Sorry for my vague description, but I was talking about the corrective price action AFTER the candle you have marked “2.” and specifically the few candles before the “syonara!” vertical line. It all depends on your target distances and stop loss distances of course as to how much of an issue it can be. I’m looking for fairly small moves of 10 to 20 pips (on GBPAUD which is volatile and probably more prone to fakeouts/noise too) so my stops need to be pretty tight. The bull and bear fight is not over until the close IMO and I don’t trust those sneaky market makers!! The last 30 seconds of the candle can be an absolute nightmare or better than xmas at times! lol
Anyway I don’t want to detract from your awesome thread I just wanted to give a different option for peeps to look at. I look forward to seeing more of the way you read the charts because so far it has been a great insight.
Ah yep I’m with ya. For me the “system” if you like, is with the trend, an interaction with the 14ema and NDNS, so for that example the ‘2’ candle has some big stopping volume (that’d have me on alert), on that chart once the price interacts with the 14ema we’re in the clear.
And no probs, all and any comments welcome eh, there’s no detracting from the thread at all. I often (too often) enter before price tests the 14ema but the market/price/charts always smacks me in the chops when I do, and stops me out. So I’m leaning toward making a 14ema test a hard & fast rule.
Here’s a really nice example of Stopping Volume, as discussed in the introductory posts here.
On the AUDUSD yesterday, a large bullish opening range was formed, then a strong break-out long above the previous day’s high/sellers. I like it when price really breaks out of the previous day’s high, a good sign of buyers.
The breakout candle though has extreme volume and a big wick on the top (sellers/stopping volume). My take on Stopping Volume (and it’s only my opinion/how I trade) is that the selling power is situated near the top of the wick. It’s not a sign of a reversal, but a temporary pause in the trend. Either way, I mark the top of the wick as a bit of a new resistance line, and any entries I take on this pullback have to meet 1R/1:1 using this area of sellers/stopping volume as the target.
Once our price pulls-back to the 14ema, without taking the stopping volume into consideration, this would be a signal to go long (as shown by the green arrows); uptrend, pullback to 14ema, and a sign of No Demand volume. But using the stopping volume price as a target or a bit of resistance, this trade offers a poor R:R. Price bounces off the NY high nicely and offers a much better R:R.
For me though, the even better R:R is once price goes long from the Previous Day’s High, breaks through the stopping volume price & offers a very small pullback and No Demand Volume.
In MT4, try view -> navigator -> then in the list of indis, right click on the S&R indi & click “modify”… In the meta-editor click the compile button (top middle), then in the log at the bottom see what the issue is. My guess is that the old indi will use a fullstop (.) as part of the code, simply change that to an underscore (_) or something similar, then click re-compile and hopefully that solves it
Could you elaborate more on the opening range? how many candlesticks/time are we talking about from market open? Should the breakout from this range have significant volume or no volume??
I’ve read on the mad scalper thread "don’t trade into the SR. So with this strategy it’s always trade on breakdown and breakout?
What do you mean when the 14ma and 50 ma is flat?can you please show an example?
How do you trade the hours in between openings? or you don’t?
Hi Pipoy, glad that compile worked in the metaeditor.
The opening range (for me) is the high and low of the first 5 minute candle, of Tokyo open, frankfurt open & NY open. When price is inside the opening range it’s in limbo.
The very next candle after the opening range can breakout out, or it can take half an hour, this varies. I’m looking for a clean breakout either above or below the opening range, followed by a weak pullback, weak in terms of both price momentum AND volume.
This is similar ot madscalper, I wouldn’t trade “into” the low or high of the opening range, but much like S&R, once price has broken through and made a weak pullback, it’s high probability that price has broken the S&R (or opening range).
When I say “when the 14 & 50ema are flat” it’s when price isn’t trending strongly. The EURUSD today is a good example, the EMAs are fairly flat/messy, then we get a nice break below the opening range.
I do trade the hours between the Openings, a couple of hours after Tokyo, and a few hours after Frankurt, then that’s me for the day.
Tried this today JN, London open and NY open. It was like clockwork. Thank you for sharing this, I’ll continue to play with the system. How long have you been using this strategy?
BTW. When do you usually close the trade? do you wait for the trend to reverse?
