I’ve just come in & opened up the charts.
Man, can I have your crystal ball when you’re finished with it.
That high of last week toyed around with the price like it was a cat pawing a mouse.
It even obliged with a 1,2,3 continuation trigger & a couple of momentum pullback steps.
I’m figuring most newcomers to this leg of the move will be positioning themselves to the North of this new high up here above 1.55?
Which is where the majority of the risk is being absorbed by the breakout traders trying to find a slot into these directional bias continuation moves?
I’m only now starting to appreciate the logic in this statement. These patterns appear all over the charts, & often several times per day on the faster time frames. I traded them last year & didn’t really filter the signals very efficiently. Needless to say, I experienced less than stellar results.
I then decided to trade them when they appeared at the start of the european trading day & if I was at the computer, the start of New York trading day too. Although the results improved noticeably, they still weren’t anything to write home about.
I thought I was taking the appropriate valid information into consideration when making trade decisions based around the 123 pattern until I read your most recent posts concerning this pattern. I can see now I was little more than hitting & hoping.
What has especially intrigued me about this thread is your explanation & presentation of support & resistance being a zone as opposed to solid, precise lines that are the usual method of presentation & your use of the average day range to gauge the potential of your trades.
I decided to come out of the shadows & join the forum so that I could thank you for posting such interesting & enjoyable material & providing me with renewed vigour to resurrect this price pattern & base it around some of the foundation structure presented.
Now that the Pound has moved inside your lower marked area of 1.5520, most of the trailing stops noted in your comments would now be adjusted up underneath the last week high & demand area that carlybonner mentioned in her post?
If I’m understanding it correctly, those traders who are trailing their stops to protect their profits will wait until a resistance level holds support first before deciding to move, as this 1.5450 has so clearly shown?
You’re welcome.
Glad you enjoy it & find the stuff to be of value.
As a matter of interest, what were the typical accompanying reasons you would use in order to trigger & execute your 1-2-3 deals?
You mentioned filtering the entries, what kind of limits did you enforce & how did you manage the trades once you got a position in motion?
That’s the general idea yes.
Obviously breaks to new ground or ground that hasn’t been tested for a while will harbour a varied selection of orders from the array of differing participants, so the market will need to digest & absorb the dominant weighting in order to mark price.
There’s no telling if it’ll be a slow grind or an aggressive shift up in activity until the market sorts & settles the activity.
Continuation buy, as well as sell stop orders will now begin stacking underneath the last significant higher low @ 1.55 & more back underneath last weeks lows.
Some will. Depends on their objectives, risk attitude & assessment of the level or zone.
Generally, the smart option is to wait for confirmation of a level first before adjusting profit orders up or down.
Tell me about it. The positive thing is, these triggers are appearing quite regularly on & around the suggested watch levels. But then I guess that isn’t surprising given the amount of increased activity these types of technical levels attract.
Wow, do I ever owe you several beers!
They certainly let the air out of a few long bets on the back of that number & no mistake.
Price was tickling the lower band of your next supply level too for a good couple of hours during yesterday’s New York morning trade, which also marked 63% of the days range funnily enough.
Looks like one or two savvy longs used that area to book more profit ahead of the release.
I’d enter trades during low volume periods, typically into the european lunch time period, after the european close & into the late New York trade day period, & I would enter in what I now recognise as no mans land or levels on the chart that at the time appeared ok, but on reflection held no particular relevance at all. If a clear 123 was setting up & I concluded that the trend was confirming, I’d take it.
I assumed my main filters were entering with the trend wherever possible & using support & resistance levels as a guide, but having found this material, I now appreciate how suspect & overly complex my preparation work was.
If I’d had the good fortune to find this material in 2008 onwards, it would have totally transformed the way I prepared my trades & entered my set ups.
When managing my entries, sometimes I’d use trailing stops, other times not. There was no consistency at all, mainly because I wasn’t working to a set plan. I’d scale out at a random pip amount or the first signs of trouble, then hope the rest of the position took off.
