Alternative Technical Templates.

[johnnykanoo]

I love picking your brain. What I am doing is to try to plot the major levels like you suggest and within those levels I can watch the price action. One thing I am getting is that you look to those levels to see how price will respond. The one thing is I am not an intraday trader and it is hard for me to comit to a movement for a period of time. When you discus managing your trade it is those smaller movements that I am after. My goal in trading is to get more comfortable in the longer terms and be able to manage them like you do with confidence.
thanks, John

OK so seriously my perspective has been to narrow. Ive only been looking at the imeidiate picture and thanks to all these posts Ive been broadening my horizon. I went and erased all my charts and started fresh. I zoned out to the day and plotted what i felt were significant zones to look at, then i narrowed to the 4 hour and plotted significant zones and now on the 15 minute chart I can really get a sense of where price is heading. Following Tess' advice I wont just jump into anything but rather wait for some confirmations ie higher highs lower lows... then I will manage my positions based on price relative to those critical zones, realizing that price will trend to those serious zones based on past performance. I know I have a ton to learn so I will keep an open mind and any input whatsoever is appreciated.

[Jocelyn]

Originally Posted by johnnykanoo

Following Tess' advice I wont just jump into anything but rather wait for some confirmations ie higher highs lower lows...

any input whatsoever is appreciated.

Good stuff, should be an interesting journey for you. If you get the chance, then by all means haul up a chart or two with your observations plotted. It will hopefully afford you a chance to receive a little feedback from folks.

Do you have any specific set-ups or triggers in mind to execute via the trend/peak-trough behaviour you mention above?

It might be helpful to you when utilizing any type of strategy (s&r observations included) to have a clearly defined trade plan in mind so you don't become distracted, waylaid or confused when price action doesn't play ball exactly as you planned around one of your zones of interest.

It doesn't need to be 'war & peace'....merely a few rules or aids written down to assist with your planning.

Obviously, any triggers and/or set-ups would ideally be already tested & adjudged under differing market conditions before attempting to trade real money.

The generic plan of executing in harmony with peak-trough (higher high-higher low etc) behaviour is cool, but you also need maybe one or two specific tools with which to go about your business of extracting profit & controlling your risk.

Always attempt to pin down as tight as you can your intended course of action as & when a possible trade comes into view. And that goes for negative as well as positive outcomes - you gotta cover all your bases!

That type of behaviour will help to instill discipline, consistancy & better assist in narrowing down possible leaks or discepancies in your strategy.

It will save you an awful lot of time if you're looking to improve or tweak a certain element of your strategy, if you know exactly how it works in differing conditions.

Good luck with your research & planning.

[johnnykanoo]

Thanks for the reply and the advice, I couldn't agree with you more first Ill just post a chart with the s/r levels on the 15minute but what i did was i went to the day chart and zoomed out as far as i could then anything that looked good i drew a horizontal line, keeping in mind it would be useless to have a million lines i limited myself to the most obvious. Then I went to my 15mnute chart which is what I trade in then I looked for an obvious trend or channel or whatever then I drew the lines for that.
Now heres where it gets tricky for me. I don't have a solid plan of action, I am in James live trading group and currently using the IB/OB. I like that alot and it is forcing me to come up with rules and I am extremly open minded and asking anybody that wants to give me advice.
So far:
1. Trade 15 minute
2. pairs GBP/USD, EUR/USD, EUR/JPY, USD/JPY so far....
3. Mark out support and resistence and determine if pairs are rangebound or trending.
4. Rangebound markets I trade s/r bounce and channel breakout
5. Trending markets I use James IB

Well that is the first steps of my template. I have been only trading micro lots and I havent worked out my T/P maybe I will try to ride a trade all the way to its next resistence???

Stop loss: So far I have one for the IB setup but thats it and I need to work on that so that I can have a decent risk/reward ratio. The only major rule I have is never ever ever have a SL greater than TP my risk/reward must be at least 1:1.

thats it any advice from anybody wld be much appreciated.

ps. my chart only shows how I am marking out the S/R levels.

[kagein]

Does price action often retrace upon the break of a resistance line before it continues its way upward?

George

[Jocelyn]

Originally Posted by johnnykanoo

ps. my chart only shows how I am marking out the S/R levels.

I can't see the specifics on your chart unfortunately. The background is too dark & the detail too small, but if you're using the levels off a higher timeframe & mirroring those levels by transporting them down onto the 15m frame, then that's fine.

You can plot different s&r markers from seperate timeframes (& highlight them on one chart reference), but ensure you color them differently so you know why they're placed where they are.

