To trade long effectively, we simply invert the [B]UM [/B]>>>
By tymen1 at 2008-07-23
Hmmmmmmmmmmmm.
That did not work. :mad:
So lets redraw the diagram.
Here we are !! 
By tymen1 at 2008-07-23
[B]Explanations next post.[/B]
[B]Explanations of the UM for long trading.[/B]
The retracements are as before.
We will have more to say about retracements later. It is important that you get your entry close to the retracement point, if not at the very point.
To enter far from the retracement point means that you could well hit the stop loss that you set.
More on all this later.
I feel very excited about what I am going to reveal!!
There are great things to come!! 
Now, back to the retracements…
They go in 2 amounts,
You exit all at once, or in stages if you so wish,
The stop loss is moved to break even as the price goes in your favour.
Watch the number of candles you trade on the main chart - don’t go beyond about 7 of them unless the price has rocketed in your favour.
[B]Next post - a full explanation of that confusing pips first drawing.[/B]
[B]Now, whats going on with that pips first drawing? [/B] 
This is an improvement to the [B]UM[/B].
[U]Procedure :[/U]
We enter long, using the [U]5 minute KC chart[/U] to get a good entry.
Part of this action is that we set a stop loss 10 pips away. (correct direction of course!! 
)
If the price action goes against us - a retrace first trade - then we will hit the stop loss and lose [U]1 amount [/U]of 10 pips.
But if the price action is in our favour, then…
after gaining 5 pips we :
- enter a 2nd amount.
- remove our 10 pips stop loss.
- place a [U]2 amount or double[/U] stop loss at the [U]black horizontal line [/U](the base or entry point).
[B]I can now see that I will need a clear diagram to help explain this - I will do so in the next post.[/B]
If the price action now reverses, we will break even with our 1st amount and lose 5 pips with our 2nd amount.
If the price action continues to go in our favour, we move the double stop loss 5 pips every time the price action moves 5 pips.
Eventually, the price action [U]will [/U]reverse (point E in the diagram) and hit the double stop loss at point D.
That is the end of it.
[B]Next post - diagram for clarity.[/B]
[B]This diagram should help explain the prevous post.[/B]
The procedure is much easier to understand in picture form >>>
By tymen1 at 2008-07-23
You can now see how to enter.
You can now see that the exit is automatically determined by the stop loss.
With only 1 amount you would make previously on pips first = 10 pips.
With this improvement with 1 amount only in this example = 15 pips.
With this improvement with 2 amounts only in this example = 25 pips.
Two amounts definitely makes a difference, even if only for a small price movement.
This should improve confidence at the outset.
This new improvement I have developed after some research.
You can read about it here :
Very interesting, can’t wait to try it out on the demo account… nothing else to add really, just letting you know I’m still listening
Hi,
In order to understand tymen’s UM SHORT and since i went again thru the whole thread (like Jimmy Jones I presume), I felt it could be interesting to have a summary of the short method with all the relevant links.
So here is my rewriting proposal and i thank yet everyone to check AND corrrect if i something is wrong or not enough accurate. If one has samples of the different pattern it could be helpful for the readers to see them to better understand.
I will all the time rely on tymen’s post to take the pictures he provided. Obviously I hope tymen is going to correct and add tips then release the RC1 until the GoldMaster release.
Tymen, my apologies for all the mistakes that you will find in this text. Also sorry for my english which isn’t my first language.
You may want to have all tymen post for the method then here is a link to a WORD file that is downloadable (13MB and thanks to cordite).
Last update :
2008-08-17 New links added to last section.
2008-08-13 New section created : Interesting Links. You may find there many tips and interesting info.
2008-08-13 Updated PNC order.
2008-08-11 BEP section : What is a bad ESP from post #982
2008-08-09 Vocabulary section : Tips from GFT live chat about DealBook S/L order.
2008-08-09 Vocabulary section : Fine tuning of STARC & Keltner added from post #974
2008-08-07 Add note : Introduction->Tips from post #953
2008-08-07 Correction : Upper limit of trading timeframe set to 60mn
Vocabulary
First of all, let’s start with some vocabulary stuff :
[ul]
[li]UMS = Ultimate Method for Candlestick Trading. It is the SHORT method.
[/li][li]BB = Bollinger Band (default settings = period 20, deviation 2 on close price, often blue)
[/li][li]CCxx = Candlestick Chart set on xx minutes. It will often be CC5, CC20, CC25 on the different picture the reader may see via the provided links.
