Alternative Technical Templates

Trading Systems Free Forex Trading Systems
856

[quote=John P.;57957]
In the name of contributing a chart, here is GBP 15M Thurs – NY session showing a bounce off previous resistance combining with a James IB entry. The times are NY. The wait for that second leg down was over an hour. I took 1/2 at + 26, moved the SL for the other 1/2 to b/e, waiting to see if that smaller R would hold on retest. It did, but I had to leave for lunch so moved SL down to top of that green candle (20046) and TP to ~ the 00. The luncheon had an opportunity cost of another 50Ps or so :rolleyes: but no complaints.

This is a nice trade John. A clear rationale, use of price action as your guide, a well proven trigger and a clear management plan for the trade. Just keep practicing this until you can do it in your sleep. Glad your levels were similar to mine (unless we are both wrong!). Seriously though there is no right or wrong, just useful or otherwise. You will see new traders who debate whether they should use candles, open/close, tails etc. It doesnt matter as long as it helps you as an individual. On my longer term charts I use a line chart as I find it easier to mark up, but when I dial down to my trading chart then I move to candles. The 2 together reinforce that it is a range of values I am looking at. I have also been trading 15 min charts for the last couple of years but in the never ending search to do less trades with a better return I have been looking more seriously at the H1 level. Keep up your good work. From here it is just practice practice practice. Oh and did I mention practice!

857

Ditto Tony’s comments. That was a well planned & executed trade. Keep your observations along those lines & you’ll begin to make life an awful lot easier for yourself down the line.

The IB/OB trigger off that template (15m) timeframe is a very robust & sensible application, especially when executed in tandem with s&r & any near-term directional flow.

I see where your frustrations were coming from re; the multiple line scenario on your charts. Obviously you’ve now discovered that the higher timeframe s&r zones are simply cascaded down onto the lower timeframe references & traded as one when they pop up on the radar.

I agree with Jos…a 60m template reference might ease & simplify your workload somewhat regards identifying the short-term action zones if you’re triggering via a 15 or 5 minute chart.

You should be able to capture a good percentage of intraday trades utilizing the 60m as a guide.

858

Hi guys:

Thanks for your replies and commentary. I am very pleased in your willingness to keep the conversation going here. Quite helpful to me personally and no doubt many others. And sorry for the delay in my reply but we have a hurricane here and i have been surfing two days straight. Combine that with getting up for the London open, and I am pooped (yet extremely content).

T – (Since I still havent finished the entire thread yet), what did you finally settle in on as your bread and butter trade(s)? From what Ive read to date, you were turning it over somewhat, perhaps going with longer term charts and less screen time?

Here is (hopefully legible) EUR charts from yesterday (July 22) I posted in another thread (to no comment). Times are EDT - USA. For the purposes of this thread, the entry worked well off previous R zone (blue line) along with James IB. I took 1/2 at next R-level (5882) had a TP set for 2nd 1/2 at upsloping trendline (gold), which triggered. I then awaited re-entry anticipating some consolidation at that TL as it was long running and battle-tested. The 60 SMA is also nearby- visible on the 240. But it barely took a breather there and I completely missed that next (substantial) move down. In hindsight, guess I was too married to my TL. Not sure what, if any, lesson to take from that. Thoughts/criticisms (anyone)?

859

Hi John
nice trade again with a clear entry. with regard to management yes you were a bit too married to the TL as you got no exit signal at that level but this all comes with practice

My aim was to get down to about 3 high probability trades per week. I have made it to about 5 on 15 min charts with a win loss of about 50% but 2-10R on the winning trades. As Tess rightly predicted it took far longer to make the change than I expected and is not something that I will do again unless I feel compelled to. I am looking at the same approach on an hourly chart to see how it would perform. In the end my bread and butter trade has evolved over the year and I am keeping the details to myself but broadly I use an adaptation of the Cowabunga method for entry which as you might guess includes the use of price action rather than the inside outside bar (although will use this and other tools on occasions). Trade management is entirely by the observation of supply and demand and action at those areas. I stick mainly to the GU these days only rarely moving to the Yen pairs

