Alternative Technical Templates.

[TheRumpledOne]

Originally Posted by Tess

I guess I would describe myself as a strictly discretionary player. I’ve never subscribed to the fact markets can be pigeon-holed or boxed into neat little mechanical robots.

I’m not saying algorithmic sets & shuts can’t return long term profits to a well oiled corporate or mid sized fund etc, but in my experience, you require very deep pockets and a large desk full of extremely sharp minds to set about sullying your hands in that environment.

I much prefer to bend & sway to the rhythm of the market, whichever cycle or wave it decides to sweep me along on.

You’ve already seen a few of my chart examples on here, & to be honest, there won’t be too many variables to any future chart posts. I like to stick pretty close to a general template & merely tweak my parameters according to which direction the wind blows.

Markets (especially currency pairs) tend to move in aggressive waves & nervous retracements. They’re one big pile of psychological warfare, all jostling for position & a decent chunk of profit. When they’re done flailing around, they’ll sink into a dozy, lazy state of flux until the next tide comes along to whip up the surf. Recognizing each of these cycles will stand you in very good stead when attempting to execute your specific template for that particular market cycle. Or more importantly....standing aside until the market behaviour fits your template.

Remember: inactivity is also regarded as a "position" in the markets


Get your table set out according to your action plan, ensure you got sufficient funding & protective measures for your aims & expectations & you can begin planning your preferred mode of execution.

I can’t (unfortunately) divulge all my little tricks & party pieces, as some of them are proprietry tools. But my generic research & observation exposure across the pairs I trade are always consistant in their preparation.

I like horizontal lines of potential engagement. I like them a whole lot!!

Over time they’ve consistently returned good odds to the methods I choose to strike under. I’m a great believer in working smart not hard, LOL.

If I can fire enough bullets at a similar target, on a similar battle field at a similar enemy without getting shot too many times in return, that’ll do for me!

In other words: find your favored set-ups…get your discipline sorted….keep well within your financial boundaries & always be prepared to bow to Mr Flexible…achieve a good chunk of that & you’ll be better prepared than 90% of your fellow combatants.

Here’s a couple examples of what I mean. Feel free to discuss, disagree, confer or ask questions. Look forward to reading & contributing stuff as it arises & time permits!

I like HORIZONTAL LINES, too!

All You Need To Trade Is A Horizontal Line

[pipvader]

Hey guys, i have a few points i need clearing up. Im starting to believe that is the level not the candlestick pattern that is important. Once i start looking for dojis, IB & OB they can be found everywhere but i low risk trade occurs when a trigger occurs at a level thats in play, is this a correct assumption?

This leads to my second question, do you only look at and trigger trades based on levels from the higher timeframes? Sometimes important levels can be a few hundred pips away. Do you play minor s/r levels in the direction of the main flow or is it better to stick to the major levels?

The following screenshots illustrate my point, we have a resistance line at 1.4806 but we also have a zone around 1.4685-1.4670 thats slap bang in the middle of my levels of interest, would engaging on and around the zone be seen as a high risk entry?

Thanks

[Tess]

pipvader,

you've more or less answered your own question

The candles or bars are merely representations of activity. They’re the result of the collective underlying psychology of the participants at that specific juncture. Note the word collective.

All these doji’s, spinning tops, bearish/bullish engulfing bars, hammers, inside-outside prints etc are simply the visual aids you use to determine whether or not you’re prepared to take action at a specific level or zone. The higher up the timeframe scale they print, (generally) the more influence they exert.

Your next piece of the confirming visual aid puzzle is the near & mid-term support & resistance zones. Together, they offer you a little more clarity & focus. Combine the two & you got the guts of a half decent plan.

You’re going to identify layers of s&r zones up & down the ladder. These will be evident across all the timeframe references.

If your plan or template calls for you act on & around these minor points of interaction, then as long as you can justify your risk for that particular trade, you’re good to go.

Part of that risk will include the conditions we’re currently trading under. Are we embedded within a confirmed trend run? Is price bouncing between clear range boundaries? Is it merely a consolidation or basing phase? These conditions will assist in influencing your decision.

Do you see what I’m getting at? My view won’t necessarily mirror yours. I got a couple different set ups & triggers for varying market conditions. Doesn’t mean I always take the trade, but I can at least consider the options.

To directly answer the 2nd paragraph of your question:
yes, I will take on trades from both sides of the s&r spectrum. If I can identify a decent risk based opportunity from a close quarter or minor s&r zone then I’ll take it on. Given the fact the Euro is still adhering to a bearish trend bias, & there are no conflicting signs via the larger timeframes, then I’d only be looking for ‘shorts’ on this pair.

Regards your second question in the final paragraph: see the underlined item back up the post.

You should have an action plan firmly in place, married to the current market conditions every time you sit in front of your technical charts.

If you don’t & your focus is blurred, then the result will likely be tentative, nervy decision making. If the conditions call for you to sit aside until the price action matches your plan or preferred mode of execution – then that’s what you need to do. Patience & discipline wins this game.

You can’t trade everything on every timeframe unless you’re set up to do so.

Hope this helps.

[Tess]

Originally Posted by TheRumpledOne

I like HORIZONTAL LINES, too!

Hello Avery.

