Yep, that’s it. Nice chart. The RSI doesn’t tell you anything you can’t clearly see in price action. We trade price, not RSI. But it’s important because other traders are watching it. Now that you have created a junk chart, may as well load it up with junk. Throw a 100SMA, 200SMA and 50SMA on it. Might as well throw a stoch, macd, and adx on it as well. just use default settings, or customize as you like. It doesn’t matter. That should be enough to cloud price and let you see what people see who don’t know how to read price. That’s about half the traders out there, so it is something you need to know about.
Hi,
I’ll add my thanks to those from others. I think this thread is a great idea.
I’m still behind on Tymen’s thread but working to catch up. In the meantime, allow me a couple of comments and a question.
Comment 1: With regard to the variations in candle displays because of using different brokers and the resuting differences, I think we could use some ground rules early in this stream on how to handle those differences. One thing we might do is all open an account with a given broker (e.g. GFT - the one Tymen uses) and use that one as common ground for discussions.
Question: The biggie for me is: What are your 10 pairs? I have restricted myself to 6: GBPUSD, AUDUSD, USDJPY, USDCAD, EURUSD and NZDUSD. Those choices came from a consideration of both spreads and correlations. I have chosen to stay away from pairs that are highly correlated with these. For example, I do not try to trade USDCHF and EURUSD at the same time because they are so highly (inversely) correlated.
Comment 2: Purposely left 'til last because it is relatively minor. May I suggest that we all give serious consideration to making more use of Private Messages (for those who can avail themselves of this option) particularly when the comment is directed to one person (e.g. notes that say little more than “thank you” clutter up the thread but add nothing to its content.)
Would appreciate your thoughts.
Thanks
I noticed that my closing price was the same as Graviton. I use IBFX. They have both mini & micro accounts. I can trade as low as 1 cent per lot if I want.
In addition to the three I listed are audusd,eurchf, usdchf, usdcad, gpbjpy, eurjpy, eurgpb. Though if one doesn’t act right, I may drop it and replace it with another.
It’s not that critical as long as we have the majors and some comdolls. The number 10 is arbitrary, but you do want enough to give you a good chance of finding 3 to 5 trades each day, and you don’t want to miss too many really good moves on majors. Let’s at least comprimize on 8, eh?
As to other stuff posted here, it’s no big deal. Once you learn these basics, it just practice. I’ll check back in and answer any questions, but it’s simple really. Just a couple more items and we’re done.
As far as correlated pairs, I haven’t see much effect one way or the other. But that’s just me. I just take the best trades and trade price. I don’t even look much at the charts once I have entry. I watch the prices change on the profit line and if the price goes up I buy more and take profit, per my 5 lot strategy. If the price goes down I exit according to that strategy. For me at least, once I’m in, it’s all about price. Looking at charts is a distraction from managing positions based on price. with 3 or 4 positions on 3 or 4 pairs, some days it’s all I can do to pull profits off fast enough, put more lots on and make sure I drop any losers fast. Customize as you like. I can’t say whether it will make it work better or worse. I only know what works for me in the end anyway. Till it be morrow.
Well, I’ll clarify a couple statements. The goal is to have 5 pairs to trade. Some days I get 5, some days less. I take what the market gives me. I may get three on fairly quickly, and then review charts of others on my watch list and wind up with 5 in a few hours. But it’s important to not force a trade. Just let it come to you like the USDJPY looks like it will. The diversification of 5 pairs really offsets many other problems.
Sometimes I will stop and reverse quickly if I see I’m on the wrong side of a pair and I have an entry going the other way. More often though, I just close a pair if it’s not performing. If things get slow, I may check back on it and I may even put it back on later, but I will never allow more than two losses on any pair in a day. You just have to cut it off somewhere. More on trade management tomorrow.
Good Thread to read. I am looking for trading higher time frames offlate due to work commitments. Two or three trades per week should be good enough for me.
Regards,
Muthu.
thanks Graviton, no question at all.
everything has been explained in details.
10 hours or even more that you have dedicate for us
are great effort for the next step.
I have to learn alot, I will devote additional 10 hours analyzing pairs :rolleyes:
then I’ll come back and I’ll be ready for fun, my seat belt fastened 
OK. I’m going to add EURJPY to my list. I’ll just have to watch and be sure that I’m not taking opposite positions whenever I have multiple positions (something that has rarely happened to me).
As you say, a few trades per day …or …even a few profitable trades per week would satisfy my goals.
re: forcing. AGREED!! Don’t do it.
re: USDJPY…Looking for an entry around 93.90 (basis - H1)?
re: closing a pair that’s “not performing.” Hmmm…Could use some clarification here. What little I have learned suggests that one “should” let a trade run to either the profit target set when the trade was entered OR to the originally enetered Stop. The argument being that IF your analysis was correct you don’t change parameters in the middle of the trade. Nonetheless, your idea of closing a trade if it’s not performing raises an interesting point. Given an initial set of conditions (T1 and SL) how do you determine “non-performance” as long as PA is within that range?