Obviously, now I realise my whole structure was fragile. But even when I began to tighten my plans up, my entries & preparation was still letting me down.
That comment about where you enter rather than how you enter really emphasises my weakness. I love the 123 set up, it’s just the fact I was unable to match it up with what you people have described as consistently significant levels.
What I plan to do from here is reintroduce the 123 & develop it around some solid, yet less complex structure. I’ll also now have more confidence when the time comes to add another set up or two & simply base them around the same areas of significance.
I was beginning to fear the lower time frames & believe all the negative press surrounding them because I couldn’t get my entry or trade management plans to work properly. I now realise it wasn’t that at all, but the fact I wasn’t looking in the correct places or preparing my trades correctly to begin with.
It’s what’s commonly referred to as “Boy Scout Trading” catcher
The fact you’re still afloat, living to tell the tale & determined to push on says a lot about your willingness & ability to accept & adapt to change. If you don’t got that quality you can forget about making progress in this business.
Key & significant zones print & stamp a 1 or 5 minute chart just as clearly & cleanly as they do a 240 minute or Daily one.
I’ve never bought into this strange reluctance or resistance to operating down at the micro level.
If your model is engineered to meet objectives that dictate you’re able to generate acceptable risk to value ratios via micro timeframe activity, then go for it.
Profit is profit, & risk control is risk control, regardless where it’s tickboxed.
Your style preference, risk tolerances & activity levels are your business. Don’t be discouraged or distracted by anyone.
Strengths & weaknesses come in all shapes & sizes, & what suits one individual won’t necessarily be to the next ones liking.
Good luck to you.
Hope you continue to enjoy the material & look forward to perusing your own contributions to the thread.
You primed a bet based on a set of criteria with a clear objective.
Good stuff.
I assume you covered the option of running this trade beyond your initial target of .6840 when lining up your bet decision?
So when your (initial) objective came into view why didn’t you peel a little of your position off & either reduce or neutralize your risk if you felt there was more potential in the trade?
I have no idea, neither do you.
What you can do however is have a bet management structure ready & waiting to slot into place.
That will ensure that if you decide to run your bet, you’ll milk as much from the deal as possible.
How do you usually approach this type of scenario when deciding to track & trail a move?
I think that comment was someone else’s description of Jay wasn’t it?
What I said was it resembled “Boy Scout Trading” (always be prepared for every consequence).
If you notice whenever Jay, Dan, Jocelyn or whoever is explaining or presenting a scenario they’ll tick the same boxes.
They might operate differently according to their styles & specific objectives for that particular bet, but the core structure rarely changes.
They suggest & prompt folks take note of where the price is now in relation to where its arriving from, & what’s driving or influencing it.
They then suggest folks map its upside/downside options & potential.
They encourage folks to take a look at the immediate nearest likely reaction zone both north & south of the current price first & mark them up.
Then dial out from that point seeking the likely tiered reaction zones to prepare for when price gets driven either side of the current level (the next likely supply & demand zones).
So that when you act you’ll know exactly what you’re going to do each step of the way & why.
You should already have a tried & tested set of criteria in place to work that particular market phase or cycle, accounting for the current drivers or influences, the bias or momentum & current range of the instrument you’re observing.
Note I use the terms [I]likely[/I] & [I]potential[/I].
No-one knows for sure what’s going to happen next.
You have absolute control over your risk module & your entry criteria. You also have control over how & when you’re going to direct your trade management module, but the one thing that’s out of your hands is how far the price is going to walk & how fast it intends to travel.
That’s why you trade like a boy scout!
And of course, that’s your choice to do so.
Far be it for me to dictate or impose my views on your decisions, but if you’re running low on account fuel & you’re unable to actively manage your positions during the trading day, whilst being handcuffed to the Daily frame, wouldn’t the lower risk/higher potential option be to direct your bets in favor of the dominant bias of a pairs motion?
Attempting to bet against an obvious dominant bias is a mighty brave stance, particularly if you’re wearing handcuffs.
Just a suggestion.
