Technical Templates 2

This thread is a continuation of the original, which can be found here:

http://forums.babypips.com/free-forex-trading-systems/6632-alternative-technical-templates.html

1 Like

So I guess we might as well continue where we left off & remind ourselves how consistently these simple technical zones play out on the price map…

Current 4 hour frame showing last weeks high-low markers, with the price action maintaining a bearish (swing) tone into the Interest Rate gig.

A bounce off the previous weeks lows looks like it’s been resisted at the 50% point of last weeks activity, again another common technical staging point between important levels.

And the 15min frame tick boxing the rejection of yesterdays high.

If I had a $ for the times price has bounced & shifted away from these common levels, or consolidated them & continued on away to fresh ground, I’d fill my house from bottom to top!!

Very handy signposts to be aware of when you’re travelling back & forth on the price highway :wink:

just like to say thanks to [B]ALL[/B] for making such a great thread, IMHO the best around…anywhere. I have been LURKING here for six months or so, and it has been great for me in developing my trading and developing my strategy around support and resistance levels - and to hearing how genuine forex traders go about there business. Your charts and analysis, that are easy to understand and follow are much appreciated, and also highlights the preplanning analysis required to become successful.
I have improved out of sight (but still need ongoing practising) with repect to the skill to trade in those zones and entering trades with trending momentum…BUT i still require much more work in all parts of my trading… the more you learn the more it does appear hard to suceed. (just today i was explaining forex to a guy in the office and whilst i and he was impressed with my knowledge - he was quick to say that, “it looks easy” which it does…in the beginning…and then i imagine it takes about 5 to ten years after that before we can maybe say, maybe say, that, “argh it is easy”

Sorrry for being off topic, but the value of your words are significant so, i was wondering if you could elaborate on:

just an aside i just trade the gpy/jpy as it moves fast, and i am just trying to learn one pair as that is all it should take…i look for 100 pip opportunities between support and resistance, floor and ceilings and i aim just to look to trade the europe/london open (so i wait all day here for that-requires patience!)
this morning about 7.30gmt price started moving down to the CPP=128.44 hesitated and then broke below and i entered a short as it crossed the line with my first target being S1=127.49which it hit in about 30 minutes, then i was ‘expecting’ price to carry on down after the clock ticked past 8am and i placed another short, too early, i should of waited for some confirmation…, but i had a tight stop and then price took off back up to the CPP=128.44…up 100 pips in about 10 minutes…
thats the trading i like and enjoy (just blew the second part of it this morning…i should of kept my mind more open - as i might of then beable to get part of the second move back up to central pivot point.

anyway thanks again all the contributors

trav72

the type of rules one might refer to in a typical scenario might include the following:

[B][U]for breakout trades[/U]:-[/B]

only enter to the dominant flows of the 60min chart

wait for a pullback (on the 15min chart) of a favored breakout range before executing�.& my trigger will be an inside bar of a lower high (shorts) or higher low (longs).

I will trade 10 contracts & trail up, locking in profits behind a 2 or 3 bar high (in an uptrend) & vice versa for shorts��.

[I](any stop-losses will be dependant on your technical positioning or % account parameters � personal tastes)[/I]

or

book partial profits (1/3rd 1/2 2/3rds, whatever) on the first fail of a 2 or 3 bar high, or next visible s&r zone + trail my remaining contract(s) behind swings on the next lower timeframe (in this case the 5min)

I will fully encash at either a pre-determined time (London close/New York close) or when prices reach the average day�s range

you would then have a similar set of rules or guides for any other technical set-ups in your arsenal.

they’re just prompters to ensure you maintain focus & discipline. If you’ve tested a particular technical set-up & you know that over a given sample of trades in similar scenario’s, certain outcomes offer you a positive expectancy, then you’ll tend to replicate those parameters next time round.

when you become familair with your instrument(s) and a specific favored scenario (breakout/reversal/continuation) begins to unfold, you’re ready to get to work as & when the opportunity presents itself.

as long as the risk is favorable & you can calculate sufficient profit potential going forward, then you’ve done all you can to leg into the trade.