Many thanks, once again, for all that you are doing to help us in this learning process.
Graviton, Here is my feeble attempt to analyze multiple time frames. This is EUR/JPY.
Monthly shows clear downtrend however appears to be entering a squeeze.
Weekly still shows downtrend but may be leveling somewhat.
Daily shows slight uptrend with very bullish candle crossing the mid BB.
4h appears to be trumpeting with a hanging man close.
1 Hr also has a hanging man close with the lower BB contracting.
30 M…don’t know waht to make of.
So…I don’t know exactly why but I think the analysis tells me that this pair is going to go up in the short term. Please feel free to rip me on this. Won’t hurt my feelings.
Good question. The simplest thing is just to stay with the system as described and either you make a ton of profits or it stops out. Having diversified among 5 pairs, if our analysis is right on only 3 of the 5 we will do very well indeed, in the range of 100 to 200 pips per day with very few losing days and hardly ever a losing week.
The problem with deviating from the system is where does that deviation stop? I think the only reason we can use to justify deviating from the system is the most fundamental rule that, “Trading capital is sacred”. Say our entry requires an entry with an unusually wide stop. For my system that would be anything over 20 pips.
First of all, I would say, that’s a bad entry. Don’t take it. If you are patient and your analysis was correct, you will get a better entry. If your analysis was incorrect, you will have saved yourself 20 pips of valuable trading capital. But let’s suppose you are in, you have three pairs performing very well, one near BE and this one drifting down over a long period of time so now it’s down 10 pips including spread. This is not a good trade, but once you are in a trade your analytical powers drop to that of a Neanderthal. What to do?
In my system you have two choices, stay in the trade until it stops out, or err on the side of preserving capital and closing it early. Either choice is acceptable in my system, since if we are going to make a mistake it must always be on the side of protecting our sacred trading capital. I do encourage some flexibility in trading systems, but only to that extent. So if you are having a bad day and have a few that are doing this to you, probably due to some new fundamental news that has come out that you couldn’t anticipate, then it’s not unreasonable to close one or two of the worst performers to further limit downside risk to your trading capital.
But in the end, you are very correct. In the vast majority of cases that news will be digested by the market and it will come roaring back, only to find you aren’t there when it does. This known error is the only one allowed, since protecting our sacred trading capital is a prime directive that can override any other rule or analysis. After you miss a few roaring comebacks, you’ll be very cautious about using this allowed and known error. But it’s always there for you. You can always close any trade any time in the name of protecting your sacred trading capital. If you think this is foolish, to allow a known error in the system, you can remove from your version. That is to say, removing it feels bad emotionally, so that is probably good. Your choice.
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Last week I had USDJPY screaming straight up and EURUSD screaming up at the same time. That’s the same as buying the EUR/JPY cross. But I understand your point. You have to do what you think is right analyzed in the clear light of when you are not in a trade. I’m with you 100% either way.
Yes, these crosses can be nasty.
Monthly-agreed. If it goes into a squeeze expect a breakout, but which way? We can’t tell. We have to wait and let the market tell us.
Weekly-agreed, this leveling is causing the squeeze to form in the monthly.
Daily-Yes, very bullish last candle. causing the leveling on the weekly. Really some good price action up. Yes, trend is up.
H4-Yes, we like trumpets. The hanging man probably caused by late Friday close out action. I was one of the guys taking profits there. I’ll see when I get to the H1. Trend is flat. When you have flat trend, look to the time frame above you for a clue, which is up and bullish daily.
H1- Yes, trend is up. The late Friday close out action is clear. The contraction of the opposite BB along with a price pull back off the top BB is screaming warning, we may be headed down from here. But, I can’t trade this down as I would like because the trend is up and the higher time frames are generally up.
30M - just a close up of the H1 action above, PA down, trend up. This is where we start looking for a good retracement entry. If PA moves down to the mid bb and turns to resume trend, we will probably have a good retracement entry on a lower TF. Almost all our entries will be made off a retracement off the main trend, so that’s what we are always looking for.
15M- Going on down a bit to see if it confirms my search for a good retracement entry. Oh yes, into a squeeze. Watch for a bounce off the lower BB for entry. That bounce will originate at lower TF’s and filter upward to this 15M chart.
5M- Nothing to see here yet, but if M15 is going to give us an entry, it has to come through here.
1M- This is where our entry will start forming. Well actually, it will form in the tick chart and this is where we will see it first, probably in the form of a bb bounce off the lower bb and an O-O or O-BB move up.
This is how we tell the future of the M15 retracement entry we are looking for. We build this pretty picture in our head of what we expect to see. If the trade follows that picture, we take it. If it doesn’t we don’t.
The purpose of this exercise is a treasure hunt. We are looking for trade set-ups using out multi-time frame analysis. If we find one, as we did in this case, we put it in our journal and watch it to see if the picture plays out as we envisioned.
