隧道交易方法

THE TUNNEL METHOD (隧道交易方法）

Step 1.First, you need a charting service. Since most all electronic trading platforms have charts with technical indicators, this shouldnt be a problem.

Create a 1 hour chart on whatever currency pairs interest you. Barcharts or candlesticks really make no difference. Overlay on this 3 things: 1) a 169 period [1 hour] ema [exponential moving average], 2) a 144 period [1 hour] ema, and finally 3) a 12 period [1hour] ema.

The 144 and 169 emas create what I call the "tunnel". The 12 ema is an extremely valuable filter that you will want to have there all the time. I will talk more about this in the filter section.

Step 2.Memorize or write down and keep next to your trading screen the following fibonacci number sequence: 1,1,2,3,5,8,13,21,34,55,89,144,233,377. For trading purposes, the numbers of interest are 55, 89, 144, 233, and 377.

Step 3.Wait for the market to come into the area of the "tunnel". When it breaks ABOVE the upper tunnel boundary, you go long. When it breaks BELOW the lower tunnel boundary, you go short.

Step 4.Stops and reverse are placed on the other side of the tunnel.

Step 5.As the market trades in your direction, you take partial profits at the successive fib numbers respectively, with the final portion of your position left on until one of the following conditons occur: 1) market hits the last fib number [377 pips] from the emas, or 2) the market eventually comes back to the tunnel and violates the other side.

Example: GBP/USD is trading at 1.8500. The emas are as follows: 144- 1.8494, 169- 1.8512. The market breaks 1.8494, and you sell at 1.8492. Your stop and reverse is now at 1.8512. Over the following hours, market starts to go down. 40 minutes after you put position on, cable is at 1.8440. You can use for computation purposes either tunnel boundary or the median of the tunnel. Emas are still the same, so if you use the median, 55 from 1.8503 is 1.8448. You should have taken part of the position off at 1.8448. Market does nothing rest of day. Stop can be moved down to protect position or left alone at tunnel. You are now looking for price to be 89 pips away from the emas. Since 55 was already passed, it no longer concerns us in this cycle. A couple of days later, cable is at 1.8300 and the median of emas is 1.8410 [1.8400 - 1.8420]. You should be out of another portion of the position at 1.8321. Market bottoms here and in the next 2 hours, cable screams to 1.8535. Your remaining short position is covered at upper tunnel boundary of 1.8420, and you are now long from this point as well. Since you are long, you would now take partial profits at 1.8475 and 1.8509.

This is a fairly typical example.

If you were to just stick to this basic model, you account would grow very well over time. Las Vegas was built with far fewer percentages in the casinos favor.

In case you havent figured it out, this model cuts your losses very short. By definiton, you cant lose very much on a single trade from your initial entry position.. On the other side, you take some quick profits at the 55 level which satisfies the scalper in you, and you have positioned yourself for bigger profits in the long run should the market keep going in your favor. By definition, you are letting profits run.

The Achilles heal of this model is when the market chops around the tunnel and gets you in and out multiple times for small losses. I will cover how to deal with this in the filters section.

Thats it. This is the model. Fairly simple in its design, and easy to remember. Has all the things every local wants in a model, except the quick 2 pip scalps, which you cant do anyway. Cuts losses, and lets profits run. Yet for its design simplicity, the thought behind is more complex. Time to talk about that.

THE FILTERS

Filters are used to increase overall profitability and/or reduce overall losses. If a filter does not do one of these two things, then I do not use it. What good is a filter if it raises your profitability by 10% but only gets you into 1/3 as many trades? What good is a filter if it reduces losses by 10% - 20% , but also reduces profitability on every trade by half? I think you get the point.

Here are the filters the vegas team uses. [Yes, I have a team. There are 3 of us. We trade GBP/USD, USD/CHF, and the S&P e-mini futures contract. Each has a specialty. Mine is GBP/USD. We are each responsible for our main pair. One of us is always at the screen when markets are open. Positions are covered by other partners when away. We only tunnel trade.]

1.)

Put the 12 ema [1 hour] on your screen with the rest of your indicators. When everything is at the same price [tunnel, current market price, 12 ema] sit up and take notice. When the market breaks away from the tunnel, there is a very high probability of a strong market move coming. I dont need Gann, because this gives me time, the square of time, and price all in equilibrium. When it breaks, it goes.

Need proof? Well, go back on your favorite currency pair and check it out. In the first quarter of 2005, this filter alone produced 20 trades, 19 which were profitable in USD/CHF. In fact, as I write this, 1 trade is still on from about 3 handles ago. Since I am not responsible for Swissy, Im not the guy pushing the button, only monitoring it when Im at the screen [changing stops when needed, etc.]. But, the position is still on.

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