Technical Templates 2

[Tess]

Jocelyn, is it fair to say that once a significant old (say 2005) level has been bypassed recently on a reasonably regular basis that it becomes redundant altogether, or do you see old zones that are apparently irrelevant reassert themselves after being dormant?

Hi Paul,

The zones we highlight as examples on here are nothing more than potential contact points. That�s how we prefer to explain them in our charts & graphs on the threads.

Guideposts if you like, to assist in determining whether prior area�s of 2 way activity will again represent possible zones of conflict before establishing the near-term directional bias.

I don�t think it�s a matter of disregarding a previously “active” level just because it doesn�t react as you would expect today or tomorrow.
Not all previous levels repel or support the current price action. There might have been very specific & unique events that influenced price to vibrate around a particular zone 3 or 4 years ago, or that�s influencing it to vibrate that same zone today.

The fact that it is, & you might be able to use it to your advantage, is the important criteria.

(human) psychology moves the price action, & that psychology is wholly dependant upon the participants, flavors & influences that drive the flow of money [B]today, tomorrow & this week[/B]

Once these zones or levels come into view on the radar the activity is magnified & reflected via the candles or bars.

That combination allows us to observe the psychology playing out now, & thus assist in planning our favored execution models & risk management structures [B]based on [/B]our interpretation of the [B]collective[/B] information.

That�s all price action is � a reflection of market psychology�.a footprint of the money.

If enough participants, for whatever technical/fundamental reason, & regardless of their superiority or standing in the market hierarchy, decide that the $US is getting bid, then it will ratchet higher. Same goes for the Euro, Yen, Swiss etc.

So, all we do on a consistent basis is to dial out to see if a specific area had any influence on the directional bias before, & incorporate that info alongside our understanding of what�s currently influencing the price action today.

Markets (& their participants) are extremely fickle entities. They are also, to some degree, creatures of habit. It doesn�t take much to spook (folks) markets into moving vast tranches of money around & pinging their bets back & forth between these common technical reference points.

Whatever you use to plot your journey from A to B just ensure you got a very good appreciation of, & handle on risk.

[trav72]

thanks for opening my eyes all. I was able to get a great entry with limited risk (ie the stop was just above that recent high and resistance triple top -about 25 pips) from the IB entry on the 15min chart. It worked out so good really… now though i am not sure where to get out. Currently up about 70pips, surely it isn’t now going to go up through that resistance for now??..

By travpip at 2009-03-23

[fxTradr]

Speaking of previous resistance, our friend from last week (1.4600) showed it’s mettle again. Right on time too at the London open. Previous week’s high, previous day’s high, a nice inside bar(some charts show it engulfing), and some RSI divergence thrown in to boot made for a nice profitable trade. It could have been played a bit better on my part by not moving my stop below entry, but I thought wrongly that previous s/r at 1.4564 would be enough. No go. It was still profitable however, which is better than a loss.

Did anyone else get in at this level?

[trav72]

i was able to grab 100+pips on this break through strong resistance @141.50.
Initially i was waiting for a retest to confirm break before i entered - but momentum was very strong so i just jumped in.

By travpip at 2009-03-23

[Sean_P]

if I had been in front of the computer I would have taken that or the similar break on GU at the same time. A strong push through deserves some attention however you decide to play it

Pound is catching a bid, albeit temporary, on the back of positive stock market momentum. You could have purchased it via any combination you like from early into yesterday�s trade.

I�ve used the eur/gbp chart here to highlight the strength-weakness relationship, but if you toggle through the other Pound based technicals they�ll tell you a similar story.

You can also take a look at the dollar index if you require a secondary technical confirmer, just to ensure it�s a pound (individual) story rather than a broad dollar based move.

It won�t always stack up, but quite often you�ll get enough information from your cross references to take a punt on a specific pair or certainly get a lead in on a strong v/s weak slant if your technicals offer up a low risk entry.
To be honest, it works more effectively keying off the larger chart timeframes. It can get a little hairy on the sub hourlies unless you got your wits about you.

I believe Tessa or Jimmy covered this on the original thread someplace?

[Just_Paul]

Hi all,

I took a cheeky short on EU today. I’d actually marked up a higher area to keep an eye on (the blue lines) but price seemed to be stalling around a line (white) I’ve had on my chart for a while now. An OB presented itself, so I decided to take a short, exiting part of my trade at the 00 level, then the rest at the next 50 level - not wanting to push my luck. +65 pips off a risk of around 40 pips.

