Alternative Technical Templates

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903

After several days of setting up charts & doing some backtesting, Monday was my first full day with this new (and simple) strategy.

#1 observation, it kept me out of trouble! My usual trading style would have had me buying the GY at way too high a price. Who knew it would drop below 209, and the pound below 1.90? Well maybe the more experienced people, but I didn’t … but the new clean charts showed clearly not to buy.
Why not short? As a general rule I just do not short the GY and since I am still new to this I missed the glaringly obvious signals that both the euro and pound were giving yesterday, screaming “short me, short me”.

Oh well, next time. :wink:

But staying out of trouble is the best because it means you live to trade another day :smiley: So I am very pleased with this beginning. As I get better, I can see some great trades ahead. Thanks again for sharing this!

And to new traders, if all the chatter about wedges & triangles and ma’s and stochs and macd’s etc etc etc is driving you to drink, then just start by absorbing the information here. You will have to learn candle patterns but the technical information you need to start trading this way will take days, not years to acquire. The rest is just money management & taking it slow in the beginning (and starting with a demo account until you are consistently in profit).

904

It’s good to hear you’re experiencing positive vibes by including this type of observation in your trade planning 4XStar. I’m sure you’ll continue to reap the benefits.

I’m not currently positioned in GBPJPY, but one of our colleagues here plays it on a regular basis. JimmyMac has a couple major vibration levels which he’s used to ride positions in & out on it’s recent journey.

I’m not sure whether they marry any of your interest zones, but for what it’s worth, I’ll haul them up here for general perusal.

I see you don’t short this pair? well, I guess you got your own reasons for that, but plotting & observation of the important s&r zones will offer each-way (long & short) focus, enabling you to zoom in the intraday chart timeframes as price bounces around these levels.

Anyhow, here’s his charts & levels. There’s a hammer type candle down yonder from 16 July, which printed it’s low @ c208.0 - That corresponds with prev zones of s&r (shown on the daily chart). You might want to keep that zone on your radar if & when price hustles down towards it.


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906

Oh, thank you for that! I am trying to learn the guppy’s ways because when you get on her good side, the ride is usually stupendous :slight_smile:

I guess I should have said I rarely short the pair, also because of the negative swap and for whatever reason I feel better when I am long, she seems to have a tendency to roar back out of the valleys she falls into. Although she can fall really hard as well!

For shorting I prefer the G-C.

Thanks to tony also for that input about the $. I tend to agree … whatever monkey business is going on, it may not be finished yet…

907

c208.0 certainly wasn’t on the Pound/Yen pit stop radar then huh? :slight_smile:
Blew straight thru it without a second glance. Next area of potential conflict on this leg down resides around the zone marked on the 4 hour chart.

Apart from the rebound at 209.70 it’s been a hard & hefty pop down off 214.0
No complaints from those short around that level, but these lower legs down from here contain one or two previous zones of busy 2 way action on the way up during March & April…

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909

You don’t require too many strategically plotted lines to be honest. Like the girls have said many times on here, they’re merely guide posts to offer a little each way gauge on the potential reaction zones as price gets batted back & forth along the route.

A little tip (which quite a few newcomers to this type of price activity have found beneficial on these instruments) is to look immediately north & south of where price is NOW (on a 5, 15min or 30min chart) & see if there is a busy zone or two of interest in close proximity first.

When price is making fierce, aggressive moves up & down the ladder like this it can be difficult to plot your watch levels with any degree of efficiency. Sometimes you need to look a little closer to home before stretching out into the higher timeframes.

What I tend to do is simply take a look at the smallest timeframe I generally utilize, & work up/down from there. It just gives me something to get a hold of when price is banging around in between my bigger watch levels from the higher timeframe charts.

You only really need two or three close proximity levels to work with whilst price is going about it�s intra-day business. Once it breaks away from these initial close proximity levels, then you can scroll out to the wider zones of interest to help you on your journey.

I�ll give you an example of what I mean here on the pound-yen 5 min timeframe.

The larger levels are still intact from the chart Tess posted up earlier, but I�ve plotted a couple closer proximity zones to keep my eye on if price decides to make a move back up to test out the momentum.

Try not to overcomplicate it. Just look for area�s on the technical chart where the bulls & bears had a little minor scuffle or difference of opinion! Those levels will quite often repeat themselves on back & forth movements until one side or the other wins the battle.

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911

Not often you see a move like this. The 4H shows the last place to get a retracement entry was on the retest at 1.9000 just before Kings speech. I have now had to dial out to the weekly to get a handle on the next zone of interest

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916

Hi I am very much interested in your thread, i have been studing forex for about a year and i must say, this is one of the most important information that i have read. Very grateful for that!!