I have posted my trade yesterday which wasnt part of my bread and butter system but was an obvious set up. Clear demand at the round number as evidenced by the 4H chart especially. In fact if you have followed this over the last 24 hours or so the strenght of the 9900 level was very obvious. Any number of possible entry triggers off the 15 minute. Some concern when the bank of England minutes caused an upward spike that wasnt maintained otherwise a straightforward trade with target in the 2.0000 area



860

Sometimes these crutches (insert indicator of choice) can influence your psychology to such an extent that you end up either passing on a good potential trade or delaying the entry/exit, thus unduly impacting the profit/loss on an individual position.

There’s really no right or wrong answer or conclusion to draw from it in my view. If a trader feels they’re benefiting from the assistance of an indicator or a couple of price aids & it’s adding to their confidence in managing the trades, then all good & well.

I’m afraid you got to take the positive with the negative, & sometimes they’ll sling you a curve ball or two. As long as you understand & appreciate why you got caught (which on this occasion you appear to), then at least you can maybe begin to see past the indicator & begin looking just why the naked price action did what it did?

It’s all about trail & error. That comes with experience & unfortunately in order to amass said experience we’re going to expose our weaknesses as well as our strengths.

If you last long enough in this game you’ll begin experimenting by gradually deleting these crutches & looking at the chart in a whole new light.

Take your time & do it at your pace. As long as you’re happy with your own progress then you’ll continue to enjoy your journey :wink:

878

Hey guys, when trading the 4 hr chart my main trigger is a candle with a wick thats longer than its body. When such a candle appears in the direction of the main trand at a s/r level it makes for a good trade. However when i trade trend reversals using just the long wick candle as a trigger its makes for less certain trade. Being as it’s a 4 hr chart i cant always wait for a retest. Do you guys have suggestions on how best to enter trades such as these and what further confirmation i should wait for before opening a position. Will post examples of what i mean in a bit.

George

879

How do you ascertain that it’s an actual reversal & not merely a pullback?
In other words, what do you use to differentiate between the two?

If you’re trading primarily off 4 hour charts, you’re going to have to be awful patient in allowing price action to tip you the nod. If not you’re going to get tangled up attempting to trade reversals when in fact they’re likely to be pullbacks in the dominant trend.

One option would be to drill down into a smaller timeframe or two. Maybe a 30 or 60min? That would highlight any early potential topping or bottoming formations playing out at your previously drawn s&r zone.

880

Here is a chart of the GBP for today (July 31) that I thought was interesting, although it is trend (channel) lines and not horizontal S/R that is the interesting part (hope thats okay).

US GDP was released at 830 am New York time. The actual number was below expectations and the USD weakened against the field. However, the dollar began a retrace within the hour. With the GBP, the retrace completely reversed the initial reaction to the news move (5 pips from 100% retracement). The part I found noteworthy for the purposes of this thread was the reversal zone on the GBP created by the intersecting trend lines of opposite slope.

The attached 15M chart shows two upper level lines. The downsloping (blueish) is the top line of a downsloping trend channel from the 240M chart. The upsloping (goldish) is the bottom line of an even longer term upsloping trend channel on the daily (once support, now resistance). I just thought the intersection zone and the effect it had on price was worth pointing out (and wanted to bump the thread too :wink: )

881

The big advantage of researching & familiarizing yourself with a trusted set of rules is to offer you an edge.

As long as you’re confident it offers you a better than average chance of staying alive out there, then you can observe whatever it is that attracts you to the chart.

Simple is often best. Less to complicate the chart & more importantly, your head.

Price action is the seed of everything. If your set-ups or strategies are wrapped tightly around the basics of price action, then I guess you’re making life a whole lot easier for yourself.

If you can work a consistent game play around those trend lines & channels John, & your risk model sits comfortably alongside it, then you’re good to go.

A well versed set-up/strategy should afford you confidence that when it all lines up, you don’t hesitate in pulling the trigger. You know where price is at now, & you got a marker for where you’re going to make your next decision if price makes a run for it. Your back up or insurance is obviously your stop-loss, but that’s all part & parcel of the plan anyway.