Any observations? Criticism?

Cheers,

Paul

[kohorok]

Hi All,

Attached pics are possibly trades that I will take.

I am waiting for the 4hr candle to closed above the 38.2%, then I will go Long…

instead if the 4hr candle hit the 38.2% and closed lower, I would probably short…

Please correct me if im wrong and give me some advices & guidances…

Thanks

[tonymand]

Hi all,

Any observations? Criticism?

Cheers,

Paul

I would say that was a nice trade Paul. I was also waiting for the challenge at the higher level. Looks like we are at the first target as defined by support at 3534 about now but I certainly wouldnt criticise your earlier exits. All a bit choppy in there

[kohorok]

I would say that was a nice trade Paul. I was also waiting for the challenge at the higher level. Looks like we are at the first target as defined by support at 3534 about now but I certainly wouldnt criticise your earlier exits. All a bit choppy in there

Im waiting for EU to hit the 1.3500 Support…

If it closed above 1.3500 (1hr candle) I will go long
If it closed below 1.3500 (1hr candle) I will go short, TP 1.3425

[Sledge100]

Hi sledge

This is how I approached the trade. I spotted the IB setup at my interest level. First thing, I will consider is will this level hold or break and what are my longer timeframe like the hourly telling me, in addition do I prefer a long or short setup. How do I determine a level will hold is by looking at past price action around this level. If you look at the hourly, price has broken the level on Wednesday. Now price is coming back to retest the level. In addition at the close of the hourly candle, the candle failed to close below the level. A short setup will only interest me if price close below that level. So I stick to going long. In addition it is also around the time when this pair will start to move. As for how I play the IB is like what James had stated in his thread, wait for price to go 2 pips above the IB for a long (refer to James�s thread for more info). To me, IB is just a form of trigger for me to enter a trade. The location of the trigger is more important as I had learnt to operate my trade trigger around interest zones as TJM and Tony had taught me in this thread. Hope I do not confuse anyone with my explanation.

Ray-
I’m not sure if it confused anyone, but it made perfect sense to me. Thank you for the explaination! I actually sat and watched all of this form before my eyes, fearing the “stab and retreat” nature of the market at the time, I never did get my long on it. Went back to bed mad at myself that I missed out on over 100 pips for not pulling trigger! It was a “gimmie” too. Thanks for the insight!
Aaron

[fxTradr]

I tried to get something going on what I thought was a good opportunity. I believe this falls in the parameters of how Tess, Jocelyn, etc,. set up to trade.

Long GBP/JPY position opened at 143.03 after rejection below the round number. Nice RSI divergence and a higher low put in. Made it to a scale out of +38 at a previously defined 4-hr S/R level. Moved my stop up a little too tight and got taken out on a retest of 143.00. Quite foolish really. Price has been meandering about ever since.

At least it was a profitable trade. Much better than the alternative.

Any comment or criticisms welcome. Hope you all are doing well this session.

[Sean_P]

I tried to get something going on what I thought was a good opportunity. I believe this falls in the parameters of how Tess, Jocelyn, etc,. set up to trade.

Long GBP/JPY position opened at 143.03 after rejection below the round number.
Moved my stop up a little too tight and got taken out on a retest of 143.00.

Quite foolish really. Price has been meandering about ever since.

What were your aims & intentions for this trade fxTradr?
I believe one of them posted up a recent chart or mentioned the significant upside levels on this pair as 141.50 in relation to the prior weeks high. If you dial out on a large hourly you’ll see the reference to this zone in regards to the current price action.

That would have been the area of interest for additional longs to test the strength of continued Pound/Yen momentum. That zone (141.50) will now be on the radar for potential 2 way conflict on any move back.

That pair requires quite a loose grip if you’re running it via short time-frame execution, especially if your game plan is also engineered around a more short view intent.

ps, they’re tied up with end of Q1 stuff this week so won’t be so active on here until after the weekend.

[fxTradr]

Hi Sean,

My intention was to hitch the wagon up for a ride to 144.00 and then see what happens. My aims were purely short term so 141.50 was way, way off the radar.

You’re absolutley right in that this pair needs a bit looser grip. Next time for sure :o

End of Q1! That explains a bit of what we’re seeing here in this crummy price action. When you aren’t working for a fund or prop house, ends of quarters don’t mean too much. Thanks for the reminder.