Yes, many different recipes for the same dish out there!
If they work for them, that's all that matters

[Ray_1]

Hi tess,

This whole week, I spent my time going through this thread. Now I am sure that what my trading toolkit will consists of. I will use trendlines, s/r, fibo and candlestick patterns in my trading arsenal. I hope i am not too late to join in your thread and hope to discuss and learn more from experienced traders like you, tony and Jimmy and jocelyn. Have a nice weekend.

[Tess]

Hello Ray,

I'm pleased you've found some of the thread contents helpful in establishing a base for your trading plans.

If you've got any questions or queries, then feel free to post them up. I'm sure some kind soul will assist wherever possible.

I look forward to your contributions as you progress with your own style of observation.

Good luck & have fun with it

[pipvader]

Thanks Tess, both your and Jocelyn's posts are rapidly improving how i look at the market.

[Tess]

I was preparing an exercise earlier for one of our Poppa’s clients as an example of a ‘top down’ technical approach using bare price & level construction. We’ve talked about this a few times throughout the thread, so it’s nothing new. But it doesn’t do any harm to remind ourselves of these important scenario’s every now & again.

I know many of you follow James’ inside-outside bar strategy across on the other thread, so thought I’d throw the lower timeframe example in as a timely offering of how you might tie all the relative pieces together when assembling & blending the information from the different timeframes.

A few of you might already be using something similar & if so, then cool. If not, then you might want to begin taking note of these types of price activity on the larger (Daily & 4 hour/1 hour) timeframes as the price action plumbs the current extremes on a few of these pairs.

Any exhaustion ( & potential reversal) behavior on the Daily & 4 hour particularly, will display similar traits at the bottom as they do at the top. Any doji, spinning top & bullish engulfing activity should be closely monitored & actioned via your smaller trigger timeframe charts.

As an exercise, simply scroll back on a few of your favorite pairs & see if you can identify similar behavior where you might have been able to advantage yourself both long & short during the repeatable price action behavior.

Crowd mentality always displays itself along similar lines. If you know what to look for you can better prepare to place yourself to the correct side of the flows!!

[TheRumpledOne]

Based on this article


-----------------------------
The System
-----------------------------

CHEAT SHEET

• Uptrend/oscillator overbought: Ignore

• Downtrend/oscillator oversold: Ignore

• Uptrend/oscillator oversold: Buy Signal

• Downtrend/oscillator overbought: Sell short signal




MT4 TEMPLATE AND INDICATOR INCLUDING SOURCE CODE ATTACHED.

[$forexinvestor]

Originally Posted by Tess

I was preparing an exercise earlier for one of our Poppa’s clients as an example of a ‘top down’ technical approach using bare price & level construction. We’ve talked about this a few times throughout the thread, so it’s nothing new. But it doesn’t do any harm to remind ourselves of these important scenario’s every now & again.

I know many of you follow James’ inside-outside bar strategy across on the other thread, so thought I’d throw the lower timeframe example in as a timely offering of how you might tie all the relative pieces together when assembling & blending the information from the different timeframes.

A few of you might already be using something similar & if so, then cool. If not, then you might want to begin taking note of these types of price activity on the larger (Daily & 4 hour/1 hour) timeframes as the price action plumbs the current extremes on a few of these pairs.

Any exhaustion ( & potential reversal) behavior on the Daily & 4 hour particularly, will display similar traits at the bottom as they do at the top. Any doji, spinning top & bullish engulfing activity should be closely monitored & actioned via your smaller trigger timeframe charts.

As an exercise, simply scroll back on a few of your favorite pairs & see if you can identify similar behavior where you might have been able to advantage yourself both long & short during the repeatable price action behavior.

Crowd mentality always displays itself along similar lines. If you know what to look for you can better prepare to place yourself to the correct side of the flows!!

Thanks for this post. This was real informative for me. I'm very new to forex. I placed my first forex trade 3 weeks ago. I traded a week and a half using James IB system. Ultimately I felt like I was just too new, uneducated, and inexperienced, i.e. not looking at the prevailing trends, support/resistence, fibonacci levels, etc.

So while that first week I was somewhat successful blindly following a system, I did not feel in control because I really did not know why I was doing what I was doing. I was just doing it because an IB or OB formed. I did not like that not being in control feeling. I want to be the one in control. I do not want the system to be the one controlling me. Therefore, since then I have been reading and studying literally every waking hour that I am not at work for the past week and a half. Hopefully I will "get it" soon. I will go back to James system and hopefully incorporate it into my own as well once I get educated (hopefully soon).

The reason I am fascinated with your post is that in my many hours of reading one of the themes I see is a "top down" approach using multiple timeframes. Also, I read about the importance of a least one or two other confirming signals.

One thing I can't seem to get my hands around yet is what timeframe to actually use to find the entry point. In a top down approach I see that we look at larger timeframes, i.e. daily, 4 hour, 1 hour etc.

My specific question is for intraday trading when you see a good setup confirmed by whatever indicators you use in your trading toolbox, do you then just drop down to the 15 minute and then try to find an entry point off that chart? I'm confused because sometimes I see stuff on a chart but then if I were to drop down to a lower timeframe to make the entry I obviously wouldn't necessarily see the same setup based on the indicators I am using. So does one look for other confirming indicators on the lower level for the same direction that their higher level confirmed? For example, if I see a head and shoulders pattern on the daily and the neckline was just broken, would a top down approch suggest I go to the 15 minute perhaps and look for confirming short things such as stochastics at overbought hooking down(IB with it too if following James system), MACD bearish crossovers, etc?