First of all I’d like to join the praise in saying that this thread(s) has opened my eyes. I’m reading through the closed thread right now, and btw Johnnykanoo, you’re more than welcome to send a copy of that compilation in my direction as well, it would be received with a large amount of gratitude.

On to main business
I understand that you experienced traders here don’t use trendlines but rather horisontal S/R.

I was wondering if any of you would have a look at this chart of EURUSD. I’d be grateful for any input on my placement of the trendline.

(I drew it using the 4H, and on that it touches the highs, but I notice that it doesn’t quite on the daily chart here. Not sure why this is… software issue maybe)

Would you say that my starting point makes sense, even though there’s swing high shortly before it? I chose this starting point since it seemed to range from the swing high until the point where I started the trendline.

Any and all input is most welcome.


Hi Jimmy,

I do not understand the part about locking in profits behind 2 or 3 bars high. Do you mean that after you entered a trade based on M15 breakout (eg a long trade), you lock in your profits behind the previous 2 or 3 bars on the M15 after the price had moved past the previous 2 or 3 bars high? Pls enlighten me. :slight_smile:

Ray

Jimmy was simply using that scenario as an example of how someone might construct their own individual rules based set-up & execution template.

It wasn�t meant to represent his personal recommendation.

However, a 2 (or 3) bar reversal play could be utilized if it appeals to your (or anyone else�s) style or trading personality.

It�s similar to any other technical entry or exit type play.

You can place your stop-loss up behind the lows of bar 3 as indicated in the example below.

It could also be used to trigger you into a trade if they marry up with one of your reversal set-ups perhaps?

As an example �
You might enter a position early into London trade & you�re gearing your target to a percentage of the average day’s range, yeah?��…

so, you could use the 2 or 3 bar reversal play as your exit, as & when price either reaches one of your pre-determined s&r levels, or when it completes it�s average day�s range (or any other such measure you use to signify the end of your desired trade longevity).

It’s just one of any number of technical tools a trader can call on to manage a trade.

It worked well for me today. I just got home from work logged on later than usual about 8am gmt, and noticed that the gbp/jpy had broken out of the tight asian range. Initial thought well missed, but then i waited and inside bar formed on the 15minute chart and then checked the 5minute and a higher low was forming and entered at 133.9 at close of inside bar. Price rose nicely for the next thirty minutes and i took profit at 134.6. Worked well, it got me a great entry and i could almost immediately bring my stoploss up to plus 10 pips
cheers

By travpip at 2009-02-06

By travpip at 2009-02-06

well guys Im looking at my next week picture already and one trade possibilty I see is in the AUD/USD which topped out at 6800 and seems like pretty good s/r level.

The big question do the bulls have it in them to push past that level or will the aud come crashing back to reality? im eyeing the 6560 level.

Now I need to work out some template rules for example my trigger coz I don’t just want to jump in short. I need some sort of confirmation. Im open to suggestions.

btw i dont know why but when tinypic hosts these charts it seems to miss things like on this chart the last 4h candle has a long upper wick touching 6800 level (its there on my chart but isnt showing up here for some reason???)

I am attaching a weekly chart… and I think that there is nothing yet appearing to say it is going south…

It just bounced from that line… (6367 approx)

I feel we would have to see a red bar or two on the daily to indicate going down, That weekly green candle, to me, appears powerful.

Opinions…??


so, we find ourselves back in familiar territory. You got a near-term view of your 4 hour chart with the guide posts set to.

you got Tuesday�s action as it vibrated around & fired off that lower zone

and here we are closing at the weeks highs & nudging this next upside barrier.

you got a couple 1st line (potential) downside levels to watch if price gets beaten back early next week & you got this heavy upside barrier at the round number (6800) to give you some balance.

what are you going be looking for to offer you an each-way option into the early weeks trade?

what will you need to see in order to prompt you to take action?

at this stage your template(s) should already be in place.
they�re your foundation, your base if you like. They shouldn�t change much at all.

you now got to wait until price sets up around your template & fits in with your favored trigger(s). If it does & it ticks your boxes, you take action. If it doesn�t����…you sit & wait until it does.

once you plot your upside & downside markers, you can then decide what (if anything) you�re going to do if price shades either end of your decision line!

compile all your desired back up info to compliment your work, cover your bases, sit back��������������.& wait.

what are you going be looking for to offer you an each-way option into the early weeks trade?

what will you need to see in order to prompt you to take action?

at this stage your template(s) should already be in place.
they�re your foundation, your base if you like. They shouldn�t change much at all.