I don’t take positions on those kind of chart timeframes against the dominant bias Matt, nor do I advise others to do so, so I’m not going to be much help on this occasion I’m afraid.
If I was ever going to consider that type of operation it would be actioned on a timeframe offering me a clearer view of the near-term swing reaction zones so that I could aggressively manage my stops & profit steps in tune with the pairs average range coverage for the current cycle or phase.
I’m very fortunate that I’m in the situation where I can check & monitor trades any time during the day.
I’ve finally discovered a couple of set ups I feel in tune with, but I was having difficulty getting them to fit & work profitably. I didn’t want to abandon my preferred choice of timeframes, & now it looks like I won’t have to.
The more I read the information, the more it appears obvious about only looking for trade set ups in the direction of a dominant price bias. When you’re waiting for the price action to drop into one of the lower identified support levels, or rise into one if the identified resistance levels, it looks like a huge move on the 5 or 15 minute charts, & very tempting to try & grab some fast profits, but I can see the risk trade off in waiting to see how it reacts when it revisits one of those levels first before getting involved.
It’s like that move yesterday & today on the Australian Dollar/US Dollar?
The nearest lower support level jjay highlighted was back at .8870 to .8890
My 15 minute chart shows that area up very clearly.
So as the price is still considered to be bullish on the pair, he’s suggesting only trading long on a pullback move to that demand area if a reliable entry signal presents itself?
And his next upper level would presumably be the last place it dropped from, which is the .9060 area?
Therefore, I’d be seeking out an opportunity to place a long trade if I received a 123 or a momentum pullback entry during the highest volume periods of the trading day, being around the London Opening & maybe the New York opening periods.
That looks as though it would offer a more attractive reward & risk balance.
Well in most cases that’s considered to be the softer option, especially if you’re new to this & still finding your feet.
It takes time to become accustomed to, & familiar with your surroundings & where you fit into this circus.
Hitching rides on the back of dominant flow is, in most cases, considered to be lower risk, higher potential odds play.
He’s saying that until the market rejects the bias, & shorts overwhelm longs on this leg of the move, then he’s playing his odds & looking for additional long bet opportunities, yes.
That level represents the 1st valid test of this leg of the current bias. If it fails there, he gets stopped out.
He then identifies the next visible area of likely conflict & defense - that would be the .8850 zone ahead of .8700-30
You don’t need a whole bunch of lines on your chart, only the nearest & obvious potential areas of conflict. On a bullish bias such as this one, trailing stops & continuation bet orders will be stepped underneath the market. Once the market absorbs & weights the dominant bias, off we go again for another ride.
Correct.
Average days coverage on this lady brings up .9040-55 on the radar. So again, watch for the behavior on the approach & see if it’s giving signs of running low on gas.
If that forms a part of your usual decision making criteria, then yes you would, providing it met your objectives.
As London clicked into life it had walked 40% of its current range. So it offered good upside (intraday) value if you received a valid signal.
So long as you can get your risk odds into play, you’re ready to make a decision.
I read on the threads somewhere that most of you all use the snagit software to capture your chart posts. I’ve got hold of a free version [7.25] & have been having a play with the functions, but can’t seem to get it to capture a freehand option so I can choose my own borders & cut it to size.
Does any kind soul know which combinations of the mode grid I need to set?
Thanks.
The pairs are a bit mixed today. Strange price action indeed on some of them.
That Australian Dollar range price has held it up twice today. Impressive.
Does that pair usually perform well in relation to its normal daily range?
I’m being reliably informed you need to set the input (on the main panel) to: [I]region[/I].
The output needs to be set to: [I]File[/I]
And you shouldn’t have any [I]filters[/I] showing up.
Basic capture grid (to the left) needs to be showing: [I]An object on the screen[/I]
That should get it done. You can then add all your text, lines, shapes etc to the chart or doc capture.
Market is rolling into end of month.
Certain currencies will be [I]‘flavor of the week’[/I] as various institutions buy or offload to balance books & square up deals.
End of month & quarter can often stir things up & send some pairs crazy, whilst others flop around like its closing time in New York.
