why call this system obos? because is mine and i can call it whatever i want :13:
just kidding the obos is the combination of ob (overbought) and os (oversold).
this system is countertrend like usual… but the fact that it is countertrend doesn´t means that i trade against strong confirmed trends, it just means that i will try to enter as close as possible to the tops and bottoms of the movements, some of them will be smaller TFs trends so is entrys against those movements.
i will try to tell how do i chose directions using my kind of technical analasys, and i will tell how to do entrys with SLs as small as possible. i will not explain the risk management that i use because that should be personal for each one of us.
for technical analasys i will use bollinger bands, trendlines and horizontal lines and fibonacci levels, to pic the ovebought/oversold zones… the zones where i would try to enter.
for entrys i will use chart patterns (lower highs, higher lows and dragons) and stochastics divergences with trendlines breakouts for trigers.
hope to get someone writting in this thread with me, becaus alone is just too boring
i think that the most important thing (and only one really necessary) in trading is risk managment. everything else is just trying to make profits:)
but like i said, risk managment is personal and each one should do what´s more confortable to him… so this don´t count for this thread.
so the most important thing in trading(to this thread) is know very fast and very soon to spot the market conditions… is it trending? is it ranging? is it in a correction movement or in a impulse movement… to know what is the market doing is the first thing we should analyse before even chose a direction or a entry point.
so how do we know what´s the market doing? easy, we look at it
but seriouslly, look at it without help is not easy, so i use indicators. bollinger bands and lines studys.
unfourtunelly do technicall analasys in back history is way to easy… but do it at real time is a lot different, and harder. but i will need to show back history pics to tell what i want, and for this i will chose good and clear egsamples, even knowing that those good and clear setups are more rare than the dubius ones… sorry for that
Rui has done an excellent job in his own trading over the past 12 months with this system. He’s avoided describing it in detail in a forum thread like this because the strategy is both subtle and a bit complex (he doesn’t think it’s that complex but those of us who’ve tried to figure it out can assert otherwise).
I’ll be interested to see if this strategy can be explained in enough detail so that others can duplicate Rui’s success. I’m looking forward to this thread!
it price is failling to breack a precious high and a previous low and it´s bouncing between those suport and resistance then the market is ranging.
if price just break a previous high or low then the price could be starting a new trend.
so if price is ranging we would be able to draw a channel, and a lot of the times this channel can be formed by a bollinger band. so basecly when price is ranging all we have to do is to sell at the top of the channel and buy at the bottom of it.
if price just breaks a suport or a resistance (top or bottom) then we might be facing the beggining of a new trend, and the confirmation of the new movement is the retest of that support/resistance, or in better words, a valid retracement. for me the retracement to be valid must went to 38.2% ,50% or 61.8% fibonacci levels, midle bollinger bands, or the previous breacked support/resistance.
so resuming in a ranging market we try to figure out a chanel and just trade the bouncings between the top and bottom of it, in a trending we try to catch an entry setup at one valid retracement. in a flat market we take a break and go play world of warcraft.
this is very resumed, but it´s as simple as that. i can explore this subject a lot more and you can find a lot of info on the net about market conditions but it´s all resumed to this.
the market condition, the direction and the trading zones are spoted in the big TFs. the H1, the H4 and dailly… sometimes even weekly suports and resistances are valuable as trading zones.
the entry setups i will look for the 15min, the 5 min and even take a look at M1 to see what it´s going on. like that i can enter hundreds of pips movements with SLs smaller than 10 pips. my best entry was in a 180 pips TP with a 7pips SL… very lucky trade i guess. i will explain later how are the entry setups.
i trade when i have time for it. during any session. but the TPs i´m looking at depends on the period of time i´m entry the trade.
i guess that every trader that is doing this for at least a year had already notice that bit moves usually happens at certain times of the day, and those times of the day are london opening, NY opening, and london closing.
at london and NY opening there´s alot of money entering the market, so we will search for big TPs at this time of the day. at london close at around 4pm gmt there are alot of orders that are closed as london traders colect their profits. so if at 4pm price is at the high or low of the dailly candle we will look for a countertrend setup till a valid retracement level (for those entrys i like the 38.2 and 50% fib level). those last entrys usually takes a lot of time to reach the TPs (sometimes 9-10 hours)
Image 1318794013-clip-20kb.png this is a clip of right now on GBPUSD. possible short entry. but it happens on a friday close and is too danger at this time to enter trades.
those are not entrys based on technical analasys. they are just entry setups
i don´t understand the word gauge. but if you mean how do i know where it will happen i don´t. i start looking for TLs breakouts as soon as a possible divergence is forming… i don´t wait for the stochs cross for confirmation
this is gbpusd right now at 15:00gmt in day 17-10-2011. it had breack a previous low with very strenght. and nod it´s on a valik retrace at 50% fib level and at the previous low suport that now can act as resistance.
it is forming a 15min divergence on stochs and if it breacks the 5min trendline it may continue the down move.
that´s a live egsample of a setup forming. still no entry thought
the obos is the combination of ob (overbought) and os (oversold).