Alternative Technical Templates.

[Tess]

Originally Posted by Tess

But the "point" being it's continued to soften, so folks could have used either option (the regular s&r intent...or the pattern confirmation) to leg in on a continuation move.

Still displaying weakness into this mornings action with that next support camp down @ 9775 beginning to whistle it's welcome

And here we are sussing out the next step of the bearish journey. This channel of previous demand (9775-9710) will harbour the usual cross traffic of stop activity & again, players will be eyeing the peak-trough behaviour to guage their trailing stops on the move down.

The next step down from here takes us to a small pocket of potential headwind @ 1.9640-9600 ahead of the more solid late 07/early 08 floor @ 1.9400.

Above here, the steps are highly visible via your intraday (15m) chart & the small hourly to judge the upside offers on profit taking.

[tonymand]

Currently watching this developing scenario

[tonymand]

You can see for yourself just how important this level is over the last 6 months or so. Get ready to rock and roll (well hope so anyway)

[tonymand]

........... and similar developing interest here on GY

[kagein]

we use price set-ups or triggers on & around our views of the pertinent support-resistance levels.

At the present time i view each s&r line equally and just look at price set ups around each one. I do take particular interest in lines drawn from the daily chart, however they can be far apart, how do u decide which minor s&r are attracting the most attention? Do you look at how many times it has tested a zone and hence apportionate weight to each particular line?

[Jocelyn]

Originally Posted by kagein

At the present time i view each s&r line equally and just look at price set ups around each one.

I do take particular interest in lines drawn from the daily chart, however they can be far apart, how do u decide which minor s&r are attracting the most attention?

Do you look at how many times it has tested a zone and hence apportionate weight to each particular line?

The significance of a potential support or resistance level is heightened by the reactive behaviour in & around it’s vicinity. Remember, it’s the general zone which harbours most of the potential activity, & that zone can quite often stretch to a 20-50+ pip channel of interest.

If price is re-visiting a previous level of intense traffic (such as this current support/demand zone on the GBPUSD between 9710 & 9775), then you can expect volatile & erratic behaviour.

You only needed to glance to your left & check the reaction from the nearest 2 visits in late February & mid March to anticipate increased interest as price again vibrated towards it late last week/early this week.

These levels have to begin somewhere though, yeah? We simply work from right to left when adjudging the potential of a reaction zone & carry those levels forward to assess their relevance in future price activity. Once a level loses it’s significance we adjust the specifics & continue to observe the behaviour.

Always look left!!

If your primary template is the Daily timeframe, then sure, most of your priority levels will emanate from there. Secondary levels could be observed from a 4 hour or 1 hour viewpoint if you’re seeking intermediate confirmation.

But essentially, you’re looking for levels or zones of activity, which have displayed previous strong attraction for players. The further back & more often those zones reacted, the better.

Tess, Jim & their crew mostly plot their primary action levels via the 4 hour timeframe. I then utilize & cascade those levels down onto my micro timeframe templates & my guy’s execute according to our specific aims & intent at the time.

If a level or zone is a genuine s&r reference then it’s going to react & offer opportunities whether you’re a micro (tick-1min) or a macro (240m-daily) timeframe trader.

The execution is secondary. It’s where you execute & how the execution is managed which deems the exercise productive….or not.

[kagein]

Ive been demoing a method that utilizes price action around s&r zones. For breakouts i wait for price to retest a level before entering, for reversals i generally wait for an obvious LH or HL setup before entering, simple stuff really. My demo account is outperforming my live account by miles. I'm frequently closing a trade for greater than 4R, in some cases i risk 10 pips and get a 100 pip move. If these kinds of results are sustainable they would provide a better R:R than many of the 'systems' I've seen out there.

Ive made 16 trades, won 12, lost 2 and broke even on the remaining 2. I risk 2% on each trade( a bit much for some).

Below are some trades i took this week, blue highlights my entry bar, green signals my closing bar

*note* the entry in the second chart was actually an inside bar on the software i use.

[Tess]

Good for you George. Adopting those types of price triggers to engage alongside your s&r observations will serve you well over the long haul.

As you’re quickly finding out, one of the major benefits of this type of trading is, that whatever market conditions exist (range or trend), you’ll have a set of tools (well defined set up’s triggering off sound price principles) to pick your route thru your chosen pairs.

Whatever you do DON’T COMPLICATE IT. Keep it simple, don’t be tempted to add any more indicators or other filters.

If the conditions aren’t suitable for your specific set up’s or triggers, then wait patiently until things line up. It’ll be well worth the wait.

One of the main (if not THE main) reasons for failure in this business is a total lack of discipline. The itchy finger & impatient nature kills most new traders.

Those who spend quality time researching & preparing a simple, effective trading plan & properly test out their findings will hold a tremendous advantage over the rest.

Keep us posted on developments George

[kagein]

I was wondering how you guys analyse the yen pairs, what do you take into consideration apart from the technicals?

[JimmyMac]

We run through the same generic principles as we would for any pair we're looking to get a position on kagein.

Rate differentials & impending int rate news which might impact the pair.
Specific regional fundamentals affecting each of the opposite pairings (British economic outlook v/s Japanese economic outlook etc)
Equity market flows (risk aversion - particularly relating to EURJPY)

That daily diet of information is readily available via various sources to most folks if they wish to avail themselves.

Although not really necessary for everyone, we also access newswire & squawk facilities which afford us instant & breaking news snippets, rumors & bits & bobs of order flow traffic etc which get bounced around during a typical trading day.

We get a decent feel for what's what out there through our daily contact base too, but again - it's not particularly necessary for the average player in the most part.