If we can’t find a trade set-up, we ask ourselves, what has to happen to give me a trade-setup. What else could happen? Then we put those possibilities in our journal and watch for them. Almost always there is something that can somehow happen that will give us a trade set-up.
These pictures of possible futures we create in our heads and write down in our journals are the treasure we hunt. If the picture works out, we’ll make lots of pips. If it doesn’t. We’ll toss it away like the lie that is was proved to be.
We do this for each pair. All that’s left to do then is go collect our pips like a farmer bringing in his crop.
This gets much easier the more times you do it. But never forget, it is not just an exercise in analysis. We are hunting the treasure of those pretty pictures of possible futures. Don’t give up until you find one, or more!
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I obviously have a lot to learn…
The daily has a single bullish candle the top of which is closing in on a down trend line. Is the “up trend” because of the trend which could be drawn connecting the lows from about 21 Feb?
H4 trend is flat? There are three very strong bullish candles preceding the one (in my case) or two (in the charts shown) small “uncertain” candles for Friday’s close. Why is D up but H4 flat?
H1 is up? Sure seems that way, based on the action over the past 10 days or so but the last 5 have been flat. With five “uncertain candles” for the past five days, why isn’t this trend flat?
Again, I say that I obviously still have much to learn.
Thanks for any help.
hello all,
I have analyzed five pairs usd/chf, usd/cad, eur/jpy, gbp/jpy, eur/gbp
Graviton, when I read your analysis of the pairs it looked very simple. But now I see that everything is not so simple. Sometimes it’s hard to determine the trend direction on monthly charts.
For me its difficult to recognize the entry points.
Here’s something that I done (as always soory for my english)
USD/CHF
Monthly, there is long engulfing pattern in the end of 2009,
Price still below MBB. It looks like PA is going up, but PA is kind flatly a bit
Weekly uptrend, down trendline that that runs from march 2009 has been broken in Junyary.
is daily chart flat? There is current extreme retracement candle.
4H, uptrend, PA is below MBB
1H – downtrend, BB is shaped as sausage
30M uptrend, BB sausage, Price is above MBB
10M, uptrend, the price is in BBe squeeze
It is slippery.
USD/CAD
Difficult for me to say is it uptrend or downtrend? But the PA is going down. And pulling MBB down
Weekly is in strong downtrend
Daily downtrend but its possible PA reversal
4H, downtrend, PA below MBB
1H PA is in the squeeze BB, below MBB, extreme candle produced CBL line for short
30M, Difficult for me to say. is it uptrend or downtrend?
10M downtrend, PA below MBB
we can go short
EUR/JPY
Montlhy downtrend,
Weekly, downtrend down trend line that that runs from October 2009 hasnt been broken yet.
There is uptrend on daily chart since march 2010 and the price is in Symmetrical Triangle
4H: uptrend, we have extreme candle and good chance for the price retracement.
1Н uptrend, opposite BB contracts,
30 Min chart is in strong uptrend.
I wouldnt trade this pair
GBP/JPY
Montly downtrend, there is PA retracement
Weekly, I drew downtrend line that has been run from august 2009, it has been broken 3-4 weeks ago.
Daily chart: PA is continue to rise after 50% of retracement.
4H: PA is very closed (like 50 pips) to the Resistant line
1H, 30M: there is strong uptrend,
15 Min : PA in BB squeeze, its where the trend usually starts. The problem is will it go for retracement or it will continue to rise. I think if the price will go down just for a small retrasement and it then will rise
I would definitely choose this pair to trade long today.
EUR/GBP
Monthly: uptrend, but currently PA on its way down
Weekly: PA close to support line. MBB is going down
Daily: I can see long engulfing pattern, that formed last Friday/
4H, H1: PA bounced off the Resistant line, MBB is going down
15M:MBB is going down, PA is below MBB, I’ll wait to enter short or long until
resistant level 0.8695 or support level 0.8715 is broken
can someone please submit 5M chart of usd/jpy I would like to see what line we are waiting to be broken.
FYI, I added some more description above to my discussion of the EURJPY above, so if you read it earlier, you might want to go back and read the ending of the story
Oh! I left this part out! LOL, my mistake. For a very quick read of the trend, I use the direction of the mid BB. That way I can just flash a screen up and pick up a trend reading. See if this works better doing it that way.
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It’s only this hard the first time. After that, it get’s a little easier each time you do it. After a month or two, you will probably be better than I am. I won’t be satisfied till that’s the case. I’ll go through all your hard work and comment, though you can already see my comments above on Eur/Jpy
Just to make the point once again, this is analysis with a purpose. It has a very definite direction. We know just what we are looking for. We are looking for trade set-ups. Either one that exists now, or one that could possibly exist in the future if something changes. Don’t give up until you find one. If you can’t find one, ask yourself, what is the easiest thing that could change to give me one? Carry on.
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