I have some questions (if you dont mind answering):

  1. Do you use the cot report as an hedge?

  2. I know that all of you worked hard to find that hedges, and i don�t expect that you will share that, but i would be grateful if you could point the way, like best book, best blog, best analyst… or what you may consider important?

I will not annoy you with any more questions for now…:slight_smile:

My thanks (excuse my ingles, since I am portuguese)
Saraiva

917

Hello saraiva & welcome to the thread.

You can ask as many questions as you like, whenever you like - it certainly won�t annoy us. Your English is just fine :slight_smile:

  1. No, we don�t use the Commitment of Traders Report (COT) as any sort of hedging tool. We do take note of what�s going on with that information, but only as part of our overall analysis. It�s not really a priority item to be honest.

If we�re considering utilizing some sort of short-term protection (insurance) against one of our potential swing positions, then there are more appropriate hedging facilities out there such as options which would look at.

  1. The simple tools & work practices we utilize on a regular basis have been handed down to us from our Parents & their colleagues. We�ve also inherited a few research disciplines & templates from the various investment/trading firms we�ve worked for along the way.

I�m afraid we�re not going to be able to offer you any positive replies to your next set of questions.
We haven�t really read any of the popular so called �trading books��we were always advised to ignore them at all costs LOL, so are unable to recommend any of those unfortunately. But I�m sure other contributors will offer you a few pointers from their experiences?

Neither do we follow any analysts or trading blogs. We use our own research models & those of our colleagues & family (whom we trust implicitly).

As you gain more experience in this business you�ll quickly discover that the vast majority of these analysts & well publicized technical guru�s really aren�t worth following at all. Their records are barely better than average.

My main piece of advice would be to discover which type of trading behavior (short or medium to long term) you�d prefer to familiarize yourself with & then explore the options of that discipline.

Research the benefits of composing a simple trading plan or set of rules to keep you on track.

You can obtain a good deal of this & other types of general info by simply typing the subject matter into your browser/search engine.

Whatever you decide to utilize � [B]keep it basic [/B]& for heavens sake, [B][U]keep it simple[/U][/B].

Good luck & continue to ask the questions if you’re unsure :wink:

918

Hi Jocelyn thanks for your answer.

This picture is a trade i took last night, and the setup was good, i entry in a inside bar at 1.8774, the stop loss was the high of the swing and the take profit was at 1.8680 level. I know that i could hold my position for maybe to a take profit at 1.8539 but since i was going to sleep, i could not track my position, and i don�t like trailing stops so…

I know i could had other money management… but i�m still working on that.

My question is, i couldn�t find any importante fundamental support for this decision. Could you help me with that?

I know also that at 9:30 am (GMT) the “Revised GDP” was out and that pushed the GBP/USD from about 1.8680 to 1.8550, but that was something thar i didn�t considered (but i should have).

Most of the time i think that i don�t have the necessary information to entry a trade…should i rely less on the fundamental and more in the technical?

Thanks

Saraiva

919

Your strategies & trade plans are obviously still a work in progress, which is fine. It will take a while before you find a combination of tools to use in differing market conditions. You�ll also undoubtedly discard some things & swap them for other items of analysis along the way, & that�s all part of discovering your preferred template or base strategy.

During these early phases of experimentation it�s important that you record as much as you can about the strategy you�re using. It will benefit you when you re-visit parts of your trade plan later & really begin to hone down your method of interacting with the market.

It�s very difficult for me or anyone else to offer specific, individual advice regards your own personal trade tactics without knowing a lot more about you, your psychological & risk tolerances, your game plans etc. The attitudes & mindset which I bring to the market will undoubtedly be very different to yours.

We will both be looking at an instrument at the same time & draw different conclusions from the available information, including the current technical & fundamental biases.

[B]What�s important however[/B], is that you come to the table armed with a [U]very definite plan of action[/U], which will include a basic set of rules for differing market conditions.

At any time of the trading session, you need to know what you�re going to do if price goes up, goes down or moves sideways. In other words, whatever price is doing when you pull your charts up, your trading plan or strategy should indicate whether or nor a potential trade is setting-up.

The fundamentals (including the regular daily economic releases) can offer you a more in depth feel for what�s driving prices out there, & if used in tandem with the technicals, will help you to stay focused on the important drivers going forward.