For example: you might have a couple of very visible & active levels which stand out hard on a 4 hour frame. You'd definitely want to be alerted as those levels came into view.

You might also be aware of a couple levels which attracted attention via your intraday (15min) timeframe & you might wish to plot those as well to maybe take advantage of any short-term activity as price buffers that zone.

So, you can have 2 sets of levels plotted on say your 15m timeframe. The 4 hour lines might be 200-300pips away, but as price comes into view, they'll show up on your 15m frame.

That way, you can utilize your triggers & set-ups to marry the harder s&r lines as they become active on your smaller timeframe.

Your rules sound fine to me. If you're engaged in James 40-100 pip live room, then by all accounts you're in pretty sensible company.

I'd concentrate & focus on what's going on in there for now if I were you. If that type of trading activity suits your psychological make up & you can construct a workable template around whatever it is he teaches, then you're well on your way.

Don't try taking on too much too soon. All you'll achieve is confusion & frustration.

Learn, adapt, practice & embrace one thing or method at a time. Once your confidence & competance increases & you're turning profit, then you can begin to explore other avenues of potential profit.

[Jocelyn]

Originally Posted by kagein

Does price action often retrace upon the break of a resistance line before it continues its way upward?

There's no real uniformity to it George. What you'll generally find is, that if a level is being fought out with at a fierce Bull-Bear fulcrum & price is coiling up or engaged in a tight sideways consolidation, then price will break-out aggressively without looking back.

Range break outs such as Asian, previous high-low trenches at least 100 pips wide, or maybe a key swing level where price has been strongly rejected will normally offer a 2nd opportunity to engage via a pullback to test the demand.

But unfortunately, markets don't work to precise rules.

Which is why traders (especially new comers) should have a specific template in place to trade each occurance.

If you're a breakout trader & you only take a position if price pulls back & forms a doji or a continuation set-up, then that's your specific rule or signal to engage. If price doesn't offer you your signal, then tough - that one slips thru the net.

Get my drift?

[kagein]

Just completed my final year project and it just dawned on me that soon ill be joining the ranks of the 9-5 squad or in my case 6:30-6, 12 hour days...urghh!!!!
It truly is the end of an era


Anyway, Ive been looking over some charts this weekend trying to find reliable price patterns around s&r lines that would help signal prices intent. Ive attached three diagrams of trend reversals. I'm leaning toward the first two, price making a lower high. However if i was to stick to just this pattern i would have missed some really good moves. I've noticed that the 3rd reversal pattern happens often enough, would it be best to let it go and try to get in on the move on a minor correction? Which of them would be the more reliable set up?

Hope you guys enjoyed your Easter

George

[Summerpip]

Hi kagein,

I tend towards the third set up. I'm not an experienced trader but I had some success trading price action set ups. At least I'm not melting down my account.
There is a s/r line @ 2.0250 and the candles show something like indecision (spinning top, doji). There would have been a chance to trade the break of the red candle @ 2.0248. Great entry!

But I wouldn't have trade it like this. Too scary for me. On the 4h chart the last candles were going up. I would have been unsure about the trend. But after the finish of the 16:00 candle (btw I'm GMT +1)we see a nice pin bar. Now it's seem more clearer to me that the last 4h candles were just a retracement and that the trend is going south again. So the alternative would be to trade the break of the 4H pin bar @ around 2.0153.
Now I scroll back to the 15 min chart. I could trade the red 20:00 candle. Hmm...Again, I'm afraid. It's late in the evening and I don't want to hold an overnight position. So I don't trade.
The next day I got lucky. The early bird catches the worm. Price retraced up to 2.0153 but didn't get higher.
From 8:45 Inside bars are forming. I would take the break of the green 8:30 candle south. That happens at 9:15. Also the stochastic were in overbought territory.

That's my reasoning. And again I'm not experienced enough. Would like to hear other opinions. Also in hindsight it's always easier to explain the moves.
I try to attach some pics. I'm doing it first time. I don't know if it works.
Summerpip

[Summerpip]

This is my 3rd pic. There was something wrong with my 3rd pic. I tried to edit my previous message and upload the 3rd pic. But it didn't work. So I post a new message with the correct one.
Also I have 2 computers. I can see the pics on one of them (Windows Me), but I don't see them on the new one which is running Winows Vista. I hope you can see them. Maybe it's the file type?

[pkfrpa]

Which do the hedge fund traders,bank traders and other major traders use the most pivots or fibs?