 4................x5..........x6 till December2014.

Now... lets pullout our Abonacci and input the 2014 BASELINE and change date to 02/01/2014. Please note that this baseline can be woobly from day today by 1 or 2pips....at list its for the current year .......adjust it. My opinion is that this might render our trading activities to as closeto those mysterious-nnual S & R levels pre-settings as possible......... and that way ranging price mountains can be detected favourably to us all abonacci maniacs.

Stevepatt might readly embrace this idea because I think it aligns well with what he said.

Also... in my opinion.. the computation of LENGTH in Abonacci needs a bit of overhaul coz a lot of our guys here seem to be struggling (me too)with that... especially when moving from one timeframe or pair to the other.

Together we win no matter what odds

I hope this might help us all.

PS. I would very much like to be in touch with anybody trading the OILUSD and the BRTUSD........would you be kind to connect me ......Thanks in advance.
  • #137
  • Mar 25, 2014 5:28pm Mar 25, 2014 5:28pm
Quoting breakthru56
{quote} hollowhead I could be wrong about this....... but I was of the understanding that the whole concept of Abonacci was based on predetermined levels set from the very first day of the year to the last day of that year(specifically JANUARY TO DECEMBER) as Bobi explained). Seems any template or any other settings based on start date of 2013 is no longer valid as we speak(according to Bobi). All because S & R levels for that year are SET on the first day of that year. Seems we have to determine the HLC for 2014, then we can have a good and effective...
i agree.. 100% have been doing something similar.. with good results.. also as mentioned.. top and btms have to be watched.. cause they are also 50% points.. just my opnion of course
  • #138
  • Mar 25, 2014 5:31pm Mar 25, 2014 5:31pm
PS. I would very much like to be in touch with anybody trading the OILUSD and the BRTUSD........would you be kind to connect me ......Thanks in advance.


MMM interesting.. I will start to watch.. interesting stuff you are putting up there.Thks
  • #139
  • Mar 25, 2014 6:31pm Mar 25, 2014 6:31pm
Wow - I'm impressed with level of research going into this.

There are three elements to how Bobi described his Abonacci trading based on his predeterminatino theory.

1. A formula to calculate a baseline.
2. Different length templates for nearer or longer term views. There is 103, 220, 680, 594, 965, 1030 to name 6 out of over 60) and each of those can be multiplied by 10, 100 and 1000 - that makes alot of template.
3. Rules - each template has different behaviors and therefore trading rules.

I don't think anyone is likely to actually work out Bobi's formula - I think it is too complex and has too many possible variables - and I don't think it's the best use of precious time.

But, we can work out a formula, with a principle for determing lengths, and a set of rules to trade that.

So it seems to me that MM levels for the preceding year give us a baseline - it is based on historical maths and Gann and Murrey knew their stuff - I'm happy to take their lead, they can calculate a starting point with S/R levels above and below. As breakthru suggested we can enter the stepback to Jan 2 for the year, with length 256 to calculate the daily levels, and enter a level to set the baseline. We can calculate the length by distance between MM levels, and either half, double, triple to change size and trade bigger/smaller lengths.

I don't think the time consuming bit is calculating a baseline - Murrey and Gann have already done that. The time consuming bit is testing how to trade them...

It is the same with the Abonacci thread. Many can see the power of the levels - but trading them is very hard, price repsects them...eventually. There are many who join that thread, but only a few that I can see have stuck it out and are trading live and profitably. I can guarantee it will be the same with whatever baseline or length we come up with. The rules around entry SL, TP, BE is what makes profit - we are in this to earn pips.
I'm a realist - I'm not looking to find the holy grail - and if I do I won't be telling any of you . Joke. I just want to find an edge that is simple, clear and can appled to any pair. And I do think MM levels with Abonacci will give us that.

So keep it coming - but remember without a set of rules, a baseline and length is only 2/3 there...
  • #140
  • Mar 25, 2014 8:00pm Mar 25, 2014 8:00pm
hollowhead

What you have just said is even more encouraging.........and a good way-foward. But....as our chairman.....( my apologies if giving you a title is offending but its all with all due respect), I would kindle ask if you can surf thru all we have said .........extract from each of us VITAL suggestions, then every Friday/ weekend we all review the past week's submissions, and then concoct... as a group... a powerhouse of our discusions. I mention this coz it would be a pity to see some people fade away from such a well thought out and organised thread you are running here. Brilliant work. It shouldnt be in vain.

Moving on.....today...going thru various posts from our members..... I noticed there is a very faint mention of MULTI-TIME-FRAMICITY. in our abonacci project endeavours. Somehow if we could incoporate higher time frames in this project..... well....... if possible.... but we can not avoid MTF trading...its the centre of the whole game.. At least one time frame higher can take us out of the ranging prices misery and unnesesary losses.

Ok..say we all trade H4.....all we have to do is make an Abonacci template of 1440 (day)(user adjustable) and launch it in H4. When price MOVES...we MOVE...... ONLY THIS TIME much secure entries coz the DAY(D1) is dragging H4...(either SOUTH or NORTH)....across the MTF mml + MTF abonacci S/R levels.. favourably for us. Just pose and imagine MTF abonacci infused with MTF mml by one two higher time frames. BASELINE etc will be of higher TF. Its like putting a B52 plane engine in a KA car or the 1972 mini car.

Above all..... I think our breakthru is just round the corner. Lets keep on talking.
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