Ah nice, the first pic from a forum reader! Cheers.
The London Open you’ve got there, the entry is about 50 minutes after London Open, the 2nd pink down arrow highlights the weak pullback.
This New York Open is due to the US ADP Non-Farm news, too volatile to trade, just luck that it went that way, beware of high risk news events eh, they can cut you in half.
I did a post a few “posts” ago about trailing a stop, will read back and find it.
Lovely price action on GBPJPY at the high of the Asian range, about 2 and a half hours into the London session. A nice bearish pin bar with reasonable volume, followed by a higher volume bearish candle which broke and closed through a bullish trend line.
Risky business there, 10 minutes before GBP PMI, could have gone either way
Much better (higher probability) entries is a nice opening range pullback long on UJ around 35 minutes after London Open, or a pullback at 10:30 on EU, both with the trend
Very excited that you’ve started spotting these opening range breakouts!
One comment though, look at the volume of USDCAD during the Europe Session, and now check it out during NY. It’s quite a low volatility pair as both US and CAD aren’t trading it at the Frankfurt Open, both countries are still fast asleep!
I find the best at the Frank/London Open, are the EU and GU, and the EJ and GJ yen crosses. UJ itself isn’t bad either.
The only reason I had the USDCAD chart open was that I attended a live trading session yesterday, where a trader was demonstrating his scalping strategy. In essence, he was using 15 minute and 1 hour stochastics to confirm price action entries on the 5 minute chart. He demonstrated his strategy by taking a risky counter trend trade which hit its stop half an hour after entry.
EU/USD
I think this is what JN was saying that the 14 and 50 EMA is “flat” on NY open which is not a good entry to do because you’re not sure if the trend is up or down since the 14&50 are stuck together. First move was that it broke down from the opening range but the EMAs wasn’t conving enough then it shot up with volume but had a hard time breaking the resistance from the past Asian high, you can see 4 no demand indicator light up here then broke down the price.
The no demand is actually a good indicator to verify your entry imo. the trend seems to go up but with the multiple no demand lighting up,i would have second thoughts here.
One more chart then I am calling it a day. Some excellent low demand volume on virtually every retrace on the down trend on the USDCAD. Kicked off with a some nice price action (increased volume on an inside bar). The yellow band is the opening range (New York)
This one’s on the EURAUD, getting a bit exotic! Firstly, the EMA’s are fairly flat but down (14 below 50), so we’re slightly bearish, but a session open can always change these things. Massive news announcement due, which breaks us below OR but then shoots us back up.
Let’s talk about the big spike. Huge wick on top of a bullish candle, these are the sellers. BEcause it’s so big, there’s a “range/zone” of sellers for me. I wouldn’t be buying in this area of the big wick.
Price comes down & tests the opening range for a long, then tests our area of stopping volume sellers to reverse. Finally price break below the OR with the trend, tests the 14 ema and offers a lot of No Demand, price takes a while but finally shows us where the safest entry is.
One thing on trading crosses, you have to keep an eye on your base pairs, in this case I’d also be looking at EURUSD and AUDUSD for stopping volume and previous day’s high and low. This is why I don’t trade crosses to much, there’s too much to monitor.
This one’s a cool one to look at, refer to the previous post for more info on stopping volume and the area of sellers. I also want to strip away the chart because I want to be using the EMAs as a guide only. Like, the trend is “flat” not because two lines on a chart are flat, but because price is flat (same for a trend).
When you get a huge spike in price, this throws the EMA’s out (as they’re an average, it’s like making $1 per day, and then one day making $100, it’ll skew your average). Anyway, when there’s a big spike in price, you can be a bit more subjective about trend.
Refering to one of the first into posts about swing highs and lows etc, this is how I read the USDCAD from last night.
I had a good day demo trading with the strategy today. I made 15 pips on GBPJPY, 19 pips on GBPAUD and 27 pips on XAUUSD. I broke even on trades taken on GBPJPY and XAUUSD. With better management (difficult on the 5 minute time frame when juggling with life) all would have been profitable trades, but with a 5 pip stop loss, todays return would have been more than satisfactory.
The last 30 seconds of the candle can be an absolute nightmare or better than xmas at times! lol
Cheers.
