Yes, I usually trade the late Asian through to early New York timeframe. The best value setups for me tend to occur as London and Europe come online. I’ll also line up trades into the overlap between London and New York but if I’ve had a good morning then I don’t have to take them.
I find it helps to think of the ATT material as dividing into setups and triggers. When I say “Carll’s” approach I basically mean that which he has spoken the most about for I’m sure he has diversified his tactics since his posts. So for the record I have “Carll’s method” as the following (to quote my Trading Strategy document):
The entry is taken on the 5 minute timeframe. The setup consists of a 1-2-3 trigger in the direction of the prevailing trend with a stochastic confirmer, all on the 5 min
[B]Carll’s Entry Setup[/B]
Clear trend on the hourly
Extreme stochastic on the 5 min
[B]Carll’s Entry Trigger[/B]
1-2-3 Pattern
Engage at break of point 2
The setup can be thought of as the checkpoints that the market has to meet in order for a trade to be considered. In this case it’s looking for a clearly identifiable trend (as determined using the 60SMA noted previously) on the hourly and then a stochastic reading of 20/80 on the 5 min.
Once we have a setup we then look to get into the market using a trigger. The 1-2-3 is a nice way of doing it as it provides additional confirmation of the move (see let the market prove you right in an earlier post) but has the disadvantage of not always occuring - sometimes price just takes off without looking back, or only retraces on a large move making the potential R return too small. For this reason I also use “Kevan’s Method” of setup and trigger as an additional option.
I have previously looked at the three ducks but decided the trigger (entering on the break of the most recent high) tended to reduce the return compared with the methods above which get you in sooner.
Here’s the Cable trade I missed yesterday because I was on vacation. It’s a classic example of the Carll method - downtrend, 1-2-3 at a lower high with stochastic hook. Plenty of range left in the tank to test the forward momentum.
It’s a beauty isn’t it. I was concerned that perhaps there wouldn’t be sufficient opportunities, as upon backtesting there didn’t appear very many identifiable triggers on the eur/usd & gbp/usd, but I simply expanded my watch list & included entries off the 15 minute too.
The big plus I’ve found is it encourages discipline. As long as I don’t chase the market & restrict my entries to only trading with the bias on the higher timeframe my damage is limited & failed trades are much more easily managed.
Its also valid trading it from 1H & 4H frames with the trend. Might require slightly wider margins for error, but if you qualify it with a 2 or 3 bar trigger as one of them (Jocelyn I think) explained in the threads, it offers some very impressive risk-reward opportunities.
I’ve been having some success with a very simple 1-hour & 4-hour modified ducks method. I determine the direction I want to trade with the 60 period ma on the 4-hour
But instead of using the 60 period ma on the 5-min as per the three ducks. Or the 5 & 15-min stoch as per Carll & company, I just look for “v-formation” candle patterns on the 1-hour chart.
In the babypips archives there is a 2007 thread titled “Trade the v-formation system”. It’s a very simple reversal candle pattern. You only need to check the charts on the close of the candles, so it makes for a nice simple 1-hour method. Great on 3 & 4 hour charts too.
Sometime I also use a candle step & close over the simple 5 period moving average along with the “v” pattern as a confirmation of the reversal.
It’s a pretty simple method that I can trade when I’m half asleep!
The “v-formation” is explained on the first handful of post, it’s very simple.
Looks good Matt. One trigger I find useful for entering on shorter timeframes once the bigger timeframe trend is clear, is actually Bollinger Bands. I wait for them to reach the outer band and then reverse and close across the 20 SMA. The trigger catches similar setups as the 1-2-3, but it has the added advantage that it can also catch the “messy” setups that don’t bother printing a nice 1-2-3 pattern.
You’ve just described a 2 bar reversal/continuation trigger.
It appears to be what cator was commenting on in his post.
I fully agree. It’s a very simple yet incredibly effective entry technique especially when prices are being driven on the back of sharp fear/greed reactions.
Absolutely - this type of simple structure can be wrapped around any choice of timeframe combination to suit each traders own objectives and risk profile.
Again, with the general structure in place for determining bias, trend and pullbacks, you can then choose from a variety of triggers to get you into the trade. The v-formation, which goes by a number of names, is a pretty reliable trigger - especially on the 60 min timeframe when paired with an extreme stochastic. It’s a shame the thread didn’t attract more attention but I guess those who take this business seriously will root out the gems on this forum whilst the masses continue their search for the grail. It’s well worth a look for anyone exploring this structure and considering trigger options to slot into their strategy.
Good end to the week as some of the prevailing trends extended into the close. With fundamental drivers in both Aussie and the Euro and the EUR/AUD trade was a no-brainer. A slightly less obvious one was EUR/NZD which had similar drivers and therefore a similar chart picture. On my platform due to spread differences I trade the inverse of NZD/EUR but it makes no odds.
We’ve had a long downtrend on the chart on the hourly which had me looking for entries and this morning we had a lower high on the 5 min coinciding with a stochastic extreme.