JM to tell you the truth I haven’t really defined my “rules of engagement” I am revisiting this method as I feel it is the best way to map price.

As of the past year I have been very unorganized. Ive done alot of scalping and alot of short term plays. Ive taken some longterm positons when I see consolidations forming (i.e. triangles) I have dabbled in different indicators and methods.

The one thing I haven’t tried to incorporate into my trading is other traders psychology. Obviously I can see when bulls and bears are fighting but I havent tried to reason with my self and ask some of the good questions like why would people want to sell at these levels? or why would people want to add to these positions?

So I know I like long wicks and when I hauled up the a/u chart I see an important level at .6800 and when price hit it it was rejected. Also I note that there was a higher high formed and in a way Im with Tony coz I don’t want to jump the gun and buy the first sell off at that level (scalper mentality in me)

the market players can do 2 things at this 6800 level. they can see this as a rally and sell or see this as a reversal and buy.

sorry for my rendition of war and peace. Now that I think about it I really do need some confirmation cos the a/u can do anything now.

the higher high could very well be just profit taking (covering shorts)

the a/u has displayed higher highes and higher lows on the daily all week

the a/u really is stuck in a range between .7274 - .6000

so my final answer :smiley: ill have to wait and see which camp is stronger I personaly am short biased but I have been picking tops and bottoms to much lately and it has bruised and battered my book.

A little early week confirmation should clear things up for me.

thanks, john

Here’s my take on AUD/USD. If you look at the major trendline, it has not yet been broken, so it may respect it or break it in the coming week. The shorter term trendline has been broken, so there’s probably an interesting struggle coming between bears and bulls - will the stronger trendline hold after the weaker one was broken.
I’d consider going long if prices break and close outside the longer trendline, but I’d prefer if prices respect the line and start moving away from it, in which case I’d consider a short position.



It is a good habit to get into to use part of your weekend to establish what you are looking for in the coming week. I make notes on 8 pairs. For next week I think there are better opportunities than the Aussie (EURGBP is in an established downtrend and EY is sat right on H4 resistance for instance). However as a couple of people have posted their ideas on the Aussie I put mine forward. The reason for doing this is to stress there is no right or wrong - thats what makes the market in the first place. Your goal is to hone your own views until they are second nature and contribute to your profitability. I have attached the 4 charts that I routinely use and a copy of my assessment. Note I use few words. Next weekend I will not only repeat this for each pair but also include a review note to see how it actually panned out. If it continues to respect the 60SMA I will try in real time to see how my entry criteria would fare (ie I will use a demo as I dont want to trade this at the moment) and if it reaches the target I have set I will also look at in real time. Thats the aim anyway. Often I am not around if it gets there or I am concentrating on real trades but you get the idea. It all helps the process of refining your approach to the market





tony great analysis!!! I only put up A/U coz that long wick caught my eye. To be honest I have bounced around from this idea and that idea and I wasnt really ready for ATT that was still to advanced for me, after all I have to think for myself and it is I who is responsible!!!

Nevertheless putting that PDF together helped me more than anyone coz I reread the whole thread in the process and now everything that is being taught seems so clear to me.

So now Im trading pennys and trying to difine my rules. Ive been with Jimmy Y since I asked you about him and I got some good ideas. Its a tricky thing to not jump on everything i see coz in times past I would be happy with 20 pips or even 10 and it seems this way of trading puts the odds against me especialy since I have to spend anywhere from 20% up just to get in the trade!!!