[/li][LIST]
[li]CC5 is the “working” chart to decide when one is going to exit or keep the running trades
[/li][li]CCxx where 60mn >= xx >= 20mn are the candlestick pattern charts detection
[/li][/ul]
[li]SB = STARC Band (default settings = factor 1, middle signal is useless and can be removed, often orange)
[/li]Note : Fine tuning settings are
ATR periods = 15
ATR multiplier = 2
starc bands price = close
starc bands periods = 6
starc bands type = simple moving average.
[li]KC = Keltner Channel (Period 4, factor 1, often dark)
[/li]Note : Fine tuning settings are
ATR periods = 4
ATR multiplier = 1
EMA periods = 20 (the GFT platform specifies this as a modified moving average and does not give the periods, but a little research shows this is the correct value)
[li]DMACD = DiNapoli MACD (default settings = Close price, signal is useless and can be removed, often red)
[/li][li]RET = Re-Trace mode, that is we expect the price to return UP.
[/li][li]PFT = Pips First Trade (that means there will be at least a second trade)
[/li][li]ESP = Evening Star Pattern.
[/li][li]BEP = Best Entry Point (1 amount)
[/li][li]REP = Re-Enter Point (2 amounts)
[/li][li]BEX = Best Exit point
[/li][li]SL = Stop Loss (just in case)
[/li]Tips for DealBook users : The Parent And Contingent (PNC) order type contains a Parent order and two Contingents. The parent order can be a Market, Stop, or Limit (typically used to enter a new position). The Contingents are a Stop and Limit, and are OCO by default. The contingent orders will be ignored until the Parent order fills (i.e., the parent order will fill before the contingent orders before working orders).
To place a PNC order in Dealbook 360: Click Trades -> New Order, and select the Parent and Contingent order type.
Warning : When you use PNC, DB actually make 3 orders. 1 for SELL (my case because i went short) and 2 to BUY (1 for your SL and the other one for the TP)
OCO means “Order Cancels Order” which means that all the 3 orders are linked together.
If you uncheck OCO, then either your SL either your TP will still run. Keep that in mind.
[/LIST]
Introduction
First of all, 2 requirements :
[B]Do remember to demo trade!!
The whole aim of this thread is to teach you to trade competently.
Got it ? No ? Let’s repeat : DEMO TRADE ! AIM OF THREAD = TRADE COMPETENTLY
[/B]
UMS is a short method. It is based on the candlestick study (see Japanese Candlestick Charting Explained).
2 trading software are often mentionned on this thread. They are MT4 (see Metaquotes) and DealBook (see GFT). MT4 has got a timeframe limitation (see #261 to surround it) and seems less powerfull when dealing with many charts (UM creator use up to 48 charts, see #300!). The second one seems to be time limited for its demo version and is unlocked asap an account is opened from a broker (example Kinetic Securities).
You need 2 main chart templates for UMS to work :
[ul]
[li]Main chart for all your next CCxx where 60mn >= xx >= 20mn. You must have a candlestick chart (usually red for down, green for up) and BB
[/li][li]Working chart for CC5. You must have CC, BB, KC, SB, DMACD,
[/li][/ul]
Note : In order to have a more clear screen, you can also set 2 different CC5 template. One for the BEP (CC, BB, KC, DMACD) and one for the RET and BEX (CC, BB, SB)
Tips :
For the trading chart you can :
- Use a 5 minute chart.
- Use a chart that is 1/4 to 1/5 the timeframe of the main chart.
For charts of 20-35 minutes we use a 5 min chart.
For charts 40-1 hour we can choose a 5 min chart or 10 min chart. (tymen generally find the 5 min chart to be better).
For charts of 4 hour and daily, you could consider a 5 minute entry chart, but here the proportions are very different and you are now probably better off going for a 45/50 min entry chart for 4 hour mainchart, and use a 4 hour entry chart for a daily mainchart.
In a daily main chart, a 5 minute entry chart really becomes ridiculous!!
The UMS is based on a single pattern recognition which is the ESP which is bearish.
Enter the trade : BEP
Main chart = Radar for pattern
So, as you can guess you choose a currency pair and apply the main template in order for you to look at your main chart (xx>=20), hunting the completely finished ESP (#586).
Note : That is why we can set all the charts from 20mn to 60mn (step 5mn), to maximize the probability of finding one ESP in any given day. The multiple charts are also in all the 4 major currency pairs so that there is now a great chance of finding a pattern.