Your lines highlighted an upper level on the 15min chart to maybe think bout taking action. I also had that zone earmarked for pretty similar reasons.

Only my markers were horizontal (my weapon of choice!!).

That upper zone highlighted on the accompanying charts showed a previous level of bearish activity or supply. Price found fair value there for a while before dropping hard out of the temporary consolidation zone.

We got lower tops on the hourly going back a couple weeks & the fundamentals aren’t exactly wearing a smiley face on the British economy of late, so I guess marking up that zone around 1.9925-50 was a fair option in my book? In my view we still got short-term downside momentum.

As price revisits the zone of interest, you can then drill down into a lower timeframe of choice & pick a trusted set-up to signal you in if circumstances dictate.

As long as you can identify an area to get you out if things wash out, then you can look down from where price came & plan for a timely exit or partial pare-off.

I’ve chosen the James 15m IB-OB/stochs set-up on this example, as it’s a very popular little set-up - but you could just as easily use one which favors your own preference.

The point being…once you recognize the behaviour traits that price is displaying (be they horizontal lines, angular lines or a combination of both) you need something as back up to get you in on the action as safely as possible.


15GU.jpg346×552 30.7 KB

883

Only my markers were horizontal (my weapon of choice!!).

OK, I admit that made me smile out loud.

We got lower tops on the hourly going back a couple weeks & the fundamentals aren’t exactly wearing a smiley face on the British economy of late, so I guess marking up that zone around 1.9925-50 was a fair option in my book? In my view we still got short-term downside momentum.

Now 300 pips lower (and counting).

I know you look at zones of consolidation or perhaps “fulcrum” areas. Do you also work the various patterns, such as wedges, pendants and the like? See attached 240 GBP for July.

Also attached up to the moment GBP 15m post US weekly UE data, post MPC statement and while Trichet is speaking.

884

No, we don’t pay any attention to chart patterns as a rule John. That’s not to say anyone else shouldn’t - just that we don’t have any use for them at all in our technical observations.

Re; your GBP chart. We’re not currently buyers of that pair. It’s in a confirmed downtrend, as referenced by the 240 & 60 minute charts.

We’re only interested in & focused on shorting that pair :wink:

885

Wow, this is a contrarian view … everywhere else I am reading how “oversold” people think it is and especially after this big Trichet-drop, everyone says “buy”. You think it is going to take out the lows of June, May, Feb and … Jan?? Do you have a downside target? And more importantly, after this last big drop, what bounce point would make a good short entry??
My estimate is 1.9521 which is the 200 ema on the 15’

Any merit to this?

889

Tess every time i read your thread i feel inspired to clean up my charts :slight_smile: Every time I read your chart I get a glimpse of your genius and I can’t help but feel like a better trader for having read your ideas.
thanks, john

890

That�s maybe one key reason why most folks come quickly unstuck in this business. We don�t pay any attention to what other folks are saying or levels they�re calling. All we need is there right in front of us on the technical charts & in the quality newswire missives. We definitely ignore all the talking heads & analyst predictions.

I would have to agree with this, im a junior equity analyst and one thing ive noticed is that analysts [B]must[/B] have something to say, when pressed for an answer you cant just say ‘im sorry i dont know the answer to that’. So definitely take analysts predictions with a pinch of salt. I would say follow your on analysis first before looking up on anyone else’s and trade what you see. I no longer try and predict where the market is going, i just sit and wait till i get a decent entry at a level that lines up with [U]my[/U] analysis

George

891

I agree … after that last explanation, I spent some time setting up a 4 hour G-$ chart with nothing on it but s/r lines … quite amazing! It is so clear looking back what the correct plays were and while that may seem true on any chart, I can see that going forward and just using price & those ongoing s/r lines it could really tell its own story.

Did you guys invent this yourself through trial and error ? or did you learn it from someone else, and then just perfect it? How long have you been trading this way? And … do you trade the G-Y?? I would be really interested to hear your input on that … I started a thread under GY on this board for input on that pair which is my favorite to trade … I like walking on the wild side I guess :D:D

Thanks for your help!