Watch your step around these calendar times!
It has its moments.
It’ll print its range just over 65% of the time. The 70% marker will come into view a little shy of 85%.
Its not exactly a high flyer for regular intraday plays. You’ll receive better bang for your buck eyeing up the likes of Cable, eur/jpy, gbp/jpy & eur/usd etc to be honest.
But you can confidently put it on your mid-range list, especially when it gets a kick on event news & data.
Doh! Of course. My brains been on full charge this past couple of weeks soaking up all this extra stuff, I’m knocked off course :o
Thanks Sean, eventually got it all worked out. It has plenty of features. Nice software.
I’ve done an example run on the recently featured Australian Dollar pair & marked out the lower zones that in my view, represent the key significant areas to be aware of should the bias change direction & prices begin to attract a negative tone.
The arrows in between the higher low swing levels would be of interest to me if prices failed to attract support, & I would begin preparing to enter on any lower high [123] or pullback-breaks that offered me sufficient risk & forward profit potential in line with remaining average range coverage.
Obviously, the proof of the pudding will be in the eating, but the combination of key significant levels, dominant bias & average range figures as a guide to trade expectancy limits matched with my favourite set up & triggers keying off micro timeframes, has allowed me to put some order & structure into my strategy planning that simply wasn’t there before.
I’ve been doing a lot of research & back checking since reading the recent contributions & nothing I’ve seen before makes more sense to me personally than this style of trading. I’m as confident as I’ve ever been about taking something forward into live testing.
Would you guys run the ruler over my 2 charts please & ensure I’ve got my bearings right? The second chart is my interpretation of the pullback-break type set up. I’m guessing that’s the correct opportunity illustration?
The only info missing from those illustrations are the previous day high, low & the previous weeks high, low levels.
Yeah, those are the types of potential reaction zones. Keep those well lit on your radar as they come into view. Quite often the first reaction away (in either direction) can be aggressive if the orders are heavily stacked one-way.
You won’t really require any more landmarks operating down at that level other than the current bias (if its clear & easily identifiable) & your daily-weekly high & low levels.
It’s not like you’re going to be executing multi-session turns anyway, so you’ll have plenty of time to wait for the cleaner set ups.
That’s the general rhythm you’re looking for.
Remember what was said about the make-up of the bar stack with this particular trigger?
You’ll find out through your testing that the bets producing the higher odds of success will be triggered on the back of the more aggressive shifts up & down in movement.
Just be mindful of your accompanying criteria when looking to trigger them.
I’ve circled the type of bar you need to be more aware of on your chart.
That’s what you want to see opening up as price catches a pop out of one of your levels of interest. Get in on the break of a pullback to one of those bar shifts.
Ha ha, yeah. They’ll be a little uncomfortable today.
13.20 was an easy sweep with usd/jpy on the slide.
Jump up & down on gbp/jpy too & see how fragile they are under 134.30
Even Jimmy might put his hand in his (deep) pockets & buy a jug if it collapses there!!!
It’s quite prevalent during the Tokyo shift. If prices close out in NY within spitting distance of a cluster level, they’ll go after stops pretty regularly, especially if their order book is tasty.
It’s always hard to say on the last business day. Depends how much more they need to do into the fix.
Aussie is rumored to have more deals which would support this local range low @ .8960.
As ever, if you get a signal that corresponds with your criteria for taking action, then hit the button.
As long as you can justify & apportion appropriate risk, then if the event or circumstance playing out goes your way & gives your bet a positive nudge - all the better…if it washes your position out, then so be it.
If you decide there’s simply too much contrary activity playing out on a particular day, then stand aside & watch it roll around.
Nice to see you vaqueros are still recommending that faithful old dałaa naki táági technical play
Less is definitely more, whatever these fast talking product salesmen will have you believe.
A bare naked chart & a decent pair of sneakers will get the job done in retail if you don’t have to stop too often to tie your shoelaces.
Mr Krantz diversifying his substantial funding portfolio at last so I hear??