With up to 44 charts, and little bit of luck, one may get 4 patterns in an 8 hour period.
Pips on all of them!!
Remember… no patterns - no trade - no pips - no money!!
You must understand that UMS can’t deal with approximate candle. We look for very clear ESP. No deal with that !
Note : If the shape is designed while the BB is dramatically UP (like making a trumpet design) then leave the trade. It is too risky. For a whole explanation of that see post #982
Once you find it, JUMP to the working chart = CC5.
Note : Let’s assume you use a 20mn main chart and that you’ve seen the ESP at 12:00. On your CC5 the current candle which is designed is yet more than 12:20. Don’t be afraid. Remember that your software has been designing the 12:00 candle with all the values of the following 20 minutes. So now you are watching the design of the first 5mn data of the next 20mn candle.
If you have made 2 CC5 templates, you have to look at the KC one.
Now the point is : where to enter ? How we can guess where is the best entry point ?
You have now to look at the last 5mn of DMACD and Mid BB and for both draw their directional vector from a same point. Then draw the sum resultant as in the example (see #207).
Note : As soon as you designed this resultant vector in your head or on a paper, you can forget the BB.
Let’s analyse the resultant :
[ul]
[li]if the resultant goes LEVEL then BEP is Mid KC.
[/li]
[li]if the resultant goes DOWN then BEP is from Mid KC to Lower KC.
[/li]
[li]if the resultant goes UP then BEP is Up KC
[/li][/ul]
Note : Those rules shouldn’t prevent you from winning more pips if ever the market is better than expected (price is upper). As usual, the more you can save from the market the more secure you will be.
You can forget KC from now on.
If you have made 2 CC5 templates, switch now to the SB one.
You have to enter the trade while you still feel safe. It is done with your SL. How to ?
Well, there are 2 school and it is all up to you :
[ul]
[li]10 pips over your current trade
[/li][li]3 pips over shadow of the star of the ESP (last advise from creator Tymen)
[/li][/ul]
Note : Whatever choice you make, you can later stick on the value you’ve calculated to set to that value all the future SL of your UMS trade !
Time to exit the trade : BEX
Well you’ve been told that the UMS work whatever happen to the price and it is true ! So now the price can either go up (RET) or down (PFT) (see #698 for global scheme)
Note : Our indicator is going to be now the SB as it is an enveloppe around the price extremes (see #618)
If PFT then you exit as soon as price go thru Lower SB and you take your first profit.
The main idea now is : if RET then we look for the price to go meet the Up SB. If reached then REP (we re-enter the trade with 2 amounts, see #621) !
Fine tuning : SB different meanings (see #712) :
[ul]
[li]If SB goes UP. If price goes up or level, you can wait 3 candles max to get more pips for REP (see #621).
[/li]Then, if price goes Lower SB then BEX !.
Note : If BB goes up also (see #654), then you’re sure this is going to be an extreme and you can wait 4 candles for REP
You have to follow the candle here. Feel if they are becomming slow, if a return is on the way.
[li]If SB goes LEVEL. If price goes up, you can wait 3 candles max to get more pips for REP (same as above).
[/li]Then, if price goes Lower SB then BEX !.
[li]If SB goes DOWN. REP as soon as price get thru Up SB.
[/li]Then, when price get thru Lower SB, you can wait 3 candles max to get more pips for BEX ! (see #690).
Note : If BB goes down also then you’re sure this is going to be an extreme and you can wait 4 candles for BEX
[/ul]
Interesting Links
13MB Word file with a copy of all tymens post (thanks to cordite)
Japanese Candlestick Charting Explained
Five Levels to know who you are
World trading times for forex (PDF download)
Multiple lot trading (WORD download)
Those Darn Market Makers
Take a breath and think …BEFORE
How the heck can I sell something I didn’t buy?
FXCaribbean, that is very nice work!
what are our bollinger band settings for the 5min chart?
I am starting to use MT4 to demo trade tymen1 system. But i can’t seem to find the starc indicator and have problems setting up the new MACD tymen1 introduced. Can anyone offer me advice?
I have got the starc bands indicator. I will attach the link here for those using MT4. But i still can’t figure out the new MACD settings.
FXCaribbean, great stuff! I have yet to read through it but I plan on doing so tonight with a cup of coffee and something good to eat
I was working on something similar but mine was really just a link doc to the important posts. This is much better.