The first hurdle was resistance that coincided with the previous day low and once that was surmounted the next stop was the ADR which was my exit target which he hit early in the afternoon. We probably haven’t seen the end of the trend - the AUDEUR may well travel some distance if the fundamentals hold - so for those who prefer to swing trade this might have offered further returns next week. For me, I prefer to be out on the close unless I’ve entered from the hourly timeframe.
And at exit as it travelled its ADR. Price moved a little further before exhausting and consolidating as is often the case once price has covered its usual range.
very nice pre trade outlook, preperation & execution. Your analyses is a lot more assured & confidant recently & i am thinking it is maybe becose you have a solid foundation to work from & it is reflecting in your posts.
i hope you enjoy much success this year with your tradeing Matt
That’s a pretty apt contribution in which to bring up honorary men status huh?
You’ve experienced your fair share of frustrations attempting to put a framework together judging by some of your earlier posts & its impressive how you’re sticking with the bones of your strategy & allowing it time to offer you a view of its capabilities going forward. Most folks don’t do that, but then most folks don’t make it either do they.
It’s been a bit of a scrappy week this week for many of the pairs but the Yen and it’s crosses gave us some reasonable trends. For anyone following a similar structure to the one outlined in this thread there should still have been pips to be had. Here’s a couple that I took. Of course not all trades work out, for instance I did take a loss on the NZD/JPY on the 14th as the pair gave a strong pull-back day and didn’t bottom out to well after the end of my trading focus period.
First up is AUDCAD from early in the week. A strong declining trend on the hourly below the previous week low and a compelling fundamental story (China weakness versus US strength + oil) drew me to the pair. A lower high hook had me in and with plenty of range in the tank we were good to go. The first hurdle was the round number at 1.04 which we broke and pulled back, giving a potential scale-in point for those inclined. Once the range got into extended territory it was time to tighten the stops and exit on signs of reversal.
The second chart is EURJPY from Friday. A strong up-trend this time, a higher low with a hook and lots of potential had me into this one. The range would take price above 110 which had provided significant resistance back at the tail end of February so that was likely to be a hurdle which proved too hard to pass on this attempt. Trailing the stop had me exiting as price entered the late New York doldrums heading into the weekend.
If you’re focusing primarily on the technical positioning of your watch list, then if I were you I’d simply carry on doing that which you’re finding most consistent success with, which is legging into pullbacks via pairs displaying a clearly dominant & bias using the timeframe combinations that suit your style.
Concentrate on the price influences & drivers of [B]those[/B] pairs first & ignore the rest until they begin setting up in a manner that will encourage you to put them up towards the top of your watch list too.
The Yen is definitely displaying the types of technical behavior so far this year that obviously fits comfortably alongside your entry & management style. Therefore why not continue to make life as easy for yourself by focusing on taking bites out of that instrument every time it signals you in based on your setup & trigger criteria?
When things (contrary influences & drivers) begin to turn over on a strong bias such as Yen you’ll see it clearly & in good time on your 60 & 240m charts. Sooner or later it’s going to lose its appeal & something else will step up to take its place. But until then, take advantage of it.
Why get involved with pairs that you have to fight & scrap with?
Couldn’t agree more. My morning routine is to scroll through my list of pairings and note down those that are displaying that clear bias on the hourly - strong slope on the 60SMA coupled with HH/HLs. Once I have a short list it’s then time to take a closer look at what the pair is doing, where the S+R zones are, etc. and then waiting for an appropriate set up to occur.
Did that routine focus you in on eur/jpy this morning by any chance?
Nice clear hourly hook, confirmed with a 15 min hook into Frankfurt/London open following the slip during Tokyo to a s&r zone.
Yen still establishing itself as the higher probability bet. Just match it up with the strongest or more stable of its trading partners & get your bet away.
hawkmoon stuck that one up this morning as it began climbing away back up the ladder, but I guess you had it on your watchlist too.
Here’s a chart of that EURJPY. Pullback to support and then a couple of 1-2-3s to enter on, can’t say fairer than that. Perhaps my interpretation of the ADR consideration needs refinement.
hello to you matt.
yes, the prep is always the same with such a strong bias momentum.
locateing some suportive technical zones to begin observing the same old set ups & triggers on pullbacks.
euro-dollar was tradeing a shallow pullback dureing asia
euro-yen is still clearly bullish to higher low steps (see 4h frame)
identify the next s&r zone
wait for the double trigger set up puting odds in my favour
identify acceptabel risk with clear upside potential & go.
2 charts from the morning, trigger frame with the 123 entery
2 charts after from the european close of business with next days upper & lower boundary’s
if prices do not dip to the minimum hl at the 109.6-110 area, then wait for continuaton move & simply trail the stops
Nice work, thanks for sharing Hawkmoon. I hear you’re doing well and the future’s bright - I’ll admit to being slightly jealous!
I take it from your commentary that your preferred entry setup is the [B]hook on the hourly[/B] inline with the trend and support zone, entering by the usual trigger set?