894

Hi Tess, since the 4hr is your reference timeframe do you fire of trades using that timeframe or do you drill down lower?

Also what are your favoruite triggers to initiate a trade with?

895

Hi pipvader,

I use the 4 hour graph as my working tablet. It’s where I plot my potential reaction levels (s&r zones…supply-demand area’s etc). It’s my primary reference as you say.

Given we like to action the majority of our positions on & around our plotted support & resistance zones, then sure I’ll drill down to a 60min or a 15min to look for an appropriate entry level in which to trigger a move.

Once a level is plotted via the 4 hour, it’s there for price to interact with. It’s still going to butt up against the level on a 1min, 5min or 15min chart. It’s not the timeframe which dictates whether or not a level is playable, but the price reaction as it approaches & interacts with the level.

Two of my favorite triggers are 1-2-3’s & breakout-pullback triggers. I’ll play them via a 5 or 15min frame (plotted from the 4 hour levels) if price sets up accordingly. I’ll also play a breakout of an inside/outside bar from a 60 or 240min frame if it’s butting a key s&r zone. Again, I’ll drill down to take a look from a tighter timeframe chart to refine an entry if desired.

I particularly like to witness exhaustion/uncertainty playing out at a key s&r zone. You can identify that type of behaviour by the way the candles/bars form on & around these levels.

Doji’s, spinning tops, bearish & bullish engulfing bars send out very powerful signals that a market is undecided about direction. Especially if they print as double, triple & multi-touch tops & bottoms.

There are any number of combination price aids you can utilize out there to gain a heads up, main thing is to step back & try get confirmation from a couple timeframes as to the current behavior of price before executing your deal.

897

Well this input is causing major changes to my templates & indicators folders!

I spent much of last night housecleaning … sort of like clearing out a messy garage, eliminating useless indicators & templates I no longer like.

Now I am left with the 4 hr one which I can switch to 1 hr and 15 min … what I do is draw a circle when I see a pivot on 4h that could be a change of direction … then zoom to 1hr and check inside the circle to see what is happening, then to the 15 min (the circle becomes humongous!)

Using that method, already I see trade setups on Thursday that were glaringly obvious & would have made hundreds of pips.

Ah … next week should be fun :wink:

Thanks to Jo & Tess for all your hard work and generosity in sharing it with those of us still learning … :cool:

898

Thank you (& other recent posters) for your kind comments. It’s really great to see folks enthusiasm & positive attitudes towards the info being relayed on here!! But don�t overlook the terrific contributions in the thread from other members, especially the work of [B]tonymand[/B].

[B]Tony[/B] has incorporated some of the basic principles & put his own unique stamp on the way he works his strategies around the concept of s&r observation. Take the time to browse his posts (with accompanying charts), I�m sure you�ll find plenty of quality material to inspire you back thru the pages.

Most of the example s&r work on here can be taken away & used as a foundation or base for your own individual templates.

If you want to incorporate additional price aids such as Fibonacci, Pivots or trendline analysis to run alongside some of this s&r material, then knock yourself out. Trial & error will determine whether you can find a consistently profitable use for them.

Just because someone else doesn�t find a particular item useful, is no reason not to explore the possibilities of you utilizing them. There�s no right or wrong in trading�…only what�s right (or wrong) for you!

Most of all � have fun with it. It�s not life or death. Demo systems are there to test & iron out idea�s. Make your mistakes on the demo before you risk your hard earned $$�s in the live markets. Then gradually feed in small stakes, building up to your desired level as your confidence grows & you get to grips with a new method.

899

You are right Tess. It is indeed inspiring to see a new generation of traders discover the thread and incorporate the ideas here. As always I have enjoyed the latest examples from you and Jocelyn. Jimmy Young was prescient as always in picking the strengthening of the dollar to virtually the day it started. Its been an exciting and wild run down on my favourite pair. I wonder how many have tried to fade the move instead of just finding a low risk entry and go with it. Quite a few judging by my bank balance! Trust all is well with you guys