[Sean_P]

Let me just sling this out here & see if it rings any bells.

Much of what these guys continually repeat is based around executing where the levels of value & risk are mostly pitched in their favor.

So I�ll grab a hold of one of their recent chart frameworks on this pair to illustrate what I mean.

You got here the template of the large hourly time-frame showing this near term 141.50 zone coming into view on the radar as Tokyo cranked up couple days ago.
That 140.0 line represents last weeks high.

You got pretty decent momentum chasing it up, & it�s already butted heads couple times signalling it�s intent.

So, do you suppose it�s a level that�s likely to attract one or two savvy value hunters?

If you then drill down to one of the gambling time-frames, in this case a 15 minute sheet, you can get a closer take on the shake-out as it probes for a way in around the resistance zone.

You got 2 half way decent value entries opening up if you�re of the persuasion that the price action is good for a continuation of near term momentum.

Remember what they constantly say about climbing aboard ahead of a potentially aggressive fulcrum?

Where do you think the novices & untrained eyes will attempt to get aboard the runaway train?? They�ll be scrambling to hop on as price lurches into 143.0 (after the value has dissipated).

Price is now bobbing around in no-mans land up beyond the breakout ceiling.

Which of the 2 zones, circled or shaded, do you think represents better value if you�re seeking a little action on the back of a momentum shift?

[fxTradr]

Thanks for the charts and analysis.

Once you see the charts in that way, it’s a bit embarrassing to say I tried to put on a long position. I suppose I was lucky to get out of that one without a full load loss.

I’ll try to keep all that in mind for the future.

[trav72]

just entered a long position here of yesterdays low and IB formation. About 25pips up now - stop bought to BE, not sure how if iy is going to get much higher. Target 1.3490 (about 40pips)

By travpip at 2009-03-25

[Sean_P]

Once you see the charts in that way, it’s a bit embarrassing to say I tried to put on a long position.

I wouldn’t call pulling a +38 pip profit out on partial size embarrassing at all.
It’s simply a different observation of how one person or group interprets value over another person or group.

I, & one or two others who work out of the office, quite often undertake short term forays into the market. Price spends an awful lot of time in range or consolidation mode, so it’s not always beneficial to have your long term trend hat on.

Regardless of whether we’re seeking long range or short range excursions, we prefer to trigger in step with the slightly larger term support & resistance area’s. They generally offer more lucrative returns & keener risk opportunities.

These more visible buy & sell pressure zones often stretch out & whip around a lot before continuing on their journey due to the absorbtion of the 2 way stop activity balancing out.

I just feel it offers better value to engage at a level such as 141.50 than try hack my way through all the bindweed up at 143.0-144.0

Once price has breached a solid area like 141.50 & taken a hard ride up, you’ll witness profit taking & re-adjustment playing out.
Players will be waiting to see what the fundamentals & flows are saying before comitting further.
This consolidatory activity needs to shake itself out before you get the secondary run up, or it dies a death & blows itself out.

[trav72]

here the euro bounced of the last couple of days lows and price is currently sitting at the 50% level of this weeks high and lows that i think Tess refers to as an area where price will change direction.
So will it head up to 1.37 or abck down to 1.3430…?
if it breaks above 1.36 or below 1.35, i will be targeting the weekly high/lows.

By travpip at 2009-03-25

[Just_Paul]

Hi all,

Took a long off the activity around the 1.3450 area - I entered off the OB following the pin bar. Entered at 1.3473, closed part just above the 1.35 level and the rest is still running. I’m looking at the 1.37 area as a target, but when I woke up this morning and checked my charts the price action seems to be fannying about a bit. Should I get out early or hang in there? Hmmm…

Paul

[Sean_P]

Took a long off the activity around the 1.3450 area -
closed part just above the 1.35 level and the rest is still running.
the price action seems to be fannying about a bit. Should I get out early or hang in there?

This should really be part of your plan before you enter the position Paul.
If you’re still of the view that Euro is biased to the upside after your initial entry, & you’ve encashed part of the deal, then why not simply trail your remaining stake up underneath a technical base?

I assume you entered via one of the smaller timeframe charts? 5 or 15 minute reference?

If so, then work back from the current price level & adjudge where you’d be happy to continue tracking the price action on this mini leg.

Tuck it back under 1.3560 or maybe 1.3530? You could even ratchet your stop back to the breakeven tag if you were feeling particularly confident of it scaling further north.