It�s not a case of leaning heavily towards the technicals at the expense of the fundamentals, but trying to find a balance where you can understand & incorporate them into your daily research & preparation planning. Even if the bare minimum simply involves checking your daily calendar of events before you commit to a trade.

Much of this early work will be a journey of trial & error. If you feel comfortable with a certain aspect of technical analysis then stick with it & try to improve your understanding & application of it. At least until it proves either indispensable or totally worthless.

920

Sometimes the data’s influence on the market will be minimal at best. Other times even the high priority data releases fail to ignite the market, especially if they print in-line with the consensus & confirm the markets current bias. But it is information that the smart & influencial players pay very keen attention to, so it wouldn’t do any harm to familiarize yourself with :wink:

As Jocelyn has already stated, the important thing is to be aware of what�s printing & what the market is expecting from the release. I�m not suggesting you wait until every item of data has printed before executing your intra-day trades, but if you�re already positioned prior to an important release, it would at least afford you time to plan your options if the data surprised the market positively or negatively.

Half this battle is in the preparation. If you have all the relevant information at your fingertips, then you can make your next move or decision with a higher degree of confidence. It might not always result in the desired outcome, but at least you won�t be caught like a rabbit in the headlights.

921

I haven’t traded today, but taking a peek at one or two pairs on the ‘watch list’ this afternoon, I notice that the local s&r zones have held up & offered decent 2 way business on the Cable & Jap.

Using them as either launch pads (entries) or potential profit booking levels (if trading up to the zone from above or below) have acted as excellent barometers from late last week/early this week.

There are plenty of examples back in the thread of these types of price action behavior, & they’re typical of the action which drives the supply-demand chain back & forth around these swing pivots.

Keep an eye of the levels for future reference & see whether they marry up with any of your alternative analysis guides :wink:


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922

Thanks for that, it is so crystal-clear when you point it out to us :cool:

923

Hi Tess, I was paying close attention to that zone, i had expected a rejection seeing as existing home sales came in higher than expected. Any reason why we had bullish movement instead?

George

925

Nothing on our immediate radar to cause any undue concern George. Most of it (mild $ profit taking) will be down to the thin UK Bank holiday activity to be honest.

If you check your Cable hourly timeframe, the swing is still solidly intact & price will require to scale the previously mentioned 1.8780 before the Pound Bulls begin to get excited.

We got more housing data, + confidence reports & FOMC minutes tomorrow. Core Durable Goods & plelim GDP numbers hit the tape later in the week, so there’s plenty for the $ Bulls to chew over yet.

927

I have just finished my second read through this thread.

In the short time I have been looking into forex (9 weeks give or take) I have read through thousands and thousands of posts on different forums, littered up my charts with every indicator known to man, tried my hand at coding the ultimate EA, studied articles on fib levels, trend lines, candle patterns, gann lines, elliot waves ect.

In the last 10 days or so I have scrapped all that and focussed on trying to extract and understand all of the info from this thread. I feel like I have everything I need in this thread to succeed. Lot’s to learn and practice of course but the basic concepts are here.

Thanks to you all for sharing. The fact that this type of discussion is in the very small minority of all of the discussion going on in the forex forums on the web tells me this is the info I want to focus on.

JJ

929

I agree, you’ve certainly got enough material to construct a decent base or foundation. And that’s one of the most important aspects when devising a trade plan. If you don’t build from a solid base, then everything else is going to come tumbling down around your ears time after time.

One of the reasons this type of information is often overlooked or avoided is the fact most folks don’t want to (or cant) put the work in.

It’s initially mentally taxing & not easy to do the groundwork. Does that reflect why most folks go belly up in this game? who knows, but it maybe explains why so many folk are constantly in search of the “off the shelf” strategy.

We all know that route doesn’t work, but it won’t stop them from desperately chasing their tails all over the park.

Good luck on your quest to do things your way :wink:

932

i took both of these trades yesterday and today, both stopped me out before moving in the direction i thought they would. i triggered of an IB in both cases, i would like to know if im doing somthing wrong. Or is their something else i should be considering?

The screenshots are from what i was look at before the trade and after.

934

You are not necessarily going to win every trade. It took me 3 attempts last night to get my place at the party. If you actioned your trade in line with your strategy then you are doing nothing wrong. This was a clear retest of the previous 4H breakdown level where you are trying to discern whether it will turn back or go on. Remember the level is actually a zone so I had 10-50 as my play area although it did get briefly through that

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936

Thanks Tony, there was actually another IB yesterday on the 1hr i decided not to take because of my previous loss, i will be a bit more flexible.

When you say zone, do you mean that if price exceeded 60 you would not trade?