ForexSpirit

If you browse trading forums then there’s a pretty high probability that you’ll have come across Avery Horton, aka TheRumpledOne (TRO), and his prolific indicator writing ability. If you’re familiar with said person then you’ve also probably seen him get banned from said forum.

If you’ve been around long enough you’ve more than likely seen him show up and get banned in numerous forums. I guess he just grates some people and forum moderators the wrong way.

I mentioned that I came across his MT4 wick counting indicator in my last post, which is what put him back on my radar again.

I decided to revisit one of the entry methods that he regularly puts forward: simply entering on the psychologically significant levels of 00, 25, 50, 75. TRO terms these levels as sweet spots.

For example, if price is currently at 1.3207, you would go short at 1.3200 or go long at 1.3225.

A chart showing those levels always helps:

He says that you can pretty much use any horizontal lines of your choosing. Nice big round numbers, such as 1.3200 imbue extra psychological significance amongst the trading masses. This same significance can also be attached to a lesser extent to other numbers such as 50, 25, 75. This is a pretty commonly held view, which probably accounts for a large proportion of why the market reacts as it does to these levels, much like with Fibonacci levels.

The rationale that any horizontal line as an entry point is going to be just as good as an other is also the basis for the BWILC birthday level entry points which I used a few years ago. In that case I used the year of my birth as one entry level point, and had additional entry points in 25 pip increments in either direction. Thus, with my year of birth being 1972, I used 72, 97, 22 and 47 as my potential entry levels.

TheRumpledOne focuses pretty much exclusively on providing entry techniques. For example, one way to use the sweet spot entry levels is to enter in the opposite direction to the prior hourly bar. If an hourly bar has just closed and it was bullish you would enter a short at the next sweet spot below the open of the new hourly bar. He recommends going for a quick 5 pips, or whatever you can grab. Almost scalping in nature.

Stop loss levels and money management are left up to the individual to figure out on their own.

Of course, things are not always as simple as they seem. If price just triggers your entry and then goes immediately against you where do you get out? You have to be careful not to let a large lose wipe out a multitude of small gains.

I think the point made that any horizontal line can be used as a valid entry point is an interesting one.

All in all, it’s not really that much of a fully fledged trading system. It was primarily food for thought.

As I mentioned, TheRumpledOne is pretty prolific with his trading forum activity so it’s not exactly hard to track down more information on this stuff and the wide gammet of other indicators and ideas that Avery puts forward. This time around I stuck to information that was posted on the babypips forum in threads such as All You Need To Trade Is A Horizontal Line and Never Lose Again!! (dubious thread title aside).