So now im trying to broaden my scope and utilize the H4 and H1 for trades maybe Ill still drill down to the 5M for execution.

Ill keep at it and in the meantime if you have any advice for me along the way I sure wouldn’t mind it.

thanks, john

The big question do the bulls have it in them to push past that level or will the aud come crashing back to reality? im eyeing the 6560 level.

looks like my trade idea would have worked out its to bad ive been to busy to trade this weak and to tired to wake up 2 am for london.

my primary work has kept me good and exhausted this week.

ill keep doing my evening analysis though.

Ive figured a way to make my new blackberry a trading machine but if you plan to go mobil go windows mobil 6.1 coz you have way better options.

anyway i have missed alot this week :frowning: how i wish i was a full time trader and limited work responsibilty booo hoo woa is me!!!

Hey Tony I hope you and your family are ok. I must admit I don’t know where perth is but all Im hearing about is those terrible fires in your neck of the woods. Its these kinds of tragedys that make me realize How good I have it. I pray for everyone who lost there homes and worse.

Hi
Looking at eur/usd and thinking that breaks of these lines may result in the possibility for some small scalping profits of maybe 20 pips. Time frame is 15 min and lines are drawn as short term S/R lines.

What would the community here have to say about the wisdom in this?


o99016mh,

i don�t adopt that particular market view, neither does Tess or Jocelyn, but that�s just our preference.

we will have a very different agenda out there to you, & to a certain extent, that dictates the type(s) of strategy model(s) one uses when interacting with the markets.

if that�s your preferred structure/game plan & it returns a consistently positive bottom line, then I guess that�s all that matters.

it�s all about finding what best works for you. Part of that discovery will require a little trial & error exercise. The beauty of this type of (s&r) technical observation is, you can use the foundation or structure & build a strategy platform to suit your own individual aims & expectations.

if you can identify particular market conditions that suit your style of execution & management, & that objective happens to buddy up with a 15min timeframe, then so be it.

it doesn�t matter how you get from A to B, only that you attempt to achieve it with the odds, & more importantly the risk, stacked as much in your favor as possible at all times.

I’m planning to use 1H and 4H to place short term S/R lines. Then I’ll move to 15min to either fade the line based on candle formations, or trade a break of the line.

I’m not planning to use a retest of the line in the case of a break, such as zenocorp mentions, as I will trade more lots for fewer pips and by the time price starts to move back to retest the line, my PT should already have been reached.

I don’t have the confidence yet to try what you guys are doing by simply letting the market prove you wrong. I hope to get there some day, but that day isn’t here yet.

Right now I’m trying to learn how to find setups with a high probability, and most of all how to not lose money. Beeing profitable on demoing doesn’t reassure me as it seems to do for others.
My method somewhat resembles that put forward by NickB, who has a blog on Babypips. His was one of the first methods I read about as a novice, and after having found you and Tess and Jocelynn, I seem to be ending up with a method using short term S/R and candle formations as the base. Only further testing will show if this works, and if it works for me.

As time allows I’ll be posting more charts asking for opinions, and I’d like to thank you for taking the time to respond.

Well, it had to happen sometime. My first post.

Having been a somewhat shady lurker around the Babypips forum for a while it’s fitting that my first contribution should be to a thread populated by the posters that have contributed most to my trading journey.

I first came across the words of Jimmy, Tess and Jocelyn on James’ thread (IB’s/OB’s) and instantly had my own personal eureka! moment. The fact that such sound reasoning is delivered in a manner both easy and enjoyable to consume is just icing.

From a purely personal perspective I would like to add that the contributions of Tonymand represent the mortar to “the gang of three’s” building blocks. You come across as unselfish and humble Tony so my kudos to you.

For the record, my trading now consists of identifying higher timeframe areas of supply/demand interest, including how the interest unfolded in those areas, coupled with familiar candle triggers and a (hopefully) sound common sense approach to entry, exit, and trade management criteria.

Having read your previous threads/posts as much as two years after the fact, it’s nice to now take part in the here and now and to say “thanks” while you’re still tuning in.

Macc