I will say to anyone coming in to this thread now, it is still beneficial to read through the entire thread at least once, ideally twice or more. The questions and Tymen’s answers, as well as the exercises and examples will help reinforce what this summary explains… in my humble opinion anyway.
Thanks, but please read it. I think it is going to be very useful then.
How true ! We can even add in this summary at the end , an exercise chapter with all the links to the different one. This post would only be a kind of TOC (Table of Content).
[B]To Maverick731[/B]
Have a look to post #811 in the vocabulary stuff. All the settings should be written.
FXCaribbean
"Don’t go where there is a path. Open a new one and leave a trail".
FxCarribean,
Good summary to help everyone put it all together so far.
However there are a couple of things.
There is no MACD or BB on the 5min chart. Those indicators are only on the main chart to determine where in the KC on the 5m chart to enter.
Also the starc band rules you have written aren’t exactly clear to me (ok I read it a couple more times, makes sense)
I assume you’re only talking about short trades here.
Otherwise it looks ok to me.
Hmmmmmmm.
Nice attempt to index everything FXCaribbean!!
You need to put the page numbers in, though. Otherwise it can be time consuming to find the post.
I will use [B]UM [/B]as general [B]Ultimate Candlestick Trading Method.[/B]
and [B]UMS [/B]as the short version.
and [B]UML [/B]as the long version.
But apart from BB = Bollinger bands and KC = Keltner channel, I will not be using any further abbreviations.
This is because of my teacher training.
[U]There are 2 reasons[/U] -
-
Abbreviations generally do not work well with students and, ultimately, confusion reigns.
-
Readers have come and gone since I started this thread. Quite a few are no longer with us and several new readers have joined up. This trend will continue and I am man enough to accept that.
This means that the page posted by FXCaribbean will only be known by the present readers.
Nevertheless, FXCaribbean’s work is very pleasing.
But do remember to demo trade!!
The whole aim of this thread is to teach you to trade competently.
[B]To set the final foundation before we start a long trade, we look at the starc band retrace entries and exits for long trading.[/B]
Thats easy, we just invert the [U]short [/U]chart >>>
By tymen1 at 2008-07-23
Hmmmmmmmm. 
That did not work either. :mad: :mad:
I will have to do more work and draw another diagram.
[B]See next post.[/B]
[B]So here is the diagram for starc band entries and exits, [U]long[/U], on the 5 minute chart.[/B]
By tymen1 at 2008-07-24
The blues are most probable entries, greens most probable exits.
And here again, is the diagram for starc band entries and exits, [U]short[/U], on the 5 minute chart.
By tymen1 at 2008-07-01
The blues are most probable entries, reds most probable exits.
[B]I would strongly recommend that readers who take up my UM method of candlestick trading do [U]print [/U]both these diagrams so that they are on hand to refer to when trading.[/B]
[B]Final post before we start an engulfing trade.[/B]
[B]I recommend the following be printed also.[/B]
[B]UMS - method for short.[/B]
By tymen1 at 2008-06-16
[B]UML - method for long.[/B]
By tymen1 at 2008-07-23
It is an attempt to save time if i had to get back to something 
page numbers aren’t reliable because each of us can set it to what we want (mine is the biggest).
ok, sure. I just wanted the text to be short. Again, it was mostly for me
I was hopping that when you would have sent the GoldMaster post, you could add the link to your sig.
Thanks. Did you checked all of it ?
I add right away those 2 MAIN things to the current version.
FXCaribbean
"Don’t go where there is a path. Open a new one and leave a trail".
If you want to understand what we’re talking about here (UMS) then read this
Hmmm, the provided link show a resultant done on the 5mn chart from BB && DMACD. (it is [B]D[/B]MACD!).
Yes ! UMS stands for Ultimate Method for Candlestick Trading - SHORT
FXCaribbean
"Don’t go where there is a path. Open a new one and leave a trail".
If you want to understand what we’re talking about here (UMS) then read this
Tymen,
Doing the summary there is one thing i didn’t get.
Do you advise, for each currency pair one choose to trade, to use all the timeframe from 20mn to 60mn, 5mn step to “hunt” the Evening Star ?
If yes, then i can’t find the post where you linked each timeframe to the related KC or STARC
FXCaribbean
"Don’t go where there is a path. Open a new one and leave a trail".
If you want to understand what we’re talking about here (UMS) then read this